Almost all agricultural commodities are facing existential threats. War has triggered supply chain disruptions and is pushing up input costs. Trade within North America is suddenly uncertain. Protectionism is on the rise around the world, with Chinese tariffs on pork and Europe’s non-tariff trade barriers being two leading examples.

Pulling in the same direction

Agriculture should be taking a “whole plate” approach to addressing these issues and not trying to fix things one commodity at a time. If the industry can step out of commodity silos and regional perspectives, we can not only address these threats, but realize the vision of making Canada a global food powerhouse.

There are positive steps in this direction, but no standard practice. The Canadian Federation of Agriculture has brought together a coalition under the banner “Let’s Grow Canada” to support policies that will encourage investment in research and development. CropLife Canada’s “Grow Canada Strong” initiative has similar objectives. Farm Credit Canada has launched a “Let’s Grow Canada” website with the intent of showcasing the stories behind Canadian farmers and food producers.

Canada currently ranks last in ag research investment among the top seven countries of the Organisation for Economic Co-operation and Development. This must change if we are to weather the geopolitical storms the country is facing. Canada is at an inflection point where agriculture has an opportunity to present governments with a vision for attracting private sector research and development investment rather than just waiting for public sector solutions.

A united front on CUSMA

The review of our most important trade agreement, CUSMA, is underway. The implications for Canadian agriculture are massive. The aggressive shift in U.S. foreign and trade policies over the past years, coming from both political parties, clearly show us that the renegotiation will be difficult.

All of export agriculture needs to come together to develop a strategic plan on how we approach these negotiations. We need to be prepared to deliver real-time advice to our negotiating team that is consistent and united. We need to be prepared to tell our governments things they might not want to hear. We need to have systematic outreach to our partners in the U.S. commodity groups, who cannot afford to “go it alone” and hope for positive outcomes.

Developing this united front requires leaders who are willing to take some risks and step outside of the comfort zone that operating in commodity and regional silos offer.

Immigration an agriculture solution

Labour is another key policy issue that requires a common front if Canada is to become an international food powerhouse. Almost all sectors of agriculture face labour shortages. New Canadians are an integral part of meeting these needs. Immigration policies in Canada are being questioned due to housing and service shortages in our major cities, but what is needed in Toronto, Vancouver, or Montreal is not what is needed in rural Canada and at our processing plants.

Agriculture needs a unified voice to tell the story about how stable jobs for new Canadians in agriculture and food production are building communities across the country. Rather than short soundbites from political leaders, we need thoughtful immigration and labour policies targeting regional, and sectorial, needs.

The Canadian economy is facing undeniable threats due to geopolitical instability and rising protectionism. Agriculture and food production in Canada can be key in mitigating these threats. To seize the opportunity, we need to present governments with united and consistent policy solutions. Agriculture needs to lead the way rather than wait for others to present solutions to us.

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It is difficult, even impossible, to change farming practices aimed at improving environmental sustainability when experiencing negative margins. That idea applies to every kind of business.

Even though this seems obvious, it is not always recognized by governments. Governments’ most frequent policy tool is regulation. Imposing costly restrictions and penalties on businesses is often the default action.

That shouldn’t be the case.

Take the carbon tax, for example. The stated policy objective is to reduce carbon emissions by discouraging the use of fossil fuels. This may work when the use of fossil fuels is a discretionary expense, but heating a hog barn in winter is not discretionary.

For hog farmers, energy costs are the second-highest operating expense after feed. At a time when farmers’ margins are written in red ink, the carbon tax is making it more expensive to raise pigs.

This is antithetical to the policy objective of reducing greenhouse gas emissions, because farmers are more likely to take on innovative business practices when their operation is profitable. The carbon tax has become a barrier to adoption of innovation that could improve environmental sustainability.

The carbon tax is also making Canadian hog farmers less competitive internationally. Manitoba exports 90 per cent of the pigs raised in the province every year, either as live animals bound for the United States or as packages of pork exported around the world.

Canadian farmers are competing against producers in other countries who do not face the added cost of the carbon tax. The reduction in our competitiveness impacts jobs in both urban and rural areas, which in Manitoba equals 22,000 jobs across the province, and discourages investment in every link of the industry’s value chain.

To summarize, when applied to the energy requirements for raising pigs, the carbon tax does not achieve its policy goals and it inhibits the adoption of alternative business practices that may improve sustainability, all while decreasing the competitiveness of Canadian farmers in world markets.

The cost and ineffectiveness of the carbon tax when applied to farming operations was recognized by the member of parliament who introduced bill C-234, “An Act to Amend the Greenhouse Gas Pollution Pricing Act.” This legislation, which was supported by a majority of MPs, would remove the carbon tax from essential agricultural operations like heating a barn in winter.

