INDEX
Safety
Nets
Under
the federal government’s timetable, the Agricultural Policy Framework (APF)
commences April 1, 2003. The Risk Management ‘pillar’ within the APF
envisions only a tweaked NISA program, referred to as ‘Super NISA’,
and a broader Crop Insurance (CI) program encompassing livestock operations,
referred to as ‘Production Insurance’ (PI). The federal government
has asked the Ontario government to sign a bi-lateral implementation agreement
enshrining and funding only these two programs. That’s it. Nothing else.
No allowance for companion programs. No Self-Directed Risk Management program
for those sectors without crop insurance. No financial disaster relief-type
program for those times when everything goes wrong at once. No counter-cyclical
income support-type program. Under the APF, government sees no need for, and
therefore will not fund, companion programs to work in conjunction with PI and
NISA. The APF contends that these two programs alone are adequate to counter
all factors beyond your individual ability to combat. They are not.
Corn producers face three financial risks:
• production loss or reduction
• income instability
• artificially depressed income.
PI and Super-NISA cover only the first two, not the third.
Crop Insurance partially offsets production risk. OCPA believes that Ontario’s
CI program is the best in Canada, in need of little alteration, and should be
left to function as it is.
NISA provides partial income stability by stabilizing income at some percentage
of an historic margin. If that margin is high, great; if it is low, too bad.
NISA doesn’t improve your margin, merely stabilizes it at an historic average,
no matter how artificially low that margin may be as a result of factors beyond
your individual ability to control. The APF says if your margin is low, get
out of the business. Doesn’t matter why your margin is low, just get out,
by using the tools and programs that are expected to be offered under ‘Renewal’,
another of the APF pillars.
But neither NISA nor CI addresses the primary problem facing the Canadian grain
and oilseed sector, and Ontario corn producers in particular, which is income
depressed artificially for years on end because of U.S. agricultural policy
and programs. That’s an impact of trade and policy, the realm of government.
In the long term, the answer to the problem is successful negotiations at the
W.T.O. so that price-depressing domestic subsidies south of the border are eliminated.
Until such success is achieved, the answer to the problem in the short-term
is income support. Under the existing set of safety net programs in Ontario,
this problem is partially offset by Market Revenue Insurance, a counter-cyclical
income support program that needs some retooling, but which has worked effectively.
There are NO income support programs provided under the APF.
It is government’s responsibility to enhance and defend the business environment
within its borders. But by implementing the APF in its current form, government
will not enhance and defend the business environment for grains and oilseeds
in Canada or Ontario. The APF ignores the injurious impact U.S. subsidies have
on the Canadian grain and oilseed sector, so does nothing to offset that injury.
As a result, responsibility for defending and enhancing the business environment
for the grain and oilseed sector will fall onto individual farmers, a burden
you cannot shoulder.
Achieving progress on this issue is likely to be difficult for several
reasons:
• The federal government does not recognize the need to permit and fund
companion programs under the APF. Your MPs need to hear why such programs are
critical.
• The provincial government must sign only an agreement that contains an
iron-clad commitment to jointly enhance and fund companion programs. Your MPPs
need to hear that enhanced companion programs are essential and must be adequately
funded.
• Neither government likes counter-cyclical companion programs because
these, on occasion, require potentially large and unpredictable amounts of funding.
Governments don’t like that. Both CI and NISA are far more predictable
with defined, capped and limited benefits that can be budgeted by government.
Governments like that. That’s why both levels of government want to keep
and tweak CI and NISA. But CI and NISA don’t support income depressed by
foreign policy. Only a counter-cyclical program supports income by providing
benefits when they are needed and none when they are not.
Both your MPs and MPPs need to hear that government has a duty to enhance and
defend the business environment for agriculture in Canada and Ontario, and only
counter-cyclical companion programs can do that.
OCPA’s solution? We need your help lobbying for three things:
1. Companion programs like SDRM, disaster assistance and an enhanced Market
Revenue Insurance must continue into the APF world and be adequately funded.
2. Existing Transition Funding must be continued for more than the announced
initial two years in order to fund these enhanced companion programs.
3. Provinces must have the flexibility to work with producers in designing and
modifying companion programs to suit individual sector needs.
