The Law of Unintended Consequences at Play in Canada Border Situation

The actions of people, and especially of government, always have effects that are unanticipated or "unintended." Politicians and popular opinion largely ignore this law.

Our industry has changed and we are struggling to define "normal" in a post-BSE world, Terry Stokes, CEO of the National Cattlemen's Beef Association (NCBA) states in an editorial.

He asks: "What does 'normal' mean? Does it mean there are simple answers to complex questions? Does it mean we should maximize short-term gains while sacrificing long-term opportunities? Does it mean questioning the safety of beef to keep from resuming trade based upon sound science? Finally, does it mean keeping our borders closed to trade for short-term profitability for our cattlemen?"

And his answer, "This short-sighted approach to defining 'normal' in a post-BSE world will have unintended consequences for our industry." And those unintended consequences are ones that will continually haunt the industry unless something is done about it.

Much to the dismay of R-CALF, Japan officials reportedly told the group who is leading the fight to keep the border closed that R-CALF's actions have helped delay the time that it will take Japan to resume imports of American beef. James Wisemeyer, writing in Inside Washington Today, says Japanese officials told him that, "When R-CALF points to the risk of Canadian beef, you are increasing Japanese consumers' anxiety for U.S. beef, because we believe the risk of beef from both countries is similar."

And the Congressional action by House and Senate members? Wisemeyer reports that the actions have "stimulated the Japanese media and Japanese consumer associations to start an opposition campaign. This will delay the international Japanese review process, especially the risk-communications process for consumers."

Stokes called the Congressional resolutions "the ultimate hypocrisy," and added this type of action increases the difficulty of reopening our export markets. "We lost $175 per head to our cattlemen when our trading partners halted trade on Dec. 24. Fed cattle prices were $93 cwt. before December 23rd and fell to $78 cwt. afterwards. This occurred because of the loss of export markets. Many of these markets remain closed because of protectionist attitudes within those countries," his editorial says.

But the United States isn't setting much of an example to Japan with our own actions towards Canada. Stokes asks, "Is this the example we want to set for the rest of the world?"

In the 1970s, high soybean prices prompted us to embargo our soybean exports to Japan. The small island nation looked around for an alternative supplier. The Japanese helped turn Brazil and Argentina into our biggest soybean export competitors.

In 1973, Arab members of the Organization of Petroleum Exporting Countries, in the midst of the Yom Kippur War, stopped shipping oil to nations that had supported Israel in its conflict with Egypt. Oil prices quadrupled. That oil price shock spawned the U.S. ethanol movement. In 1980, the partial embargo on U.S. grain exports to the Soviets over the war in Afghanistan closed a big U.S. export market.

U.S. corn growers responded to those politically-motivated market disruptions by aggressively developing alternative uses for corn, which paid off in tremendous growth in both ethanol and high-fructose corn sweetener.

Just like what happened in the past, Stokes warns that these unintended consequences jeopardize our future and the future of the next generation of cattle ranchers. "Loss of demand means lower prices and fewer cattlemen. Loss of export markets means lower prices and fewer cattlemen. More regulation means more concentration, increased costs and fewer cattlemen. I don't think this is what we want for ourselves or for our children."

Stokes ended his editorial with this statement: