Index

• OCPA 1999 Convention
• Thanks to Sponsors
• Annual Meeting
• Changes in OCPA Executive
• Thanks to Bob Down
• Safety Net Update
• Ontario Agri-Food Technologies Annual Meeting
• Trade Policy
• OCPA Directors 1999/2000
• Technology Use Agreements (TUA's)
• Corn Prices

• Cyanamid Crop Protection, which sponsored the banquet speaker, Ron MacLean,
• BASF Canada, which helped cover the costs of the noon luncheon,
• Novartis Crop Protection Canada Inc., which helped cover the costs of a buffet breakfast for delegates and others on March 3,
• DuPont Canada Inc. which helped cover the transportation costs for Ryland Utlaut, chair, National Corn Growers’ Association, and sponsored the refreshment breaks, and,
• Canadian Mist Distillers and London Agricultural Commodities Inc. which provided cash donations.

Convention exhibitors were AgrEvo Canada, AGRICORP, Agri-Food Laboratories, AL-MAR Grain Systems Ltd., Alpine Plant Foods Ltd., Cyanamid Crop Protection, Direct Seeds, Dow AgroSciences, DuPont Canada Inc., Farm Credit Corporation, Hyland Seeds Division of W.G. Thompson and Sons Ltd., Lambton Conveyor Ltd., Maizex Inc., Monsanto Canada Inc., Novartis Crop Protection Canada Inc., Novartis Seeds Inc., Ontario AgRadio Network Inc., Pickseed Canada Inc., Pioneer Hi-Bred Ltd., Pride Brand Seeds – King Agro, Rhone-Poulenc Canada, UPI Inc., and United Agri Products.

ANNUAL MEETING
OCPA committee chairs presented their annual reports at the March 3 annual meeting. Copies will be provided to any member upon request. They can also be found on the OCPA web site (www.ontariocorn.org).

Portions of the auditor’s report for 1997-98 are published elsewhere in this issue.

Resolutions were approved which asked for:

• continued strong support for the Ontario Market Revenue Insurance program,
• pesticide companies to eliminate rebate programs in favour of “point of sale” price discounts,
• Ontario Ministry of Transport to implement a strategy for control of weeds adjacent to farm properties,
• various features in proposed new Carrier Safety Rating Programs of the Ontario Ministry of Transportation for farm trucks (these are summarized in the March issue of the Ontario Corn Producer),
• OCPA to initiate or support educational efforts to explain various marketing methods,
• means be found to maintain the Port Stanley harbor and facilities, and,
• improved marketing communication between Ontario industrial corn users and corn producers.

Resolutions were defeated which asked OCPA to investigate the possibility of the corn advance payment program being administered by Agricorp, to review the system used to allocate delegate representation, and to censure seed and chemical company salespersons for being too persistent.

CHANGES IN THE OCPA EXECUTIVE
The OCPA executive has a new look for 1999/2000. President is Anna Bragg, a Bowmanville-area farmer and OCPA director for Region 4 (Durham, Victoria, York and Simcoe counties or regional municipalities). First vice-president is Dennis Jack from Kent County. Second vice-president is Mat Menich from Norfolk County (OCPA Region 7, Brant and Norfolk counties). Treasurer is Fred Wagner from Waterloo Region who represents Region 5 (Waterloo, Wellington, Halton, Dufferin, and Peel counties or regional municipalities). Bob Down, Huron County, who stepped down as president after three annual terms, remains on the executive as past president. OCPA congratulates all on their appointments.

Also selected at a board meeting which followed the annual meeting on March 3 were the OCPA committees for 1999/2000. These are presented elsewhere in this issue, along with a listing of all OCPA directors for 1999/2000.

