A coalition of farm groups, trade associations, and several crop input businesses in Canada are calling on the federal government to provide compensation to farmers in Eastern Canada who they said were negatively impacted by federal government-imposed tariffs on imported Russian fertilizer this spring (GM March 18, p. 1).
The group is also seeking the removal of tariffs in time for the fall application season and planning for 2023, according to a July 18 press release. The companies and associations listed in the announcement include Fertilizer Canada, the Ontario Agri Business Association (OABA), Sollio Agriculture, Sylvite Agri-Services, Atlantic Grains Council, Grain Farmers of Ontario, Ontario Bean Growers, Ontario Canola Growers, Christian Farmers Federation of Ontario, and Quebec Grain Farmers.
“Fertilizer is the most important input for ensuring strong, hearty yields,” said Karen Proud, President and CEO of Fertilizer Canada. “We need to support our growers and the industry needs predictability for the 2023 growing seasons as the planning is happening now. Now, more than ever, the world needs more Canada.”
The Canadian government on March 3 implemented a 35% tariff on all Russian imports, including fertilizer, in response to Russia’s invasion of Ukraine and as part of Canada’s decision to withdraw the most-favored-nation status to Russia and Belarus as trading partners. The tariff was not applied to products that were in transit prior to March 2, 2022.
“This was done without any prior consultation with the agriculture sector, and as a result, Eastern Canadian farmers were disproportionately impacted,” the group states, noting that approximately 660,000-680,000 mt/y of nitrogen fertilizer is imported from Russia to Eastern Canada. This amount represents between 85-90% of the total nitrogen fertilizer used in the region.
“The war in Ukraine has added considerable strain to global food security and Canada’s agriculture industry is well-positioned to help, but farmers’ ability to do this relies on a secure, predictable supply of fertilizer to maximize crop yields,” the group said. “Our industry strongly supports the people of Ukraine and condemns the Russian invasion. We also support sanctions and other measures imposed by the Canadian government and our allies aimed at quickly ending the war. However, action by the Canadian government should not jeopardize Canada’s capacity to produce food today or in the future.”
According to the statement, Canada is the only G7 country that has tariffs on Russian fertilizer, placing Canada’s agricultural industry at a “competitive disadvantage” to other countries around the world.
“Farmers bore the costs of tariffs, which has put Canadian farmers at a disadvantage to farmers in other countries who did not have tariffs on fertilizers,” said Christian Overbeek, Chairman of Québec Grain Farmers. “We need compensation for farmers and concrete solutions for the 2023 planting season in place this summer.”
According to OABA Executive Director Russel Hurst, as reported by Syngenta Canada, the tariff in most cases was initially paid by fertilizer importers, but then passed down the distribution chain, ultimately hitting farmers. Depending on how much spring tonnage was prepaid, Hurst estimated the tariff added C$150-$180 million in input cost, with most of that expense falling on Ontario producers, and about a third hitting growers in Quebec and the Maritimes.
Hurst said fall fertilizer supplies for Ontario are now essentially in place, but the 35% tariff will continue to be applied to any Russian product. “The fall planting season is quickly approaching, as well as procurement preparations for 2023,” he said. “Compensation for growers and predictability for industry will be important in the coming months as Canada’s agriculture industry steps up to do our part in this global crisis.”