A study commissioned by the Grain Farmers of Ontario (GFO) shows the impact the federal government’s fertilizer tariff has had on producers in the province, including a reduction in application rates.
According to the results of the RealAgriStudies survey, more than half of the farmer respondents reported being asked to pay a surcharge on their fertilizer purchases, which most attributed to the government’s tariff. More than one in six farmers also reported experiencing a fertilizer supply shortage for the 2022 growing season.
Further, approximately half of farmers indicated that they used less fertilizer in 2022 because of the higher price, and 25% indicated they made changes to their crop rotation due to fertilizer considerations. One quarter of the farmers surveyed also reported they will be making changes to their 2023 crop rotation, with over half indicating a likelihood they will grow more soybeans, a crop that requires less inputs than corn.
Meanwhile, 17% of respondents said their retailer has notified them of potential fertilizer shortages for the upcoming season.
In early March last year, the Canadian government suddenly slapped tariffs on many imports from Russia, including fertilizer, as part of wider global economic sanctions on Russia in the wake of its unprovoked invasion of Ukraine. With so little time before the start of spring seeding, farmers had little choice but to pay the tariff out of their own pocket.
Eastern Canadian farmers were disproportionately impacted by the tariff, as Ontario, Quebec, and Atlantic Canada rely heavily on fertilizer imports. Indeed, approximately 660,000 – 680,000 tonnes of nitrogen fertilizer are imported from Russia to Eastern Canada annually, which represents between 85-90% of the total nitrogen fertilizer used in the region. According to Statistics Canada, the federal government collected $34 million in tariff income on fertilizer imported into Canada in 2022.
GFO has lobbied the federal government to remove the tariffs on fertilizer – noting Canada was the only G7 country to levy such a charge - and return any tariff money that it has collected back to producers.
The Food and Agriculture Organization of the United Nations (FAO) has stated that commercial fertilizer is directly responsible for approximately 60% of total world food production and that without commercial fertilizers, global food security would become considerably harder to attain, especially with a growing population.
“Farmers work on very thin margins for the businesses we run that support our families, Brendan Byrne, Chair, Grain Farmers of Ontario, said in a release. “We need to produce an abundant, healthy crop and to do that, and we need to provide plants with nutrients.”
Representing Ontario’s 28,000 barley, corn, oat, soybean and wheat farmers, GFO said it is continuing to press the Canadian government for information on how money collected via tariffs on fertilizers will be returned to farmers, when tariffs will be removed, and how the government will ensure access to fertilizer for the coming year and beyond.