The National Corn Growers Association, U.S. Grains Council and Corn Refiners Association contend the Canada Border Services Agency’s decision to initiate an investigation into alleged injurious dumping and subsidizing of grain corn by the United States is fundamentally flawed.

“The reality is this will end up hurting the Canadian agricultural industry as much as it hurts the U.S. agricultural industry,” says Rick Tolman, NCGA CEO. “Canada has expanding livestock, ethanol and corn processing industries that rely on U.S. corn. Our countries have similar trade philosophies and as NAFTA partners, we should be working close together, especially going into the WTO talks.”

The complaint was filed by the Ontario Corn Producers’ Association, the Federation des producteurs de cultures commerciales du Quebec and the Manitoba Corn Growers Association Inc. The associations allege dumping and subsidizing of grain corn in all forms from the United States is harming Canadian corn producers.

Grain corn in all forms includes whole kernel corn and grain corn that have been processed in a limited way by cracking, crushing, rolling, grinding or flaking. It includes ground corn such as corn flour, corn grits, corn meal, corn bran, sharps and other residues, corn which is hulled, sliced or kibbled, as well as grain corn mixed with other grains and oilseed (such as millet) that can be separated from the grain corn after importation. The product definition also includes white dent corn.

“Negotiation is always preferable to litigation. Our respective grain sectors have much more to gain from working collaboratively to open new markets for the grain sector and its valued-added products,” says Audrae Erickson, CRA president.

The CBSA on Sept. 16 initiated the investigation under the Special Import Measures Act.

“The argument that Canada’s corn growers are being injured by imports at low prices is flawed,” says Kenneth Hobbie, USGC president and chief executive officer. “If Canadian producers are unable to compete with U.S. grain corn, we would expect to see significant and steady increases in imports over the past several years while Canadian corn production would post declines. However, this has not been the case.”

According to a joint statement made by U.S. Department of Agriculture Secretary Mike Johanns and U.S. Trade Representative Rob Portman, the United States is disappointed by Canada's decision to proceed with a formal investigation and does not believe the investigation is justified. The government said it will defend the interest of the U.S. corn producers and exports during the investigation.

Canadian imports of U.S. corn are down over the past two years. Average corn imports from the United States between 2000 and 2003 were approximately 140 million bushels per year, dropping to 85 million bushels during the past two years.  The forecast for next year is 103 million bushels. While Canada's corn production has increased, its domestic corn demand still cannot be met through domestic production alone, according to Portman and Johanns.

The investigation is expected to take several months to complete.

 

National Corn Growers Association