Ottawa Journal
Standing up for Canadian corn producers
David Tilson MP Dufferin- Caledon

Canadian corn producers have struggled in recent years with declining corn prices globally, as well the United States domestic support programs that continue to provide American producers with an economic advantage.

Our government is standing up for Canadian corn farmers by requesting consultations with the United States at the World Trade Organization (WTO), on subsidies provided to U.S. corn growers, as well as on the total level of U.S. tradedistorting agricultural support.

The United States is the world's largest producer and exporter of corn. In 2005/2006, the U.S. accounted for 41% of global corn production and 68% of all corn exports. During the last two years, U.S. corn subsidies have averaged almost U.S. $9 billion per year, which has resulted in a significant distortion of corn prices in Canada. Canada has consistently been a net importer of corn since 1993 with the U.S. as the main supplier.

Agood example which demonstrates this considerable distortion is that world corn prices actually declined significantly from 2003 through to 2006, yet U.S. corn production actually increased from 256 million tons in 2003/04, to a record 300 million tons in 2004/05, and then decreased slightly to 282 million tons in 2005/2006.

Our new government believes that existing U.S. corn subsidy programs cause serious prejudice to Canadian corn growers through their effects on prices in the Canadian market. In addition, the U.S. also maintains export credit guarantees that serve to subsidize the exportation of certain U.S. agricultural products. Canada's position is that these programs are inconsistent with the United States' WTO obligations. Furthermore, our government believes that total U.S. trade-distorting domestic support, specifically, the Total Aggregate Measurement of Support (Total AMS), exceeds the United States' corresponding WTO commitment levels for certain years, which is not in compliance with certain provisions of the WTO Agreement on Agriculture.

Canada is concerned that the American subsidies will continue to cause economic harm to Canadian corn farmers. Our new government supports our producers and that is why it is committed to pushing for a level playing field so they may compete with their American counterparts.

The government will work towards resolving these issues through dialogue with the United States. Consultations are the first stage in the WTO dispute settlement process. This stage allows both parties to discuss the measures at issue, in an effort to resolve their dispute before resorting to a formal adjudicative process. If both parties fail to reach an agreement at this stage, Canada can request that a WTO dispute panel be appointed to adjudicate the issue.

Our government is committed to standing up for our Canadian farmers and producers. Reducing unfair subsidies will assist in creating a more equitable trading environment for agricultural products and for our producers.