A loan is OK for now . . .

But if the China dispute lingers, farmers will deserve cash compensation

It seems obviously a good thing that the federal government today quintupled the interest-free Cash Advance program to $500,000 and ramped-up the prime rate portion to a total of $1 million combined.

I say “obviously” because I know from writing about cash advances last year that they are a topic that gets farmers fired up. These sorts of nuts-and-bolts-of-finance programs have many little devils hidden in the details, and no doubt there will be some we discover in the coming days. (I expect my phone to start ringing any minute now . . .)

But in geopolitical and national terms, the government stepping in with something like this doesn’t just show support for farmers, who are caught innocently in the fight between authoritarian China and (naively?) rules-following Canada, but also signals to China that this country will step in to help the people that it targets for retribution. China is a bully, and it is as ham-handed and brutal as bullies almost invariably are. They sniff weakness and lack of commitment when picking targets, so China is no doubt watching closely how this country reacts to its belligerence. The government stepping in with a program that provides some support for farmers for the next year shows a willingness of the government to play this thing out in the coming months, and not a desperation to “fix this thing fast because we can’t take the heat.”

Acting desperate to assuage the Chinese would probably just embolden them in their belligerence. Weakness is unlikely to bring respite.

Unless the U.S. drops its case against Meng Wanzhou, or she wins her extradition hearing in Canada, I can’t see this situation clearing up in the next year. That means that whoever is government at this time next year will probably have to come up with compensation for farmers now taking a hit for the sake of the nation. A loan won’t be enough if China keeps its border closed and prices depressed. Farmers are taking a financial hit here and will deserve cash compensation if the situation lingers. It might cost a lot, but providing compensation would also demonstrate to the Chinese that its attempt to hurt one isolated group of Canadians and divide Canadians over whether or not to give in to China won’t work. It might be a Liberal government. It might be a Conservative government. But whoever it is needs to let China know it can’t reach into Canada and deliberately hurt Canadians and damage their industries.

Longer term, the best response is to diversify markets and find more people who will buy Canada’s canola and canola products. Canada relies too heavily upon the U.S. and Chinese markets, which allows those countries to play games with Canada like both have done in the past year. That’s why it was good to see International Trade Minister Jim Carr announcing today that he’s heading off on another mission to build wider markets for Canadian products like canola.

But that’s going to be the work of years and decades, not a quick fix and full compensation for China, with 20 percent of the world’s population, blocking access to its market. It’s necessary work. It’s important work. But it’s not going to fill in that hole created by Chinese fury.

Lots of people have called upon the government to send ministers, maybe even the Prime Minister, or Agriculture department officials, or canola industry officials, or somebody or other, over to China to have a good talk with the Chinese about their concerns and about how we’d really, really like them to reopen their market to Canadian canola. Pardon my skepticism, but to me that seems like the only thing it would accomplish would be to prove to the Chinese that we are weak, that we can be hit and will then buckle under the pressure. I just can’t imagine it working.

But retaliation, which others have called for, also seems pointless to me. Canada can’t hurt them that badly. They’re not going to scream if we play back at them their games on trade, or make a lot of noise about things China is very touchy about, like its abuse of its Muslim Uyghur population. All retaliation would accomplish, methinks, is turning China’s present tantrum into a long-term grudge match. Canada doesn’t need that.

So, OK, cash advances will allow people to bin their canola, pay off bills and wait for this thing to blow over. It’ll help for a few months, but I’m guessing that less than a year from now I’ll be covering news of direct compensation for Canadian canola growers. It’s what they’ll deserve if this dispute isn’t cleared up.

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