Canola Farmers Caught in China Feud May Get Aid From Trudeau

(Bloomberg) -- The Canadian government will consider providing an aid package for canola farmers after China restricted its purchases of the crop, Trade Minister Jim Carr said.

“We have a very serious understanding of possible consequences of this issue on producers,” Carr said in an interview Thursday. “If necessary and as necessary, we will look at possible support.”

Some measures are already being considered as part of an agricultural support package, said one government official, speaking on condition of anonymity because no final decision has been made. One such measure would be a crop insurance-style program that would give farmers some kind of upfront payment, up to a threshold, for their crops. That program may not be limited to canola, in a bid to blunt the impact of any further Chinese pressure tactics on other crops, the official said.

The government is also considering aid for farmers similar to that provided to workers in the softwood lumber sector, which was impacted by U.S. tariffs, the official said. Farmers are watching the issue closely as Canada’s spring planting season nears. Canada’s shipments of canola -- used in cooking and as livestock feed -- to China last year totaled C$4.4 billion ($3.3 billion).

Asked about potential aid, a spokesperson for Canada’s Agriculture Minister Marie-Claude Bibeau declined to respond specifically but said the government “will continue to stand-up for Canada’s canola industry.”

Huawei Link

Prime Minister Justin Trudeau is grappling with how to respond to China’s move, the latest in a bubbling feud surrounding Huawei Technologies Co. Chief Financial Officer Meng Wanzhou, who was arrested in Canada after a U.S. extradition request. China has demanded her release -- and has since detained two Canadians before choking off canola sales.

Carr said the priority in the meantime is trying to get evidence from China of why they’ve suspended export permits for two major Canadian companies. China is the biggest buyer of Canadian canola.

“We have to resolve this issue, right away, on the basis of whatever evidence the Chinese can present to us that indicates there’s an issue,” he said. But China hasn’t provided any evidence yet, he said.

“We have asked Chinese authorities to show us examples of impurities and we haven’t yet seen any of those.”

Beijing has confirmed the suspension of exports from Glencore Plc-owned Viterra Inc. and Winnipeg-based Richardson International Ltd. China says it found pests in canola shipments that had already been cleared by Canadian inspections.

Root Problem

Carr declined to say if he thinks the canola issue is a Chinese pressure tactic to free Meng. “I can’t say, because I don’t have the evidence, and no one has said directly to us that it is related,” he said.

A spokesman for a major industry group said the focus should be on fixing the root problem.

“First focus is on fixing the issue as quickly as we can,” Brian Innes, vice president of public affairs for the Canola Council of Canada, said in an interview on Thursday. “Everyone is aware that farmers are facing difficulties and I’m sure that when the time comes there may discussions on that.”

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