Alberta is the one province sitting on the sidelines in the debate since
it will get about the same amount of federal safety net money whether allocated as it is presently or via a formula
based more on value of provincial productivity of non-supply managed commodities. Also, unlike the two provinces
immediately to the east, there seems to be relatively little farmer unrest this year in Alberta over safety net
support. (There was more in 1998 because of successive years of weather problems in the Peace River region.)
Ministers agreed to continue the discussion at their next meeting in November.
The agenda at the Prince Albert meeting also included trade, greenhouse gas emissions and biotechnology. As for
the former, the battle lines seem to be building between those who want greater access to international markets
(field crop and livestock groups), and those who want to keep existing barriers (dairy and poultry). A third (Prairie)
thrust comes from those who seek to maintain the Canadian Wheat Board as is despite strong pressure from the U.S.
and from those Canadian farmers who’d like its mandate diminished. By the time the next trade round formally begins
in late 1999, expect to see more heavy artillery in all camps.
Ministers discussed expected recommendations for actions relative to the Canadian Kyoto initiative (see article
elsewhere in this issue), though actions await the outcome of the report of the Agriculture Table expected later
this summer. As noted in the accompanying article there has been remarkably little consultation with farmers and
farm groups at the provincial level during this process. Of the national farm groups represented at the table,
only the Canadian Cattlemen’s Association has done a good job in keeping other groups informed. (The CCA is the
source of most information provided to OCPA and, via OCPA, to other Ontario commodity groups.) The Canadian Federation
of Agriculture, although co-chair of the table, has provided very little. Its only planned consultation (hopefully
subject to change) will be with delegates to its summer meeting in Newfoundland. This is not a good strategy for
ensuring producer “buy in” to recommendations.
Ministers did announce their support for Canadian efforts to have agricultural soil sink sequestration included
as part of the Canadian strategy.
Ministers also expressed their concern over the many campaigns of misinformation designed to stifle agricultural
biotechnology in Canada. But it’s not clear what they intend to do about it, and, in the case of the minister from
British Columbia there is only lukewarm support for this technology.
Features of the meeting were the presence of several new ministers and upcoming elections. But this is often the
case. The noise from protestors outside was also an obvious distraction. Agriculture ministers are not used to
this. (Mike Harris needs to give them lessons.)
FEDERAL SAFETY NET FUNDING ALLOCATION
The crux of the safety net dissension at the ministers’ meeting is the allocation of federal funds. OCPA appreciates
the strong position advanced by Ontario’s Hardeman. But upset voices from Saskatchewan and Manitoba also are a
major force. The causes of the discontent are explored in this month’s editorial.
The Honourable Lyle Vanclief, federal Minister of Agriculture and Agri-Food, is caught in the middle, with the
governments of the two eastern Prairie provinces doing a reasonably good job of painting him as the scapegoat for
safety net program failures in those two provinces. No doubt the debate is politically damaging to the federal
minister, though we applaud him for his efforts to seek solutions based on common sense rather than mob violence
and provincial political expediency.
One of the obvious missing ingredients is a good objective measure of relative risk. Prairie governments say funds
should be allocated relative to risk, but never say what this is, or how it should be measured.
Obviously, the present risk factor (relative provincial crop insurance costs) is an unsatisfactory measure. It
represents differential costs associated with differences in program design and levels of government subsidization,
and different administrative efficiencies, and rewards those provinces with more marginal farm land. There is little
evidence that this measure reflects true financial risk, recognizing that land and operating costs tend to be far
higher – and relative profit margins smaller – on more productive land.
In 1998, ministers of agriculture identified the issue of “risk” as worthy of more study at their summer meeting.
But to our knowledge, little has been done. Perhaps a solid study can be completed in time for the November meeting.
This question is being asked of Ontario: Does this province really want an equitable distribution, or simply enough
federal funds for existing and planned programs? The latter is clearly the near-term goal. But does it make sense
for a federal government to give relatively more support permanently to agriculture in some regions than others,
especially for those producing similar (competing) commodities?
This debate will continue.
MARKET REVENUE NEWS
We’re disappointed the Ontario Ministry of Agriculture, Food and Rural Affairs has taken so long to implement an
appeal process for the 1998/99 Market Revenue Insurance (MRI) program. Nothing is in place as this newsletter is
being written, though hopefully the process will have occurred by late July. The present proposal is for a hybrid
committee involving representatives from the Agricorp board of directors and producer groups representing corn,
soybeans and wheat growers. Producer groups have endorsed this proposal and it’s time for the process to proceed.
MRI is important to the financial well-being of Ontario grain and oilseed producers in 1998/99, and will be even
more important in 1999/2000 and probably 2000/2001.
