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Founded in 1909, UFA Co-operative Limited is an Alberta-based agricultural co-operative with more than 120,000 member-owners. UFA’s network comprises more than 114 bulk fuel and Cardlock Petroleum locations, 34 Farm & Ranch Supply stores and a support office in Calgary, AB. Independent Petroleum Agents and over 1,000 UFA employees provide products, services and agricultural solutions to farmers, ranchers, members and commercial customers in Alberta, British Columbia, and Saskatchewan.
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takes a certain kind of ambition to do what farmers do. Between the hours and the hard labor, to the public scrutiny and bureaucratic maze running, it's not an easy task. While the agriculture industry feeds millions quietly tilling and producing behind the scenes, many forget that our food comes from the hands of real people with real stories.
Join us as we share stories from those with boots on the ground and unearth unique perspectives on agriculture's biggest conversations. It's time to grab your shovel and get to work. I'm Don Schaefer and this is Digging In with UFA.
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In recent years, many conversations have taken place on the effects of emissions and chemical outputs from the industry of agriculture. In response, policymakers have developed strategies to curb emissions, strategies that oftentimes disregard the effect on the producer. Do our governmental policies address long-term solutions with realistic expectations for farmers and ranchers? Today, we start digging in to the carbon tax.
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For Trish Henderson, life began on the farm, homesteading back in 1905. The Henderson roots dig deep into the soil of central Alberta, enriched by stories of generations past. Stories punctuated by drought years with dusty crops, topsoil drifting in the wind, and bountiful, abundant harvest. Years of on-farm experience and an impressive resume of advocacy and consulting work for the agricultural sector.
makes her a sought-after expert. This is Trish Henderson.
I farm with my family. We're a mixed operation with a focus on beef cattle. My kids are the sixth generation raised on the farm near Erskine in central Alberta and my family hosted it here in 1905.
I currently serve on the UFA board of directors and as an advisory board member for Tallgrass Ventures, which is a Calgary-based venture capital fund that invests in ag and food tech. And agriculture is my life.
Change often takes a long time and a lot of work. The seed of an idea for a better version of the status quo takes root and is watered by the resonance of those who see its vision. The power of this small singular idea from the momentum of an emboldened advocate paves the way for the change we want to see. To grow tall, you have to start small.
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My name is Shannon Serita. the Director of Government Relations Policy and Markets with Alberta Grains. Alberta Grains is a commission, so we're governed by the Marketing of Agricultural Products Act. And we serve wheat and barley farmers across Alberta. We collect a levy.
and are directed by a farmer board to reinvest those funds into various activities to improve the operating environment for farmers as well as their economic sustainability. And so I'm tasked with policy. I'm pretty passionate about policy and I love working with farmers on behalf of farmers as a lobbyist and advocate for the agricultural sector. I worked with the federal government for a number of years in the industry department and then also overseas.
at a Canadian embassy abroad as a trade commissioner. And so I had the fortune of having agriculture under my portfolio. And it was pretty exciting to understand how trade policy, trade market access issues impact the agricultural sector. So I think when I moved back to Canada, I was really compelled to work in agriculture, not only because of my family roots, but because it's very rewarding working.
directly with farmers and having that direct line to how government policy impacts their operations at the farm gate.
Farming has always been a capital-intensive industry with high costs for land equipment inputs. However, from this initial price to seed fertilizer to the rise in equipment costs, as well as the significant capital gains tax when passing down the family farm, it seems practically impossible to keep up, let alone get started. How do farmers, producers, and ranchers overcome the complexities of a legislation that further inflames the already established hardship?
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first and foremost on our mind this year is the weather. We've received less than half of our normal precipitation this year. We're in a very, very severe drought in the small pocket that we farm in in central Alberta right now. Water issues are first and foremost in our minds right now. But depending on the year, sometimes it is trade issues. Think of in the cattle business, we're faced with BSE trade issues in 2002, 2003. There's so many different things.
can impact us, it's hard to say one thing. It's a different issue every year it seems. I'd say there's a plethora of issues that surround the movement of grain and getting it over to our markets. And I'd say those surrounding issues are what most impacts farmers. It's a high stakes industry and there's a lot that it can impact farmers in any given growing season. This year we started off with a very robust crop and
Now the dry conditions are starting to create a whole source of challenges for producers. So every year is a little bit different.
