Index
Safety
Nets
Early adoption of new technology, improved crop quality, efforts to lower costs
of production, and the exploitation of new market opportunities can only go
so far in ensuring international competitiveness. Ontario grain and oilseed
producers operate in an open international market with few or no tariffs on
imports and exports. Efforts by grain and oilseed farmers to increase their
competitiveness using technology quality and market exploitation are at risk
of being derailed by recent, dramatic increases in U.S. subsidy support for
competing American farmers.
U.S. data show that farm subsidy support has tripled since 1997, with 95% of
the funds going to American grain and oilseed farmers, even though they represent
only 20% of U.S. farm receipts.
The effect has been to stimulate U.S. production and depress global grain and
oilseed prices. With the open borders created by the Canada-U.S. Trade Agreement
and NAFTA, Ontario farmers must compete directly with U.S. farmers and their
subsidy programs within our own domestic market. Depressed prices in the United
States mean depressed prices and farm incomes in Ontario, but without the support
of the U.S. Treasury.
Proposals put forward by the U.S. House of Representatives and Senate for the
next U.S. farm bill both recommend increasing spending on farm programs. The
House proposal would increase spending by US$79 billion for the decade 2002-2011
to a total of US$168 billion, up 88% versus the decade 1992-2001. Those proposals
do not appear to change the current situation where 95% of direct government
payments go to U.S. grain and oilseed producers. In a major development, the
House defeated amendments that would have deflected significant spending (US$19
billion) away from income and price support programs toward enhanced environmental
stewardship programs.
Given a level playing field, we believe that Canadian grain and oilseed producers
can compete against growers in any part of the world in terms of producing high
quality crops in a cost-effective manner. However, to achieve that level playing
field, long-term and short-term action is required by government in two key
areas – trade liberalization and domestic support.
Our goal for domestic support is to see producers in all countries supported
at the same level.
In the short term, it will be necessary for the federal and provincial governments
to increase the support to Canadian oilseed and grain producers to the same
level as our competition in the U.S.
We support the federal position that agricultural support should be shared with
provincial governments. The fact that some provinces have chosen to provide
support at levels above the usual 60:40 (federal:provincial) ratio reflects
a failure by Ottawa to provide leadership on this issue, rather than an agreement
that the international trade-and-subsidy-induced income problems are the primary
responsibility of provinces.
Over the longer term, the government of Canada must negotiate a sharp reduction
in allowable trade-distorting domestic subsidies, via a new agricultural trade
agreement through the World Trade Organization (WTO). Once that has been achieved,
our goal of equity in support will be easier to maintain as the U.S. and other
countries are forced to reduce their domestic support.
In the next WTO agreement, we are seeking:
• a sharp reduction in permissible spending on trade-distorting domestic
support
• the elimination of all tariff and non-tariff barriers
• elimination of all export subsidies.
Technology
and Life Sciences
Grain and oilseed crops are vital to Canada’s economic well-being. In addition
to their near $2 billion primary value, Ontario grain and oilseed crops are
the basis for strong provincial livestock and food processing industries.
A large percentage of Ontario’s grain and oilseed exports are in the form
of value-added products, and of high-quality, ‘identity-preserved’
specialty produce.
This is an industry experiencing rapid change. Technology is changing dramatically,
with many farmers adopting techniques such as ‘no tillage’ (where
seeds are planted directly into untilled soil), ‘global positioning’
satellite technology for crop monitoring and management, and new genetically
enhanced crop varieties for improved crop quality and reduced pesticide usage.
Crops are being grown increasingly with specific quality characteristics needed
for specific customers. The percentage of crops used for the direct manufacture
of industrial as well as food products continues to grow.
