With China escalating its trade disputes with Canada and the United States, Canadian farmers say they need a better safety net.
And, says the president of the Grain Growers of Canada, they need it now.
“We’re seeking some immediate changes,” said Jeff Nielsen in an interview about why GGC felt it was important to issue a public call for the federal government to immediately fix what the organization believes is an inadequate system to deal with farmers’ financial challenges.
- an immediate revamping of AgriStability to boost margin coverage from 70 percent to 85 percent
- an ending of the reference margin limit in AgriStability
- extension of the boosted cash advance interest-free levels to $500,000 to all crops, not just canola
- the formation of a comprehensive strategy to deal with the suddenly hostile world trading environment farmers are grappling with
Nielsen said the AgriStability changes could be executed almost immediately under the business risk management rules of the Canadian Agricultural Partnership, which contains the overall agricultural safety net suite.
“We want a program that is bankable, predictable and simple,” said Nielsen. “That’s something that could be changed right now.”
However, achieving large changes to Canada’s safety net program suite has never been easy. The agreements are produced by years of discussions between the federal government, the provincial governments and farmers. They are long-term deals that contain many adjustments and compromises. The current agreement ends in 2023.
Saskatchewan’s assistant deputy agriculture minister, Paul Johnson, was skeptical that any large changes will be possible in the next few months.
“There’s not going to be any substantive changes,” said Johnson in an interview. “Even changing the deadline was complicated…. It would be a monumental task.”
Anxiety is spreading fast and deep in the farming community as it becomes increasingly clear that Canada’s dispute with China, and the U.S.-China trade war, show no signs of ending soon.
U.S.-China trade talks have fallen apart, with the U.S. claiming China has backed out of crucial agreements, and China’s state-controlled media taking an increasingly truculent tone in discussing the situation.
The U.S. has boosted its tariffs on some Chinese goods from 10 to 25 percent, and the Chinese have cranked up their tariffs on some U.S. products.
On May 16, reports were circulating that Chinese buyers had been cancelling purchases of U.S. pork. U.S. soybean sales have already been suffering, slashed as the trade war heated up, but pork had been considered safer because of the collapse in Chinese pork production due to African swine fever.
Nielsen said Canadian farmers know they cannot expect the sort of support that American farmers receive.
“We know we can’t compete in that environment,” said Nielsen.
However, existing programs can be made better and farmers better protected than they are today.
“It’s just to help farmers a bit,” said Nielsen.