No matter of the justification, it's important to be realistic about how new pieces of legislation will affect those at the foundation of food production. How do we maintain equitable conversation and balance in our efforts to address some of the most polarizing issues, especially those impacting the egg sector?
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Honestly, it's really hard to see any advantages in the agricultural sector to the carbon tax. It started in 2019 and it was set at $20 per ton of carbon equivalents and then it rose by $10 every year. I think we're currently at $65 per ton and that'll increase an additional, well, you under the current government, the plan is to increase that additional $15 a ton until it reaches $170 by 2030.
So for our farmers, it's pretty much applied directly to the cost of heating and transportation fuels. So we see it in the crop sector on propane and natural gas. It's only voluntary to the extent that when it was first developed, the Alberta government, all provincial governments had the opportunity to design their own programs. And those could have been accepted by the federal government. In Alberta's cases, they chose to opt out of that.
because they didn't agree with the fundaments of applying a carbon tax. And so we are now considered a backstop province. So we are beholden to the rules of the federal government. And most of our farmers, if not all, are already doing so much to reduce or improve their efficiencies on farms. You know, there's a small supplemental rebate applied to small and rural communities of about 20%.
but that's such a fraction of anything that farmers are using in their operations because that's calculated at an individual basis. There's really no advantages because it's difficult to drive behavioral changes when there's no alternatives. So our farmers are already doing so much. For us, there's large implications on the grain drying side and that's a huge cost on farm when farmers do need to employ grain drying to preserve the quality.
and the safety of the crops they're pulling off and there's nothing that they can switch to. There's just no alternative. So it doesn't have the intended impact when you can't switch or change your behavior. amplifies the inflationary pressures we're already seeing in the marketplace already in terms of an added cost. And you add that to high interest rates when you have higher capital expenditures and higher interest rates, it just...
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compounds the impact on the farm level on the balance sheet. While there are some carbon tax exemptions for on-farm fuel, especially di-diesel and gasoline, these exemptions do not apply to other energy consumed on the farm like electricity used to dry grain. It may seem like farmers have an exemption, but it's solely for farm use and does not include energy, nor those that support operations off the farm like truckers. Farm use fuel
is only part of the energy equation. When looking specifically to the carbon tax, it follows a pattern on unfettered and preset pricing that producers have no say over. An additional cost in a trickled down system that, though seemingly a marginal change, balloons into a hefty cost for producers.
For the most part, we're price takers at the farm gate. We don't have a huge amount of control in terms of setting the prices that we are offered in the marketplace. The costs that the people that purchase our products are seeing are going up. So that's trickling down the food chain.
Those costs are passed on to producers through the basis when they deliver grain and it just adds costs all along the entire supply chain. So ultimately those get passed on to consumers. And then, you know, there's a competitiveness aspect of it too. So the food that we're producing against a region who isn't subject to carbon pricing or carbon tax, it makes the production of our food less competitive.
The United States is one of our biggest competitors and their farmers aren't subject to the same level of carbon taxation that we are. I think to really capture it at the farm level, we're not just looking at carbon emissions. I mean, it's the whole way that the environment works together. It's not just carbon, it's a whole cycle. And really what you'll see us do at the farm level is trying to get the natural systems to work the best they can. So whether that be trying to have livestock and cropping systems work.
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together as much as possible to be able to have nutrient recycling through manure as fertilizer. That's often possible, but not always. So it's really, I would call it more of a holistic approach at the farm versus just a tunnel vision, just carbon. There's so many other facets involved with it. There's been lots of things over the years that have been contributing to reducing carbon emissions. For example, no-till technology, which was pioneered in Saskatchewan decades ago.
That was to prevent soil erosion and it also sequesters carbon at the same time. So there's not just one particular solution. guess sustainability is multifaceted when it comes to a family business. The first and foremost basis is that you need to have financial sustainability to be able to keep going. That's got to be number one is a strong financial foundation to be able to make the best decisions possible and not have that hand tied behind your back when it comes to making decisions that are going to be the best.
provide the best outcome in the long term. So that's definitely the foundational basis. And thinking long term, like I shared, I'm raising the sixth generation of farmers on our location right now. And I want to make sure that the land that has been in my family for generations is still viable for my kids to produce on in the future. So that long-term vision that goes along with both the financial and the environmental sustainability piece are key.
