• Market Revenue Program Announcement
  
• Agricultural Policy Framework (APF)
  
• Crop Insurance
  
• Grain Growers of Canada Report
  
• New Pest Control Products Act Introduced
  
• SR&ED Tax Credits
  
• Nutrient Management
  
• U of G/OMAFRA Contract
  
• AGCare
• Corn Prices - April 9, 2002

So why is there no interim payment on corn? The 85% Market Revenue support level is only $3.41 per bushel. The average weighted price to February 28, 2002 is $3.42 per bushel. Current projections show no or a very small corn payment for the 2001 crop.

The corn support level in the ‘Made-in-Ontario’ proposal was about $4.03 per bushel, so this announcement is about 60 cents per bushel short of the proposal (40 cents per bushel short, after a one-third deduction).

OCPA’s immediate response was to issue a news release expressing Ontario corn farmers’ shock at this announcement, which was portrayed as addressing a funding crisis in the industry. The two-year extension for 85% support was in fact a 75% cut in support for 2001, versus the 2000 crop year.

The provincial and federal governments provided $90 million and $68 million, respectively, last year to Ontario grain and oilseed producers in order to fight the devastating effects of U.S. subsidies. This year, there is not only no supplemental support, but the promised price support program improvements (Made-in-Ontario program) have not materialized. Quebec values its agriculture industry and provides a much higher level of support for farmers than Ontario.

To compound the shortfall versus what was proposed in the Made-in-Ontario program, the two-year extension, it must be emphasized, applies only to 85% of your average farm yield. So not only is there a 60 cents per bushel (40 cents, after one-third deduction) difference in support level, but you also have a shortfall of 100% of your average farm yield (proposed) versus 85% (announced).

The Market Revenue program at 85% and a one-third deduction is woefully short of what is required for equity with Quebec or the U.S.

Also, please note that the interim payments for grain and oilseed crops are being paid out at 80% of projected payments, not the usual 50%, so your final payment, if any, in late fall will be much smaller.

Our fight is not over. Our goal is still to achieve equity with the U.S. It will take a lot of continuous pressure on MPPs and MPs – especially cabinet ministers at both levels of government.

We also have a major challenge in keeping the ‘companion fund’ dollars that should and would have been flowing into the Market Revenue program from going into NISA enhancements, SDRM enhancements, and even ‘non-safety net’ pillars being touted under the Agricultural Policy Framework proposals.

We have very serious concerns, and have notified both Ministers regarding government proposals to deposit unallocated safety net funds into a ‘Special Project Account’ to fund projects related to risk management, environment, food safety, industry renewal and life sciences (the five pillars emphasized in the Agricultural Policy Framework). It is our position that it is totally unacceptable to use funds allocated to the safety net budget for purposes other than safety nets.

The Market Revenue announcement falls far short of what had been anticipated by the Made-in-Ontario safety net working group. The announcement does not in any way address the recommendations of the group for program enhancements to Market Revenue Insurance.

Grain and oilseed producers are tired of being caught in the cross-fire of a political struggle between a provincial PC government and the federal Liberal government.

Furthermore, Quebec, which has an agriculture industry two-thirds the size of Ontario, provides support at a level of 19.6 per cent of provincial agriculture Gross Domestic Product (GDP), compared to Ontario’s 9.4 per cent. In 2001, grain and oilseed farmers in Quebec will receive $79.24 per acre compared to Ontario grain and oilseed producers at $33.58 per acre.

Agricultural Policy Framework (APF)
As detailed in our last newsletter, the ‘APF machine’ started up with a series of workshops scheduled across Canada from March 27 to April 19.

OCPA reps attended the grain and oilseed consultation in London on March 27 and were not impressed. Rather than repeating our observations that were provided in our April newsletter, suffice it to say that our fears are well-founded. These workshops fall short of the need for extensive consultation via broad-based advisory committees. We repeat: rushed inadequate consultation is no substitute for broadly based review and significant opportunities for producer input. The stakes are too high.

The series of colour brochures provided during this consultation are available at: www.agr.gc.ca/ puttingcanadafirst.

OCPA is now in the process of drafting our own agricultural policy framework document.

Crop Insurance
OCPA will be meeting the AgriCorp crop insurance committee on April 18 to discuss concerns centred on large premium increases for producers who have moved from a discount position to a surcharge position.

