Flying under the radar in the United States-Mexico-Canada Agreement on trade is a small change in Canada’s access to the American sugar markets — something that the United States has historically guarded with protectionist policies.
In a news release expressing disappointment with many of the concessions granted during trade talks, the Canadian Federation of Agriculture acknowledged the federal government achieved “beneficial results” for some sectors within agriculture, such as increased U.S. market access for Canadian sugar beet producers.
Why it matters: Canada gained a larger, though still small share of the U.S. sugar beet market under the new USMCA trade deal, which is positive for Alberta sugarbeet growers.
Read Also
Ontario’s agri-food sector sets sights on future with Agri-Food 2050 initiative
The first-ever Agri Food 2050, a one-day industry event dedicated to envisioning the future of food and farming in Ontario,…
This market access, while significant to sugar beet growers in Alberta, has little relevance to their Ontario counterparts.
According to information from the Canadian Sugar Institute lobby group, the United States government intervenes in its sugar market to support domestic production of both cane and beet sugar. This artificially supports domestic sugar prices above world and Canadian price levels, restricts imports and uses a special re-export program to encourage exports of sugar and sugar-containing products.
Under the previous North American Free Trade Agreement, Canadian sugar exports were limited to 1/10th of one per cent of the 10.5 million tonne U.S. sugar market. That translates to 10,300 tonnes of beet sugar processed by Lantic Inc. in Taber, Alta., — from sugar beets grown by Alberta farmers — and 59,250 tonnes of sugar-containing products, which are produced in Eastern Canada, primarily at two Ontario blending facilities.
The new USMCA will allow an additional 9,600 tonnes in both divisions.
Arnie Bergen-Henengouwen, president of the Alberta Sugar Beet Growers and board member for the Canadian Sugar Beet Growers Association, said the concession to allow the additional tonnage was based on an agreement already part of the Comprehensive and Progressive Agreement for Trans Pacific Partnership. And while Canada’s share of the American sugar market remains small, he said it’s still significant to 200 growers supplying the Taber processing plant.
He said the additional market access stabilizes the industry, and he hoped it would encourage investment in the processing plant.
“For [the United States] it was a small give. The significance to us is much greater than it is to them,” Bergen-Henengouwen said.
No effect on whole beet exports
As of 2016, Statistics Canada reports 318 farms growing 38,456 acres of sugar beets nationwide. Ontario houses 138 of those producers, with 10,816 acres reported as of 2011. Acreage for 2016 is not available.
Sandra Marsden, president of the Canadian Sugar Institute, said the new market access is only relevant to sugar beet producers whose produce is refined within Canada.
Ontario sugar beet growers export their whole crops to the U.S., where they are processed by Michigan Sugar, which lists itself as producing an average of one billion pounds of sugar each year, making it the third-largest sugar beet processor in the United States. Consequently, Ontario sugar beets are not affected by the USMCA and will continue to be freely exported without trade restrictions.
