Geopolitics push Canadian farmers into high-stakes game

Opinion

Hey there, time traveller!
This article was published 21/09/2024 (389 days ago), so information in it may no longer be current.

If farmers weren’t already down in the dumps because of this week’s deluge on their unfinished harvest, a policy paper released by two well-respected agricultural economists might send them there.

Just as the September “supermoon” rose over those flooded fields across Manitoba this week, Al Mussell and Ted Bilyea with the Ontario-based Agri-Food Economic Systems presented policymakers with what could be categorized as a super “moonshot” challenge.

They warn China’s pursuit of anti-dumping sanctions against Canadian canola is a sign of more to come as agricultural commodities get caught up in the geopolitics now compromising rules-based trading systems.

Food has become the weapon of choice for protesting another country’s behaviour in the marketplace, even if it has nothing to do with the alleged transgression. “There is a pattern of agri-food becoming the go-to target for trade retaliation and for political tensions spilling over into agri-food trade,” they write.

While China’s investigation into whether Canada is unfairly subsidizing its canola seed exports wasn’t directly linked to Canada’s decision to impose prohibitive tariffs on imported Chinese electric vehicles, few believe it was coincidental.

Here’s where the moonshot comes in.

“Canada needs a rapid pivot to anticipate a future of adverse effects from large countries’ industrial policies and a less friendly international trade environment not readily contained by the rules-based system. But Canada still needs the rules-based system that shields smaller economies from geopolitical intimidation,” Mussell said.

“We need a mixed strategy, with our own industrial policies, new trade alliances, but also supporting the system of trade rules we have now. Canadian agri-food policy needs to align with this — it represents a big shift.”

In other words, countries with smaller populations such as Canada, whose economies rely heavily on exports, can’t afford to abandon the pursuit of rules-based trading if they are to thrive in the global marketplace. But they also need to start planning for those systems to fail.

That’s a tall order. I’m still hung up on the phrase “needs a rapid pivot,” which is laughable (in a sad sort of way) when used in the context of Canada’s agricultural and trade strategy development.

Canadian agriculture is a shared responsibility; most policy pivots require co-operation from the federal, provincial and territorial governments. Even in the best of times, it can take decades to develop policy that fundamentally changes the industry’s course.

And these are not the best of times. Canada’s largest trading partner is amid a presidential election campaign which will set the tone for diplomatic relations for the next four years. U.S. trade policy has shifted towards bilateral plays and towards investments designed to support domestic priorities, such as protecting workers, addressing climate change and reducing its reliance on exports.

Canada’s minority Liberal government could lose a non-confidence vote at any time, throwing this country into election mode. If history is any indication, agriculture ranks low on politicians’ priority list for winning the hearts and votes of Canadians.

However, just because it’s a long shot, doesn’t mean pursuing a more diversified strategy is an unworthy goal.

The stakes are high for Canadian farmers. “Canada is one of only a handful of countries heavily leveraged toward agri-food net export and operating at significant scale,” the paper says.

That makes our producers vulnerable to lost returns if their market access is disrupted. These actions also tend to artificially influence competitiveness. Plus, losing access to export markets has the effect of “softening up” Canadian agribusiness companies, making them ripe for foreign takeovers. Recent examples of that phenomenon abound.

So, what is Canada to do?

Align more closely with the U.S.? That food market is relatively mature compared to developing economies, so demand growth would stagnate.

The economists stopped short of offering solutions.

However, it leaves me wondering whether the rising tide against immigration in this country needs a reality check. Issues such as housing, after all, are surmountable challenges.

Canadian farmers are good at producing commodities that feed people. Our future food security, as well as our national security, benefits from feeding those people closer to home.

Laura Rance is executive editor, production content lead for Glacier FarmMedia. She can be reached at lrance@farmmedia.com