Union
Gas
OCPA has contacted the Honourable John Baird, Ontario Minister of Energy, to
express the organization’s concerns regarding the recent Ontario Energy
Board’s (OEB) approval of retroactive rate increases to be implemented
by Union Gas.
According to an OEB release: “the Board approved the recovery of deferral
account balances of $109,160,000
through a retroactive charge to customers. These charges are due to increases
in upstream transportation cost and the high natural gas commodity costs and
cold temperatures of the winter of 2000/2001. These unexpected conditions increased
both the amount and cost of gas that Union used to run their pipeline, storage
and distribution system and these higher costs were not included in the rates
already charged by Union….Retroactive charges apply to all Union customers,
including those who purchased their gas from a marketer. The actual charge will
depend upon the amount of gas consumed by the customer in 2000 and 2001.”
This decision has a direct impact on corn producers, who are very significant
consumers of natural gas, used in the drying of grain corn whether directly
on-farm or at commercial drying operations.
In conjunction with the Ontario Agri-business Association (OABA), OCPA has called
for changes to be made within the regulatory process in order to provide stability
within the marketplace and prevent a repeat of retroactive increases for which
there is no recourse by natural gas customers. These issues become even more
critical with the deregulation of hydro services in Ontario.
Throne
Speech Outlines Government Priorities
Governor General Adrienne Clarkson delivered the Speech from the Throne to open
a new session of Parliament on September 30. The speech is intended to outline
the goals of the government for the upcoming session.
Key points in the speech from an agriculture perspective included:
• a commitment to implement the Agricultural Policy Framework (APF) and
related measures to promote innovation in the agricultural sector
• ratification of the Kyoto Protocol on Climate Change before the end of
this year
• the re-introduction of pesticide legislation as well as ‘Species
at Risk’ legislation
• a commitment to improving food safety.
In a news conference following the Throne Speech, Minister of Agriculture and
Agri-Food Lyle Vanclief expressed satisfaction with the fact that agriculture
has been mentioned specifically in the last two Throne Speeches, indicating
that it is a priority for the current government.
In answer to questions regarding the impact of U.S. and EU subsidies on Canadian
producers, Mr. Vanclief confirmed that the government is committed to ongoing
work through WTO to equalize the playing field.
He also expressed the belief that the APF would be effective in mitigating the
various challenges that the industry faces, including trade, marketing and weather
impacts.
Wonderful
Wednesday
On Wednesday, October 9, OCPA 2nd vice-president Don McCabe and Executive Assistant
Brenda Miller-Sanford traveled to Parliament Hill to take part in a reception
designed to showcase organizations, communities and businesses from rural Canada
to the rest of the country. Planned by members of the Liberal Rural Caucus,
the reception was attended by many parliamentary assistants, Members of Parliament,
some Senators,
Cabinet Ministers, commodity groups and general farm organizations.
For OCPA, the event was a perfect opportunity to demonstrate the diversity of
corn as a commodity, as well as speak to some key Members of Parliament and
their assistants about issues facing our industry.
Many thanks to the offices of Rose-Marie Ur, Ovid Jackson, Paul Steckle, Murray
Calder and Lynn Myers for their lead role in the organizing of this important
event. We would also like to acknowledge additional assistance provided by the
offices of Domenic LeBlanc, Hon. Rey Pagtakhan, Rodger Cuzner, Hon. Anne McLellan,
Brenda Chamberlain, Hon. John Manley, Bob Speller, Sue Barnes, Charlies Hubbard,
Senator Herbert Sparrow, John Bryden, Stan Dromisky, Mark Eyking, Larry Bagnell,
John O’Reilly, Hon. David Anderson, Hon. Hedy Fry.
Special thanks to Chera Jelley and Greg McClinchey for their assistance in getting
around Parliament Hill.
The event featured a reception, displays, networking opportunities and a draw
for a number of donated prizes. Congratulations to Sylvia Hanes, winner of the
Polylactic Acid shirt. The shirt, donated by Ontario Agri-Food Technologies,
represents a new biobased product made from corn. Polylactic acid, made from
carbon dioxide captured in corn sugars (glucose), can be made into a variety
of items, including shirts, sweaters, umbrellas, carpets, plastic wrap films,
credit cards and drinking cups.
Ethanol-blended gasoline gift certificates for the draw were provided by UPI
Inc.
