Safety Nets In Ontario
by David Morris

Speaking at the OCPA Semi-annual Meeting, Steve Duff, with the Ontario Ministry of Agriculture and Food, explained that the previous federal-provincial safety net agreement, under which programs like NISA, Crop Insurance, Market Revenue Insurance, the Cash Advance Program and Disaster Assistance were delivered, came to an end on March 31, 2003. The contentious Agricultural Policy Framework (APF) is Ottawa’s proposal for the next version of this agreement.

At this point, the federal government appears determined to include only two types of programs: production insurance and income stabilization. Most significantly from Ontario’s perspective, it does not include a replacement for the Market Revenue Insurance program.

The proposed income stabilization program has some serious weaknesses for Ontario. Coverage would be provided through the Canadian Agricultural Income Stabilization Program (CAISP), a combination with elements of both NISA and disaster relief. There are two major flaws with CAISP. Firstly, pay-outs would be based on producers’ own production margins over the previous five years. In an era of chronically declining margins, this would lock producers into progressively declining support and negative margins are not covered. Secondly, to enroll in the program, producers must make an up-front cash deposit equivalent to 14% of their reference production margin, thereby locking up cash needed to meet operating and living expenses.

The Ontario government has taken a firm stand that it will not sign the agreement to implement APF until the deficiencies in it have been corrected and it receives endorsement from Ontario producer organizations. If the Ontario and the federal government are unable to come to terms, the availability of the Cash Advance Program is in doubt for this fall, because of federal insistence that it be delivered through APF. With respect to NISA, Mr. Duff expressed the opinion that, regardless of what happens, Ontario producers would be able to draw on NISA for one more year. Similarly, he indicated that there appears to be sufficient reserves in the Market Revenue Insurance program to cover the pay-outs for the 2003 crop. After that, it remains to be seen whether Ontario could provide more assistance than would be equivalent to its current 40% contribution to risk management programs.

Ag Minister Provides an Energetic Start to the Semi-annual Meeting
Helen Johns, Minister of Agriculture and Food and the PC candidate for Huron-Bruce, was the lead-off speaker at the OCPA Semi-annual Meeting. She began her high-energy speech by thanking the OCPA for its on-going contribution and commitment to the development of Ontario’s position on the many issues facing agriculture today. In reviewing the agricultural initiatives of the current government, she restated her commitment to not sign the APF implementation agreement until it has met with the approval of the farm groups of Ontario. In particular she endorsed the two central preconditions established by the Ontario Agricultural Commodity Council: joint government funding of programs outside the APF to offset economic injury caused by foreign government action, and joint government funding of a replacement program for Market Revenue Insurance. She commended the farm organizations of Ontario for the unity which they have shown in their response to the APF. She also expressed the hope that they will maintain this united front in the face of the pressure that is likely to be put on some groups by the federal government. Her frustration with the lack of flexibility on the part of the federal government and its pressure tactics with respect to the APF was evident throughout her presentation. She summed up her resolve to hold firm by saying, “I’ve got news for Lyle. I’ll sign the APF when it’s good for the farmers of Ontario.”

With respect to the issues reflected in the two preconditions, Ms. Johns said that she believed that the responsibility for compensating farmers for trade injury should rest solely with the federal government. She added, however, that she would willingly sign a deal with a 60:40 split, if that’s what it takes to get something in place. She was very clear that Ontario would not go it alone on this front. The Minister did promise that
Ontario would go it alone, if necessary, to maintain the current Market Revenue Insurance program for the coming year, while continuing to push for a replacement program based on 60:40 cost-sharing with the federal government.

Ms. Johns went on to highlight other key elements in the Conservatives election platform, geared toward improving the economic sustainability of agriculture, strengthening rural communities, and protecting the family farm. She promised to work to create new opportunities for Ontario agricultural products. Ms. Johns indicated that the ethanol industry would get a major boost under a Conservative government. There would be a requirement to increase the ethanol content of motor fuels. This would be coupled with incentives to increase production in Ontario, most notably a 100% tax deduction for companies building new facilities. The Minister also envisions the creation of a new Bio-Products Research Institute, whose purpose would be to create and promote opportunities for new use of agricultural products.

Ms. Johns said that she was proud of the Conservative platform because it fills the vision she has for Ontario agriculture and promised to continue to work with the industry to ensure that the policies of the government are right.

Steve Peters Offers the Perspective of the Provincial Liberals
Steve Peters, Liberal candidate for Elgin-Middlesex-London, promised that a Liberal government would “get serious with the issues”, especially trade injury. He said that it’s time for the government to show pro-active leadership and make the Ontario agricultural industry, now the second largest industry in the province, the best in the world.

He pointed to his experience as Mayor of St. Thomas in bringing economic development to that city as an example of the kind of leadership he could provide as part of the government.

Mr. Peters was critical of the position of the federal government with respect to the APF. He promised to work with the federal government to develop programs that meet the needs of Ontario producers and endorsed the two central preconditions of the OACC for signing the APF, (i.e., trade injury compensation and market revenue insurance). “The federal government needs to learn that a ‘one-program fits the whole country’ approach does not fit Ontario,” he said. “The APF is clearly not in the best interest of Ontario’s grain and oilseed producers. It is not appropriate for the province to sign.” Mr. Peters criticized Ottawa for attempting to play one sector off against another in trying to get the APF ratified. “You can’t sell out one sector to help out another. It has to work to the benefit of all producers”, he said.

Mr. Peters said that part of the Liberal platform contains an “aggressive strategy to clean up the air”, which includes the requirement that all motor fuels would be required to contain a minimum of 5% ethanol by 2007, and 10% by 2010. Mr. Peters sees this as a way for all sectors of society to win together. Agriculture benefits from the increased demand for grains; rural communities benefit from economic development; and the rest of the province benefits from cleaner air. It was Mr. Peters’ goal to see 5 new ethanol plants built within Ontario.

Mr. Peters said that he looks forward to developing a strong working relationship with the agricultural industry as they jointly create programs to benefit Ontario agriculture. He concluded by thanking groups like the OCPA for helping to educate him, an urbanite, about the importance of agriculture to this province, and promised to work with the industry to similarly help educate the rest of the urban populace.