Straight-up cuts in fertilizer rates — if imposed to help Canada meet its targets for cuts in emissions by the end of this decade — could translate to significantly reduced income for farmers, an industry group warns.
Fertilizer Canada, the group representing manufacturers, wholesale and retail distributors for nitrogen, phosphate, potash and sulphur, on Monday warned “cutting fertilizer applications to meet the federal government fertilizer emissions targets could reduce farm income by $48 billion over the next eight years.”
That figure — $48.36 billion over the years 2023 to 2030 — comes from the summary of a report the group commissioned from consultancy and accounting firm Meyers Norris Penny (MNP).
The figure covers Canada’s production of three crops — spring wheat, canola and corn — and isn’t specifically based on Canada’s proposed target for cuts in fertilizer emissions, but rather a separate target proposed for the European Union.
“If Canada adopted the EU model, the potential economic impact of reduced fertilizer use would be devastating to Canadian farmers,” Fertilizer Canada said in Monday’s release.
“The EU model” refers to a target laid out in the “EU Green Deal,” proposing to reduce “nutrient losses” of nitrogen and phosphorus by at least 50 per cent by 2030.
According to a November 2020 report prepared for the European Parliament’s committee on agriculture and rural development, that target would “reduce the use of fertilizers by at least 20 per cent by 2030.”
Canada’s latest proposal on fertilizers, meanwhile, comes from its December 2020 climate plan, “A Healthy Environment and a Healthy Economy.” That document calls for a national emission reduction target from fertilizers — cutting those emissions 30 per cent below 2020 levels.
The federal government, in the document, said it would “work with fertilizer manufacturers, farmers, provinces and territories, to develop an approach to meet” that target.
The Canadian document said direct emissions tied to synthetic nitrogen fertilizer application have increased by about 60 per cent since 2005 and are projected to keep increasing.
“Improving how fertilizers are used through better products and practices will save farmers money and time, and help protect Canada’s land and water,” the federal document said — though it didn’t specify whether, or how much of, its 30 per cent cut would be achieved through reduced fertilizer rates.
MNP’s report, based on the EU proposal, models a 20 per cent rate reduction for the years 2023 to 2030, and focuses on the effects for corn, canola and spring wheat in Canada.
The results are based on a similar number of acres for the three crops using the five-year average; a straight-line reduction of fertilizer use starting in 2023; a straight-line reduction in yield based on industry yield response estimates for each crop; no inflation effects; and no effects of reduced crop supplies on crop prices until 2030.
A straight-line reduction in fertilizer usage, MNP said, “results in increased differences of actual yields versus potential yields if the status quo had been continued.”
By 2030, yield gaps for the three crops are estimated at 23.6 bushels per acre per year for canola, 67.9 bushels per acre per year for corn, and 36.1 per acre per year bushels per acre for spring wheat.
Given constant prices, MNP said, the total value of lost production for those three crops rises from $1.8 billion in 2023 up to $10.4 billion by 2030 — in all, $48.36 billion over the eight crop years in question.
To meet a 20 per cent reduction in fertilizer rates, “there may be adjustments forced on farmers’ practices that will have varying degrees of net impact on farmers,” MNP wrote.
“This report is however based on the assumptions of continued farming practices (including crop rotation) as they are today to reflect the possibility of farmers accepting the lower production that lost nutrients would have on the production levels of their crops.”
“When the federal government announced a 30 per cent emission reduction target for on-farm fertilizer use it did so without consulting — the provinces, the agricultural sector or any key stakeholders — on the feasibility of such a target,” Fertilizer Canada CEO Karen Proud said in the group’s release Monday.
Fertilizer Canada said the industry has been working to limit on-farm emissions for over a decade by way of its 4R Nutrient Stewardship program, which aims to “optimize plant nutrient uptake, and increase yields, while achieving verifiable reductions in emissions.”
“We do not have to choose between the environment and the economy,” Proud said in Monday’s release. “By choosing 4R Nutrient Stewardship, as the foundation to a holistic approach to on-farm emissions reductions, the agricultural sector and the government can work together to meet our environmental goals, while at the same time supporting our farmers.”
“Farmers don’t need the government to tell them how to properly use fertilizer,” Gunter Jochum, president of the Western Canadian Wheat Growers, said in a separate release Monday citing the MNP report. “We engage crop consultants, soil tests and use the latest technology available to us. Our government should be strongly supporting the agronomic techniques that we have put into practice.”
The Wheat Growers, in their release, break down the MNP data to show, by 2030, a $4.61 billion loss in Saskatchewan growers’ canola and spring wheat crops; a $2.95 billion loss for Alberta canola and spring wheat; and a $1.58 billion loss for Manitoba canola, corn and spring wheat.
“The Canadian government must recognize that innovation is best driven by the farmers and organizations that support them,” the Canadian Association of Agri-Retailers said in a separate release Thursday, also citing the MNP report.
“The proposed Canadian mandate will lesson our country’s ability to compete on the global market by increasing cost of production and reducing yield.” — Glacier FarmMedia Network