Out of balance?

[farmers_son]

Have you noticed that we are not selling cows to the Americans at the world price?

Obviously NAFTA has benefited the oil industry but that does not translate into benefits for farmers. I stand by my comments that NAFTA has not benefited primary agricultural producers. Canadian farmers in general are worse off after NAFTA than before.

Farmranger, some facts…

Since NAFTA Canadian farm debt has doubled while average Realized Net Farm Income fell 5% every year.
Average per farm debt in the US in 2003 was Cdn$113,402, average per farm debt in Canada in 2003 was Cdn$199,024.
Per farm income in the US in 2004 was Cdn$ 43,178, per farm Net Cash Income in Canada was Cdn$24,606.

Since NAFTA Canadian agricultural exports have continued to expand sharply, but Canadian net farm income from the marketplace has plummeted to record lows and has been negative five of the last six years. The beneficiaries of this trade has been American multinational corporations, not the primary producer.

If you are talking oil and gas, sure NAFTA has been good. But if we are considering agriculture we have to consider that maybe NAFTA has not been so good. The border is still closed to OTM live cattle and beef and trade barriers still exist regarding the trade of UTM live animals and beef. And for what good reason? Why are our NAFTA partners still blocking our cattle when they have had their own domestic case of BSE?

The oil and gas industry is quite capable of looking after itself but there is no reason cattle producers should be defending a trade agreement because it has been good for the energy sector. Where is the trade agreement that will see Canadian cattle producers enjoy record high prices? Where is a trade agreement that will see grain producers enjoy record high prices.

When prairie farmers remember the good old days those days are before NAFTA. Sure it is great that Alberta has a vibrant oil and gas industry but no one, and I mean no one, can say that our agriculture is vibrant. We get hammered by our U.S. NAFTA partners every single day whether we are trying to sell grain or cattle.

[FarmRanger]

Well f_s, if it was just the free trade agreement that was wrecking the price of our cows, I’d agree with you. Remember BSE, and your beloved Liberals who shot us in the foot with their bogus banning of Brazilian beef for the same reason our cows are being banned in the U.S. right now. We can’t even legitimately take the high road right now because of it. And the fact was, it was only because Chretian wanted to protect his buddies down at Bombarier that he sacrificed the cattle industry. Another fact - it’s not a tariff that’s keeping our cows out of the U.S. right now.

Sure, it’s pretty obvious that the rest of us in agriculture aren’t exactly raking in the bucks right now either. How do you link the cause to the free trade agreement? How has removing tariffs to agricultural goods resulted in increasing debt and lower incomes for Canadian farmers? Did Canadian (non-supply managed) average commodity prices fall more than average world market prices? Spouting (unreferenced) statistics with no argument as to why they are caused by free trade doesn’t exactly convince me you’re right. You may as well tell me that solar flares and UFO landings lowered farm income.

[farmers_son]

While I happen to agree with you on Brazil that has nothing to do with NAFTA. And you are correct to say it is not a tariff that is restricting access for our cattle and beef to our NAFTA trading partner. It is a non tariff trade barrier that is not science based.

I am not an economist. I can only offer my observations and opinion. The farm situation may have, probably would have, grown some worse without NAFTA. Perhaps NAFTA made no difference at all but the same could be said for the oil and gas. Why would you believe NAFTA benefited oil and gas as that industry boomed after NAFTA but cannot accept that NAFTA may not have benefited agriculture if agriculture in Canada declined from pre NAFTA days.

It is not solar flares to recognize that it is almost three years since BSE was discovered in Canada and still trade in cattle and beef has not returned to normal. It has been two years since BSE was discovered in the U.S. yet trade in live cattle has not returned to normal. The U.S. has acknowledged that they have BSE since last June too yet trade in live cattle and beef has not returned to normal. Japan has resumed trade in beef with both the U.S. and Canada yet our trade with the U.S. has not returned to normal.

It is not UFO sightings to recognize that since NAFTA the U.S. has placed tariffs on Canadian wheat where before NAFTA there was no tariff or very little. It is not UFO sightings to recall that the U.S. placed countervails on Canadian live cattle entering the U.S. for a period of time before that trade action got shot down in U.S. courts. Hogs have been threatened too. Off the top of my head I would suggest that every major Canadian agricultural commodity that is exported to the U.S. in significant volume has been the target of trade harassment by the U.S. since CUSTA/NAFTA came into effect.

