December 10, 2004

 

 

Canadian Spring Wheat Tariff Boosts Prices in US State

 

US North Dakota wheat farmers have benefited almost $100 million from an import tariff on Canadian spring wheat.

 

The 14 percent tariff has drastically cut Canadian spring wheat imports, triggering higher local prices of about 20 cents per bushel, according to Jim Peterson, marketing director for the North Dakota Wheat Commission.

 

The tariff's impact on local spring wheat prices in 2003 and 2004 amounted to about $100 million more in revenue, said state Wheat Commission Administrator Neal Fisher.

 

Wheat Commission officials discussed their trade dispute with the Canadian Wheat Board during a meeting this week in Fargo.

 

North Dakota farmers produced about 500 million bushels of wheat over the past two years.

 

The tariff, first imposed in March 2003, cut Canadian spring wheat imports from about 50 million bushels a year to about 3 million this year.

 

"It made a significant impact on the prices we're receiving," said Maynard Satrom, an Oriska farmer and Wheat Commission director.

 

"It kind of shows you what we've lost because of the way they do business," Satrom said.

 

The International Trade Commission ruled that Canada unfairly subsidizes its spring wheat farmers and dumps the grain on the US market at below-market prices. The ITC imposed a 14 percent tariff on Canadian spring wheat imports, but ruled against a similar border tax on imports of durum, a type of wheat used to make pasta.

 

The North Dakota Wheat Commission has long maintained that the Canadian Wheat Board, a state trading enterprise that controls all wheat sales from Canada's Western provinces, is an unfair trader subsidized by the Canadian government. Canadian Wheat Board officials reject the allegations, saying they comply with global trade rules.

 

The Canadian Wheat Board has appealed the ITC's tariff to two dispute panels representing the North American Free Trade Agreement.