Index
Unseeded acreage is eligible for Market Revenue Insurance. The guaranteed
production under market revenue is 85 per cent of your average farm yield. The market revenue claim is based on
# acres X 85 per cent of your average farm yield X (support level, minus average annual weighted price) X 2/3.
Market revenue USAB claims are paid when the crop year is completed. Crop insurance USAB claims are paid before
harvest.
It is critical that final planted acreage be reported by June 30 and crop insurance premiums be paid by July 10.
Producers with problems should contact their AgriCorp representative immediately to resolve any concerns or disputes.
If you are still not satisfied about your coverage, you should write to the Chair of AgriCorp’s Crop Insurance
Committee, 1 Stone Road West, Guelph, Ontario, N1G 4Y2.
If you wish to appeal the settlement of your claim (or you have a contract eligibility dispute), you should write
to the Crop Insurance Appeal Board, 1 Stone Road West, Guelph, Ontario N1G 4Y2.
Safety Nets - National News
The next big national safety net event is the meeting of Canadian ministers of agriculture in early July. They
are expected to ratify the agreement worked out in March which will see the federal government allocate $665 million
across provinces by value of receipts from sales of eligible commodities, and another $435 million for disaster
programs and the interest costs of the new springtime cash advance program. All amounts are to be matched by provincial
governments at the ratio of $40 provincial per $60 of federal funds.
As noted in previous newsletters, good progress is being made in the understanding of how the $665 million portion
(called Pool 1) will be used. It will cover NISA contributions and administration, crop insurance, fall cash advance
program costs and other companion programs - such as Market Revenue Insurance and various NISA “top-up” programs
in Ontario and other provinces. More on the Ontario use of these funds follows later.
Pool 2 program and funding details are more uncertain. For example, is the $435 million a cap each year, or an
amount which is continued to a fund which can accrue? And how do provinces budget for matching funds? For example,
what if the disaster all occurs in one province in a given year: will that province be required to match $435 million
(or more) in federal funds on a 40:60 ratio? And will there be one national disaster program or a family of provincial
programs with common features? How do you ensure that more disaster money is not triggered by ill-advised usage
of Pool 1 monies? There are lots of unresolved questions. Hopefully, progress will be made when the ministers meet.
Disaster Program for 1999
The ministers also have some serious problems to address with 1999 disaster programs, especially the federal “AIDA”
program. When Minister Vanclief announced in February 2000 that he would alter the calculations so that beginning-year
inventory values could be based on commodity prices on either the first or last day of the 1999 farm fiscal year
- and on a commodity-by-commodity basis (whichever gave the largest payout) he apparently made a commitment which
is expected to exceed committed federal funds by 20-40 per cent. As a result, there is a serious likelihood that
prorating will occur. This is why farmers receiving disaster-assistance cheques for 1999 are only being paid half
of the calculated federal assistance level. (Farmers are getting all of the provincial allocation under the Ontario
Whole Farm Relief Program, which bases beginning-year inventory calculations on year-end values. The interim cheque,
then, consists of 100 per cent X 40 per cent of total assistance funded by Ontario, plus 50 per cent of the 60
per cent funded by Ottawa - or a sum of 70 per cent of the total.) It’s not clear how Ottawa will handle this dilemma
- substantial prorating when final cheques are issued, or more federal money to be authorized by cabinet. And
the federal decision is compounded by the fact that in several provinces - including Manitoba and Saskatchewan
- there is only one disaster program, AIDA, and it is funded 40 per cent by provinces. These provinces, in turn,
are showing reluctance to cover their share of the added cost for the enhancements announced by Vanclief, unilaterally,
in February.
OCPA and most other members of the Ontario Agricultural Commodity Council (OACC) have no formal position on inventory
calculations. There is general support for the concept that year-beginning inventory calculations should be based
on year-beginning values, not those 365 days later. This would seem consistent with good accounting practice, and
is the method used by many farmers in calculating annual profit or loss. In some cases, year-end inventory values
are based on cost to produce, but this is much more complicated. There seems to be less rationale for basing the
calculations on a choice of beginning-year or end-of-year, and on a commodity-by-commodity basis, whichever yields
the most favourable value. Inventory calculations – especially those to be used in any long-term disaster assistance
program – must be based on good accounting principles.