I can only offer my opinion to suggest that the U.S. would not have taken these trade actions against Canadian agricultural exports if they did not have unrestricted access to Canadian oil and gas. I can only offer my opinion that before NAFTA our oil and gas provided a dispute settlement mechanism that worked faster and more effectively to see fair trade took place between Canada and the U.S. I can only offer my opinion that Canadian agricultural producers are vulnerable to these trade actions by the United States and that since NAFTA the situation has grown worse not better. If you want to say that is solar flares and UFO sightings go right on ahead. But I contend the situation of the Canadian primary ag producer has worsened as a result of NAFTA not improved.

[FarmRanger]

I would argue that agriculture would be even worse off with no NAFTA agreement. Have our commodity prices dropped more than the world price? At least we have a close market with less market restrictions than we’d likely have without NAFTA. The Americans quite correctly don’t purposely try to make themselves look bad internationally and going against the spirit, if not the lettering of the free trade agreement does make them look bad.

On the other hand, what if there was no NAFTA? If my neighbor called me a “bastard” and made cheap shots at my expense to try to make himself look good, I wouldn’t deal with the jerk anymore than I HAD TO either.

Bashing the Americans over Kyoto since our signing on, is hypocritical and disingenuous at best. We’ve increased greenhouse gas output about twice the percentage that the Americans did over the same time period. They’ve actually taken measures to do something, while the Liberal’s solution is to exhaust more hot air in Ottawa and write penalty cheques to 3rd world countries like China who don’t have to meet any emissions restrictions(and just burn the fuel we won’t be able to use). Martin’s cheap shots (and that is certainly not the only one) obviously don’t have be true, ethics don’t appear to factor into Liberal decisions, and the main stream media never seems question his verbal diarrhea.
Cheap cows is just one example of the damage inflicted, the cost being borne by the Canadians he claims to love. The more the Liberals damages American market relations, the more commodities we’ll have to ship on expensive ocean freighters with Bahamas flags.

It takes leadership to build bridges between countries, any idiot can knock them down.

[cowman]

farmers son: Without NAFTA we would have a situation where the Liberal government could put an export tax on our oil and gas to the detriment of Alberta? They could legislate that we would have to sell our resources at a cheaper price to eastern Canada than what we could get in the States? In other words the NEP? Thankfully NAFTA prevents them from doing this. Why should a Liberal government care one rip about what happens in Alberta...we don't vote for them? Probably also explains their less than robust attempt to get the border open?
I think you should remember that compared to some parts of the country you as an Alberta ag producer have quite a few advantages? A better CAIS deal, better crop insurance options, better calf set aside, better transition program for cattle, no provincial sale tax, cheaper income tax, $400 extra bucks in your pocket...and on and on? The money to pay for these goodies comes from the revenues generated by gas and oil? How many times has Saskatchewan told their producers they just can't afford the programs Alberta has?
We have these revenues because we have access to American markets guaranteed through NAFTA! The eastern Liberals can't shut down our markets for their benifit anymore? You should thank Brian Mulrooney everytime you get a provincial government check in the mailbox!
Lets not forget that it wasn't the USDA that dragged its feet on getting the border open? R-CALF has challenged the whole process through the courts? They have in fact delayed the process a lot and the USDA has no choice but to go through the legal hoops to get this done? That is just the legal situation down there.
In the big picture we'll do okay. The border will be open to cows this year hopefully and we'll come out of this in a strong position? I would think we will have better solutions in both countries to solve these sort of problems.

[farmers_son]

You ask “Have our commodity prices dropped more than the world price?” Yes and if you need an example obviously beef and grain have dropped in price more than the world price because of direct U.S. tariff and non tariff barriers on Canadian imports.

