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Canada's Export Market Development for Agricultural Products

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Canada's Export Market Development for Agricultural Products CAN4DA'S EXPORT MARKET DEVELOPMENT FOR AGRICULTURAL PRODUCTS. (foreign AgriCUltur,al'. ~~~~~mi-C Reporot). _f. Omero Sabatini. W?1sh1ngtbn, DC: E?onomic Researc-h Ser:vice. M~y (HAL Call No. A281.9/J[g8F) ___~ ________' _/_"______' ,:"""'.......L...­ 8 1.0 :: 111112. IIp·5 W 1~~3.2 W u.: ~~ IIIII~ t ~ 2.0 111111.25 1~111.4 ~ 1.6 ' CANADA'S Export Market Development for Agricultural TR\.~GENCY REAOING ROOM Products JUl 7 1915 Sw Room 50s 500 l2th St., o'e 20250 Washington, . A'? ;:mer'" ,l;fr,lIj 'M • m5l~ gi' !Eif U.S. Deportment Economic Foreign of Agriculture Research Agricultural Service Economic Report No. 107 ,'. , {j' I- Q ; CANADA I S EXPORT MARKET DEVELOPplEHT FOR AGRICUTIrURAL PRODUCTS. Foreign Demand and o Competition Division, Economic Research Service, Foreign Agricultural Economic Report No. 107. .; o " ABSTRACT In the late 1960 I S Canada I s exports of wheat and share of the world vrheat market declined. Canada began a program of crop diversification away from wheat and toward barley and rapeseed. To improve Canada's international market position and to facilitate the switch in farm proiluGtion, the Federal Goverrunent began a large-scale, well-financed program for the development of foreign markets for agricultural products. In January 1972, Canada launched a cost-sharing Grain;] and Oilseeds Marketing Incentive Program, which can receive Federal allocations of up to C$7 million per year and which operates in cooperation with industry associations, trading companies, agencies, universities, and simila:-o organi:Gdtions. International demar.d for grain and o:ilseed.s bas b<"en st.rong , I since this program was put into effect, e.nd so far, emphasis has been on developing long­ term projects and building up the infrastructure for foreign market penetration. In 1973, the Government set up another cost·.sharing program covering virtually all other farm products, with Goverr.ment allocations (If up to C$3 million per year. In the past few years, Provincial ~overnments, quasi-governmental marketing boards, and private organizatiDns have alsq stepped up their programs for foreign market developm\~mt or initiaLed new ones. Ttie combined funds made available by these groupg for the promotion of farm exports amount to several million dollars per year. Canada's increased activity in world markets is creating greater competition for U~S. exports. Canada has been particularly successful in expanding its axports of grai.ns, oilseeds, and pork to coun­ tries in East Asia. Key Wor1s: Canada; Foreign market development; Agricultural exports; Foreign ~nmpetition; Grain exports; Oilseed exports. ,; May 1975 Washing-hon, D.C. 20250 " I ott ~'i Ii .. It ~~. :'11 , ...-_*ullik' Q'A: It",' ='1 \1, - "'*" I I PREFACE This report reviews Canada's programs and institutions for the promotion of agricul­ tural exports. It seeks to: (1) ident{fy activities and organizations that have been most successful in expanding Canadian farm exports to established markets, opening up new outlets for Canadian farm products, and/or making inroads into traditional U.S. markets; and (2) to point out the kind of eompetition that Canada's export promotion activity is likely to generate in the future for U.S. exporters of farm products. The author is indebted to numerous officials of the Canadian Government and various other organizations who provided helpful information and assistance. Contacts with most of these officials were established through the courtesy of Garry Benoit, Assistant Commercial Secretary (Agriculture) of the Canadian Embassy in Washington. William J. Mills, former U.S. Assistant Agricultural Attache, Ottawa, was especially cooperative and supplied much of the source material. Reed E. Friend, Leader, Developed Countries Program Area, Foreign Demand and Competition Division, Economic Research Service, pr?vided overall direction and supervision. :& Ii F ,,r; I, t !: Ii [: "'", r: I t~ ~ f eI' l'~ f '0 i Il {j EXPLANATORY NOTES The metric system was occasionally used. The e~uivalents of the units used are: 1 metric ton = 2,204.6 pounds; and 1 kilogram (kg.) = 2.2046 pounds. Weights equivalents of 1 bushel are as follows: Wheat, 60 lbs., or 27.22 kgs.; barley, 48 Ibs., or 21.77 kgs.; oats (Canadian bushel), 34 Ibs., or 15.42 kgs.; rye 56 Ibs., or 25.40 kgs.; flaxseed, 56 Ibs., or 25.40 kgs.; rapeseed, 50 Ibs., or 22.';8 kgs.; and soybeans, 60 lbs., or 27.22 kgs. Split years (e. g., 1973/74), unless otherwise noted, refer to the Canad,ian marketing year, which starts on August 1 and ends on July 31. Both U.S. and Canadian dollars were used. From May 1962 through May 1970, the fixed rate of exchange was C$l = US$0.925. The fixed relationship was ended in May 19'70. Since then, the annual average rate of exchange has been as rollows: 1970, C$l = uS$1.o4; 1971, C$l = US$1.01; 1972, C$l = US$.99; 1973, C$l = US$l. ii c. ,)~' ~/..*' ~c,_'_____.