Red Tape Hurts Farm Competitiveness

Aparl iamentary committee recommends major changes to federal regulations that disadvantage Canada’s farmers against their global competitors.

If implemented, the recommendations in a recently tabled House of Commons agriculture committee report could go a long way toward dealing with farmers’ complaints that government fees and red tape make them uncompetitive in the marketplace.

In all, the 80-page report makes 32 sweeping recommendations aimed at improving competitiveness in Canadian agriculture.

It targets four areas: export opportunities, competition, research funding and regulation.

REGULATION TARGETED

The report reserves some of its strongest language for regulation, saying witnesses during public hearings held last year repeatedly demanded government “reorient the regulatory framework so that it encourages the sector’s competitiveness” while still ensuring food safety.

“Some regulations contain requirements on Canadian producers or processors but not on their direct competitors,” says the report.

“There is a very strong feeling among Canadian farmers that every requirement imposed on them should also be imposed on their competitors.”

As an example, the report notes Canada’s federally registered meat-packing plants pay Canadian Food Inspection Agency inspection fees, which ultimately get passed back to producers. U. S. plants pay no inspection fees for inspections within normal working hours.

American plants also follow less stringent rules on the removal from beef carcasses of specified risk materials (SRMs) as a BSE control measure. This makes SRM removal in Canada more costly and plants uncompetitive, the industry maintains.

MEAT INSPECTION

The report pointedly recommends CFIA eliminate its meat inspection billings during regular business hours and that Ottawa compensate the beef industry for SRM removal costs.

The committee recognizes a “long-standing irritant” by producers that new pesticides and veterinary drugs are often available in the U. S. long before they reach the Canadian market.

It calls for a government study into the “level to which imported agricultural products do not meet the same standards required of Canadian producers,” with recommendations on how to fix the problem.

It also recommends regulations for approving generic herbicides to allow products to become available as soon as scientific reviews are completed.

COMPETITION BUREAU

The Competition Bureau comes in for close scrutiny. Farm groups regularly accuse the federal bureau of being a paper tiger in preventing companies from charging higher prices for products in Canada than in the U. S.

Keystone Agricultural Producers tried and failed to get the Competition Bureau to investigate discrepancies in 2009 potash fertilizer prices between Manitoba and North Dakota.

The committee quotes a Competition Bureau official testifying during public hearings that “the Competition Act is not a vehicle for price regulation and it doesn’t make it unlawful for firms to charge high prices.” At the same time, the official acknowledged that charging high prices “can be looked at as firms seeking to maximize returns or it can be looked at as some form of inappropriate pricing.”

The committee recommends the bureau “thoroughly examine” the state of competition leading to the 2009 potash price controversy.

It also recommends the bureau “clarify its position regarding the role that price levels play” in assessing levels of market competition.

CORPORATE CONCENTRATION

The committee expressed concern about corporate concentration in the Alberta beef-packing industry and the potential impact of U. S. country-of-origin meat labelling on packer competitiveness in Canada.

On agricultural research, the committee recommends government revise plant-breeding legislation to allow farmers to save their own seeds and to expand publicly funded plant breeding and variety development.

The Canadian Federation of Agriculture said it was encouraged by most of the report.

But CFA expressed concern that the report recommended maintaining a 98 per cent rule for Canadian content in food. In a statement, CFA first vice-president Ron Bonnett said the agriculture committee had originally recommended an 85 per cent Canadian content.

“By moving to 98 per cent, there is a very real concern that the Product of Canada label will virtually disappear from Canadian store shelves due to the onorous restriction,” Bonnett said. [email protected]

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