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Canada Under Pressure to Reform Pig Industry

24 July 2012, at 10:09am

CANADA - As Canada prepares to enter into the Trans-Pacific Partnership trade talks, some participating countries' pork producers are banding together to try to reform Canadian programs, which they say give pig farmers an "unfair advantage."

Meanwhile, a Canadian government official has justified government-funded programmes for what he called a "struggling" industry in Canada, a sentiment echoed by an independent pork producer.

"Pork producers in Canada have disproportionately benefited from the government programmes," said Nick Giordano, vice president and counsel for international affairs at the Washington-based National Pork Producers Council. "Now that Canada is coming into the TPP, this is a perfect opportunity to be re-examining these issues," he said.

"We believe this sort of thing violates the spirit of both NAFTA and the Trans-Pacific Partnership."

The US industry might take expensive and time-consuming legal action, he said, if Canada doesn't consider reforming its government-funded programs, and if producer assistance does not become a topic of discussion at the TPP table.

"I'm not going to rule that out. I want to be perfectly clear; I am not going to rule out the United States industry filing more trade cases. We don't feel we should have to do this."

Andrew Spencer, CEO of Australian Pork Limited, also said Canada needs to reform its government influence in the agriculture sector Australia and New Zealand dropped government-funded agricultural assistance in the 1980s and 1990s, he wrote in an email to Embassy, but "Canada has not yet reformed its agricultural sector to the same extent."

Subsidised Canadian pork makes the export price cheaper, he wrote, which "displaces pork from other countries which do not operate subsidy programs, giving Canadian producers an unfair advantage."

Mrs Spencer said his organisation has been meeting with Australia's Department of Foreign Affairs and Trade about the issue, and is engaged with Mr Giordano's organisation as well as New Zealand Pork to discuss further steps.

"Australian pork cannot compete on a level playing field with Canadian producers while they benefit from such subsidies," he added.

The Canadian pork industry argues that the appreciation of the US dollar put a damper on the currency exchange, and increases in soy and corn have put pressure on Canadian producers.

The industry also suffered from swine flu in 2009, causing a loss in exports.

In August 2009, the Canadian government announced programmes to help the struggling industry, and the Canadian Pork Council's public relations manager Gary Stordy said the programmes put in place at that dire time are measures that are now, incorrectly, referred to as subsidies.

Most of the programmes were used to shrink an industry that was too big to sustain itself, explained Mr Stordy.

"Our industry has had some difficulty over the past couple years," he said. "Producers, frankly, were in financial stress."

He said two program,es that have caused a stir with foreign pork producers were essentially buyouts for farmers in trouble.

"Frankly, for those who took advantage of the programmes, they would certainly say that it didn't replace any income or they didn't get the value of what they felt they should deserve," Mr Stordy said.

Mr Giordano said these programmes are still problematic. "When the industry goes into a downturn, our producers don't have that sort of government protection," he said. "It's still producer support."

He said the US industry is "absolutely" concerned that when the three-year wait time expires in the fall of 2012, Canadian pork production might explode, with many farmers who are in comfortable financial standing re-opening their farms.

But Mr Stordy said this is unlikely to happen.The average age of pork farmers in Canada is 55 and over, and in an industry that is still struggling, it's not feasible for farmers that age to re-invest and start a business in the current conditions after equipment has been left to sit for several years, he explained.