Frito-Lay
Switches to Corn Oil
Late in September, Frito-Lay officials in Plano, Texas announced that the company
will switch from cooking with hydrogenated oils to corn oil in its most popular
snack foods such as Doritos, Tostitos and Cheetos.
By eliminating the currently used hydrogenated oils that contain trans fatty
acids (which have been linked to greater risks of heart disease as well as contributing
to weight gain), and converting to corn oil, the company is attempting to provide
a healthier snack food.
Nutrient
Management Regulations
OCPA members will hopefully have had a chance during the early harvest season
to review the information provided in last month’s magazine and newsletter
about proposed Phase I regulations for the Nutrient Management Act, 2002 (NMA).
As well as three western Ontario consultations hosted by Minister of Agriculture
and Food Helen Johns, consultation meetings hosted by Environment Minister Chris
Stockwell were held in Kemptville on October 11 and in North Bay the following
week. As of this writing, OCPA has made presentations at each of the three western
Ontario meetings (highlighting the issues outlined in last month’s newsletter),
and plans to participate at the Kemptville meeting.
After recent discussions with OMAF personnel, OCPA is encouraged that the government
appears to have heard and to be making efforts to respond to several key concerns
expressed by OCPA and others during the consultations. OMAF has undertaken an
economic impact assessment that will encompass both Phase I and Phase II of
the proposed regulations, to be released in late October or early November.
Several alterations to reduce the complexity of preparing a nutrient management
plan (NMP) are being considered. This complexity is one of the greatest concerns
OCPA sees in the proposed regulations, a concern that was not dispelled during
a recent meeting between OCPA and several Ontario crop advisors.
The Ministry has reaffirmed that the regulations should not discourage either
the use of manure for application on ‘cash crop’ land, or the utilization
of municipal biosolids. The Ministry continues to acknowledge that funding for
training and education programs, research, enforcement and other aspects of
implementing the regulations is needed, and is being solicited.
The upcoming Phase II release will likely also include some clarification
or modification of Phase I regulations. Phase II will include issues that are
addressed within most municipal bylaws, including:
• construction and siting of barns and manure storages
• land application
• biosecurity
• local advisory committees
• feedlot operations
• content requirements of nutrient management strategies for municipalities
and other non-farm industries that apply nutrients to land
• setback distances for applying nutrients around waterways and other sensitive
features
• restrictions for spreading nutrients on snow-covered or saturated land
• MOEE's land application program review
• MOEE's strategy for the five-year phase-out of the application of untreated
septage.
The regulations pertaining to the setback distances from waterways, etc. will
be of particular interest to cash crop farmers. Most farmers recognize the need
for particular care and special management of nutrients in these zones, as a
result of the higher potential risk of runoff or water impact, especially for
manure-based nutrients. However, it is our hope that OMAF and MOE recognize
that a significant portion of Ontario’s cropland resides within a reasonable
distance of watercourses, tile drain inlets and other sensitive features, and
that nutrient applications in these areas can be managed carefully to protect
water resources and maintain productivity. This type of flexibility to allow
mitigating management practices for application of nutrients in the most appropriate
way is an important aspect of the legislation, and one which generally appears
to have been acknowledged and allowed in the first phase of the proposed regulations.
GM
Food Labelling
The Canadian General Standards Board (CGSB) Committee for “Voluntary Labelling
of Foods Obtained or Not Obtained Through Genetic Modification” met again
in Ottawa in mid-September. The primary purpose of the meeting was to consider
the merits of a proposal from Agriculture and Agri-Food Canada that would base
GM labelling on a "contains/does not contain GM material” (i.e., genetically
modified DNA or protein) basis rather than using the previously agreed upon
"product of/not a product of" GM crop (or livestock, or micro-organism)
approach.
As a result of scheduling conflicts, OCPA was unable to participate in the CGSB
meeting. However, in written comments submitted previously, OCPA suggested the
AAFC-proposed approach might have some merit, but only with certain provisos.
Since there are a variety of reasons why some consumers may choose not to purchase
GM-derived foods, labels must clearly convey that a product “is derived
from GM sources” but “does not contain GM DNA or protein”, in
that order, to provide consumers with the information they are most interested
in first (i.e., GM or non-GM) followed by the qualifier statement.
