Index
Disaster Relief
Plans
Although announcements were made on December 10, by both the Ontario and Canadian governments, on new disaster
relief support, most details were lacking when this newsletter was written.
Key elements will likely include:
• A commitment of new federal money, for two years, with the new program being funded 60 per cent federally and
40 per cent
provincially. At press time, Saskatchewan was holding out on funding its share of the program, but we expect this
will change, especially given that province’s current $100-million budget surplus. (Our compliments to Murray Calder,
MP for Dufferin-Peel-Wellington-Grey for highlighting this when the Hon. Eric Upshall, the Saskatchewan Minister
of Agriculture, appeared before the Standing Committee on Agriculture in late November.)
• The program will be linked to use of NISA account funds, though a complete draw-down will not be necessary, perhaps
only part of the “Fund 2” portion, i.e., that portion of personal NISA account funds contributed by governments.
• The program will likely be based on 70 per cent of the previous three-year average “gross margin,” with the latter
being defined as net farm income plus expenses for land rental, interest costs, etc. (Although grain and oilseed
producers have argued, as spelled out in the OCPA December newsletter, that this will discriminate against those
who farm high-value land – such as much of the cash-crop land in Ontario – there seems little will within Agriculture
and Agri-Food Canada or national farm organizations to make an adjustment.)
• There may be offsetting compensation to provinces to help the cost of “companion” programs now in place to address
the current farm income problem. Politically, this seems like a “must” for Quebec which would likely receive next
to nothing under a national 70 per cent disaster program when the gross margin base includes “ASRA” support payments
for pork, grain and oilseed producers. However, similar problems exist for Alberta, British Columbia, and Prince
Edward Island with their provincial disaster programs. We’re hopeful the compensation program will also include
equivalent funding for the Market Revenue Insurance (GRIP) program in Ontario.
• It is not clear whether the allocation formula will include recognition of the fact that some Prairie provinces
have used former GRIP monies to further subsidize crop insurance (i.e., with producers now paying less than half
of premium costs), or the $1.6 billion which was recently given to Prairie farmers as compensation for the loss
of grain transportation subsidies. (This loss is one of two reasons why Prairie grain prices are down; the other
reason is low global prices caused by U.S. and EU subsidy programs, the same factors depressing grain prices in
Ontario.)
• The proposed program should work reasonably well for Ontario pork producers and other livestock producers currently
experiencing income depression. Price depression in these sectors is primarily caused by global supply and demand,
and not subsidies. A political problem could be that many hog producers with other significant sources of farm
income may not qualify for disaster relief payments, regardless of current low pig prices.
• The program, however, is unlikely to be more than a short-term “fix” for Prairie grain farmers, given its 70
per cent-of-three-year-average base, and the fact that international subsidy programs are likely to keep crop prices
low for several future years – just as happened from 1986 through 1993. Expect Western producer groups to be back
within a year or two looking for a better formula. (Remember, the former Western Grain Stabilization Act and Agricultural
Stabilization Act grain programs were thrown out as inadequate in 1991 – after several years of $1 billion/year
ad hoc programs – because they “only” provided support at 100 per cent and 90 per cent, respectively, of the five-year
average.)
• The new program will likely have payout “caps” to prevent the politically unpopular possibility of large payouts
to very large farms, including those owned or managed by feed companies.
In addition, it is clear that December 1998 announcements on a new national disaster program will not represent
the end of the current round of national negotiations on a new federal-provincial agreement. The new program may
further distort the inequity which exists in current federal financial support across provinces. A new national
safety net agreement is to be finalized in March 1999.
Ontario
Grain and Oilseed Position
Ontario grain and oilseed producer organizations, led by the Ontario Corn Producers’ Association (OCPA), the Ontario
Soybean Growers’ Marketing Board and the Ontario Wheat Producers’ Marketing Board, were very active in November
and December, trying their best to ensure that any new national program does not short-change Ontario farmers and
enables the continuation of – and adequate funding for – market revenue insurance. These groups appreciate the
close cooperation which has existed among members of the Ontario Agricultural Commodity Council (OACC) in developing
a common Ontario position on safety net needs, plus the fact that delegates to the annual meeting of the Ontario
Federation of Agriculture endorsed two resolutions, one supporting the continuation of market revenue insurance,
and one endorsing the OACC safety net position. The OACC position includes support for NISA, NISA top-ups as they
currently exist in Ontario, market revenue insurance, a new disaster relief program which is designed to be equitable
for Ontario farmers, improvements to crop insurance (including the new self-directed risk management program for
some horticultural producers) and an equitable allocation of federal safety net funds for Ontario.
