Voluntary Report - public distribution

**Date:** 11/13/2003

**GAIN Report Number:** CA3076

CA3076

**Canada**

**Agricultural Situation**

**This Week in Canadian Agriculture, Issue 41**

**2003**

**Approved by:**

![](media/image1.wmf)Gary Groves

U.S. Embassy

**Prepared by:**

George Myles, Matthew Cahoon

**Report Highlights:**

CWB Joins Federal, Alberta And Saskatchewan Governments To Appeal U.S.
Wheat Decisions \* Alberta Wheat, Barley Producers Support End To CWB
Monopoly \* CWB Export Estimates And Special Contracts For Alsen Wheat
\* Canadian Durum Exports To U.S. Expected To Resume In Late Winter \*
Manitoba Environment Commission Clears Way For Second Shift At Maple
Leaf Brandon Plant \* Philippines Accepts Canadian Beef \* Statistics
Canada Revises 2002/03 Canola Production Number \* CFIA Moves To Combat
Spread Of Asian Long-Horned Beetle

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Ottawa \[CA1\]

\[CA\]

This Week in Canadian Agriculture is a weekly review of Canadian
agricultural industry developments of interest to the U.S. agricultural
community. The issues summarized in this report cover a wide range of
subject matter obtained from Canadian press reports, government press
releases, and host country agricultural officials and representatives.

*Disclaimer*: Any press report summaries in this report are included to
bring U.S. readership closer to the pulse of Canadian developments in
agriculture. In no way do the views and

opinions of these sources reflect USDA's, the U.S. Embassy's, or any
other U.S. Government agency's point of view or official policy.

CWB JOINS FEDERAL, ALBERTA AND SASKATCHEWAN GOVERNMENTS TO APPEAL U.S.
WHEAT DECISIONS: The Canadian Wheat Board (CWB) announced that it has
teamed up with the Government of Canada and the provincial governments
of Saskatchewan and Alberta in an attempt to reverse the part of the
recent U.S. International Trade Commission (ITC) ruling that has
maintained anti-dumping and countervailing duties on Canadian exports of
hard red spring wheat. The CWB and the governments filed the first
papers in their appeal to a NAFTA panel on the finding that sales of
Canadian hard red spring wheat into the U.S. during the period of
investigation were unfairly subsidized. \"By joining forces, we have a
better chance of reducing the current tariffs of 14.15% on hard red
spring wheat,\" said Ken Ritter, chair of the CWB\'s board of directors.
Ritter said the joint action with the governments will complement the
CWB\'s own appeal of the ITC decision to a NAFTA review panel on the
finding that Canadian exports to the U.S. cause injury to American
farmers. \"At a minimum, our intent with this appeal is to have the
tariffs completely eliminated, not just reduced. We\'re following a
two-pronged approach to get some relief for Prairie farmers who have
built a strong business relationship with U.S. millers,\" said Ritter.
The CWB plans to file this notice of appeal on injury by November 24,
2003. The CWB is also working with the Canadian government to explore
possible WTO challenges of all three rulings - the anti-dumping and
countervailing duty rulings from the U.S. Department of Commerce and the
injury ruling from the ITC. The CWB will not be appealing the
anti-dumping ruling through a NAFTA review panel. Ritter also noted that
the CWB would be meeting with farmers and farm organizations in the
major wheat-producing states in an attempt to broaden the understanding
of the CWB\'s operations and dispel persistent myths.

