Durum dispute skews trade attitudes

North Dakota State Roundup

Published April 1, 1993  | April 1993 issue

A recent dispute between the United States and Canada over Canadian sales of durum wheat in the United States may limit farmers' support for the emergent North American Free Trade Agreement (NAFTA).

The dispute centers on growing sales to US processors of Canadian- grown durum wheat by the Canadian Wheat Board, a non-governmental agency that has a monopoly on marketing of wheat from Canada's prairie provinces. Durum, a hard, high-protein wheat grown in North Dakota, is used to make pasta products, such as spaghetti and lasagna. Prices for durum have fallen sharply in the past four years as has US production.

US farmers argue that durum imports from Canada undercut local prices and are unfairly subsidized by Canada's preferential freight rates for grains and by the Wheat Board's pricing policies. The Canadians respond that their exports are legal under the Canada-United States Trade Agreement (CUSTA) and that the policies alleged to be unfair subsidies have been ruled legal by a special bi-national panel charged with ruling on CUSTA disputes. Moreover, U.S.-subsidized exports of durum to other countries have severely reduced Canadian sales in these markets, wheat board officials say.

US commodity associations and North Dakota's congressional delegation are currently seeking additional measures to limit the inflow of durum. But in the meantime, "This whole dispute has tainted the views of a lot of commodity associations," says Bill Wilson, agricultural economist at North Dakota State University in Fargo. The Minnesota, North Dakota and national associations of wheat growers have taken a strong stand against NAFTA. And the National Farmers Union, in a policy statement adopted at its recent annual convention, "adamantly opposes the North American Free Trade Agreement in its current form."

According to Wilson, support for NAFTA among other growers is generally mixed. Sunflower and edible bean growers generally support NAFTA, but these crops have less economic importance—and their producers less political clout—than wheat and sugar groups. The corn industry's viewpoint contrasts with that of wheat producers. Willis Anthony, a Minnesota farmer and corn growers' spokesman says, "We see great potential for sales of corn sweetener and other corn products into Mexico."

Edward Lotterman