Trade, transportation and taxes key to boosting agrifood exports

Boosting agrifood exports lies with making sure Canada is ready to compete internationally and that means tending to the trade, transportation and taxation policies, says Phil de Kemp, Executive Director of the Barley Council of Canada.The 3Ts, as he called them, are important to making Canada globally competitive “not just for value-added industries, but also for barley and grain producers in general.”On the trade front, getting the Comprehensive and Progressive Trans-Pacific Partnership ratified as soon as possible “is extremely important for all of us in the industry; barley going through a hog or beef cow or certainly malt because of the significant reductions in tariffs, markups and country-specific quotas,” he told the Senate agriculture committee, which is examining how to increase value-added agrifood exports.“Canada probably has the opportunity for an additional 300,000 or 400,000 tonnes of barley going as value-added as malt or through a beef cow or pork for processing to Japan.”In addition to the now concluded USMCA, Canada must pursue “an aggressive strategy in all markets for trade agreements, particularly in China. We must emphasize to all of our trading partners that we are open for business and ready to bring our world-class food products to market.”The country's transportation system must be responsive, transparent and reliable, he said.  “As a multi-billion dollar industry dependent on trade, we cannot simply hope for timely and dependable transportation.” Legislation passed earlier this year should help, he said. “We ask that improving our rail service with an eye towards further reliability remain a point of emphasis going forward.”Grain shippers want to see more product move in the six months following harvest when the international market conditions are most favourable, he said. “We have a lot of capacity we can use to be more competitive and capture a higher price in that market during that time of year,” Kemp said.As for taxation, recent American tax cuts put competitive pressure on Canadian farmers and processors, he said. “In particular, U.S. processors will now have the ability to depreciate their capital investments and equipment over the span of just one year. Meanwhile Canadian processors have a longer depreciation schedule; three, 10 up to 20 years depending on the equipment.”The government's new tax policy is not consistent with its desire to encourage Canada's agri-food industry to grow and be internationally competitive. Kemp said Canadian processors face a carbon tax while “manufacturers and our farmers while our friends south of the border do not. This adds another layer of cost to our entire food supply chain.JoAnne Buth, CEO of the Canadian International Grains Institute and a former senator, said much of Canada's wheat is exported without any value added.“It would be difficult for Canada to mill all of its wheat to meet the export specifications of the hundreds of customers that are buying Canadian wheat. Our domestic industry is the largest user of Canadian wheat, taking 2 to 3 million tonnes every year.“There are about 50 commercial wheat, oat and corn mills from coast to coast in seven provinces. Canadian mills ship ingredients to a wide variety of markets from local niche customers to large domestic and international buyers,” she said.The growing global population creates many opportunities for Canadian grain growers, she said. There will be an increased demand for animal protein, which means more animal feed is needed, and plant-based protein.“There are numerous products on the grocery shelves today touting increased protein levels.” One way for Canada to expand for sales can be seen in the experience Western Canada has British bakery giant Warburtons. It has buying Canadian wheat for 25 years and now is importing pulse flour from Saskatchewan “to increase the protein content in a variety of products by adding pulse ingredients. While the partnership has led to the launch of five new Warburtons products onto British grocery shelves, she said. Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He's also the author of two science fiction novels with more in the works.