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Safety Nets Update
No appreciable progress has been made in clarifying Agricultural Policy Framework (APF) safety net proposals to be implemented commencing April 1, 2003. OCPA has received no analytical proof from either the Federal or the Provincial government that business risk management programming as proposed is demonstrably better than the current suite of safety net programs. If what is proposed cannot clearly be proven better than what we have, OCPA cannot support the business risk management pillar of the APF.

But it’s not enough merely to criticize. OCPA has been working with Federal and Provincial governments on committees at both the elected (i.e., Directors/ MPs/MPPs) and technical (i.e., staff/bureaucrats) levels from the very beginning of this exercise. Many ideas have been put forth from OCPA and other commodity groups across Canada. From our perspective, none has received much consideration from government.

One such proposal for modifying NISA has been put forward through the National Safety Net Advisory Council by Keystone Agricultural Producers of Manitoba. It essentially adds a Fund 3 to the existing NISA program. Fund 3 would require no producer contributions, would be an entitlement on withdrawal rather than an individualized account holding deposits, would carry entitlements forward only 2 years should a producer choose not to take a triggered withdrawal, and would cover all losses whenever annual margin drops below 70% of the historic reference margin. In essence, this Fund 3 is simply a government-sponsored disaster program incorporated into the existing NISA format. OCPA supports further analysis of this proposal, but there is little likelihood of meaningful assessment, especially given the limited time available before March 31.
A cynic would conclude that the lack of progress and clarity is because the real driving force behind the APF’s business risk management pillar is not the improvement of safety nets for producers, but rather the attempt to quantify and limit Federal government spending exposure through 2007 at ‘up to’ $1.1 billion annually. Federal safety net spending for each of the last three years has been closer to $1.7 billion annually (including Special Grains and Transition Program expenditures), a fact overlooked in the currently proposed BRM programs. These additional expenditures brought support for a typical Ontario grain and oilseed producer up to approximately the same level of support provided for grain and oilseed producers in Quebec and the U.S. in each of the crop years 2000/01 through 2002/03. Without the continuation of that additional funding to offset injury caused by U.S. ag policies and subsidies, support for grain and oilseed producers in Ontario will once again slip woefully behind as prices are pressured lower. But while those injurious U.S. policies will continue through 2007, funding to offset that harm will not. By reducing annual funding by almost 1/3, that is exactly what the Business Risk Management pillar of the APF proposes to do. Reduced funding means reduced benefits. Plain and simple.

No matter how much the proposed ‘super’-NISA and Production Insurance are tweaked, manipulated, designed, spun and twisted, business risk management under the APF cannot possibly provide support equivalent to the current suite of safety net programs unless it also includes counter-cyclical companion programs such as Market Revenue Insurance, and the additional financing of the Transition Program to fund them.

Nutrient Management Regulations
As this newsletter is written, consultations on the Phase II proposed Nutrient Management Regulation and accompanying protocols are rapidly approaching the January 31 deadline. In December, the Ministers of Agriculture and Food, and Environment, held several public consultation sessions. A fair portion of what they heard from ‘grassroots farmers’ was fairly critical of the complexity of the proposed regulations and the potential impact on the viability and cost to Ontario farmers. In January, the Hon. Helen Johns has been meeting extensively with farm organizations, including commodity groups and coalitions such as the Ontario Farm Environmental Coalition (OFEC), as well as other interest groups.

In a mid-January meeting between the Minister and the OFEC Steering Committee, the Minister acknowledged a few aspects of the proposed regulation that would require changes, and some alternatives have been suggested. Many other areas of the draft reg and protocols require rewriting to improve clarity and to ensure correct interpretation.

Two mid-January meetings, one in Kemptville and one in London, requested by crop commodity groups were held with OMAF staff focusing on field cropping issues. These have helped clarify many issues, and identify which proposed rules are reasonable and which require further development or alteration to make them workable for crop producers.

