U.S. body upholds duty on Canadian wheat

[dArKeR]

The U.S. International Trade Commission opened the door for duties on Canadian hard red spring wheat Friday, a decision Ottawa vowed to fight at the NAFTA level.

The ITC ruled that American wheat farmers have been injured by the Canadian Wheat Board's (CWB) marketing practices, meaning the steep tariffs that has kept vast amounts of Canadian wheat out of the U.S. will continue.

But in the same decision Friday, the body ruled unanimously against continuing the duties placed on durum wheat from Canada. Durum wheat is widely used to make pasta, while spring wheat is used for baked goods.

http://theglobeandmail.com/servlet/story/RTGAM.20031003.wbwheat1003/BNStory/Business/

Do as I say not as I do.

[phgnome]

1. Canada's next move in the wheat dispute

Canada shouldn't sweat it. See, the advantage of having supply is on Canada's side. We seem to think that an abundance of supply is bad because it brings down the per bushel price.

What's often left out of the debate over price is the rising level of demand for food in general around the world. Moreso, developments in agricultural technology is not often considered. In the short term, it poses an "unfair advantage" in terms of per-unit price. But, to argue the other side of the coin, developed countries should invest in finding better agricultural technologies and methods to yield more crops because we are running into food shortage problems on a global scale. What I say doesn't apply only to Canada, it applies to all countries that are able to grow food. Human population is rising and, as this happens, the amount of agricultural land that is available declines. We will run into the double-whammy, where we will find that the per capita amount of food available on the planet will decline significantly. Already, there are places with massive drought and famine because of desertification in many regions. The per capita amount of drinking water has also fallen significantly as the overall world population rises.

We are approaching a dangerous point in global development and, if there is not enough supply to sell, it will affect all of us.

In short, the US is not Canada's only wheat market. A large portion of its wheat crop is also sold to countries like Iran, where there is a great demand for food (because the Middle East has dried up so much, largely due to industrial development and processes).

I say everyone should work to reduce the price of food production and learn more efficient and better means of gaining larger crop yields. We don't want to approach a point where too many people are starving (it might already be too late), because it will cause social and political instabilities, leading to the demise of countries that depend on the availability of supply to eat.

I think it's fair that American farmers grow food for America ... it employs a lot of people and frees up some of Canada's food supply to sell to countries where climates and conditions are not suitable for food production, thereby bringing unstable countries a more social stability.

[rapier]

2. notes

Our farm program represents a subsidy and market intervention many mnay times greater than those of the Canadian Wheat Board. While the ruling was a political inevitibiliy nobody is pure in this area.

Someday this will all be moot as tight makets drive up prices. That has started already in fact.

[phgnome]

3. I wonder about those subsidies sometimes

Where does all the money go? I sometimes suspect these "subsidies" are swallowed up by the corporations. I think there is such a thing as diminishing returns in subsidies -- where if an industry gets too much subsidy, efficiency per dollar spent declines because it actually destroys smaller, independent agri-businesses and gives the few left an oligopoly or monopoly on the food supply.

Diminishing returns is a tricky thing, indeed.