No official support prices have been announced as yet for the 1999/2000 market year, but we understand these prices
will be very similar for major crops to those in 1998/99 (i.e., $3.32/bu for corn, $7.81/bu for soybeans and $4.01/bu
for winter wheat). Remember these apply to 85 per cent of historic average yields multiplied by seeded acreage,
with farmers receiving two-thirds of the difference between the base price and the Ontario crop year average market
price. (The other one-third represents the producers’ share of premium costs.)
The Ontario MRI program is not actuarially sound for the long-term. With projected payouts of about $60-70 million
in 1998/99 and possibly more than $100 million in 1999/2000, the payout rate exceeds annual additions to the fund
of about $25 million in new government contributions and about $15-20 million in interest. The fund balance was
$340 million as of April 1, 1999, but has since decreased by about $30 million because of the interim payment in
May.
The focus of OCPA and other grain and oilseed groups is in four areas: One is agreement by governments that the
program meets producer and public sector needs and should be maintained at least until U.S. support program intentions
are known for years after 2002 (when present so-called “transition payments” end under the 1995 “F.A.I.R.” Act)
and/or until the outcome of Millennium Round negotiations on world trade and agricultural subsidies ends. The second
is a commitment by the federal and Ontario government to make annual contributions of at least $25 million per
year to the MRI account. The third is a commitment by the federal and provincial governments to leave $112 million
and $70 million, respectively, in core funding (remaining from unused GRIP program funds from the early-to-mid
1990s) in the program. (Producers also have $60 million in premiums contributed during this period.) The fourth
is transfer of the program account and administrative responsibility to Ontario Grain and Oilseed Programs, a corporate
entity created by Ontario producer groups, so that MRI account funds can earn a higher rate of interest, and to
permit the use of risk-reducing instruments like reinsurance and hedging to protect the fund principal. Every one
of these four objectives is proving to be a struggle. MRI dominates the work agenda within OCPA.
On the longer term (or perhaps intermediate term), if grain and oilseed prices remain low as many analysts expect,
we anticipate efforts by the Government of Canada – driven by continuing pressure from Western crop farmers – to
institute a new or revamped income support program for this sector. The short-sightedness of Prairie decisions
to abandon GRIP is becoming painfully apparent and either GRIP will have to be resurrected, or something else created
in its place. As pointed out repeatedly by OCPA since last fall, a support program based on 70 per cent of a three-year
average is inadequate when grain prices are depressed for several years in succession. That’s why GRIP (and MRI)
used a 15-year average. When such changes – and new money – arrive, MRI is an ideal mechanism for distributing
funds to Ontario grain and oilseed producers.
We appreciate the recent strong support which has been expressed by the Christian Farmers’ Federation of Ontario
(CFFO) for MRI, reversing years of negativity.
CROP INSURANCE
The “Optional Unit Coverage” pilot project continues to progress well. We appreciate the six meetings which Agricorp
had across Ontario in late June and early July to meet with the 67 participants. A test will come when final yields
are collected this fall, to make sure yields from the various “optional farm units” are measured correctly. A meeting
occurred between Agricorp directors and farm groups in early July with the focus being partly on changes needed
to improve this program in 2000. This spring Agricorp found that although about half of those new potential customers
(i.e., those not formerly in crop insurance) approached about optional unit coverage took regular insurance, all
farmers appreciated the fact that they had choices; they could opt for 90 per cent overall coverage, or 85 per
cent coverage with optional units – same price for both – and they individually decided what was best for their
farms.
The goal of all of this is increased participation in crop insurance. In 1998, only about 44 per cent of Ontario
corn acreage was crop insured. The percentage will be up in 1999, though the exact amount is not yet known. A reasonable
goal is 75 per cent. No one relishes the prospect of another “1992” in Ontario – or flooded-fields-can’t-plant
conditions as exist this year in parts of the Prairies, without most farmers being crop insured. And the means
to accomplish this involve better insurance and more choices.
Although the CFFO recently passed a resolution “strongly opposing” Optional Unit Coverage, the position of CFFO
delegates seems much more divided. Those with larger cropping farms appreciate the importance of the coverage being
offered with this program.
One of the negatives to improved participation is continued efforts by the Canadian and Ontario federations of
agriculture to extend coverage under the Ontario Whole Farm Income Assistance/Agricultural Income Disaster Assistance
program to cover negative margin losses. Telephone calls to OCPA from several farmers and accountants have already
highlighted the present inequity where farmers who participated in crop insurance in 1998 (paying premiums and
receiving benefits) did not qualify for disaster assistance, while neighbours not in crop insurance received funds.