As of the writing of this newsletter, OCPA has not compiled a full list of changes and suggestions for the draft regulation and protocols, but will do so before the end of the public consultation period at the end of January.
Significant issues identified to date include:
• COMPLEXITY: The complexity of the proposed rules continues to be an overriding concern among crop farmers. Faced with the choice of having to take
the necessary training to complete their own NM Plan, or hire a consultant to do it for them, along with all the necessary agreements, documentation, certification or approvals, many farmers, especially medium-sized operations and older farmers may decide to alter their farm operations to minimize their NM Planning involvement (for example, rent out their land rather than farm it themselves).
• COMPENSATION: Several of the rules around setbacks and buffer zones will mean a loss of some productive landbase on many farms. For example, a single watercourse crossing a 100-acre width farm (440 yd or 400 m) would require buffers amounting to 6/10ths of an acre (both sides of watercourse). Multiply this by the number of watercourses (ditches with some aquatic vegetation) and across much wider fields or farms, and the amount of affected land can become substantial.

As well as buffer zones along watercourses, there are also setbacks from private wells, residences, municipal wells, etc. where nutrients cannot be applied, and other areas such as the two-year-time-of-travel zones around municipal wells where nutrient applications may be restricted. Farmers are concerned that there have been no details or commitments regarding compensation for lost productivity under these situations.
• TIME COMMITMENT: As well as the time required to complete plans and assemble all necessary documentation, farmers will also be required to attend training courses – one for developing their own NM Plans or Strategies, an additional one (1-2 days suggested) for certification/licencing to apply nutrients on their own farms. At present recertification/relicencing is proposed to be every three years, so this is a recurring time commitment. It is not clear why recertification/ relicencing is every three years, while renewal of a NM Plan is every 5 years, except in exceptional circumstances (see article elsewhere in this magazine, or the October issue of the Ontario Corn Producer). The time required for activities related to NM Planning means that much time away from other productive activities on their operations.
• INCONSISTENCIES: Under the draft proposal as released, commercial fertilizers (since they were included in the list of materials in the Odour I classification) could not be applied within 25m of a residence wall, or 50m of a residential area (4 adjacent houses), school or health facility, despite the fact that owners of these properties could apply fertilizers on lawns and gardens within these setbacks. OCPA has been informed, verbally, that this inconsistency has now been corrected, but we have not received any written confirmation, to date, to this effect.

Also of concern is the restriction that you cannot use the short-version NM Plan (see article elsewhere in this issue) if you plan to apply more than 15 kg/ha over the OMAF/NMAN software nutrient recommendation. As a result, growers planning to apply nutrients to maintain medium to high soil phosphorous levels (a management practise long recognized as suitable) would be unable to utilize the short version NMP. Flexibility should be considered to broaden the applicability of the short form to a greater number of farmers – for example, allowing the use of the short form for those who “apply nutrients at less than 15 kg/ha above OMAF (NMAN) recommendations or within appropriate phosphorous maintenance levels”.

Another perceived inconsistency is that no commercial fertilizer can be applied within 100m of a municipal well. NM Plans are based on the premise that nutrients are applied at the level utilized by the crop. Thus, there is no scientific rationale to disallow use of commercial fertilizer within this 100m zone (reducing productivity, as noted above, but providing negligible reduction of risk to water drawn from that well). Application of biosolids or manure should be disallowed within the zone, due to perceived concerns about pathogens.
• UNCERTAINTY: Many farmers are uncertain about how they will need to address many aspects of their nutrient management operations. For example, if cash croppers use manure from neighbouring livestock operations, will the costs of developing the NMP be borne by the receiver or the generator? Who is responsible for ensuring that any temporary storage meets specifications? Who bears liability in the case of a problem during transportation, storage or application? Another area that requires clarification is the level of detail from a NM Plan that will need to be submitted to the public registry. What level of control will be exercised in screening out frivolous or vexatious complaints or enforcement activities? Is there sufficient flexibility to allow use of manure and biosolids within no-till production systems?

Although the objective of the NM legislation (i.e., “to protect our water and the environment while maintaining the competitiveness of our agri-food industry”) is supported by OCPA and most farmers, until these concerns are addressed, many farmers will not be receptive to undertaking additional time and costs to comply with the regulations.

