As harvests of bitter economics come off in Canada, it is becoming evident that 2019 is not just a bad year within a range based on experience. The world is turning away from rules-based trade -- just as it begins to grapple with an unprecedented meat shortage- and major assumptions underlying our expectations of agri-food marketing, business risk management policy, and international trade will need to shift.
In an Independent Agri-Food Policy Note released October 8, 2019, Agri-Food Economic Systems documents the evidence of fundamental change occurring from a return to agricultural protectionism, evolving gaps in trade policy, and major geo-political shifts. Canada needs a new approach for the future for agri-food.
“We are not facing market misalignments where low prices will eventually cure low prices; stable and open markets facilitate adjustments that resolve these issues,” says Douglas Hedley, Agri-Food Economic Systems Associate and co-author of the report.“Rather, in this environment, low prices could be an indicator that markets as we have known them are badly impaired or simply collapsing, with unknown points of traction and stability at much lower price levels.”
The policy note explains how increasing protection of agri-food products, the decline in rules-based trade dispute resolution and remediation, feeble macroeconomic policy, and initiatives in foreign influence undermine Canadian agri-food interests. Some alternative strategies are identified, some of which could be considered radical and recently might easily have been written off.
“Canada lacks leverage versus larger economies, a problem that the World Trade Organization (WTO) was designed to overcome,” says Ted Bilyea, Agri-Food Economic Systems Associate and co-author of the report. “Canada must now seek out elements in which it has leverage to bear, such as agri-food.”
“Canadian agri-food cannot stand still, uphold free market/WTO principles in isolation, hope for supply disruptions elsewhere, nor “ad hoc support” its way out of this; the global environment has already changed too much,” says report co-author Al Mussell, Agri-Food Economic Systems Research Lead. “We will need a different approach built on creativity and innovation.”
The policy note is available at www.agrifoodecon.ca Agri-Food Economic Systems is an independent economic research organization dedicated to agri-food located in Guelph, Ontario.
Source: Agri-Food Economic Systems October 8, 2019 news release