Index
Grain Growers of Canada
The founding convention of the Grain Growers of Canada (GGC) occurred on November 13-15 in Ottawa. The founding
members are: the Alberta Barley Commission, the Alberta Winter Wheat Producers’ Commission, the Atlantic Grains
Council, la Fédération des Producteurs de Cultures Commerciales du Québec, the Canadian Canola
Growers’ Association, the Ontario Corn Producers’ Association, the Ontario Soybean Growers, the Saskatchewan Canola
Growers’ Association, the Western Barley Growers’ Association, and the Western Canadian Wheat Growers’ Association.
The president is Brian Kriz, past chair of the Alberta Barley Commission; vice-chair is Ken Bee, chair, Ontario
Soybean Growers; and other executive members are Anna Bragg, president, Ontario Corn Producers’ Association, and
Ted Menzies, president, Western Canadian Wheat Growers’ Association.
We expect other grain, oilseed, pulse and other specialty crop producer groups to join in the coming months.
Following a day of formal speaker presentations on trade, subsidy programs and biotechnology, the GGC adopted some
initial policy positions as follows:
Farm Income -
The Grain Growers of Canada supports a comprehensive approach to the issue of farm income that includes short,
medium and long-term measures. Where the approach calls for support, it should not be delivered in a manner that
penalizes efficiency or favours inefficiency.
Short-term: The Grain Growers
of Canada will work to have the Government of Canada supply a greater portion of the total allowable Aggregate
Measure of Support (AMS) for grain, oilseed and specialty crops to equal, but not exceed, support supplied to U.S.
counterparts.
Medium-term: The Grain Growers
of Canada will seek to make existing safety net programs more effective for grains, oilseeds and specialty crops
producers, and will work to reduce farm costs, for instance through tax reductions, and increase investment in
and development of value-added processing for grains and grain products.
Furthermore, recognizing that transportation and marketing costs are a key cause of farm income pressures, the
Grain Growers of Canada:
Long-term: The Grain Growers of Canada
supports and will work toward the global reduction of international and domestic support.
International Trade
- The Grain Growers of Canada advocates the liberalization of international trade in grain and grain products
through implementation of the following:
Biotechnology - The Grain Growers of Canada supports biotechnology and other technologies related to
grain production that meet approved standards for food, feed and the environment in Canada while providing enhanced
value and benefit to both consumers and producers.
Recognizing that biotechnology raises a number of policy issues, the Grain Growers will strike a committee to discuss
issues (e.g., Biosafety Protocol) and develop policy positions.
The Grain Growers of Canada (GGC) is off to an excellent start, thanks to the effort made by all delegates to the
founding convention to concentrate on finding common ground and compromise. And there proved to be much more common
ground than anyone expected at the beginning. This should be the start of an effective, coordinated process by
which Canadian grain growers are adequately represented at the national level.
The temporary office of the GGC is the office of the Alberta Barley Commission in Calgary, though the goal is to
establish a national office in Ottawa early in 2001. Kevin Muxlow, formerly with the Alberta Barley Commission,
is the new executive director of the GGC.
A special thanks goes to the Alberta Barley Commission for its leadership in creating the Grain Growers of Canada.
Duties on Corn Imports into Western
Canada
On November 7, the Canada Customs and Revenue Agency imposed a provisional duty of $U.S.1.58/bu on imports of U.S.
corn into Western Canada. This was in response to a complaint by the Manitoba Corn Growers’ Association (MCGA).
The $U.S.1.58 consists of $U.S.1.01/bu to offset dumping and $U.S.0.57/bu to offset U.S. subsidies.
The calculations continue, and an altered provisional duty could be announced on February 5, 2001. More important
are hearings in February by the Canadian International Trade Tribunal (CITT) on the question of ‘injury’. Before
the provisional duty can be made permanent for a five-year period, the Manitoba corn growers must prove that they
have been injured by U.S. subsidies and/or U.S. dumping practices affecting exports of corn into Western Canada.
The CITT decision is expected on March 7, 2001.
If the CITT rules in favour of the MCGA, court challenges could follow as well as further CITT hearings on the
question of ‘public interest’. (The CITT may consider whether the duties are justified even if corn farmers are
injured).