Unfortunately, the Senate disagreed and amended the legislation, removing the reference to barn heating.

How much will this change cost Canadian farmers? The Parliamentary Budget Office estimates this cost to be $910 million annually.

There is a better way. Not all government policy objectives need to be met using a regulatory hammer, as is being done with the carbon tax. Instead, governments should be adopting an incentive-based approach. The alternative policy approach is one rooted in collaboration with farmers and accepting that financial sustainability for producers must be at the foundation of any strategy.

The collaborative approach may not appear to be the easy path for those who are charged with implementing government policy.

Canada is a large, diverse country and innovative practices that drive fiscal and environmental sustainability in Quebec or the Maritimes or British Columbia may not work on the Prairies. The approach must have enough flexibility to account for differences in climate, soils and ecosystems across Canada.

Provincial and local governments need to be engaged when determining which new practices and technology will work in a specific region.

While this may sound messy and complicated when compared to a one-size-fits-all regulation, in the long run, it is incentives and collaboration, instead of costly regulations, that will deliver meaningful results.

The federal carbon tax is set to increase again on April 1. If this happens, Canadian farmers will be a little less competitive internationally and see a little bit more red ink on the bottom line. It does not have to be this way.

– Cam Dahl is the general manager of the Manitoba Pork Council, which represents that province’s pork producers.

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The 2016 Canadian Wheat New Crop Missions sessions kicked off on Nov. 10 with a seminar for Canadian millers, the largest buyer of Canadian wheat. By the time the missions are over later this month, they will have reached customers in 17 countries in Asia, Latin America, Europe, North Africa, and West Africa.

Some of our competitors, like the U.S. Wheat Associates, also put on new crop seminars. But Canada is unique because we deliver the entire value chain including representation from farmers, exporters, Canadian Grain Commission, Canadian International Grains Institute (Cigi), and Cereals Canada.

When customers have a question on Canadian production, we have a farmer in the room to answer. When there are questions on supply or logistics, an exporter is there to provide the right information. Cigi and the grain commission provide unbiased technical information on the grading factors and the technical milling, baking, and pasta- and noodle-making properties. This collaborative effort demonstrates the commitment of Canada’s value chain to supporting our customers and providing them with the opportunity to optimize the value and performance of our wheat.

The missions are about a lot more than industry representatives talking to international buyers. We are also there to listen directly to our customers’ needs and concerns — bringing back these needs and concerns is one of the key objectives of the missions. This feedback allows us to adjust our grading and classification systems to give buyers what they want and to focus research goals on the traits and qualities that will get the highest return from the market. The recent changes to the wheat classification system are one example of adjustments made in Canada as a result of going abroad to listen directly to the needs of our customers.

Talking to our customers is important in years when everything is going well and high-quality wheat is overflowing. The conversations are even more important in years when things did not go as planned, like the 2016 growing season. Farmers know that the growing season was cooler and much wetter than normal and have experienced one of the most difficult harvests on record. Customers know this too and they want to know the quality effects of the curveballs thrown by Mother Nature.

The news delivered by the Canadian team is better than many customers are expecting. Over half of the Canada Western Red Spring crop is still in the top two grades. The Canadian team is able to assure customers that Canada has good quality to deliver.

But the news is not all good and we can’t hide these facts.

The cooler-than-normal wet summer experienced by much of the Prairies was an ideal environment for the growth of fusarium fungi. This year, fusarium has had minimal effect on the milling, baking, and pasta- and noodle-making properties of wheat and durum But fusarium also produces a mycotoxin called deoxynivalenol or DON, and there are strict limits on DON in most markets because of food safety concerns. Fusarium has especially impacted the record-level durum crop which has seen downgrades because of the fungus.

Because the Canadian team includes the entire value chain we are able to work with customers to help ensure they can access the Canadian quality they have come to expect while meeting their country’s grain safety regulations. The missions also allow Canadian farmers to highlight the strong management practices that allow them to consistently deliver high-quality grain that is sustainability produced. For example, this year’s missions feature presentations from producers who outline the sustainability of modern Canadian agriculture. Farmers demonstrate how their practices are reducing energy consumption, sequestering carbon, reducing erosion, and improving soil health. This is a good news story both here and abroad.

Telling the Canadian agricultural story gives context to our customers about who we are and demonstrates our collective commitment to upholding Canada’s reputation in the global market. Canada is known for quality, sustainability, and the investment of the value chain to ensure we are producing the best product, year after year.