More details will be provided in our next newsletter.

Grain Growers of Canada Report
The Grain Growers of Canada's (GGC) agenda continues to be busy, with work on the policy direction set at the November 2001 annual meeting continuing. Safety net policy, grain marketing, the Agricultural Policy Framework consultations and a strategic planning project have been among the key initiatives the GGC is working on.

Trade Injury Compensation Program (TICP)
The GGC continues with its efforts to build support for the TICP among fellow farm groups as well as policy makers in Ottawa. GGC developed the TICP proposal to compensate grain and oilseed producers across the country who, according to AAFC analysis, are absorbing economic injury to the tune of $1.3 billion per year. The injury is caused by U.S. and EU grain subsidies. Signals from Washington and Brussels do not indicate intentions to retract subsidies any time soon, making the TICP a necessary government response for Canadian growers who cannot escape the collateral damage European and U.S. programs impose.

The GGC executive committee, which includes OCPA director Don Kenny, met with senior government officials and key Members of Parliament in late February to discuss the TICP proposal. There is no denying the impact that foreign subsidies have had on Canadian growers, and policy makers are struggling with regard to the hard decisions that will have to be made on future safety net policy. The GGC is working to position the TICP proposal as a core part of the next generation of safety net policy.

Following late February and early March meetings, AAFC officials pledged to bring the TICP proposal forward to the federal-provincial working group investigating safety net options for Ministers of Agriculture to consider for the next generation of safety net programs. Meanwhile, MPs from both sides of the House of Commons vowed to bring the TICP proposal before their caucuses for consideration. The GGC made another presentation to the National Safety Nets Advisory Committee, the body that advises Minister Vanclief on safety net policy, regarding the TICP proposal in early April 2002.

Farm group support for trade injury compensation took a significant step forward with the Canadian Federation of Agriculture (CFA) passing a favourable resolution at its recent annual meeting. This was reported in the April 2002 OCPA newsletter. The CFA and GGC have since agreed to collaborate in lobbying for trade injury compensation, and in early April 2002 issued a joint statement to national media and politicians in Ottawa. The statement outlines strong support for "the federal government to introduce a program that compensates

Grain Marketing
Providing farmers choice in grain marketing is a key plank of GGC policy, and the association continues to move forward on this front. The debate on grain marketing is quite mature in western Canada, in particular, and it is clear that farmers generally want options, ranging from cooperative marketing to negotiating sales independently. Ontario producers, for example, have such a range available to them now. The GGC has developed a discussion paper on grain marketing that incorporates options offered by, for instance, organizations like the Ontario Wheat Producers' Marketing Board and similar grain marketing agencies in Australia. With the discussion paper, the GGC intends to initiate a dialogue with stakeholders on making changes that provide the range of marketing options that farmers in the west desire. To take discussion on this policy issue to the next step, the GGC will meet with directors of the Canadian Wheat Board in April to discuss the paper and attempt to engage their collaboration in developing marketing options further.

Agricultural Policy Framework & Strategic Planning
The development of the pillars of the Agricultural Policy Framework (APF) has stepped up a gear with the start of stakeholder consultations led by Government Policy Consultants, an international lobby firm.

The meetings are taking place across Canada, with a number of specific grains and oilseeds meetings taking place. The 5 pillars of the APF relate to risk management, science and innovation, renewal, food safety and the environment. And the purpose of the exercise is to advance on each pillar in order to position Canadian agriculture for the 21st century and to ‘brand’ Canada as a leader in innovation, food safety and environmental management.

There are many good ideas in the APF. Criticism shouldn't focus so much on what's in it as on what is missing - i.e., objectives regarding the international trading environment. For the grains and oilseeds sector, which is tightly integrated into international markets and prices, the competitiveness of the international trading environment is a critical target at which policy should be aimed.

The GGC has been coordinating a message into the APF consultations across the country that a 6th pillar should be added to the APF, and it should be geared to improve the competitiveness of the international trading environment. As concrete measures, the GGC strongly advocates a two-fold approach: 1) launch the TICP program; and 2) pursue aggressive trade liberalization through the World Trade Organization. An open and competitive international trading environment is crucial if the APF is to benefit all agri-food sectors. GGC members delivered this message at APF grains and oilseeds consultation meetings from British Columbia through Ontario and Prince Edward Island.

