Safety Nets
Ontario Agriculture takes United Stand on Transition Funding
Odyssey Report Released
Canada to Sign Kyoto Agreement
Clean Air Plan: Focus on Renewable Energy
OCPA Position on Nutrient Management
Cuts to University of Guelph Programs
Performance Testing
Provincial Alternative Fuels Report
Grain Growers of Canada
Final CBAC Report Released
Semi-Annual Business Meeting
Corn Prices - Sep. 16, 2002

Safety Nets
OCPA is most appreciative of the September 17 announcement by Premier Ernie Eves and the Hon. Helen Johns delivering Ontario’s $72.5 million share of Year 1 Transition assistance. We extend our thanks to the provincial government for: 1) contributing to the Transition Program; and 2) distributing assistance using the methodology developed by the farmers of Ontario through the Ontario Agricultural Commodity Council (OACC, a coalition of 24 non-supply managed commodity organizations).

Provincial Transition assistance, reflecting the current 60:40 Fed-Prov cost sharing arrangement, was not a foregone conclusion. Ontario agreed to provide its share of funding for the 2-year Transition Program announced by Prime Minister Jean Chrétien June 20, but other provinces (i.e., Saskatchewan and Manitoba) declined participation in the Transition Program. Grain and oilseed producers in those provinces will receive only the Federal portion of payments.

OCPA, along with the Grain Growers of Canada, OACC, and others, has been advising the Federal Government against delivering Transition Program payments through NISA in the manner announced. This is not a good mechanism for delivering sector-specific assistance to commercial-scale agriculture in time of need. It appears the Federal portion will take the form of a direct deposit (perhaps in early November) equal to 4.25% of the average of your NISA eligible net sales for the period 1997 - 2001. All the usual rules regarding caps on contributions and account balances apply. Usual NISA triggers apply in order to be accessed. There are major concerns for those producers who withdrew their NISA account balance to deal with financial distress, now have no NISA account, but must remain out of the program for 2 years. At present, these producers would receive no Transition Program assistance. To avoid these problems with NISA, OCPA advised that maximum flexibility should be given by Ottawa to the Provinces to determine the best method for delivering Transition assistance in each province. To date, it appears that Agriculture and Agri-Food Canada has ignored our suggestions. However, in following the OACC’s advice on distribution of Transition assistance, the Provincial Government in Ontario has demonstrated a very welcomed openness to suggestions from the farmers of this province.

OACC recommendations for the distribution of Year 2 Transition Funding will be formulated in the near future. OCPA has recommendations regarding distribution of Market Revenue Insurance funds currently available for the 2002/03 crop year (i.e., 100% of yield and 100% of support price). We also have recommendations for usage of any residual MRI funds when the program officially ends March 31, 2003. However, our primary recommendation, to both levels of government, is that companion programs (such as a modified MRI) must continue after April 1, 2003 when the Agricultural Policy Framework begins.

Ontario Agriculture takes United Stand on Transition Funding
On September 9, farm leaders representing all of Ontario’s non-supply managed commodities – red meat, horticulture and grains and oilseeds – unanimously confirmed the agreement on a proposed distribution for Year 1 of transition funding initially reached by OACC’s Safety Nets Committee.

The Ontario Agricultural Commodity Council (OACC) proposed that federal and provincial funding be delivered as a total package that can effectively address the current needs of Ontario’s farmers. Under the OACC proposal, the first year of joint federal-provincial transition assistance would be delivered to Ontario producers in the form of a direct cash payment via the Market Revenue Insurance program in conjunction with a ‘flow through’ NISA-calculated payment. OACC believes that such an approach addresses the needs and the concerns of Ontario’s producers, and establishes a sound basis for transition to the new Agricultural Policy Framework to be implemented as of April 1, 2003.

OCPA applauds the efforts of the OACC in developing a solution to funding distribution that has been endorsed across the broad spectrum of Ontario agriculture, allowing the sector to speak with a single voice. We look forward to working with OACC and other industry and government partners to ensure the continued development of effective risk management tools that will help ensure a sound future for the industry.

Odyssey Report Released
Ontario’s Agricultural Odyssey Group (AOG) was established in 2001 to examine issues expected to influence Ontario’s agricultural sector through the next decade and beyond. Chaired by former OFA President Roger George, the group – which consisted of representation from across the sector, including both supply managed and non-supply managed commodities as well as general farm organizations – conducted extensive research in order to develop an extensive series of policy options and recommendations designed to help Ontario agriculture remain vibrant and profitable. Their report – described as a ‘blueprint for an evolution from where we are today toward where we need to be in the next 10 years’ – was released at a news conference and reception held in Guelph on September 9.

