TORONTO — Canada imposed a duty of more than $1 per bushel on American feed corn imports on Friday, following complaints that U.S. farm subsidies are creating low prices that Canadian farmers cannot compete with.
The federal Revenue Department in Ottawa said the duty, $1.047 in U.S. currency, was intended to put prices of imported American feed corn on a par with that grown by Canadian farmers.
It said that Canadian growers have seen a significant drop in prices and that it was "satisfied that there was a reasonable indication that the subsidized imports of grain corn have caused material injury to the production in Canada of like goods."
The department said the Oct. 31 cash price for U.S. No. 2 grain corn was $1.57 a bushel in U.S. currency, reflecting 99 cents of farm program subsidy. It did not give the Canadian price for the same grade.
The Canadian move follows the Oct. 16 Washington decision to impose a 15% duty on Canadian softwood lumber, causing strong protests from Ottawa.
But Canadian government spokesman Denis Comeau said there was no relationship between the two decisions.
"The two are simply not linked. This decision was based on the merits of the evidence presented," he said.
The tariffs nevertheless set back efforts by the two countries to negotiate a comprehensive free-trade treaty, an initiative proposed by Prime Minister Brian Mulroney to President Reagan last year and begun in May, 1986.
In Washington, Agriculture Secretary Richard E. Lyng said he was "astonished and dismayed" by the Canadian action and denied that U.S. corn exports to Canada are subsidized.
"In the classic definition, an export subsidy means that a lower price is offered to foreign buyers than to domestic buyers," Lyng said. "This is simply not true in this case. The price for U.S. corn is the same for Canadian buyers as for our own."
Canada's 40,000 corn growers are mostly in the provinces of Ontario and Quebec and their harvest is worth about $360 million annually. It is almost entirely animal feed and corn sweeteners.