BFO commends launch of the Market Access Initiative, but further action is desperately needed

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Source: Beef Farmers of Ontario

The Beef Farmers of Ontario (BFO) are pleased to have been present for the launch of the new Market Access Initiative this morning. The Governments of Canada and Ontario have collaborated to take action and tackle market access challenges and disruptions in international trade patterns for Canadian agricultural products.

Effective September 3, 2019, the Ontario government will accept applications for the Market Access Initiative, a cost-share funding initiative open to all Ontario food and agri-product exporters to assist them in accessing new markets. This new initiative is expected to be of interest to agricultural organizations and other value chain partners in the beef, pork, and grain sectors. The Market Access Initiative will commit up to $1 million to market diversification projects and is supported through the Canadian Agricultural Partnership.

Today’s announcement provides important recognition of the costs that the escalating trade disruptions and barriers are having on the competitiveness and viability of the Ontario beef sector.

Like many sectors in agriculture, the Ontario beef sector is heavily dependent on the export market. Close to one third of all beef produced in Ontario is exported to high value markets in the United States, Japan, China, Hong Kong, Mexico, and others.

While the contribution of export markets has reached record significance, there are also growing challenges. Trade disruptions, and non-tariff barriers imposed by other markets on Canadian beef products results in significant lost value that directly impacts beef farmers, processors, and the entire beef supply chain. With the China closure alone, the Canadian beef industry expects to lose hundreds of thousands of dollars per week in lost value based on previous export volumes.

The economic sanctions imposed by Saudi Arabia in August of 2018 have had a significant impact on Ontario Beef exports to the Kingdom. Since 2014 the Ontario beef industry has made a strong commitment to growing brand recognition and strategic partnerships in Saudi Arabia, a market that had grown to over $26.5 million for Ontario beef exports in 2017. The Ontario Corn Fed Beef program has become one of the most recognized and valued premium beef brands in the high-valued Saudi market.

While shifting product to other markets is possible, establishing a competitive advantage in the market and developing relationships takes time and effort, other regions will likely not deliver equivalent demand and a net loss of value will continue to occur. Even with regained access, relationships have been lost and our reputation as a reliable supplier has been strained, which will take significant time to rebuild. In the interim, depressed returns for producers and processors will continue.

Regardless of the reasons for the market access issues facing the sector in a number of key export markets, Ontario’s beef and cattle farmers and processors have no immediate recourse to address current challenges. Current challenges serve as an important reminder of the need to invest in systems to diversify and strengthen our exports.

The initiation of the Market Access Initiative and the commitment by our federal and provincial partners to find solutions to help mitigate the critical market access challenges facing the beef sector is a positive development. However, other agricultural sectors have received billions of dollars in commitments to help offset losses and potential losses incurred as a result of recent trade agreements and disruptions. The beef sector, like all agricultural sectors, deserves an equitable level of support and assistance proportionate to the harm received.

While immediate assistance and support is critically needed to help relieve some of the pressure our farmers are facing, today’s announcement serves as an important first-step in helping to address the consequences of the current trade disruptions and market access issues.

BFO urges our federal and provincial governments to continue to work with the sectors that have been harmed by recent trade disruptions and barriers on the development of assistance and support programs to help farmers weather the storm.

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