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Corn could be focus of next trade war with the United States

by 5m Editor
29 November 2005, at 12:00am

ALBERTA - It looks like corn could be the focus of the next trade war with the U.S. December 15th will see the Canadian Border Services Agency release results of an investigation into whether U.S. farmers have been dumping cheap corn in Canada. If so, there could be countervailing tariffs placed on U.S. corn coming into Canada.

Corn could be focus of next trade war with the United States - ALBERTA - It looks like corn could be the focus of the next trade war with the U.S. December 15th will see the Canadian Border Services Agency release results of an investigation into whether U.S. farmers have been dumping cheap corn in Canada. If so, there could be countervailing tariffs placed on U.S. corn coming into Canada. Alberta Agriculture, Food and Rural Development

Aside from raising the price of corn here, such tariffs would increase production costs for other products, such as beef, poultry and eggs. These costs which would eventually be passed on to consumers.

While it’s not a big issue with growers here, Manitoba and Ontario corn growers have been fighting U.S. imports and calling for federal government action for years.

A couple of weeks ago, the Canadian International Trade Tribunal -- an administrative body that reports to the minister of finance -- ruled that in their opinion, unprocessed corn from the U.S. is hurting Canadian producers.

Of course, the big complaint by Canadian corn producers is that American farmers are subsidized.

In the U.S., if a farmer sells for below market value, Washington pays a subsidy to make up the difference. This deficiency payment means American farmers are free to sell their products for whatever price they want to.

It’s this practice say Canadian corn producers, that has forced their market price to the lowest its been since 1900. In Ontario these days, a bushel of corn fetches about $2.30. Canada has more than 29,000 corn growers, who produce 365 million bushels of corn annually, valued at $1.4 billion.

More than 100 million bushels of U.S. corn comes into Canada each year. Corn farmers are hoping the Canadian Border Services Agency will help them to finally get some closure on this issue of U.S. dumping.

However, cattle, poultry and beef producers are on the other side of this issue. After all they feed corn, some of it U.S. corn and they see the imposition of tariffs as simply raising their costs of production.

Source: Alberta Agriculture, Food and Rural Development - 25th November 2005

5m Editor