Last fall, Myron Krahn spent $45,000 on gas to dry his corn crop.
The federal carbon tax on fuel for grain drying added about $3,800 to his bill.
Given those numbers, Krahn can’t comprehend federal government estimates claiming the carbon tax only costs farmers $200-$800 each year for grain drying.
“We’re not even a big farm and we were in the thousands of dollars, in carbon tax, just on grain drying alone,” said Krahn, former president of the Manitoba Corn Growers Association, who farms near Carman, Man. “I just can’t understand where those characters get their numbers from.”
Last week, federal Minister of Agriculture Marie-Claude Bibeau released estimates on the carbon tax and the cost of grain drying.
Her department used data provided by grower groups, including Manitoba’s Keystone Agriculture Producers (KAP) and Agriculture Producers Association of Saskatchewan (APAS), to arrive at the figures.
The federal estimate of the costs also factored in data provided by provincial governments, including Alberta, Saskatchewan and Manitoba.
In all, the costs of carbon pricing on grain drying work out to between 0.05 to 0.42 percent of total on-farm operating expenses, according to the federal government.
“The analysis that has been made by the department do not show that the impact of the price on pollution has a significant impact on grain drying, that it has a significant impact on the operation costs,” Bibeau said June 9. “The impact is a very small percentage in the operating costs, so this is why we are not moving forward with more specific relief.”
KAP president Bill Campbell doesn’t accept Bibeau’s analysis.
If there’s a minimal cost to growers because of the carbon tax on grain drying, then give the money back to producers.
“I would put a challenge out. If the minister truly thinks that this was insignificant, then send it back (to farmers),” he said from his farm near Minto, Man. “If (the minister) calls it insignificant, then just rebate it. And we’ll see how much was actually paid.”
The carbon tax on grain drying became a contentious issue last fall, when the wet and late harvest forced thousands of producers to dry their grain. Farmers and farm groups complained, arguing farmers sometimes have to dry their grain and it’s unfair to tax an essential practice.
Campbell and other producers take issue with the government’s math.
Based on reporting from the Canadian Press, the government relied on estimates from producer groups and provincial governments. The Alberta government pegged the cost of the carbon tax on grain drying at 16 cents an acre for grain and oilseeds. The APAS estimate was 51 cents per acre to dry wheat.
The Grain Farmers of Ontario figure was $5.50 an acre for corn and about $2.18 for all grains.
The government used those numbers and may have averaged the cost across all the grain farms in Canada, coming up with an average impact of $210-$819 per farm.
When Jeff Nielsen first saw the estimates, one question came to mind.
“Where did they get these numbers from?” asked Nielsen, Grain Growers of Canada chair, who farms near Olds, Alta. “It’s clearly not the data that we submitted…. We were transparent (in our data). So, let them be transparent and tell us where they got the numbers from.”
The $200-$800 estimate doesn’t represent the reality for someone like Krahn. His gas bill for grain drying was thousands of dollars higher in 2019.
“If you take a number and divide by every farmer across the country, of course it’s going to be a small number,” he said.
To help producers like Krahn, federal officials are hinting at other approaches.
In February, the federal and Alberta governments partnered to launch the Efficient Grain Dryer Program. Aimed at covering the cost of making energy efficient improvements on the dryers, $2 million was retroactively made available to cover 50 percent of eligible expenses.
A review of carbon pricing on “trade-exposed industries,” including agriculture, was also planned for early 2020. However, producers should not expect an exemption on grain drying when the review is finalized.
“Where the impact is significant, exemptions have been given,” Bibeau said, citing exemptions for operating farm vehicles or heating greenhouses.
“This pollution pricing policy, it’s an important part for a greener economy and for more sustainable development and I think we also want to recognize farmers are doing a lot in terms of improving technologies, improving their practices to be good stewards of the land also, but I don’t think the price of pollution, waving the price of pollution is the right approach.”
Nielsen doesn’t believe farmers are being recognized for their beneficial practices. Thanks to zero tillage, producers have cut fuel use. They’re also using fertilizer more efficiently now because of precision technology.
“We’re sequestering carbon (in the soil)… and (we’re) not going to burn any more fuel than we absolutely have to,” he said. “It (grain drying) is just a fact of life for a lot of grain producers across Canada. (And) if you’re a corn producer, you have to dry your grain.”
Producers are willing to do their part when it comes to reducing emissions and climate change, Krahn said.
But a tax on grain drying doesn’t make sense, especially when margins on grain farming are extremely tight.
“Whether it’s the trade issues, or the lack of action on trade issues by the current government, or the carbon tax on farms, we’re just continually being put in a position of (disadvantage) compared to our competitors.”
Carbon pricing for provinces without their own climate change plan went into effect in 2019, starting at $20 per tonne before rising to $30 a tonne in April. Costs will increase until 2022, when they reach $50 a tonne.