Safety Nets
Lindane
Ontario Safe Drinking Water Act Introduced
Corn Performance Tests
Voluntary Labelling Standard for GE Foods
Vision Released for U.S. Biobased Incentive Program
New President for Agri-eBusiness Group
Grain Growers of Canada
Corn Prices - December 12, 2002

Safety Nets
Spinning our wheels. That’s what it feels like. We’ve been spinning our wheels in safety net discussions, or ‘risk management programming’ as we are supposed to refer to it now, especially at the national level, for at least the last 18 months since the Agricultural Policy Framework (APF) was initiated with the Whitehorse Agreement in June 2001.

Yes, there have been some successes. OCPA’s work in developing, promoting and lobbying for the Grain Growers of Canada’s Trade Injury Compensation Program resulted in the decision to provide Transition Program payments. But the success was a partial one, and to date there has still been no admission or recognition that Canada’s grains and oilseed sector will continue to suffer from the price-depressing impact of U.S. farm policy at least through 2007.

Yes, OCPA was successful in obtaining enhancements to the Market Revenue Insurance (MRI) program (from 85% of support price and yield up to 90%). But we were successful because both levels of government want to eliminate what they view as commodity and sector-specific companion support programs like MRI and needed to spend the money left in the ‘pot’. Success did not result from any admission or recognition that commodity-specific, counter-cyclical support programs are crucial, and need to be continued and enhanced to offset the price-depressing impact of U.S. farm policy.

Yes, OCPA and all other commodity groups in Ontario (and the general farm organizations too) were successful in having the province ‘ante up’ its 40% share of Transition Program funding. And we were successful in maintaining a unanimous consensus on distribution of that funding primarily through MRI as the most efficient and quickest means of getting payments to those most in need, grain and oilseed producers.

OCPA commends OMAF, and Minister Helen Johns in particular, for the quick distribution of committed Transition Program funds. To date, of the provinces that agreed to participate, Ontario is the only one that has already distributed its funding.

AAFC has not admitted the inadequacies of channeling the federal portion of Transition Program funding through NISA. Even though Minister Vanclief himself confirmed that perhaps only 70% of federal Transition Program NISA deposits will be triggered, AAFC insisted on using NISA to distribute funding anyway. So while provincial cheques have already been distributed and cashed, federal NISA deposits won’t be accessed until 2003 at the earliest, if ever. We were successful at the provincial level because a Minister wanted to listen. But at the national level, apparently no one wants to listen.

And that’s why it seems we are spinning our wheels. Not enough politicians and bureaucrats seem to be listening to, or perhaps don’t want to hear, this reality:

• Crop Insurance handles production risk well in Ontario ... leave it alone
• NISA handles income stabilization, not as well as it might ... tweaking will help
• counter-cyclical income support programs, like MRI, are absolutely essential to offset damage inflicted through artificially depressed prices ... companion programs must be continued and enhanced in the APF-world.

OCPA has been involved in APF safety net discussions from the outset. We participate directly in the National Safety Net Advisory Committee and in the technical working group assisting the NSNAC. We have made presentations at both rounds of APF information discussions. We have prepared and presented our own briefs to as many people as would hear us, at all levels of government. We have worked closely with the Grain Growers of Canada in preparing and presenting briefs, including that to the Standing Committee on Finance in November.

Are we getting through? Not at the NSNAC nor AAFC level. Bureaucrats work only on assessment of ‘super’ NISA and ‘Production Insurance’. Not one minute has been devoted to assessing companion programs, yet the APF Risk Management world commences April 1, 2003. At the most recent meetings of NSNAC October 31 and November 1, participants expressed deep concern over the lack of meaningful progress. Moreover, analysis completed to date shows that a smaller portion of the government’s safety net funding will be going to the grains and oilseed sector under ‘super’ NISA and ‘Production Insurance’.

There is not a chance that these programs will be ready in time; they will be insufficient by themselves even if they are ready, and they represent less than adequate funding in the final analysis anyway.

Once again to her credit, Minister Johns has listened to our concerns. She wrote to Minister Vanclief October 28, 2002 and asked that the current package of Ontario safety net programming be extended one more year because of inadequate progress on APF programming. More spinning of wheels? Perhaps not. Getting companion programs like MRI into the APF-world would be a major accomplishment. We just have to keep pushing for their continuance and enhancement. And in a letter to the Ontario Agricultural Commodity Council dated October 30, 2002, Minister Vanclief stated: “as I am still working with my provincial and territorial counterparts on the development of the business risk management component of the APF, no final decision has been made on how companion programs will be treated.”

