Canola growers want more than cash advance

Farm groups thank the federal government for program expansion, but producers demand an open market and better prices

Canadian farmers are less than thrilled with higher cash advances to help them through the canola dispute with China.

Reaction was lukewarm to last week’s federal announcement that for 2019 the maximum loan advance would rise from $400,000 to $1 million. Many farmers said another loan, even at low interest, does not solve the real problem.

Under the revamped program, canola growers can get up to $500,000 interest-free while the interest-free portion for other crops remains $100,000.

Agriculture Minister Marie-Claude Bibeau also announced that the enrolment deadline for AgriStability would be extended from April 30 to July 2.

While most farm organizations were careful to thank Ottawa for the help, farmers vented on social media. They want the Chinese market open and better prices. Many used the analogy of putting a bandage on shotgun wounds.

“It’s not the silver bullet for the problem,” agreed Agricultural Producers Association of Saskatchewan president Todd Lewis.

The problem is that China has refused most Canadian canola seed shipments since late February, citing contamination, and not yet granted Canadian Food Inspection Agency officials access to conduct their own assessment.

Although Canada continues to approach the issue from a scientific basis, frustrated farmers say it’s time for a political solution.

Glaslyn, Sask., farmer Daryl Fransoo said farmers want to see a plan, not take on more debt. The family operation seeds about 3,000 acres of canola each year and usually takes the interest-free portion of the advance.

“Yesterday alone we lost another $5 a tonne on canola and that pretty much wipes out the (extra advance) the federal government gave agriculture,” he said May 1.

“I think we’re in real trouble in the short term here and that doesn’t bode well for the long term obviously.”

Fransoo said they won’t take the advance this year because they were fortunate to have a good marketing year last year. But he worries that if the situation isn’t resolved and farmers have to repay the advance they will start dumping canola on the market and cause prices to plummet further.

Canadian Canola Growers Association president Rick White said the increased advance only buys some producers time and individuals will make decisions based on their own circumstances.

“Over time, if China continues to be out of the market, cash flow will become more and more and more of an issue for farmers,” he said. “That’s what this program is designed to do.”

Those who already applied for 2019 advances since applications opened April 1 will be able to amend their applications at no administrative charge.

Since April 1, the program had issued slightly more than $300 million on 3,500 applications and is processing about 100 applications daily. Those numbers are trending about 10 percent higher than last year.

The 2018 program totalled $1.44 billion on 10,300 advances, White said.

Lewis said farmers may wait to apply in fall after they see how the growing season and political climate go.

He said many farmers hold back canola and sell in June or July. The situation this year means the bump to $1 million might help those farmers who won’t be able to do that.

Meanwhile, the extension of the AgriStability deadline to July 2 allows producers extra time to decide if that program might work for them this year.

Saskatchewan’s assistant deputy minister of agriculture policy, Paul Johnson, said there has been an increase in inquiries and the province does expect some will reconsider participating.

Federal International Trade Minister Jim Carr is expected to lead a trade mission to Japan and South Korea in June in attempts to drum up more buyers for Canadian canola.

Canadian officials are also targeting France, Chile, the United Arab Emirates, Thailand, Malaysia, Pakistan, Bangladesh, Mexico and Germany. Bibeau is in Japan this week for a meeting of G20 agriculture ministers.

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