Although there was a reasonable level of support for the AAFC proposal at the
CGSB meeting, all of the consumer groups represented were solidly opposed. Thus,
the decision of the Committee was to proceed to a second written ballot (vote)
on the draft standard as it stood prior to the AAFC proposal being put forward.
There was also some discussion around the issue of minimum and maximum threshold
levels for making claims on foods/food ingredients containing GM. The voting
draft will reflect the results of these discussions.
The timeline proposed for further steps are:
• vote on draft standard (October 2002)
• compile results (Nov. 2002)
• “develop proposed actions to negative ballots and comments”,
to try to elicit a ‘Support’ response to achieve consensus (Nov./Dec.
2002).
If negative votes are withdrawn or changed to positive votes, the Standard will
be considered ‘approved’ by the Committee. Then it must be reviewed
by the CGSB`s Panel on Process Assurance for Second Level Review (to assure
that the approved CGSB consultative/ consensus process has been adhered to),
as well as by the Standards Council of Canada for approval as a National Standard.
Following a final editing, the Standard would then be published. If each of
these processes moves forward as expected, publication of the Standard could
be expected in March, 2003.
Private
Member’s Bill Calls for Mandatory Labelling of GM Foods
MP Charles Caccia’s Private Member’s Bill calling for the mandatory
labeling of GM foods has returned to the House of Commons, where it received
first reading on October 8. Now known as Bill C-220, the proposed Act would
require that “all foods or food ingredients that are or that contain genetically
modified material [at or above the 1 per cent level] to be labelled to this
effect.”
According to the summary, this labelling would allow for post-release research
and monitoring of potential health effects of GM foods and provide consumer
choice in the marketplace. The provisions of the bill would require the genetic
history of a food or ingredient to be recorded and traced through all stages
of distribution, manufacture, processing, packaging and sale.
When Mr. Caccia’s bill was before the House in 2001, it was opposed
by a coalition of industry groups for numerous reasons:
• it would raise food costs substantially, while providing no increased
health or safety benefits
• it would have a significant and to date unmeasured impact on growers
and on the agri-food industry as a whole
• two expert panels – the Royal Society of Canada and the Canadian
Biotechnology Advisory Committee – recommended that GM food labeling be
done on a voluntary basis
• serious potential trade impacts, especially with Canada’s major
trading partner, the U.S., as all foods coming into the country would have to
be labeled according to the Standard.
The bill was defeated 126-91 on October 18, 2001. It is expected that many of
the same arguments will be forwarded as the debate on this issue resumes.
Corn
Hybrid Registration
OCPA members were informed in the July Newsletter that CFIA had taken unilateral
steps to reintroduce registration for all hybrid corn, which has been exempt
from registration since 1997. The stated rationale was to be able to track hybrids
and ensure accountability (although it is not clear what this means) in the
event of another occurrence such as the ‘Starlink’ episode or a mix
up (mislabeling) of seed lots as occurred with canola cultivars a couple of
years ago.
OCPA had countered in written correspondence that subjecting all corn hybrids
to registration was unnecessary since seed corn companies had agreed to provide
CFIA with lists of all their hybrids containing novel traits (i.e., Bt, Liberty
Link, Roundup Ready, Pursuit Tolerant), and that such regulatory oversight would
add unnecessary cost to the sector (ultimately borne by farmers) and could also
inhibit innovation and development of new ‘niche’ or specialty markets
for corn in Canada (for example, food corn hybrids, waxy, high amylose or other
hybrids with specialty starches; or hybrids that could be developed with traits
suited to specific bioproducts or other end uses).
Discussions have since taken place between CFIA personnel and Canadian Seed
Trade Association (CSTA) representatives at the latter’s annual meeting
in Kelowna in July. A further meeting was held in mid-September involving CFIA
(senior management and Variety Registration Office personnel), OCPA, CSTA and
seed corn company reps, as well as the Ontario Soybean Growers and the Quebec
Fédération des Producteurs de Cultures Commerciales du Québec
(FPCCQ). The soybean sector has also been seeking less onerous
variety registration oversight. As well as the variety registration issue, discussion
topics also included rules being imposed by CFIA over the naming of varieties
in Canada. The core issue in this case is that if a variety is developed or
marketed outside Canada, CFIA rules would require that the same variety name
be used in Canada, regardless of whether it is marketed by the same or a different
company, and regardless of whether it fits with company’s naming/ numbering
schemes (many of which convey information about the hybrid/variety traits).