It is, indeed, worth reconsidering the direction of agriculture policy and to consider different options for federal resource allocation. Old ideas must be evaluated against new environments. This is particularly true for the grains and oilseeds sector. Accordingly, the GGC has submitted a proposal to AAFC that would have the GGC lead a strategic policy review for the grains and oilseeds sector. Under such an initiative, consultative meetings would be held with farm and industry stakeholders and strategic options would be recommended to achieve long-term economic growth for the sector. Sources within AAFC report that the proposal is being strongly endorsed by senior officials, and that the GGC should expect substantial federal funding to lead the project.

New Pest Control Products Act Introduced
As one of her first acts in her new role, Health Minister Anne McLellan introduced the proposed Pest Control Products (PCP) Act on March 21, and second reading occurred on April 8. The proposed PCP Act will now go to the Standing Committee on Health for hearings and consultation prior to third and final reading.

A new PCP Act has been ‘on the books’ for most of the past decade following the Pesticide Registration Review that occurred in the late 1980s. However, previous Health Ministers did not introduce the potentially contentious legislation, since most of the aspects addressed by the proposed law were in fact already being implemented in the daily operations of the Pest Management Regulatory Agency (PMRA).

Such is still the case – most of the progressive components to be included in the proposed Act have already been implemented in practice. For example, requiring special protection for infants and children; taking into account pesticide exposure from all sources, including food and water; considering cumulative effects of pesticides that act in the same way; and supporting pesticide risk reduction, for example, by encouraging the registration of lower-risk products and ensuring that only pesticides that make a useful contribution to pest management are registered. As such, OCPA can be supportive of most aspects of the proposed bill.

There are some aspects of the proposed legislation that OCPA finds particularly disturbing though, and for which we will be seeking alterations.

First is the proposal that Canada must initiate a review of any pesticide active ingredient if the active ingredient is under review or deregistered in any other OECD country. This would suspend any additional registrations involving that active (including submissions already in the ‘pipeline’, such as additional tank mix partners, expanding the species controlled, etc.) during the term of the review. While there may be some circumstances under which such a review could be warranted (i.e., if new safety or toxicological concerns surface), there are often very different reasons why a review might be needed in one country but have no bearing in another (different environments, different pest complexes or pest population dynamics, different use patterns, etc.). Using the same logic on which this provision is based, Canada should register any new active ingredient when that product is registered in any other OECD country.
(Unfortunately, past experience with the PMRA suggests this is not likely to happen, even when environment, use patterns and all other major considerations for a product are comparable in both countries.)

An even more alarming provision of the new PCP Act is the unprecedented ‘transparency’ measures proposed. These would include, (but are not limited to):

• establishing a public registry to allow access to detailed evaluation reports on registered pesticides

• allowing the public to view the test data on which these pesticide evaluations are based

• allowing anyone to request the Minister to undertake a special review of a pesticide product.

OCPA has no particular concern with the first of these, but while the latter two provisions may seem reasonable on the surface, they could be seriously problematic. For example, PMRA hires highly trained scientists to evaluate the data on toxicology, environmental fate, user and nontarget exposure, efficacy, etc., etc. The number of people in the general population having the expertise and training to appropriately interpret the test data submitted by companies (registrants) would be miniscule.

Interpretation by everyone else would be seriously flawed. Further, such ready access by the public to company data that often requires disclosure of proprietary business information will be one further reason that companies may delay, or avoid altogether, a registration submission in Canada, thus disadvantaging our agri-food sector even more than it already is. Further, what measures will the Minister or PMRA put in place to prevent frivolous or vexatious requests for special reviews to be done, a tactic that anti-pesticide activists could use to seriously tie up PMRA resources that could otherwise be applied to review and approval of newer, reduced risk products?

Finally, and perhaps most serious of all, is the only passing reference to the need to address the ‘technology gap’ faced by the minor use/minor crops sector. As most OCPA members will know, the number of products registered in Canada for minor uses has been falling further and further behind those approved by EPA for use across the border. But Canadian horticultural growers’ produce (without access to the newer, safer pest management tools) must compete directly with the U.S. produce (for which these tools have been approved) on Canadian grocery shelves. The proposed Act does little to allay concerns that this problem will be addressed.

