INDEX Safety Net Update Optional Unit Insurance Coverage Trade Injury Compensation Program 2002 OCPA Executive and Board 2002 OCPA Convention Thank You to Sponsors Agricultural Policy Review Corn Prices

Rural Liberal MPs, led by Rose-Marie Ur, MP for Lambton-Middlesex-Kent, and Paul Steckle, MP for Huron-Bruce, are working hard trying to convince federal finance minister Paul Martin to change this policy, as are OCPA directors and staff (who have met Mr. Martin three times since late February on this issue).

The Ontario cabinet must also agree to use unallocated funds to provide an MRI top-up. Several Ontario cabinet ministers have a strong aversion to agricultural support programs regardless of justification and need. Strong opposition also comes from the Ontario Ministry of Finance. OCPA staff and executives have met with many cabinet ministers and Finance officials in recent weeks trying to garner support.

The uncertainty is augmented by the assumption that there will be a major cabinet shuffle soon after the March 23 leadership vote. Some leadership hopefuls have expressed solid support for farm safety net programs - notably Ms. Witmer, and in more cautious tones, Mr. Eves. But others seem less supportive, with the emphasis being on lower taxes and reduced government spending - not a positive sign for those seeking enhanced safety net support.

OCPA directors have no intention of giving up. We’ve presented a strong business case to two levels of government - demonstrating financial need, injury caused by U.S. subsidies, the efficiency of corn production in Canada versus the U.S., the effects on $300-400 million in expected new processing-plant investments in Ontario, and a formula for meeting grain and oilseed producer needs with no additional government expenditures until fiscal 2003/04.

Now it’s up to governments to respond.

Ontario grain and oilseed farmers have tried to work with both levels of government to come to a successful resolution to the severe financial conditions plaguing farmers, including enhancement of the Market Revenue Insurance program. Statistics Canada figures demonstrate the grains and oilseed sector continues to experience substantial decreases in on-farm revenue, down $126 million in 2001, while other agricultural sectors show positive advances. The figures prove that the U.S. support payments, 95% of which will go to grain and oilseed producers, have had a devastating effect on market prices.

We express our appreciation, again, for the support which we’ve received from other Ontario farm groups and from Jim Grey, president of Casco, for our efforts.

At a recent meeting of the Standing Committee of Agriculture and Agri-Food in Grand Bend, Ontario, Charles Regele, president of the Huron County Federation of Agriculture, made a particularly powerful presentation on behalf of Ontario grain and oilseed producers. It was much appreciated.

Optional Unit Insurance Coverage
AGRICORP is extending the Optional Unit Coverage (OUC) pilot program for another year. Optional Unit Coverage is an insurance product designed to respond to the needs of large producers who farm over a wide-spread area with varying levels of risk.

Under Optional Unit Coverage, coverage levels are based on the number of units a grower has and the size of the smallest unit within the operation. These criteria are used to determine the OUC deductible. This deductible is applied to the level of coverage the producer chooses for each crop.

To obtain more information or to apply for the 2002 Optional Unit Coverage Pilot Program, call AGRICORP’s Customer Action Centre, toll-free at 1-888-AGRI-999 (1-888-247-4999) by May 1, 2002.

Trade Injury Compensation Program
The proposal for a national Trade Injury Compensation Program (TICP), developed by the Grain Growers of Canada to compensate Canadian grain and oilseed farmers for an estimated $1.3 billion in annual losses caused by U.S./EU subsidies, is receiving growing support. The injury for corn producers is estimated at about $0.65/bu. The proposal is that support would be based on historical farm production, just as with the ‘AMTA’ program in the United States. This would make it ‘WTO-green’ and non-trade distorting according to U.S. designations.

Thanks to solid support from some Western Canadian members, the TICP received cautious support at the recent annual meeting of the Canadian Federation of Agriculture. (Support was less forthcoming from some Eastern members who felt that the money should be more evenly distributed to all farmers, regardless of whether they had been injured by direct U.S. subsidy policies or not - the old ‘entitlement’ versus ‘need’ rationale.) The TICP program would mean that all grain and oilseed producers would be treated equally, i.e., in comparison with U.S./EU injury, regardless of province of production.

