Canola grower aid would send China strong message

The federal government appears ready to support farmers during the present canola dispute with China through program changes, but there is room for a grander gesture — one that would send a message to Chinese officials that Canada is in it for the long haul.

China is refusing to accept Canadian canola seed, ostensibly due to pest issues, which Canada strongly disputes. The move is thought to be in retaliation for Canada’s detention of Huawei executive Meng Wanzhou at the request of the United States for extradition. As long as that situation is not settled, this standoff is likely to continue.

Officials with two main canola groups — the Canola Council of Canada and the Canadian Canola Growers Association — have said they agree with the federal government that the best approach to the situation is to find a science-based solution.

Both groups agree that the federal government is highly engaged with the issue, and Agriculture Minister Marie-Claude Bibeau has said she is considering several options to help farmers who are unable or unwilling to sell canola at lower prices. Her decision may come in the next few weeks.

Key suggestions at the moment include increasing the amount available to farmers from the Advance Payments Program to $800,000 from $400,000, and tweaking the AgriStability and AgriInvest programs.

These are designed to help farmers for the short-to-medium term.

Increasing the allowable limit in the cash advance program should have happened long ago. Farm sizes have grown considerably during the program’s inception, so amounts available need to accommodate the higher expenses producers face.

The program allows farmers to borrow $100,000 interest free for 18 months, and another $300,000 at slightly below prime. It is not being accessed as much as it should be, in part because many younger farmers don’t know about it.

However, with the canola dispute ongoing, the program is getting more attention, so more farmers may discover its potential to manage cash flow. That will allow them to store grain for longer periods, with the hope that they can wait out a drop in prices, rather than being forced to sell grain at a loss because of a need for income.

Still, some farmers are leery of borrowing more money.

In the medium term, suggestions include helping farmers with infrastructure, such as purchasing bins to allow more canola storage for longer periods.

These proposals are designed to nurse farmers through certain stages of the dispute, and they will be helpful, but the dispute has the potential to last for some time.

So why encourage farmers to store so much canola? When the crisis passes, there will be a glut of canola on the market and prices will fall. That too, could take some time to pass.

Why not work to keep canola growing and moving?

This entails finding alternative buyers and federal efforts to seek other markets under trade agreements Canada has with Europe and with 10 Pacific nations in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (which does not include China).

While tweaking AgriInvest and AgriStability would also prove helpful for many, both programs are farm-revenue based. A bolder initiative would address revenue strictly from canola with a compensation plan for low prices.

Although the Canadian government does not appear willing to launch a major scheme similar to the $12 billion support program for farmers in the United States, it can demonstrate that it is willing to shepherd its farmers through this difficult time.

Canada’s economy is too small for a retaliatory trade war with China, but stronger support for farmers would clearly show China that Canada will not allow this dispute to dramatically disrupt markets and — as Prime Minister Justin Trudeau once said in reference to the U.S. — Canada won’t be pushed around.

Karen Briere, Bruce Dyck, Barb Glen, Brian MacLeod and Michael Raine collaborate in the writing of Western Producer editorials.

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