Ontario grain and oilseed producer group representatives were in Ottawa on December 2 and express appreciation
for the reception provided by the following MPs and Senators: Peter Adams, Paul Bonwick, Murray Calder, Brenda
Chamberlain, John Finlay, Joe Fontana, the Hon. Herb Gray, Ovid Jackson, Gar Knutson, Larry McCormick, Lynn Myers,
Jerry Pickard, Julian Reed, John Richardson, Paul Steckle, the Hon. Jane Stewart, Rose-Marie Ur, the Hon. Lyle
Vanclief, Susan Whelan, and the Hon. Eugene Whelan. A special thanks to Ur, Calder and Pickard for helping arrange
some joint meetings with other MPs, and to Ur, Calder, Bonwick, McCormick, and Steckle for ensuring that some of
our concerns were discussed during a subsequent session of the Standing Committee on Agriculture and Agri-Food
with Minister Vanclief and his senior staff.
We believe that many rural Ontario MPs are well versed on this issue. It remains to be seen what influence their
advice will have on the ultimate federal government decision.
Our thanks to all OCPA members and delegates who have raised this issue during their conversations with their elected
Members, federal and provincial, at the local level.
Risk Study
Advocates of the current federal safety net support formula – where a disproportionately large share of federal
safety net funds goes to farmers in Manitoba and Saskatchewan – have argued that this allocation is based on “risk”.
They say agriculture is more risky in those provinces, and the federal government should provide compensation accordingly.
Arguments about the need to avoid using federal funds to perpetually distort inherent differences in competitive
advantage have generally fallen on deaf ears nationally, especially within national farm organizations. Moreover,
the definition of “risk” being used to allocate federal safety net funding has been crop insurance costs.
Using crop insurance costs (premiums plus administration) as a measure of risk has its own problems. These costs
generally reflect differences in design and administrative efficiency across provinces. As well, participation
in crop insurance in Manitoba and Saskatchewan has been enhanced by higher levels of government subsidization of
premiums.
But there is a more fundamental question: Are inherent differences in year-to-year variation in crop yields a reasonable
definition of risk?
For example, consider that yield potential and yield consistency have a major effect on fixed asset costs. This
is the reason an average land rental may be well over $150/acre for the better farm soils in southwestern, midwestern
and parts of eastern Ontario, but only $25/acre or less for heavy clay, poorly drained or low heat-unit soils in
other areas. A 30 per cent reduction in yields on land priced to reflect its generally high and consistent yield
potential can be far more damaging to farm economic viability than a 30 per cent decline for land already priced
to reflect this likelihood.
To this end, Ontario farm groups are exploring the possibility of a top-quality study on the measurement of risk,
for safety net funding purposes. We assume – without prejudicing the results – that year-to-year variation in net
income, or profit, is a much more meaningful measure.
We welcome comments and will keep you informed.
Optional
Unit Crop Insurance
Plans are slowly progressing on implementation of a pilot optional unit coverage program for grain and oilseed
crop insurance for Ontario in 1999.
Though the Hon. Noble Villeneuve, Ontario Minister of Agriculture, Food and Rural Affairs, gave his approval of
the pilot project in October, no formal decision had been made by his federal counterpart, the Hon. Lyle Vanclief,
as of early December.
However, a document, called “The federal government’s interim risk splitting policy,” was provided to OCPA in early
December, outlining similar programs now in place for other provinces and/or commodities. The gist of the “interim
policy” is that although Agriculture and Agri-Food Canada (AAFC) does not like these programs, they will be permitted
providing the total maximum cost for crop insurance does not increase. This means producers participating in such
programs – including the proposed new optional unit coverage plan in Ontario – might not be able to take the highest
coverage option (i.e., up to 90 per cent in the case of corn, soybeans and wheat for 1999). According to the AAFC
document, this tradeoff already occurs for seed corn crop insurance where participating farmers can insure varieties
(inbred and hybrid seed production) separately, but, in turn, are not eligible for the highest rate of coverage
which would otherwise apply. This might be a reasonable tradeoff for producers of grain and oilseed crops interested
in optional unit coverage.
Another issue still to be resolved concerns additional premiums to be charged for optional unit coverage (both
in the 1999 pilot project, and in any permanent program which may follow). The OCPA believes it is reasonable to
assess an added premium charge for optional unit coverage, but only if it is linked with a mechanism to reduce
base premium costs for those who self-insure (and reduce risks to crop insurance) by spreading their farm operations
over a larger distance. This reduces the chance of payouts from localized damage caused by hail, thunderstorms,
etc.
