You don’t have to have been involved in agriculture all that long to recall that the biggest detriment to Canadian farm exports used to be subsidies paid by the United States and the European Union.

The two sides were battling for markets by undercutting each other to attract buyers, and then backfilling losses to their farmers by cutting subsidy cheques out of government accounts. For Canada it was a case of being caught in the middle, forced to sell low, but without the financial resources of the two big players to bolster farm accounts with a subsidy.

It took years to level the playing field in large part thanks to framework deals such as the North American Free Trade Agreement which put in place some common sense rules to trade.

That is not to suggest NAFTA, or any other trade deal between trading partners, is flawless, and disputes do arise, but they are at least a foundation to keep trade flowing under a set of agreed to rules. And trade deals did help reduce subsidy wars, evolving farm trade beyond a wild west atmosphere where sales were often made by cutting someone a cheque on the side either to support framers, or offset costs for the buyer.

Enter American president Donald Trump and the wild and woolly west reappears. Trump seems to operate by one guiding principle in terms of business, never sign a deal where you don’t come out the big winner.

Some might suggest that is the crux of business, but if you win by limiting the trade partner’s ability to also make a reasonable dollar you could end up without partners to deal with. Trump doesn’t seem to care.

So NAFTA has been reopened and sits in tatters with little likelihood it will be resuscitated anytime soon.

And on a grander scale Trump’s posturing has thrown the United States into what is fast become a full-scale global trade war.

Trump is already at loggerheads with China, Mexico, Europe and Canada, and that is highly disruptive to trade in general, and it is having an impact on the agriculture sector specifically.

The impact is having a blow back effect on American farmers too, so the US has announced it is going to prop up the sector with those frightful subsidies. The U.S. Department of Agriculture has announced US$12 billion in federal aid programs for farmers to help them cope with declining prices and falling demand for American soybeans, pork, fruits, and other crops, demand lost based on Trump’s high-handed approach to trade.

This move has to send a shudder through the farm sector because it is one of those things that producers have no control over, but that can affect profitability in a major way. Subsidies are not a trade mechanism where Canada can reasonably compete, nor is it a way to facilitate reasonable trade between partners. •

— By Calvin Daniels