September 23, 1998

Midwest Farmers Running Out of Options in Protest on Imports

By THE ASSOCIATED PRESS

ISMARCK, N.D.-- Farmers and ranchers who blockaded Canadian border crossings on Monday to keep farm products out of the country may have few options besides seeking a grain-dumping action by the Federal Government with the International Trade Commission.

Hundreds of farmers and ranchers blockaded Canadian border crossings and stopped a Canadian Pacific train for about 20 minutes near Portal, N.D., by putting a tractor on the tracks.

One Montana farmer, Hank Zell of Shelby, said: "These little towns are drying up. Farmers don't have any money."

Frustration with trade policies has intensified so much that North and South Dakota officials began pulling over Canadian trucks last week under tougher inspection programs for wheat and livestock.

"Our market just keeps slipping away from us," said the blockade organizer, Ron Jensen of Sweetgrass. "We just can't afford to produce a bushel of grain for $2. The Federal Government says it costs us $5.54 to produce it."

The farmers have had this argument before.

From June 1993 to May 1994, Canada shipped nearly 91 million bushels of wheat south. Under pressure from farmers and farm-state lawmakers, the United States adopted limits that year on the amount of wheat Canada could export to the United States without paying tariffs.

But those quotas -- which allowed Canada to ship only 55 million bushels of wheat annually before tariffs were imposed -- were lifted a year later, and grain shipments from Canada have increased to 73.2 million bushels in the last year.

The law used to impose the tariffs was abolished during negotiations in 1995 under the General Agreement on Tariffs and Trade, said Neal Fisher, administrator of the North Dakota Wheat Commission.

Now, the most talked-about and perhaps only option for the farmers is to get the Federal Government to bring a case against Canada before the International Trade Commission accusing the country of dumping grain at below-cost prices.

To do this, the Government would need to know the prices set by the Canadian Wheat Board, which exports all wheat grown in western Canada. But efforts by Congress's General Accounting Office to audit the board have failed.

Not everyone blames the Canadians. Ford Runge, an economics and law professor at the University of Minnesota, said Canadian grain imports might have some modest regional impact on prices, but in the main, farm prices are set by larger forces of supply and demand.

"This is just a reflection of farmers' frustration with low prices and a series of bad years," he said.

Canadian officials contend that they are simply meeting customer demand and are not dumping wheat on the American market.

"It's customer satisfaction we're capitalizing on now in the U.S.," said Jim Pietryk, a spokesman for the wheat board. "Our durum, the last couple of years, has been disease-free."

A North Dakota State University study last year found that durum and barley producers in the upper Midwest had lost nearly $270 million in income in three years because of Canadian grain dumping. Processors said they were forced to buy Canadian grain because of disease-plagued domestic crops.

American farmers dispute this, saying there is plenty of good grain south of the border.

Another problem for farmers is that United States trade officials tabulate wheat import figures on a nationwide basis. Fisher said that meant the impact of Canadian imports on farmers in the upper Midwest was not adequately measured.

A spokesman in the office of the United States trade representative, Charlene Barshefsky, who spoke on the condition he not be identified, pointed out that the United States exported 28 times as much wheat each year as it imported from Canada -- making it hard for farmers to make a case that the market has been disrupted.

The Asian currency crisis has made the situation worse by depressing demand from abroad. That and high-yield harvests at home have resulted in overflowing storage elevators, particularly in the Northwest.

Some farmers have little hope in Government intervention.

Larry Neubauer of Sweetgrass, Mont., said he had had it with trade officials.

"The peaceful ways, the talking ways, the diplomatic ways, have basically been exhausted," Neubauer said.