GM / non-GM Food Labelling
In late December, the CGSB (Canadian General Standards Board) released the results of the second written vote (October 2002) on the proposed standard for Voluntary Labelling of Foods Obtained or Not Obtained Through Genetic Modification. This committee is comprised of over 50 voting members and a comparable number of information members (who can participate and contribute to the discussions, but do not have a vote)
evenly spread across the spectrum of producers (agricultural commodity and general farm organizations, food processors and input suppliers, etc.), users (consumer associations and other consumer-oriented groups, food retailers and exporters, food and nutrition groups) and general interest members (government and quasi-government agencies, and broad-mandated agricultural interest groups). Their objective has been to develop a set of guidelines to be followed if a company decides they wish to label a food as either GM or non-GM for sale or use in Canada. The voluntary approach to labelling was pursued as a means to provide additional information for those consumers who wish to make choices based on GM or non-GM content. The voluntary approach would avoid imposing the substantial costs inherent in mandatory labelling (including costs associated with implementing full tracking and verification procedures for GM/non-GM content on all food products) onto the entire industry, resulting in higher food costs, even for the large proportion of the population that does not deem GM/non-GM as an important selection criterion. This voluntary approach has been endorsed by both the Royal Society of Canada and the Canadian Biotechnology Advisory Committee.

Of the 53 CGSB Committee members eligible, 49 votes were cast. Of these, 53% voted in support of the current draft standards (OCPA was one of these), 28% voted against it, and 11% abstained. Many of the ‘No’ votes indicated support for an Agriculture and Agri-Food Canada proposal that had been considered extensively by the Committee through internet/e-mail discussion last summer and face-to-face debate at a September 2002 Committee meeting, but for which insufficient support was garnered to include it as part of the October draft for the written ballot. (Refer to the Newsletter in the November issue of the Ontario Corn Producer for more details).

Under the CGSB rules, approval of a draft standard is by consensus, which is defined as substantial agreement by concerned interests involved in the preparation of the standard, including an attempt to resolve all objections (all concerned interests given the opportunity to convince committee members of the validity of their case). A valid consensus requires that at least 60% of those eligible to vote do so, and that at least 50% vote affirmatively. These criteria have been met.

Under the rules of CGSB operation, all ‘No’ votes must be accompanied with reasons for not supporting the draft guidelines as well as alternative solutions. Issues or options that have already been thoroughly explored or addressed by the Committee cannot be used as the basis of a negative vote. The committee is obligated to consider new options or alternatives in an attempt to resolve objections (thus getting a ‘No’ vote changed to a ‘Yes’ vote). Along with releasing the results of the vote and attendant comments, the proposed actions arising from these were provided. Given that many of the ‘No’ votes were submitted with the request that the AAFC-proposal be brought back for reconsideration, there are minimal changes proposed to the draft at this time. Those groups that voted ‘No’ have been asked to consider the proposed actions and the supporting rationale, with February 7 established as the deadline for further input.

Planning for the 2003 Corn Growing Season
As your plans for the 2003 growing season progress, there are several aspects regarding the use of GM crops that growers should keep in mind, aside from the issue of hybrid selection with respect to end-markets or uses for your corn (see article on non-EU approved hybrids elsewhere in this issue).

With the steadily increasing acreage of Bt corn (approximately 40% of the 2002 crop was Bt, up from about 35% in 2001), the requirement to plant a minimum of 20% of your acres to non-Bt hybrids becomes even more important as a means to prevent development of Bt-resistant strains of European corn borer and prolong the useful life of the Bt technology. This 20% ‘refuge’ (where unselected corn borer adults can mature and be available to mate with any isolated resistant individuals, thereby ensuring the ‘resistance factor’ cannot build up to problem levels) is standard across North America and was agreed on by regulatory agencies (CFIA in Canada and EPA in the U.S.), industry and farmer groups as a conservative, yet reasonable technology stewardship procedure. Seed companies selling Bt hybrids are required, as a condition of CFIA approval of their Bt traits, to inform their customers of this refuge requirement. Most if not all seed companies require their customers to sign statements indicating they will adhere to this requirement on their own farm operations. (You cannot depend on your neighbours for refuge acreage for your corn, since you have no influence over what they will plant). Last summer, CFIA conducted on-farm visits in order to determine whether seed companies were complying with their responsibilities.

In 2002, RR (Roundup-Ready glyphosate tolerant) varieties were planted on about 1/2 of Ontario’s soybean acreage, and it remains to be seen whether the trend to the increasing acreage of RR soybeans levels off in 2003. Acreage of RR corn hybrids is also expected to increase again in 2003, perhaps approaching 10% of the entire corn crop in the province. The issue growers need to be aware of here is that of weed management. Although to date there are no documented cases of definitive resistance to glyphosate, the huge expansion in acreage managed primarily with glyphosate for weed control vastly increases the probability for selection of resistant biotypes. Thus, growers are cautioned that relying on glyphosate in corn as well as soybeans in their crop rotation is strongly discouraged. Alternating or rotating herbicides with different modes of action not only guards against resistance buildup, but will also help ensure the range of weed species present on your farm is not gradually selected
towards the more difficult to control species for a particular herbicide group.