The issue of negative margins still remains divisive, though there is good recognition that this has a major bearing
on the integrity of crop insurance. In addition, the inclusion of negative margins distorts the program in favour
of those for whom ineligible fixed costs (example, land costs, cash rent, etc.) are a lower portion of total costs.
With negative margins included, AIDA pays more readily, and a bigger amount for those who farm $10-acre-cash-rent
land, than those who pay $150/acre. The OACC position is that negative margins should not be included in either
base or current-year calculations, and OCPA supports this.
NISA
Canadian ministers will also spend time discussing the NISA program. There is concern among both ministers and
farm leaders that if the total size of NISA accounts in Canada continues to grow, even in times of tough financial
conditions, the political support for this valuable program will erode.
New procedures by which farmers can make interim withdrawals have been effective in speeding access to NISA funds
in times of need, and also help ensure that NISA withdrawals occur in the same taxation year as the low income
from farming operations. If NISA withdrawals cannot occur until after year-end tax-filing time, then NISA income
occurs in the next taxation year when it could be subject to a higher rate of taxation.
The three per cent interest bonus on producer-contributed funds also encourages producers to leave money in NISA
accounts even when it could be used to boost farm income in times of need. Indeed, some bankers encourage farmers
to leave their funds in NISA, using the interest bonus as the “carrot,” while increasing their lines of credit
to meet larger cash-flow needs during difficult years. While this may make good economic sense in the short term,
it tends to run counter to the purpose of NISA - to be a source of funds during years of below-average farm income.
At the same time, producers remember that the interest bonus was introduced by the Government of Canada to offset
the fact that NISA contributions are “after tax” money, rather than a taxable farm expense, as was the original
intent of the committee which designed this program.
Finally, discussion continues on links between NISA and disaster assistance. Is it reasonable to ignore NISA account
balances in calculating disaster program payouts? Can it be termed a “disaster” if NISA funds are not all used?
Ontario Safety Net Planning
The Ontario Agricultural Commodity Council (OACC) has spent a considerable amount of time this spring considering
how “Pool 1” funds allocated to Ontario can be best used to meet Ontario farm safety net needs. The OACC has been
assisted in this process with analyses and advice provided by the Ontario Federation of Agriculture, the Christian
Farmers’ Federation of Ontario, and the Ontario Ministry of Agriculture, Food and Rural Affairs. While governments
– not producer groups – make the decisions on safety net allocations, it is assumed that a united farm organization
position will be very influential in the government decision-making process.
Success came at a June 12 OACC meeting when the organization endorsed a three-year plan for allocating an estimated
$228 million/year in federal/provincial safety net funds among various programs. These include crop insurance (premiums
and administrative costs), NISA (including NISA top-ups), a new self-directed risk-management (SDRM) program for
producers of edible horticultural commodities as an alternative to crop insurance, Market Revenue Insurance, and
several other smaller programs. It is hoped that the Governments of Ontario and Canada can act on this recommended
package soon after the national meeting of agriculture ministers in July.
OCPA is pleased with the cooperative manner in which Ontario farm organizations approached this exercise. No group
got everything it wanted, but the result is a package of programs which should benefit all.
Market Revenue Insurance
Federal minister of agriculture Vanclief continues to stall on the request by Ontario farm groups that payments
under the Market Revenue Insurance (MRI) program be enhanced and extended through the 2002/03 crop year, to match
the duration of the new federal/provincial safety net agreement referenced above. Calculations indicate that support
could be increased above the 85-per-cent-with-one-third-deduction level, using existing funds within the MRI account
and those to be added out of new “Pool 1” funds discussed earlier. In essence, the Government of Canada could improve
the lot of Ontario grain and oilseed farmers at no additional cost to Ottawa - and thereby reduce the huge gap
which exists between support levels for equivalent farmers in Ontario versus the U.S. - but is reluctant to do
so.
