Putting all your eggs in one basket has risks. If the basket gets dropped, your entire income can be lost. That is the principle that drives individuals and businesses to diversify. It reduces risks.
Sturgeon County area farmers may wonder if their livelihoods are in peril because of a lack of diversification in markets for their crop. Currently the Chinese government is refusing to buy Canadian canola seed as it is normally processed. It’s a big deal because 40 per cent of Canada’s canola crop is sold to China. A $2-billion export is now in jeopardy.
Much of Canada’s canola would be blocked from export to China if the rule goes through. And currently Canada does not have the seed cleaning capacity to meet that requirement, says Greg Sears, chair of the Alberta Canola Producers Commission that represents 14,000 Alberta canola growers.
The Chinese say they won’t accept canola unless it has no more than one per cent of dockage, extraneous plant material such as weed seeds and plant stems. Currently Canadian canola seed is processed to 2.5 per cent dockage. The Chinese have said a greater percentage of dockage poses a greater chance of blackleg fungus being transmitted. Canadian officials say science does not support that conclusion and they are resistant to making expensive changes to processing for what they see is not a reasonable threat.
The Chinese threat is not a new one. It has been made many times since 2009. Canadian officials say it is impossible to meet the latest deadline of Sept. 1. This is particularly worrisome in a year when good rains mean farmers are expecting a bumper crop that they are eager to get to market.
So you might say, why worry? The Chinese deadlines have come and gone for seven years. Repeated extensions on the deadline has made sure our canola seed has always reached the Asian giant.
That is a good point. Officials in Canada and China are working on a solution in a hope that they can smooth this over before Sept. 1 and before Canadian Prime Minister Justin Trudeau visits China later that month. Trudeau’s task, to improve bilateral trade relations, may be made harder by this latest event. This is Trudeau’s first visit to China as prime minister. He was already expected to be at a disadvantage as he tries to improve relations with China, which were considered frosty during the Harper era.
Some say that this issue is not really about blackleg fungus at all. They say it is about China getting an upper hand in bilateral trade relations while they barter for some other advantage. But what if China did make good on its threat? Where would Canada market its canola crop?
Time is ticking on. Is it time for Canada to find additional markets for its canola so it doesn’t have as much in the Chinese basket? Developing more baskets could spread out the risk and ensure our canola gets to market.