Ontario grain and oilseed farmers have been leaders in the ‘life sciences’
approach that is now capturing attention both federally and provincially. Indeed,
life sciences – the use of agricultural crops to produce new products –
renewable automotive fuels, petrochemicals, bio-plastics and new food and consumer
products – dominated the marketing strategies of some Ontario grain and
oilseed groups long before the term became popular in government circles. Thanks
to a technology-driven and research-and-market-oriented provincial grain and
oilseed industry, further growth, ingenuity and market diversification can be
expected in the decade ahead.
Will
Paul Martin Claw Back Safety Net Money?
Most of our attention on grain and oilseed safety net needs has been focused
on the need for additional support to secure equity with competing farmers in
the United States and Quebec. But there is also a threat that the federal Department
of Finance, led by Finance Minister Paul Martin, will claw back some of the
safety net funds already allocated for Ontario farmers from previous years.
Details follow:
The goal of OCPA and other Ontario grain and oilseed groups is to secure changes
to the Market Revenue Insurance (MRI) program which will provide support at
100% of cost of production (as calculated with the ASRA program in Quebec) on
100% of historic average yields. Calculations show that there should be enough
money in the MRI account to fund this program for the 2001/02 crop year, using
funds already in the account from past years, plus new monies to accrue from
government safety net budgets for current fiscal years.
But this all hinges on the retention of previously accumulated funds in the
MRI account. The history of these funds follows:
MRI was created in 1991 as part of the national ‘GRIP’ program for
grain and oilseed producers, which operated from 1991/92 through 1994/95. Federal
and provincial governments and producers contributed funds into provincial accounts
in an ‘actuarially sound’ manner, which meant the funds accumulated
in most provinces. When Saskatchewan, and then Manitoba, chose to leave GRIP
after 1994/95, the federal government sought to end the national program. There
was inconsistency in the treatment of accumulated GRIP surpluses. Manitoba gave
the surplus back to the federal and provincial government and to producers.
Though federal officials dispute this fact, Government of Saskatchewan documents
show that $150 million in accumulated federal GRIP contributions were transferred
to other Saskatchewan safety net uses. Quebec and Ontario were permitted to
keep their surpluses. In the case of Ontario, this followed a strong fight by
producer groups (with provincial government support) based on the reality that
the Ontario GRIP program (i.e., MRI) was still continuing.
The amount of money in the Ontario GRIP/MRI account after 1994/95 was substantial
- about $112 million in federal funds, $70 million in provincial funds, and
$60 million in producer funds. Ralph Goodale, federal minister of agriculture
at that time, countered Department of Finance objections by agreeing to extend
funds for use through four additional crop years, and Lyle Vanclief later secured
an additional two-year extension. This extension ends after the 2000/01 MRI
year, i.e., when final 2000/01 MRI cheques are mailed to corn and soybean growers
in late 2001.
Grain
Growers of Canada
Developing more effective safety net programs for grains and oilseed producers
across the country continues to be a priority focus of the GGC. In late October,
Agriculture & Agri-Food Canada released farm income projections that, while
positive for the livestock and other farm sectors, continued to run at low levels
for grains and oilseeds. Adverse prices brought on by foreign subsidies over
the past several years, coupled with drought conditions this past summer, haven't
allowed farmers to recover much in the way of lost income.
It is clear that the grains and oilseeds income situation requires a long-term
policy solution. A grains sector safety net program that is available over the
long run is a much better approach than ongoing lobbying for short-term, ad
hoc payments.
The GGC presented a proposal to the National Safety Net Advisory Committee (NSNAC),
a national committee that advises the federal Minister of Agriculture on safety
net programs, that would create a sub-committee to develop a new, national safety
net program for the grains sector. To date, the NSNAC has been almost exclusively
focused on analyzing and presenting changes to existing programs, like NISA.
The GGC's proposal received support from grains and oilseeds groups on the NSNAC;
however, other members were more comfortable with having discussions amongst
the whole committee.