Further, while Vanclief and his staff continue to tell farm leaders that their requests are being considered, they
are quietly trying to coerce the Government of Ontario into signing a deal which would extend the MRI agreement
only through the 2000/01 crop year, while returning unused monies to Ottawa at the end, and preventing any enhancement
of existing benefits.
The deal Ottawa insists Queen’s Park sign also has a provision that those who dropped out of MRI at an earlier
date - whether by design or accident - can never rejoin this program. This is contrary to the original GRIP program
design which had provisions for phased-in re-entry. We have raised this with government officials in Ottawa and
the response has been “tough.” Rules are rules. Period.
Politicians at both the federal and provincial level need to hear directly from farmers on this issue.
GM Update
Surprisingly, there is not a lot new to report on the “GM” (genetically modified foods and crops) front. The activists
continue to tell scary stories but both the media and the public seem to be losing interest.
Prince Charles rejoined the biotech debate recently with some anti-science statements, but these were refuted by
his sister and father, in a manner which sounded like a rich family feud.
The biotech advertising campaign of large companies has been largely ignored by the activists, even though some
farm groups were concerned that these ads might trigger reactions.
Dr. Doug Powell, University of Guelph, is currently repeating an Ontario corn farmer survey which he did last June
to determine how much GM corn was planted in Ontario this year, and how well farmers respected guidelines for the
planting of a minimum of 20 per cent of “refugia” (non-Bt) corn. These results should be available in early July.
We anticipate that about one-third of Ontario corn will be GM this year, as it was last year, with almost all of
this being Bt.
The issue of food labelling is under review on at least two fronts. One of these is the continuing Canadian General
Standards Board process, developing standards for the voluntary labelling of GM and non-GM foods. The issues remain
the same. While the consensus seems to be shifting in favour of a broader definition of genetic modification –
at least to include all foods and crops which have been approved under new “novel food” rules introduced by Health
Canada and the Canadian Food Inspection Agency in 1994 – there is still opposition. A major source of opposition
is the Canadian Wheat Board (CWB) and Cyanamid. The latter has developed a new herbicide-resistant spring wheat
variety using accelerated mutagenesis (treatment with high levels of radiation or mutagenic chemicals). This variety
has been approved as a novel crop. And both Cyanamid and the CWB are lobbying hard to have it called a non-GM
variety, even though this would apply for domestic food markets only and not for exports, and despite the fact
that labelling will be voluntary.
The question of detectability is also on the table. OCPA, the Ontario Soybean Growers, AGCare, the Ontario Agricultural
Commodity Council (OACC), Ontario Agri-Food Technologies, and Consumers Association of Canada, respecting the views
of Canadian consumers as monitored in several ways, consider that the guidelines must cover all foods made from
GM organisms, whether GM ingredients can be measured in the finished food product or not. Others, especially some
food manufacturers and the Canadian Canola Council, have argued that non-detectability means that the food is non-GM.
This is not a key issue for voluntary “does contain” guidelines, but it is a dominant issue for those who want
to label foods as being non-GM. OCPA continues to argue, in cooperation with many other groups, that non-GM means
non-GM. Such foods should contain no ingredient made from a GM organism, with the only exception being an allowance
for inadvertent mixing (e.g., an allowance for cross-pollination of non-GM corn with pollen from Bt plants). As
for the latter, the standards which now exist for seed purity would seem appropriate for non-GM crop production
and certification.
If non-detectability was the criterion for labelling as non-GM, this would exempt most food products made from
corn, soybeans and canola. The only exception would be those containing crop proteins and DNA unmodified during
processing - e.g., corn flakes and tofu. But surveys indicate that this approach would have little credibility
with the public, and certainly not with anti-biotech activists.
