Free trade with the land of the not so free – corrected

A free trade deal with the USA is one of the government’s goals – as it has been for previous administrations.

John Key pushed the free trade message during his meeting with Vice President Joe Biden.

No-one should be holding their breath while waiting for a positive result though.

To understand just how difficult achieving free trade with the USA will be you only have to look at the strength of  protection in its domestic economy.

The impact of  restrictions on potato growers in Manitoba is a good example:

ALL MANITOBANS:

  • With the new regulations introduced on March 31, 2010, you now have less choice when it comes to picking locally grown potatoes
  • When you buy Manitoba grown red potatoes from a major retailer, you are only supporting Peak of the Market’s 13 member potato growers because of their monopoly control within Manitoba

Small Potato Growers:

  • If you grow even as little as one acre of potatoes, you must apply to Peak of the Market for a permit
  • You are permitted to sell only ‘freshly dug’ potatoes
  • Your potatoes can only be sold in bulk (no pre-packaged bags)
  • Any potatoes unsold by November 1 every year ‘must be given to a food bank’

Farmers’ Markets and Seasonal Vegetable Stands:

  • Farmers wishing to sell potatoes must obtain a permit
  • Potatoes can no longer be sold at any market after November 1 of each year
  • Potatoes can now only be sold in ‘bulk’ (ie. no pre-packaged bags)

Year-Round Vegetable Stands:

  • Under these new regulations, small potato producers are no longer allowed to sell to you

Restaurant Owners:

  • If you wish to feature locally grown potatoes on your menu, they must now be purchased exclusively through Peak of the Market

Vegetable Wholesalers:

  • If you want to sell Manitoba grown potatoes, they must now come exclusively from Peak of the Market

One of the comments left on the blog show what the regulations mean to a single grower:

I am a farm woman and I earn a living growing food especially vegetables. I love farming with a passion , and I’m enthusiastic about planning my garden months ahead. This new regulation will put an almost complete halt to my operation. My seeds are ordered and I have already purchased my potato seeds. I am in disbelief that they some 13 farmers can be so powerful and disregard their fellow Man. farmers. I will also be disappointing my 7 to 10 part-time employees like me enjoy and find great satisfaction in this line of work. I’am creating my own employment and giving someone else a chance at a job in the emplyment section. With ll the talk of supporting small manitoba local farmers, now is the time to speak up because as a grower, it will be a challenge to be able to keep operating as we were in the past. I SINCERELY AM SO VERY HOPEFUL THAT I WILL HAVE FREEDOM TO GROW FOR YOU my vegetables this summer. Jeanne Berard Garden

This is the power 13 potato growers can wield against their immediate neighbours. The combined power of the country’s producers and manufacturers against the perceived threat from New Zealand if protective barriers are lowered will be far worse.

The USA is supposed to be the land of the free but when it comes to trade it’s the land of the not so free.

Hat Tip: Offsetting Behaviour.

CORRECTION:

Julie has pointed out my geogrpahical error – Manitoba is of course in Canada, not the USA.

Producers in the USA are protective about imports but I don’t know any examples, like the Candaian potato one, of protection on their domestic market.

9 Responses to Free trade with the land of the not so free – corrected

  1. Julie says:

    Very interesting and I don’t doubt the US does support anti-competitive behaviour but isn’t Manitoba in Canada?

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  2. Billy The Bunyip says:

    Canada may be USA’s neighbour but it is still Canada!

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  3. KG says:

    The freedom–or otherwise–of Canadian potato growers ought to be the least of Kiwi’s worries.
    And the freedom to sell agricultural products overseas isn’t going to be worth much if NZ continues down this socialist road.
    Sniping about the “land of the free” is a bit rich, coming from a Kiwi.

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  4. poneke says:

    Manitoba was in Canada last time I was there.

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  5. The American dairy industry isn’t far from the Manitoba potato example, actually. Check out this piece from the Washington Post and weep. Seriously – a must read for anyone in NZ dairy who wants to understand how completely ruined American dairy is.

    I cannot give a stronger recommendation than I’m giving for the article linked above for folks who are interested in how American dairy works.

    Poneke: my condolences for your having wound up in Manitoba. Was it -40 season or mosquito season or the two weeks between the two either side?

    @KG: America is wonderful, but it’s massively disappointing for anyone who sets their expectations of free markets too high. It broke my heart a little when I was driving down to DC for grad school from Canada. Stopping at a Sheetz (discount) gas station in Pennslyvania, they had a petition drive going for folks to mail their state congressman against a new regulation that would have basically forced them out of the market in favour of the big guys. Lowered expectations….

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  6. Have now posted a bit on that article over at Offsetting. It’s very very good, and gave me a nice essay question for my take-home exam a couple years back.

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  7. homepaddock says:

    Julie – thank you for correcting my geographical blooper.

    Bill, KG & Poneke, thank you too although had you read the post in full you might have noticed that as soon as I read Julie’s comment I added a correction at the end.

    Eric – thanks for the link, that is a chilling story.

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  8. KG says:

    Quite so homepaddock. My apologies.

    Like

  9. Billy the bunyip says:

    The correction and my comment must have crossed the digital divide at the same time as it was not there when I commented.
    All that aside I have no illusions at all as to the freedom of the USA. With family living there we are constantly reminded of that. Protected species such as Wall St and the UAW to name a couple are ample evidence of the lack of economic freedom.

    Like

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