The federal government is open to the idea of enhancing farm support programs — including the advance payments program — as a way to help Canada’s canola producers cope with the loss of one of their key export markets.
But before any changes are made, the federal agriculture ministry needs to review existing support programs and determine which ones should be targeted, said federal Agriculture Minister Marie-Claude Bibeau.
“I’m very open to this idea but I want to take the time to look at the various … risk management programs that we have, including the advance payments mechanism … to see which one would be the most appropriate because our intention is to support our farmers,” Bibeau told reporters in Saskatoon March 29.
It’s “too soon to say” how quickly program changes could be implemented, Bibeau added.
“We’re just looking at reviewing all of the tools that we have but I would say it’s a matter of weeks to have a clear understanding and to make a decision on what mechanisms would be the most appropriate … and where we have the most flexibility.”
Bibeau and federal Trade Minister Jim Carr were in Saskatoon last week to meet with canola industry officials and provincial ministers.
Federal, provincial and industry leaders shared information on the current situation regarding canola exports to China and discussed potential solutions aimed at resolving the trade issue.
Chinese customs authorities have terminated canola seed shipments from two of Canada’s largest canola exporters, Winnipeg-based Richardson International and Regina-based Viterra.
Chinese authorities cited pests and other phytosanitary concerns as the reason for the trade action.
So far, only two companies had the export licences suspended, but other canola exporters from Canada have also indicated that new sales to China have effectively been curtailed.
“It’s Viterra and Richardson that have been affected by regulatory decisions by the customs agency in China but all of our canola seed exporters have said that new sales of canola have effectively dried up,” said Canola Council of Canada president Jim Everson.
Bibeau said the government of Canada is working to find a “science-based solution” to the trade disruption with China.
She declined to acknowledge that China’s ban on Canadian canola seed exports is politically motivated but conceded Ottawa is also working on the diplomatic front to ensure a timely solution.
“We are really putting the emphasis on (finding) a science-based solution,” Bibeau said.
So far, inspectors from the Canadian Food Inspection Agency “have found no pests of irregularities …” that should impact trade with China, she added.
Everson said no other importers of Canadian canola have raised concerns about the quality of Canadian canola.
“We have these multiple issues that have been raised by China, which is perplexing to us because other importers have not (raised concerns),” Everson said.
If the disruption to canola exports “is truly about quality, it shouldn’t take very long at all” to resolve, he added.
Sources who attended the meeting with Bibeau said it appears unlikely that Canada will send a political delegation to China.
Last week, the provincial government and the Agricultural Producers Association of Saskatchewan said they would press Ottawa to consider immediate changes to the Advance Payments Program (APP), a farm cash advance program that is back-stopped by federal government.
The program offers cash advances to farmers on the condition that the advances will be repaid, under preferred terms, within a certain period of time.
As it stands, the program offers a maximum advance of $400,000 per qualified applicant, with the first $100,000 offered interest-free.
In meetings on March 29, Saskatchewan Agriculture Minister David Marit requested that the maximum cash advance limit be extended to $1 million, with interest payments waived on the entire amount advanced.
Ottawa was also asked to extend the repayment deadline, a move that would reduce financial pressure on farmers who are either unable or unwilling to sell their canola at reduced prices.
“Hopefully, that will help alleviate the pressure of spring seeding and the expense around that side of it,” Marit said.
In a March 28 news release, APAS proposed changes to the advance payments program, along with improvements to the federal-provincial AgriStability program.
“AgriStability is intended to be the program that supports producers when market or price problems put their income at risk,” said APAS president Todd Lewis.
“But because of funding cuts, program design issues and administrative red tape, many Saskatchewan producers withdrew from the program. So, we have a potential vehicle available for governments, if they are willing to commit to improvements.”
APAS proposes the following changes to the AgriStability program:
- An enhancement of AgriStability coverage to deal with export market issues.
- Elimination of enrolment fees for 2019 AgriStability applications.
- An extended 2019 enrolment deadline and elimination of late-enrollment penalties.
- AgriStability interim payments should trade issues seriously reduce farm income.
Carr told the media last week that Ottawa will consider changes to existing farm support mechanisms to provide short-term financial relief to producers, who are also facing restricted trade in pulse crops to India and durum wheat to Italy.
“If necessary and as necessary, we will look at possible support,” he told Bloomberg.
Saskatchewan’s canola seed exports to China were valued at nearly $1.4 billion in 2017.