| Coverage
Completion Deadlines Approaching for Crop Insurance and Market Revenue AGRICORP reports that Crop Insurance sales have increased again for 2002, with an expected increase in total acreage similar to the 7.8% increase achieved in 2001. Application deadlines are now past. Customers must report their final planted acreage for Crop Insurance and Market Revenue by June 30. Crop Insurance premiums are due July 10. |
Safety
Nets
Market Revenue Insurance:
OCPA is anticipating an imminent announcement from OMAF concerning enhancement
to the Market Revenue Insurance program for both old crop and new crop. We have
been pursuing an enhanced MRI program for a very long time. OCPA’s goal
has always been to close the gap between support provided to grain and oilseed
producers in Ontario versus much higher levels provided in Quebec and the U.S.,
and to base support on cost of production rather than 15-year average price.
We have shown that sufficient funding was already available in the MRI pot for
significant enhancement to MRI payments for the 2001/02 crop. No new funding
was required.
The stumbling block to enhanced support had been ‘strings’ attached
to Federal funds in the MRI pot under the old safety net agreement. Lack of
access to these funds supposedly prevented payment percentages from being increased,
and changes to the formula used to determine the support price. The mid-winter
extension of the joint Fed/Prov safety net agreement to include both the 2001/02
and 2002/03 crops was welcomed, but somewhat disappointing because support was
restricted to the existing 85% level with no alteration in support price formula.
OCPA, our grain and oilseed partners and OFA lobbied strenuously for the federal
government to cut those ‘strings’. Thanks to the tireless efforts
of MPs Rose-Marie Ur, Paul Steckle, Murray Calder, Paul Martin, and others,
including their assistants, we understand that Minister Vanclief informed OMAF
late in May that constraints on the usage of residual federal funds in the MRI
pot were dropped. Payment percentage could be changed, federal funds could be
used first, thus ensuring there would be none left at the expiration of the
2-year agreement (thus no longer exposed to the requirement that unused residual
federal funds be returned to Finance in Ottawa).
Ever since the federal government relaxed constraints on the use of federal
funds in the MRI pot in late May, there has been nothing preventing OMAF from
enhancing MRI payments on the 2001/02 crop. Now that the new Minister has had
time to become fully acquainted with the issue, it is time for the provincial
government to move quickly to enhance MRI payments for 2001/02 crop and close
the gap in support that exists between Ontario, Quebec and the U.S. The need
is great; equity is the goal; the funding exists; the constraints have been
cut; all that is needed is the political will to act.
June 20 Federal
Agricultural Policy Framework (APF) funding announcement:
On June 20, the Prime Minister announced Federal funding of “$5.2 billion
in new investments” over 5 years for the proposed new Agricultural Policy
Framework (APF) and claimed “with full participation of the provinces,
the total package announced today is worth $8.18 billion in new investment for
the Canadian agriculture and agri-food industry.” The total package for
the five-year program is worth $13.1 billion, assuming full participation of
the provinces. That sounds like a lot of money, and it is; but “the devil
is always in the details”, of which there are still few.
Current annual safety net funding consists of $600 m Federally in Pool 1 funding
for NISA, Crop Insurance and companion programs such as Market Revenue Insurance.
In addition, another $500 m federally in Pool 2 funding supports the Canadian
Farm Income Program. When both are matched 60:40 by participating provinces,
the result is $1.83 billion per year currently, or $9.1 billion over 5 years.
Therefore, in reality, the $13.1 billion June 20 announcement contains $4 billion
in new money from both federal and provincial governments, assuming full provincial
participation. $2 billion of that new money is represented by ‘transition’
payments which end after 2 years. That leaves slightly less than $2 billion
in joint federal/provincial funding spread over 5 years, or $400 million/year,
to pay for the new requirements and implementation of the other 4 pillars of
the Agricultural Policy Framework (food safety & food quality, environmental
stewardship, science & innovation, and renewal), plus the ‘bridging’
required to get there.
