April 2006

Index

• Safety Nets Policy Committee
  • Risk Management Program
  • OCPA will deliver both the Spring Credit Advance Program and the Fall Advance Payment Program in 2006
  • Federal Grain & Oilseed Payment Program
• Grain Trade & Market Development Policy Committee
  • Ethanol
  • OCPA Terminates Membership in Grain Growers of Canada
  • Trade Initiatives
  • CBSA's Duty Relief Programs
• Environment, Technology and Research Policy Committee
  • Source Water Protection Update
  • Meeting with Ministry of the Environment (MOE)
  • Nutrient Management Act
  • Own Use Imports
  • Variety Registration
  • Coexistance
  • Research
    

Safety Nets Policy Committee

The Ontario Grain & Oilseed Safety Net Working Group:

The objectives of our 7-commodity safety net working group remain the same:

Since the semi-annual meeting in September, the group has:

Risk Management Program

Risk Management Program (replacement program for MRI):
The main thrust of the G&O Safety Net Working Group has been to get our RMP implemented for the 2005/06 crop year. We have presented the RMP to a great many commodity groups, the OFA, the CFFO, the CFA, and others. We have a large number of letters of support and endorsement.

RISK MANAGEMENT PROGRAM: KEY POINTS FOR GROWERS

Our RMP represents a new way of doing business; but, our RMP will happen only if growers across Ontario support it and push very hard to get it.

RMP Highlights

RISK MANAGEMENT PROGRAM

Note: Support prices are indexed annually using Farm Input Price Index

OCPA will deliver both the Spring Credit Advance Program and the Fall Advance Payment Program in 2006

Traditionally, the OSG and the OCPA have only delivered the Advance Payment Program for their respective commodities. ACC Farmers' Financial has delivered, with the agreement of the OSG and the OCPA, the Spring Credit Advance Program (SCAP) to corn and soybean producers in Ontario as well as other eligible commodities. ACC Farmers' Financial has also delivered the APP, however, it has not offered corn and soybeans advances for the fall program.

On February 28, the Farm Financial Programs Branch of AAFC informed the OCPA of their decision "to allow ACC Farmers' Financial to continue to deliver the SCAP including soybeans and corn for one more year. The OCPA and OSG will also be permitted to deliver the SCAP for their respective commodities providing they are ready to do so with the electronic system and other administrative components. The OSG has agreed to have the OCPA administer the SCAP for both corn and soybeans. Administrative and electronic systems components have and are being developed with successful trial run uploads of data already completed. Further information and application forms will be forthcoming shortly.

Federal Grain & Oilseed Payment Program

An accounting firm, acting on behalf of an incorporated Ontario farm, confirms the following about their treatment under the GOPP, the Federal $755 million payment, 7.4% of ENS announced just prior to the election with cheques in the mail now.

"Because Ontario administers the CAIS program provincially and the GOPP is administered federally, Ontario corporations have not been sent their payments because there has been a delay in Ontario (Agricorp) getting 2004 data sent to Agri-Food Canada. It sounded like Agri-Food Canada had now received the data from Ontario, but they don't expect payments to go out until April! I asked if there was anything that could be done to speed up the process, and of course he said no.

Agricorp is processing corporate CAIS returns. I do know of at least one corporation that we have (who has a January year-end) and they have their 2004 Calculation of Program Benefits and half of their 2004 CAIS payment. The ironic part is that Ontario is withholding the other half of their CAIS payment because they are waiting to receive information from the Federal government, yet the federal government won't release their GOPP because they are waiting to receive (the same) information from the provincial program. It doesn't make a whole lot of sense."

Grain Trade & Market Development Policy Committee

Ethanol

The OCPA supports ethanol produced in Ontario using corn grown in Ontario. Taxpayer-supported business ventures should be held to a higher level of accountability than business ventures not dependent on government assistance. Therefore, government assistance for ethanol should maximize benefit to rural Ontario and to Ontario corn producers which is the specific promise Premier McGuinty made in September 2003. The OCPA proposed that taxpayer assistance to ethanol producers be based on their purchases of Ontario-grown corn. The provincial government chose not to implement our proposal. The provincial government chose instead to provide EGF operating grants to ethanol producers based on their output of ethanol, all ethanol not just new production and regardless of corn source. Ethanol produced from imported subsidized U.S. corn would reap the same taxpayer funded assistance as ethanol produced using Ontario-grown corn. However, ethanol made from imported subsidized U.S. corn obviously cannot provide anywhere near the same economic benefit to rural Ontario and Ontario corn producers as ethanol made from Ontario-grown corn. Taxpayer assistance could have, and should have been provided in a manner ensuring maximum benefit to rural Ontario and to Ontario corn producers. The OCPA has asked to be included on the OMAFRA committee reviewing and approving government funding for ethanol projects in Ontario as we are the only legitimate voice representing the interests of the corn producers of Ontario whom Premier McGuinty promised to benefit.