Directors of the Ontario Corn Producers’ Association have not pursued countervailing/antidumping duties on U.S.
corn exports into Eastern Canada for several reasons, including recognition that a sizeable duty would likely kill
expected expansions in the size and number of industrial corn processing plants in Ontario, and might even mean
reductions in the present industrial processing of corn in the province. In addition, OCPA would prefer to concentrate
its resources on increasing Canadian and Ontario government support for grain and oilseed producers - to level
the playing field between Canada and the U.S. - versus attacking U.S. corn growers and programs (all of which are
fully compatible with World Trade Organization rules, to the best of our knowledge). OCPA did seek and secure a
countervailing duty on U.S. corn imports from 1986 through 1990, at a cost to OCPA of about $500 to $600 thousand,
though the duty was ultimately ruled illegal by a panel of the General Agreement on Tariffs and Trade, in Geneva.
However, the OCPA directors are fully supportive of the action taken by the Manitoba Corn Growers’ Association
in seeking antidumping and countervailing duties on U.S. corn imports. The reasons given for not seeking similar
duties for imports into Eastern Canada, especially industrial corn processing and expected plant expansions, differ
from those for Western Canadian corn growers. OCPA wishes Manitoba corn growers success in their venture.
Starlink Corn
OCPA has followed, closely, the StarLink corn fiasco in the United States, and the potential for StarLink genes
to be found in corn exported from the U.S. into Canada. According to the Canadian Grain Commission, no tolerance
has been established for StarLink contaminants in corn used in Canada, either for feed or food usage.
The Government of the United States has given assurance to the Government of Japan that all corn exported to that
country will be tested to ensure the absence of StarLink genes before shipment.
OCPA directors consider that it is fair for the same provisions to apply to corn shipped into Canada, and are currently
pursuing steps to ensure that this occurs, as quickly as possible. These have included formal requests to Canadian
ministers responsible for Agriculture and Agri-Food Canada, the Canadian Food Inspection Agency, the Canadian Grain
Commission, and International Trade, and letters to Ontario corn handlers and processors. In these letters, OCPA
has requested that:
The Ontario Corn Producers’ Association is a strong supporter of biotechnology
as a means of improving the quality and efficiency of production of Canadian agricultural and food products. Biotechnology
represents an effective means of reducing the use of inputs such as pesticides in agricultural crop production,
and reducing or eliminating the presence of natural toxins in farm produce. But it is also critical that products
of biotechnology are not used as food or feed in Canada until they have been approved by regulators in Health Canada
and the Canadian Food Inspection Agency. This is not the case with StarLink technology.
Ontario corn producers have taken precautions in both 1999 and 2000 to ensure that biotech genes not yet approved
for importation into Europe (though approved for use in Canada) are excluded from corn used in corn processing
in Canada. It is difficult for Ontario corn farmers who have met this discipline to accept the importation of corn
from the U.S. which may contain genes unapproved for usage even in Canada.
There is no known reason to expect that StarLink genes cause health or environmental problems, but the approval
process has not been completed in either the U.S. or Canada, and, until that occurs, it is reasonable to seek the
same conditions on corn exports from the U.S. into Canada, as are being applied for exports to Japan.
Labelling of Genetically Modified
Foods
Efforts continue by the Canadian General Standards Board (CGSB) to develop standards for the voluntary labelling
of genetically modified (GM) foods. At a meeting in mid-November, there was a consensus reached that guidelines
for voluntary labelling cannot be the same as those which might be used in mandatory labelling, and that Canadian
standards should not allow for the large number of exemptions which exist with mandatory standards in Europe, Japan
and other countries. (The exemptions seem to be designed to avoid the need for mandatory GM labels on almost all
foods.) There also seemed to be agreement that the definition of ‘genetic modification’ used in novel food regulations
under the Canadian Food and Drugs Act should be the same one used in the CGSB standards.
However, debate continues to rage on questions such as whether foods should be considered ‘GM’ if there are no
detectable GM ingredients in the food even though they came from GM sources (examples being corn sugars from Bt
corn, vegetable oils from corn, soybeans and canola, or foods produced with genetically modified microorganisms
and enzymes). Also, some are suggesting that the labelling should be restricted to terms such as ‘contains rDNA’
or ‘does not contain rDNA’. (OCPA opposes this option since it is doubtful that one Canadian in one hundred knows
what rDNA means, and, also, consumer surveys have shown that consumer concerns involve all forms of ‘non-natural’
genetic modification of food organisms.)
There is broad recognition that future labelling options in Canada will be highly dependent on what happens in
the United States. With a President Gore, pressure is expected to increase within the U.S. Administration for mandatory
labelling of GM foods. With a President Bush, it is expected to decrease. As this newsletter is being written,
the identity of the next U.S. president is unknown.