Lindane
It has recently come to OCPA’s attention that there will be only enough ‘drillbox’ seed treatments available for about 1/3 of the normal use for wireworm control in field corn in 2003. This situation has arisen from the withdrawal of registration and phase-out of lindane-based seed treatments (such as Agrox B-3, Agrox D-L Plus and DL+C) imposed by PMRA, with no comparable alternative control for wireworm available in corn.

As reported in the March 2002 newsletter, PMRA had elicited ‘voluntary withdrawal’ of lindane by registrants, and established Dec. 2004 as the last date for use of lindane seed treatments in corn, Dec. 2003 as the last date for any retail sales of lindane-containing seed treatments and Dec. 31, 2002 as the last date for manufacturing of these seed treatments. However, PMRA also imposed a restriction on the amount of product that a manufacturer could produce prior to this Dec. 2002 deadline (maximum of average production over the past five years). As a result of these decisions, corn growers in Canada will be denied access to an effective crop protection tool and many could suffer significant crop damage from wireworm since there is no effective alternative treatment available to most growers. (Force™ and Counter™granular insecticides are registered for this pest, but few farmers have the applicators required to apply these products).

In a February 2002 letter to PMRA, OCPA pointed out that growers would be left without any treatment option if PMRA adhered to their aggressive timetable. In this same letter, we pointed out that no effective alternative was likely to be registered in time, and that PMRA had failed to consult with OCPA as a representative of users of these products who will be adversely affected by their withdrawal. Even when effective alternatives are available, they will be much more expensive, and will either be applied to all corn seed (resulting in less ability to use Integrated Pest Management practices, and greater environmental exposure than is currently the case with the lindane-based seed treatments) or seed companies will have to maintain treated and non-treated inventory lines (a huge expense which will ultimately be reflected in the price of seed). In a March 28 response, Dr. Claire Franklin, PMRA Executive Director, acknowledged the absence of alternatives for lindane, but reiterated that their phase-out schedule had been established in consideration of users’ needs.

The U.S. Environmental Protection Agency (EPA) has recently reaffirmed that lindane seed treatments for corn will continue to be available to growers in the United States. This is just one more example of competitive disadvantage for Canadian farmers, and the lack of ‘harmonization’ of pesticide regulations with our biggest trading partner (and biggest competitor).

What OCPA (and industry) has asked for is simple and logical, entails no cost to the government or PMRA, and yet still ultimately achieves the ‘stewardship’ objectives that PMRA uses to justify the removal of lindane from the Canadian marketplace.

Our request is this: allow lindane seed treatment to remain registered, and allow manufacturing capacity to meet market demand, until such time as an effective and practical alternative control for wireworm is available. (Given that this alternative will be more expensive, regardless of what it is, all of the unused lindane-based seed treatments still available will be quickly used up in the following growing seasons, so there will be no orphan material needing to be dealt with by expensive disposal methods.)

Ontario corn growers who have depended on use of these drillbox seed treatments for effective control of seed insects such as wireworm are asked to express their concern to Dr. Claire Franklin, Pest Management Regulatory Agency (PMRA), 2720 Riverside Drive, Ottawa, Ontario A.L. 6606D2 K1A 0K9; phone 1-800-267-6315 or (613) 736-3708; e-mail claire_franklin@hc-sc.gc.ca or fax (613) 736-3707.

Corn Performance Tests
As a result of the termination of the corn and cereals agronomy program at Kemptville (casualty of recent budget cutbacks at the University of Guelph), the corn and cereals (wheat, oats and barley) hybrid/variety performance testing program has taken a huge hit in eastern Ontario. OCPA, the Ontario Wheat Producers and the Ontario Field Crops Research Coalition (OFCRC) are currently engaged in discussions and planning to overcome this deficit. University and OMAF personnel are also involved in the discussions. Other stakeholders (seed companies, Soil and Crop Improvement Association, etc.) will be included as well through the mid-November Ontario Corn Committee and Ontario Cereals Committee meetings.

Prior to the announcement of the Kemptville loss, OFCRC had initiated discussions in late summer on possible options for improving the entire performance testing system across the province for all field crops in order that it might be run more efficiently and more effectively. Now that harvest season is complete, this initiative is being pursued aggressively so a longer term plan for any improvements can be put in place as soon as possible. However, even if some viable options are identified, it is highly unlikely that any significant changes to the current system could be put into operation for the 2003 field season.

