The dispute between Canada and China which has led the two countries battling over canola is not going away.
The dispute over canola started in March, when Chinese customs stripped Richardson International of its export registration.
The result is that Canadian canola has been essentially shut out of its largest export market since then, officially citing quality issues with product from this country.
However, it is more than obvious the new trade barrier was erected as a way for China to bring pressure to bear over the December arrest of Huawei CFO Meng Wanzhou.
The impact of such a trade dispute cannot be lost on the Yorkton area, where canola is both a major crop for area farmers, and the focus of the two canola crushing plants located here. Any disruption to market access with a major buyer such as China creates a level of unease, as the market has accounted for around 40 per cent of sales in the past.
The tension between the two countries over trade is not lessening either. It has been reported Canadian soybean, pea and pork exporters are also facing difficulties at Chinese ports. As the list of products facing issues grows, to-date focused on the agriculture sector, again it could have a ripple effect to producers here.
This is an issue that logically has to be addressed at the highest levels, federal government to government, but that process seems to be at a stalemate at best.
Here in Saskatchewan Premier Scott Moe has called for what would essentially be a retaliatory tightening of Canada’s inspection regime on Chinese imports arriving at Canadian ports.
While that stance might seem reasonable on some level, an escalation of a trade dispute which is already sending shivers through the Canadian agriculture sector may not have the effect he would hope for.
China is now a massive market, one that tends to drive world trade on the broader basis because of the country’s massive population which is beginning to flex its muscles in terms of demand for import products as their disposable income grows.
The tension which exists won’t evaporate by growing the rift, and any such action would need to be taken only as a last resort.
What is required is a plan of how to lessen the impact on producers while a solution is worked out at the highest levels.
In that regard Moe has also been in the fray criticizing the federal government for not moving forward with a plan to enhance credit to farmers through changes to the Advance Payments Program, which provides cash advances. Such advances are certainly a quick way to get money to producers, but it also would impact returns down the road as advances come off sales at some future point. They are essentially a way for farmers to access cash today to deal with the effects of trade taking it from sales tomorrow, which is not a sustainable solution. Nor is it reasonable to expect farmers to essentially fund their own defence of the impact of the trade dispute.
Much like the retaliatory sanctions idea that needs greater forethought, our farmers need a better response to the financial hurt they may face from a spat between countries at the highest levels.
