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Farm support not needed in global market: think-tank

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OTTAWA -- Canada's food industry would do fine -- better in fact -- if supply management and other government supports were eliminated, a new report from the Conference Board of Canada argues.

While it's not the first time the Ottawa-based think-tank has called for market liberalization of the protected agricultural sector, the report calls on producers to look to the demand explosion in emerging markets for growth and not simply protect their domestic turf.

It notes the major source of growth in the world's food demand is in countries that are already net food importers.

"The Canadian food industry's prospects are better than ever: The sky is the limit," the report issued Monday states. "We know, for instance, that most of the two billion additional people that the world will add between now and 2050 will be in developing countries.

"These countries are getting richer, increasing their average calorie consumption and relying more on meat and less on starches for their dietary needs."

Canada is being asked by trading partners to dismantle supply-management systems that protect producers of eggs, milk and poultry. Eliminating or reforming the system is a key demand of the European Union in trade talks.

The status quo is sustainable, the think-tank says, but the industry could do better by deregulating and competing for the growing global market.

Consumers and governments provided about $82 billion in total support for the agricultural sector since 2003, with almost $21 billion going to milk producers, the Conference Board calculates.

The think-tank says government attention and money would be better spent addressing well-known and serious problems in the food industry, including food safety, diet-related chronic disease and the environment.

The Conference Board makes six recommendations to help grow the country's $155-billion food economy. These include reforming support programs, improving farm performance by removing barriers to getting bigger and more efficient, expanding sources of capital investment and adopting approaches used by other commodity-based industries to expand internationally.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition December 4, 2012 B5

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