Sturgeon County farmers say they’re not yet worried about a trade dispute with China that could affect up to 40 per cent of Canada’s canola exports.
China and Canada are at loggerheads this month over a proposed trade restriction on canola set to kick in this Sept. 1. Farmers are hopeful the problem will get resolved, as negotiations are ongoing.
China has been expressing concerns about the potential for the transmission of the canola disease blackleg from Canada for several years now, said Greg Sears, chair of the Alberta Canola Producers Commission (which represents Alberta’s 14,000 canola growers).
In February, they announced they would require all canola imports to contain less than one per cent dockage (which refers to non-canola seed elements such as weed seeds and plant stems) as of Sept. 1. Currently, the rules allow for up to 2.5 per cent dockage.
“The Canadian export grain handling system is not designed to operate at today’s capacity with that cleaning requirement,” Sears said – we don’t have the seed-cleaning capacity. That means much of Canada’s canola would be blocked from China if the rule goes through.
Canada ships about 40 per cent of its canola or about $2 billion worth to China each year, Sears said. While Canada has grown its domestic canola market in recent years, farmers would still see a drop in world canola prices if this rule went through.
Blackleg is a fungus that peppers infested canola plants with black spots and dirty white lesions, girdling stems and restricting nutrient uptake. It has caused up to 50 per cent losses in some western Canadian fields, reports the Canola Council of Canada. It’s transmitted by wind-blown spores and infested seed.
Canada is arguing that China’s new rule is unjustified, Spears explained.
“We have not seen any data that indicates that the risk of transmitting blackleg is reduced by changing this dockage requirement,” he said, adding that trade officials have presented Canadian research that suggests otherwise.
“There is no greater risk of transmitting blackleg at two-and-a-half per cent than at one per cent.”
While blackleg can be transmitted through infested dockage, there’s no evidence that higher amounts of dockage lead to higher transmission rates, said Trevor Nysetvold, president of BioVision Seed Labs in Sherwood Park (which does the majority of blackleg testing for Alberta’s canola producers).
“We see samples with high dockage that has no blackleg all the time,” he said.
“There’s no direct link you can make between higher dockage and higher blackleg.”
Sturgeon County farmer Terry Bokenfohr, who has planted about 1,000 acres of canola this year, said he suspected this was a case of China throwing its weight around due to a global oilseed glut.
Most farmers can deliver canola with one per cent dockage if they don’t get hail, he noted. The problem comes at the export terminal, where that canola gets mixed in with seed from farmers who might not have bothered to make the effort.
While seed prices might take a hit if China’s rule goes through, Bokenfohr said he and other local farmers weren’t too worried about it.
“The crushing market domestically takes over half the supply right now. If China doesn’t want to buy our raw seed, perhaps they’ll buy crushed canola oil?”
Sears agreed that it wasn’t panic-time yet; Canada had developed its crushing capacity in recent years, and could switch to exporting canola oil or meal if needed.
Farmers should prepare for a possible change by ensuring their combines are set right to minimize dockage, Sears said. Since canola shipments are blended during exports, it’s probably not worth it for farmers to clean their seed to one per cent dockage unless grain terminals offer an incentive for them to do so.
Otherwise, it’s a case of wait-and-see for farmers as negotiations continue, Sears said.
“We certainly hope the issue will be resolved and it’ll be business as usual.”