ALBERTA WHEAT, BARLEY PRODUCERS SUPPORT END TO CWB MONOPOLY: According
to a news release from the Alberta provincial government, a poll
conducted for the Alberta government proves farmers want marketing
choice. The province-wide poll of Alberta farmers shatters Canadian
Wheat Board claims of monopoly marketing support, says Deputy Premier
and Minister of Agriculture, Food and Rural Development, Shirley
McClellan. \"Without a shadow of a doubt, the majority of Alberta wheat
and barley growers want marketing choice for their grain,\" said
McClellan. \"We hear it every day from our producers. Now the Canadian
Wheat Board can hear it loud and clear from them too.\" The Alberta
government released results of an Ipsos-Reid poll, conducted in
September and October 2003, which showed 68% of Alberta growers want the
option to sell their barley to anyone, including the Canadian Wheat
Board, while 64% of producers want the same option for wheat. Only a
quarter of growers surveyed support single desk selling for both wheat
and barley. McClellan said the survey showed wheat and barley producers
believe marketing choice will give them better prices and greater market
access. \"We call on the federal government and the Canadian Wheat Board
to immediately implement a grain marketing system for Alberta producers
so that they can enjoy the same benefits as farmers in eastern Canada,\"
said McClellan.

The agriculture minister said she plans to present the federal
government with details of how a 10-year test open market for wheat and
barley can benefit Alberta producers while maintaining the Canadian
Wheat Board as an option for farmers. Legislation passed in 2002 enables
the Minister to negotiate with the federal government and the Canadian
Wheat Board on a test open market. \"Our purpose is not to eliminate the
Canadian Wheat Board,\" said McClellan. \"Our aim is to grow our
value-added industry by giving our producers the right to use their
business savvy. If they can plan, plant, grow and harvest a crop, surely
they can market it once their grain is in the bin. It must be their
choice.\" The survey also showed support for marketing choice across all
of the Canadian Wheat Board\'s electoral districts in the province. Full
survey results are available on the Alberta government's website:
http://www1.agric.gov.ab.ca/\$department/deptdocs.nsf/all/agc6751/\$FILE/marketing_choice_fall_report.pdf

CWB EXPORT ESTIMATES AND SPECIAL CONTRACTS FOR ALSEN WHEAT: According to
the November 7 edition of Agriline, the Canadian Wheat Board (CWB)
expects to export 16 MMT of wheat and barley in 2003/04, versus 8.8 MMT
in 2002/03. If this target is met, it will be 10-15% below the long-term
average and similar to reduced levels seen in 2001/02. Wheat exports are
projected at 11 MMT (5.60 MMT last season), durum 3 MMT (2.90 MMT),
barley 2 MMT (310,000 tonnes). The CWB will be offering a one-time
special contract program for the

unregistered wheat variety Alsen in 2003/04 to clear remaining stocks.
Alsen is a fusarium-resistant wheat variety developed by North Dakota
State University. Its interim registration was not renewed this year
because it did not meet milling standards for hard red spring (HRS)
wheat, while kernel appearance conforms to that of milling grades. A
special grade will be established at an initial payment of C\$126/tonne.

CANADIAN DURUM EXPORTS TO U.S. EXPECTED TO RESUME IN LATE WINTER:
According to a November 3 *Farm Assist* article, Canadian durum exports
to the U.S. are expected to pick up in late winter and early spring,
although possibly at lower levels than in past years, industry sources
say. Canada has not exported any durum to the U.S. since the 13.55% duty
on durum wheat was imposed August 29, 2003 by the U.S. Commerce
Department. "We're able to sell durum now into the U.S.," said Dwayne
Lee, a wheat analyst with the Canadian Wheat Board. However, "just when
that will occur depends on the market and buyers." The U.S. imports
roughly 359,000 tonnes of Canadian durum on average, said Lee, who added
that if the tariffs had stayed in place, Canada would have found other
markets. The U.S. traditionally imports durum in late winter and early
spring. On the world market, Canada has exported 1.118 MMT of durum to
all destinations, as of October 26, 2003, compared to 792,500 tonnes a
year ago, according to the Canadian Grain Commission. Canada exports 3.4
MMT of durum a year on average, the majority of which goes to North
Africa. South America, the European Union and the U.S. are also noted
customers for Canadian durum.

