In the short term, the Russian invasion of Ukraine changes the world supply and trade flows of grain, fertilizer and fuel. In the medium to long run, many other changes are likely, many of which will directly affect agriculture.
Even with the most optimistic scenarios, the ramifications of the war and all its ripple effects will be around for a long time. In pessimistic scenarios, NATO countries will be drawn deeper into the conflict and then all bets are off.
With global food security a potential issue, will clean fuel standards be maintained? Will a big chunk of American soybeans and Canadian canola still be devoted to renewal diesel or will feeding people become more important than reducing greenhouse gas emissions?
Within Canadian politics, will removing the carbon tax become a more popular and palatable policy direction when fuel prices have already escalated to excruciatingly high levels? Might this influence who wins the leadership of the Conservative Party? Might this be an issue that helps dethrone the Trudeau Liberals?
What of Europe’s farm to fork program with its ambitious mandates for much less fertilizer and pesticide and more farmland devoted to organic production? Europe has shown every sign of pushing its policies onto the nations from which it imports agricultural products. This may all see an adjustment. Food security may override the European obsession with going green and their longstanding anti-GMO mindset.
Meanwhile, what will the reaction be in developing nations where even small food price increases are a matter of great concern? Mass protests and government overthrows have happened over food security in the recent past.
Canada has long been lagging in its support of NATO. Rather that meeting our annual commitment of two per cent of gross domestic product, observers say we are contributing in the range of only 1.4 per cent.
Suddenly, NATO has become much more important and all member nations will be pressed to live up to their commitments. For Canada, this will be a huge budgetary increase over many years that will add to the trillion-dollar federal debt, much of which has been compiled over the past decade.
Meanwhile, the provinces are legitimately clamoring for increased health care funding from the feds. Covid clearly demonstrated the fragility of our system. Solutions go beyond just increasing health care budgets, but a lot of investment is also needed.
The current federal government seems reluctant to cut spending anywhere, but the debt is becoming unmanageable. As interest rates rise, a larger and larger proportion of tax dollars will go to just paying the interest on the debt.
As farmers, it will be hard to press for a bunch more money in business risk management programs in the upcoming ag policy framework. The next five-year federal-provincial agreement is a work in progress, but it comes at a time when governments are facing other spending priorities.
It’s a national embarrassment that Canada doesn’t have the facilities to supply liquified natural gas to Europe to replace Russian energy. The federal Liberals thought they were saving the world by killing the Canadian oil and gas industry. Instead, Europe will be held hostage by a bloodthirsty dictator.
In Quebec, a company called Arianne Phosphate is developing a Canadian greenfield source of phosphate. Perhaps it’s time to make sure this phosphate source can be turned into phosphate fertilizer within Canada reducing our dependence on countries like Russia.
As the war continues, watch for attitudes to change on many fronts.