THANKS TO BOB DOWN
OCPA directors and staff extend their sincere appreciation to Bob Down for his three years of dedicated service as OCPA president. He has put in countless hours in support of Ontario and Canadian farmers, and, in doing so, enhanced the stature of OCPA and Ontario agriculture, nationally. Although Down is no longer president, the OCPA board intends to keep him busy as its representative on a number of provincial organizations including the Ontario Agricultural Commodity Council and the Ontario Federation of Agriculture. Thanks go also to Pat, his wife, for her solid support as well as for her own active career in municipal government and farm organizations.

SAFETY NET UPDATE
As expected, the structure of the new national Agriculture Income Disaster Assistance (AIDA) program was approved by Canadian ministers of agriculture at their late February meeting. At press time (early March), all provinces except Nova Scotia had agreed to cover 40 per cent of the program costs. The national program is essentially identical to the Ontario Whole Farm Relief Program announced earlier, and the submission of an Ontario program application form will automatically trigger both federal and Ontario funds. One difference is that Ontario funds are capped at $100,000 per farmer (up to five “farmer” equivalents per corporate farm or cooperative) while the federal cap is $175,000. This means any payouts on claim amounts of more than $100,000 per farmer will be reduced to the 60 per cent (federal) share. This should affect few Ontario farmers.

Contrary to earlier expectations, there is no administrative fee under the new federal program. (None under the Ontario program, either.)

As of early March, about 1,000 claims had been received in Ontario, and about $3 million distributed. The average payout to date is about $10,000. It’s too early to estimate final totals accurately, though the total number of claims may range between 3,000 and 5,000, with $30- to 50-million paid out for Ontario for the 1998 taxation/claim year. By comparison, it is projected that 20,000 to 30,000 Ontario farmers will receive support under the 1998/99 Market Revenue Insurance program, for a total amount likely to exceed $60 million (after deducting one-third for producers’ share of premium costs).

OCPA has been informed that the federal government is reconsidering how it will compensate provinces such as Ontario and Quebec for equivalent funding provided through programs such as Market Revenue Insurance, though details are not yet known. This issue was discussed in the March newsletter.

Although the Canadian Federation of Agriculture had been very vocal in its condemnation of the fact that the new program does not cover negative margins and deducts one year in actual or deemed contributions to NISA, the Honourable Lyle Vanclief, Canadian minister of Agriculture and Agri-Food, received limited criticism on this matter when he addressed the annual meeting of the CFA.

At press time, there was still no announcement on a spring interim payment for corn under the Market Revenue Insurance program. However, we’re informed that such a payment is highly likely, and our best guess remains 13 cents/bushel ($5.12/tonne).

There is no further news on the long-term future for the Market Revenue Insurance program although a 1999/00 program appears certain. Agriculture ministers have extended the current federal-provincial safety net agreement for at least one more year – i.e,. through 2000/01. This is probably good news for the Market Revenue Insurance program, though it does indicate the difficulty which ministers are having in agreeing upon a new national safety net agreement. The ministers meet again in July 1999. We understand that a major area of contention involves efforts by most provinces to secure a more equitable allocation of federal funds among provinces – and efforts by Saskatchewan and Manitoba (which now receive a disproportionately large share) to preserve the status quo.

A subcommittee of the national NISA committee has apparently rejected a proposal – at least for now – which would have obliged farmers to deduct the costs of commercial trucking, drying and storage from grain and oilseed crop sales in determining NISA-eligible sales. This is good news. However, the issue has not disappeared, and a Saskatchewan farmer is suing NISA over the right to add transportation costs from the local elevator to the West Coast, after title to the crop has been transferred to the dealer or Canadian Wheat Board, to NISA-eligible sales. OCPA disagrees with this legal action. Transportation costs should only be included to point of initial delivery.

On crop insurance, the only news is a correction in information provided in the March newsletter. Agricorp has agreed that those participating in the 1999 optional unit pilot project can purchase corn, soybean, and winter wheat crop insurance at 70 per cent, 75 per cent, 80 per cent or 85 per cent coverage level. For edible beans and spring grains, the choices are 70 per cent, 75 per cent and 80 per cent. This is a marked improvement over initial plans to provided optional unit coverage at only the highest coverage level. OCPA expresses appreciation to Agricorp for this change.