Therefore, at the prompting of the GGC, the NSNAC will now begin to look at
new program options for grains and oilseeds farmers. The first meeting on grains
and oilseeds safety nets will take in place in early December, in Ottawa. Meanwhile,
the GGC farm income working group, chaired by GGC Vice-President Ken Bee, is
working on a program to offset the negative effects of foreign subsidies, which
the GGC will be advancing within government channels. The proposed program will
be discussed at the GGC's 2nd Annual Meeting at the end of November 2001.
Supporters of reigning in foreign subsidies, like the GGC, received welcome
news from the World Trade Organization. At the 4th Ministerial Conference in
Doha, Qatar, trade ministers from all WTO member countries agreed to launch
a new round of international trade negotiations dedicated to liberalizing trade.
Agriculture is a core part of the negotiations. In the declaration to launch
the talks, governments agreed that comprehensive negotiations aimed at making
"substantial improvements to market access; reductions of, with a view
to phasing out, all forms of export subsidies; and substantial reductions in
trade-distorting domestic support."
Canadian negotiators were reported to play a leadership role in keeping the
agriculture text on track, and should be congratulated for doing so. The GGC
will continue to be a strong advocate for international agriculture trade liberalization
at the WTO. Eliminating the alarmingly high levels of subsidies granted to our
foreign competitors is desperately needed for our industry to become more profitable
and stable. This round of talks, however, won't be over any time soon, with
a conclusion scheduled for 2005.
Study
on Value-added Products from Corn or Corn Co-products
OCPA has recently undertaken a review of the scientific literature on ‘value-added
products from corn and corn co-products’ in an effort to identify specific
opportunities for investment in research and development of value-added products
derived from corn, corn components, and constituents or extractants from co-products
of industrial/food corn processing.
This literature review and research scan is expected to provide OCPA with:
• A detailed understanding of what products are being developed and what
research and development activities have been or are currently being pursued
in this area
• An overview of where there may be opportunities for OCPA to stimulate
development
of products or uses for products that can be derived from corn and corn processing
co-products
• A ‘big picture’ snapshot of the potential value that might
be attained through development of such products or uses, and which of these
opportunities may be of particular benefit to develop in Ontario. (Although
this latter aspect may go beyond the scope normally considered within a literature
review/research scan, it is included to ensure that any information pertinent
to this point can be picked up during the current search.)
By necessity, the scope of the review will need to be fairly broad, encompassing:
• Any/all major and minor products that are derived from corn directly
(i.e., oil, meal, flour, starch, proteins such as zein, pigments such as xanthophylls
and carotenoids, etc.)
• All of these or other constituents or components of the major and minor
industrial corn-processing byproducts (distillers’ grains, corn gluten
feed, corn gluten meal, hominy, germ, fibre/pericarp fraction, etc.)
• Any products or uses of other corn plant fractions or constituents, such
as corn cobs, corn husks, corn stalks or constituents of these.
However, in order to keep the review more manageable, major existing commercial
products and those that have undergone significant development previously will
be excluded. For example, there is little to be gained from reviewing the current
uses or derivatives of corn starch, corn oil, corn-derived ethanol, etc., since
there are other, established commercial interests that would be expected to
pursue these opportunities.
It is OCPA’s aim to have this review completed in time to make decisions
this winter on where to invest research funding towards development of potential
value-added products from corn constituents. With funds available through the
CORD III (Canada-Ontario Research and Development program, Round III) and needing
to be utilized by December 2003, OCPA believes there is a current opportunity
to invest in this area.
Although OCPA has set aside some funds to cover the cost of conducting the review,
the Food Research Group of Agriculture and Agri-Food Canada in Guelph has undertaken
to assist OCPA in conducting the review, at no cost to this stage. This assistance,
and their related expertise in this general field of research, are much appreciated.
OCPA members will be informed in future issues of the outcome of the review,
and potential areas of research and market development investment.
Annual
Research & Services Meetings
The annual series of meetings for committees and sub-committees of the Ontario
Agri-Food Research and Services Coordinating Committee (OASCC) has begun again.