OCPA was encouraged by the outcome of this meeting: it was clear that CFIA senior
management were listening, and appear very willing to explore some alternatives
whereby our major concerns could be addressed as long as the regulatory and
compliance hurdles that they face both domestically and internationally can
be met. A small working group will be established to explore and recommend solutions
to the current standoff. OCPA will be a participant in this working group, which
will meet later this year.
Grain
Growers of Canada
The past few weeks and months have been very active in Canadian agriculture
policy. The Grain Growers of Canada (GGC) has been carrying forward the needs
of grains and oilseed producers on a number of key issues.
Safety
Nets
The ongoing development of new safety net programs, as outlined in the Agriculture
Policy Framework, remains one of the most important issues for the Grain Growers
of Canada. GGC has a number of concerns with directions being taken by Agriculture
and Agri-Food Canada. A number of these proposals may actually exacerbate the
impact of foreign subsidies and market interference, instead of mitigating them.
Because our grains and oilseed producers receive world prices, their revenues
have fallen as a direct result of rising foreign subsidies. Because our principal
safety net programs are based on revenue, safety net funds available to grains
and oilseed producers will actually decline when they are needed the most, when
trade injury from foreign subsidies is increasing.
Suggestions for changes to the system, such as the "contribution margin"
proposal coming out of the department of Agriculture and Agri-Food Canada, would
make new safety net programs even more dependent upon farm profitability and
thus even more subject to distortions caused by foreign subsidies. As a result,
GGC believes that this approach is inadequate for revamping the safety net system.
GGC and our member organizations continue to press for changes to the Agriculture
Policy Framework to correct these problems and help mitigate the impact of the
artificially low world prices caused by foreign governments.
Trade
GGC remains very active on trade issues. Canada's 80,000 grain and oilseed producers
grow crops worth roughly $10 billion per year. This significant contribution
to Canada’s economy, its trade surplus, employment and rural well-being
will be jeopardized by failure to realize real gains during the current round
of World Trade Organization negotiations.
We are concerned regarding some recent developments in these talks. Canada appears
to be isolating itself from the Cairns Group, which is actively promoting reduced
interference by governments in world grain and oilseed markets. The last move
in this direction came recently, when Canada chose not to support Cairns Group
proposals for significant reductions in domestic support. As a result of these
decisions, Canada risks being excluded from further Cairns discussions, thus
weakening the bargaining position of both Canada and the Cairns Groups and jeopardizing
the potential success of the negotiations.
Environmental
Issues
Changes to Canadian environmental policies will have a significant impact on
the future of farming in Canada. Discussions about these policy changes are
another key area of focus for GGC. Upcoming consultations regarding the implementation
of the Kyoto protocol will be a big part of our environmental efforts.
Innovative Canadian agriculture producers are already managing their cropland,
rangeland and livestock feeding programs in ways that reduce or remove greenhouse
gases. Increased use of ethanol and bio-diesel as well as trading in carbon
credits have possible economic benefits for farm families while helping Canada
meet its international commitment. We look forward to working with both industry
and government to bring about these positive developments.
Unfortunately, little information exists regarding the cost half of the ledger.
This has given rise to concern within the agriculture community that the cost
of Kyoto implementation will outweigh the benefits.
GGC and other farm organizations have asked the Government of Canada to provide
the agriculture community with estimates of how net farm income may be affected
by Kyoto implementation measures, especially those that will cause energy cost
increases.
Annual
Convention
GGC’s joint convention with the Canada Grains Council will be held in Ottawa
November 18-19. Based on the theme - "How Do We Ensure a Profitable Agriculture
Industry in a Distorted World Market?" – the program will feature
speakers who will give the European, U.S. and Cairns Group perspective on the
WTO negotiations. Symposium participants will also take part in debates and
updates on the Kyoto Protocol and food safety.
| Corn Prices - October 8, 2002 | ||
|
Period:
to Aug. 31
|
Approximate
Tonnes Marketed
|
Average
Weighted Price
|
|
2001-02
|
2,893,400
|
$136.67/tonne
|
|
2000-01
|
2,624,500
|
$125.69/tonne
|
|
1999-00
|
3,468,100
|
$112.26/tonne
|
The above figures are based on levies received by OCPA for commercial sales.
1