June 14, 2018
CPTPP – A strong future for Canadian grain farmers
I love growing grain. I’ve done it my whole life and I am proud of the quality product my family and I produce in Saskatchewan. Canadian grain farmers are known for growing more grain on existing land in a sustainable manner. All this is required to not only meet the increasing expectations of the global markets but to keep our soil and ecosystems healthy for the next generation.
The government of Canada has said that is in favour of free trade. In particular it has identified agri-food exports as a key target, setting an ambitious target of $75 billion in agri-food exports by 2025. Canada’s farmers are on board to meet that target, but we need expanded markets to get there. Unfortunately, this is an uncertain time for international trade with the NAFTA negotiations uncertain and CETA being questioned by some European nations.
Fortunately, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, is an exceptional opportunity to increase market access to some of the most prosperous and fastest growing markets in the world. Markets like Japan, Vietnam, and Malaysia whose populations value the high-quality grains and other agri-food products we can deliver. I am proud that our government was as the table to sign the agreement this spring and join my fellow farmers in urging the speedy ratification before the House rises for summer.
According to the Canadian Agri-Food Trade Alliance, once the CPTPP enters into force, it will be one of the largest Free Trade Agreements in the world with 11 countries representing almost 500 million people and a combined GDP of $13.5 trillion, or 13.5% of global GDP. Overall, Canadian agri-food sales are expected to rise by a total of $1.84 billion under CPTPP. Given how long the original TPP was being discussed, CPTPP is one of the most studied agreements ever by the Canadian government. We know what it contains, as well as the benefits it provides.
For grains and oilseeds, there are some very specific opportunities for some of our key exports. These include, but are not limited to:
Canola – With 90% of canola being exported, the removal or reduction of tariffs which are currently as high as 16% will mean better value for both Canada and the importing nation. In addition, it will remove Australia’s advantage over Canadian canola as their tariffs are only 9%. CPTPP is expected to increase canola oil and meal exports by $780 million per year. As a canola farmer this is a clear benefit that will allow me to invest in my business with confidence.
Oats – CPTPP is about evolving opportunities for oats. With an emerging middle class, large populations, and rising health concerns like diabetes and heart disease, many of these countries could be good importers of oats. For example, in Vietnam, diabetes is growing at an alarming rate. In 1991 just 1% of the adult Vietnamese population were diagnosed with diabetes, by 2012 this rate was over 5%. Healthy grains like oats can help these populations mitigate the risks of heart disease and diabetes.
Barley – Benefits for barley exports include reduced or eliminated tariffs, mark-ups and country specific quotas for feed and food barley, malt, and processed beef and pork products will enhance Canada’s access opportunities in all TPP countries. This will translate into an additional 400,000 to 500,000 tonnes of Canadian barley required to take advantage of the agreement terms.
All this to say, it is crucial to my fellow grain farmers and I that our MPs and Senators work together in a non-partisan way to see the ratification legislation passed as soon as possible. Canadian farmers, and the Canadian economy as a whole depend on free and open access to strong markets. Trade truly is my future.
Margaret Hansen farms at Langbank and Moose Jaw, Saskatchewan, growing canola, wheat, barley, and lentils. She represents the Western Canadian Wheat Growers Association on the GGC Board and serves as Chair of the Trade Committee.