Nick Giordano, National Pork Producers Council trade counsel spoke to Canadian pork producers at the annual Banff Pork Conference in Banff, Alberta last week. Giordano said that Canadian subsidies were causing injury to U.S. pork producers, which is why NPPC filed countervailing and antidumping grievances against Canada.
Giordano cited the fact that the Canadian breeding herd has not declined since April of 1996 as an indicator of the subsidies. During this time, the U.S. breeding herd declined by about 16 percent. Giordano also cited Statistics Canada data that showed in 1999 nearly all of Canadian hog producers income came from government program payments and in 2002 that number was over 50 percent of farm income.
Giordano claimed programs such as the Canadian Agriculture Income Stabilization Program and a provincial program in Quebec provided the subsidies that allowed Canadian producers to keep sow numbers high, despite market conditions.
Giordano received applause for speaking at the conference, but also some dissention from the attendees. Canadian producers claim weaner pig contracts with U.S. companies above the cost of production are what drove the size of the breeding herd, not subsidies. The producers say the contracts were their market signals, along with favorable exchange rates, allowing them to turn a profit regardless of low hog prices.
Martin Rice, executive director of the Canadian Pork Council, spoke following Giordano and claimed Canadian hogs are not subsidized and duties will hurt the pork industry on both sides of the border.
Rice said that in 1999, in conjunction with the Uruguay Round of the World Trade Organization discussions, the U.S. Department of Commerce stated that Canadian subsidizes were unlikely to return. Again in 2004, as part of the case brought by NPPC, the U.S. DOC stated that “countervailable subsidies are not being provided to producers or exporters of live swine from Canada.”
Giordano answered this by saying that NPPC disagrees with the DOC findings, and that the DOC has been known to reverse it’s preliminary findings in its final ruling.