There is also some concern that AGRICORP may not be ready to manage a pilot project in 1999, even if federal and
provincial approval occurs. Hopefully this agency will do everything it can to ensure delivery of a quality pilot
for 100 to 200 participants in 1999.
Corn
Seed Research Contribution
We remind members that when they purchase corn seed from some companies this winter, they will be ensuring an automatic
contribution (refundable upon request) to support public corn research in Ontario.
OCPA thanks other producer organizations, especially those involved in the production and marketing of milk, hogs,
beef and poultry, for their willingness to inform their members who produce only farm-fed corn of the benefits
of corn research and of the types of projects on which research funds will be used.
New
Pest Management Advisory Council
Just when Canadian farmers feel they may be making some progress in Ottawa in efforts to get a pesticide regulatory
system which better recognizes the competitive needs of Canadian agriculture, Health Canada has tilted the playing
field further against their interests.
The Pest Management Advisory Council appointed in late 1998 is far more stacked against agricultural interests
than the interim council which it replaced. (The interim council was comprised of the same individuals or groups
who formed the Pesticide Regulatory Review Team in the late 1980s.) While the new council does include two farmers,
Jack Wilkinson from the Canadian Federation of Agriculture and David Jeffries from the Canadian Horticultural Council,
plus a canola industry representative and three representatives of pesticide manufacturers (one a supplier of biological
products), these folks are badly outnumbered by those known to be against pesticides.
The latter include representatives from the Sierra Club, World Wildlife Fund, Canadian Environmental Law Association,
Canadian Association of Physicians for the Environment, and Barbara McElgunn of Toronto (who, while being the perpetual
president of the Canadian Disabilities Association of Canada, is better known for her anti-technology views). The
only representative of an agricultural college/university represented is economist Prof. Peter Stonehouse of the
University of Guelph, known more for his pro-organic interests rather than for his knowledge of pesticides or toxicology.
Another representative is Halifax marine biologist Prof. David Patriquin, Dalhousie University, who is another
organic advocate often quoted by the media for his anti-pesticide views. Other university representatives come
from Carleton University and York University.
Our guess is that the Hon. Alan Rock, Minister of Health, is probably not fully aware of the distorted nature of
his advisory committee, perhaps created on the advice of senior staff of the Pest Management Regulatory Agency.
Rock is quoted as telling the new council at its founding meeting that he considered a top priority to be the creation
of a more efficient pesticide registration system and international harmonization. One might suspect that this
advisory committee will have other priorities.
It’s unclear whether the Minister of Agriculture and Agri-Food had any input to the makeup of the advisory committee.
Ron Cameron, of Thamesville, Ontario, long recognized as one of Canada’s most knowledgeable farmers on pesticide
issues, was not invited to serve on the new committee.
CEPA
and Endangered Species
Canadian farmers also need to be concerned about current activities in Ottawa to amend the Canadian Environmental
Protection Act (CEPA) and to introduce new endangered species legislation. Although the current CEPA is written
so that other legislation (such as the Fertilizer Act, Seeds Act, Animal Health Act, Canada Grains Act, Pest Control
Products Act, etc.) takes precedence for the regulation of many agricultural products, there are those in Ottawa,
including Environment Canada and several influential MPs such as the Hon. Charles Caccia (chair, Standing Committee
on Environment and Sustainable Development), Karen Kraft-Sloan (MP for York North), and Clifford Lincoln (former
minister of environment for Quebec and current MP for Lac-Saint-Louis) who have fought to have CEPA and Environment
Canada play a more controlling role – particularly in the regulation of products of agricultural biotechnology
and pesticides.
CEPA is being reviewed, again, and some of the proposed amendments could cause major problems for agricultural
technology in the years ahead.
A similar situation applies for new federal endangered species legislation. Although a balanced committee which
includes representation from the National Agriculture Environment Committee, the Canadian Cattlemen’s Association
and the Canadian Federation of Agriculture has provided advice on the nature of new legislation, others in Ottawa,
again led by Mr. Caccia, have attempted to force the government to introduce legislation without providing reasonable
compensation for private landowners (e.g., farmers) whose well-being might be seriously damaged by new rules for
the protection of endangered and threatened species. These folks need to keep in mind the distrust which has been
created in the U.S. through the introduction of draconian legislation which does not adequately recognize the rights
of landowners, or provide for reasonable compensation.