Seaway Valley Farmers’ Energy Cooperative
Congratulations to Bud Atkins, president of the Seaway Valley Farmers’ Energy Cooperative, and members of the Seaway
board of directors, on the signing of a deal with the DG Bank, Germany, to provide $17.5 million in new funding
to proceed with the construction of the new ethanol plant in Cornwall. The DG Bank funding goes with $10 million
provided as a loan by the Farm Credit Corporation, $3 million provided as a grant by the Government of Ontario,
and $19.5 million in equity funding provided by Seaway shareholders. Funding, in the form of a loan, was also provided
by the Agricultural Adaptation Council, using funds provided by Agriculture and Agri-Food Canada under the Canadian
Agricultural and Rural Development Fund.
The new plant, to be completed in 2002, will produce 66 million litres of fuel and industrial grade ethanol per
year, using about seven million bushels of corn.
The Seaway announcement follows one made by Commercial Alcohols Inc., a few weeks earlier, to proceed with a 150-million-litres/year
plant at Varennes, Quebec (just east of Montreal on the south side of the St. Lawrence River). The Quebec plant
received a loan debenture (this is a correction from the printed magazine) of $25 million from the Government of Quebec.
Both plants will benefit from provincial sales tax exemptions on ethanol used as automotive fuel, and the federal
government has granted a 10-year exemption on excise taxes used on fuel-grade ethanol. (If the excise tax ends
sooner, plants will be compensated by amounts equivalent to the value of the excise tax.)
The directors of the Seaway board, and president, Bud Atkins, deserve special recognition on their accomplishment.
Few would have had the diligence and persistence to fight for almost 10 years to make this project a reality.
Casco
Casco officials have responded to the item in the November newsletter about their moisture adjustment charges.
They state that all of the additional moisture in damp corn received for processing at harvest time (i.e., in addition
to that found in 15.5% corn), must be removed by evaporation. This fact has been confirmed to OCPA by experts on
corn wet milling at the University of Illinois. The reason is that water moves in a ‘counter-cyclic’ direction
during wet milling - being added at the final stages of starch purification, and removed after being used for corn
steeping. Casco also states that the process involved in steep-water drying is complex and energy intensive, and
that the additional ‘moisture adjustment’ charges in 2000 reflect their additional costs. OCPA has no independent
way of confirming this information. Casco officials have also said that if energy costs drop next year, they are
prepared to reduce the moisture adjustment fees accordingly.
The fact remains that the moisture adjustment charges are higher than the actual costs of grain drying for more
efficient operations; for farmers with such setups, it makes more sense to deliver dry corn than damp corn, even
at harvest time. For those without storage or on-farm drying setups, it may make more economic sense to deliver
damp corn to Casco, even with the moisture adjustment fees, since (1) drying fees are almost as high at many commercial
dealers, (2) Casco pays a higher price for corn than most dealers, and, (3) the elevation charges for corn which
is dried, but not sold to commercial dealers, must also be included in the total cost calculations.
There is confusion within Casco/Corn Products and among others in the corn wet milling industry as to whether there
are any advantages to wet millers in processing damp corn as compared to artificially dried corn. Some knowledgeable
people have told us that the starch-protein separation process is better with damp corn; others claim not - and
the answer for Ontario plants remains unknown despite two years of trials involving OCPA, Casco and the University
of Guelph at the London and/or Cardinal plants. Research planned for the fall and winter of 2000/01 has essentially
been mothballed because farmers objected to the increased moisture adjustment fees being assessed by Casco this
year (this is even after considering some of the reductions in fees which were to be applied with this project,
thanks to co-funding by Casco and other sources). The hope is that this project can be picked up again next fall
- hopefully under less extreme growing and harvesting conditions - and done in such a manner that researchers can
determine whether there are any economic/quality advantages with damp corn milling. This, in turn, should lead
to a resolution of the question of whether there can be a reduction in moisture adjustment fees because of offsetting
advantages to the company. Until this is resolved, damp corn deliveries to Casco are likely to be restricted to
at-harvest deliveries; the concept of holding damp corn by farmers with larger, sophisticated corn drying/handling
facilities for delivery/sale into the late winter months makes little economic sense, especially considering the
higher storage risks.
Casco officials have assured OCPA that they are always in the market to buy corn directly from Ontario farmers
(even when a bid price may not be posted). OCPA continues to monitor this situation closely.
Corn Prices (November 22, 2000)
| Period: Oct. 1 - Sept. 30 |
Approximate Tonnes Marketed |
Average Weighted Price |
| 1999-00 |
3,709,700 |
$111.98/tonne |
| 1998-99 |
3,903,600 |
$117.80/tonne |
|
1997-98 |
2,530,000 |
$141.48/tonne |
| The above figures are based on levies received by OCPA for commercial sales. | ||
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