OCPA is involved in a number of these, primarily the Ontario Weed Committee,
the Ontario Field Crops Pest Management Committee, Ontario Corn Committee, Ontario
Soil Management Committee and others that directly pertain to OCPA-related interests
such as economics, food engineering, and so on. As well, through our involvement
in the Ontario Field Crops Research Coalition (OFCRC), our priorities and those
of other OFCRC members are carried forward to other subcommittees as well as
the more ‘senior’ OASCC committees such as the Ontario Soil, Water
and Air Research and Services Committee and the Ontario Field Crops Research
and Services Committee. In fact, OCPA generally has direct representation at
these latter meetings, due to our prominent role within OFCRC.
Each of these OASCC subcommittees performs a very specific function, such as
annual publication of the Ontario Corn Performance Report in the case of the
Corn Committee, or recommendations on pest management or weed management recommendations,
etc. However, research and service priorities are reviewed on an annual basis
and new and emerging research or service issues are forwarded upwards through
the committee system, as well as directly to the appropriate agency (AAFC, U.
of G., OMAFRA, Ministry of Environment, etc.).
This fall’s series of meetings is of particular importance to OCPA and
other field crops groups, since the Plants Program at the University of Guelph
is undergoing it 4-year in-depth review and renewal this fall and winter. This
process culminates in a new 4-year strategic plan for crops research, approved
and funded through ARIO and the OMAFRA research contract with the University.
The same priorities are utilized by Agriculture and Agri-Food Canada (AAFC)
in aligning their research programs with the identified sector priorities.
In fact, OCPA and the OFCRC members have already been in preparation for this
fall’s meetings for several months, having reviewed all of the OFCRC areas
of research priorities over the past year. These revised and more detailed priorities
have been fed into the system already, wherever appropriate. (Copies are available
on request). Public sector researchers have welcomed this type of input from
the farm community, indicating it provides them with much needed guidance, and
often associated financial support, for conducting their research programs.
Canadian
Corn Pest Management Coalition
November 1 was the most recent meeting of this group, which enjoys the active
participation of public and private sector researchers and crop advisors/extension
personnel, along with OCPA and representatives from the Canadian Food Inspection
Agency (who provide regulatory oversight of the biotechnology-based pest management
products such as Bt-corn). This group provides participants with an update on
current and recent developments in pest management research and regulatory issues,
as well as an opportunity for providing guidance for further activities. The
primary topics addressed at the Nov. 1 meeting included:
• Review of recent research on corn borer, corn rootworm, European chafer,
cutworm, etc. and how to carry this research forward in the most coordinated
and cost-effective manner
• Update on corn rootworm research related to monitoring/study of the variant
that lays eggs in soybeans, thus circumventing crop rotation as an effective
control measure. Some substantive progress has been achieved in developing genetic
marker-based ‘tags’ which will allow rapid identification of the soybean-adapted
rootworm variant. As well, progress was updated on biotechnology-based control
options (Bt corn specific for rootworm control) and ‘insect resistance
management’ (IRM) issues were discussed. Due to significant differences
between the rootworm and corn borer pest population dynamics, IRM measures for
rootworm are likely to differ from the approach that has been in place for Bt
corn and corn borer.
• Update informing participants that the EPA has renewed the registration
of all Cry1Ab-based Bt corn events for the next 7 years, and that the research
blitz over the past two years on impacts of Bt corn on Monarch butterflies has
exonerated Bt corn from any significant negative concerns.
• Review of a procedure proposed for monitoring for occurrence of, and
reporting of any suspected Bt-resistant corn borer populations. Also discussed
were measures to be taken in the event a Bt-resistant population is confirmed.
The discussions also encompassed what roles might be expected from seed company
representatives, crop advisors, field scouts and growers in this resistance
monitoring process. More information on this will be provided in an upcoming
issue of the Corn Producer magazine.