Cam Dahl is president of Cereals Canada, Murdoch MacKay is a commissioner with the Canadian Grain Commission, and JoAnne Buth is CEO of the Canadian International Grains Institute. Information on the New Crop Missions, including presentation material and technical data, can be found at canadianwheat.ca.

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Trade missions like this one to China are not unique, and follow closely to recent trade missions to Korea and Japan. So why do both industry and governments put so much time and money into trade missions?

The quick answer to that question is “because they work.”

Agricultural trade is sophisticated, technical, and large. The flow of billions of dollars is guided by a myriad of conflicting government policies and regulations. Face-to-face visits between ministers, senior government officials, and industry have a way of cutting through this complexity. Despite the complicated nature of the business, success in agricultural trade often comes down to one-on-one relationships.

Governments are responsible for setting the rules for trade, and industry is responsible for sealing the deal and keeping the customer happy. These missions are a good example of how industry and government working together can get the whole job done.

What are some of the things we talked about when we were in China, Korea and Japan?

A key focus for Cereals Canada was the Canadian quality advantage.

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Canadian farmers and industry can consistently deliver a high-quality product that processes the same way every time.

I remember growing up when my mom was baking bread and would say, “This batch of flour is just not right” — and the resulting bread was not quite right either. The same concept holds true for large international customers. They want their bread, noodles, or other products to be the same every time it comes out of the oven. The consistency of Canadian grains helps them achieve that goal.

Consistent high quality product has always been important for key Asian markets like Japan and is becoming more important to growing markets like China. As incomes grow across this region, people are demanding better and more consistent food products. Canadian farmers, exporters and crop development companies stand ready to meet this growing demand for quality. This is what gives Canadian cereal grains their competitive advantage.

Our customers also talked about another Canadian advantage — clean air, clean water and clean land. Canadian agriculture’s strong reputation for delivering safe food must be guarded by everyone in the industry.

How can individual farmers protect Canada’s reputation for safe food?

There are many examples, but perhaps the most important is rigidly following the labels when applying pesticides and seed treatments. Do you think that bit of treated seed in the back of the truck won’t do any harm? Or those few days of pre-harvest interval won’t make a difference?

Think again.

Consider the damage that could be done to Canada’s reputation if those few seeds push a shipment over an international maximum residue limit. And because testing is done at parts per trillion, those few seeds might just be the difference between a shipment being accepted and one that is rejected.

Food-safety concerns and environmental reputation are growing issues in international markets. As a trading nation we must protect ourselves against countries that use “safety” as an excuse to block trade. We do this by fighting for trading rules that are based on strong science.

Promoting sound scientific rules for food safety and environmental sustainability is another key goal of trade missions like the recent missions to Asia. Canada is using every opportunity to promote science-based trade and helping to build the scientific capacity of our trading partners.

Canada already has a strong reputation for high-value products in the international marketplace. By working together, producers, industry, and government can build on the Canadian brand and deliver long-term profit for everyone involved. That is our ultimate goal.

The post Why go on trade missions? appeared first on Alberta Farmer Express.

In some ways, it makes me nostalgic for the good old days when our market access efforts primarily consisted of the cry: “Tear down that tariff wall.” It is not that simple anymore.

Mandatory country-of-origin labelling (COOL) is one example of a non-tariff barrier that is costing Manitoba’s beef industry hundreds of millions of dollars. COOL became law in the U.S. in 2002.

What is COOL? Simply speaking, COOL requires all meat sold in the U.S. to carry a label indicating the country from which the product originated.

American politicians argue that the law is necessary to help inform U.S. consumers about where their meat comes from. But market research indicates that those consumers place very little value on the information provided by the new labels. Basically, consumers care about the information only if it does not cost them anything to get it.

But while the price at U.S. meat counters may not be any different, the cost to the Canadian beef industry has been huge. It is estimated that COOL costs the Canadian beef industry about $625 million each and every year. COOL hits Canada’s pork producers equally hard.

Canada and Mexico have always objected to COOL because it unfairly discriminates against beef exported into the U.S. The law requires segregation of animals that have been imported from another country. This has significantly increased the cost of processing Canadian livestock and many U.S. plants have cut back on Canadian purchases, or cut them out altogether.

Canada and Mexico have taken the U.S. to the World Trade Organization (WTO), and convincingly won both the initial case and the appeal launched by the Americans. The WTO ordered the U.S. to end its unfair discrimination by May 23, 2013. That is not going to happen. Earlier this month, the U.S. agriculture secretary proposed regulatory changes that he claims will address the WTO’s concerns. In fact, the proposed changes will make things worse.

Additional labelling requirements will increase discrimination against Canada and Mexico. Instead of decreasing the regulatory burden, the proposals will increase the costs of compliance. In fact, it is my view that not only do these proposals fail to comply with the existing WTO ruling, but they also violate additional trade provisions.