The announcement essentially extends existing federal funding of $600 million/year
used to support NISA, and Crop Insurance for 5 more years, (i.e., Pool 1 funding
matchable 60:40 by the Provinces to provide $600 + $400 = $1 billion/year),
but discontinues support for companion programs such as Market Revenue Insurance
after 2002 crop. Current funding to support the Canadian Farm Income Program
(CFIP) is terminated, thus ending the program. However, the announcement blends
the $500 million/year previously used to support CFIP in with the core $600
million funding to provide $1.1 billion/year in federal money to support enhancements
to NISA and Crop Insurance. The announcement refers to the $500 m/year as ‘new’
federal funding.
The provincial allocation formula for this Business Risk Management funding
proposal is not clear. Under the old safety net agreement, Ontario received
21% of Pool 1 funding, or about $126 m/year. The Pool 2 funding was not allocated,
but paid out whenever disaster struck – provinces matched the portion paid
to their own growers. Ontario historically received about $60 m/year (i.e.,
roughly 12%) of this Pool 2 funding which, when matched with provincial contributions
of $40 m/year, supported payouts under OWFDP/OFIDP of about $100 million annually.
OCPA’s concern is that when the $600 m and $500 m Federal portions are
melded together to provide $1.1 billion in annual support to APF Business Risk
Management programs, what will be Ontario’s allocation?
OCPA is also concerned that companion programs such as Market Revenue Insurance
are terminated after the 2002 crop under this funding program. Ag Canada’s
own analysis concludes that foreign subsidies have reduced prices on average
by about 13%-18%, equivalent to the average gross margin for grains and oilseeds
for the period 1980-2000. In other words, foreign subsidies have eliminated
the gross margin from grain and oilseed production. And NISA and CFIP support
producers at their historic average gross margin, which for grain and oilseed
producers, as Ag Canada has proven, is zero. Only commodity-specific companion
programs – such as the cost-of-production based enhanced MRI proposed by
OCPA – are capable of making up for this foreign subsidy injury. Enhanced
NISA as proposed by the APF will not work because it remains based on historical
operating margins.
| Safety
Net Lobbying The GGC has continued its efforts to get a federal program implemented to compensate grain and oilseed producers for the $1.3 billion in trade injury suffered at the hands of U.S. and EU policy. The GGC proposal has gained a great deal of support, including 28 farm groups from across the country, a constituency that includes every major farm association in and out of the grains sector. Additionally, the three prairie provincial agriculture ministers announced their support for an annual trade injury payment in early May, 2002. Furthermore, the federal government’s own cross-Canada consultations on the Agriculture Policy Framework (APF) revealed concern that the policy framework didn’t include provisions to compensate farmers for trade injury, and confirmed that farmers want such a program. And most recently, the four western Premiers announced their support for an annual trade injury payment on June 6, 2002, at the conclusion of their conference in the Yukon. There is likely no clearer a policy direction for the federal government to take on any other issue as there is on the need for trade injury compensation. GGC Welcomes
Funding Announcement Activity
on Environmental Issues Semi-Annual
Members’ Meeting |
Ethanol Update
According to recent news reports, groups from four Saskatchewan communities
have signed agreements with an American company that will result in the construction
of four ethanol plants over the next three years.
Expanded ethanol production in Saskatchewan has long been a goal of the Saskatchewan
government. In May 2001, Premier Lorne Calvert announced plans for the development
of a ‘Greenprint for Ethanol Production’ that will be released shortly,
subsequent to second reading of the Ethanol Fuel Act currently in the Saskatchewan
legislature.
OCPA applauds the government of Saskatchewan for their recognition of the potential
environmental and economic gains to be achieved through the adoption of a renewable
fuels mandate.
New PCP Act
As indicated in the May/June newsletter, the Honourable Anne McLellan, Minister
of Health, introduced a new Pest Control Products Act to the House of Commons
in mid March. This Act governs
registration
of all pesticides in Canada, including herbicides, fungicides, insecticides,
rodenticides, and many common household products such as disinfectants, pool
chemicals and so on.
