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article - why canada doesnt grow more food

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beethoven

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http://www.ottawacitizen.com/business/Gardner+Canada+doesn+grow+more+food/4921534/story.html

Dan Gardner: Why Canada doesn’t grow more food


By Dan Gardner, The Ottawa Citizen June 10, 2011

With rare exceptions, discussions of food policy in Canada are limited to the joys of eating organic and how hard-pressed farmers need more help from the government.

What you never hear is this: As a result of rising population and wealth, global demand for food is soaring and the world faces a food crisis unlike anything seen since the 1970s if food production does not grow rapidly. Canada is among the very few nations with the capacity to dramatically boost production. But we’re not. In fact, Canadian agriculture is stagnant. And politicians will not even discuss how we can change that.

“There is a disconnect,” says Larry Martin, an agricultural economist at the George Morris Centre, an independent think tank devoted to agricultural policy.

“Canada has the third-largest endowment of arable land per capita in the world, after Australia and Kazakhstan,” notes Martin. “We have, depending on the set of numbers you look at, nine per cent of the renewable fresh water supply in the world.” Put those two facts together, add one of the greatest commodity booms in history, and money should be pouring into Canadian food production.

But Martin found something startling when he compared the ratio of investment in agriculture with the depreciation of existing assets. Over the last decade, as China boomed and food prices soared, there was no rush to invest. “The ratio in Canada in eight of the last 10 years is less than one. So there’s less new investment coming into the food industry than there is depreciation.”

In the United States, by comparison, the worst year in the last 10 saw 40 per cent more investment than depreciation.

“It’s just astonishing when you see these numbers. We think of ourselves as a great wheat exporter but our share of the wheat market is declining. During the ’90s and early 2000s, we had between 20 and 25 per cent market share and it’s gone down steadily to 15 in the last few years.”

The causes of the stagnation are many, Martin says. A big one is a regulatory system that stifles innovation. Martin recalls testifying at a parliamentary committee alongside a wheat breeder from the University of Saskatchewan. “He went through a whole list of wheat varieties that he came up with that are much higher yielding than the wheat varieties in Canada. He couldn’t get them registered in Canada but they got registered in Montana and we now have to compete with them.”

Then there’s “supply management,” the 1970s-era policy which effectively turned dairy and poultry production into an industry-controlled cartel protected by import tariffs. It’s good for existing dairy and poultry producers because it keeps prices high and stable. And it has made the lucky people with production quotas a lot of money: the quota for a single dairy cow can go for $30,000 and estimates of the total value of production quotas range between $30 billion and $50 billion.

So what’s the catch? Canadian consumers pay far more for dairy and poultry products than they would in a free market. Supply management also makes it difficult or impossible for producers to achieve the economies of scale needed to drive costs down. Perhaps worst of all, it impedes trade liberalization.

“Our government will also continue to open new markets for Canadian business in order to create good jobs for Canadian workers,” the Conservatives promised in the Speech from the Throne. That’s good. Canada is a trading nation and the steady expansion of free trade is very much in our interest. But then came this: “In all international forums and bilateral negotiations, our government will continue to stand up for Canadian farmers and industries by defending supply management.”

Free trade talks are about concessions: “You get rid of your trade barriers and market-distorting policies and we’ll get rid of ours.” By declaring supply management a sacred cow, the government of Canada says to the people on the other side of the table, “you get rid of your trade barriers and market-distorting policies but we’ll keep ours.” It’s not hard to guess what that does to negotiations.

Of course Canada isn’t the only country with agriculture policies stuck in the 1970s. Far from it. According to the Organization for Economic Cooperation and Development, the percentage of gross farm receipts that can be chalked up to government intervention — either by direct subsidy or market restriction — is 13 per cent in Canada. In the European Union, it’s 24.9 per cent. In Japan, it’s 47.8 per cent. (The United States has some appalling agriculture policies but its farmers only owe 6.8 per cent of their income to government.) Economists loathe these policies because they inflict all sorts of collateral damage and make food production much less efficient than it could be.

Consider supply management. Who pays? Consumers who often don’t know they are. Who benefits? A small number of farmers who are highly organized and concentrated in certain ridings. Politicians who swear to defend the status quo get the gratitude of the former without incurring the wrath of the latter — while any politician who dares to even consider change gets no gratitude and lots of wrath.

“Look at us,” Larry Martin suggests, “and look at New Zealand, sitting out there in the middle of the ocean, not close to anything.” In the world of food, New Zealand is a “superpower.” And yet, thanks to daring reforms in the 1980s, New Zealand’s farmers owe almost none of their income to government support. “You think, ‘if we could do even half of what they have done wouldn’t we be in great shape?’”

Good for us. Good for the world. If only the politicians would talk about it.

Dan Gardner’s column appears Wednesday and Friday.

E-mail:[email protected]

© Copyright (c) The Ottawa Citizen
 

burnt

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Whenever someone begins to attack supply management, it immediately becomes clear that they don't have a clue what they are talking about.

It is as if they believe that all farmers should be willing to work for whatever loose change the consumer has left to throw at them in exchange for supplying their food.

The truth is that if the primary food producers of a country are kept in want, then they are also kept powerless.

