Canola isn’t the only crop affected by trade disputes.
Ottawa—The U.S.-China trade tiff is destabilizing international trade and the federal government needs a strategy to cushion Canadian farmers from the fallout, says Grain Growers of Canada (GGC) and its members.
In addition to the Chinese blockade against Canadian canola seed and other crops, grain growers are bound to suffer in the global economic slowdown that will accompany the stiff tariffs China and the United States are imposing on each other’s goods, said GGC Chairman Jeff Nielsen.
“The time has come for the Canadian government to aggressively defend the interests of Canada’s agriculture sector in China and around the world,” he said. “This is a non-partisan issue and Canadian farmers need government support to ensure that we are well positioned to weather this storm.”
He called for changes to the AgriStability Program to include “coverage for margin losses below 85 per cent and removal of the reference margin limit. These changes can be made under the current Business Risk Management program framework.”
Asked in Japan during the G20 agriculture ministers meeting about President Trump’s promise of $15 billion in aid to American farmers suffering from the tariff war, Agriculture Minster Marie-Claude Bibeau said the government had already increased the maximum under the Advance Payments Program to $1 million from $400,000. Canola growers will receive the first $500,000 interest free while other crops will remain at $100,000 interest free. As well the AgriStability enrollment deadline for the 2019 program year without penalty, from April 30th to July 2nd, 2019,
Assistance for other crops “will evolve according to the situation,” she said. “The government is prepared to respond to support producers of other commodities should further trade actions occur.”
In addition, the working group set up a few weeks ago by the government and the Canola Council of Canada is still looking at ways that Ottawa can help farmers, she said. “Strong collaboration and ongoing dialogue amongst industry and governments is vitally important to resolving this issue.”
Nielsen said the increase in the interest-free portion of the APP should be expanded to all crops as several are already “being negatively impacted by the current situation either directly or indirectly.”
GGC Vice Chair Markus Haerle, who’s President of Grain Growers of Ontario, said, “The issues we are seeing with trade into China can no longer be said to be commodity specific. As a soybean farmer I’ve seen my prices plummet and markets close due to the flooding of the market by U.S. product.”
In addition to Chinese disruption, the loss of the Indian pulse market and Italian durum market has added to the long list of risks that are well beyond the control of farmers, he said. “Now it is time for them to do everything in their power to keep markets open so the sector can reach its full growth potential.”
Nielsen said the $15 billion in aid announced by Washington is in addition to a $12 billion plan announced last August “to compensate American farmers for lost sales and low prices as a result of trade disputes with China and other countries. President Trump has also indicated that the government will not hesitate to purchase grains from US farmers for distribution as food aid, further distorting markets.
“In addition to the recent suspension of canola imports from Canada over unproven phytosanitary concerns, soybean prices are dropping and imports to China have slowed to a trickle, reaching levels not seen in a decade,” Nielsen said. “Chinese importers are reluctant to sign contracts for other Canadian agricultural products given the uncertainty in the market.”
Bibeau said Trade Diversification Minister Jim Carr is working on finding new markets for Canadian agricultural products.