March 6, 2020 marked a sombre anniversary for Canada’s canola industry.
It’s been a year since China banned the majority of imports of Canadian canola, and an end to the ban is nowhere in sight.
“It’s a very frustrating situation for producers and the industry,” said Jim Everson, president of the Canola Council of Canada. “There are some exports going to China. Only about a third of what we would normally have had this time of year. It’s really concerning.”
Since March 6, 2019, when China refused shipments from Winnipeg-based Richardson International, citing fears of an insect infestation, there have been numerous efforts to re-establish trade between the countries.
Everson said there have been discussions by the Canadian Food Inspection Agency and technical staff in China.
“This is an effort to get everything on the table and work towards resolving the issue and this is all being done. I think it’s fair that the government people from Canada are not satisfied there’s a very strong explanation for the action China has taken. It’s an issue that is beyond the control of the canola industry. It’s not about canola, it’s about the other issues between Canada and China and it is frustrating because the farmer and the industry are shouldering the whole issue,” said Everson.
Over the past year, Federal Minister of International Trade and Diversification, Jim Carr, led a party which included government officials, and two farmers, on a trade mission to South Korea and Japan to strengthen their relationship with those vital trading partners. Throughout the year, staff at the Canola Council of Canada led webinars keeping farmers updated on the proceedings.
Clayton Harder, the new chair of the Manitoba Canola Growers Association, is frustrated by the whole situation and the lack of a resolution.
“Anxiety is a big part of it,” he said. “From a planning perspective, farmers have to keep their pencils sharp. But with these unknowns that are completely out of control in the background, it leaves people with an elevated level of concern,” said Harder who farms near the RMs of Clements, Springfield and Rosser.
He grows canola, soybeans, cereals and forage grass seed, and will continue to grow canola despite the uncertainty.
“We’re hearing about the contacts that the Canola Council of Canada has with the current people in government to talk about a resolution,” he said.
He said he’s seen more stories about increased anxiety in agriculture media and farm papers.
“Farmers pride themselves on being stoic individuals, but people are talking about it,” he said.
Harder would like to see a resolution to the trade dispute, but there are some other things that can be done in the mean time.
“We would like to see an increase in biofuels content. If Canada could go to that five per cent, that would be a market the size of Japan itself. That would be great, that would really help us out. We would like to see the government of Canada expand its access to new markets within Asia.”
China buys a huge volume of Canadian canola, so it is difficult to find someone who can fill that void.
“Filling it or finding something equal to it is unlikely. It’s going to take a variety of different entities to fill that gap. That’s the reality. It’s not going to go to one place. It’s going to be a number of them,” said Harder.
Forty per cent of all canola produced in Canada is sold to the Chinese market.
Harder said that as a farmer, he keeps hearing the same thing over and over again, but doesn’t see any solution to the problem. Farmers have also faced additional pressures from a tough harvest, the rail strike and the blockades.
“There hasn’t been a lot of wins,” he said.
Everson said that while it may not be apparent, there have been ongoing efforts to resolve things with China, including technical discussions and efforts by ministers to reach out to their counterparts in China.
“We have a new ambassador to China and that’s really important because an ambassador plays a special role. We’re optimistic that, that will help. But everything takes time.”
In addition to visits to South Korea and Japan, the Canola Council of Canada did a trade mission to Pakistan last December.
“That’s a market that is quite interesting to us from a diversification perspective,” said Everson. Sales of canola are up in markets like the United Arab Emirates, Pakistan and Mexico, and exporters are looking at other markets.
Everson said there hasn’t been a lot of development in the stalemate between China and Canada because negotiations take time.
“We’re watching the dynamics of prices very closely. There were changes made to the Advanced Payments Act to provide supports to producers in the short term. I think that’s been well used by producers. We have to look at the data. There are a lot of different factors impacting this — changes to the American and Chinese relationships, and tariffs and that has to be affecting international prices,” he said.
COVID-19 has also made it more difficult to hold trade negotiations. Canada has withdrawn staff from Chinese embassies and Air Canada is no longer flying to China.
“There were technical discussions that took place in December. They’re on hold at the moment because of coronavirus, which is understandable,” said Everson.
Canada has raised the trade issue with the World Trade Organization, and they’ve had a consultation.
“If this was simply a matter around canola, canola quality and canola commerce, it would not be that difficult to resolve. You’d have to have some negotiation. This is largely an issue that is not specifically about canola,” said Everson.
Yet he remains optimistic because there is strong demand for Canadian canola, and Canada has good technology, resilient producers and the opportunity to expand the canola-processing industry, which has grown a lot in the past 10 years.