The supply managed industries of Canada are not without some problems, but contrary to what Martin implies, they are not being overpaid for their products.

To make comparisons to dairy or poultry product costs from other countries is totally ignoring some salient facts - cost of production, social costs, etc.

Would Martin feel better if Canadian milk was 20% cheaper and the dairy industry would need constant bailouts like it does in the U.S.? Or if poultry production in Canada was completely vertically integrated like in the U.S.?

Give your head a shake.

:mad:
 

Tex

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burnt said:
Whenever someone begins to attack supply management, it immediately becomes clear that they don't have a clue what they are talking about.

It is as if they believe that all farmers should be willing to work for whatever loose change the consumer has left to throw at them in exchange for supplying their food.

The truth is that if the primary food producers of a country are kept in want, then they are also kept powerless.

The supply managed industries of Canada are not without some problems, but contrary to what Martin implies, they are not being overpaid for their products.

To make comparisons to dairy or poultry product costs from other countries is totally ignoring some salient facts - cost of production, social costs, etc.

Would Martin feel better if Canadian milk was 20% cheaper and the dairy industry would need constant bailouts like it does in the U.S.? Or if poultry production in Canada was completely vertically integrated like in the U.S.?

Give your head a shake.

:mad:

I would have to totally agree with you, burnt. This is a globalist argument where the globalists don't care much about the actual economy, but where they can buy and sell the cheapest they can find and make the most money. There are so many costs to these "market" approaches that are not ever seen by anyone but the producers.

We won't even enforce the rules on the books against price discrimination against suppliers when it comes to these global powerful companies. It undermines the real economy.

Has anyone ever heard of dumping on the on the world market? It is done all the time and that is the "global" price.

Tex
 

Kato

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Canada is among the very few nations with the capacity to dramatically boost production. But we’re not. In fact, Canadian agriculture is stagnant. And politicians will not even discuss how we can change that.

And why would it be stagnant? Perhaps because the incentive to invest in agriculture has been tossed in the trash heap like the thousands of cattle producers who were left to sink or swim in 2003? There is not much faith in the future when one looks at the events of the recent past.

What about the grain producers who have seen a world class crop variety research infrastructure that guaranteed access to the newest and best grain varieties with no license agreements or fees shut down in the name of "free enterprise", which is another name for multinational control over the food supply.

Or the fact that the so called Competition Bureau is nothing but a rubber stamp for corporate concentration?

There are lots of reasons why investment is stagnant, and I'd say supply management lags a long way behind them.
 

Aaron

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Kato said:
Canada is among the very few nations with the capacity to dramatically boost production. But we’re not. In fact, Canadian agriculture is stagnant. And politicians will not even discuss how we can change that.

And why would it be stagnant? Perhaps because the incentive to invest in agriculture has been tossed in the trash heap like the thousands of cattle producers who were left to sink or swim in 2003? There is not much faith in the future when one looks at the events of the recent past.

What about the grain producers who have seen a world class crop variety research infrastructure that guaranteed access to the newest and best grain varieties with no license agreements or fees shut down in the name of "free enterprise", which is another name for multinational control over the food supply.

Or the fact that the so called Competition Bureau is nothing but a rubber stamp for corporate concentration?

There are lots of reasons why investment is stagnant, and I'd say supply management lags a long way behind them.

Exactly. May 20, 2003. One generation's equity was lost and the next generation gave up all together. You either cross your fingers on the weather or the markets, or both. Every day is different and you don't get a guarantee of the same rate of pay each day, let alone a bonus for good work.

But again, it's a hippy-filled article about looking after the rest of the planet and making sure everyone has food. Crying buckets of tears for people and governments who can't afford our food in the first place, because they are trying to figure out where they can make the next quick buck and who they have to kill to get it.

If the author thinks everyone in the third world needs our food, I say they would be much better suited with some sexual education and a lifetime supply of condoms. If they can't figure out the reasoning behind that, they don't need our handouts.
 

andybob

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The powers that be in their infinite wisdom are insisting that MORE land in the UK be taken out of arable production, and be put into environmental projects!!
Aaron, there has just been an online discussion involving several of the biggest aid charities droning on about our responsibilities to the "poor nations", my comments about population controll went down like a lead baloon, and I also had to put them right concerning the potential for these countries to produce enough food for their own populations with good governance, and investment in infrastructure and education. All that we achieve by helping these countries, is to enable their dictators remain in power, and living in lavish lifestyles by being able to plunder what little remains of their coutries assets, because we cover the costs of feeding and to a degree, educating and medicating their populations.
 

burnt

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andybob said:
The powers that be in their infinite wisdom are insisting that MORE land in the UK be taken out of arable production, and be put into environmental projects!!
Aaron, there has just been an online discussion involving several of the biggest aid charities droning on about our responsibilities to the "poor nations", my comments about population controll went down like a lead baloon, and I also had to put them right concerning the potential for these countries to produce enough food for their own populations with good governance, and investment in infrastructure and education. All that we achieve by helping these countries, is to enable their dictators remain in power, and living in lavish lifestyles by being able to plunder what little remains of their coutries assets, because we cover the costs of feeding and to a degree, educating and medicating their populations.

Yup. However, this truth does not fit with the sentiments of those who claim to be doing "charitable" work.
 

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