Canola farmers wary of tough rules in China

New import regulations will bring higher processing costs, group says

The head of a national group that represents canola farmers says they are concerned China’s plan to impose stricter import regulations on the crop this week will put them at a competitive disadvantage and clog Canada’s grain terminals.

China says it will allow canola shipments containing no more than one per cent of waste product starting Thursday, compared with the 2.5 per cent allowance today. The waste, known as dockage, includes parts of the canola plant other than seeds, as well as weeds and other crops.

Those tougher restrictions coming from Canada’s largest canola buyer will mean grain traders will have to pass on the higher costs of processing to farmers, said Rick White, CEO of the Canadian Canola Growers Association.

“Those higher physical costs of cleaning down to that level, there are additional costs to that, and they will be passed back through the industry and farmers will certainly be picking up their share,” White said Monday.

“We could be at a competitive disadvantage because our costs will be higher than other countries.”

He said he’s also concerned the new rules will delay grain shipments going through western terminals because they will need more time to sort through the canola and clean various equipment.

The dispute comes as Statistics Canada is expecting some bumper grain crops this year, including 17 million tonnes of canola for the third biggest harvest on record. It also could become an irritant during Prime Minister Justin Trudeau’s visit to China this week.

Luo Zhaohui, China’s ambassador to Canada, said last week he hopes the issue doesn’t mar Trudeau’s trip. At the same time, he said Canada has been inflexible.

China is the largest customer of Canadian canola, accounting for 40 per cent of exports of the oilseed worth about $2 billion annually.

The Chinese government has said it’s imposing the new regulations to prevent a disease called blackleg from being brought into the country, but industry representatives say there’s no scientific basis for that.

Norm Hall, president of the Agricultural Producers Association of Saskatchewan, said the rules are instead a way for China to use up some of its stockpiles of canola.

“I think it’s more China using it as a non-tariff barrier,” Hall said Monday. “They’re using that to slow down the sales and make sure that their mills use some of their own production.”

A spokesman for International Trade Minister Chrystia Freeland said Monday she continues to raise the issue with her Chinese counterparts in the hopes of reaching a “long-term solution, based on science, for our Canadian producers.”

We could be at a competitive disadvantage because our costs will be higher than other countries.