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Alberta farmers have a lot of worries and concerns about potential 25 per cent tariffs imposed on their industry by U.S. President Donald Trump, but not a lot of information to go on, says Lynn Jacobson, president of the Alberta Federation of Agriculture (AFA).
“We don't actually know the actual details of what's going to happen yet, and I think everybody's searching for those details,” he stated.
However, his members have been speculating about what might happen, says Jacobson, and one thing they all agree on is any tariffs imposed on Canadian agriculture are going to have almost as significant of an impact on the United States' own food processors and industries because the two nations are so integrated when it comes to agriculture.
“The economies are so integrated, I guess sitting up here I am just shaking my head and going: you guys are letting somebody that has a personal beef try to dictate what's going to happen for the rest of the world,” said Jacobson. “There is a danger it will put the world into recession.”
“Certain areas of the States they're very reliant on Canadian product coming down, and really a lot of the Canadian product that we send down there," he added, "like Hard Red Spring wheat is basically used to mix with air grain to upgrade their grain to standards that they need for their millers. We are supplying a very specific product so they can use their product more.
"Without our product going down the States, or ours becoming more expensive, then that's going to drive up their prices too, because they're going to have to replace that with something.”
Potash production is another area where Canadian suppliers play a key role in American agriculture. This would drive up input costs south of the border, and might be a key industry Canadians could leverage in any counter-tariff response.
“Another industry that the U.S. really depends on for 80 per cent (of farming operations) is potash," explained Jacobson. "If they don't have the potash, well, 80 per cent of the U.S. use of potash comes from Saskatchewan out of Canada. If they cut that supply back down or something, or it's really bad and they (Canadian retaliations) cut it completely off, the U.S. farming industry probably would take a 50 or 60 per cent reduction in yield across the board.”
However, the most vulnerable crop growers to U.S. tariffs in western Canada, says Jacobson, would likely be oilseed producers– such as those who farm canola, for example.
“About 90 per cent of domestic production is bought by (the U.S.) for oil processing,” he explained. “That is going into the States for biofuels and things like that.”
Beef producers would also be put into a vulnerable position.
“Another part of the industry that's gonna have an effect on is the cattle industry because there's a lot of two way flow of live animals across (the border) now … Some of those animals go down to the States and they're fed down there. Or cattle come up here and they're fed up here … So that industry is quite integrated to a large degree.”
Many Canadian farmers also buy their machinery from the United States, and high tariffs would obviously have a knock on effect, says Jacobson. However, this is also the point where Jacobson feels the Alberta government might have a role to play to help mitigate these impacts.
“We (at the AFA) talked about some of the things the Alberta government could do, because when you're talking about tariffs, you're also talking about a shared jurisdiction with the U.S.,” he said. “So say on farm equipment, you could have an Alberta tax rebate basically on the tax return on Alberta-produced equipment or Canadian-produced equipment, rather than on what you can buy from the U.S. And then you could extend that tax break to European equipment, too– which could fill some of the gap that U.S. companies do.”
Jacobson said if tariffs are eventually imposed on Canadian agriculture exports, the AFA would expect a more muscular response than it has seen from Premier Danielle Smith and the Alberta government to date.
“I think we want to be a little bit more forceful and have things waiting in line that can happen,” he confirmed. “If that tariffs' discussion goes away, and Trump backs off on a lot of this stuff, then it all disappears. But I think the government has to be a bit forceful. You know you can't appease Trump … Bargaining for him, it's winners and losers. It's not mutual gain; so I think we have to take that into account as well.”
Jacobson said there are also some punitive things his board has discussed that the Alberta government can do on its own, such as levying fees on all U.S.registered transport trucks coming across the border into Alberta, raising the bar on American cattle producers to meet Alberta brand inspection levels or asking that CFIA tags be in place before American animals are allowed to come across the line.
However, ultimately, a crisis such as this will require a national response, says Jacobson, and it should start with lowering inter-provincial trade barriers and encouraging grain companies to seek out new markets in other areas of the world instead of always relying on the easy sell to the United States.
“I think our farmers need to encourage players within our industry, like grain companies who are the buyers of our products, to try to diversify where they're selling these products and look for new markets for us,” he said. “It's a trying time, but there are things we can do.”
Alberta Beef Producers response
Great West Media also reached out to the Alberta Beef Producers (ABP) to get its response to potential U.S. tariffs. ABP sent out a statement via email in the form of a quote attributed to ABP Chair Brodie Haugan.
"We will be taking some time to determine the implications of the announcement. Those details will drive the conversations we'll have over the next week in San Antonio, Texas, where we are meeting with political representatives from across the States. Alberta Beef Producers believes in the integrated trade market between Canada and the U.S. and will continue to advocate for the cattle producers, beef processors, and consumers who rely on that trade."
In a statement released on its website Feb. 2, the ABP affiliated Canadian Beef Producers also emphasized the integrated nature of the cattle industry on both sides of the border.
“Every day, $3.6 billion CDN in goods crosses the Canada–U.S. border, resulting in a $1.3 trillion annual trade relationship. Notably, Canadians purchase $722 USD/person of U.S. agricultural products each year while Americans purchase just $118 USD/person of Canadian agricultural products annually.
“The American and Canadian beef and cattle industries are partners in that cross-border trade, with small and medium sized processors and local and regional food systems on both sides of the border relying on the free flow of cattle and beef across the border.”
