Farmers worry about the environment, but a Prius can’t pull an air seeder

A timely rain or an early frost can be the difference between staying afloat or handing the farm over to the bank after a foreclosure.

By Todd MacKay from the Canadian Taxpayers Federation and Robin Speer of the Western Canadian Wheat Growers Association

The climate matters to farmers – a timely rain or an early frost can be the difference between staying afloat or handing the farm over to the bank after a foreclosure. But farmers are worried that carbon taxes will threaten their way of life without protecting the environment.

Farmers are worried about the cost. A John Deere S690 combine has a fuel tank that holds 1,155 litres. British Columbia is charging a carbon tax of 7.7 cents per litre of diesel. That means farmers would pay $89 in carbon taxes per fill during harvest, and it requires many tanks of fuel to take off millions of tonnes of grain every year. Urban Canadians can buy hybrids to minimize the direct costs of a carbon tax, but a farmer can’t pull an air seeder with a Prius.

Even worse, Canadian farmers have to compete in a global market. It’s not likely farmers in the United States will face a carbon tax and farmers in Australia certainly won’t – a carbon tax was already tried Down Under and it’s been discarded. Farmers from Fargo and Wagga Wagga would be happy to take market share from farmers in Battleford and Wetaskiwin who would become less competitive due to a carbon tax, but how would that help the environment?

“Ah, but there’s an easy fix,” say carbon-tax advocates. “We’ll just exempt farmers.”

British Columbia exempted agriculture from its carbon-tax regime, so there’s a precedent, but even with exemptions, farmers’ livelihoods would remain at risk. If farmers are exempted, someone else will have to bear a disproportionate burden to meet emission reduction targets. The Manitoba government estimates that agriculture accounts for 30 per cent of that province’s greenhouse gas emissions. Exempting agriculture would force others to reduce more emissions and that affects farmers.

Consider nitrogen fertilizer. Modern agriculture depends on fertilizer, but it’s energy-intensive to produce. Canadian fertilizer producers work hard to minimize emissions, but a carbon tax would force them to raise prices. That would force Canadian farmers to make a difficult decision: Pay a higher price for Canadian fertilizers or buy it from other countries? And again, how would it help the environment to put Canadian fertilizer plants out of business while plants in other countries expand?

The questions farmers are asking about carbon taxes go beyond the bills. They have a more practical concern. Will a carbon tax actually work? B.C. implemented its carbon tax in 2008. “Since 2010, B.C.’s GHG emissions have increased every year,” said Marc Lee, an economist at the Canadian Centre for Policy Alternatives. “As of 2013, they are up 4.3 per cent above 2010 levels.”

What’s Mr. Lee’s solution?

“Let’s cut the crap about B.C.’s carbon tax,” said Mr. Lee. “To be truly effective, carbon taxes will need to be much higher than B.C.’s current rates.”

So paying 7.7 cents in tax per litre of diesel isn’t enough reduce emissions? Canada accounts for 1.6 per cent of global emissions. How high would Canada’s carbon tax have to be to have a practical impact, especially if other countries aren’t imposing carbon taxes on their people?

Canadian farmers are the best in the world at adapting to a tough climate and they’re already producing more food while using less land, water and fuel per bushel. Canadian farmers have come a long way from sod huts and threshing machines, and they’ll meet new challenges with new crop varieties, new fertilizers and new production practices.

But Canadian farmers are worried a carbon tax will undercut their ability to compete with farmers around the world without actually protecting the environment.