For 2003, a short-term solution for the spring-planted crops will be considered, which may or may not reflect a logical progression to the longer term strategy for sustainable operation of performance testing across Ontario. Unfortunately, no fall wheat tests to replace those normally operated by Kemptville could be planted this fall, leaving a big gap next summer/fall in the fall wheat performance information available in Eastern Ontario.

While it is still too early to determine the outcome or what form it may take, many options are being considered, and all feasible ones will be explored. For the Eastern Ontario situation in 2003, some options currently under consideration include:

• seeking another public researcher(s) or private seed company to operate the trials in 2003
• operating the performance test on a ‘privatized’ or ‘contracted services’ basis
• finding additional resources for Kemptville to operate the tests (perhaps on a cost recovery basis)
• some hybrid system in-between (i.e., local group/manager with cooperation/assistance from Kemptville (perhaps use of plot equipment, for example).

OCPA and the other organizations noted above welcome further input or ideas.

Ontario Safe Drinking Water Act Introduced
On October 29, the proposed Ontario Safe Drinking Water (OSDW) Act was announced, along with several other initiatives, in follow-up to the recommendations from Justice Dennis O’Connor’s Part II Report of the Walkerton Inquiry. The purpose of the Act is “to gather in one place all legislation and regulations relating to the treatment and distribution of drinking water” and “would expand on existing policies and practices and introduce new features to protect drinking water in Ontario”.

According to the news release, broad consultations with the public were conducted on the components of the Act, which include:

• licensing and accreditation of drinking water laboratories
• drinking water quality standards, including the creation of an Advisory Council on Standards
• certification and training of drinking water systems operators
• the requirement of an owner's licence for municipal drinking water systems
• a statutory standard of care requirement for municipal drinking water systems
• compliance and enforcement, including the creation of the Office of the Chief Inspector.

Although separate from the Safe Drinking Water Act, the Nutrient Management Act was approved by the legislature in June, and the phased announcements of the nutrient management regulations have followed (phase 1 in August, phase 2 later this fall). The Nutrient Management Act and regulations “will form an important element of the watershed protection system envisioned by Commissioner O'Connor” by “enhancing the protection of Ontario's water resources by minimizing the effects of agricultural practices on the environment, especially as they relate to land-applied materials containing nutrients.”

Also augmenting the Safe Drinking Water Act is the introduction of the Sustainable Water and Sewage Systems Act. This legislation would “make it mandatory for municipalities to assess and cost-recover the full amount of water and sewer services” and is proposed to be implemented in two stages.

Assessing full costs of water and sewage services within a municipality would comprise the first stage, to be followed with developing a plan for the municipality to implement full-cost recovery.

Also included in the late October statement was the government announcement of its first step towards developing a “watershed-based source-protection framework in Ontario”. An advisory committee, with representation from conservation authorities, municipalities, environmental stakeholders and agricultural groups, will “guide the development of the framework”. Ultimately, it is suggested that farmers will need to develop individual farm-water protection plans.

Funding of over $19 million for local groundwater studies will be used to “map sensitive groundwater areas, survey how groundwater is used, and identify wellhead protection areas around municipal wells and potential contaminant sources. The information generated by these studies will help the communities develop local source protection measures”. In addition, $6 million is being spent to establish a provincial groundwater monitoring network. Information is being reported from over 175 monitoring wells already in place and others are being established. The network is intended to provide an earlier warning system for groundwater levels and quality.

Voluntary Labelling Standard for GE Foods
After a protracted debate and two additional meetings of the Canadian General Standards Board (CGSB) Committee following the January vote on the 1st mail-in voting draft of the proposed guidelines for voluntary labelling of foods that are, or are not, products of genetic modification, the 2nd voting draft of the propose standard was issued in late October.

One of the primary differences between the current voting draft and the previous (January) draft, is a change in terminology. The draft labelling standard now uses the term ‘genetic engineering’ (GE) in place of the term ‘gene technology’ used in the earlier voting draft. Otherwise, little has changed, other than a significant rewriting to ensure consistency throughout the document.

The primary reason for extended discussions over the spring and summer was a proposal put forward by Agriculture and Agri-Food Canada suggesting a third option for labelling (aside from ‘product of GE’, and ‘non-GE’) which, in essence, would have allowed labels such as ‘product of GE but does not contain any GE protein or genes’ on products such as canola, soybean and corn oils, and purified corn starches.

Although this proposal did garner support from some participants, it was turned down by all consumer group representatives at a mid-September CGSB Committee meeting, because of concerns with the extra complexity on labels (likely to result in even greater confusion over what the GE/non-GE labels meant) and the additional delay in implementing voluntary labelling if the proposal were to be developed further. (The consumer groups felt such ‘fine-tuning’ could be considered once the basic voluntary labelling standard was established).

