Corn and the Environment-Corn Breeding and Genetics

Ontario Bean Producers' Marketing Board
Ontario Canola Growers' Association
Ontario Coloured Bean Growers' Association
Ontario Corn Producers' Association
Ontario Soybean Growers
Ontario Wheat Producers' Marketing
Board Seed Corn Growers of Ontario

March 2005

Ontario Grain & Oilseed Group - Position Summary
The Ontario Grain & Oilseed Group is negotiating with the Ontario Ministry of Agriculture and Food for income support for the 50% of Ontario farm families who are wrestling with a drastic price collapse that threatens the viability of grain and oilseed producers in this province.
We are grateful to Minister Peters and his staff for the willingness they have shown to fashion an effective partnership to sustain our industry through this challenging period. These points provide a summary of the discussions we and the Minister have been having. We urge all legislators in Ontario to support our joint efforts to build a sustainable public policy environment for our industry.

Ontario Grain & Oilseed Producers face a price collapse

The government of Ontario ended the Market Revenue Insurance (MRI) program after the 2003 crop year - a program designed to support incomes in the grain and oilseed sector.

A new federal-provincial program - CAIS - was put in place to address agricultural income stabilization; but this program does not meet the needs of the grain and oilseed sector plagued by margins driven artificially low by U.S. subsidy programs. Refinements are needed to make CAIS more effective and responsive."

Unfortunately, as the protections of the MRI were removed, grain and oilseed prices collapsed; positive net earnings for last year obscured the price collapse to some degree as producers used futures markets to hedge market risks. No such opportunities are available for the 2005 crop year because prices have fallen so low."

Now, grain and oilseed prices are at a 25-year lows, while energy and other input costs continue to soar. For the 2005 crop, Ontario producers face prices far below the cost of production and - unlike farmers in Quebec - we face this commercial disaster with no provincial mechanism to offset this severe market collapse.

Without provincial action to support the sector, the viability of many of the grain and oilseed producers who make up approximately 50% of all Ontario farm families is seriously in question.

The grain & oilseed sector is critical to the health of Ontario's agricultural and rural communities

Grain and oilseed producers make up about 50% of all farm families; our hirings, purchases, tax payments, participation in community events, etc., are critical to the health of rural communities everywhere.
We are a key supporting sector for other areas of agriculture - beef and pork producers, dairy, egg and poultry producers all rely on grain and oilseed producers for feed and other factors of production.
Grains and oilseeds grown in Ontario are critical inputs for our food processing industries, and the availability of these locally-grown commodities is a key anchor and attraction for food processing investment and employment in Ontario.
A healthy grains and oilseeds sector is critical to the development of the alternative fuels industry - a key element in Ontario's environmental strategy going forward.
If grains and oilseeds producers fail or falter because of a lack of public support during the current price collapse, the negative impacts throughout the rural and urban economy would be staggering.

The Grain & Oilseed Price Collapse is a temporary phenomenon - but without provincial action, the harm to Ontario could be permanent.

The collapse in grain and oilseed prices is being driven by a major step-up in U.S. agricultural subsidies; these subsides are designed to counter competition from Latin America and Europe and all of those jurisdictions are working to persuade America to moderate these policies.
Multi-lateral negotiations under the WTO are proceeding slowly, but meaningful reform will not occur before 2007 at the earliest.
If these market distortions are removed by international negotiation, our industry's underlying competitiveness plus market developments in Ontario - including dramatic increases in demand for Ontario grains and oilseeds to fuel ethanol and biodiesel production - could see Ontario grain and oilseed producers return to vigorous economic health. But we have to be there in order to benefit.

We're working with the government to find a realistic safety net to get our industry through the current low-price period.

The Grain & Oilseed Group is asking for a one-time injection of $300 million dollars to get the industry through the disastrously low-prices of 2005 (this is significantly less money than the discontinued MRI program would have generated for Ontario farmers).
Beyond that, we're co-operating with the Minister to find a longer term stabilization mechanism that will be affordable to the province in the worst years and that - in most years - will involve little or no pay-outs as our industry competes effectively.

The Grain & Oilseeds Group values the responsiveness we're finding in our negotiations with the government.

We believe the Minister and Ministry understand both the dilemma we face now in this period of very low prices and the exciting potential of our fundamentally competitive producers to contribute to enhanced future rural prosperity and to support the rapid expansion of the renewable fuels industry to the benefit of all Ontario.
Beyond that, we're co-operating with the Minister to find a longer-term support mechanism that will be affordable to the province in the worst years and that - in most years - will involve little or no pay-outs as out industry competes effectively on a more level playing field.