Americans do it again to Canadian farmers

MACSPECTRUM

Wheat board slams U.S. duties

By*ALLISON LAWLOR
Globe and Mail Update with Canadian Press

The Canadian Wheat Board quickly criticized the new punitive duties the U.S. government slapped on imports of Canadian wheat Tuesday, saying they will hurt Western Canadian wheat farmers and will be an impediment to trade.

The U.S. decision comes after a trade investigation into allegations that grain shipments to the United States are unfairly subsidized by the Canadian Wheat Board.

The U.S. Commerce Department announced it had imposed preliminary countervailing duties averaging 3.94 per cent on Canadian shipments of durum and hard red spring wheat. Durum is used in making pasta, while spring wheat is baked into bread, rolls and bagels.

The preliminary duties — at 3.94 per cent — were far below than what U.S. wheat farmers had requested.

"We are not happy with this decision because we do not believe that our wheat exports are unfairly subsidized under any rule of international trade," Ken Ritter, chair of the Canadian Wheat Board, told reporters during a teleconference on Tuesday.

"However, the tariffs that have been imposed are significantly lower than the levels requested by the North Dakota Wheat Commission which wanted 14.4 per cent on durum and 25.5 per cent on spring wheat. This only points to the weakness of the North Dakota case."

The Winnipeg-based wheat board, which has a monopoly on selling western Canadian wheat and barley to the rest of the world, has been investigated by the U.S. nine previous times. Each time, the investigation has failed to prove unfair trade practices by the Crown corporation.

"This trade challenge should never have been launched," Mr. Ritter said, and called on the North Dakota Wheat Commission to stop wasting the time and money of farmers on both sides of the border and withdraw the case immediately.

"This whole trade challenge reflects nothing more than American frustration at the success of our wheat in their market. They are also intolerant of any marketing system that is different from their own."

The tariffs, which are expected to be in place by next week, will affect Western Canadian wheat producers and impede trade, said Adrian Measner, the wheat board's president and chief executive officer.

"Four per cent is still an impediment to trade," Mr. Measner told the conference call.

In a typical year $400-million worth of wheat and durum is sold to the United States which represents about 10 per cent of the wheat board's revenue.

"The U.S. a premium market to us worth about $47-million a year," Mr. Measner said.

Of the 18 million to 20 million tonnes of wheat that Canadian farmers produce in an average year, Canada exports about 1.6 million tonnes of spring and durum wheat into the U.S. annually, worth about $300-million in the year ending last May 31.

The drought last year in Western Canada affected yields, Mr. Measner said.

Specifically, Canada sold 1.55 million tonnes of hard red spring wheat in the United States, valued at nearly $219-million. Durum wheat shipments for the same period were 523,831 tonnes, worth $85.7-million.

The U.S. Commerce Department is scheduled to decide in May whether to impose preliminary anti-dumping duties on the wheat imports.

Under trade law, countervail duties are meant to offset the impact of illegal subsidies. Anti-dumping duties are aimed at reversing the impact of so-called dumping, which refers to the selling of a product in an export market at below cost.

Tuesday's countervail wheat duties come about a year after the U.S. Commerce Department imposed punishing 27 per cent duties on Canada's softwood lumber exports, a move that has cost the Canadian industry hundreds of millions of dollars and wiped out thousands of jobs.

The U.S. government began a formal investigation into Canadian wheat shipments last fall after the North Dakota Wheat Commission petitioned the Commerce Department and the International Trade Commission to look into the Canadian Wheat Board.

The North Dakota wheat commission was acting on a report by U.S. trade representative Robert Zoellick, which said the Canadian wheat industry is subsidized and puts U.S. wheat exporters at a disadvantage.

A spokesman from Agriculture Minister Lyle Vanclief's office called the new punative duties disappointing and said the government is reviewing the details of Tuesday's announcement.

Chealion

The United States is a little paranoid, no? And why would they export wheat to us?
Our Farmers are doing horrible as it is with droughts, and making less money then ever known before, is the United States subvertly trying to tear our country apart?

__________________
Chealion the one, the only, and pleased to be at your service. =)
Forum Rules | Classifieds Rules
I still remember Macnutt.

gordguide

Every bag of flour requires some amount of Duram in order to create good properties for bread and baking. This is the kind of wheat we grow in Canada, but it won't grow anywhere else because growing conditons don't exist elsewhere. Canadian wheat is also required to make pasta, anywhere in the world. In both cases the remaining bulk of the flour can be made from a variety of grades. Canada has always exported the required volume of this kind of wheat to the US.

In the 80's North Dakota began growing some Duram, mostly due to changing weather patterns (ie closer to draught conditions). They don't have nearly enough in production to satisfy the needs of the US mills.

All of a sudden, the Wheat Board is the enemy, because if Canadian Wheat is made more expensive then the Dakota farmers can recieve a higher price for their production of this specialised crop.

Previously, complaints about the Wheat Board were based on competition with the US (the world's largest grain exporter) in foreign markets, and there was little that could be done about it. The major problem was that the Wheat Board doesn't publish the prices it sells wheat for, so it made it more difficult to undercut us; the US had to guess about our prices when negotiating a contract. In the past the US subsidized exports (gave away free wheat the federal government bought from US farmers) to effectively drive down the price in international markets, but of course that's expensive.

All the grain companies in the US are privately held (ie they are family owned and don't have to provide public doucments about sales, profits, etc) but they share this information with the US government.

The US knows that it is unlikely a family owned grain company would somehow spring up in Canada, so if they can demolish the Wheat Board then our prices would be public (ie a grain company could be formed but it would be traded on a stock exchange and therefore must provide public details of it's operations) and their prices would still be secret.

Make sense now?

__________________
"Being an artist doesn't take much, just everything you got. Which means, of course, that as the process is giving you life, it is also bringing you closer to death. But it's no big deal. They are one and the same and cannot be avoided or denied. So when I totally embrace this process, this life/death, and abandon myself to it, I transcend all this gibberish and hang out with the gods. It seems to me that that is worth the price of admission." —Hubert Selby, Jr.