“The Americans quite correctly don’t purposely try to make themselves look bad internationally” Well maybe they do not do it on purpose but they end up looking bad just the same. I frankly do not think they care. I believe we were better off pre NAFTA when we had control over the single most influential and persuasive lever in world trade, our energy. Now it seems we have to rely on the Americans concerns over world opinion of American international policy to maintain equitable trade in Canadian ag commodities. Lets see…control over our energy resources, or world opinion of our American trading partners. You can figure it out for yourself which would have best keep the Americans trading fair and square.

[farmers_son]

Cowman: Your points are well made. I for one however would have preferred to get a fair price for my livestock than to be receiving CAIS and set aside money.

It is my opinion that the USDA absolutely dragged its feet on reopening the border. There was some very questionable dealings within the USDA regarding testing for BSE or non testing for BSE. R-Calf is a scapegoat. It clearly served U.S. interests to see the border closed to our live cattle and it serves U.S. interests to see the border closed to our cows and cow beef today. At some point the border being closed to our cattle stopped being about food safety and became protectionism. I think that point came quite a while back.

The actual date of the border opening is subject to a great deal of political maneuvering. The point I am trying to make is the border should have been open to our cows within weeks of the U.S. owning up to their own BSE situation last June if not before. However you are right to say the border will open at some point. The question remains should it have opened a lot sooner given our NAFTA relationship with the United States and would that border have opened a lot sooner if Canada had not relinquished control over its oil and gas reserves.

[FarmRanger]

Canadian grain prices follow the world price. Period. The fact that we can ship anything to the States keeps our freight down. Please, keep the BS out of grain.

Our cattle are being discriminated against by WORLD markets as well as the U.S.. Borders are opening, which is a good thing, but face it, BSE screwed things up for a while, and blaming the Americans is BS.

I get so sick of U.S. bashing, attributing all their foreign policy to oil acquisition with no reasonable arguments to back it up. Some whacko terrorists fly planes into buildings and any reaction by the U.S. is because of oil?? Free trade is to suck up Alberta oil?? Well I call BS!!

Cowman had it exactly right when he said that the Ottawa Liberals would be shutting down the Alberta economy to benefit central Canada if it wasn’t for NAFTA. I fear that Kyoto is just some backdoor attempt to do the same thing.

[farmers_son]

It is true that BSE lost us international markets to those countries that did not have BSE. Which leaves the question of why is the U.S. still blocking our live cattle and beef since they have acknowledged they have BSE too. Not to mention that the International Review Panel clearly told the Americans that BSE could not be viewed as a Canadian problem in isolation from themselves. The incidence of BSE is comparable in both countries and food safety requirements are harmonized and have been for decades. If NAFTA is working then why are we not shipping cows to the U.S. this very minute and why have we not been shipping cows to the U.S. for the last six months if not the last year?

Canadian primary ag producers are not wrong to expect that NAFTA should benefit them too and not just the oil industry. The longer it takes trade in live cattle and beef to normalize then the more foundation there is in arguments that NAFTA does not benefit the Canadian farmer. I acknowledge there is free and fair trade for oil producers. Where is the fair trade for cattle producers?

[FarmRanger]

Still don’t get it? Face it f_s, your beloved Liberals don’t give a rat’s rear end about you and your cows, otherwise they try to do something constructive in foreign relations with the U.S. Yes, good science isn’t prevailing yet, just as it didn’t a few years ago in the Canada Bombardier / Brazil BSE fiasco.

What if the shoe was on the other foot? If Ottawa had the choice to listen to a vocal Canadian lobby group or a nasty trash-talking self-serving neighboring government, who do you think would get the attention?

Exactly… and you’d be applauding them.

[farmers_son]

I would say that you don't get it yet. NAFTA provided the energy sectors on both sides of the border with the assurances that they could invest and have access to the U.S. market.

Canadian cattle producers thought they could do the same. Yet the border closed. NAFTA did not work. BSE was a crisis for NAFTA and exposed some its weaknesses. NAFTA was supposed to be a common and free trade pact but when push came to shove it was not all for one and one for all rather the U.S. left Canadian beef producers out in the cold to protect their own interests. NAFTA did not work for Canadian agriculture, it is a simple fact. Every day the border remains closed and barriers remain in place that drive down the price of our live cattle then that is another day that proves NAFTA does not work for agriculture.

