Farm groups press feds to get canola moving

Resolving the trade dispute with China over canola is urgent as farmers head to the fields, growers and handlers told federal standing committees last week.

The import ban on Canadian canola costs the entire agricultural sector time and money and is creating significant stress, the agriculture and international trade committees heard from witnesses.

Red Deer farmer Mark Kaun said he has $25,000 worth of canola seed waiting to go in the ground and most of last year’s crop in storage. Switching to a cereal isn’t an option because that seed is in short supply.

“I am holding on my farm 500 tonnes of unpriced 2018 (canola) crop,” he said at the agriculture committee. “Changing cropping plans really doesn’t work to maintain the best agronomic practices in the spring. I have 50 bags (of canola seed) waiting in the warehouse at $600 a bag.”

William Gerrard, who farms near Riding Mountain National Park in Manitoba, said the recent drop in prices as a result of the dispute has cost his farm about $70,000.

And Stephen Vandervalk, Western Canadian Wheat Growers vice-president from Fort Macleod, Alta., said he has lost $50,000 on old crop and could lose $100,000 on new crop.

“When grain growers are caught as innocent political pawns in events that we have no control over, we always pay the price,” he said.

Canadian Canola Growers Association president Bernie McClean said there are about 10 million tonnes of canola in storage, creating cash flow and bin space problems for farmers.

Grain companies told the trade committee they appreciate the government’s efforts to find a scientific resolution to the problem but reject China’s allegation that canola shipments contain weeds, disease or pests. Most believe the problem is political and tied to the detainment of Huawei executive Meng Wanzhou at the request of the United States.

“While we understand and agree that technical discussions between the regulatory subject matter experts must be allowed to occur to either address or dispel these alleged quality issues, we cannot emphasize enough the importance of expediting this process,” said Jean-Marc Ruest, senior vice-president of corporate affairs at Richardson International.

“The current state of uncertainty is creating significant distress among all industry stakeholders, and in particular producers who are currently making spring seeding decisions.”

He said the importance of regaining the Chinese market is clear. In 2018, the grain sector represented slightly less than 30 percent of all Canadian goods sold to China.

“Of the top 25 products exported to China, seven grain and oilseed products appear on the list, totalling $4.8 billion annually,” he said. “Canola seed was, of course the single-largest export from Canada to China in 2018, at $2.72 billion.”

Finding new buyers for that much canola won’t be easy.

Viterra chief executive officer Kyle Jeworski said China takes between 3.5 and five million tonnes of canola seed alone.

“To replace that takes years,” he said. “The challenge is you have to get market acceptance of canola and you have to build up all of the infrastructure.

“It needs to be crushed where you’re converting that seed to both oil and meal.”

Jeworski said Mexico, Pakistan and Bangladesh have some additional capacity but can’t take a fraction of what China did.

The committee witnesses identified other trade issues such as India’s tariffs on pulses, Italy’s refusal to take Canadian durum, Peru and Vietnam not taking wheat and Saudi Arabia not buying barley.

Saskatchewan farmer Megz Reynolds said farmers could possibly ride out a single problem.

“The frightening reality is that almost every crop being grown in Western Canada is currently struggling with one trade barrier or another,” she said.

Ruest said the trend to non-tariff trade barriers is concerning.

“I think it’s incumbent on government to recognize those tactics for what they are and take a very strong stand because it becomes very quickly a very slippery slope with respect to those types of issues being put forward in the future by other jurisdictions,” he said.

The Conservatives have asked numerous times in the House of Commons for an emergency debate on canola but were turned down each time.

“This is a crisis,” said Souris-Moose Mountain MP Robert Kitchen on April 12. “When will the prime minister actually stand up for our canola farmers?”

Saskatchewan Trade Minister Jeremy Harrison said the lack of debate is concerning, considering the importance of canola. He met with his federal counterpart Jim Carr last week to press for action.

He asked for an immediate decision on raising the cash advance limit, saying the province had requested that weeks earlier.

He also said that the issue should be raised to a level of “very significant national effort.”

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