Despite a very aggressive timetable for hearings by the Standing Committee of
Agriculture, and a long list of groups and individuals requesting opportunity
to make presentations (many requesting much more stringent approval measures
and/or focussing on having cosmetic pesticide use in urban settings banned),
OCPA and a number of other farm organizations, including AGCare, the Canadian
Horticulture Council, the Canadian Federation of Agriculture, the Grain Growers
of Canada (represented by Don McCabe, Chair of the GGC Environment Committee),
Pulse Canada, and the Canola Council of Canada were able to make presentations
to the Committee in early May. Many common themes were shared by the various
presentations.
OCPA has endorsed several aspects of the proposed legislation (most of which
are already in operation), including:
• applying a science-based approach to the risk/benefit assessment of pesticides
• 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
• 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
• encouraging public awareness of pest control product approval processes
and decisions.
OCPA has also highlighted several concerns with the proposed Act:
• Excessive transparency may limit access to newer safer pest control products.
The proposed Act would permit the public to view the test data on which PMRA’s
pesticide evaluations are based and allow anyone to request that the Minister
undertake a special review of a pesticide product. OCPA requested that the transparency
measures contained in Canadian legislation be comparable to those that exist
within the U.S. pesticide regulatory system.
• Canada’s commitment to harmonization should be enhanced and consistent,
not one-sided. The Act as proposed would require that Canada initiate a special
review of any pesticide product banned by any other OECD country, although there
are obvious 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.). OCPA requested that such
a review be undertaken only if there is clear risk anticipated within the Canadian
context, since any additional assessments or approvals involving that active
ingredient (including submissions already in the ‘pipeline’, such
as additional tank mix partners, expanded list of species controlled, etc.)
would be suspended during the term of the special review. We also suggested,
if the proposed measure is retained in the Act, that Canada should be compelled
to consider registering any new active ingredient when that product is registered
in any other OECD country.
• More encouragement is needed for introduction and approval of newer,
reduced-risk products, especially for ‘minor use’. Only passing reference
is made in the proposed legislation to the minor use issue or the need to address
the ever widening ‘technology gap’ in this area. PMRA seems to walk
‘lock-step’ with the EPA on phase-out of older products, but has not
adhered to the same philosophy as the EPA in ensuring that producers must first
have access to suitable alternatives. This impacts corn directly, for example,
with seed treatments where we face loss of Lindane at the end of 2004, but with
little likelihood of having an effective alternative registered by then. (And
the new product will cost substantially more for growers and industry to use).
• Efficiency and cost-effectiveness of PMRA’s pesticide regulation
should be a key goal. OCPA suggested several opportunities to improve the cost-effectiveness
of PMRA’s operations, without jeopardizing their ability to “prevent
unacceptable risks to people and the environment from the use of pest control
products”, including:
• establishing a stakeholders’ advisory council, as allowed in the
proposed legislation, to advise the Minister on all aspects of the operation
of the pesticide regulatory system
• expanding the use of joint (bi-lateral) assessments of new products and
for re-evaluation of older products
• improving their understanding of client needs and better communicating
PMRA policies and procedures to registrants, to users and to the Canadian public
• focusing more resources on access to newer, reduced risk products, including
for ‘minor use’ applications.
Given access to the same tools, Canadian farmers can compete effectively, continuing
to provide Canadian consumers with a safe, abundant, high quality food supply
produced in an environmentally responsible manner, and at a competitive cost.
The Health Committee is expected to return the proposed PCP Act, with amendments,
for third reading and final debate and passage by the House of Commons prior
to their recessing for the summer.
New Funding
For Pesticide Registration
In late May, Health Canada (HC) and Agriculture and Agri-Food Canada (AAFC)
announced $7.3 million in new funding to support registration of reduced risk
pesticides.
