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PTAC Calls Commerce Department Duties on Imported Swine Unjustified

by 5m Editor
18 October 2004, at 12:00am

WASHINGTON, D.C - The Pork Trade Action Coalition called a Department of Commerce (DOC) announcement today of preliminary dumping duties on live swine from Canada an “unjustified and unfair tax on American farmers.“ PTAC vowed to continue to fight against the duties on behalf of hundreds of American farmers who rely on the imports for their livelihoods.

The DOC announced preliminary duties on live swine from Canada ranging from 13.25 percent to 15.01 percent. The DOC will make its final determinations early next year, and duties may increase or decrease from the preliminary determinations. The International Trade Commission (ITC) is expected to make a final determination on the question of whether imports have injured the U.S. industry by March 2005.

“The DOC’s preliminary dumping rates are unfair and will hurt hundreds of American farmers who buy Canadian pigs and raise them to market in the U.S,“ said John R. Block, former U.S. Secretary of Agriculture and a Senior Advisor to PTAC. “These duties are completely unjustified. Canadian exports are not hurting the U.S. industry – they account for only 3.3% of the U.S. market. In fact, U.S. pork producers are enjoying record prices and record profits. In addition, the price of hogs is set by the market – not by Canadian exporters. The DOC has made a misguided trade policy decision that could wipe out many small farms in the Midwest.“

The National Pork Producers Council (NPPC) and other groups filed the petition earlier this year with the U.S. government alleging that Canadian hog producers were dumping (exporting hogs at a price below their cost of production) and that the Canadian government is providing illegal subsidies to their hog farmers. In August, the DOC rejected NPPC’s claim regarding Canadian subsidies, ruling that payments to Canadian hog and other farmers did not break U.S. laws or world trade rules.

“The government tax on Canadian pigs will make these pigs unaffordable to American family farmers,“ said Larry McAllister, Founder and President of Iowa-based Prairie States Management Company, a family owned and operated business founded in 1986. “We are particularly disappointed that the National Pork Producers Council has pursued this matter which penalizes its own members whose business practice is to buy pigs from Canada. I was assured that the NPPC had no desire to close the border to Canadian pigs. However, this tax does, in fact, close the borders to many finishers like myself. I don’t believe the DOC or the NPPC have considered the impact of this decision. I supply many Iowa farmers with Canadian pigs to feed under contract. This tax will make it difficult to supply these pigs affecting the livelihood of many Iowa farm families “The NPPC and the DOC need to understand how these duties will hurt hundreds of independent pork producers.“

While the DOC set preliminary duties for one Canadian exporter at a minimal level, duty levels of 14.06 percent on the nearly 80 percent of Canadian swine exports to the U.S. covered by the “all other rate“ could put many independent American farmers out of business.

“Two-thirds of Canadian imports are baby pigs imported by family farms that cannot otherwise obtain the quality or quantity of pigs needed from U.S. sources,“ said McAllister. “Most of the remaining imports are slaughter hogs.“

Added Block, “These Canadian pigs are a vital component in U.S. pork industry productivity and profits. They allow U.S. packers (the companies that slaughter the hogs and turn them into pork products) and processors to meet the combined demand for pork in the U.S. and in export markets that the U.S. has been able to develop.“

U.S. and Canadian farmers, finishers and others recently formed PTAC to fight the antidumping trade petition. PTAC members represent hundreds of family-owned farms in the Midwest who have built their business plans based on buying Canadian pigs to raise them in the U.S. on American grain. Because there is more capacity to slaughter and process hogs in the U.S. than the total supply of domestic born hogs, Canadian imports allow more hogs to be slaughtered therefore increasing the efficiency of packers' production lines. These pigs are a critical element of many U.S. farmers’ operations, allowing them to remain competitive in a U.S. industry in which some large, integrated packers own a significant portion of the hog supply.

“This case is far from over,“ continued Block. “The Pork Trade Action Coalition will continue to fight this unjustified farm tax. We are confident that the facts will show that imports are not injuring the U.S. industry, but instead strengthening it.“

The goal of the Pork Trade Action Coalition Force is to assure that the U.S. government considers all the facts in the Canadian Swine case fairly and objectively, with a full understanding of the ramifications of any decision.

For more information on the Pork Trade Action Coalition or a copy of the DOC fact sheet on the preliminary decision, please contact Dara Klatt at (202) 466-6210 or [email protected].

Source: Pork Trade Action Coalition - 15th October 2004

Pork Trade Action Coalition

5m Editor