MANITOBA ENVIRONMENT COMMISSION CLEARS WAY FOR SECOND SHIFT AT MAPLE
LEAF BRANDON PLANT: Earlier this month, the Manitoba Clean Environment
Commission released its report on this summer's public hearing regarding
the expansion of the City of Brandon's Industrial Wastewater Treatment
Facility and Maple Leaf Foods Inc. hog processing plant alterations. The
commission has recommended approval of the expansion of Brandon's
treatment facility to accommodate waste from a second shift at the Maple
Leaf plant. Maple Leaf's licence allowed for future expansion to a
two-shift operation, but only pending improvements and approvals for the
expansion of the Brandon treatment facility. The current speculation in
the industry is that the Brandon plant will not begin a second shift
until about the fall of 2004.

PHILIPPINES ACCEPTS CANADIAN BEEF: According to an article in the *Globe
and Mail*, The Philippines has become the first market to open its
borders to both bone-in and boneless beef from Canada following Canada's
single case of bovine spongiform encephalopathy (BSE) in May, 2003. It
would appear that the action is symbolic, in that total Canadian beef
exports to the Philippines in 2002 were valued less than \$100,000.
However, the Canadian cattle industry is hoping that the Philippines
decision will lead to the re-opening of other Asian markets. Two-way
trade between Canada and the Philippines is strongly in favor of the
Philippines, which exported \$709 million in merchandise to Canada last
year (mostly electronics and textiles) while importing \$193 million
worth of goods from Canada (mostly wheat and lumber).

STATISTICS CANADA REVISES 2002/03 CANOLA PRODUCTION NUMBER: According to
a November 6 *Reuters* article, Statistics Canada revised its 2002/03
canola crop production estimates up by almost 17% from its season-ending
estimate of 3.6 million metric tonnes (MMT) to 4.2 MMT. In a typical
year, a Statistics Canada estimate would have to be revised by only 1.3
percent. \"This has to be one of the biggest revisions we\'ve made since
I\'ve been there,\" said Oliver Code, chief of the crops section of
Statistics Canada, which has been recognized by the United Nations as
the world\'s top statistical agency for accuracy. The statistical agency
did not officially revise the number to 4.178 million tonnes until
October 3, 2003, well after the marketing year ended. Code said a
combination of factors produced the big revision. Severe drought in 2002
slashed crops in the main canola-growing regions of the Prairies, making
it difficult for farmers to estimate supplies for Statistics Canada\'s
telephone surveys, he said. As well, many farmers were still harvesting
grain after surveyors phoned in early November, and there was confusion
about how to report unharvested grain. Battered by two years of drought
and small crops, farmers were also under extreme stress, making it
difficult for surveyors to probe for answers, he said.

CFIA MOVES TO COMBAT SPREAD OF ASIAN LONG-HORNED BEETLE: The Canadian
Food Inspection Agency (CFIA) has announced it will work with the
municipal, and provincial levels of government to prevent the further
spread of the Asian Long-horned Beetle (ALHB) infestation in Toronto. A
program of selected tree cutting on public and private property will be
combined with an effort to pursue emergency registration for new
pesticides to help prevent the spread of the insect. According to the
CFIA, the Asian Long-horned Beetle is one of three invasive forest pests
that Canada is dealing with at this time. The other two are the Emerald
Ash Borer in Essex County (Ontario), and the Brown Spruce Long-horned
Beetle in Halifax (Nova Scotia). All three are serious pests. The CFIA's
program to counter the Brown Spruce Long-horned Beetle is now in its
fourth year of operation and the Agency reports good progress towards
eradication. Following extensive surveys in Essex County, the CFIA will
reportedly adopt strategies to control the spread of the Emerald Ash
Borer, a pest which has already appeared in Michigan and Ohio. APHIS,
the New York State Department of Agriculture and Markets and the New
York City Department of Parks and Recreation have jointly participated
in the Asian Longhorned Beetle Cooperative Eradication Program since the
pest was initially discovered in New York in 1996.

**Find FAS on the World Wide Web:**

Visit our headquarters' home page at http://www.fas.usda.gov for a
complete listing of FAS' worldwide agricultural reporting.

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