OCPA Terminates Membership in Grain Growers of Canada

On Friday, February 24, 2006, the OCPA sent the following letter to the President of Grain Growers of Canada terminating our membership in that organization:

"This letter is to advise that the Board of Directors of the Ontario Corn Producers' Association has decided to terminate its membership in the Grain Growers of Canada effective March 31, 2006. As one of the founding member organizations of the GGC, this has been a difficult step for the OCPA to take. GGC's continuing inaction and lack of meaningful involvement in national safety net issues, especially during the recent federal election, has been very disappointing. GGC's other interests, priorities, and memberships have increasingly hampered our national safety net objectives. The Board of the OCPA believes it can better serve the interests of its membership through other means at the national level. The Board of the OCPA wishes the members of the GGC all the best in their continuing endeavours."

Trade Initiatives

The Canadian Corn Producers (a consortium of the Manitoba Corn Growers' Association, La fédération des producteurs de cultures commerciales du Québec, and the Ontario Corn Producers' Association) launched a four-prong attack on the injurious impact of illegally dumped and subsidized imports of U.S. grain corn (the fourth prong, Risk Management Program, is discussed in the Safety Net Policy Committee report):

a) Byrd Amendment Retaliation

In December 2004, the Canadian Corn Producers asked the Canadian Government to add U.S. grain corn imports to the list of products targeted for retaliation by Canada against the U.S. for its refusal to repeal the Byrd Amendment (i.e., the U.S. law, already declared illegal under the WTO, that allows the U.S. Government to pay to affected U.S. industries anti-dumping and countervailing duties collected in the course of unfair trade actions brought in the U.S.). The possible retaliatory measures are imposing a surtax against such imports or suspending the injury requirement in a dumping and subsidy complaint under the Special Import Measures Act (SIMA).

To date, the Federal government has done nothing.

The U.S. Senate has passed a bill to rescind the Byrd Amendment, but the House of Representatives has yet to address the issue. Even if the House passes similar legislation, the two versions would have to be melded into one bill for Congressional approval and signing into law by the President. Moreover, the Senate proposal would not remove the Byrd Amendment until 2010 at the earliest.

b) WTO Case

In May 2005, the Canadian Corn Producers asked the Canadian Government to commence WTO dispute settlement proceedings by requesting consultations with the U.S. regarding the illegality of U.S. grain corn subsidies in light of (a) the expiry of the so-called "peace clause" in the WTO Agreement on Agriculture and (b) the recent WTO dispute settlement reports in the Upland Cotton complaint initiated by Brazil which found that several of the major U.S. agricultural subsidy programs (which also apply to grain corn) violate U.S. WTO obligations.

US$10.4 billion dollars in subsidies are projected to be paid to U.S. grain corn producers in the 2005/06 crop year. That is half again the value of the crop and equivalent to 49% of the value of the total U.S. grain corn crop.

On March 3, 2006, OCPA received the following letter from Industry Canada:

"This is in response to your letters of September 12 and 29, 2005, addressed to the Honourable David L. Emerson, former Minister of Industry, regarding alleged U.S. agricultural subsidies affecting grain corn. I regret the delay in replying to you.

One of Canada's primary objectives in the World Trade Organization (WTO) agricultural negotiations is to achieve substantial reduction of trade-distorting domestic support, which would, if achieved, constrain the ability of the United States, and other governments, to provide such support. While it is not yet clear what the outcome of these negotiations will be, it is encouraging to note that both the European Union and the United States recognize the necessity for substantial reductions in trade-distorting domestic support. Thank you for the copy of the July 7, 2005 brief from the Canadian Corn Growers in support of a request to initiate a WTO challenge of grain corn subsidies provided by the United States Government. The Government of Canada is carefully considering this request, taking into account the merits and possible implications of pursuing a WTO case.

The federal government is well aware of the harm that can be caused to Canadian producers as a result of foreign government subsidies. It is for this reason that we are seeking increased disciplines to significantly reduce trade-distorting domestic support. Our primary goal is to ensure a level playing field for all agricultural producers."

To date, the Federal government has done nothing. This letter makes it obvious the Federal government has little intention of doing anything soon.

c) Anti-dumping and Countervailing Duties Complaint under SIMA

The Canadian Corn Producers filed a domestic trade remedy complaint under the Special Imports Measures Act (SIMA) respecting the injurious subsidization and dumping of imports of U.S. grain corn. On December 15, 2005, the Canada Border Services Agency (CBSA) announced its preliminary determination that 100% of U.S. grain corn imports into Canada are dumped and U.S. grain corn subsidies are indeed injuring Canadian grain corn producers. The CBSA estimated the margin of dumping to be US$0.58 per bushel and the amount of subsidy to be US$1.07. As a result, the CBSA imposed provisional anti-dumping duties of US$0.58 per bushel and provisional countervailing duties of US$1.07 per bushel totaling US$1.65 per bushel or about Cdn$1.90 per bushel.

The CBSA will issue a final determination of dumping and subsidy investigations on Wednesday, March 15, 2006. Injury hearings before the Canadian International Trade Tribunal will commence March 20, 2006 and are scheduled to last 5 days. The CITT will issue its final findings on injury on Tuesday, April 18, 2006. A public interest inquiry, should the CITT decide to hold one, would commence in late August with an opinion issued mid-October.