Recommendations are broad-ranging, and are divided into a number of distinct areas:
• consumer trends
• food safety
• marketing in a concentrated food sector
• environment
• agricultural extension and technology transfer
• farm income and marketing
• technology and research
• land use and rural planning
• rural development and leadership.

The report also devotes a special section to the need for change in Ontario farm organizational structure in order to better address current and future challenges.

Canada to Sign Kyoto Agreement
The announcement early in September by Prime Minister Jean Chrétien that Canada must quickly move towards the reduction of greenhouse gas (GHG) emissions through the ratification of the Kyoto agreement is consistent with many of the objectives of the OCPA.

Ontario’s corn farmers are already providing both direct and indirect environmental benefit and reduced GHG emissions through avenues such as:
• the adoption of no-till and conservation tillage to increase soil organic matter through the sequestration of carbon in soil sinks
• reduced fossil fuel usage through no-till and minimum till production reduces carbon dioxide (CO2) emissions
• the development of nutrient management plans to ensure optimum fertilizer balance is achieved for crop growth while reducing the potential for nitrous oxide (N2O) loss -- N2O is the strongest of the naturally occurring greenhouse gases, with an impact 310-fold greater than CO2
• corn-derived ethanol production: this bio-based fuel both draws on a renewable resource and reduces smog and other pollutants in the atmosphere
• the use of corn as a renewable feedstock for the production of bio-based products such as plastics, thereby reducing our dependence on fossil fuels. OCPA is actively pursuing new marketing and development opportunities in the area of bio-based industrial feedstocks.

While recognizing the potential role that corn farmers can play in helping Canada to meet its Kyoto commitments, OCPA has also expressed concerns that the ongoing damage inflicted on Canadian grain and oilseed producers through U.S. and EU farm subsidy practices may hinder progress in emission reduction and diminished reliance on fossil fuels. As a result of the current farm income crisis for grain and oilseed producers, many farmers cannot afford to make technological changes for environmental purposes. Unaddressed, this situation could eventually result in reduced availability of the bio-based feedstocks that will ultimately help Canada meet its Kyoto commitment. Although Prime Minister Chrétien cited the damage to developing nations from U.S. and EU agricultural subsidies, he did not indicate any recognition of the damage inflicted on producers here in Canada.

Clean Air Plan: Focus on Renewable Energy
Also early in September, Ontario Liberal Leader Dalton McGuinty promised an aggressive attack on the sources of air pollution in Ontario in order to reduce pollution and smog levels. Ontario experienced a record number of ‘smog days’ in 2002.

The elements of the five-part plan include:
• cleaner power generation: all coal-fired plants to be shut down by 2007
• cleaner fuels: all gasoline sold in Ontario would be required to contain at least 5 per cent ethanol by 2007, rising to 10 per cent by 2010
• more public transit: a portion of existing provincial gasoline tax would be dedicated to public transit
• renewable energy, including a substantial commitment to the development of ‘green’ power
• increased energy conservation, with a commitment to reducing Ontario’s electricity consumption by 5 per cent by 2007.

According to background information provided with the announcement, the ‘McGuinty Clean Air Plan’ would provide more than 75 per cent of emission reductions needed for Ontario to meet its share of Canada’s obligations under the Kyoto protocol. The mandated inclusion of ethanol in all Ontario gasoline could be expected to provide increased markets for Ontario corn as well.

OCPA Position on Nutrient Management
The first phase of the Nutrient Management Regulations (NM Regs), as outlined in the article elsewhere in this issue, has both good and bad aspects for Ontario corn producers, as proposed. Presented below is an overview of the information presented by OCPA at a series of consultations held across Ontario through the month of September. A copy of the full brief is available on OCPA’s website (www.ontariocorn.org) or by contacting the OCPA office.

OCPA supports the stated purposes of the legislation and regulations, the scope and phase-in timelines as proposed, and the recognition that nutrient management must be science-based. We are also pleased that the Hon. Helen Johns, Minister of Agriculture and Food, has stated that the Ontario government is “committed to implementing regulations... that will protect our water and the environment as well as maintain the competitiveness of our agri-food industry”.

OCPA also strongly endorses having provincial regulations that will provide a consistent business environment for all farmers province-wide and will supersede the patchwork of municipal bylaws that currently regulate nutrient management, some much more stringently than others.

We understand from early consultations that OMAF has committed to conducting an impact study that will analyse the full economic implications of both Phase I and Phase II of the NM regulations. OCPA welcomes this study and recommends that it document the economic impact to the entire agricultural sector (not just farmers, but also the input supply industry). The results will be important in formulating the final version of the NM regulations.