[FarmRanger]

“Canadian cattle producers thought they could do the same.”
And they did, pre BSE.

“Yet the border closed. NAFTA did not work. BSE was a crisis for NAFTA and exposed some its weaknesses”
Where did you cut and paste this from? There weren’t provisions for BSE in NAFTA, so I guess we should scrap the whole thing?

“NAFTA did not work for Canadian agriculture, it is a simple fact.“
Not so simple, not a fact for the rest of agriculture. And even the BSE thing will get worked through, although a lot slower than if we hadn’t had the anti-American Liberals running things here.

“Every day the border remains closed and barriers remain in place that drive down the price of our live cattle then that is another day that proves NAFTA does not work for agriculture.”
Proves it, does it? For all of agriculture? Or is this one of those Liberal “A proof is a proof is a proof” things? All it proves is that the borders aren’t totally open to live cattle yet. Slagging the Americans for cheap political gain hasn’t brow beaten them into fast tracking the process? What a surprise!

[cowman]

Farmers son: I will concede the USA has not been helpful with some of their protectionist actions. They have flaunted the spirit of NAFTA as well as the actual rules. The softwood lumber dispute is the very worst?
However the USDA was prepared to move ahead faster but was delayed by R-CALF? The court challenge by R-CALF did slow down the process when they got Cebull to issue his injunction? There is a process in the USA that has to be gone through...that is their law? They can't fast track it because they have this group waiting on the court house steps to take them to task if they try?
My problem with Canada being able to retaliate is this: Canada is run by a power elite from the "golden triangle", and every decision of what is best for the country revolves around what is best for that area! So therefore we get trade policy, financial policy, social policy that benifits that area...and too bad for the hinterlands! NAFTA gave us some power to not be pawns, used and sacrificed, so the money keeps flowing into Toronto, Montreal, Ottawa?
NAFTA gave us the start to take back some of the power of self determination for our areas and to throw off our colonial masters down east? Every westerner should be thankful we now can control our destiny instead of being dictated to by a group of Liberal crooks.

[farmers_son]

Cowman: True. I see those comments as applying more to the oil patch however than to agriculture. It is difficult for someone on this side of the border to completely understand how the U.S. system works and to exactly what extent R-Calf was responsible for the delays in normalized trade resuming and to what extent the border being closed suits the U.S. administration. We should not forget either that the NCBA took some very protectionist positions although they did not go the court route like R-Calf.

The USDA presently has a published rule to allow Japanese beef into the U.S. Given that the incidence of BSE is much higher in Japan than in North America and that Japan did not have a feed ban in place until much later than both Canada and the U.S. the importation of beef in Japan certainly would take some wind out of R-Calf’s sails regarding their obsession with Canadian live cattle. As long as there is not a case of nvCJD that is claimed to have resulted from eating North American beef instead of British beef I see the BSE/CJD thing becoming less and less of an issue with consumers and with politicians. In today’s news I noted where 4 children have become ill after eating chicken and bird flu is suspected. The area is on a migratory bird path and birds have no respect for international borders.

Beyond beef, an issue I see with NAFTA is the U.S. signing FTA deals with other countries that the other NAFTA partners are not party to. Australia comes to mind and in 2006 the Central America Free Trade Agreement comes into effect. The U.S. enters into FTAs with these countries, their goods enter the U.S. and then trade within NAFTA. Officially the trade is between the U.S. and the other country but unofficially the other NAFTA partners share the benefits and the costs. Isn’t it a loss of sovereignty for Canada and Mexico when we see what is in effect the U.S. making our trade policy for us.

[FarmRanger]

I was just rereading my posts f_s, and they look a lot more hostile toward you than what they were intended to be. I think my disdain for federal Liberal antics got partially directed at you. I offer you my apology, as this does nothing to further rational discussion. I’m pretty sure everyone here values your reasoned input, even if we sometimes have different opinions.

With any agreement, don’t both sides trade away some sovereignty in order to gain some benefit from the other side? The other partners in NAFTA did the same. By sovereignty, do you mean the obligation to live be bound by your portion of the agreement, in order to reap the benefits of the other signatories fulfilling their obligations? So I guess both Mexico and the U.S. also lost some “sovereignty” too?