We repeat a suggestion made in earlier newsletters that producers seriously consider enrolling in the 1999 corn crop insurance program. The program continues to improve. Rates are down by an average of more than 30 per cent for 1999 – with an additional discount of up to 30 per cent for those with low actual of calculated (based on Market Revenue Insurance data) claim histories. With projected cash-crop income already low for 1999, can you afford to take a financial hit from crop failure?

ONTARIO AGRI-FOOD TECHNOLOGIES ANNUAL MEETING
Ontario Agri-Food Technologies (OAFT) held its annual meeting on March 4 in Guelph. OAFT is a 33-member organization formed in 1997 to encourage investment in agri-food biotechnology and other advanced technologies in Ontario, and to help in the identification of priorities. Dr. Gord Surgeoner is now president of OAFT, on a two-year leave of absence from the University of Guelph, replacing Dr. Murray McLaughlin who left OAFT in January 1999 to take a position with the Royal Bank, providing venture capital for new agri-food biotechnology initiatives.

A new executive of OAFT was elected on March 4 with Dr. Bruce Hunter of Novartis Seeds being elected chair and Terry Daynard of OCPA becoming vice-chair. OCPA thanks Susan Iler of the Ontario Soybean Growers’ Marketing Board – who stepped down as vice-chair after serving two terms – for her efforts. Surgeoner was the former chair, a position which he relinquished in becoming president, a full-time position.

OAFT priorities for 1999/00 include expanding its membership among food companies (most present members are farm organizations, universities and farm input supply companies), and cooperating with the Ontario government to develop an enhanced business strategy for agri-food biotechnology. This is a highly important initiative for the Ontario agricultural community.

TRADE POLICY
The next round of multilateral trade negotiations (termed the “Millenium” Round) beginning in Seattle in November 1999, promises to be every bit as important for Ontario agriculture as the preceding Uruguay Round. Ontario is by far the largest exporter of agri-food products in Canada – 40 per cent larger in dollar value than for the next biggest exporting province (Alberta) in 1998. And exports represent a higher percentage of the Gross Domestic Product of Ontario than for most – if not all – other Canadian provinces.

OCPA representatives had the opportunity to meet recently with the Honourable Lyle Vanclief, Minister of Agriculture and Agri-Food. The following points were emphasized:

• Canadian corn is fully exposed to the global market. There are virtually no restrictions or tariffs on imports.
• When duties on corn imports into Mexico end under NAFTA, there will be major opportunities to export high-value food-quality corn to that country.
• Ontario corn has found a good export market in the eastern U.S. Transportation, rather than trade rules, are the chief concern. A lot of U.S. corn is also imported.
• Subsidies are important, but the issue here is primarily domestic. Canada was obliged to reduce its level of “amber” support by 20 per cent from 1986-1988 levels as a result of Uruguay Round. In fact, amber support is down by 85 per cent. Despite this, Canada has some excellent amber support programs, including NISA, crop insurance and market revenue insurance. Some Ottawa officials have suggested that because these programs are amber, they are somehow in violation of WTO commitments. This is untrue. It is true that they are potentially countervailable, but only if they can be proven to cause injury to producers in the importing country. Fortunately, those industries most concerned about countervailing duties (CVDs) on exports to the U.S. (e.g., red meats) face very low domestic subsidy levels in U.S....indeed, lower than in Canada. This is not true for corn, for which subsidy levels are very high in the U.S. – higher than in Canada – and U.S. programs are highly trade and production distorting. The U.S. Loan Deficiency Program is a price support program, and is being used in 1999 planting decisions. Canada must retain Market Revenue Insurance in Ontario, at least until the Millenium Round is over, or the U.S. announces its intentions for subsidy support after 2002.
• In addition, too much significance is being placed on the “greenness” of proposed new whole-farm disaster programs, and implications for CVDs. Under WTO rules, “green” subsidies will also become countervailable after Jan. 1, 2003 under the “peace clause.” While this might change with Millenium Round negotiations, it is foolish to assume this is a given, especially considering U.S. intentions.
• Canada should align itself closely with Cairns Group. Canada was basically out of the fold in the last round, and on its own, attempting to align with countries with very high domestic subsidies and import restrictions in the final stages of the last round of negotiations. This should not occur again.
• Priority must be given to the export interests of those who operate fully exposed to international competition.
• Priorities for the future should emphasize value-added products (rather than basic commodities) which represent much greater opportunity for growth and added rural employment. The global market for bulk sales of grains and oilseeds has not grown in tonnage for two decades. Value-added is where OCPA has concentrated its efforts in market development for corn over the past 15 years – with good results. We are more excited about exporting high-value corn products than feed-grade corn.
• Trade in agri-food products made from genetically modified crops will be a major issue in the next trade round. Canada should be cautious in opening up the current Sanitary and Phytosanitary Agreement in Agriculture. This agreement may represent Canada’s most significant contribution to the last trade round. We have more to lose than gain by allowing others to introduce rules which allow countries to limit exports for reasons not based on good health science. Current bio-safety discussions are also very important.