E-Commerce for Corn Begins
The pilot project that offers Ontario corn producers the option of electronic contracting for sales to Casco is now available. The program, designed to increase the volume of corn purchased by Casco directly from Ontario growers, uses the Internet to make the contracting process more streamlined and more convenient. A full outline of the project was provided in the January issue of the Ontario Corn Producer.

Growers attending an information session in London this past month had the opportunity to review the program just prior to its official launch, and expressed enthusiasm for the program’s potential. Interest in the website has been high in its first few days of operation (as this newsletter is written), with growers checking prices and making contracts over the Internet (http://www.casco.ca/sellcorn/homepage.nsf )
At this time, electronic contracting is available only for deliveries to Casco’s London plant, with expansion to Cardinal and Port Colborne plants planned for the future.

In order to access the site, growers must first register using their Agri-eBusiness (AEB) number. That number is available on the mailing label of this magazine – it is the eight-digit number placed directly above your name. Be sure to include all 8 digits when registering on the site.

Canada Grains Council
Biosafety Protocol Update
The Cartagena Protocol on Biosafety had been ratified by 39 countries by the end of 2002. It is expected that the requirement for ratification by 50 countries that brings the international agreement into force will be met by mid-2003.
Canada Grains Council (CGC) reports that many outstanding issues associated with the Protocol’s implementation have yet to be resolved, making it difficult to predict the impact on Canada’s grains, oilseed, pulses and special crops industry. CGC has recommended that the Government of Canada delay ratification until key issues are resolved in a satisfactory manner.

CGC is actively supporting the government in developing arrangements with Canada’s major trading partners to define regulations for the transboundary movement of living modified organisms (LMOs) to ensure that trade can continue uninterrupted. CGC also provides leadership to the16-member International Grain Trade Coalition, rapidly becoming recognized as the voice of the world’s grain industry. IGTC has made numerous international presentations on world grain trade, and recently met with WTO officials in the attempt to ensure that the Protocol is compatible with WTO trade commitments.

On-Farm Food Safety
The On-Farm Food Safety Pilot Project coordinated by CGC has now been completed. Consensus of the 24 farmer-participants in the program was that although the program provides some benefits, significant alterations are required if it is to be manageable for farmers:
• producer training component needs to be included
• record-keeping needs to be simple and flexible enough to adapt to existing systems already in use by farmers (eliminating the need for ‘double’ record-keeping)
• requirements need to be practical, achievable, and contribute to the goal of food safety
• challenges to the availability of registered crop protection products for some crops could be a major impediment
• concerns regarding the cost and process of third-party audits.
CGC is attempting to address these issues and will run a second, smaller pilot project in 2003 to test reforms made to the program based on the results of this past year’s trial.

Post Farm Food Safety Program
CGC’s application for funding to develop a generic model and conduct a baseline mycotoxin and microflora study was approved this past fall. The project, also supported by the Canadian National Millers’ Association and the Animal Nutrition Association of Canada, has two primary objectives:
• develop and test a HACCP-based generic model for the post-farm sector of the grains, oilseeds and special crops industry
• conduct a baseline study of the incidence and dynamics of mycotoxins and microflora in the post-farm sector for Canadian milling wheat.

The project is currently proceeding with some modifications resulting from current production and industry conditions. Although producer participants were drawn primarily from western Canada, modest representation from eastern Canada is in place as well.

Next steps include:
• completion of generic model and Good Operating Practices manual
• extension of mycotoxin/microflora study
• assessment of operational implications of implementation of model.

Grain Growers of Canada
Safety Net Update

The key issue for grains and oilseed farmers in proposed business risk management programs being brought forward by Agriculture and Agri-Food Canada still remains - none of the proposals on the table today will address the impact of foreign interference in world markets.

On December 11, GGC formally requested that Agriculture and Agri-Food Canada explicitly outline any aspect of the APF that will mitigate the impact of foreign interference. To date, the question remains unanswered.

