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Restoring canola exports to China ‘chess, not checkers’

Canadian captives complicate things, nevertheless, some farmers have lost patience and confidence in Ottawa

Some Canadian farmers, no closer to knowing when they’ll regain access to their biggest canola customer, are going from feelings of uncertainty and anxiety to anger and frustration.

“We demand action,” Ian Steppler, who farms near Deerwood, Man., wrote on Facebook last week.

The federal government and grain industry are committed to restoring Canadian canola seed exports to China worth $2.7 billion in 2018, officials said during an online update May 3.

“(T)he goal of the Government of Canada is to regain this market,” Canola Council of Canada president Jim Everson said.

But May 1 Ottawa enhanced its cash advance program and extended the deadline for farmers to enrol in AgriStability to July 2. The moves tacitly acknowledge the obvious; the dispute that started in March has no end in sight.

Trade Diversification Minister Jim Carr said, with industry co-operation, he will seek new markets for canola starting with a trade mission to Japan and South Korea in June.

Jim Carr.
photo: Creative Commons/MissionInnovation

“Our government is taking action at both home and abroad to find lasting solutions to this situation,” he told reporters in Ottawa May 1. “We will not rest until this issue is resolved for our Canadian producers, workers and their communities.”

While China claims shipments of Canadian canola were contaminated with weed seeds and plant diseases — an allegation the Canadian Food Inspection Agency has not been able to verify — many observers suspect China is signalling its displeasure with Canada’s arrest late last year of Meng Wanzhou, vice-president of Chinese technology firm Huawei, at the request of U.S. government.

Canada is focused on using science to address China’s complaints because that’s how similar issues were resolved in 2016 and 2009, Carr said.

World Trade Organization (WTO) rules oblige China to show Canada the scientific evidence behind its complaint, Everson said.

Ottawa isn’t so “blind or silly” not to recognize how some might see a geopolitical link to the canola boycott, Carr said.

“But we don’t have evidence of that,” he said. “And we also think that we have to be cautious… there are other possibilities and we want to avoid unnecessary escalation,” Carr added, alluding to two Canadians held under arbitrary arrest in China and two others sentenced to death.

“We are prepared to use every diplomatic and political lever that are at our disposal when we believe the time is right.”

Setting a deadline for China to respond is tempting, Carr said, but what if it comes and goes?

“We have to play chess here, not checkers,” he said. “So you should be assured to know that we are thinking through every possible scenario and we will leave no option on the table. Everything will be looked at very carefully.”

Carr added he won’t make all Canada’s options public.

Some farmers on social media say Canada should release Wanzhou.

“I think caving into the threats and bullying from China would be precisely the wrong approach,” Al Mussell, a Guelph, Ont., agricultural economist with Agri-Food Economic Systems, said in an interview.

“The fact that they (China) keep wanting to up the ante shows that we’re on to something with this.

“But at the same time it needs to be acknowledged by Ottawa that who is paying the price for this so far is agriculture.”

It would arguably put innocent Canadians travelling in China at greater risk.

Such a move would also anger the Americans and sully Canada’s reputation, given it has a legal obligation to arrest and hold Wanzhou, pending an extradition hearing.

Meanwhile, more help could be coming for farmers.

Rick White.
photo: Allan Dawson

“(W)e hope it doesn’t drag out long, but it’s looking longer than we had hoped,” Canadian Canola Growers Association (CCGA) CEO Rick White said.

He said the industry is working on new initiatives to address the situation, but the efforts are still in their infancy. He said they involve the canola working group, tasked with restoring trade, finding new canola markets and proposing ways to help farmers survive the loss of the Chinese canola market. White said more detail will be coming later this month.

We are working out a short-, medium- and long-term strategy as this unrolls because nobody knows how long this is going to take,” White said.

“And key in this is ensuring farmers are supported all through this as the environment changes.”

The working group has already told the government to up its biodiesel mandate to five per cent from three. That would use up 1.3 million tonnes of canola.

Manitoba canola cash prices are down 60 cents to $1 a bushel, to around $9.50, since China stopped buying Canadian canola in March.

Canola prices are down 18 per cent from a year ago, compared to a nine per cent drop in wheat.

CFIA officials have been video conferencing with Chinese officials, who have yet to agree to invite Canadian officials to a face-to-face meeting, Agriculture Minister Marie-Claude Bibeau said May 1.

Conservative opposition leader, Andrew Scheer, chiding the government for not restoring canola exports, says Canada should launch a World Trade Organization challenge.

“Canada needs to send a message that we won’t back down,” Scheer said. “There have been no consequences for China for its canola ban or mistreating our citizens.”

Some farmers are calling for “boots on the ground,” even though Chinese officials refuse to meet.

Critics say China sees the Canadian government as weak. But if China is punishing Canada why would it meet, others counter. The longer the issue is unresolved the more pressure Ottawa faces from Canadians.

Steppler said he and other farmers are growing frustrated by government inaction.

It isn’t for a lack of trying, White said. The working group, consisting of the deputy ministers of agriculture in Ottawa and the Prairie provinces, the president of the CFIA and officials from the Canola Council of Canada and CCGA, are working hard, as our Canadian government officials in Ottawa and at its embassy in Beijing.

“There is no simple solution for any of this,” White said. “There are many layers to this. Any and all ideas are on the table.”

About the author

Reporter

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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