A field crop of canola is harvested by a combine machine near Olds, Ab. on Oct. 23, 2018.Larry MacDougal/The Canadian Press
Planting of canola across Canada this year could tumble by 10 per cent or more as desperate farmers scramble to deal with the fallout from a Chinese import ban.
A significant cut in canola production would be a blow to the economic fortunes of farmers, particularly in Western Canada, who have relied on sales of the lucrative crop in recent years to sustain their operations through the long growing season, industry officials warned a Parliamentary committee on Tuesday.
“Canola has been the most cash-generating crop for Canadian farmers,” said Curt Vossen, president and chief executive of Winnipeg-based Richardson International Inc., one of two Canadian exporters that have been prohibited from selling canola in China. “This has put a chill on the market.”
Farmers could reduce their canola crop by 10 per cent or more this year to mitigate the loss of their biggest export market, Mr. Vossen told the Commons agriculture and agri-food committee.
The concerns come as federal officials confirmed that China is scrutinizing a third Canadian exporter of canola.
Canada sold $2.7-billion worth of canola seed, which is used to produce oil and animal feed, to China last year. That represents 40 per cent of this country’s canola crop, and 90 per cent of its canola exports. And 2019 was shaping up to be even better, with good prices and increasing sales, until Beijing blocked all exports by Richardson and Regina-based Viterra Inc. last month over allegations that recent shipments contained weed seeds, bacteria and other contaminants – allegations Canadian officials dispute. The companies are Canada’s largest canola exporters.
The sales halt and the detention of two Canadians in China are widely seen as retribution for Canada’s arrest last year of Meng Wanzhou, a senior executive of Huawei Technologies Co. Ltd.
Federal Trade Minister Jim Carr defended Ottawa’s response to the Chinese ban, insisting that a necessary first step is to force China to back up its claim that Canada’s canola is tainted. He said that’s why Ottawa is pushing for an emergency meeting between top Canadian and Chinese officials to review tests on the shipments identified as a problem.
“The Chinese don’t say it’s a political issue. They say it’s a scientific issue,” Mr. Carr told a separate meeting of the Commons international-trade committee. “Let’s let the scientists have a go.”
Farmers typically sell stockpiles of the previous year’s crop in the spring to finance their operations through planting and harvest, Rick White, CEO of the Canadian Canola Growers Association, told the committee. But the ban and sharply lower prices have made that difficult, and could leave millions of tonnes of canola unsold, he explained.
Farm groups want Ottawa to modify federal financing programs, including subsidized short-term loans, to help farmers get through the crisis. Federal officials said they are consulting with farm groups about enhancing some of those programs.
A top federal official said on Tuesday a third Canadian canola exporter is under scrutiny by China after receiving a notice that a recent shipment did not comply with the country’s quality standards. Fred Gorrell, assistant deputy minister of Agriculture and Agri-Food Canada, would not identify the company.
“They are scrutinizing their inspection, and then at that time, if they do not get compliant, perhaps there would be other implications,” Mr. Gorrell told reporters.
Earlier, Mr. Gorrell told the committee the Canadian Food Inspection Agency (CFIA) has retested samples from all recent canola shipments that China called problematic and found no weeds or other contaminants. “We are a safe and reliable global supplier of canola,” he insisted.
Mr. Gorrell added that the Chinese have not targeted other Canadian farm commodities, in spite of widespread concerns the feud could escalate. “Maybe there is confusion in the marketplace as well as concern because of what’s happened, but there has been nothing from China to suggest any other commodity is under scrutiny,” he said.
Ottawa is in talks with Beijing to send a delegation to China to help defuse the crisis. Canadian officials want a face-to-face meeting between CFIA president Siddika Mithani and her Chinese counterpart to deal with their quality concerns.
“We’ve always had a resolution and I’m confident that will happen,” Mr. Gorrell said. “They need our canola."
But Richardson’s Mr. Vossen said he has seen no indication China is ready to back down. “We’ve had no communication with the Chinese," he said.