A consultation organized by Environment Canada on proposed new legislation occurred in downtown Toronto at the
same time as the annual convention of the Ontario Federation of Agriculture. We understand that few farm representatives
attended.
Greenhouse
Gas Emissions and Ontario Soils
A very successful meeting occurred in late November – involving participants from many farm organizations, two
levels of government, private companies and the University of Guelph – to consider means by which the storage of
carbon (organic matter) in Ontario farm soils could be enhanced. The purpose was to explore means by which activities
of the very successful “GEMCo project” in Western Canada (GEMCo is a consortium of public utility companies, including
TransAlta and Ontario Hydro, formed to develop means of reducing net greenhouse gas emissions) might be matched
in Ontario.
A steering committee was formed, and smaller groups have been created to develop research and development plans
in two areas – expanded use of no tillage, cover crops, winter cereals, etc., as a means of increasing soil organic
levels – and increased production or improved management of perennial forages. Further activity is expected in
1999.
It is still uncertain whether Canada will be granted the right to use agricultural soil carbon “sink” capacity
as part of its Kyoto implementation plan. Approval can be expected no sooner than 2000. Without such inclusion,
it is difficult to see much interest within the Canadian farm community “buying-in” to any Canadian Kyoto implementation
strategy. This is especially so, given the fact that analyses by the International Panel on Climate Change and
other scientific bodies have projected a net positive effect of projected global warming on Canadian agriculture.
(Certainly most of those Ontario farmers who experienced above-average temperatures in 1998, compared, for example,
to below average temperatures in 1992, would agree.)
Canadian
Agri-Food Research Council
OCPA represents the Canada Grains Council (CGC) on the Canadian Agri-Food Research Council (CARC), a national body
created to oversee and advise on Canadian agri-food research activities. An OCPA/CGC goal has been to have this
body play a greater role in seeking enhanced funding for Canadian agricultural and agri-food research.
A breakthough came at the summer 1998 meeting of CARC in Charlottetown, when CARC members appointed an ad hoc committee
to develop a plan for increased activity in this area. In late November, the plan was presented and approved. Implementation
is in the hands of the CARC board of directors. We look forward to hearing reports of progress when all CARC members
meet again, in early May.
Agriculture and food has a very low profile, compared to others such as the Medical Research Council, in seeking
increased research support at the national level. This is probably one reason why we’ve seen little improvement
in recent years in public funding for agricultural research. Indeed, the research budget of Agriculture and Agri-Food
Canada (AAFC) was chopped dramatically as recently as 1995. It’s time for this to change.
OACC
Research Committee
Previous newsletters have described the growing interest among many Ontario
farm groups in creating a new structure or coalition, through which farm groups can consider common research policy
interests and pursue collective actions where warranted. This is not intended to serve as a replacement for the
existing “OASCC” research advisory committee structure in Ontario. Rather it’s meant as a means for addressing
larger issues – such as overall levels of research support, new sources of funding, overall Ontario/Canadian research
coordination, etc.
The new coalition might be considered as an extension of the Ontario Field Crops Research Coalition, which has
functioned successfully since the early 1990s, as a means of developing common field crop producer group positions
on many research issues.
A formal founding meeting of the new coalition is planned for early January. We’ll have more information in the
next OCPA newsletter.
New
Ontario Biotechnology Strategy
Prof. Gordon Surgeoner, an environmental biologist at the University of Guelph who is well-known to Ontario farmers
for his leadership in many areas of agriculture, was seconded for several months in late 1998, by the Ontario Ministry
of Energy, Science and Technology, to help develop a new Ontario biotechnology strategy. It is expected that the
new strategy will include a strong role for agri-food biotechnology – centred at Guelph, but including research
and development activities at other locations throughout the province.
We’re hoping to see a strong linkage between this new ministry policy, OMAFRA-funded programs at the University
of Guelph, AAFC research at Ottawa, London, Harrow, Vineland, and Delhi, private research, the research programs
of groups such as the Ontario Field Crop Research Coalition, and the newly created Ontario Agri-Food Technologies.
The joint Ontario project on Fusarium resistance is one example of what a well-coordinated strategy can accomplish.
Federal
Variety Registration Review
The Canadian Food Inspection Agency (CFIA), formerly AAFC’s Food Production and Inspection Branch, has initiated
a broad review of plant variety registration requirements in Canada. The review was launched in response to requests
by various groups, including the Ontario Soybean Growers’ Marketing Board, to eliminate some or all variety registration
requirements for their crop varieties. OCPA was successful in achieving this elimination a few years ago.
