Mr. Speaker, I will be splitting the remaining 20 minutes with the members for Lakeland and Kootenay—Columbia. I am happy to take part in the debate this evening because it is of great importance to my riding of Peace River, Alberta which is mainly an agriculture producing riding. Farmers in Peace River country know full well the impact of the agriculture trade wars that have taken place in the past.
In order to talk about this issue we have to talk about the massive trade war that was taking place as a background to the Uruguay round negotiations in agriculture. Agriculture has been one of those mavericks that have not been under trade rules in the past. For over 50 years we have had trade rules with regard to industrial products and some services around the world. But agriculture was not brought under those trade rules until 1992 and only then it was a modest start. The backdrop was the massive trade war that was taking place during the 1980s. I know from my own experience, having farmed during that period, I certainly do not want to go back there again and be subject to those massive European and American subsidies. I do not want to, nor does my son, to go back to the situation where we have farm programs where we have to jump through all the hoops in order to qualify, in other words farming the program, growing wheat year after year with crop rotation which really it did not call for it at all. It was not a good agricultural practice.
We do not want to go back there. That is the setting for the Uruguay round that took place with the signing in 1992.
I have to remind the House that it was only a modest start. All farm countries recognize it was a modest start, that we had to at least get agriculture started. They used 1986 as the base year for calculating subsidies, one of the highest years in the history of agriculture subsidies in the world.
The idea was to get agriculture started, reduce some tariffs, reduce export subsidies by a modest amount, build in a future round which is the one we are talking about for 1999-2000 in order to make great progress. I guess I would have to say it is understandable that we are in the situation we are today.
Over 85% of the world trade in agriculture is still not subject to controls through rules. In addition, this has brought about a very stagnant farm net income situation. For the last 10 or 12 years we have had stagnant farm net income in Canada. The east Asian situation has hurt us further.
Here is the present situation. Farmers are hurting, net farm income has decreased and there is the continued big use of European and American subsidies, although they are staying within their limits on their program. That brings me to what we need to do to correct the situation.
We are talking about some kind of short term program, but that is not the answer for farmers in the long term. I would make the case that we have to work together with like minded countries to advance this farm negotiation that is going to be taking place at the World Trade Organization.
The Cairns Group has been very active in looking for trade liberalization. I would make the case that we have to also include the United States as an ally in reducing massive European subsidies. The reason I say that is I believe they are only basically responding in the United States to European subsidies, not really wanting to do it themselves, but Europe has the systemic problem of trade and agriculture subsidies. I believe it has the problem for a number of reasons such as a couple of world wars where it was short of food.
That does not excuse the European Union for producing beyond what it requires itself. That is what is happening these days. It is overproducing. Last year world wheat demand was down by 8% but what did we see from the European Union? A 30% increase in production. That is because farmers are getting these massive subsidies.
I suggest we have to co-operate with the United States. It is one of the world's biggest grain producers. I think it is in our interest to work together to try to convince the European Union to phase down these subsidies in the next round of the World Trade Organization talks to be taking place within the next year.
I suggest we might have to move outside the agriculture box in order to do that. We have to put some pressure on these people. We might have to talk about industrial tariffs. We might have to talk about security in things like NATO, intellectual property, services, all things the European Union would probably want. I think we have to be very forceful because our farmers simply cannot compete against the treasuries of the other countries. We can compete on the basis of production with anyone in the world but we cannot compete with the treasuries of the United States and Europe. It is in our interest to try to get some trade liberalization.