The tariffs decreed in March, in the wake of the Russian invasion of Ukraine, add to an already difficult context for farmers who must deal with the increase of their inputs, such as fuel and machinery.
Canadian farmers are feeling the brunt of Ottawa's sanctions on Moscow as they face a 35% tariff on Russian fertilizer imports. A group of Canadian producers is asking for federal intervention to lessen the shock.
The group, which includes associations representing grain producers in Quebec, Ontario and the Atlantic provinces, estimates that approximately 660,000 to 680,000 tonnes of nitrogen fertilizer is imported from Russia into the three Canadian regions. This would represent between 85% and 90% of all nitrogen fertilizers used.
It brings significant additional costs for agricultural producers, reacts the chairman of the board of directors of Sollio Cooperative Group, Ghislain Gervais, in an interview. We are asking for support from the federal government to compensate agricultural producers for these tariffs.
Mr. Gervais, who is also a chicken and grain farmer, estimates that the tariffs will have resulted in additional costs ranging from $10,000 to $15,000 to his business. For all Sollio member growers, this could represent additional costs of $30 million. Combining the increase in fertilizer prices and tariffs, we are talking about a price increase that can be two to three times [more expensive].
Agricultural producers in Eastern Canada, who import Russian fertilizer, deplore the imposition of a 35% customs tariff. Interview with Ghislain Gervais, President of the Sollio Cooperative Group. #EconomyZone
Canada's supplies have been disrupted by the Russian invasion of Ukraine, says Maurice Doyon, full professor in the Faculty of Agriculture and Food Sciences at Laval University. Canada is a major producer of potash, but when it comes to nitrogen fertilizer, we used to import a lot of it. It came from Russia and Ukraine. We find ourselves in a more difficult situation in terms of what is available to our farmers.
Finding other suppliers would not be much help for grain producers, adds the professor who points out that prices are determined by the world market. For example, we are potash producers. If potash becomes scarcer on world markets, it will increase prices on the planet and we will also have to pay that price.
The tariffs decreed in March, in the wake of the Russian invasion of Ukraine, add to an already difficult context for farmers who must deal with the increase in their inputs, such as fuel and machinery, deplores the president of the Producteurs de grains du Québec, Christian Overbeek. We don't need to pay that extra tax. Already, the value of the basic good, nitrogen fertilizer, had doubled or even tripled before the tariffs compared to 2021.
The exit of producers does not call into question the importance of supporting the Ukrainian people, Mr. Overbeek insists.
“If it's a societal decision, it's a societal decision. It is normal for society as a whole to bear the costs. »
— Christian Overbeek, President of Grain Producers of Quebec
The 35% tariff on Russian fertilizer alone does not explain the spike in food prices at the grocery store, but it does add to a series of factors that affect the price of Canadians' plate, says the grain grower rep. Isolated, each factor may have a small effect, but when added together, it brings the impact that is seen by consumers who shop for groceries.
Agriculture and Agri-Food Minister Marie-Claude Bibeau did not comment directly on the grain farmers' exit. However, she pointed out that the government has already put in place various assistance programs, including changes to the Advance Payments Program, which would lead to savings of an average of $5,500 in interest costs over the next two years. for program participants.
Producers continue to have access to a suite of business risk management programs, she writes in a e-mail. We will continue to provide our farmers with the tools and resources necessary to enable Canada to do its part in this time of global food insecurity.
Ottawa is in a difficult when it comes to finding the right balance between supporting the Ukrainian people and supporting the country's agriculture, according to Professor Doyon.
The Russian sanctions come at a time when the war in Ukraine raises issues about grain access and affordability across the globe, he adds. If I reduce the tariff, I'm helping Canadian farmers and I'm going to have a smaller increase in the price of grain. On the other hand, I send money to the Russians.