By extending disaster relief coverage to include negative margins – while making the program permanent – this effect
could be magnified.
DISASTER RELIEF AND NISA
Given the strong opposition to disaster relief programs being
displayed in the two eastern Prairie provinces, it is questionable whether this program will be made permanent,
notwithstanding its apparent benefits for livestock producers.
We have growing concerns about the longevity of NISA, given its well-publicized failure to address recent income
problems in both the pork and western grain sectors, and the reluctance of farmers to use NISA funds even when
income is down. Federal data indicate that Canadian farmers withdrew only about 15 per cent of triggered withdrawals
in the 1997 program year, with many farmers stating that they wanted to save NISA funds for retirement. This was
not the program’s intent.
Another problem is that NISA funds have been triggered too late for addressing near-term financial needs, although
recent changes to accelerate the timing of payouts has been beneficial. Some Ontario farmers have indicated a reluctance
to put more funds into NISA – despite the attractiveness of matching government contributions and the three per
cent interest bonus – because they can’t get the money out when they need it.
The OCPA position is that NISA is a valuable, core safety net program. However, further changes are needed to correct
the weaknesses outlined above. OCPA supports government decisions to link disaster assistance with NISA support.
It’s difficult to ask governments for disaster assistance while NISA money remains in the bank.
GMO UPDATE
The most noteworthy change since the update in the July issue has been an intensification of efforts by activist
groups, recently joined by the Sierra Club of Canada, to eliminate biotech crops from the Canadian food supply.
Their arguments and approaches are similar to those used in Britain though it remains to be seen whether they will
be as successful here, given the fact that Canadians (and Americans) have much more confidence in their food regulatory
system than is the case in Europe, especially England.
Their attack features several messages including statements suggesting biotech food is “dangerous to health and
environment,” farmers are slaves to biotech and pesticide companies, biotech crops need more pesticides (??), and
consumers have a “right to know.” The latter means food labeling, though it’s obvious they are pushing for a skull-and-crossbones
type of label rather than meaningful information. Some farm spokespersons are supporting this approach even though
advice from Europe, especially the UK – as well as from focus groups in Canada – is that such labels tell the consumer
little and only serve to confuse consumers more by supporting the unfounded claims of alarmists.
OCPA is pleased with the initiative launched recently by AGCare in cooperation with Dr. Doug Powell, Department
of Plant Agriculture, University of Guelph, in playing a proactive role in ag biotech communications. This approach,
being funded in part by the CanAdapt program as well as by farm organizations, is already having an effect. AGCare
letters are showing up increasingly in Canadian newspapers and magazines, and the media are calling AGCare daily
for information.
OCPA itself has written many letters on this issue. The OCPA response on the labeling issue is the following (an
excerpt from several letters):
“The most common current usage of biotechnology involves grain corn, soybeans and canola, but almost no Canadian
eats these in their unprocessed form. Rather they are components in the manufacture of thousands of other food,
beverage, and non-food products, often in very small percentages. How far does the labeling go? 10% made from corn?
1%? 0.01? Should toothpaste be labeled because it contains sorbitol made from corn? What about food packaging which
commonly contains corn-based glues and sizing?”
“Further, how far and how specific does the labeling go? There are lots of different genes and technologies. Different
label information for each? And should it extend to all production technology? Should it list all inputs used in
crop and livestock production (including organic pesticides, and/or the specifics of alternative pest control methods)?
Should it tell what source of manure was used as soil fertility and what steps were taken to ensure that all pathogens
were killed during composting? Or whether the crops used were hybrids or natural crosses – or rye, triticale, wheat
and some barley varieties, all of which involve man-made transfers of genetic material between species and/or chemical
treatments to change chromosome structure?”
“Finally, there is a risk that such label information could mask the value of current label information which is
known to affect human health, via a dilution with information on speculative, unknown risks. How big should food
labels be – like pesticide labels?”
“Advice from Europe is that biotech labeling has been of negligible value in informing consumers or allaying their
concerns about biotechnology. Indeed, it may have raised concerns where none existed. No doubt this is part of
the strategy for some pro-label advocates.”
“Ontario Corn Producers’ Association supports the right of consumers – who so desire – to purchase food grown in
specific ways. Choice already exists via purchases from bone-fide organic producers who will provide the appropriate
documentation – at a price. Indeed, those who purchase organic food should ask for this. But is it right to impose
higher costs on all other consumers who simply want the assurance that purchased food meets Canadian health standards
based on the best available science, and sold at prices which reflect the cost-efficiencies of state-of-the-art
food-production technologies?”
