Russia’s February 24 invasion of Ukraine is reverberating around the world for farmers who depend on fertilizer for spring planting in the northern hemisphere. Ontario, for example, has capacity to store only two-thirds of the fertilizer needed for spring planting. The remaining fertilizer supply – nitrogen and phosphate -- is usually in transit from Russia and the Baltic area for later delivery to the ports of Montreal and Hamilton. 

The situation is made more complex by the fact that the Canadian government announced 35 per cent tariffs on all imported goods from Russia and Belarus that were not in transit prior to March 2, 2022. The Ontario Agri-Business Association (OABA) led by executive director Russel Hurst, is providing a sample letter that can be shared with local MPs to raise awareness of the effects on farmers. 

“As a sector, we are fully supportive of punitive actions against Russia resulting from their decision to invade Ukraine,” says Hurst. “Although the tariff is intended to be a punitive action against the Russian economy the consequences will be ultimately felt by Ontario farmers through spring fertilizer supply shortages and price increases.”

OABA is recommending: 

1.  Standing Committee on Agriculture and Agri-food (AGFI) hold an emergency meeting to address the supply chain challenges the Eastern Canadian fertilizer value chain is currently facing due to the implementation of the tariff and associated supply chain restrictions on Russian goods.

2.  Amend the tariff policy on Russian fertilizer to include the following:

a.  35% tariff would not apply on fertilizer imports that have a documented fertilizer purchase order made prior to March 2, 2022.

Context: Purchase orders for Russian fertilizer are typically made by Canadian-based companies which import fertilizer into Eastern Canada several months in advance of shipments being initiated. As a sector, our position is that fertilizer importers should not be penalized for business decisions made prior to the implementation of the tariff.

b. 35% tariff applies to fertilizer purchases orders made as of March 3, 2022.

Context: OABA and its 500 members are fully supportive of a tariff on Russian fertilizer for all purchase orders initiated on or after March 3, 2022.

c.  35% tariffs paid by fertilizer importers be put “in-trust” until further clarity on tariff policy decisions can be made by government decision makers.

Context: This would allow for Canadian-based companies importing fertilizer into Eastern Canada to recoup tariff payments, if amendments are made to the current policy to mitigate the undue burden placed on the domestic fertilizer supply chain.

3.  Ensure that vessel shipments of fertilizer that are of Russian or Belarus origin currently in transit are allowed to off-load at Canadian ports (i.e. Port of Hamilton and Port of Montreal), if all necessary shipping requirements are adhered to (i.e. ship and crew is not of Russian origin, per Customs Notice 22-02).

Context:  It is vital to Ontario farmers that vessels currently en route to Canada from the Black Sea/Baltic region are permitted to deliver the fertilizer that Ontario farmers vitally need during the spring planting season. If this is not allowed to happen there is the very real probability that some Ontario farmers will not be able to access adequate fertilizer to grow their crops.

4.  Government of Canada examine providing the sector (i.e. fertilizer importers, distributors, ag-retailers and farmers) compensation for undue financial hardships associated with the implementation of the 35% tariff on fertilizer.

Context:  The timing of the tariff decision and implementation significantly impacted long established supply chain operations and agreements that had already been negotiated and logistics established. The tariff negatively impacts product availability with no feasible global sourcing alternatives weeks before the crucial spring planting period. The tariff further escalates farm level pricing due to tariff fees being incorporated into mid-spring fertilizer imports. 

Source:  Ontario Agri-Business Association March 14, 2022 statement