grainswest.com
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Serving Farmers in Western Canada for 31 Years
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Traditional
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Traditional
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PowerRich
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in China, and such restrictions aren’t reciprocal, Morris is
pragmatic.
“There are bigger issues we’ve got to worry about. We need
the money.
“I think ChAFTA’s going to be very important for Australian
agriculture,” he added, predicting it will
not benefit Australia’s large, traditional
commodities such as grain, cotton
and sugar so much as non-traditional
products. Barley is the only grain he
said will benefit significantly. Dairy
producers will win big with increased
exports of milk products, technology
and dairy cows—likewise horticulture,
fruit, vegetables and wine. The meat
industry, especially beef, will benefit
substantially in live cattle shipments,
which have already grown.
“A lot of the benefit is going to come
on quite gradually,” Morris qualified.
“The tariffs are dropping, often over a
decade. Over that time, the industries will develop as needed.”
Steve Larocque, owner of Beyond Agronomy, is an Alberta
farmer and crop advisor. He has studied Australian agriculture
and compliments the savvy crop management of the country’s
farmers.
“I’ve never seen efficiencies anywhere in the world like I have
in Australia,” he said. He believes this is because Australian
farmers face extreme weather instability without the benefit
of government crop insurance. “When you don’t have that
backstop, you get real creative real fast.”
He put ChAFTA in perspective, comparing it to the CETA
deal.
“We have to be careful saying the Aussies have one-upped
us, because what they don’t have is what we would consider
a free trade agreement; it’s concessions from the Chinese
government on import tariffs.”
And besides, he said, Canada ought to be concentrating on
the biggest, most accessible markets.
“The European agreement was low-hanging fruit. It’s going
to take a lot more coercing to develop a decent free trade
agreement between Canada and China.”
What Canada has over Australia is consistency, said Larocque.
Canadian grades may vary, but volumes remain steady, while
Australian production tends to yo-yo. With a hungry country like
China, volume is a big deal, he explained.
“Canada’s competitiveness is in being able to produce a
consistent product.”
Echoing Nelson, Larocque said what Canada can learn from
the ChAFTA deal is to leverage all its assets simultaneously,
offering better deals on the commodities China craves in
exchange for lower agricultural tariffs.
“In Canada, there’s not a lot stopping Chinese investment
in our natural resources. If China wants natural resources and
we’re selling lumber, coal and petroleum to them, why not
leverage that and get a better deal on market access, whether
that’s for grain or new BlackBerrys,” he said. “Let’s make sure
we’re not being shortsighted in giving them what they want
without bringing all the other commodities
on board.”
Nelson added that Canada needs to
understand what other market players such
as Australia are doing, and keep pace. And
though he noted it’s difficult to overturn
market advantages (such as those Australia
has gained with ChAFTA), once they’re
established, the competitive advantage
gained isn’t necessarily permanent.
Moreover, Canada must work hard
to maintain existing markets, Nelson
concluded.
“We have to make sure they’re serviced
at all costs, even if it means breaking even.
Once a supplier or a country changes
source, it’s really hard to break back in. Part of this commodity
is customer service. How are we making sure that customer can
go nowhere else?”
“We have to be careful
saying the Aussies have
one-upped us, because
what they don’t have is
what we would consider
a free trade agreement;
it’s concessions from the
Chinese government on
import tariffs.”
–Steve Larocque