• Results of the 2001 survey on farmer awareness of and compliance with
Bt corn/insect resistance management measures were presented. In brief, Ontario
corn growers continue to demonstrate excellent compliance with the IRM/refuge
requirements, with 87% of surveyed Bt corn growers planting the required minimum
of 20% non-Bt corn refuge and 90% planting this refuge within the 1/4 mile minimum
distance from their Bt corn. More detailed results of the survey will be provided
in an upcoming issue of the magazine.
Canadian
Agricultural Research Council (CARC)
The fall meeting of CARC was held in Ottawa on November 15 and 16. Ken Hough,
OCPA Director of Research & Market Development attends CARC, representing
the Canada Grains Council.
Aside from an excellent selection of guest speakers (Dr. William Leiss on risk
management, risk assessment and risk communication; Dr. Arnold Naimark on the
Canadian Biotechnology Advisory Council report on the patenting of higher life
forms; Dr. Wendy Sexsmith providing an update on the Pest Management Regulatory
Agency; Dr. David Layzell, outlining the coordination role of Biocap in developing
an extensive plan for climate change research related to agriculture and forestry),
highlights of the information discussed at the meeting include:
• The Canada Committee on Crops, in response to a request to CARC to establish
an ‘organic production’ committee, will consider how to address this
request within the crops sector (since this is where the majority of organic
activity occurs).
• The Canada Committee on Natural Resources (CCNR) reported that Environment
Canada is proposing a 3 ppm limit for nitrate in surface waters (by comparison,
the drinking water guideline in Ontario is 10 ppm). Further, it appears that
this proposal is based on one study (albeit a very comprehensive study). Concern
was also expressed that the ‘nutrient management legislation’ proposed
in Ontario is not taking adequate consideration of science into account, specifically,
many BMPs have been developed on small scale research plots, but not verified
as effective on the whole-farm scale. For both issues, the CCNR was encouraged
to undertake some direct, active involvement in conveying the need to base regulations
on sound science and the ‘balance of scientific evidence’, and that
additional research is required before establishment of Ontario’s nutrient
management regulations (messages that have been conveyed by many other stakeholders
already).
• The current status of SR&ED (Scientific Research and Experimental
Development) Tax Credits for farmer-based research investments was reviewed.
A CCRA (Canada Customs and Revenue Agency) proposal, as initially vetted during
cross-country meetings last spring, has been promised but has not been formally
issued yet. Through this proposal, farm organizations would provide the necessary
information to their members on the proportion of check-off funds going to research,
so that individual farmers can calculate and claim the SR&ED tax credit
on their tax return (combined with SR&ED tax credits eligible from all sources).
This proposal does not address the objective of the farm organizations, which
would be that farm organizations could actually receive the SR&ED tax credits
on behalf of their members (thus ensuring that the full eligible tax credit
is claimed and utilized to reinvest in additional research). Nevertheless, the
CCRA proposal is a good first step, although there are a couple of concerns,
including: 1) some effort is required by farm organizations to coordinate this,
but there is no opportunity for direct feedback to know what proportion of an
association’s members actually take advantage of the program to claim their
tax credit, and 2) there has been some suggestion that this process should be
given a couple of years to see how satisfactory it is, before further discussions
with Finance Canada regarding possible legislative changes required. Such a
delay/timeout is not acceptable. It was indicated that the Western Grains Research
Foundation has spent considerable effort in moving ahead on this issue, and
has recently achieved some level of success, although the specific details were
not available. (OCPA will contact the Foundation to verify what has been accomplished,
as there may be some opportunity to benefit from understanding what their experience
and achievement has been.)
- a functional foods and nutraceuticals research centre has been established
at the University of Manitoba and will collaborate closely with existing related
research efforts underway at Winnipeg-based medical research facilities
- the four national programs of the AAFC Research Branch were outlined, focusing
on Resources (soil, water, climate, and genetic material); Crops (protection,
production, and varieties), Animals (reproduction, welfare, and nutrition);
and Food (safety, nutrition and quality, including non-food uses of agri-food
products).
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