According to AAFC’s news release, $3.3 million will be allocated for coordination
of priorities (in cooperation with growers, industry, and the provinces) and
conducting research on reduced risk and minor use pest control products. This
will include establishing a central coordination body to develop protocols for
field trials and residue analyses, conducting trials to generate data for registration,
and preparing registration submissions. It is hoped minor use registrations
will double through this
Corn registration
It has recently come to OCPA’s attention that the Variety Registration
Office (VRO) of the Canadian Food Inspection Agency (CFIA) is trying to reintroduce
registration for all field corn hybrids, which have been exempt from registration
since 1997. Although OCPA is currently awaiting a response from the VRO regarding
concerns we expressed in recent correspondence to them (more on these concerns
below), a VRO representative has indicated that their primary concern is being
able to track hybrids and ensure accountability (although it is not clear what
this means) in the event that another ‘Starlink’ episode occurs. Since
CFIA’s Plant Biosafety Office reviews and approves novel traits (any trait
outside the normal range traditionally found in corn, regardless of whether
such traits are derived through modern genetic engineering techniques such as
recombinant DNA or ‘traditional’ breeding methods, including mutagenesis),
corn seed companies had already agreed to provide CFIA with a list of all hybrids
containing such novel traits, to address the concerns that arose at the time
of the Starlink problems.
The proposed ‘registration’ is described as a ‘listing’
of all field corn hybrids under a new Schedule C of the Seeds Act. Although
merit data, such as yield, stalk breakage and relative maturity information,
will not be required for the listing, it is not yet clear exactly what other
measures will need to be fulfilled in order to meet the listing requirements.
However, it appears to entail most of the other criteria required for corn prior
to when the registration exemption was granted.
Most seed corn companies have only recently become concerned as they become
aware that the listing may entail more than mere cataloguing of their hybrids.
(They were also more interested in obtaining an ‘exemption’ from registration
for soybeans, similar to that allowed for corn.) These requirements would also
be imposed in full on any individual growers wanting to import a specific hybrid
for their own use.
Interestingly, OCPA has not been officially informed that field corn hybrids
would again be subject to registration, despite the fact that OCPA undertook
a sector-broad consultation (involving seed companies, growers from all provinces,
public breeders and the seed certification industry, as well as users) during
the process of seeking the exemption.
OCPA is very concerned that this ‘listing’ proposal goes far beyond
the measures required to address the concerns that arose from the Starlink episode
and a similar tracking concern with erroneously labeled GMO canola seed a couple
of years ago. OCPA fully concurs with the seed companies offering to list their
novel traits hybrids,as this would involve only minimal cost and effort, and
addresses a specific issue in collaboration with CFIA. However, we fail to understand
what benefits would be served by a CFIA listing of all field corn hybrids, especially
if this involves submission of hybrid description information, pedigree description,
reference sample, etc. (i.e., all except merit data) and the associated ‘cost
recovery’ price tag. Since the current registration exemption over 5 years
ago, no seed corn problems attributable to the lack of registration have occurred
in Canada. However, several benefits have occurred since the registration exemption
was granted, including greater investment by seed corn companies in the Ontario
Corn Performance trials (using funds formerly devoted to registration testing,
the results of which farmers never had access to), more rapid access to new
hybrids thus improving our competitiveness, and increased opportunity to access
specialty hybrids (for example food-grade quality hybrids) which may not have
achieved the performance hurdle required for registration. These benefits may
be in jeopardy if the proposed listing/registration is implemented. And in the
newly envisioned world of value-added products and the bioeconomy being promoted
under AAFC’s Agricultural Policy Framework (APF) and Industry Canada’s
‘Innovation Strategy’, such added regulatory burden could well be
the difference between Canadian growers being able to participate in such markets,
or these opportunities being serviced by U.S. farmers just across the border.