___._...._"_._~_~"_"~~_'~_~_"--"""<)~~__ -'-~A>lt 1 ~ ~t CONTENTS ~" ! o Page 1\~ Ii ~ SUMMARY .vii 11 INTRODUCTION 1 I CANADIAN FARM PRODUCTION AND EXB,QRTS. • • '" 2 11 Farm Production and Its Relationship to the World Market. 2 ff Canadian Farm Exports . 4 ~ Composition of Exports •..... 4 jl 6 Patterns of Trade and Competition with U.S. Products. hH Exports by Commodity... 6 l' Exports by Country.... 12 t The Importance of Foreign Trade to Canadian Agriculture; Canada's Stake ft in Trade Liberalization . 16 k ~ . ~[, EXPORT PROMOTION AND FOREIGN ~\1A.RKET DEVELOPMENT PROGRAMS. 18 Scope and Changing Aspects (If Canadian Farm Exports Promotion ,. 18 i " The Institutional Framework ':,1 ............... 22 ' : PROGRAMS OF THE FEDERAL GOVERNL.1ENT AND QUASI-GOVERNMENT NATIONAL AND f INTERPROVINCIAL ORGANIZATIONS. • . 22 Department of Industry, Trade and Commerce. .' " 22 Market Development Fund for Agricultural Products 23 Grains and Oilseed~ Marketing Incentive Program 24 Agricultural and Foods Products Market Development Assistance Program 25 Trade Fairs and Missions and Other Traditional Programs of IT&C 26 Trade Fairs and Missions..... 26 Other Services.......... 28 Program for Export Market Development 29 The Canadian Wheat Board . • . 31 Ce.nadian International Grains Institute 34 Canada Grains Council . 35 Department of Agriculture . 38 National Marketing Agencies . 39 Credit Programs For Promotion of Exports to Developing and Communist Countries. 40 Improvement of Grain Handling and Transportation Facilities 43 PROGRAMS OF THE PROVINCIAL GOVERNMENTS. 45 Alberta . 45 Manitoba... 4'7 Ontario ... 48 Other Provinces 49 Interprovincial Cooperation 49 PROGRAMS OF OTHER SELECTED ORGANIZATIONS ENGAGED IN EXPORT PROMOTION. 50 Rapeseed Association of Canada. 50 Rapeseed Production in Canada . 50 General Approach to Rapeseed Export Promotion 51 The Japanese Market . 53 Other Foreign Markets 5'7 The Canadian Market . 59 iii o o Ontario Flue-Cured Tobacco Growers' Marketing Board. 62 Hog Marketing Organizations . 65 Fruit and Vegetable Organizations . 68 Other Organizations. .. ... , 70 Ontario Bean Producers' Marketing Board 70 Western Grain Cooperatives .... 71 Canadian Seed Growers Association (CSGA) 72 Cattle Associations • . 72 Palliser Wheat Growers' Association ... 73 FOREIGN INVESTMENT FOR PURPOSES OF FARM EXPORT PROMOTION. n Canadian Investment Overseas. '. 73 Foreign Investment in Canada. • . 74 Government Aid to Investment for Trade. 75 PROBABLE IMPACT OF CANADIAN EXPORT PROMOTION PROGRAMS ON U.S. TRADE 75 SELECTED REFERENCES 79 \::-.: iv ~t<I'iA';;'&.:J..i'triee!e"#'S.... ~:.,il ' , ! i l TABLES Exports of principal Canadian agricultural products, 1963-73. .. , . 5 1­ J 2. Canadian, U.S., and total world wheat exports, by major areas of ( destination and Canadian and U.S. percentages of' the market, 1962/63-1971/72, 7 I 3. Exports of Canadian 'wheat, by destination, quantity and value, average (i ! 1963-67, and annual 1968-73 .. , ...............•..• 4. Exports of Canad.ian barley, by destination, quantity and value, average 1963-67, and annual 1968-73 ....... , ............. 10 5. World exports of barley by principal countries of origin and Canadian, \ U. S., and Fl'ench share of the total, 1960/61-1973/74. '.' . .. :,' 11 6. Exports of Canadian rapeseed by destination, quantity and v0'+ue, average 1963-67, and annual 1968-73 ...................... 13 7. Exports of Canadian flaxseed by destination, quantity and value, average 1963-67 ;;"and 1968-73. • . "'" . 14 8. Percent distribution of Canadian a6ricultural exports by principal country of destination~ averages 1945-49 to 1965-69 and annual 1970-72. ; . 15 9· Cans,dian and U.S. exports of wheat and wheat flour in terms of wheat, excluding donations, to specified countries, 1967/68-1971/72.. , . 41 54 10. Japanese production and imports of principal oilcrop~ 1960-73 . 11. Japanese production of edible vegetable oils and vegetable oil meal and cake, 1960-73 . • . .. " . 56 12. Supply and disposition of rapeseed meal and production of mixed feed in Japan, 1968-73.................... 58 13. Canadian crushings of rapeseed and soybeans; production of soybean and rapeseed oil; and imports of U.S. soybeans and soybean oil; 1960-73 60 14. Canadian production of deodorized vegetable oil for use in the manufacture of margarine, salad, and shortening oil, 1966-73.. 61 63 15. Canadian exports of unmanufactured tobacco, 1963-73 66 16. Canadian hog production and trade, 1963-73. 17. Japanese imports of pork (fresh or frozen) 'by principal sources, fiscal years 1971-73. ., . 69 \; J' t Ii ti I F "~: I .'r f ¥. ~ !; ~ H b ~ ;~ H t" v , ~-:-------~ ".. -----<"~-,'- ,,-_. , ... ~ , -, SUMMARY () j, During theicJ~ast 4 or 5 years, Canada has implemented a significant program for pro­ moting farm e~~6rts. Funding is generous, and the Government and other organizations are determined to provide all the' financial support needed to assure success. Canada is a ~ajor world exporter of wheat, barley, rapeseed, linseed (flaxseed), and tobacco. It also ships sizable amounts of red meat to the United States and Japan.
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