The chorus is ramping up. The federal government is under increasing pressure to take action on the canola issue.
China seems in no mood to open its doors to Canadian canola. Apparently, it won’t even allow a Canadian delegation into the country to talk about the situation.
You can perhaps blame the Trudeau government for poor relations with China, but many factors may have played a role in the Chinese blockade including African swine fever decimating China’s hog sector and its ongoing trade dispute with the United States centred on soybeans.
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You can’t change the past. What should the federal government do now? Is special support for canola farmers warranted and if so, what form should that take?
Some farmers and farm groups certainly think and hope the feds will act. So far, it’s been a great issue on which opposition politicians can berate the Liberal government.
It would have been helpful optics for Justin Trudeau and his cabinet to demonstrate more concern over the past month. Empathy can go a long way when there are no easy solutions. A little sabre rattling wouldn’t hurt either.
It sounds likely that the feds will finally take the advice of the Canadian Canola Growers Association and make adjustments to the cash advance program, probably a higher limit and a higher amount that’s interest free.
Bigger loans, even interest free loans, won’t solve anything, but they will help some producers storing canola who need cash for seeding expenses. It’s an action the feds can easily take to show they’re doing something and it won’t involve a large cost. It’ll buy some time in the hopes of a resolution and it will buy some good will while toning down opposition attacks.
What can the feds do beyond that? Some have suggested changes to AgriStability, but most producers aren’t enrolled and probably can’t be convinced to enrol without the assurance of a payout. Ironically, for all of its flaws, the principles behind AgriStability are the only way to evaluate and compensate for the differences in economic pain from one farm to the next.
Is some other form of ad hoc assistance warranted and if so how could it be accomplished? Very few viable ideas have been forwarded. Canola in storage has dropped in value and so has new crop canola. Where prices will end up is anyone’s guess and many factors are at play.
No special programs were initiated when India put huge tariffs on pulse crops or when Italy started discriminating against Canadian durum. On the other hand, billions have been set aside for the supply-managed sectors that are likely to lose domestic market share due to new trade deals.
On canola, some will argue that compensation is warranted because the Chinese action is related to the arrest of Huawei executive Meng Wanzhou, but even if you accept that premise, just how would you structure an assistance package?
There are many valid reasons to dislike the Trudeau Liberals and Justin Trudeau specifically, but a Conservative government would also be hesitant to play Santa Claus and shower assistance on the grain industry. Improvements to the cash advance program might be the only logical action.
Unfortunately, this issue is likely to still be important when the federal election rolls around in October. It’ll be interesting to see what the Conservatives propose in their election platform, but it would be surprising to see any promise of cash assistance.
