A canola update on trade with China

Hi, my name is Jim Everson I’m the
president of the Canola Council of Canada and I’m joined here today by the
CEO of the Canadian Canola Growers Association, Rick White. So we’d like to
provide an update on our trade situation with China. As you know China is a
critically important market for Canadian canola. We face a major market blockage
from China for canola seed and unfortunately it still continues there
isn’t a terrific amount of new information about our trade situation
with China but there are some seed sales happening currently. Otherwise the
permits for Richardson and Viterra have still been suspended and there are
heightened inspections that are applying to all seed shipments going into China.
So that’s the situation that’s been the case for some time; there are certainly
some activities taking place including Canada taking China to the World Trade
Organization for consultations but the situation remains still a significant
challenge for us. And this is a very, very important issue for farmers so we’re
going to go through a few items and give a more clear update on the China
situation and we’ll also have some questions today that are coming direct
from farmers and we’ll answer some of those questions for you today. There are
some positive signs but they’re limited there are month-to-month seed shipments going to China at the moment. There’s also an appointment of a new ambassador
Mr. Dominic Barton is the new Canadian Ambassador to China — that’s a good thing for our industry he’s an internationally well-known businessman. He’s very
familiar with natural resources’ trade so we will be working with him and with the
rest of the Government of Canada and there is the WTO consultations that have
recently taken place where Canada and China met under the auspices of the WTO
to discuss China’s concerns. Anytime that the two sides are sitting down and
having a solid consultation is a good thing for our industry. We’ve already had
an announcement earlier on this year from Minister Bibeau about the Advance
Payments Program expanding the limits, more interest free for canola, etc., also a
delay or a stay of default for the 2018 program which has really really helped
farmers out with the cash flow needs. But one of the key parameters that we’re looking at and talking with the government is about AgriStability,
in particular the reference margins under that program of 70% are just too
low to be adequate for farmers to help them during this time and you need to
have these business risk management programs working properly so we’re
working and advocating every chance we get to increase those reference margins
to 85% and remove the reference margin limit to get a true 85% coverage
level under that program. The government has heard us but we’re looking for them
for action right now. There is strong demand for high quality
canola in China we have had market access challenges with China in the past
and we’ve been able to deal with them effectively. We are optimistic that we
will be able to do that this time. Diversification of markets is pretty
critical — one of the areas is biofuels: domestically increasing the use of
canola in the biofuels industry in Canada. It’s important that the
provincial governments be supportive of us on that front they have a strong
interest in agriculture in the province and canola in the province and I think
they can play a strong role in working with the federal government. We’re also
looking at improving the competitiveness of Canadian canola in the European
biofuels market. A third area is working with the government to improve our human resource capacity through trade commissioners, plant scientists and so on who helped us with our market access issues particularly in Asia. China
certainly but also other Asian markets that we will be looking to to diversify
our market base such as Pakistan, Bangladesh, Vietnam and so on. So we are working with the government to have them increase their capacity to support
market access work on behalf of the industry. When we look at the biofuel
market here in Canada we’ve been long-standing advocates of trying to
move the renewable content, particularly in the diesel pool to increase from 2% nationally to a 5% nationally. When you look at moving from
2 to 5% and including canola oil in that mix of renewable content,
that would require about 1.3 million tonnes of canola seed and it would mean
about $650 million farmgate price level. So, it’s a domestic market and it’s
a predictable market — one that we can control within our own boundaries and
not rely on an export market quite as heavily as we have. That would reduce
greenhouse gases by about 3.5 million tonnes per year just by doing that change we have Quebec moving to 4% we have Manitoba now moving to 5% but we are looking at Saskatchewan and Alberta to move from 2 to 5% provincially to
make that happen. It’s the right thing to do for the
environment and for farmers and for diversifying our markets domestically here and makes better utilization of our crush capacity. And it also keeps the value-added at home here for Canadian farmers. Thank you very much and please keep in
touch you can always get information from our website ccga.ca You can contact us direct, email us, call us, whatever works for you. But we need your ideas and
your input so that we can carry those messages forward to the government. This is a really important issue we understand the importance of the Chinese market please go to the website it’s canolacouncil.org We have a special page there on our China file so that whenever there’s an update to the
situation with China you can learn about it there and we’re very interested to
hear your ideas and thoughts about the China market. Thank you very much.

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