Given the diversity of carbon regimes in place — or about to be launched across the nation — there is one thing in the agricultural industry that is certain: farmers don’t like it. In fact, many farmers are downright angry.
This was evident long before The Western Producer’s three-week series on various carbon reduction efforts across the planet, which wraps up in this edition.
Yet given the information that’s coming together, it looks like the costs to farmers won’t be inordinate; farmers should be able to withstand them without endangering the financial success of their operations.
In fact, there may even be a grumbling acceptance in the agriculture industry of the various carbon taxes across the provinces, with one condition: this had better work to reduce greenhouse gases and address climate change. If not, it simply becomes another tax on farmers, and that is not acceptable.
What has farmers so miffed, in part, is that many current practices have significantly reduced the amount of carbon emitted, and so far, these practices aren’t recognized in any of the carbon regimes.
Whether it be a tax on carbon, or cap and trade, or a mix, there is not a heck of a lot that can be done to reduce emissions other than incremental improvements. Farmers have already invested a lot of time and money in practices that reduce carbon output.
And unlike the makers of those mythical widgets, who can increase the price and adjust the supply based on demand, farmers cannot pass the tax costs along to anyone. They are the end of the line, absorbing all extra costs because they are largely cost- and price-takers, not setters.
Farmers’ use of inputs and fuels are not elastic; it is necessary. In fact, if farmers try to meet the federal economic advisory panel’s goal of increasing agricultural and agribusiness exports to eight percent of global exports by 2027 (up from 5.7 percent), yields will have to increase, and more carbon-producing inputs (chiefly fertilizer) and fuel will be required.
Thus far, none of the carbon efforts proposed across the country address this problem.
Nor do we know whether farmers receive credit for carbon sequestration efforts already in place or whether their previous investments in expensive equipment with more efficient engines and premium fertilizers (which emit less carbon) will be recognized.
And what will the average farmer pay for carbon? In British Columbia, where the carbon tax is $30 per tonne, the average farmer is paying about $1,000 per year. But federal government numbers suggest that at $50 per tonne in 2022, the average farmer in Western Canada will pay $3,700 per year.
Still, carbon regimes are in place in B.C. and Alberta and agriculture in both those provinces has not been significantly affected. (No doubt some farmers will disagree.) Saskatchewan plans to fight a carbon tax in court, but by 2018, if the province doesn’t have a plan in place, Alberta’s regime will be imposed by the federal government. Manitoba’s plan is still a work in progress. Quebec and Ontario went the cap-and-trade route.
With such diversity, cost projections are of limited value and uncertainty reigns.
The governments that have yet to impose a carbon tax can help address this by recognizing that agriculture is not an industry where practices can change based on taxation. If food security is a prime objective, this must be addressed through carbon policies that reflect reality rather than wishful thinking.
Bruce Dyck, Barb Glen, Brian MacLeod, D’Arce McMillan and Michael Raine collaborate in the writing of Western Producer editorials.