SR&ED Tax Credits
Since the announcement in very late February by the Canada Customs and Revenue Agency (CCRA) of the new Scientific Research & Experimental Development (SR&ED) Tax Credits (see the article in the March issue of the Ontario Corn Producer), OCPA has learned some additional pertinent information through meetings with CCRA personnel.

Despite the provision for the program to be retroactive to research expenditures (investments) since January 1, 2001, such investments would be eligible only if OCPA had had all other conditions satisfied as of that date. The primary condition that OCPA did not have satisfied was a resolution from a members’ meeting or constitution clause stating that “OCPA is designated to act on behalf of its members in all matters related to SR&ED tax credits”. OCPA passed a resolution to this effect at our annual meeting in March 2002, meaning that only research expenditures after that date are likely to be eligible for the SR&ED tax credits (and then, only if they meet the other SR&ED eligibility criteria).

Despite the potential costs for unquantified benefit, OCPA plans to take the necessary steps for our members to be able to claim the SR&ED tax credit on your personal tax returns (see March article for details). If it turns out that OCPA’s 2001 research investments are indeed eligible for the tax credits, members will be informed and will be able to claim these credits on their April 2003 tax returns.

Nutrient Management
While there has been no activity by the Provincial Legislature on the proposed Nutrient Management Act since its recess prior to Christmas, farm groups have been moving forward. AGCare member groups have reviewed the proposed legislation for all aspects that may have implications for crop production, and have developed guiding policies on these to be used in the upcoming discussions expected on regulations to accompany the Act, once it is approved.

U of G/OMAFRA Contract
OCPA understands that a new contract has been signed by OMAFRA and the University of Guelph, governing the broad aspects of the $50.5 million in research, education and laboratory services operated by the University and funded by OMAFRA. Although not party to the details of the agreement signed at this stage, we understand that there are still some significant negotiations ahead in regard to the actual budget items funded and the specific cuts that need to be made in the University programs to operate within the allotted budget.

Members of the Ontario Field Crops Research Coalition (OFCRC) have been in discussion with senior University and OMAFRA personnel on the cuts suggested for the field crops area, as have commodity representatives for the livestock and horticultural sectors. The objective of these discussions has been to minimize the long-term impact of the required cuts, protecting strategic research personnel and resources. It is still too early to provide details or to assess whether our efforts have been successful.

AGCare
Following the recent AGCare Annual Meeting, AGCare has re-established its committees for the coming year.

• Pesticides Committee: Chaired by OCPA’s Don McCabe, the immediate focus will be on the recently introduced Pest Control Products Act, and moving forward on the same ‘equitable access’ issues that have existed with pesticide regulation for some time – addressing the minor use technology gap; improved harmonization with U.S. approvals; encouraging submission of new registrations for joint PMRA/EPA review. AGCare’s efforts on these issues will need to be coordinated with national grains and oilseeds and horticultural crop organizations in order to gain ground.

• Nutrient Management/ Water Quality: John Morrison, representing the Ontario Wheat Producers on AGCare’s Board of Directors, chairs this committee. The main task at hand will be to ensure the interests of Ontario’s field and horticultural crop producers are looked after throughout the negotiations in the coming year on the regulations to accompany the nutrient management legislation.

• Biotechnology: Quentin Martin, AGCare Director from the Ontario Seed Growers’ Association, continues as Chair of this committee. The ongoing discussion on labelling of GM foods, as well as challenges to the science-based Canadian approach to regulation of GM (novel) traits are the main issues anticipated at this stage. Challenges presented by the introduction of new traits (including issues such as pest resistance management, market channeling, etc.) may arise as well.

The Chairs of these three committees will join Mary Lou Garr (Chair), Peter VanderZaag (1st Vice-chair) and Greg Hannam (2nd Vice-chair) on the AGCare Executive for the coming year.

In each of the above areas, aside from the obvious government consultation activities needed, AGCare will play a substantial public awareness role for the non-farm populace. Presenting farmers’ perspectives (via media, health and food professionals, educators and other respected information sources sought out by consumers) on these issues, along with information on the many environmental and quality protection initiatives undertaken, will help consumers better understand modern farm practices and the associated environmental and food quality issues.

1