Russian Fertilizer Tariffs: Farmers Call on Feds to Act
The cost of fertilizers has increased due to the war in Ukraine.
Farmers in Eastern Canada is feeling the brunt of tariffs imposed on Russia last March. They are calling on the federal government to take action to avoid having to pay the price.
Russia is a major producer of fertilizers, particularly nitrogen fertilizers, nitrogen being one of the essential elements for crops along with phosphorus and potassium. In financial value, it is the second country, behind the United States, that exports fertilizers to Canada, according to Statistics Canada.
March 2 saw the entry into force of an order from the Canada Border Services Agency that subjected all goods originating in Russia or Belarus to a 35% customs tariff. This measure is part of the sanctions that Canada imposed on Russia following its invasion of Ukraine.
As a result, agricultural producers find themselves with a hefty bill while many of them had already placed their fertilizer orders long before that date.
Several organisations, representing more than 50,000 farmers, are calling on the government to ensure that tariffs levied on fertilizers are paid directly to farmers.
They say the government collected $34 million in tariff revenue on fertilizers imported into Canada this year.
Among these organizations, Les Producteurs de grains du Québec represents some 9,500 farmers who produce corn, soybeans, wheat, oats and canola, in particular.
“We understand the warning that the Canadian government wants to give Russia, but on the other hand, it doesn't It is not to be suffered only by agricultural producers.
— Christian Overbeek, President of Les Producteurs de grains du Québec
And fertilizers from Russia would not be the only ones to have suffered a price increase.
Other fertilizer-producing countries, thus Russia's competitors, may have also adjusted their price lists as they see business opportunities, Overbeek suggests.
He believes that this situation is unfair, especially since producers in other countries are not subject to such an additional cost.
We sell our productions according to global stock market benchmarks, so if we have a higher production cost than [that of] our American competitor producer, when we offer our products, whether on the local or international market, we have an economic disadvantage, he explains. If there was a positive profit margin, it is much smaller, but if there is a negative margin due to this tax, it is the cessation or significant reduction in local production that is result.
Before the Standing Committee on Agriculture and Agri-Food on March 31, the President and CEO of Fertilizers Canada, Karen Proud, stated that Eastern Canada receives from 660,000 to 680,000 tons of nitrogen fertilizer from Russia every year. This represents between 85 and 90% of the total nitrogen fertilizer used in the region.
Unlike western Canada, which has extensive nitrogen production infrastructure #x27;fertilizer, the east of the country is rather devoid of it.
Rather, we relied on imports, recalls Mr. Overbeek. If there has been no installation of fertilizer production plants in Eastern Canada, it is simply for reasons of safety. #x27;economy. It was cheaper to import it.
Fertilizers are therefore mainly imported from the United States (about 59%) and Morocco (11%).< /p>
However, in Quebec, nearly half of imported fertilizers come from Russia (43% in 2021). It is the province's number one supplier country. In Ontario, Russia supplies 30% of imported fertilizers, behind the United States, while in Prince Edward Island, the United States and Russia share the market.
In this context, agricultural producers call on Canada to ensure a business environment that is stable and predictable.
Representatives from the Atlantic Grains Council, Grain Producers of Quebec, Grain Growers of Ontario, Ontario Bean Growers Association, Ontario Canola Growers and the Christian Farmers Federation of Ontario have started discussions with Ottawa, except that the result is slow in coming, notes Mr. Overbeek.
He says he had to do an awareness exercise, because the intricacies of the market agriculture were not well understood by all decision-makers.
For its part, the government recalls that the imposition of customs tariffs on Russian products is a way of condemning Russia's attack on Ukraine and of showing Canada's support for the Ukrainian people.
“To help Canadian agricultural producers deal with the general rise in the cost of inputs, we Made changes to the Advance Payments Program resulting in an estimated $69 million interest cost reduction over two years. »
— Marie-Claude Bibeau, Minister of Agriculture and Agri-Food
She indicates that she is in discussion with representatives of the industry to determine how the government can better support producers in Ontario, Quebec and the Atlantic, who are being hardest hit by rising fertilizer costs.