I think it's just important to note too that farming in general is just a very capital intensive business, right? And so farmers are always and have always been looking for ways to maximize their efficiencies. So if I look at the use of fertilizer, for instance, it's being used incredibly efficiently because it's a huge cost on farm, right? And fertilizer is, you know, one of the resulting concerning emissions from crop production, but
We continually see that farmers are able to produce more on less land and they're using fertilizer precisely and even using variable rate technology. So they're not using, you know, a pound more than they need to because that adds costs to their farm. So they're constantly looking for ways to bring down their costs and increase the efficiency on farm. We already know our farmers are doing the right things. So
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You know, other incentives could help with the adoption of new technologies, investments in research that help improve crop genetics, that reduce again, the use of fertilizer or help improve the drought resistance and pest resistance, disease resistance plants. Those are all really positive investments that also have the environmental outcomes that we're seeking to achieve through the carbon tax.
The only thing that increases red tape and regulatory burden doesn't usually incentivize innovation. The private sector and the research groups that Shannon's involved with at the Alberta Grains Commission certainly do a good job of innovation and solving real world problems. And I would say that's a better way to fill gaps and solve problems. Being on a stable financial footing at the farm level is key.
That's how you enable producers to be the best stewards possible for the land and their care. There are some financial incentives available right now for targeted management practices that are available. They're good and they certainly are driving proper behaviors and they help drive those changes faster with the financial incentives, depending on the level. The biggest drawback is the administrative burden that goes along with these programs, both for
the producer and at the funder level. It takes days to prepare an application and that's just on the farm level, let alone the number of eyes that have to see those applications later on. So I don't know if they're an ideal tool. They certainly help and I'm very interested in them as a producer, but whether or not they're efficient is definitely a question. Yeah, and I might just add that some of those programs as well.
I've heard many farmers who don't qualify because they've already done a lot of the work on their farm. So there still needs to be support for the early adopters, for farmers that have long been adopting these practices, who kind of go unrecognized in these conversations. And that is actually probably the largest cohort of producers is those that have already made really positive changes on their farm. So when we're talking about, you know, new technologies in the adoption,
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It's a lot of risk for farmers to take, so they need to see what the return on investment is. So any work that can be done to help prove out the returns on investment and the benefits to farmers, then that goes a long way to helping speed up the rate of adoption because they're all independent business people that are taking on huge risk. But we've just been advocating straight across the board for exemptions for farmers. There is a bill in place now.
It was supposed to encompass exemptions for all farm fuels and including buildings and barns and heating and cooling. And now that's kind of been stripped back and we'll only be looking for exemptions for operations like grain drying. We'd like to continue to see and push for exemptions across the board for agriculture. I always say that the more I know about agriculture, the more I understand why I'm not a farmer.
It is such a risky business. don't know how they sleep at night. Trish has mentioned it's just always evolving. Seems like there's always something coming at egg and a lot that's out of their control. And I think that's the hardest piece of the business is that there's just so many variables that are simply out of farmers control. I think the one thing that doesn't seem as apparent to policymakers, to the public is just how much egg is doing.
and especially like looking at that sequestration piece. When you look at the data, you can see that agricultural soils are sequestering more than they are actually emitting. so we don't, farmers don't necessarily get credit for that activity. And I think whatever policies come into place, the underlying measures and metrics have to take into account what has been happening for the past.
40, 50 years or longer in agriculture. And a lot of times they're setting the baselines in the present or recent history, which really doesn't take account for the large gains that the sector has made voluntarily on its own without government intervention for decades. I would reiterate, it's just the fact that this is beyond a carbon conversation. We really need to look more
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holistically and the environment doesn't work just on carbon. It's a whole bunch of other complicated factors that are at play with each other. There's not just one thing that keeps a farmer up at night. There's so many different things at play and it's a balancing act. It's not carbon at all costs. It's balancing carbon with other environmental necessities as well as the price of food because we all need to eat.
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At the end of the day, we look to our resiliency within ourselves and our communities to make our collective futures as bright as possible. All it will really take is conversations like these, some vulnerability, and a little digging.
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Thanks to the support of UFA Cooperative, we're able to share stories from those who live and breathe agriculture. We'd like to thank our guests for sharing their insight into the future of agriculture and for being with us today. For more information and a new episode every month, visit ufa.com. With listeners like you, we'll continue to dig a little deeper here on Digging In with UFA. Stay tuned for a future episode as we dig even deeper into the carbon tax. I'm Don Schaffer.
Thanks for