The other labelling initiative at the federal level involves hearings by the House of Commons Standing Committee
on Agriculture and Agri-Food. These hearings pertaining to the potential for mandatory labelling are occurring
at the insistence of Hélène Alarie, Bloc agricultural critic, who has been the most vocal opponent
of agri-food biotechnology in the House of Commons. However, mandatory labelling has also been supported by the
New Democratic Party. No one is clear, however, on what Alarie and the NDP want to label, how they would do it,
and what the cost to consumers and the food industry would be.
The OACC recently endorsed the AGCare position on GM labelling. Support has also been provided by the Science and
Technology Committee of the Ontario Federation of Agriculture, though not necessarily by the OFA itself. At press
time, the Canadian Federation of Agriculture has no official position on the specifics of voluntary labelling,
though CFA staff has generally supported the CWB position and that of food manufacturers.
The United Church of Canada has stepped further into the biotech debate by issuing a publication which presents
a strongly negative perspective, and which is based almost entirely on news clippings (largely Toronto papers),
interviews with anti-biotech activists, and the literature of these groups. There is no hint in the publication
that mainstream farm groups were consulted, nor that any significant consultation occurred with biotech scientists
or government regulators. Remember that this and other United Church anti-farm technology initiatives are being
financed by funds forwarded to head office by local congregations. We focus on the United Church because it has
been the most outspoken in its anti-biotech initiatives. But it’s questionable whether the other churches are different.
Pesticide News
Just as the public fervor over biotechnology has begun to abate, pesticides have, once again, returned to the front
page. (It’s of interest that, in a public poll conducted by Ontario Agri-Food Technologies last December, pesticides
were rarely mentioned as a food concern.) Much of this stemmed from a report issued by the House of Commons Standing
Committee of Environment and Sustainable Development, chaired by Toronto MP Charles Caccia, well known for his
anti-pesticide views.
OCPA has reviewed the report and is very disappointed with its anti-pesticide bias, its errors and omissions,
and its superficiality. The bias is evident right in the chair’s introductory remarks when he attempts to equate
pesticide usage with tobacco usage (equating antibiotics with “anti-life” would be more appropriate), and in the
choice of witnesses asked to give testimony. A large array of anti-pesticide groups was invited, most with statements
linking pesticides with cancer and other health and environmental problems, but the Canadian Cancer Society and
Canadian Medical Association were not invited, nor were reps from groups such as the Canadian Centre for Toxicology
which has published extensively on pesticides links to health. The only person invited as a witness from the University
of Guelph was agricultural economist Peter Stonehouse, known for his organic-agriculture advocacy and not for his
knowledge of health, environment or pesticides.
Not surprisingly, the report dwells extensively on projected threats of pesticides to health and environment and
largely ignores benefits. It also proclaims that organic agriculture reduces soil erosion (notwithstanding its
heavy dependence on soil tillage and diesel fuel use for weed control), with no cited evidence...except statements
from Dr. Stonehouse.
The report calls for the elimination of all cosmetic use of pesticides, arguing that aesthetics have no health
or environmental benefit. While the focus is on dandelions in lawns, it’s clear that the recommendation would be
the elimination of pesticide use (including organic products) for control of insects and diseases on gardens and
indoor plants.
While Caccia has been an antagonist of pesticides for many years (in the 1980s he called for the banning of all
pesticide use), it’s disappointing that the report was approved by other Liberal MPs as well as those in the NDP,
PC and Bloc parties. Only the Canadian Alliance filed a dissenting, minority statement.
It’s curious that many of those calling for reduced pesticide usage are also those opposing the use of biotechnology
as a means of reducing pesticide usage.
Casco News
Casco is upgrading its corn unloading system at London, hopefully in time for the 2000 harvest. This is good news
for hundreds of truckers and shippers.
Construction begins on the new JBL citric acid plant in Port Colborne this summer. It’s not clear yet how much
additional corn will be milled by Casco as a result of this new market, but it is expected to be substantial.
