Inroads on international roadsThe federal government is making inroads for Canadian barley by fostering new international trade relationships.
At the end of March, Prime Minister Harper and Gerry Ritz, minister of Agriculture and Agri-Food Canada (AAFC), announced the launch of free-trade negotiations with Japan that will benefit grain growers in Western Canada.
“A free-trade agreement with Japan could provide tremendous opportunities for the agriculture industry,” said Ritz, who was in South Korea for similar talks at the time of the Japanese free-trade announcement. “Japan is already our agriculture industry’s second largest market. Importing most of their food needs, Japan represents a market approaching $4 billion for our farmers and food processors in Canada.”
According to AAFC, Japan is currently the second largest market for Canadian malt barley—Canada is Japan’s largest malt barley supplier, providing 40 per cent of malt imports.
“Japanese buyers have grown to trust the quality of Canada’s world-class wheat and barley,” said Ritz. “In fact, Japan’s world-famous beer, Sapporo, is a longtime user of Canadian malt.”
“Sapporo buys Canadian malt for both its operations in Japan and of course its Sleeman operations in Guelph,” said Ritz. “Having said that, there’s a growing demand around the world for feedstocks, for feed for animals as well, and certainly we have the capability to deliver on both levels.”
Just prior to Japan, Harper met with Yingluck Shinawatra, prime minister of Thailand, to begin official discussions on free-trade deals with Thailand.
In February, Ritz led two trade missions—one to China, with Harper, and one to Washington, D.C.—to promote Canada’s world-class barley to potential importers. The intent was to reaffirm with China and Washington that the quality of Canadian grains will continue to improve.
“We need to maintain that top-quality product that we have,” said Ritz. “It’s a hungry world out there. It doesn’t matter what part of the world you’re looking at—from the European Union to China to South America to parts of Africa—there’s growing demand for quality agricultural products.
“There’s a focus on food security and sustainability,” he added. “Canadian agriculture producers are one of the few groups in the world with the ability to step up their game and produce more.”
During the China mission, Ritz said there were also some productive conversations about Canadian barley.
“In China, one of the major buyers that the Canadian Wheat Board (CWB) used to work with is a group called COFCO (China National Cereals, Oils and Foodstuffs Corporation),” he said. “In our meeting with them, they said that on top of the Canadian malt barley they’ve been importing, they are looking at importing feed barley, as well, to work into their livestock sector—so that’s good news.”
On these missions, Ritz was accompanied by representatives from a number of agricultural groups, including the Grain Growers of Canada (GGC), the CWB, and the Canola Council of Canada, as well as individuals from livestock and life sciences groups.Stephen Vandervalk, GGC president, went on the China mission and said there is high demand for Canadian malt barley for Chinese beers.
“It sounded like they want a lot of Canadian malt barley for their different beers,” Vandervalk said. “They do use a lot of Canadian barley now, but I think they want more.”
Ritz said that rising Chinese demand for Canadian beef could also benefit western Canadian barley producers.
“In China, we had some movement with beef and that’s great for barley growers in Western Canada because beef producers need that good Canadian barley to feed all of their cattle,” he said.
In Washington, there was also interest in barley.
“There’s a big demand for Canadian barley down there,” said Richard Phillips, executive director of the GGC, who accompanied Ritz to Washington. “We need some alignment in standards and disease testing—that would make things easier.”
“We’re looking at every avenue we can to thin the border, not thicken,” said Ritz. “We’re looking at harmonization of regulation and access to that market in more commercially friendly ways.”
These missions were also opportunities to look for ways to build relationships that will benefit the agriculture industries on both sides of the border.
“The trade missions are about relationship-building and keeping the doors open for communication,” said Phillips.
“People have the authority to shut the borders, so you need to have relationships where people will call and say, ‘We have a real problem with your product, but before we shut this border, can you guys fix this?’”
So what are the next steps after these talks?
“The next step would be retracing some of the original steps, making sure we continue to trade to those countries that have become major buyers,” said Ritz. “We make sure those trade routes are open and the commerce continues to move through. We’re a trading nation and we produce a lot of good-quality product—we just need a good place to put it.”
Canada has concluded free trade agreements with nine countries: Colombia, Honduras, Jordan, Panama and Peru as well as the European Free Trade Association states of Iceland, Norway, Switzerland and Liechtenstein.
In March, Thailand joined a growing list of countries with which Canada is negotiating a bilateral free trade agreement. According to the Office of the Prime Minister:
- In 2011, Canada’s bilateral merchandise trade with Thailand was nearly $3.5 billion.
- In 2010, Canadian direct investment in Thailand was valued at $890 million.