However, OCPA also has some significant concerns with the regulations as proposed:

1. Documentation requirements are too complex.
OCPA encourages the provincial government to give careful consideration to the results of the planned economic impact assessment of the NM regulations, encompassing both Phase I and Phase II regulations (to be issued later this fall).
OCPA also appeals to the government to drastically simplify the proposed regs, to streamline the process and thus enhance compliance, foster stewardship and minimize cost to both farmers and government.
2. More sophisticated management of nutrients may be discouraged.
3. Enforcement must be addressed.

The government should establish plans for very targeted enforcement measures aimed at true violators (with some random audits to ensure general compliance is being

Cuts to University of Guelph Programs
In a memorandum published in late August, Dr. Alan Wildeman, Vice President, University of Guelph, announced some details of the plans for implementing changes to “manage a base budget shortfall of $6 million that resulted from increased program costs and a reduction of the transfer payment from OMAF in 1999.” Funding for the OMAF/U. of G. agreement, renewed this spring for a 5 year term, has remained stable at $50.5 million per year since 1999.

Following several years of implementing ‘one-time’ cuts, such measures were exhausted and fiscal reality meant some programs could no longer be maintained. As stated in Dr. Wildeman’s memo: “This five-year contract incorporates a strategic plan for change that will preserve the University's and OMAF's infrastructure, and position both to refocus priorities to respond to changes and meet research challenges of the future.” The announcement follows well over a year of planning and extensive consultation with farm organizations, particularly those most affected by the cuts. “Foremost in our strategic planning was the recognition of the need for sustainable programs, with increased revenues, innovation, technology transfer and commercialization. Three principles guided the strategic planning process: minimize duplication of programs and infrastructure, invest in programs that are of the highest priority, and create centres of excellence at locations throughout the province,” stated Dr. Wildeman.

Under the OMAF/U. of G. agreement, research will focus on five priority areas:
• Improved production agriculture and market diversification in the plant and animal areas
• The life sciences, including biotechnology
• Food and food system safety
• The environment
• Rural policy and development.

Some of the program changes include:
• Consolidation of beef and dairy research at Guelph and in eastern Ontario, and the consolidation of sheep research at Guelph.
• At Ridgetown, the elimination of support for beef and dairy research programs is being offset by a greater emphasis on teaching and research in environmental programs. Ridgetown plans to operate its dairy herd on a cost recovery basis to aid in its education role.
• Vineland will continue to be the pre-eminent centre for tree fruit breeding and viticulture, while its programs in floriculture, ornamentals, post-harvest physiology and greenhouse vegetable crops will move to Guelph. In addition, the mushroom program at Vineland will be relocated.
• At Guelph, faculty will increasingly be expected to use other diverse research funding opportunities available to them to meet their staffing and program costs.
• Also at Guelph, the Veterinary Clinical Education Program (VCEP) will be focused more significantly in areas that support disease prevention and surveillance in agricultural animals.
• In the field crops research area, the cropping systems/nutrient management program and the agronomy programs at Ridgetown and Kemptville will be collapsed, but at Ridgetown an environmental management program will be implemented.
• The agriculture and horticulture diploma programs will no longer be offered in Guelph, resulting in expanded diploma programs at Kemptville and Ridgetown.
• The Laboratory Services Division is tasked with generating greater revenues from their services to offset base budget cuts.
• The University will achieve significant cost reductions for operating facilities managed under the Ontario Realty Corporation.
• Throughout the system, including Guelph, research programs judged to be of lower priority will no longer receive funding.

The changes will affect about 60 staff positions across all U. of G. campuses (Guelph, Kemptville, Alfred and Ridgetown) and research stations in Thunder Bay, New Liskeard, Kettleby, Vineland, Simcoe, Emo and Cambridge. However, through “reorganizing positions along strategic directions, taking advantage of vacant positions where possible, reducing infrastructure costs and increasing revenues,” only about 10 full-time employees will lose their jobs. Relocation counselling, severance allowances and other support are provided to affected personnel.

Although downsizing and cuts are never welcome, OCPA and the Ontario Field Crops Research Coalition (OFCRC) have commended the University and OMAF for taking a strategic approach to this challenge and for the consultative process they pursued. While changes of this magnitude will be felt by the industry, the impact of the cuts will be minimized as a result of the careful planning. Over the longer term, the University programs are now well positioned to assist the agri-food sector in their research, education and support needs.

