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Federal government boosts loans for canola farmers amid tensions with China

Federal government boosts loans for canola farmers amid tensions with China
Photo courtesy K-State Research and Extension

OTTAWA – The federal Liberals promised Wednesday to give Canada’s canola farmers much-needed financial aid to help lessen the impact of China’s decision to ban the product as part of a trade dispute with no immediate end in sight.

The changes made to a special agricultural program will raise loan limits to $1 million from $400,000, and the portion that will be interest-free is rising to $500,000 from $100,000 for canola producers.

Producers praised the changes on Wednesday, saying they amount to a tool farmers will be able to use to get through a tough spot.

“Hopefully we won’t need any more help and hopefully the market smartens up and we’re able to get our crop in and sell it at a good price,” said Todd Lewis, president of the Agricultural Producers Association of Saskatchewan.

Citing unproven concerns about pests, China has rejected Canadian canola seed imports in recent months and barred shipments from two of Canada’s biggest exporters in what is considered retaliation for the detention of Huawei executive Meng Wanzhou.

About one-quarter of Canada’s $11 billion in canola shipments went to China last year, or $2.7 billion, and any prolonged blockage will hurt farmers, the industry and the broader economy. The seeds are the raw input for canola oil, used in cooking and industry.

The Liberals said changes to the advance payments program are designed to ease cash flow pressures for affected farmers.

“We stand shoulder-to-shoulder with Canada’s canola producers and farm families across the country and we will continue to listen to their needs,” Agriculture Minister Marie-Claude Bibeau said on Parliament Hill Wednesday morning.

“Canada has the best canola in the world as well as a very robust inspection system.”

International Trade Diversification Minister Jim Carr said he will lead a canola trade mission to Japan and South Korea in early June to help farmers find new markets for their products.

He also said he will be promoting canola in all of his upcoming visits, including in France.

“It is critical that Canadian exporters have other readily available markets when faced with trade disruptions,” he said.

“Our country’s continued prosperity and job creation depends on security markets abroad.”

Conservative foreign affairs critic Erin O’Toole called Wednesday’s announcement positive, adding it is a step his party has long called for. But he warned it is a stop-gap measure that does not address the underlying diplomatic tensions.

“The Trudeau government has allowed our diplomatic situation with China to descend into chaos, where we are not sure what commodity could be at risk next,” O’Toole said while standing outside the House of Commons.

Conservative Leader Andrew Scheer has previously called for the federal government to take a more confrontational approach with China, including launching a complaint with the World Trade Organization and cut Canadian funding to China’s Asian Infrastructure Investment Bank, to which the government has committed $256 million over five years.

Scheer has also pressed the Liberals to appoint a new ambassador to China. On his way into the weekly caucus meeting, Prime Minister Justin Trudeau said the government has a strong, career diplomat who is handling “the particulars of this very well.”

Carr told reporters there is agreement across the sector, including with provincial governments and producers, that Canada should engage China on the basis of their allegation — that there are impurities in the canola inspected twice by the Canadian Food Inspection Agency. Canada will navigate this challenging period with China through careful, deliberate and strategic engagement, he said.

Saskatchewan Premier Scott Moe said Wednesday’s announcement buys “some breathing space” for nervous farmers and suggested China will ultimately relent because it needs canola.

“We just need to ensure that we have the relationship that we are actually able to trade that commerce and we are going to support our federal government in those conversations moving forward,” he said.

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