Archives

Canada and U.S. industry officials square off on pork trade issue

Canadian hog producers won't likely know until at least mid-April which argument the International Trade Commission (ITC) sides with as it considers claims that Canadian farm subsidies are causing injury to the U.S. hog industry, a long-standing industry conference was told here this week.

Representatives of both the U.S. and Canadian pork industries, stated their clear, but opposing viewpoints on the countervailing duty issue as they addressed more than 700 producers and industry representatives attending the 32nd annual Banff Pork Seminar.

Nick Giordano, International Trade Counsel with the National Pork Producers Council (NPPC), based in Washington, DC, and Martin Rice, Executive Director of the Canadian Pork Council (CPC), headquartered in Ottawa presented their positions on the trade action that was launched by the NPPC in March 2004.

The ITC is considering a NPPC petition calling for countervailing and antidumping duties on Canadian pork to retaliate against what it alleges are unfair subsidies paid to Canadian producers. The Canadian Pork Council maintains that the expansion of Canadian pig exports has been driven by unprecedented U.S. demand and specialization within an integrated North American hog market.

Although the U.S. Department of Commerce (DOC) has said in two separate rulings within the past five years it saw no evidence of unfair subsidies or injuries to the U.S. pork industry, the final determination by the DOC on the existence of countervailable subsidies will be made by March 7. The ITC will make its ruling on whether imports are causing, or threatening to cause, injury by April 18.

"Expansion of the Canadian hog industry in two recent years when the market cycle was down can only lead U.S. producers to conclude Canadian farmers are being heavily subsidized with programs that provide a guaranteed income regardless of economic conditions," Giordano told the conference.

He said at a time when the U.S. hog industry was retracting, the Canadian industry was in expansion mode. He pointed specifically to the Canadian Agriculture Stabilization (CAIS) program and Quebec's ASRA as two programs providing producers guaranteed incomes.

"The Canadian income stabilization subsidies create substantial incentives for Canadian hog farmers to increase their herd size and eliminate any risk involved in doing so," said Giordano. "U.S. farmers must respond to normal market conditions and must absorb risk. If market conditions deteriorate in Canada, the government increases its subsidies to Canadian hog farmers. These farmers do not respond to market signals and continue to invest and continue to grow their herd size."

The Canadian pork industry is just as vulnerable and responsive to market forces as the U.S. industry, Martin Rice pointed out.

"U.S. and Canadian hog industries receive comparable levels of public support," he told the conference. "The average US government payments to hog farms was equivalent to $CDN 38,000 per farm in 2000 and $CDN 47,000 in 2001. But, the public programs play a very modest role in the hog industries in both the United States and Canada."

While Canada has become a leading world exporter of pork and a major supplier of feeder hogs to the United States, he said it only made economic sense to ship the hogs to where the buyer demand is greatest.

"Canada and the U.S. operate in the same integrated North American hog market," he said. "We're all living through the same profit and loss circumstances. Canadian swine producers and exporters have no incentive to sell below fair market value (dumping)."

Exchange rate developments over the last two years have changed the economics of hog production to the U.S.'s favor. At the same time, Canadian production is levelling off, - in some cases declining - in response to economic changes, he said.

The Banff Pork Seminar is co-ordinated by the Department of Agricultural, Food and Nutritional Sciences, University of Alberta, in co-operation with Alberta Pork, Alberta Agriculture, Food and Rural Development and other pork industry representatives.

© 2005 Meristem Information Resources Ltd.
Meristem® is a registered trademark of Meristem Information Resources Ltd. All rights reserved.
Legal Disclaimer