A big shrug follows the Russian food embargo

Sunday, October 5, 2014

When Russia added Canada to the list of countries it will not buy food from, the Canadian government offered no compensation to sectors affected and exporters merely predicted that they would seek alternative markets

by BARRY WILSON

The odd thing about the aftermath of Russia's August decision to add Canada to the list of countries it will not buy food from for the next year is how little aftermath there was.

The federal government said it was a stupid decision that would hurt Russian consumers more than Canadian farmers. It made no promises of compensation. Affected farm sectors said they were disappointed at the closure of markets and hoped to find new ones. And then the world moved on.

There were few farm lobby demands for compensation if sales were lost, no demonstrations, no threats of further retaliation – really, no surprise.

It is a sign of how agricultural politics has changed in Canada over the past few decades. Once upon a time, demands for compensation for farmers held hostage by international politics would have been loud and likely effective.

This time, Canadian exporters predicted they would find alternate markets for most of the affected products and some were even skeptical that the Russians would actually carry out their boycott, considering it included Canada, the United States, the European Union, Australia and Norway – all nations that applied sanctions against Russia for its aggressive meddling in Ukrainian affairs, but also among the world's major food exporters.

By far the biggest Canadian hit could be felt by the hog industry, which was on-track to sell $500 million of product this year to Russia, Canada's third-largest market. On the other end of the food boycott pipeline, Russian pork processors and consumers will be scrambling for supplies.

That Russia would pick food imports as the target of a retaliatory boycott is hardly surprising. Food and farmers typically are among the most politically powerful constituencies and a hit on them is a hit on governments that will feel the pressure.

Food has been a political weapon from the days of Roman armies salting the fields of their adversaries to make them barren to then-U.S. agriculture secretary Earl Butz declaring in 1974, as fears of a world hunger crisis escalated: "Food is a weapon. It is now one of the principal tools in our negotiating kits."

These days, when the federal Conservatives drew up a list of possible trade retaliation targets if the United States does not soften its Country-of-Origin labelling rules, U.S. food exporters to Canada were a primary target.

But Canadian predictions that Russia's boycott will hurt Russia more than its suppliers probably are true. It illustrates that food politics and, in particular, boycotts sometimes can descend from serious international brinkmanship to farce.

Of course, Canada can be counted on to offer an example. In December 1979, when the Soviet Union invaded Afghanistan, the United States imposed an embargo on grain shipments to the USSR. On Jan. 4, in the middle of an election campaign, the Keystone Kop government of Joe Clark said it would join the embargo in support of the United States.

Well, not quite. An existing contract to ship 3.8 million tonnes of wheat to the Soviets in 1980 would be honoured.

But then the Liberals won the 1980 election and lifted the embargo in 1981, just in time to negotiate a new 25-million-tonne wheat deal. Grain farmers were paid $70 million in compensation and life moved on. Many Clark-era cabinet ministers said later it was a dumb decision in the first place.
Russian politicians may quickly relearn the 30-year-old lesson. BF

Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture.