Thank you very much for the opportunity to come and speak on this very important aspect.
My name is Jason Skotheim. I farm north of Prince Albert with my brothers. I am also the chair of the Saskatchewan Barley Development Commission, or SaskBarley, as we call it.
SaskBarley is a producer-elected and directed commission that ensures that the approximately 7,500 barley producers have the resources and representation to strengthen Saskatchewan's competitive advantage and ensure that producers' and Saskatchewan's interests are protected.
Our mission is to ensure the long-term profitability and sustainability of barley production for Saskatchewan farmers. SaskBarley is in full support of Canada's participation in the TPP, and we urge the government to sign and ratify the agreement at the earliest opportunity.
The TPP offers a multitude of long- and short-term benefits to the Saskatchewan barley industry. A commitment to the TPP would be investment in the long-term future of barley production. It would provide significant opportunities and benefits for the entire barley value chain in western Canada by way of reduced or eliminated tariffs, markups, and country-specific quotas for feed and food barley, malt, and processed beef and pork products that use barley as an input.
I'll use Japan as an example. Japan typically imports about 330,000 tonnes of barley a year from Canada. Approximately 250,000 tonnes of that barley is used for feed purposes. Last year that number dropped, as Japan began sourcing these commodities from countries that offered cheaper prices due to fewer regulatory constraints.
Currently, there is a tariff of $113 per metric ton for Canadian feed barley entering the Japanese market. This number would be reduced to zero once the TPP was implemented. This would allow Canada to become more competitive within the Japanese market, and could increase the value of Canadian feed barley exports to Japan by up to $25 million.
The TPP would also see barley preparations and flour become duty free immediately in Japan on TPP-wide tariff rate quotas, TRQs, of approximately 400 tonnes, growing to 615 tonnes over five years. Canada currently exports about 100,000 tonnes of food barley a year to Japan.
For malt barley, the TPP would increase the TRQs for Canadian malt barley immediately to 4,000 tonnes for roasted malt and 89,000 for unroasted malt.
The TPP would increase the exports of Canadian livestock, as you just heard from the cattlemen’s association, which would increase the domestic demand for feed barley.
The Canadian Pork Council has estimated that the TPP agreement could increase the demand for Canadian pork in the amount of 1.2 million extra hogs a year. These factors translate into improved access to the Japanese market, which could boost the value of Canadian barley exports by tens of millions of dollars a year, possibly for an additional 400,000 to 500,000 tonnes of Canadian barley and an additional $100 million in increased annual revenue to Canadian barley producers.
Saskatchewan represents approximately 35% of barley production in western Canada. These increases would mean millions of dollars of additional barley exports from Saskatchewan. With a reliable transportation system, this could potentially mean an extra 150,000 tonnes of barley produced a year, either as a crop or as a value-added input.
If the TPP agreement is not ratified, Saskatchewan barley producers and the related value-added industries will be placed at significant risk. We will not be able to maintain our current market export share due to the increase in competition from countries such as Australia and now the Ukraine. It is estimated that we would lose approximately 50% of current sales of barley producer revenue into Japan, valued at over $50 million or 250,000 tonnes of barley equivalent.
Beyond the Japanese market, the TPP would open up trade to many other markets. Tariffs would be eliminated for food barley and barley preparations, as well as feed barley, into the other 11 TPP countries. In Vietnam, the current 5% tariff on roasted and unroasted malt would be eliminated within three years.
The benefits to the Saskatchewan barley industry are our top priority. We want to ensure that barley stays within the farmer's rotation. The TPP would also benefit the entire Canadian agriculture sector, and in turn the Canadian economy, by increasing market opportunities for all the crops Canadian farmers grow.
This increases the sustainability of the farming industry, as farmers need a variety of options of profitable crops in their portfolios in order to maintain their rotations and produce the high-quality crops Canada is known for, while still maintaining a successful and profitable business.
Maintaining a sustainable future for the agriculture producers of Canada means nurturing and growing a sector that has been driving the Canadian economy for the last 25 years, including times when other resources such as oil are fluctuating.
Agriculture has been consistent in terms of exports and job creation. Today, one in eight Canadian jobs are related to agriculture—