Industry worried new rules could affect availability of fertilizer

Wednesday, May 28, 2008

by SUSAN MANN

The new rules aren’t driving retailers out of business, explains David MacKay, executive director of the Canadian Association of Agri-Retailers. But some retailers may choose to drop certain product lines instead of installing new security measures.

The product most retailers would consider dropping is anhydrous ammonia, he says. The chemical is an ingredient in the illegal drug methamphetamine.

From late 2001 to early 2004 there were 65 reported thefts of anhydrous ammonia in Ontario’s western region, says OPP Dect. Constable Pat Hickey. He attributes a drop-off in thefts since then to increased vigilance by retailers, changes in illegal drug making methods and people getting serious burns while stealing the fertilizer.

There is also concern that another fertilizer ingredient could be used to make bombs. In 2006 police intercepted the purchase of three tonnes of ammonium nitrate by terrorists in the Greater Toronto Area who planned to make bombs and target public buildings in Ontario. But even before then retailers and governments realized farm fertilizers are dangerous in the wrong hands, MacKay points out. He notes that the bomb that killed 168 people in Oklahoma City in 1995 was made from ammonium nitrate.

In response to these concerns, new industry codes of practice for increased security were implemented three years ago.

For an average two-acre site, the code requires the installation of six-foot high, industrial-strength, chain link steel fencing topped by three lines of barbed wire, additional lighting, locking for both the fence and the tank valves, physical theft deterrence, video surveillance, increased software requirements, and staff training. To meet the requirements, retailers must spend an average of $50,000 per site, McKay explains.

To make matters even more challenging, while retailers would like a single comprehensive code for as many products as possible, industry codes and government regulations are being written for individual products. Failure to comply with industry codes and pass an onsite audit means retailers don’t receive the products from fertilizer manufacturers.

Canadian fertilizer retailers want a tax credit program similar to their American counterparts to upgrade security. Under the new U.S. Farm bill it’s proposed that American fertilizer dealers get credited for about 50 per cent of their costs. A similar program in Canada “gives us parity and allows us to say competitive with our U.S. counterparts,” MacKay says.

Farmers along with other farm and agricultural groups support the retailers’ request.

“Preventing terrorism is a public good so government should give them some assistance in implementing these new rules,” says Canadian Federation of Agriculture president Bob Friesen.

Governments should share the costs associated with society’s protection, says Dave Buttenham, CEO of the Ontario Agri Business Association. “It shouldn’t all be put on the industry.”

The retailers’ association has been asking for government financial help for the past two years, MacKay says, noting that Canada’s port facilities currently get a rebate for security upgrades at ports and on ferries.

So far, however, the government has ignored the association’s requests for financial help. But MacKay says the Liberal opposition may write a private member’s bill for a tax credit program for retailers. BF