Russian Fertilizer Tariffs: “We Penalize Ourselves!” »

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Russian fertilizer tariffs: “We are penalizing ourselves!”

Canada is the only G7 country to impose tariffs on Russian fertilizers.

Marcel Michaud, a New Brunswick farmer, is concerned about the rising price of fertilizers.

Anger is brewing in the agricultural community at the explosion of production costs. Despite everything, Canada refuses to lift its sanctions on Russian fertilizers, even if it means worsening the food crisis.

Farmer Marcel Michaud digs into the ground with his hands to show us big potatoes soon to be harvested. Spring got off to a bad start. In our area, we had heavy rain, explains the owner of GAM farms in New Brunswick. But this year, it's not just the weather conditions and the price of fuel that are worrying him.

His fertilizer bill has doubled in 2022. The pandemic has led to problems in supply chains. The war in Ukraine and the shortage of natural gas, which intervenes in the preparation of fertilizers, have affected production on the European continent.

The Trudeau government is also contributing in its own way to the increase in prices. Ottawa imposed 35% tariffs on all products from Russia, including nitrogen fertilizers. Before the tariffs were imposed, 85-90% of the fertilizer used in eastern Canada came from Russia, according to the industry.

The shock is brutal.

“In farming, when you have curve bales like that, it doesn't go well. »

— Marcel Michaud, potato farmer in New Brunswick.

The Union of Agricultural Producers (UPA) is calling for the lifting of tariffs. The Canadian government is on the wrong track, according to Charles-Félix Ross, the director general of the UPA.

A decision to tax fertilizers is to tax food, underlines Mr. Ross.

Canada is the only G7 country to impose sanctions on fertilizers from Russia. Even the UN Secretary General discourages the imposition of sanctions on Russian fertilizers and its ingredients like ammonia, to avert the global food crisis.

“In 2022, there is a real risk of running out of food. It is absolutely essential to remove the barriers to Russian fertilizer exports.

— Antonio Guterres, Secretary General of the United Nations, on September 14.

In principle, farmer Marcel Michaud has nothing against the sanctions regime against Russia, as long as he does not find himself in a disadvantageous position vis-à-vis his American competitors. We penalize ourselves! he says.

Finance Minister Chrystia Freeland does not flinch. Russia deserves to be in the same category as North Korea, she said last week.

Canada stripped Russia of its preferred trading partner status in the wake of the invasion of Ukraine and imposed 35% tariffs on all imports from there. This tough sanctions regime is not about to change, according to the minister.

“All Canadians support a strong sanctions regime against Russia, especially now.

—Chrystia Freeland, Minister of Finance of Canada.

Prime Minister Justin Trudeau – seen here with Deputy Prime Minister and Finance Minister Chrystia Freeland – at the retreat from the Liberal caucus in Saint Andrews, New Brunswick.

Minister Freeland reminds us that the Western sanctions regime has much, much, much more serious consequences for European countries than for Canada.

However, according to our information, some ministers around Justin Trudeau's cabinet table disagree and believe that Canadian fertilizer tariffs are unfair to local farmers.

For the moment, the Prime Minister is open to specific aid measures, without specifying which ones. We understand to what extent the production costs, the costs for our farmers have increased. This is a reality around the world, and we are going to be there with measures to help them, said Justin Trudeau last week on the sidelines of his party's caucus in New Brunswick.

For now, the Government of Canada has been content to improve its advance payment program to help farmers cover their costs while waiting to sell their products. The interest-free advance limit has been increased for the 2022 and 2023 seasons.

In preparation for the next harvest season, the agricultural industry must realign its supply strategy and quickly.

The Sollio Group, the largest agricultural cooperative in Canada, can turn to Western Canada for certain fertilizers such as potash, but this is not enough to meet all the needs. Moreover, transport by train is more expensive than by ship.

Reserves of urea, a nitrogen fertilizer, in the warehouses of the Sollio cooperative group on the South Shore of Montreal.

Sollio intends to look to countries like Algeria and Egypt, for example, in view of the next season. While the price of some products doubled in 2022, it could still jump 25-50% next year.

Casper Kaastra, CEO of Sollio Agriculture, does not dare to draw a definitive line under Russia as a source of nitrogen fertilizer supply.

We are turning to other countries, but one thing is certain, we cannot afford a food crisis in Eastern Canada, so we have to keep our options open, explains Mr. Kaastra.

Casper Kaastra, CEO of Sollio Agriculture

Sollio is also looking for long-term solutions to reduce, for example, the amount of fertilizer needed in the fields. In particular, the cooperative group is seeking to develop new coatings for fertilizer so that the nutrients are deployed at the right time in the soil. That's a good example of where you can do more with less, explains Casper Kaastra.

Marcel Michaud, for his part, tests potato varieties that require less water and fertilizer. However, this selection process takes years and offers no immediate solution to rising fertilizer prices.

Feet between two rows of potatoes, the farmer watches the horizon with uncertainty. There are people who say, “I can't take any more, I'm going to give up.” Young people say, “I'm not taking over, I don't need this”. It's a shame, explains Marcel Michaud, who is worried about the next generation in the agricultural sector.

For him, it's impossible to get rid of this impression that, no matter how hard of his land, the fruit of his labor escapes him more and more.

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