Canada’s dispute with Saudi Arabia has agriculture industry on edge

Green Prairie International — the name says it all. It’s a forage production facility that ships worldwide, and as such, Canada’s latest political battle with Saudi Arabia could cost them big business.

“The consequences are quite negative extensively, everywhere,” says business manager John Van Hierden.

Green Prairie International has been dealing with Saudi Arabia for the last decade, as the newly developed dried corn silage was expected to be a booming business in the Middle East, but now Van Hierden fears that it is all up in the air.

“If you take an up-and-coming market like Saudi Arabia with the potential to ship upwards of 50,000 metric tons there, it’s more than millions of dollars.”

Saudi Arabia has already blacklisted wheat and barley exports from Canada.

WATCH: No apology from Trudeau on Canada’s dispute with Saudi Arabia

2:22 No apology from Trudeau on Canada’s dispute with Saudi Arabia

Cam Dahl with Cereals Canada said 135,000 tons of barley has been going to Saudi Arabia every year.

“That represents about seven per cent of our total barley exports every year so that is a significant number and a significant loss,” added Dahl.

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Market access is not a new problem for the grain industry and this latest tiff adds to the struggle.

“If this was just one country where we were having market access and concerns about growing protectionism, it would be a speed bump along the road but it’s not,” said Dahl. He added, “It’s costly for farmers and it’s very worrisome for an industry that depends on trade.”

WATCH: The effect on Saskatchewan exports to Saudi

1:31 The effect on Saskatchewan exports to Saudi

No matter the size of the county, Dr. Shamsul Alam, a professor of finance in the faculty of management at the University of Lethbridge said trade loss of any size leaves a mark.

“Any dispute is harmful, whether it is small or it is significant. For example, in the agriculture sector, one in two employment opportunities in the agriculture sector is based on the exports of agriculture products.”

With an unknown future in the feed market, Dahl added the entire industry is waiting to see the ripple effect.

“That kind of volatility is not good for grain farmers and it’s also not good for beef producers who are looking for a stable supply of reasonably-priced product.”