An estimated $500 million (CDN) is spent by North American farmers on corn insecticides annually. Bt corn with
resistance to European corn borer (ECB) can eliminate some of that. Much more will be wiped out with the impending
arrival of hybrids with Bt genes resistant to corn rootworm; these should be available in Canada about the same
time as the arrival from the Midwest of new rootworm ecotypes tolerant of crop rotations.
And recent research from Iowa (and preliminary data from Ontario) shows that Bt corn with resistance to ECB also
means less ear moulds which create mycotoxins. Greater mould resistance will come from current OCPA-funded research
at AAFC’s Eastern Cereal and Oilseed Research Centre, Ottawa and the University of Guelph.
Roundup-Ready soybeans and corn offer the opportunity to replace expensive pesticide applications with one – sometimes
two – passes with a low-cost herbicide so safe it’s sold at Canadian Tire.
It is for reasons such as this that Novartis, DuPont and Cyanamid all recently announced plans to downsize their
agricultural pesticide divisions. Biotechnology offers the opportunity to cut North American pesticide sales by
billions of dollars.
OCPA expresses appreciation to the Canadian Food Inspection Agency and Environment Canada for providing $60,000
over two years to assess the effect of Bt corn pollen on butterfly larvae and to recommend strategies for minimizing
risks while retaining the benefits of this powerful, effective technology. The research being led by Dr. Mark Sears,
Department of Environmental Biology, University of Guelph, and chair of both that department and the Ontario Bt
Corn Coalition, will examine the extent to which milkweed plants are located near corn fields in Ontario, the extent
to which Bt corn pollen dusts these plants, the level of pollen dosage needed to cause larval mortality, potential
differences between different Bt corn “events,” and potential corrective strategies.
With financial support provided by Novartis Seeds, Pioneer, and OCPA, Powell has arranged for a telephone survey
of 1,000 growers to assess their understanding, and compliance with the advice of the Bt Corn Coalition and OCPA
that a minimum of 20 per cent non-Bt corn be planted to delay the development of Bt resistance in the ECB. This
is called ‘refuge’. The results which should be released formally before this issue of the Ontario Corn Producer
reaches member homes, show that about half of the growers surveyed grew Bt corn in 1999. Of these, about 13 per
cent grew less than 20 per cent of non-Bt ‘refuge’. However, an analysis of the data showed that almost all of
these were smaller growers with less than 100 acres of corn. Of those with more than 100 acres, only three per
cent had less than 20 per cent of non-Bt corn. These results are encouraging, but there is room to do even better
next year.
SEED CORN RESEARCH CONTRIBUTION
OCPA and participating seed corn companies are finalizing procedures
by which the contribution of 50 cents/unit on 1999 seed corn sales can be transferred to OCPA, to be used wholly
for support of corn research, using a third-party trustee. The trustee is being used to ensure confidentiality
of market share information of the participating companies. Of those companies indicating initial support, all
but Growmark have, to date, indicated that they will be providing contribution funds on 1999 sales. Discussions
are continuing with Growmark, the only farmer-owned cooperative among the group.
OCPA extends it appreciation to the following companies for their support of OCPA-directed corn research via this
process: Agventure Seeds Inc., Cargill Hybrid Seeds, Direct Seeds Inc., Hyland Seed (W.G. Thompson & Sons Inc.),
Maizex Inc., Mycogen Canada Inc., Novartis Seeds Inc., Pride Seeds (King Agro Inc.), Renk Seed Company of Canada
Ltd., and Zeneca Seeds.
CONGRATULATIONS TO DAVE HUME
OCPA congratulates Dr. Dave Hume, Department of Plant Agriculture,
University of Guelph, on his appointment to the position of overall coordinator of OMAFRA-funded research at the
University of Guelph. This is a step up from his former position as coordinator of plant research. We’re hopeful
that this will also mean the appointment of a new faculty member in Plant Agriculture to assume responsibility
for crop management and physiology research programs formerly managed by Hume.
There is still no one appointed to fill Dr. Tony Vyn’s position, vacant for nearly one year. This is a major void.
We understand the university may be having trouble finding quality candidates at the initial salary level for an
assistant professor. There are too many good opportunities in agribusiness, and a 68-cent dollar makes it difficult
to attract candidates from the U.S. This position is crucial to Ontario agriculture. It needs to be filled with
a quality candidate, soon, even if this means a higher-than-base salary.
| Period: Oct. 1 - May 31 |
Approximate Tonnes Marketed |
Average Weighted Price |
| 1998-99 |
2,817,354 |
$117.75/tonne |
| 1997-98 |
1,575,800 |
$151.16/tonne |
|
1996-97 |
2,056,700 |
$153.06/tonne |
| The above figures are based on levies received by OCPA for commercial sales. | ||
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