You might think that U.S. beef and pork producers are 110 per cent behind their government on COOL, but they are not. You see, free trade is good for both sides of the border. The vast majority of U.S. producers and processors support removing COOL provisions because the regulations are hurting the U.S. industry. It is estimated that the new rules proposed in the U.S. will cost 9,000 American jobs. This is a case of a lose-lose situation.

This fight is not over. If the U.S. proceeds down the current path, Canada will return to the WTO. Ultimately, the WTO may grant Canada and Mexico the right to impose tariffs on U.S. goods to compensate us for the cost of COOL. I hope it does not come to this but given the losses to our livestock sectors, this is not something our governments will back away from.

Unfortunately, in the short term the legal process will continue. It is likely that there will be six to eight months of additional legal review at the WTO (making some trade lawyers a lot more money) before a conclusion is reached.

What lesson can livestock producers take from the COOL battle? The simple answer is that trade is more complicated than it used to be. COOL is just one example of non-tariff barriers to export access.

Some countries do not like the supplements that are commonly used in North American meat production. Some countries do not like the extra food safety precautions in place in Canadian plants. Our approaches are science based and an improvement of food safety. But because they have not been approved by the EU’s own internal bureaucracy, they do not accept them. I am certain that there are bureaucrats around the world who are currently trying to invent barriers based on environmental factors or their perception of animal welfare.

Manitoba’s beef producers, and our province as a whole, benefit significantly from beef trade. Over half of what we produce leaves the country. We must continue to aggressively pursue new opportunities on the international market. But we need to keep in mind that trade will be complicated.

New barriers will appear, often when least expected. We need to be ready to deal with these issues as they come up. But we also need to be proactively addressing the problem. Governments can do their part by building better dispute resolution processes, which is anticipated in the Canada-EU trade deal.

Producers are also going to be asked to take steps if they want to continue to access international markets. Today some producers will say that they find these measures, like traceability, costly and of little benefit.

But more and more of our customers are telling us that they will only purchase our products if we can prove how our animals were raised. This is increasingly becoming the price of doing business.

The post Country-of-origin labelling: The fight goes on appeared first on Alberta Farmer Express.

One just has to look at a few headlines to understand why farmers may feel this way. Animal rights groups are focused on agriculture and they are calling on the public to support their efforts. Often our response has been to be dismissive of the concerns raised. But animal agriculture needs to take a step back from the traditional defensive responses to these issues.

Activist groups like to portray our producers as heartless exploiters of their animals. But that is simply not the case. All of the farmers I know care very deeply about the welfare of the livestock under their care. Producers go to extraordinary measures, sometimes at significant personal sacrifice, to protect the health of their animals.

Activists do have it wrong, but that is not a reason to dismiss, out of hand, concerns from civil society. Consumers in Canada and throughout our key international markets are demanding to know more about their food. Where does that steak come from? Who produced it? How was it raised?

Governments are responding to these questions. After all, the people asking are the same ones who elect politicians to office. If we, agricultural producers, don’t answer these questions the only people left to provide information are the activists.

Governments are not the only ones who are paying attention to the question “where does my food come from?” Our customers are paying attention as well. Large purchasers like McDonald’s and Wal-Mart are developing contracts that specify how the meat they sell must be produced. Our customers are not developing these codes because it makes them feel good, they are taking these steps in response to consumer demand.

New code of practice

Producers should take this trend seriously. We need to tell our story to urban Canadians, who are mostly divorced from the realities of where their food comes from. Producers need to make a much greater effort to demonstrate the high standards of care under which our animals are raised. Our success at accomplishing this goal will determine if the words “animal welfare” will be a nemesis that drags down our industry, or an opportunity to differentiate Canadian products in world markets and enhance our bottom lines.

The National Farm Animal Care Council (NFAC) is in the process of revising the code of practice for beef production. NFAC includes representatives from producer groups (e.g. Canadian Cattlemen’s Association) the federal government, provincial governments and civil society through the humane society. This new code of practice will likely be open for public discussion by the end of this summer or early fall.

Similarly, the Canadian Food Inspection Agency (CFIA) has launched a review of the regulations for the transport of animals. In other words, what regulations need to be in place to ensure animals arrive at their destination healthy?

These processes should be viewed as an opportunity for, not an impediment to, our industry. If the NFAC and the CFIA do their jobs, beef producers will have a clear way of proving to society what we already know — we care about the welfare of our animals.

It is critical that our industry is open to conversations with the public on animal welfare issues. When voters don’t understand agriculture, the people they elect don’t understand agriculture issues.

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