Although OCPA voted against adoption of the voluntary labeling standard as presented in the January 2002 ballot, we have decided to support the current draft standard, albeit with some clearly stated caveats.

Our rationale for the ‘Yes’ vote for this draft is as follows:

• the current draft represents a fair compromise for all parties, to attain voluntary labelling of GE/non-GE foods and food ingredients
• the current draft is much improved over the previous drafts
• further delay in implementing voluntary standards for labelling of foods that are or are not products of genetic engineering is not likely to further resolve any significant issues, and thus, would not serve the interests of the CGSB committee
• the standard includes labelling guidelines for both ‘GE/product of GE’ foods and food ingredients, as well as ‘non-GE’ and ‘not a product of GE’ foods/food ingredients
• the 5% allowance for adventitious material (i.e., unintentional mixing from cross-pollination and/or mixing during harvest, handling, transportation and processing) has been maintained.
However, our support comes with several caveats, as follows:
• OCPA still staunchly believes that Canadian consumers and industry would be better served by having a definition/scope for the standard that matches the definition of genetic modification (GM) already entrenched in Canadian food and plant/crop legislation, i.e., ‘novel plants, novel foods’. In the interests of compromise and moving forward with implementation, we will agree to the scope/definition of genetic engineering used for the standard at this stage. Our primary rationale for this position continues to be that the novel plants/novel foods regulations would provide a very clear delineation between what products are novel/GM and what ones are not. The definition for GE used in the standard does not provide that clarity, and will result in some confusion among consumers and industry.
• OCPA agrees that the terminology ‘genetic engineering’ (GE) is a significant improvement over the previously proposed terminology of ‘gene technology’, despite a continued belief that the most appropriate approach for the standard would be consistency with existing Canadian food and plant regulations and use of the consumer-familiar terminology of ‘genetic modification’ (as noted above).
• OCPA is concerned that the draft does not explicitly preclude the labelling of a multi-ingredient food as ‘non-GE’, where there is known to be a GE-derived food ingredient below the 1% content level (including processing aids or any other ‘additive’ or ingredient. This would also apply to foods such as yogurt or beer, for example, if genetically engineered bacteria or enzymes were used in production of these foods). Under a voluntary labelling system, OCPA believes that labelling a food as ‘non-GE’ in these circumstances would be misleading at best or even fraudulent. It is not clear from the text of the draft standard whether or not this type of claim could be made.
• Even with the stated definition of GE, and the list of excluded technologies, additional clarification is needed. For example, modification techniques such as ‘liposome fusion’ and ‘protoplast fusion’ are defined in the standard but are not specified as being part of the GE definition, or on the list of excluded techniques. More problematic is that ‘transduction’ is listed within the definition for recombinant DNA (and therefore included as a GE technique), but is also listed under excluded techniques. (OCPA believes transduction should not be an excluded technique.)
• OCPA has also repeated our request that all references to corn in the example label statements (in Appendix B of the standard) be both factually and contextually correct, in regard to the difference between foods and food ingredients made from sweet corn (where virtually no ‘GE’ crops are grown) and field corn (where substantial amounts of ‘GE’ crops are grown).

Vision Released for U.S. Biobased Incentive Program
The Biomass Research and Development Technical Advisory Committee, established under the Biomass R&D Act of 2000 and comprised of representatives from industry, non-profit organizations, academia and the agricultural and forestry sectors, recently released their Vision for Bioenergy and Biobased Products in the United States.

The Vision outlines goals for biomass use in the U.S. economy and energy industry and calls for “cooperative approaches to expand domestic renewable biomass resources to help supply our energy needs, develop rural economies, and protect our environment”.

The long-term goals outlined in the Vision, to be completed by 2030, are:

• increase biomass consumption for power to 5% of electricity and heat demand in utilities and industry
• increase biomass-derived transportation fuels from the current 0.5 percent of U.S. transportation fuel consumption to 20% in 2030
• increase production of chemicals and materials from biobased products from the current 5% of target U.S. chemical commodities to 25% in 2030.

The Vision also identifies specific near- and mid-term goals to be achieved by the years 2010 and 2020 respectively. A full copy is available at www.bioproducts-bioenergy.gov.

Will initiatives like Agriculture and Agri-Food Canada’s Agricultural Policy Framework (APF) and Industry Canada’s Innovation Strategy be adequate to ensure Canadian agriculture and industry can remain competitive in the face of these massive and well-funded efforts in the U.S.?

