Deal to open a world of opportunity

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This article was published 24/01/2018 (2831 days ago), so information in it may no longer be current.

It could be argued that when it comes to the Manitoba economy, international trade deals have the most impact on the agricultural industries.

While exports to Asia represent only about 20 per cent of the province’s total exports, Canada’s inclusion in the new Trans-Pacific Partnership (TPP) — with the exclusion of the U.S. — creates substantial opportunities for Manitoba agricultural producers, especially in the hog and pork sectors.

At Wednesday’s annual meeting of Keystone Agricultural Producers (KAP), Dermot Hayes, a U.S. trade economist and consultant to the U.S. National Pork Producers Council, did not mince words about the advantages Manitoba producers will now have.

“Canada will have preferential access,” he said. “At some point, the U.S. will have to come to its senses.”

Manitoba Agricultural Minister Ralph Eichler said the signing of the TPP deal “is an opportunity to get in on the ground floor. This will open the door for more opportunities. We’re not concerned that the U.S. is not in. For us, it means opportunities for our marketplace.”

The chance to sell more pork products into Japan and Vietnam, for instance, comes at a time when many stars are properly aligned in the agricultural sector in the province.

KAP president Dan Mazier said last year’s strong crop added about $1 billion to the Manitoba economy, with yields averaging about $100 per acre better than average.

With the moratorium on hog barn expansion lifted and the implementation of new building technologies, conditions are right for those producers to continue to expand.

There are also important changes to land-use regulations currently being considered — most notably, changes in the regulations on licensing small drainage projects — making it possible for farmers to earn rental income on unproductive acreage that can be deployed for projects that benefit the broader community.

Mazier said the current provincial government’s enthusiasm when it comes to lessening the regulatory environment has helped create an atmosphere of optimism in the industry.

“There were a lot of old laws, a lot of old things that locked producers into a pattern,” he said. “The moratorium on hog producers was one of those things… we couldn’t even modernize.”

He said now that it’s been removed, there are changes to building codes for hog barns and the implementation of modern materials used in barns that make them safer not only for the hogs and for employees, but also better for the environment.

“We had to address those types of legislation,” he said. “This government is doing a wonderful job. They are even asking what else do we need to be working on.”

KAP brought in Hayes, an economist at Iowa State University, to speak at Wednesday’s event (last year, he also spoke at a Manitoba Pork Producers event). He is very critical of the current protectionist stance on trade being promoted by the Trump administration. For instance, he believes a disruption to NAFTA will almost certainly mean a downsizing of the agricultural infrastructure in Iowa that was built to handle substantial exports to Mexico.

He is also a keen observer of what is happening in China and is convinced that country will need to increase its imports of grains and meat protein, especially pork.

Although China is not part of the 11-country TPP — which includes Canada, Japan, Australia and New Zealand — he said if Canada were to sign a trade deal with China, “it would be unbelievable for Canada”.

“If you could get rid of duties going into China, especially if other countries don’t have that benefit, it could revolutionize Manitoba,” he said. “I’ve seen it in Australia and New Zealand. When China starts to buy your produce, you become prosperous.”

martin.cash@freepress.mb.ca