OCPA does agree with the VRO on one point however. For crops subject to Canada’s
variety registration system, the approval criteria should continue to be based
on science-based data such as merit, quality parameters and
Justice Dennis
O’Connor’s Report – Part II on the Walkerton Inquiry
The recently released Part II report focuses on making “recommendations
for improvements to each of the main components of Ontario’s water delivery
system”. Part I dealt with the “events in Walkerton and the causes
of the tragedy”.
The majority of the recommendations arising from Part II of Justice O’Connor’s
report are directed at 5 specific areas: source protection, standards and technology,
municipal water providers, provincial oversight, and special cases (including
First Nations water supplies and small private water systems serving the public
such as campsites, resorts, rural restaurants, etc.).
Recommendations that cite farming or agriculture all pertain to ‘source
protection’, and include:
• The Ministry of the Environment should take the lead role in regulating
the potential impacts of farm activities on drinking water sources. The Ministry
of Agriculture and Food should provide technical support to the Ministry of
the Environment and should continue to advise farmers about the protection of
drinking water sources.
• Where necessary, the Ministry of the Environment should establish minimum
regulatory requirements for agricultural activities that generate impacts on
drinking water sources.
• All large or intensive farms, and all farms in areas designated as sensitive
or high-risk by the applicable source protection plan, should be required to
develop binding individual water protection plans consistent with the source
protection plan. (The report recommends that for small farms not in environmentally
sensitive or high-risk areas, current voluntary programs should be continued
and improved.)
• Once a farm has in place an individual water protection plan that is
consistent with the applicable source protection plan, municipalities should
not have the authority to require that farm to meet a higher standard of protection
of drinking water sources than that which is laid out in the farm’s water
protection plan.
• The Ministry of the Environment should work with the Ministry of Agriculture
and Food, agricultural groups, conservation authorities, municipalities and
other interested groups to create a provincial framework for developing individual
farm water protection plans.
• The provincial government, through the Ministry of Agriculture and Food
in collaboration with the Ministry of the Environment, should establish a system
of cost-share incentives for water protection projects on farms.
Another recommendation in the Source Protection section states: “The provincial
government should ensure that sufficient funds are available to complete the
planning and adoption of source protection plans.” A similar recommendation
“to ensure programs relating to the safety of drinking water are adequately
funded” is made in the Provincial Responsibility section.
These recommendations will clearly have an impact on agriculture, although it
is still too early to judge the extent or cost of the implications. It is likely
that some of these recommendations will be incorporated into the proposed Nutrient
Management legislation and regulations, where this is feasible and compatible
with the draft NM legislation currently being discussed by the Legislature and
Standing Committee on General Government. (The Honourable Helen Johns, Minister
of Agriculture and Food, has stated on several occasions that the nutrient management
legislation is one of her highest priorities.) Others may be implemented under
the proposed Safe Drinking Water Act recommended for enactment, or the Environmental
Protection Act recommended for amendment in Justice O’Connor’s report.
It is also too early to tell whether the ‘adequate funding’ recommendations
might result in some financial assistance for farmers to assist them in taking
the necessary steps to implement measures to protect water sources or to complete
their farm nutrient management plans.
The report does outline overall cost estimates to implement the entire set of
93 recommendations (and Premier Eves has stated his government will do so).
These costs are summarized as:
• $99-$280 million for one-time costs related to implementing the 93 recommendations
• $17-$49 million for annual on-going costs
• $100-$520 million and $41-$200 million in one-time and ongoing annual
costs for steps already taken by the provincial government since the Walkerton
tragedy.
The report suggests the average household cost to address all recommendations
would be between $7 and $19 dollars per year, much less than for “less
essential services such as cable television, telephones or Internet access”.
| Corn Prices - June 11, 2002 | ||
| Period: to Apr. 30 |
Approximate
Tonnes Marketed
|
Average
Weighted Price
|
| 2001-02 |
2,001,900
|
$133.85/tonne
|
| 2000-01 |
1,914,300
|
$125.64/tonne
|
| 1999-00 |
2,688,600
|
$117.44/tonne
|
The above figures are based on levies received by OCPA for commercial sales.
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