October 27, 2003



Canada Should Think About The Importance of Biotech Wheat


Canada should keep an open mind to genetically modified wheat if it wants to keep its foothold in world grain markets, an agricultural economist told western Canadian farmers on Thursday.


If competitors and buyers of Canadian wheat are quick to adopt the technology and reduce their weed-control costs, Canada could fall behind, Colin Carter of the University of California, Davis, told an agricultural trade symposium in Winnipeg.

"I think the Canadian industry has to kick the tires" and explore whether GM wheat could provide benefits, Carter said.

Monsanto Co. has applied for Canadian government approvals for a line of GM wheat, but has faced widespread opposition over fears approval could ruin export markets for Canadian wheat.

Carter was speaking at a meeting held primarily to examining what impact the loss of a historic shipping subsidy has had on western farmers -- a loss he argued pales in comparison to bigger global challenges.

Carter said China is examining growing GM rice, and argued the country likely would be willing to explore GM wheat in the future. Brazil is another likely adopter of the new crop, Carter said.

"We have to look under every rock for productivity gains," he said.

Canadian farmers face bigger hits from gains in the Canadian dollar relative to the U.S. greenback along with shifts in grain production to lower-cost South America and former Soviet countries than they ever could from domestic farm policy changes, Carter said.

"It's a vicious world out there, a very competitive market," he said.


It's been eight years since the federal government canceled a century-old subsidy that covered part of the cost of shipping grain out of the vast Prairies by rail to export shipping terminals.

The subsidy was worth more than C$700 million ($534 million) a year when it ended, but was axed to save the government money and comply with trade rules.

Since then, western farmers have slashed wheat and canola production, in part because their freight rates rose by as much as 70 percent in parts of the Prairies, economists said.

Land values, which economists predicted would plummet, have instead increased by as much as C$100 per acre in Alberta, said Jared Carlberg of the University of Manitoba.

Farmers have turned to higher-value specialty crops along with feed grains for the swelling cattle and hog industries.

Growth in livestock production was forecast as "the golden goose" when the subsidy died, said economist Hartley Furtan from the University of Saskatchewan.

But gains have failed to make up for lost returns in the grain sector, Furtan said.

"You can draw the conclusion that farmers, in general, have not benefited in terms of net farm income in any way since 1996," Furtan said.

But a leading farm lender said the subsidy loss helped prompt farmers to become more sophisticated.

"Producers are very, very resilient and have a lot more ability to adapt and change than people give them credit for," said Barry Smith, a national director of Canadian Imperial Bank of Commerce.