Saskatchewan producers are frustrated as they watch the price of their hard work drop due to a two-front trade war.
China’s 100 per cent tariffs on certain Canadian canola products are officially in place, just weeks before farmers begin planting their crops.
As a result of the uncertainty, the price of canola has been dropping. It is now down about $2 a bushel.
Clinton Monchuk is a fourth-generation farmer. His family has farmed land near Lanigan, Sask., for the last 120 years.
He’s faced tariffs before, but nothing quite like this with China’s 100 per cent tariff on Canadian canola oil, canola meal and peas on top of the looming 25 per cent U.S. tariffs on all Canadian goods.
“It’s like getting two kicks in the backside,” he said.
“Nobody is going to get out of this scot-free.”
Monchuk has a crop rotation that switches what he grows every four or five years. Based on his rotation for this year, the farmer stands to lose $100,000 on canola alone.
“When you add in all the other commodities that are taking a hit on the prices, we’re pretty close to a quarter of a million dollars,” Monchuk estimated.
Canada exported $4.9 billion worth of canola products to China last year. A 20 per cent export reduction would result in the industry – predominantly Western Canada – losing $1 billion this year.
“Farmers are just going to feel a little bit more of a squeeze,” said Stuart Smyth, an agricultural and resource economics professor at the University of Saskatchewan.
“They may need to rely on lines of credit to ensure that they’ve got adequate cash flow. The challenge is we’re heading into an incredibly expensive three months.”
Producers invest thousands of dollars per acre into seed, fertilizer, crop inputs, fuel and equipment just to plant their crops in the spring.
“The Chinese have deliberately timed this to have a maximum impact on Canadian agriculture,” Smyth said.
Saskatchewan produces more than half of the country’s canola. Alberta and Manitoba are the other two major growers.
Leaders in the prairies have asked for immediate action from Ottawa to address the Chinese tariffs.
The federal government has said it plans to support farmers but has not announced any concrete measures.
“We are focused on making sure there are supports to make sure that we have mechanisms in place to support those impacted producers,” federal agriculture minister Kody Blois told reporters in Ottawa on Wednesday.
Monchuk believes the uncertainty facing producers is unnecessary.
“It’s unfortunate that we as farmers are in this situation and have to feel the consequences,” Monchuk said.
“I feel it’s 100 per cent preventable.”
