May 24, 2019 by Lee Hart

Canola trade conflict at a standstill

If Canadian farmers were hoping to hear today there is a quick fix in sight to the resumption of canola exports to China, they would have been disappointed.

There is little change on the efforts of the Canadian canola industry and federal government in getting the

Oh, for the return of sunnier days for the canola industry.

canola market to China re-opened — everyone on this side of the Pacific Ocean is doing everything possible, looking at all options and on the other side of the Pacific, China just isn’t talking.

That was the essence of the latest canola industry webinar (the third such update) this morning. Along with Jim Everson, president of the Canola Council of Canada and Rick White, CEO of the Canadian Canola Growers Association, also on the line today was Canada’s relatively new federal agriculture minister, Marie-Claude Bibeau.

The canola industry has been organizing these update webinars since China surprisingly put a halt to imports of Canadian canola seed back in March, supposedly because it was contaminated with weed seeds and diseases. Canada had a re-look at the canola and by all measurable standards there is nothing wrong with the batches. It meets all long-standing export quality standards.

The real issue — that has to be danced around — China is punishing Canada for its involvement in detaining/arresting one of China’s senior Huawei corporation executives Meng Wanzhou in Vancouver, who is wanted on trade issue charges in the United States. The long process to have her extradited from her mansion in Vancouver, 24 miles south to U.S. soil, is just beginning and by many accounts could take years of legal wrangling.

In the meantime, China is sending a punishing message to Canada — we don’t want your canola seed, and we are finding reasons not to take some of your pork. Let’s not forget the plight of three Canadian citizens who have been arrested and jailed in China on some fairly flimsy charges and could face the death penalty.

As the situation persists China is likely to tighten the screws even further. Also as was pointed out in the webinar today, there is an increasing global movement toward trade protectionist measures which doesn’t help matters either.

The webinars repeat the message that all levels of Canadian industry and government are working “very, very hard” to find a resolution to the problem. And the fact appears that there is no resolution unless China changes its mind. And since China won’t even talk about the problem, any solution is stalled.

Back on home soil, about the only thing the government can offer, that is somewhat helpful, is to increase the level of Cash Advance Payments available to producers to $1 million and along with that make $500,000 interest free. The $1 million limit is a permanent change, while the interest-free limit is for 2019 only. That is the plan, however as Minister Bibeau pointed out it takes time to get all the regulations and paperwork in place, and then have the 36 administrators of the Cash Advance program sign off, so it will be several weeks before those new limits are available to producers.

There is also an industry/government working group meeting regularly to look at all options for Canadian canola. All ideas are being explored but again there doesn’t appear to be any silver bullets in the working group holster. They are looking at increasing canola seed trade with countries that have crushing capacity. They are looking at biodiesel market opportunities. They’ve also discussed some means of making proper storage capacity for Canadian canola seed available to producers in case a good chunk of the 2019 crop has to sit.

In response to a question about direct aid or subsidy to affected farmers, similar to what the U.S. has announced, Minister Bibeau says it may be considered, but it is not an immediate option.

President Trump, on the other hand, has announced a $15 billion aid package for U.S. farmers affected by trade conflicts. According to some sources that may include, payments of about $2 per bushel to soybean growers, 63 cents per bushel to wheat growers and four cents per bushel to corn growers to compensate for losses from the trade war.

So with the China/Canadian trade conflict it is one of those rare cases where no news really isn’t any good news. When you are in bed and being crowded by a politically motivated, non-communicative giant, there really isn’t a whole lot you can do until it decides to roll over.

Lee Hart is a field editor with Grainews based in Calgary. Contact him at 403-592-1964 or by email at [email protected]

 

 

 

 

 

 

Lee Hart

Lee Hart


Lee Hart is a long-time farm writer, and honorary member of the Alberta Institute of Agrologists, with many observations on the agriculture industry, who never hesitates to admit he is wrong (should that ever happen.)


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