The CFIA has engaged a consulting firm, FARR Biotechnology, to conduct a survey of Canadian organizations and individuals
to collect views on variety registration.
In the view of OCPA and many others, the survey questionnaire is biased in favour of the retention of variety registration,
and even solicits support for the reintroduction of variety registration requirements for corn. Some bureaucrats
have long memories, and don’t concede defeat easily.
We congratulate the Ontario Corn Committee for refusing to waste time participating in this process. OCPA will
take the same position. Both groups are too busy preparing for the future to spend time with games played in Ottawa,
attempting to preserve the past.
The elimination of registration requirements has led to an avalanche of new corn hybrids in recent years – many
containing biotechnological improvements. Many companies have completely revamped their hybrid lineups for 1999.
Think of the delay and dissatisfaction which would have been created if the same old practice existed of requiring
one or two years of registration data before new products could be marketed.
Further congratulations are in order to the Ontario Corn Committee for its improved method of presenting performance
trial data (a significant step forward on the commitment made when corn registration was abolished) to produce
farmers with better public performance data. We are pleased that OCPA could assist in this process, by including
1998 (and 1997) performance trial results in the December issue of the Ontario Corn Producer magazine and on line
in the OCPA web site.
Congratulations
to Clarence Swanton
OCPA congratulates Prof. Clarence Swanton on his recent appointment as chair of the newly created Department of
Plant Agriculture at the University of Guelph. He will not have an easy task trying to create a new department
out of the several formerly independent units (Crop Science, Department of Horticultural Science, and the Horticultural
Research Institute of Ontario).
We look forward to a close working relationship with Swanton and his colleagues. Activities of his department are
crucial to the future well-being of plant agriculture in Ontario. OCPA was pleased to have been able to play a
minor role (by attending all candidate seminars, interviewing some candidates, and sending a letter of comments)
in the selection process.
We express appreciation to Prof. Dave Hume, retiring chair of the former Department of Crop Science. He is presently
serving as acting coordinator of Plant Research Program for the Ontario Ministry of Agriculture, Food and Rural
Affairs contract, at the University of Guelph.
1999 Input
Prices
With low corn prices, growers are very uneasy about input prices for the 1999 crop season. We’re pleased that seed
companies have generally not increased seed prices, and some have even reduced prices at least for some hybrids
– perhaps reflecting the fact that the returns paid to corn seed producers were down in 1998 as well.
U.S. sources indicate that nitrogen fertilizer prices remain under downward pressure because of a continuing excess
of global plant capacity versus global demand. Potash prices may be higher, however, because of tight supplies
and the weak Canadian dollar.
There is no word on Canadian pesticide prices as yet. However, information from the U.S. suggests that the price
of several – maybe even many – pesticide products is in decline, as pesticide companies face the prospect of losing
sales to Roundup Ready (RR) soybeans and RR and Liberty-Link corn.
County/Regional
and Annual Meetings
Once again, it’s county and regional meeting time, and we hope to see you at your local assembly. The meetings
may have a little different flavour this year as we solicit your views on the rapidly changing scene in Ontario
agriculture – with biotechnology moving in fast, markets changing, new market opportunities (and requirements)
developing, international trade negotiations starting again and the nature of safety net programs under major review.
We appreciate the growing extent to which OCPA county and regional meetings are being held in conjunction with
county/regional meetings of the Ontario Soybean Growers’ Marketing Board, the Ontario Wheat Producers’ Marketing
Board, and the Ontario Canola Growers’ Association.
Hope to see you there.
Also, mark down Tuesday, March 2 as the date of the OCPA annual convention in London – and March 3 for the OCPA
annual meeting. We have an excellent line-up of speakers, with an emphasis on future change in agriculture – the
same theme we’ll be pursuing at county/regional meetings in January and February.
Corn Prices (December 7, 1998)
| Period: Oct. 1 - Oct. 31 |
Approximate Tonnes Marketed |
Average Weighted Price |
| 1998-99 |
467,000 |
$119.16/tonne |
| 1997-98 |
169,800 |
$163.24/tonne |
|
1996-97 |
165,500 |
$172.47/tonne |
| Final Crop Year Figures (Oct. 1/97 - Sept. 30/98) | ||
| 1997-98 |
2,508,900 |
$141.64/tonne |
| The above figures are based on levies received by OCPA for commercial sales. | ||
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