Trade issues can be expected to dominate the OCPA agenda, once again, as the Millenium Round proceeds.

TECHNOLOGY USE AGREEMENTS (TUA’S)
OCPA has received numerous queries from Ontario corn growers raising concern over the condition contained in the Pioneer Hi-Bred “Technology Agreement” that states seed will be sold to the grower “only if the grower agrees to keep the harvested grain from these hybrids [stacked with YieldGard and Liberty-Link genes] out of grain export channels.”

In subsequent consultation with Pioneer Hi-Bred management, it has been clarified that this restriction applies only to hybrids which contain both the YieldGard gene and the Liberty-Link gene together (and only when these were inserted through two distinct “transformation events”), since this specific combination has not yet been approved for marketing in Europe. Furthermore, Pioneer markets seed of only one such hybrid in Canada – Pioneer 38B22. (Interestingly, hybrids containing either the YieldGard gene or the Liberty Link gene alone are approved for European trade, as are hybrids where the Liberty Link and YieldGard genes have been inserted together in a single transformation event).

Producers growing this specific hybrid should advise the purchaser(s) of their grain from this hybrid that it must be kept out of European grain channels. OCPA and Pioneer will notify the Ontario Grain and Feed Association of this situation, so their members can also take measures to ensure this restricted hybrid does not get marketed into Europe inadvertently. Given the relatively limited distribution of this specific hybrid to which the European marketing restriction applies, OCPA therefore advises Ontario corn growers that this clause should not be cause for refraining from signing the Pioneer Hi-Bred Technology Agreement.

In regard to other companies and other TUA’s, OCPA is aware that there are a few other similarly restricted transgenic corn hybrids, i.e. which contain genes transferred through “biotechnology” which are not yet fully approved for trade in the European market. Examples include:

• DeKalb’s ‘Btx’ hybrids (their Bty - ‘YieldGard’ hybrids are fully approved)
• DeKalb’s Roundup Ready hybrids
• hybrids containing AgrEvo’s ‘Starlink’ Liberty tolerant gene, although none of these are approved for sale in Canada, to date.

Each of these, we understand, are covered by technology use agreements issued by the seed companies marketing hybrids containing these genes, with restrictions on marketing as noted above and requirements that growers notify buyers of grain from these hybrids that it must be kept out of European trade channels. OCPA advises corn growers to consult with their seed suppliers regarding any other marketing restrictions imposed or recommended by the pertinent seed companies for hybrids containing transgenic traits.

 CORN PRICES (March 8, 1999)

Period: Oct. 1 - Jan. 31	Approximate Tonnes Marketed	Average Weighted Price
1998-99	1,566,800	$116.19/tonne
1997-98	989,500	$153.76/tonne
1996-97	1,221,000	$152.41/tonne
The above figures are based on levies received by OCPA for commercial sales.

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