As we drift into a new year, an opportunity presents itself to refocus and take a fresh look at the issues at hand. Some people make New Year’s resolutions, some think about changes, and others take advantage of the fresh calendar to implement real change to benefit stakeholders and their own position. This restart with intent is true on farms, within the ag industry, and (perhaps) even government.
The Minister of Agriculture and Agri-Food, Marie-Claude Bibeau, has several items already on the docket for this early part of 2021. Although these issues are important to farmers and ranchers, questions remain on how high a priority they are for the Liberal cabinet and the Prime Minister’s Office.
Fish or cut bait on BRM reform resolution
Reforming farm assistance programs took much of the agricultural lobbying oxygen in 2020 and there is little to show for the effort. Last year finished off with a stalemate between the Prairie provinces and the federal government on Bibeau’s proposed changes on the final day of the federal-provincial-territorial meeting. There was hope that a compromise could be found by Christmas or year’s end to allow for retroactive changes to AgriStability for 2020. That is now shrouded in doubt, as no agreement was reached. With the announcement of the climate and environmental plan in December, increased commodity prices, and pure topic exhaustion, Bibeau should either find compromise in early Q1 or cut bait and focus on the reformation of the risk management suite for the next five-year framework in 2023. There will be bigger topics in 2021 to tackle…..
Address possible carbon tax exemptions for agriculture
The agricultural lobby was not successful in arguing for exemptions to the carbon tax for grain drying and heating at $20 and $30 per tonne in 2020, but the Liberals planning to raise the tax to $170 per tonne by 2030, the costs on agriculture could cross a threshold putting the argument for exemptions back in agriculture’s favour. Just switching to electricity is not a solution for many applications in agriculture, so the policy is widely viewed as a tax with little alternative options. Whether it be diesel-powered tractors or natural gas/propane grain dryers, farmers are challenged to find alternative fuels for many applications. This increase in cost to farmers is not balanced with recognizing the work farmers have done to sequester carbon through agronomic practices.
In June, the minister stated that the carbon tax on fuel for grain drying resulted in “insignificant costs” to farmers, a statement she may not be able to stick to with her government’s proposed carbon tax increases.
Agriculture’s role in the climate plan
Although the carbon tax gets most of the attention from the federal government’s climate plan there are other components that will touch agriculture. Both the Clean Fuel Standard (CFS) and new targets for reducing synthetic fertilizer use will impact agriculture. With the CFS finally reaching the Canada Gazette on the last possible week of December, farm groups will be working hard to understand the land use requirements in the first quarter while the minister will need to win over certain farm groups and farmers on the opportunity that this may be for grain and oilseed demand. Farmers in Canada do not appear to be as stalwart biofuel supporters as they are in the U.S. so Bibeau may have to be more granular on the possible benefits to farmers and how it fits into the climate plan. The other requirement in the climate plan is the 30% reduction target in synthetic fertilizer use that will need to be further flushed out by Minister Bibeau and stakeholders, including Fertilizer Canada, who initially showed a positive response to the new targets.
- The COVID-19 vaccine roll out into agricultural sector. It’s critical that high risk workers in the food system are deemed a priority for getting the vaccine. There has been lobbying by the worker unions and agriculture industry to see meat workers and certain farm workers get the vaccine as soon is deemed possible behind front line health care workers and the elderly.
- Developing a good relationship with incoming USDA secretary Tom Vilsack. Previous combos of Bibeau/Perdue and MacAulay/Perdue were relatively solid and did not cause any harm to the important Canada/U.S. trade relationship
- Sorting out the USTR challenge of Canada’s implementation of dairy TRQs under the new USMCA (CUSMA) agreement. Although this is more of a file for the trade minister, Vilsack knows the file well and Bibeau represents a dairy riding.
Minister Bibeau must re-establish trust with farmers in 2021 if she is going to be effective in this portfolio. A good example of the distrust were the changes to the CFS land use requirements. It appears that farm groups got many or most of what they asked for in the changes to the initial draft, yet farmers are having a hard time getting behind the CFS and there’s an assumption it will have a negative impact, largely based on the Liberals’ track record. When Minister Bibeau does deliver on an agricultural lobby ask, the Ministry has to find a way to get stakeholder credit or the PMO will see little need to deliver wins in the future without any possible political points.
Minister Bibeau is truly trapped in a position of being pushed by her portfolio stakeholders for changes that many times run perpendicular to the direction of her cabinet colleagues and the Prime Minister’s Office. All of this presents a very intriguing 2021 — as if 2020 wasn’t interesting enough.