The TICP proposal has also received solid support from other Western farm groups that are members of neither the Grain Growers of Canada nor the Canadian Federation of Agriculture. And we’re pleased with the support expressed by Members of Parliament from several parties.

Agriculture and Agri-Food Canada officials and Mr. Vanclief do not seem supportive, claiming that Ottawa should not be seeking to match U.S. support programs. They also suggest that the TICP program could still invite U.S. trade action even if it is ‘green’ and similar to the U.S. program. It sometimes appears that ‘risk of trade action’ is used by folks in Ottawa to oppose anything that they don’t want to do.

OCPA supports this approach strongly, and views the TICP as a possible replacement program, at least in part, for when the 85% MRI program is expected to end after 2002/03. (OCPA has promised Mr. Martin that, if he agrees to allow Ontario to fund 2001/02 and 2002/03 85% MRI payouts entirely out of the existing account balance, we will not seek another extension after 2002/03. The goal is to have something else, national or Ontario-specific, in place by then.)

2002 OCPA Executive and Board
Dennis Jack was elected to a second term as president of the OCPA at the association’s 19th annual meeting in London, Ontario on March 6.

Dennis Jack

Joining Jack on the OCPA executive for 2002/2003 will be Mat Menich (Region 7), 1st vice-president; Don McCabe (Region 14), 2nd vice-president; Larry Cowan (Region 12), 3rd vice-president and Fred Wagner (Region 5), treasurer. The board of directors approved the election of a 3rd vice-president for 2002/2003 to replace the retiring past president. The position exists until the position of past president is no longer vacant.

The OCPA board of directors welcomed two new members. Steven Byvelds was elected to the position of director for Region 1 and Jeff Davis was elected in Region 13. The director’s position in Region 4 is vacant at this time but will likely be filled at a meeting on March 26.

OCPA expresses its appreciation to three retiring directors: Anna Bragg, past president (Region 4), Bud Atkins (Region 1) and Krin Dieleman (Region 13). The association wishes them well in their future endeavours.

2002 OCPA Convention
The 2002 OCPA convention took place in London with excellent attendance from producers.

Speakers on the program covered a wide variety of issues, including the grain and oilseed markets, nutrient management, the U.S. Farm Bill, ethanol and other grain producer issues of national importance.

Safety nets were at the top of most producers’ minds as Ontario’s Minister of Agriculture, Food and Rural Affairs, the Honourable Brian Coburn, opened the convention. The minister expressed his concerns about the federal government’s intransigence on providing an Enhanced Market Revenue Insurance program for the 2001/2002 crop years. Producers expressed their frustration to the minister regarding the lack of progress on addressing shortfalls in on-farm revenue caused by increasing U.S. subsidies for grain and oilseed farmers south of the border.

Anna Bragg Anna Bragg was director for Region 4 on the board of directors of the OCPA for ten years. Anna served as OCPA president from 1999-2001 and has represented OCPA in a number of coalition efforts and organizations. Anna will be focusing on her business operations – Bragg Custom Farming Ltd., Foston Farms, Bragg Wild Bird Seed and Bragg Health Service.
	Bud Atkins Bud Atkins was the director for Region 1 for 11 years. Bud helped to spearhead the development of an ethanol-from-corn facility in Cornwall, Ontario and is the president of Seaway Valley Farmers’ Energy Cooperative.
Krin Dieleman Krin Dieleman served on the OCPA for nine years representing Region 13, including as chair of the OCPA Farm Financial Programs Committee and OCPA’s representative on the board of ACC. Krin enjoys travelling and plans to spend more time with his family farm operation

OCPA expresses its appreciation for the excellent presentations made throughout the day:

• Brian Doidge laid out the needs of Ontario grain and oilseed producers facing market prices depressed by high U.S. subsidies and detailed what would be required to provide farmers with an adequately funded MRI program.

