Manitobans say changes to federal loan program a 'Band-Aid' solution for canola farmers
Federal government announced changes to loan program Wednesday in response to trade dispute with China
Some Manitoba farmers say a boost to a federal loan program for canola producers is only a Band-Aid solution.
In response to an ongoing dispute with China around canola imports, the federal government announced changes Wednesday to the Advance Payments Program — a federal program that provides agricultural businesses with access to low-interest cash advances.
Under the changes, the maximum amount of money available to individual producers under the program will increase to $1 million, with the first $500,000 interest-free. That's up from a maximum of $400,000 with the first $100,000 interest-free, federal Agriculture Minister Marie-Claude Bibeau announced in Ottawa on Wednesday morning.
But it's not a long-term solution, says the president of the Manitoba Canola Growers Association.
"This is really just a Band-Aid approach [which] is going to assist farmers with cash flow," said Charles Fossay.
"If they can't sell their canola or don't want to sell their canola because the cost is now below the cost of production … this will allow us to pay those bills and then hopefully market the canola at a profit in the future."
In March, China banned imports of canola seed from Winnipeg-based Richardson International and Viterra, citing concerns surrounding pests.
The Canola Council of Canada said in March that Chinese importers were unwilling to purchase any Canadian canola seed.
The federal government has disputed the pest claims and has asked China for more information.
It's been speculated the ban is retaliation for Canada's arrest of Meng Wanzhou, a executive with the Chinese tech company Huawei who is facing extradition to the United States.
Farmers need certainty
On Wednesday, Bibeau said farmers often face tremendous pressures, and trade uncertainties can add to stress and mental health issues.
"We must consider that this is bridge funding and this is going to be beneficial in some respects," said Bill Campbell, president of Manitoba's Keystone Agricultural Producers, whose farm south of Brandon, Man., includes about 600 acres of canola.
"But it will not resolve the issue of international trade."
Campbell said with the growing season starting and canola going into the ground, farmers need certainty over the situation — fast.
"Essentially this is like taking a 15 per cent cut to your paycheque and having no recourse to resolve it," he said, while echoing Fossay's sentiment that the federal government's move is, at best, a temporary solution.
"What the government has done is a step and is a Band-Aid, but we need to realize that if we do not get the production out of this canola, a loan does not help us," he said.
Campbell says he's under pressure to get more yield from his canola crop because of the drop in prices. He said he needs a 20 per cent higher yield this year to make up for the lost revenue.
"If we can't get it in price, we have to get it from yield," he said. If the yield isn't increased, he said, some producers' farms could be in jeopardy.
Delegation to China
Gunter Jochum, a canola producer near St. François Xavier — a community about 30 kilometres west of Winnipeg — says the government needs to resolve agriculture disputes not just with China, but other nations as well.
"While it looks at the surface like a great idea, it doesn't really solve any of our trade problems that we have with China or India, or Italy for that matter," he said on Wednesday.
Jochum says India is not taking Canadian pulses because of a different dispute, and Italy is not accepting Canadian durum wheat. He thinks Ottawa needs to send trade delegations directly to those countries to solve the trade disputes.
During Wednesday's announcement in Ottawa, Manitoba MP and International Trade Minister Jim Carr also said he will lead a trade mission to Japan and South Korea to promote Canadian canola.
Jochum is among those who are calling on the federal government to send a delegation directly to China.
"Right at the moment I'm not very optimistic," said Jochum. "However … I do believe we can get this resolved, but we can't get it resolved if we don't send a delegation to China."
Campbell said the next few weeks will be crucial and he hopes to see a solution before the House of Commons rises for the summer, and before this fall's federal election.
"This is fairly important and this is fairly significant," said Campbell.
"We need a really good growing season this year."
With files from Kathleen Harris, Cameron MacLean and Patrick Foucault