‘Slow death by 1,000 regulations’ for agricultural trade

Glacier FarmMedia – Farmers’ access to foreign markets is slowly being strangled by an increasingly complex thicket of diverging rules enacted by countries around the world, says a University of Saskatchewan economist.

Why it matters: A new policy paper says global food security is being threatened by protectionist trade rules in many exporting countries.

“It’s like we’re bleeding from 1,000 cuts, and every single one of those cuts hurts trade and hurts food security,” said May Yeung, a professional affiliate at the university’s Johnson Shoyama Graduate School of Public Policy.

Yeung is the author of a report on non-tariff measures in agriculture that was recently published by the University of Calgary’s School of Public Policy. They include agri-food regulations created to protect human, plant, animal and environmental health in each country.

“They are an increasing factor impeding world food trade as more governments are basing policy decisions on ideological or political factors rather than sound science,” said the report.

As a result, the “agri-food trade system becomes less predictable, riskier and more volatile,” it said. “For international trade, it has been described as a slow death by 1,000 regulations.

There will be serious consequences if this trend continues, the report said.

“The more divergence, the more friction is created in agri-food trade, which raises fulfilment costs whose cumulative effect thickens borders, gradually grinding trade movement to a halt.”

Yeung said regulators in most countries used to have a tacit agreement that their agri-food standards would largely harmonize with those of other nations. They mutually recognized each other’s rules “so it wasn’t too difficult for anyone who’s exporting,” she said.

“What’s happened recently since the early 2000s is that countries are moving away from mutual recognition or harmonization or any sort of convergence, and they’re going further and further their own way.”

By affecting exports, the problem is endangering farmers’ ability to feed the world at a time when the total global population is expected to grow to about 10 billion by 2050, she said.

“More and more of us who study this are now saying, ‘look, if we don’t figure out some way to converge our regulations, then we really are threatening our global food security’.”

Although Canadians have largely won the birth lottery when it comes to the supply of food, “we have this thing called winter,” said Yeung. “Unless we want to go back to the 1920s when everybody would start canning and had a cold room … we have an issue, because remember, that single winter doesn’t really allow us to grow a lot, so if you want a balanced, nutritional diet, we need to import stuff.”

She said there is no silver bullet for slow death by 1,000 regulations. Officials instead must undertake the grinding work of holding meetings, talks and negotiations between countries and take “10,000 steps together, right? You have to all work together.”

The report’s recommendations include creating and maintaining “a sustained, continuous, vocal global conversation to counter political factors in science-based decision-making, recognizing that economic rationale is not always an incentive.”

It also recommended encouraging regulatory convergence by using every available venue and forum to open communication channels and build networks, including informal and formal options provided by preferential trade agreements, the World Trade Organization and multilateral groups.

The report said there also needs to be sustained, co-ordinated collaboration among domestic stakeholders, such as farmers, to address international non-tariff measures.

Yeung said the problem is that many countries are reluctant to give up sovereignty, meaning the political will to change things sometimes doesn’t exist.

“And I don’t know how you figure that out because people have to be willing to talk about things and willing to budge on their positions, and some are more entrenched than others.”

Civil groups within countries have promoted causes ranging from eliminating pesticides to opposing food imports, pressuring governments to respond with new regulations, said Yeung. She pointed to how polarized the world has become about genetically modified organisms even though the technology has boosted yields and allowed crops to be grown in areas that were once impossible.

She described the controversy about GMOs as based on unscientific fears over a “new fancy name, and they did stuff that sounds scary. It’s like, ‘well, I don’t understand’.”

However, the world’s agri-food trade has become segregated into two camps.

“One is the countries that do participate in GMOs and have adopted GMOs, and then there are the ones that do not,” said Yeung. “And then the ones who do not may or may not allow import for consumption, they may or may not allow cultivation — most of them do not allow cultivation — some may or may not allow it for animal feed, they may or may not allow it in for other purposes. So, look how complicated just that sentence is, so if you’re trying to export something, say your (GMO) canola, and you’re trying to figure out what to do, it gets really, really complicated.”

Among the headaches faced by farmers is the risk of accidental mingling of GMO and non-GMO products in the supply chain, said Yeung.

An unapproved line of genetically modified flax was detected in 2009 in shipments to the European Union.

“And Europe was Canada’s largest flax market, and they shut the entire market down instantly, and cost millions and millions of losses to the Canadian flax industry.”

The report said preferential trade deals such as the Comprehensive Economic and Trade Agreement between Canada and the European Union have improved overall bilateral trade. However, it said CETA’s focus on reducing or eliminating tariffs has done little to mitigate non-tariff measures that impede many of Canada’s agri-food exports to the EU.

The divergence in regulations around the world isn’t just about food, said Yeung, pointing to rules detailing how far apart headlights can be in cars.

“But in food — particularly because of food safety issues and the environment, and because of its biological nature — there are a lot more rules and regulations.”

The trend is partly being led by significant improvements in the ability to examine agri-food imports for pesticide residues, allowing officials to test products “even down to infinite zero, so things are getting more complicated and much more stringent.”

Exporting agricultural products used to be relatively simple, said Yeung, with tacit understandings among some countries to recognize each other’s systems.

The current situation is quite different, said the report. Farmers or exporters who legally and correctly use a chemical for an agri-food product in their home market “can find that the same product is rejected at the border of an importing country because of these differences in minimum residue limits (MRL), resulting in delays, increased costs and, if a perishable, degradation and possible physical loss of the product itself.”

The issue is being aggravated by public misconceptions about the role of MRLs, “to which governments are responding with increasingly stringent MRLs in a race to zero tolerances,” said the report. “There is no scientific evidence of demonstrable benefit to food safety in approaching zero, but it is occurring at the expense of significant disruption to agri-food trade.”

It has been estimated that both MRL divergence and stringency have reduced trade for the 30 largest globally traded crops, said the report.

Farmers must either segregate their product’s supply chain to continue to export to multiple divergent markets, use alternative crop protection, or give up on a particular market, “all of which imposes considerable adjustment costs,” it said.

– This article was originally published at The Western Producer.