Performance Testing
For many years, the public variety testing systems for various field crops in Ontario have been under pressure to significantly reduce testing costs. Despite increased industry sponsorship, limited government funding continues to threaten the current system. This was particularly evident during negotiations of the OMAF-U. of G. agreement in 2001/02. OMAF continues to provide significant support for performance testing, but the industry needs to do all it can to ensure that the system continues to be effective and efficient.

The various crop committees under OASCC’s Field Crop Research & Services Committee (FCRSC) are intimately familiar with the testing needs for each of their crops. However, the necessary efficiencies needed at this time may require greater co-operation among these committees and changes that are cross-commodity in nature. There may also be methods currently used by private seed companies that would work well within the public system. The Ontario Field Crop Research Coalition (OFCRC) considers variety performance testing to be a very high priority effort. The producers represented by the OFCRC continue to express their need for unbiased/independent crop data. This information is crucial to the decision-making of producers when developing their crop production plans. Performance testing is considered a role that government should undertake and it is a good investment for the crop industry as a whole. With our broad farmer-based membership, the Coalition feels that it is in an appropriate position to co-ordinate an effort to evaluate potential changes to the collective field crop variety performance testing system. To this end, in late August the OFCRC organized a day of touring both public and private sector performance testing sites and hosting discussions among field crop commodity representatives, public and private sector researchers and crop advisor personnel, and research administrators. The purpose of the day was to initiate the process of pursuing the following objectives:

• To study the variety performance testing methods for all field crops in Ontario (i.e., corn, soybeans, cereals, forages, beans, canola), both public and private.
• To seek ways in which the public testing system can be made more efficient and more effective.
• To encourage the implementation of changes that will increase testing efficiency and improve the quality of the information that is provided to Ontario field crop producers.

If/when areas for improvement are identified, the OFCRC will work to effect the necessary changes. The OFCRC is quick to note that efficiencies gained within the system may not only help to reduce costs, but may also allow for additional testing (e.g., novel crop variety/ management system comparisons). Based on feedback from all quarters, the day met or exceeded the expectations of all participants as a first step towards achieving the above long-term goals. Certainly, much more consultation is needed among the stakeholders (grower groups, seed companies, public researchers, OMAF and U. of G. administrators) to identify and develop specific recommendations for improvement. In doing so, care must be taken not to jeopardize the benefits that the agri-food community currently derives from the public-supported performance testing system.

As a member of OFCRC, OCPA is a strong supporter and active participant in this process. We look forward to constructive dialogue over the coming months as the sector grapples with potential solutions to these challenges.

Provincial Alternative Fuels Report
In June the Province of Ontario Select Committee on Alternative Fuels Sources released its final report. Their mandate was “to investigate, report and recommend ways of supporting the development and application of environmentally sustainable alternatives to our existing fossil [carbon-based] fuel sources”.

The report delivers 141 recommendations covering 20 topic areas. Through its recommendations, the Committee “seeks to establish an overall policy framework to support the development of alternative fuels/energy, and outline policy and programs to support specific alternative fuel/energy sources and technologies”. For the purposes of the report, alternative energy encompassed the spectrum from water power, wind power, biomass fuel and biomass energy (i.e., methane generation from landfills, biological wastes, etc. as well as production of energy crops), solar power, alternative transportation fuels (including ethanol, biodiesel, natural gas, propane, hydrogen but also covering modified refining, production or use technologies for traditional fuels) and fuel cells.

Of the 141 recommendations, most deal with issues pertaining to general government policy pertinent to some aspect alternatives fuels, and in that context could have some indirect impact on ethanol, the primary alternative fuel of interest to OCPA.

Of the several recommendations that do deal directly with ethanol or biofuels specifically, the recommendations deal with issues such as:
• assessing the potential to expand ethanol and biodiesel production capacity in Ontario
• establishing a low-level ethanol content requirement in Ontario gasoline
• establishing a network of E-85 refilling stations along major transportation routes across the province
• providing incentives for retailers selling gasoline that meets the Automakers’ Choice Gasoline specification
• assessing emissions and environmental implications of expanded ethanol/biobased fuels in Ontario
• expanding retail sales tax incentives to encourage purchase of alternative fuelled vehicles
• coordinating provincial and federal tax policies to encourage alternative fuel and vehicle use.

OCPA has been consulted for further input as the government assesses how to respond to these recommendations and how to build a more holistic alternative energy policy framework. The potential avenues opened through this process fit well within the objectives of our OCPA market development strategy, outlined above.

