Premier, producers commend federal government's plan to boost loans for farmers

Help from Ottawa in the form of cash advances is a welcome short-term solution for farmers caught in a trade dispute between Canada and its number one canola customer China, according to the Premier of Saskatchewan and canola producers in the province.

China has stopped taking canola seed from Canada, saying it's contaminated with pests. Experts say it's a political move after an executive from Chinese telecom company Huawei was detained in B.C.

On Wednesday the federal government announced that it will more than double the maximum amount of money available to individual producers under the Advance Payments Program (APP), from $400,000 per year to $1 million.

The increase will be available to all Canadian farmers. For canola producers, the interest-free portion will be increased to $500,000 from $100,000.

Premier Scott Moe wrote a letter to Prime Minister Justin Trudeau last month calling for changes to the APP, including a request for interest-free loans of $1 million dollars.

Although Trudeau didn't meet that specific request, Moe said Ottawa's new plan will help many farmers in Saskatchewan start seeding. 

"We're appreciative of the effort. I think, in fairness, the federal government has shown that they do support Canadian, Western Canadian agriculture and Canadian agriculture by extension," Moe said. 

Moe said the next goal is restoring a positive trading relationship with China. 

The federal government has also announced that it will lead a trade mission to Japan and South Korea in early June and will engage in outreach to other countries, looking for new markets for Canadian canola.

Moe said Saskatchewan's trade and agriculture ministers have been invited to accompany the federal government in that trade mission.

"One of them, at least, will be attending that as we are always open to, and aggressively seeking, the opportunities that we have to market our exports into other markets and to expand our exports," Moe said.

Producer grateful for interest break

Todd Lewis, president of the Agricultural Producers Association of Saskatchewan, farms at Gray, Sask. He said the federal government's solution will work to temporarily assist producers with canola they are unable to sell.

"They'll be able to take an advance on that canola and also on next year's crop. So it will help a bit on the cash flow," Lewis said. "It's a short term remedy. It's not going to fix everything."

"I think the million dollars sounds like a lot of money but it just speaks to the risks in agriculture. It's not uncommon for farmers to be spending more than a million dollars to put their crop in."

Lewis said producers have been calling for an increase in APP amounts, which have remained stagnant for years.

"Unfortunately we need a crisis like this canola trade situation with China to be the catalyst for it, but it's welcome," Lewis said. 

Lewis said the increase in interest-free loans will save producers thousands of dollars in interest.

'Tread lightly,' warns canola farmer

The federal government wants the CFIA to travel to China and test canola seeds exported from Canada. Lewis said he supports that idea.

"Between the CFIA and the Canadian Green Commission we have a system in place second to none for traceability and we know that when we ship our canola off from the farm gate that it's in good shape and we're certainly have had the tools in place to back that Canada ships good canola to our customers worldwide," said Lewis.

"Hopefully the CFIA will be able to put that part of this situation to rest, that China has in fact received good product."

Lewis said that if it is merely a political move, it will probably take longer to mend the relationship and restore trading.

Moe has suggested retaliating against China for closing the door on Canadian canola. Lewis said he would caution the government to "tread lightly."

"We sure don't want to see this trade trade situation escalate," Lewis said.

He said a full-on trade would be bad for both Canada and China.

"Food and politics don't mix and this is just another situation here where there's not going to be any winners in this if we see this trade war escalated."