It is important to note that the GGC's push to have programs put into the Agriculture Policy Framework (APF) that will address depressed prices caused by foreign interference is virtually universally supported by other Canadian farm
organizations.

The National Safety Net Advisory Committee (NSNAC) has met regularly over the past few months to discuss the formation of new programs. Farm leaders have also met directly with Minister Vanclief to outline concerns and discuss alternative proposals for improvements to the programs currently outlined.

Timing is an important factor in these ongoing discussions. Currently there appears to be little or no flexibility regarding when new programs will be put in place. Minister Vanclief has indicated that the money committed to the APF could be put in jeopardy if the March 31 deadline is not met. This is of serious concern given the amount of work that remains to be done in designing new programs.

We also remain concerned because all proposals for a new NISA program are ‘amber’ (i.e., trade and production distorting) according to World Trade Organization (WTO) definitions. Moving the majority of Canada's agriculture spending into amber programs could be problematic in the future, especially given the fact that amber spending limits will almost certainly be reduced as a result of the current round of WTO negotiations.

Despite the real concerns with new program design, it is important to remember that there are positive aspects of the APF. For the first time in many years, the federal government has committed to stable long-term business risk management funding. The Minister of Agriculture has also publicly committed to designing the programs to ensure that all of the money designated for farm safety nets will be spent each year. This is unlike the current system in which unused funds are returned to the Consolidated Revenue Fund.

Environment Update
Don McCabe, Chair of the GGC's Environment Committee, working in conjunction with representatives from the Canadian Cattleman’s Association and the Soil Conservation Council of Canada, has been instrumental in the analysis and communication of the potential impact of environmental policy on grains and oilseed farmers, particularly for the debate on the Kyoto Accord.

Following Canada's ratification of the Kyoto Protocol, the Canadian Agriculture sector's focus has shifted to the legislation and regulations that will be required in order to implement the agreement.

The GGC will work with other farm groups to develop Kyoto implementation policies that will benefit farmers and do not impose additional cost burdens.

Trade Update
With the release of a position paper in early December, the European Union (EU) became the last of the major agriculture traders to outline a position on key areas under negotiation.

There are important differences between the proposals put forward by the EU and the other members of the WTO. The EU would prefer to proceed with trade liberalization measures that are much more modest than those proposed by other WTO members, such as the Cairns Group.

For example, the EU has proposed a 45% reduction in export subsidies, whereas most countries have called for their elimination entirely.

The EU's proposals would also move additional environmental, social and animal welfare programs into the ‘green box’, or non-trade distorting category. This could allow them to shelter more of their subsidy programs in the green box, which will likely not be subject to significant reductions. This will be a contentious issue with other countries that are demanding more aggressive agriculture reforms.

Significant concessions will be required if the wide gulf between the various positions put forward to the WTO is to be closed. Intense negotiations over the next few months will set the agriculture agenda for the remainder of the Doha round of talks.

Grain Marketing Update
Obtaining marketing choice for western wheat and barley producers remains a key objective of the GGC. Increased market flexibility will help farmers diversify, build their own pasta and flour plants, process ethanol, and explore niche markets. Not only will this help increase farm income, it will assist in increasing development in rural Canada.

The potential introduction of genetically modified (GM) wheat is another issue that could impact grain marketing. GGC is following this issue closely, and will ensure that the needs of the farmers are considered as policies regarding GM wheat are discussed and developed.

AGCare Annual Meeting
AGCare (Agricultural Groups Concerned about Resources and the Environment) will hold their annual meeting on Tuesday February 11 at the Holiday Inn in Guelph. Focused on the theme, It’s All About Food Safety, the program features a variety of speakers on topics such as the impact of the Nutrient Management Act, pesticide availability for minor crops, and environmental regulatory impacts on agriculture.

For more information or to register, contact AGCare at 519-837-1326 (phone), agcare@agcare.org (e-mail), or visit the AGCare website: http://www.agcare.org

Corn Prices - January 20, 2003
Period: to Nov. 30
Approximate Tonnes Marketed
Average Weighted Price
2002-03
619,500
$157.64/tonne
2001-02
1,000,900
$135.56/tonne
2000-01
831,700
$120.43/tonne

The above figures are based on levies received by OCPA for commercial sales.



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