Considerable movement is afoot at the federal level as well, on policies that will stimulate additional

Grain Growers of Canada
Cam Dahl, former Legislative Assistant to Howard Hilstrom, MP for Selkirk – Interlake and Chief Agriculture Critic for the Official Opposition, assumed the role of Executive Director for the Grain Growers of Canada (GGC) as of September 1. Mr. Dahl replaces Kevin Muxlow, who has undertaken graduate studies with the Department of Agriculture Economics and Business at the University of Guelph.

GGC will hold its annual convention in conjunction with the Canada Grains Council on November 18 and 19 at the Delta Hotel in Ottawa. The focus for the third annual meeting of GGC will be: "How do we ensure a profitable agriculture industry in a distorted world market?" Sessions on the World Trade Organization will include U.S. representatives, with special focus on the U.S. Farm Bill; the Cairns Group, with special focus on the goals for increased market access, export subsidy elimination, and reductions in international domestic support; and the European Union, with special focus on reform to the Common Agriculture Policy. Other sessions will focus on the Agriculture Policy Framework, the potential impacts of the Kyoto Accord, and ongoing work on food safety.

GGC’s annual business meetings will be held on November 16 and 17. Committee meetings are open to all delegates of the GGC.

Final CBAC Report Released
Late in August, the Canadian Biotechnology Advisory Committee released a report that provides eight recommendations for improving the regulation of Genetically Modified (GM) food in Canada.

Recommendations are organized under the themes of: good governance, precaution, information and consumer choice, and broader social and ethical implications.

Although the expert panel has identified areas in which the management and coordination of Canada’s food regulatory system can be improved, committee chair Arnold Naimark emphasized the fact that there is no evidence to indicate that GM foods pose any greater risks than comparable foods in the marketplace.

CBAC continues to support voluntary labeling for GM foods to provide consumer choice: it does not support mandatory labeling for all GM foods.

The full report is available on the CBAC website: www.cbac-cccb.ca.

Semi-Annual Business Meeting
OCPA president Dennis Jack opened the Business Meeting, held in London September 10, by thanking staff and board members, past and present, for their efforts on behalf of the association. He cautioned that higher prices for corn, while positive for growers, are temporary: the need for a long-term safety net program continues.

Committee chairs presented reports on committee activities to meeting delegates for consideration and approval. Copies of the committee reports are available on the OCPA website or can be obtained by contacting the OCPA office.

Delegates approved the budget presented by Treasurer Fred Wagner for the 2002/2003 fiscal year. Details of the budget are presented elsewhere in this issue of the Ontario Corn Producer.

OCPA delegates passed 6 resolutions, including:
• That OCPA lobby the federal government to design an easier trigger mechanism to NISA accounts
• That OCPA continue to lobby government for MRI as a companion program to help stabilize the oils and grains sector
• That OCPA’s Corn Producer Magazine have a section in each issue devoted to stating, in detail with economic impacts, the position of OCPA, OACC, the Ontario government and the federal government, with regard to present programs, transition programs and future APF programs
• That OCPA pursue companion programs to be included under the Agricultural Policy Framework
• That OCPA lobby the Ontario Ministry of Agriculture and the Ontario Ministry of the Environment to assist in maintaining the flexible hours of operation for country elevators
• That OCPA negotiate the following eight items:
- Transition payments for 2001-02 need to be distributed based on the OACC agreement
- Transition payments for 2002-03 should be distributed based on the same agreement, unless a major problem arises in which case an acceptable agreement needs to be worked out within OACC
- MRI needs to be enhanced to 100% of support price and yield for 2002-03 in order to use up all available funding in the MRI ‘pot’
- ‘Super NISA’, as envisioned in the Agricultural Policy Framework, is insufficient (even with the inclusion of ‘Production Insurance’) to serve as the only financial safety net program after April 1, 2003 when APF begins. NISA does not, was not designed to, and is incapable of, offsetting sector-specific injury unique to the grains and oilseeds sector caused by foreign agricultural policy
- Only companion programs, like a modified MRI (i.e., support prices based on cost-of-production) respond to sector-specific injury caused by artificially depressed prices. A modified MRI program needs to continue after April 1, 2003 and become part of the APF Risk Management ‘pillar’
- Any residual funding in the MRI ‘pot’ (after enhancement to 100% of price and yield for 2002-03) needs to be rolled ahead and used as ‘seed money’ for a new companion program after April 1, 2003, not be used for other government priorities or issues
- Funding currently committed to Transition Payments from both the federal and provincial governments need to be continued after March 2003 and used to fund the new companion program
- A sixth pillar on the federal-provincial agreement be trade injury from U.S. Farm Plan – EU subsidies.

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

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