Canada ups loans to farmers after China blocks canola

Ottawa (AFP) –


Canada increased loans to farmers Wednesday after China blocked shipments of canola -- its most valuable crop -- amid diplomatic tensions between Ottawa and Beijing.

The government said it would more than double the amount of money available to individual farmers under an existing aid program to Can$1 million (US$750,000).

Canola farmers in particular will also not have to pay interest on the first Can$500,000.

"Canada will continue to navigate this challenging period with China through careful, deliberate, and strategic engagement," Trade Minister Jim Carr told a press conference.

He said he would also lead a trade mission to Japan and South Korea in early June as part of ongoing efforts to diversify Canada's export markets.

And he will promote canola at upcoming OECD and APEC meetings, building on recent trade outreach to the UAE, Thailand, Malaysia, Pakistan, Bangladesh, Mexico, Germany and France.

"It's critical that Canadian exporters have other readily available markets when faced with trade disruptions," Carr said.

According to the industry, canola generates one quarter of all farm cash receipts in Canada, supporting 250,000 jobs. Ninety percent of it is exported as seed, oil or meal.

China, which took in 40 percent of the total Can$11 billion in Canadian canola exports last year, recently banned imports from two major Canadian canola firms -- Viterra and Richardson International -- saying it detected harmful organisms in shipments, which Canada disputes.

There are "no scientific reasons for this action," Foreign Minister Chrystia Freeland has said, while China has defended its ban as "completely reasonable and legal" to protect the health and safety of its citizens.

Relations between Ottawa and Beijing have been frosty since the December arrest in Vancouver of a top executive of telecom giant Huawei on a US extradition request related to Iran sanctions violations.

In a move seen as retaliation, Chinese authorities have detained two Canadian nationals -- a former diplomat and a business consultant -- on suspicion of endangering national security, and sentenced two others to death for drug trafficking.