I’ve followed Steve Verheul’s career for a long time. His years as Canada’s lead negotiator for agriculture trade deals, and then as Canada’s lead trade negotiator, parallel the years I’ve written about agriculture trade.
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Few people have been as integral as Verheul has been to Canada’s leadership in pushing for open trade around the world.
That’s why it was disconcerting to hear his current pessimism about the state of open trade.
“The pendulum has swung away from relying on market forces in the economy to an increasingly interventionist approach,” he said at a recent one-day conference hosted by the Canadian Agri-Food Policy Institute (CAPI), the Canadian Agri-Food Trade Alliance and the Canadian Global Affairs Institute in Ottawa.
The meeting included agriculture ministry deputy ministers, the new head of Farm Credit Canada, staff from agriculture organizations and food trade groups and ambassadors to Canada from Japan, France and Egypt. There were also some farmers in the crowd. Marie-Claude Bibeau, federal minister of Agriculture and Agri-Food dropped in at one point.
As someone who follows global news, I had a good sense that things are changing. We’ve known that for a while, but the message at the conference was clear.
A new strategy is needed for Canada.
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Ted Bilyea, formerly of Maple Leaf Foods and now a writer of insightful reports for CAPI, says the fundamentals of the agriculture market have changed for Canada.
For the past several generations Canada has produced an abundance of food, usually a surplus, which meant lots of work marketing it around the world. When that abundance tipped to excessive surplus, it meant hard times for farmers, with no control over prices created by roiling global markets.
For several years we’ve been hearing that the rising middle class in China and the Indo-Pacific will demand more food, as they can afford it, to increase family nutrition and show status. That tipping point appears to have been reached as demand continues to grow for Canadian pork and beef, soybeans, canola and pulses in the region.
When I talk to farm commodity group staff today, they mention meeting demand as one of their current challenges — not getting rid of surpluses.
Here’s where the proviso comes from anyone who has watched markets for decades. The global market takes orders from no one, and as soon as we talk about stability and depending on growth, something will happen to correct price. While demand signals are strong, don’t skimp on managing risk.
There’s a sense that Canada isn’t ready to capitalize on the opportunities at hand and that we haven’t been in the last five to 10 years.
Yes, the value of Canadian agri-food exports has increased, but that’s almost all because of the rise in crop prices. As global agri-food trade has increased, Canada hasn’t increased its share or kept up to its historic share.
The reasons are many. No Canadian companies are playing on a large scale in the world in agri-food, other than maybe in potash, and that’s more resource than food ingredients or products.
Michel Miraillet, the French ambassador to Canada said he’s been struck by how “comfortable” we are in Canada, satiated by our bounty of jobs, food, resources and stability, and oblivious to what’s going on in the rest of the world. He didn’t call us ‘soft’, but he was pretty close.
Building a culture that celebrates competitiveness, especially globally needs to be a goal. That’s not something accomplished by government; it needs to be fostered in the home and in businesses, educational institutions and by individuals.
We can’t look to government to solve these sorts of challenges, but they do have a role. The Port of Vancouver is the critical gateway to Asia, but the conference heard it is languishing, poorly rated and is administered by various levels of government through a port authority.
Rail capacity, especially in the West, requires investment by governments and the companies that use it.
Governments are also putting impediments in front of the agriculture industry, and several people at the conference took government officials to task on the issue, chiefly balancing reducing carbon emissions versus maintaining the productivity needed to meet the food demands of a world where hunger is increasing.
Other issues include political interference in the process to have gene editing approved and glyphosate’s use renewed.
The potential payoff of increasing our trade and influence in the world for Canada is huge in profits, human development and jobs and connection.
It’s not one we can afford to let languish.
