BY DOUG JENNESS
ST. PAUL, Minnesota-The U.S. government, monopoly grain
merchants, and food processors are increasing their efforts to
whip up anti-Canadian chauvinism among working farmers in the
Upper Midwest. Taking advantage of the worsening economic
difficulties facing farmers, they are attempting to get grain
and livestock growers to think their problems are caused by
the "dumping" of imports produced in Canada on the U.S.
market.
For nearly a month state officials in Idaho, Montana, North Dakota, South Dakota, and Minnesota have been attempting to block trucks transporting grain and livestock from Canada. They have directed state police to employ a variety of weight regulations and safety and health measures to stop trucks, inspect them, and either delay or turn them back. State officials are urging the federal government to bring a case against Canada before the International Trade Commission accusing the country of dumping grain at below-cost prices.
At several Canada-U.S. border crossings, farm groups have organized U.S. farmers and ranchers in actions to stop trucks. Following Montana governor Marc Racicot's announcement that on September 21 state cops would accelerate their checks for compliance with truck weight and livestock health, a protest of several hundred, including farmers and ranchers, blocked trucks in Sweetgrass on that day. A similar action occurred near Portal, North Dakota, where a tractor on a railroad track stopped a Canadian Pacific freight train for 20 minutes.
U.S. Secretary of Agriculture Dan Glickman, responding to the truck stoppages, stated, "I understand the concerns that have prompted these governors to take action against agricultural imports. Their acts," he said, "reflect deep and understandable frustrations."
The Canadian government suspended its initial request for consultations under the World Trade Organization and the North American Free Trade Organization when U.S. trade officials agreed to meet with representatives from Canada.
`Overproduction' of wheat causes crisis
The backdrop to this trade dispute is the severe
conditions confronting working farmers. In the United States,
prices for most farm commodities have plummeted. The price of
wheat for example has dropped to a 21-year low. In September
the price of wheat dropped to an average $2.37 a bushel-it was
$3.66 in the same month last year and as high as $5.20 a
bushel in some areas just two years ago. Most farmers estimate
they need between $3.25 and $3.50 a bushel to make enough for
their families to live on.
The main reasons for the plunging price of wheat and other grains are a worldwide glut resulting from bumper crops in the United States, Canada, and Australia and cuts in exports to countries in Asia. This has led to the stockpiling of 340 million bushels of wheat in the United States, enough to fill a line of hopper rail cars stretching from Seattle to Chicago.
One of the grievances raised by U.S. government officials is that the Canadian Wheat Board is subsidizing wheat farmers in Canada and marketing wheat at below the costs of production. To get the International Trade Organization to take up a U.S. grievance against this alleged "dumping," however, U.S. officials have to convince the Wheat Board to allow them to audit its books. Efforts by the Congress's General Accounting Office to get the Wheat Board to permit this have failed.
The Canadian Wheat Board, a government-run agency, was established in the 1930s as the result of protests by farmers who demanded the government guarantee some protection from the instability of prices and buffer farmers against monopoly grain traders, processors, and railroad owners. U.S.-based grain monopolies like Cargill and Continental have been pressing the U.S. government to get the Canadian government to weaken the firm hold the Wheat Board has on marketing all wheat produced in western Canada.
For example, four years ago when there was a big uproar against the importing of durum wheat (used for pasta) from Canada, then U.S. secretary of agriculture Mike Espy sharply criticized the Canadian Wheat Board for engaging in unfair and predatory market practices.
Washington is pressing to put this issue on the agenda for the next round of international trade negotiations that are to begin next year.
Between June 1993 and May 1994 some 91 million bushels of wheat were imported from Canada. During that period the Clinton administration imposed a limit of 55 million bushels that could come from Canada without being subjected to tariffs. The following year the law used to enact the tariffs was abolished as part of negotiating the North American Free Trade Agreement (NAFTA). In the year ending May 31, the number of bushels had risen to 73.2 million. These imports, however, amount to only about 3.5 percent of U.S. wheat exports. This is not enough to depress wheat prices to today's level.
Farmers: get no relief from Washington
Fueling the anger of farmers in the United States is the
failure of either the Clinton administration or the Republican-
dominated Congress to offer relief. House and Senate
Republicans proposed a $3.9 billion program that included some
disaster relief funds as well as early transition payments
that are part of the 1996 farm law. The Clinton administration
proposed a $7.1 billion aid program to subsidize farmers when
commodity prices fall below set levels. Wheat growers would
gain 57 cents a bushel more; corn growers 28 cents. This,
however, is far too little for producers to even break even.
Editorially commenting on the tinkering of Congress and the White House, AgriNews, published in Rochester, Minnesota, offered this description of the farmers' dilemma. An October 1 editorial stated:
"Farmers aren't sure where government policy is headed. They are also in no position to control markets and stop what many of them fear is a rapid march toward corporate agriculture. All they know for sure is that the success or failure of their operations ought to be determined by their own abilities, not by the fickleness of federal farm policy and the unreliability of foreign demand."