• Kevin Brosch, DTB Associates, Washington, D.C., explained what developments are taking place in the U.S. to reach a successful conclusion to U.S. Farm Bill negotiations. Brosch explained that Congress agreed to a fast-tracking of WTO talks in exchange for President Bush signing the final legislation.

• Brian Kriz, president of the Grain Growers of Canada, detailed the activities of the organization and the efforts being made to develop a national voice on safety nets, trade and other issues on behalf of Canada’s grain and oilseed producers.

• Bliss Baker, president of the Canadian Renewable Fuels Association, updated corn producers on the state of the Canadian ethanol industry and pointed to higher support mechanisms for U.S. ethanol producers and the threat it poses to the expansion of the Canadian industry.

• Greg Stewart, OMAFRA corn specialist, provided producers with a production update.

• Janet Wightman, Executive Vice-President and C.O.O., Farm Credit Canada, examined the financial outlook for farmers heading into another crop year.

• Gordon Miller, Environmental Commissioner of Ontario, spoke to the decisions that need to be made to address environmental concerns in Ontario and what concessions the public must be willing to make to ensure progress on environmental issues in rural Ontario.

• Greg Wall, Senior Scientist, Soil Resource Group, Guelph, spoke on nutrient management and the economic opportunities, in addition to environmental benefits, farmers could receive from nutrient management planning. Wall viewed new legislation as one way to deal with water quality issues and issued a challenge to producers to show responsible nutrient use.

The presentations by Bliss Baker, Gordon Miller and Greg Wall are covered in articles by David Morris and Bliss Baker elsewhere in this issue of the Ontario Corn Producer.

The entertainment for the evening was provided by the Second City Troupe Comedy Revue. The style of the troupe, and involvement of those in the audience in comedy sketches, provided some additional humour for those attending the annual banquet.

Thank You to Sponsors
OCPA expresses a special thanks to the following sponsors of the 2002 annual convention:

• Pioneer Hi-Bred Limited, which sponsored the banquet entertainment, the Second City Troupe Comedy Revue

• BASF Canada Inc., which sponsored morning speaker Kevin Brosch, DTB Associates, Washington, D.C

• Agricultural Commodity Corporation sponsored the wine for the banquet

• DuPont Canada Inc. which sponsored the refreshment breaks.

OCPA would also like to express appreciation to many sponsors who participated in the annual convention:

• AgriCorp
• Agri-Food Laboratories
• Agricultural Commodity Corporation
• Agrotain International
• Almar Grain Systems Ltd.
• Alpine Plant Foods Corporation
• Aventis CropScience Canada Company
• BASF Canada Inc.
• Bayer Inc.
• Direct Seeds Inc.
• Dow AgroSciences – Mycogen Seeds
• DuPont Canada Inc.
• Farm Credit Canada
• Innovative Farmers Association of Ontario
• John Ernewein Limited
• Lambton Conveyor Ltd.
• Maizex Seeds Inc.
• Monsanto Canada Inc.
• Ontario AgRadio Network Inc.
• OSCIA – Environmental Farm Plan
• Pickseed Canada Inc.
• Pioneer Hi-Bred Ltd.
• Pride Seeds
• Ridgetown College, University of Guelph
• Syngenta Crop Protection Canada Inc.
• UPI Inc.

Agricultural Policy Review
In 2000, Samy Watson became Deputy Minister of Agriculture and Agri-Food, a department known within federal circles for its frequent cries for government support. Watson set out to change that, through a series of presentations and talks across the country, then by developing an Agricultural Policy Framework (APF) that was endorsed by Canadian ministers of agriculture in mid 2001, and by convincing the federal cabinet to fund the strategy through commitments announced in the December 2001 budget. Next step is to have essential elements approved by Canadian ag ministers at their mid 2002 meeting.

There are many positives in Watson’s initiative. Emphasis on change and innovation, and attention to opportunities and challenges of the twenty-first century, are most welcome. They match many existing OCPA priorities. The five themes that make up the focus of APF - environment, science, safety nets, food safety and renewal - are praiseworthy, but limited. (Markets, marketing, business management and technology transfer are missing from the list.)