With the endorsement of OCPA, the Agricultural Adaptation Council recently awarded $115,000 to Casco to help share
the cost of transferring research facilities from Chicago (home of Corn Products International, parent of Casco)
to Cardinal. This will be used to expand research on corn quality and on new uses for corn.
The corn oil refinery at Cardinal - which was closed when the former CPC International split into two companies,
Corn Products International, and Best Foods - is being reopened. This is good news, as it represents a local market
for corn byproducts (corn germ oil), and will add employment in the Cardinal area.
Dr. Dennis Miller, a chemical engineer from Michigan State University, and Brian Doidge, Ridgetown College, University
of Guelph, recently completed a study on potential new Canadian markets for the production of chemicals from corn.
The study was co-funded by OCPA, Casco, and OMAFRA’s Special Research Projects Fund. The primary opportunities
include polyols (such as sorbitol used in toothpaste, etc.), polyethylene glycol, organic acids and more. Discussions
are continuing on how to best use this information for expanded corn processing in Ontario.
Corn Products International has asked Casco to double the size of its business in Canada. OCPA is eager to assist.
Appreciation is extended to both Agriculture and Agri-Food Canada and the Ontario Ministry of Agriculture, Food
and Rural Affairs, which have been very cooperative in these efforts.
Water Quality
The E.coli water contamination in May in Walkerton, Ontario, reminds us of the importance of our water quality.
OCPA members express their sympathies to the families and to the community which has suffered greatly in coping
with this tragedy.
Fuel Ethanol News
The Canadian Renewable Fuels Association had a very successful annual meeting on June 20th at the Hilton Hotel
in Windsor, Ontario, indicating the growing importance of ethanol in addressing air quality and global warming
issues. Speakers made presentations on biodiesel, greenhouse gases, the 2000 Ethanol Vehicle Challenge and Denver’s
successful efforts in utilizing ethanol to address air quality concerns. The annual meeting preceded the world-class
2000 International Fuel Ethanol Workshop held in Canada for the first time in its 16-year history.
Work is underway at Commercial Alcohols Inc. in Chatham to build a new, larger stack, install scrubbers and replace
or repair dryers to alleviate odour concerns. The plant is now back up to capacity after months of reduced production
in late 1999.
Seaway Valley Farmers Energy Cooperative is very close to finalizing a financial arrangement with a lead lender,
and getting a plant under construction in the industrial park in Cornwall, Ontario. The years of hard work and
determination by Bud Atkins, and his board of directors, will finally end in a successful campaign and an important
addition to the Ontario ethanol industry.
Greenhouse Gas Emissions
Although agricultural soils as a sink for carbon dioxide emissions are still not approved as an acceptable strategy
for meeting Kyoto obligations on net greenhouse gas (GHG) emissions, there is a high expectation that this will
occur at the next official international meeting of the “Council of Parties” (COP) later this year. Don McCabe,
OCPA director for Lambton, and chair of the OCPA Research and Technology Committee, has assumed a major role in
this process on behalf of Ontario crop producers. OCPA also expresses appreciation for active support being provided
by the Innovative Farmers of Ontario and its chair, Bob McKinnon of the Port Elgin area, the Ontario Soil and Crop
Improvement Association, and the Soil Conservation Council of Canada.
The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) funded several studies by consultants. Their
reports, made available on June 19, support earlier projections that soil sinks are crucial to the ability of Ontario
and Canadian agriculture to meet Kyoto targets for reductions in net GHG emissions.
However, there are large uncertainties. One of these is the extent of carbon sequestration on different soils and
with different cropping patterns and reduced tillage practices. Is minimum tillage of benefit, for example, or
is no tillage required to sequester carbon? What about periodic tillage? Does this undo all of the years of benefit
of previous no tillage? There are many more questions.
Emissions of nitrous oxide – which has 310 times the global warming potential of carbon dioxide – are critical
to consider in this debate. A large amount of carbon dioxide sequestration can be offset by a small additional
amount of nitrous oxide. And the dynamics between reduced tillage and nitrous oxide losses are poorly understood.
