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VIDEO: Flax growers skeptical of EU deal

Glacier FarmMedia Special Report: Individual countries and special interest groups will continue to find ways to block trade

Our March 24, 2016 issue marks the second in a series of Special Reports prepared by reporters from the Glacier FarmMedia network, which includes the Manitoba Co-operator. In these articles, reporters explore the implications of the yet-to-be- ratified Comprehensive Economic and Trade Agreement between Canada and the European Union.

Western Canadian farmland is a long ways from Europe, but for many farmers, European markets already seem right next door.

“We talk to Europeans pretty well every day,” said Paul Gregory, a honey and forage seed producer from Fisher Branch, Man.

“It’s an important market for us.”

The Comprehensive Economic and Trade Agreement with the European Union will obviously affect the large Canadian export crops of wheat and canola.

However, the biggest direct impact might be felt by the smaller crops, which already serve niche markets in Europe.

CETA appears to protect the access that some of these crops have already gained. For others, the agreement offers a way to build new markets with greater confidence.

However, it’s safe to say one formerly major export crop sector is greeting CETA with skepticism.

“I’m not sure how much difference it’s going to make,” said Eric Fridfinnson of Arborg, Man.

“I would hope (that increased export access occurs once CETA is finalized), but the experience we had…”

Fridfinnson is talking about what happened to Canadian flax in 2009 after trace amounts of an unapproved genetically modified variety appeared in shipments to Europe.

The EU closed its markets to Canada and now buys Canadian flax only for livestock feed, biodiesel and industrial uses.

Flax growers were hit hard, and many stopped growing the crop.

Fridfinnson suspects that European countries or special interest groups will continue to find ways to block trade, even if CETA creates more dependable access and systems to deal with disputes.

He fears that forage seed exports will suffer the same fate as flax now that GM forage varieties are being tested.

“Unless we can get the genie back into the bottle with Roundup Ready alfalfa, I think that business is at real risk,” said Fridfinnson, who grows forage seed for export.

Gregory also grows export forage seed, but he’s more optimistic about the potential for CETA to preserve and expand markets in Europe.

He said the zero-tolerance policy for unapproved GM seeds now makes every shipment a gamble.

“Right now, we cannot get exporters’ insurance,” he said.

“If this GM seed is found too late in the system, we could be looking at a multimillion-dollar lawsuit against our farm and against our business. There’s risk for the grower, the shipper and the processor. It’s something that we hope is clarified.”

Gregory hopes that CETA’s dispute settlement and technical issues structure can defuse these potentially explosive situations before they cause the kind of damage that has darkened Fridfinnson’s view.

Gregory has seen Canadian honey shipments suffer because of the GM issue, and he hopes CETA can depoliticize the issue.

“If we were to ratify this agreement, it would help our exports for honey.”

Soybeans are another crop that could attract more attention in Europe as they spread west across the Prairies.

Ernie Sirski, who has started growing the crop on his farm near Dauphin, Man., doesn’t expect CETA to suddenly break open new markets because a lot of Canada’s soybean crop already goes to the EU.

“There will be some benefit for pulses and soybeans going into Europe, but it’s probably not going to affect us as much as other parts of agriculture,” Sirski said.

However, he said protecting current trade will be a significant gain because access can never be assumed to be permanent, as the flax situation proved.

As well, Canada might be edged out in the future if it doesn’t nail down access for its products.

“If we don’t have a trade agreement, then other countries will, and we have to make sure we’re at the same table and we’re not shut out of markets we’ve been traditionally in,” he said.

About the author

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Reporter

Ed White is a reporter with Glacier FarmMedia and has specialized in markets coverage since 2001 and has achieved the Derivatives Market Specialist (DMS) designation with the Canadian Securities Institute.

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