Still, the APF represents the most significant agri-food policy review and reorientation at the national level in Canada since former agriculture minister Don Mazankowski and provincial ministers did a similar review in 1989 through 1990.

While OCPA applauds the current initiative, it also has some major concerns in the areas of content and consultation.

Some content is familiar territory for Ontario corn producers. There is a strong emphasis in the APF on value-added development, exports of processed products versus commodities, and development of new non-food products. Nothing new for an Ontario corn industry where industrial processing has increased nearly 60% in five years, where net exports of bulk corn have mostly been replaced by exports of processed products, where fuel ethanol production has grown substantially, and substantial producer and public funds support research on new value-added opportunities.

LONDON SUPPORTS ETHANOL BLENDS London’s deputy mayor Russ Monteith was on hand for the OCPA convention to receive a presentation by Market Development Committee chair Doug Eadie and Elgin County director Jeff Davis. The City of London is converting its gasoline stock to MMT-free ethanol-blended fuels in an effort to address growing smog concerns.

Environmentally, Ontario farmers have led governments in environmental farm planning, responsible pesticide usage, nutrient management planning, support for biotechnology for environmental improvement, and more. OCPA promoted initiatives to reduce net greenhouse gas emissions - reduced tillage, soil carbon sequestration, renewable fuel usage and nitrogen fertility research - years before Agriculture and Agri-Food Canada became interested.

Also disconcerting is a planned 15% shift of research dollars from ‘plant and animal’ research to research on ‘bio-products and processes’. But new products for bio-products and processes must include new crops bred for these purposes (early-maturing white corn; food-grade soybeans; lower toxin levels in wheat). The shift in emphasis could cause substantial disruption, with no net benefit or real change in direction.

An underlying theme in APF documents is that safety nets have not worked because of continued dependence. It’s like saying that health insurance doesn’t work because people keep making claims. Droughts occur; it rains too much; insects, diseases and aphids attack; prices plunge unexpectedly.

Safety net programs will always be needed.
APF-related documents from AAFC criticize safety nets because they sometimes augment farm income. Of course they do. In grains and oilseeds, where injurious U.S. and EU subsidies depress Canadian farm income by more than one billion dollars per year, Canadian farm support programs are needed to relieve some of this burden.

Mazankowski understood this need well in his ag policy review of more than a decade ago. Safety net changes and enhancements (leading directly to the introduction of GRIP and NISA for grain and oilseed farmers - to counter high U.S. and EU grain subsidies) were basic to his approach.

A recent AAFC safety net analysis criticizes Market Revenue Insurance (Ontario’s GRIP) because “it could slow adjustment out of the grain and oilseed sector”. Contrast this with recent statements by Jim Grey, president of Casco, emphasizing the critical importance of a stable supply of Ontario-grown corn. You can’t have a prosperous secondary grain and oilseed processing industry, with link to new-age products, without a healthy industry for farmers growing the basic crops.

Of major concern are blanket APF statements to the effect that existing safety net programs don’t work together well (in fact, many do), and that a new one-size-fits-all approach is needed, when many of the biggest problems at present lie with one-size-fits-all programs such as disaster assistance and NISA.

Farmers have to change, and constantly strive to improve efficiency, quality, productivity and environmental integrity. But when the viability of even top producers is threatened by U.S./EU farm subsidy policies, then Canadian/Ontario farm safety net programs need to help close the gap. There is no other way.

Concerns about content are matched by concerns about process. Mazankowski took the time, twelve years ago, for lots of consultation. There were broad-based advisory committees and national conferences. Virtually all producer groups were included, as were the provinces. Although decisions were not universally accepted, the outcome was widely supported and guided Canadian agriculture for many years.

There is nothing wrong with a major ag policy review, or with reconsidering directions and resource allocations. And there are good concepts in the present review. But some are clearly misguided, especially in the realms of research and safety nets. And the rushed, inadequate consultation is no substitute for broadly based review and significant opportunities for producer input.