Wednesday, November 08, 2006

Canadian farmers watch U.S. election

Sometimes farmers forget that when they vote in their local communities, the outside world is watching the results.

While Canadian news rarely is reporting in the U.S. press, American news is often reporting by the media in the North. Yesterday, the majority of daily newspapers and the broadcast stations in Canada played up high in their newscasts the U.S. election and what might be the impact.

Canadian farmers and rural areas were also tuned in, attempting to understand what their American neighors might do in terms of international trade policy if the U.S. government at different levels becomes more left-leaning.

This week there were attempts to perhaps get World Trade Organization talks going again, and the U.S. plays a key role in whether any international trade agreement in agriculture will ever be achieved.

The Canadian wheat farmers in particular want to know where the U.S. and Europe will stand on their subsidies to farmers.

There is inner turmoil in Canada's wheat industry itself, with the Canadian government attempting to end the Canadian Wheat Board monopoly on international grain exports, and two of the largest grain players at a chance to possibly merge.

Yesterday, Saskatchewan Wheat Pool announced it offered an unsolicited bid to buy Agricore United: if they merged, the market capitalization would be worth more than $1.2 billion, according to Pool.

For Canadian wheat and durum farmers, this means there might be less competitors who want their grain in Canada.

If the Canadian Wheat Board was also no longer the sole seller of grain outside of the country, then more Canadian farmers may be looking south of the border to ship their grain, especially to the pasta market.

That's why Canadian farmers were watching the election south of the border: take the changes happening in agriculture within Canada, add new political dynamics in the U.S., and what happens in trade between the two countries will be interesting, to say the least.

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