Now, farmers in Canada are once again dealing with heightened uncertainty as China bans imports of canola oil, canola meal and peas. This announcement marks the end of a longstanding series of trade conflicts between Ottawa and Beijing. These conflicts have been exacerbated by geo-political tensions and extreme economic impact. Canola is the bedrock of Canadian agriculture. Unfortunately, it now finds itself on the chopping block, facing unprecedented attacks that threaten the very livelihoods of countless farmers.
The name canola is a combination of the words “Canada” and “ola,” the Latin word for oil. People primarily use it to produce cooking oil, high-protein animal feed, and biodiesel. Scientists in Saskatchewan and Manitoba bred canola in the 1970s to eliminate the erucic acid problems of its ancestor, rapeseed. Today, canola is one of the dominant crops for many Canadian farmers. Margaret Rigetti, who runs a family farm in southern Saskatchewan, remembers her family’s deep relationship with canola. Her grandfather was one of the original pioneers that grew the crop when it first came here. Since then, it has increasingly been vital to their fertility practices and to their farming operations.
More than half of Canada’s canola is produced in Saskatchewan, highlighting the crop’s significance to the local economy. The market has been rocked by trade disputes. In 2019, Beijing suspended imports of Canadian canola from two major exporters amid allegations of Canadian contamination. This ruling was predictably seen as retribution for Canada’s detainment of Chinese business executive Meng Wanzhou. Once Meng Wanzhou was released, the two Canadians held in China were likewise set free. So the canola ban was dropped, with restrictions ending in 2020. The projected economic damage from the fight came close to $2 billion.
The canola market is really starting to stabilize. In addition, farmers are currently dealing with the impact of new Chinese tariffs, announced in retaliation for Canada’s tariffs on Chinese EVs, steel, and aluminum. These tariffs go as high as an outrageous 100 percent on important products like canola oil and peas. Chris Procyk, another farmer hurt by these tariffs, spoke to the Catch-22 that many farmers face.
“We are unfortunately once again caught in the middle of a trade dispute that we didn’t cause or we didn’t create, and we’re left paying the bill.” – Chris Procyk
Yet Procyk worried that we’re entering a dangerous point where history might be repeating itself, as more uncertainty hangs heavy over the agricultural sector. He pointed out that farmers are already trying to get in today’s marketplace through a labyrinth of trade relations and increasing market volatility.
The challenging reality that has confronted farmers like Rigetti this summer has made many farmers reevaluate how to operate. She knows that even as the chaos unfolds, it’s critical to keep the big picture in mind.
“We have to be careful to keep things in perspective and not scare our kids. I do try to keep the focus on what we can actually control, which is planting a crop, growing the best crop we can grow, manage our costs and manage our mental health.” – Margaret Rigetti
Rigetti notes that for countless farmers in Saskatchewan, canola is still the key to their economic survival.
“For a large part of Saskatchewan, the farm economy has been driven by canola.” – Margaret Rigetti
These ongoing trade disputes still threaten the volatility of Canadian agriculture. Procyk asked to what extent we can know the market in such unpredictable market conditions.
“There’s not really a place to pivot.” – Chris Procyk
As Canadian crops and potash flow south into the U.S. while farm machinery moves north, maintaining a stable trading relationship is crucial. Mexico’s action item Intensive energy and transportation cooperation products covered by the Canada-U.S.-Mexico agreement are immune from U.S. tariffs. It’s the new Chinese tariffs that will hit Canadian farmers the hardest.