New President for Agri-eBusiness Group
Peter Forde, an eBusiness Industry Executive, has recently been appointed as President of Agri-eBusiness Group Inc. (AEBG Inc.), a business alliance formed by the Agricultural Commodity Corporation, Ontario Corn Producers' Association and Ontario Wheat Producers' Marketing Board. AEBG Inc. currently operates a central producer unique numbering system for the commodity groups as well as an electronic grain sales transaction system between elevators and the commodity groups.

Forde brings two decades of technology-sector experience in general management, marketing and financial management roles. Before joining Agri-eBusiness, he was Director of Product Strategy for Xign Corporation of Pleasanton, California and General Manager of Xign’s Canadian subsidiary in Waterloo, Ontario. Forde was a founder of Xign Corporation and instrumental in raising financing for initial operations. He led the definition of Xign’s product vision, which encompassed its business-to-business ePayment and eInvoice products and services. Prior to that, Forde was VP and Chief Technology Officer at Waterloo-based RDM Corporation, and earlier served as VP and General Manager of Spicer Corporation of Kitchener. Forde holds an MBA from York University and a Bachelor of Mathematics from the University of Waterloo.

Forde succeeds Brian Hughes, General Manager and CEO of Agricultural Commodity Corporation, in the President’s role at AEBG Inc. Hughes will continue to serve as vice-president and member on the Board of Directors.

Look for more detail on the vision and future directions for AEBG Inc. – including an expansion of the scope of eBusiness services offered and extension of services to other participants in the food supply chain – in the January issue of Ontario Corn Producer.

Grain Growers of Canada
The Grain Growers of Canada/Canada Grains Council Joint Grains Symposium was held in Ottawa on November 18 and 19, immediately following the Grain Growers of Canada Annual General Meeting.

Deadlines for publication of the magazine prevented the inclusion of convention results in this issue of the Ontario Corn Producer. A full report will be included in the January issue.

On other GGC issues, net income for grains and oilseed farmers continues to be hit by the impacts of foreign interference in the international market. Instead of diminishing, international distortions continue to grow - the most recent Farm Bill in the United States provides a glaring example.

Current safety net programs, like NISA, are based on farm income. For grains and oilseed producers, net income is directly dependent upon distorted world prices. As international subsidies increase, world prices decline, and the amount of help delivered by income-based programs will fall.

Grain and oilseed farmers are hit twice by foreign subsidization and market interference. First because of lower prices, and second by diminishing access to domestic safety net funding.

For this reason, the Grain Growers of Canada maintain that revisions to the safety net programs envisioned under the Agriculture Policy Framework are essential in order to mitigate the impact of artificial world prices caused by foreign interference. This mitigation should be accomplished through a combination of national programs and provincially administered companion programs.

A single national safety net program such as NISA will not meet the needs of Canada's grains and oilseed producers. Provincially administered companion programs, jointly funded by the federal and provincial governments, must be maintained to allow individual provinces to tailor specific programs to meet the unique needs of farmers in their region.

GGC has asked government to adopt safety net programs that will mitigate the negative effects of foreign trade policies and foreign subsidies as part of the ‘risk management’ pillar in the Agriculture Policy Framework. These programs should be in place until the burden of artificial world prices is eliminated.

Other recommendations include policies that would:

• allow producers who have collapsed their NISA accounts to re-enter the program in order to access Transition Funding
• adjust NISA triggers to ensure that growers have access to transition funds
• improve the crop insurance program so that it better covers crop losses caused by natural disasters
• maintain provincial flexibility in production insurance programs
• ensure that investment funds remain separate from income stabilization programs.

GGC continues to maintain that ‘Trade’ must be made the sixth pillar of the Agriculture Policy Framework. Future reductions to foreign subsidies that distort world markets, as well as artificial trade barriers, will have a critical role to play in the effective functioning of our safety net programs.

The current round of negotiations at the World Trade Organization provide Canada with an opportunity to level the playing field and reduce the harm being done to export-dependent sectors by foreign market interference.

Safety nets policies are only one part of successfully securing a profitable future for our grains and oilseed sector. Other components must be brought together as a package of improvements to Canada's agriculture policy. These include the expansion of value added processing (e.g., bio-fuel production) and improvements to the way in which Canada markets its grains and oilseeds. Marketing changes are necessary to ensure our farmers have access to new niche markets and processing opportunities. GGC will continue to be involved in initiatives that promote the expansion of our industry.

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