January 21, 2020
KAP releases initial data on impact of carbon tax on grain drying
Manitoba producers will have paid almost $1.7 million in carbon tax related to the cost of drying grain on their corn alone by the time this harvest season ends, Keystone Agricultural Producers announced today.
“We are firm in our position that there needs to be an exemption for farmers under the carbon tax framework for all the costs associated with drying all grain, as well as for heating barns and farm buildings,” KAP president Bill Campbell said today. “Now that Manitoba falls under the federal backstop, farmers are left paying prices that, as price-takers in the global economy, cannot be passed along.”
Following the meeting of the federal, provincial, and territorial agriculture ministers in late 2019, Keystone Agricultural Producers worked with farmers across the province to compile data to demonstrate the need for an exemption under the federal backstop. The request for this information was made by federal Agriculture Minister Marie-Claude Bibeau and Manitoba Minister of Agriculture and Resource Development, Blaine Pedersen.
"The carbon tax on grain drying not only impacts our profitability as farmers but our competitiveness in a world market," says Manitoba Corn Growers Association president Dennis Thiessen. "If we look to corn farmers in the northern United States, they are paying less for their drying costs and on top of that don't pay a carbon tax. That corn comes into Manitoba, making Manitoba farmers uncompetitive. This is completely unacceptable, impacts Manitoba farmer's profitability and the federal government needs to be aware of this."
Initial data shows that the average producer paid $3.69 per acre in carbon tax on grain drying (primarily corn), including propane and natural gas. That means that almost $1.7M left the provincial economy this year from corn production alone. A typical farmer in this province growing 500 acres of corn spent approximately $14,145 on fuel for drying grain, while the carbon tax added $1,722 to their fuel bill. Wet conditions this harvest meant that other grain had to be dried as well. Significant and atypical rates of precipitation during the 2019 harvest season forced many farmers to dry grains that may not have been dried otherwise.
The ability to dry grain is important from an economic, a harvest management and a food safety perspective. Storing damp grain can lead to quality losses or mold which in turn could lead to a producer receiving a lower price for their crop, or at worse render the crop unmarketable due to food safety concerns.
This week at Manitoba Ag Days, KAP is asking producers to stop by its booth with their fuel bills from drying grain so that KAP can continue to bolster its case on this important policy issue for farmers. KAP will also work with the provincial government to present a unified case to the federal government as to why this exemption is vital to producers across the country and to our national economy.
In November 2019, KAP requested a meeting with the Prime Minister on this important topic and will be requesting meetings with federal ministers and federal opposition MP’s as part of the annual Canadian Federation of Agriculture annual general meeting.
For more information:
Joey Dearborn, communications coordinator
Keystone Agricultural Producers