One major concern is the assumption by most analysts (including the consultants hired by OMAFRA) that increased
soil nitrogen applications automatically mean more nitrous oxides, and the reverse. The scientific literature,
however, is far less certain. Most annual emissions of nitrous oxide occur during short periods of water-logged
soil conditions - particularly in early spring when snow melt, rainfall, and semi-frozen soils mean soggy soils
- but also after cloudburst rainfall conditions, such as Ontario has seen in May and June of this year. The literature
also suggests that the presence of ground cover may be more important than soil nitrogen fertilizer applications
per se in determining total losses. Perhaps it’s more important to have soil cover in early spring, than to focus
on reduced N applications as a means of reducing nitrous oxide emissions.
As a result of the questions and uncertanties, OCPA and other members of the Ontario Field Crop Research Coalition
still believe the most important need in the GHG area is for more good-quality research. Unfortunately, while AAFC
has provided $4 million in new funds for GHG research, it has linked these to a strange condition that these must
be matched about 50:50 with private funds. This means that most of the $4 million could be unavailable for use
by farm groups who must focus their limited resources on issues more directly linked to farm economic well-being,
than Kyoto commitments made by the Government of Canada. (This is particularly so in light of evidence that, on
balance, global warming would probably benefit Canadian agriculture.) Hopefully this federal policy will be amended.
The coalition is also seeking provincial funds to support the needed research.
Grain Growers of Canada
A number of grain and oilseed groups across Canada, including OCPA, have met in 2000, seeking means by which they
can work more closely together on issues of common interest. There is a proposal for the creation of an entity
called the Grain Growers of Canada (this includes oilseeds, pulses, and other specialty crops), to be funded at
a level sufficient to have a national office, by member groups. A key meeting occurs in Calgary on June 29, and
a more formal launch is expected later this summer or fall.
An organization such as this is badly needed. Grain and oilseed groups are about the only national agricultural
interest with no national organization, and farmers have paid the penalty.
We’ll provide more details as they become available.
Spring Cash Advances
As of June 19, the Agricultural Commodity Corporation has received 1,386 applications totaling $23.6 million.
National Corn Growers Association
The U.S. National Corn Growers Association President Lynn Jansen of South Dakota, and chief executive officer Chris
Wehrman of St. Louis visited Ontario in late May to meet with executive and staff members of OCPA. This is the
second NCGA executive visit to Ontario within about a year, and it was much appreciated.
Wehrman, who leaves NCGA this summer after six years, has played a key role in striving to improve links between
that organization and its counterparts in other countries, and the visit was part of her plan. NCGA and OCPA staff
have worked closely in recent months on biotech communications, and hopefully this will continue after she moves
on.
The Michigan Corn Growers Association (MCGA) has gone through some revitalization in the last year or two, and
a meeting between OCPA and MCGA is expected to occur this summer. The MCGA wants to see an ethanol plant built
in that state (there is presently no significant corn processing in Michigan, except for Kellogg’s, which buys
its corn grits from other states), and we support this initiative.
Dr. George Jones
George Jones, now retired and living in Fergus, Ontario, was a champion of corn and modern weed control technology
during the 1960s and 1970s. He is well known to many corn farmers.
We’re pleased that he was awarded an honourary doctor of science degree at the University of Guelph convocation
June 14.
Although George did not have a PhD degree, he was sometimes called “Dr. Jones” by those who respected his knowledge,
leadership and enthusiasm. Now he’s truly Dr. Jones.
Dr. Jones was featured in the December 1999 issue of the Ontario Corn Producer.
| Period: Oct. 1 - Apr. 30 |
Approximate Tonnes Marketed |
Average Weighted Price |
| 1999-00 |
2,531,800 |
$112.19/tonne |
| 1998-99 |
2,688,000 |
$117.43/tonne |
|
1997-98 |
1,160,300 |
$152.25/tonne |
| The above figures are based on levies received by OCPA for commercial sales. | ||
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