Grain Farmers of Ontario and Grain Growers of Quebec seek federal government intervention to provide immediate fertilizer tariff relief to avoid grain shortages and increased consumer costs.
By Andrew Joseph, Farms.com; Image via www.pixabay.com
What’s going to be? Grain shortages and high consumer food costs or relief from fertilizer tariffs impacting farmers?
That’s what the Grain Farmers of Ontario and Grain Growers of Quebec (Producteurs de grains du Québec) want to know as both have joined to get the federal government of Canada to immediately act against the burden of fertilizer tariffs.
The two organizations, representing over 50,000 grains and oilseeds farmers believe that without tariff relief on fertilizers, they will not be able to afford to grow and harvest as much grain, causing shortages and causing food prices to rise for the consumer.
“The invasion of Ukraine continues to escalate and its impacts on the global food system are increasing. It is vital that the Canadian government offer tariff relief for farmers who cannot continue to bear the brunt of these costs,” said Brendan Byrne, Chair, Grain Farmers of Ontario. “One of the key areas of concern for grain farmers is the shortage and additional costs of fertilizer available to us for our planting season. This is a moment in history for our partners in the fertilizer industry to act with integrity in treating farmers fairly around pricing and contracts.”
The associations know that it is currently a critical time for all farmers in Canada and the US, as grain planted today will impact how much grain is available at harvest time to feed people and livestock in Canada, as well as around the world.
Not just because of the invasion of Ukraine, fertilizer shortages were predicted last summer by the industry.
Call it the perfect storm of issues driving the fertilizer market. More fertilizer was being required by farmers wanting to plant corn owing to the higher realized prices in 2021. When Covid-19 hit and stimulus cheques were issued in Canada and the US, farmers bought lots of fertilizer putting stress on the supply relative to increased demand, eating into the reserves.
Because of Covid, fertilizer manufacturers shut down citing a lack of ingredients. Or, the same ingredients were sold elsewhere because, at that time, manufacturers could make more money selling it sectors for things other than fertilizer. The real answer is a grey area mix of the two, it assumed.
Prices went up. Then a run on fertilizers in the Spring of 2021 caused the reserves to fall even lower, to virtually nothing. Then Hurricane Ida hit the US in August knocking out power effecting production for a few weeks.
Then there’s the global supply chain issues. China’s export ban on nitrogen, India’s reduced production. And now the Russian Federation invasion of Ukraine.
Supply has simply not been able to keep up with demand, which is why high fertilizer prices are hitting farmers across, well… everywhere.
While the two associations acknowledge that there isn’t much it can do about most of the perfect storm reason, it does feel the Canadian government can provide help with regards to fertilizer tariffs.
Tariffs on fertilizers that were shipped from Russia and fellow invasion co-conspirator, Belarus, were imposed on goods shipped from them just prior to Canada (and the world) imposing sanctions against them.
The steep tariffs on the ships carrying nitrogen and phosphate fertilizers—mostly urea, urea-ammonium nitrate (UAN), and monoammonium phosphate (MAP)—to Canada are at the heart of the issue for the grain farmers.
It is estimated that the tariffs affect about 200,000 tonnes of fertilizer shipped prior to the sanctions from Russia and Belarus.
“This is a global crisis and farmers are ready to plant the crops, but we cannot afford to pay additional inflated costs while doing so. We understand the reason behind tariffs, but the impact to our food system is not supportable and the government must act now to provide relief to farmers, who are paying the price. Fertilizer shortages coupled with increased costs are going to make this a difficult spring and potentially a compromised harvest, which could be devastating as the world is looking at grain and food shortages. Eastern Canadian grain farmers need access to the tools that will help them grow an abundant, healthy crop,” said Christian Overbeek, Chairman of the Grain Growers of Quebec.
Grain Growers of Quebec and Grain Farmers of Ontario are united in stating that it is not acceptable for farmers to pay the additional costs for fertilizer created by the restrictions and tariffs.
Grain farmers in Quebec and Ontario need the federal government to provide immediate relief from the tariffs and to help ensure that there is enough fertilizer in Canada for grain farmers in Quebec and Ontario.