Farmers in B.C.'s Peace Region may be stuck in the middle of a diplomatic dispute between Canada and China.

One of Canada's largest grain processors, Richardson International, says its permit to export canola to China has been revoked, a move that has been linked to the arrest in Vancouver of Meng Wenzhou, a top executive for Chinese tech giant Huawei.

Foreign Affairs Minister Chrystia Freeland says there is no scientific basis for the Chinese government's allegation that some imports from Canada were contaminated with pests or bacteria.

Regardless, canola accounts for roughly half of the crops produced in the Peace Region straddling the northern border between B.C. and Alberta. And Canadian farmers as a whole are losing access to an important market.

"There's nothing that we can do locally that's going to affect China's decision to accept canola again," said Rick Kantz, a farmer in Fort St. John and president of the B.C. Grain Producers Association.

"It needs to be a press from provincial and federal governments."

Canola accounts for about half of the agricultural crops produced in B.C.'s Peace Region. (Nathan Day)

'China just wants to do damage to Canada'

Ken Ball, a senior commodities futures advisor with PI Financial in Winnipeg, thinks China targeting canola producers isn't necessarily a huge problem, adding only one company is in China's crosshairs at the moment.

That's still enough to cause economic disruption, however, and could be a sign of future problems if the diplomatic dispute is not resolved soon.

"China just wants to do damage to Canada," Ball told Daybreak North host Carolina de Ryk. "This is just two countries getting nasty with each other right now and China is doing most of the nastiness."

Ball says canola prices are falling for other reasons including being overpriced in the fall.

Ironically, he believes if Chinese actions lower the price of Canadian canola enough, the country may return as a customer.

Listen to the full interview with Ken Ball: