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Canada is vulnerable in world markets

Article Abstract:

A study for the Economic Council of Canada on the grain trade indicates that Canada will gain from a world-wide reduction in trade barriers, particularly in the Japanese market. The report finds that the international demand for grain does not react strongly to price changes. Therefore, Canada has nothing to gain from a price war, which would only benefit importing countries. The report finds that the international grain market is characterized by rising instability due to shocks that are the consequence of the government policies of various nations. Free trade will benefit the Prairie farmers more than the farm industry in Eastern Canada, who will suffer from liberalization. The report concludes that Canada must support multilateral approaches to cooperation amongst the grain producing nations and adopt flexible farm strategies to keep its options open.

Research, Exports, Grain industry

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Handling the risks

Article Abstract:

The Economic Council of Canada has developed a series of measures to alleviate the income instability and overcapitalization in the grain industry of the Prairie provinces. The recommendations include: supporting the work of the Farm Debt Review Boards; making crop insurance compulsory; and developing farm management training programs. In addition, the Council suggests that farm-income support be decoupled from the production of specified crops, and be based on farm income instead of output or acreage. Options to government support of farmers include: farm-income insurance; farm adjustment options; income stabilization funds; and family income disaster relief.

Analysis, Management, Agricultural subsidies, Agricultural administration

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