CBSA's Enforcement of Provisional AD&CV Duties:

CBSA's Duty Relief Programs

Environment, Technology and Research Policy Committee

Source Water Protection Update

The McGuinty government introduced the 'Clean Water Act' (Bill 43) into the legislature on December 5, 2005. The intent of the government through this new legislation was to safeguard the health of Ontario families and communities by protecting the natural sources of our drinking water. It would establish Ontario as a leader in the delivery of safe drinking water in the following manor:

Communities would work together across watersheds in full and public consultation, to develop and execute plans to protect their drinking water sources. To ensure the communities are able to complete the necessary studies, the government will invest $67.5 million - $51 million over 5 years for technical studies and $16.5 million for conservation authorities over the next year for staffing and resources. If this legislation gets passed, the act would help integrate water protection and growth planning, and ensure that growing communities can continue to have an appropriate supply of safe, clean water. The act would better protect both the quantity and quality of the water in Ontario's aquifers, rivers and lakes, including the Great Lakes.

This draft legislation was posted for comment on the Environmental Bill of Rights. Since this issue touches many sectors other than just Ontario Corn Producers, the analysis was undertaken by the Ontario Farm Environmental Coalition (OFEC). It is a group that represents over 50 farm organizations in the province and is chaired by OFA (Ontario Federation of Agriculture), AgCare (Agricultural Groups Concerned About Resources and the Environment), OFAC (Ontario Farm Animal Council) and CFFO (Christian Farmers Federation of Ontario). OCPA is represented through AgCare; however, OCPA has been a regular participant in the OFEC Nutrient Management and Water Quality working groups. Since OFEC doesn't employ any staff members, it is through the in-kind contributions of staffing resources from the above groups, as well as ourselves, that the group functions.

The first reading of the draft legislation by the members of OFEC generated a multitude of questions and concerns. The first thing that was very apparent was that the legislation had the appearance of being rushed; more so than the Nutrient Management Act which received heavy criticism as well in this area. There seem to be many areas where the legislation contradicts itself. Skepticism from the group would suggest that this may be by design in order to provide the necessary flexibility for interpretations of convenience. The balance of power appears to be with the municipalities, the larger conservation authorities, the permitting office and the permit officer; more disturbing is the process lacks the necessary checks and balances for proper accountability. If one recalls, one of the reasons the province was in charge of the Nutrient Management Act was to provide consistency across the province. With the way the balance of power has been set up, charging water protection back to the municipalities and conservation authorities, it is a 'recipe for disaster' for potential inconsistent by-laws in adjacent regions. Suspiciously, sewage by-passes and other similar processes seem to be exempted.

Other areas of concern; the legislation goes on at lengths about 'threats' to drinking water. OFEC has always talked about 'risks' to drinking water; the main reason being that risks can be addressed through 'multi-barrier' approaches. There is only one way to mitigate a threat - eliminate it. There is also verbiage used that leads the group to believe that the act contains some precautionary pieces and is covering all water everywhere - this was not the intent of the recommendations made by Justice O'Connor from the Walkerton Inquiry.
One last glaring issue; the consultative process seems to be flawed as many of them occur after actions have been implemented. They appear to be an exercise of tokenism.

Meeting with Ministry of the Environment (MOE)

Many of the above points were captured within OFEC's response submission to the Clean Water Act EBR posting. Unfortunately, when we met with MOE in late February, they did not come equipped to discuss our concerns. OFEC did however, build on these initial reactions.

One of the most concerning missing pieces through this whole process is the lack of a cost/benefit analysis and who is expected to pick up the bill. Should it be the party that is receiving the greatest benefit? Is it the tax payer who gains the benefit? The only response MOE could make was that this information would not be available until the assessment report was completed.

Within the purpose statement of the draft legislation, OFEC conveyed some concerns that there was some very important wording missing such as water conservation, multi-barrier approaches and the value of cost-sharing. There are examples in other jurisdictions, Manitoba being one, where care has been taken to include such verbiage. Looking towards the future, water conservation will become just as big as threat as some of the land uses being targeted by this legislation.

Another area of concern brought forward by the members of OFEC was the issue around responsibility and accountability. There is a concern that the way the permitting office is set up, it is not being presented as being the same office that will bear the implementation costs. This has to happen at the same level of government or problems will emerge. OFEC does not think the permitting system is appropriate, and it is not consistent with what O'Connor was recommending. There are standards in the province that are currently being met (ie. pesticide and liquid manure storages) that do not require a permitting system. It would be nice to see Source Water Protection set up the same; a system with random inspections that would provide the necessary integrity to the system. Continuing along this thought process; it would also be nice to set the funding up as incentive-based.

To further explore this issue of accountability, there is the situation of decommissioned municipal wells. These wells were shut down because of problems and were never properly decommissioned because of cost. Would municipalities use this system to pay for what they have been unwilling / unable to fund?

Finally, there is the whole issue of privacy. It is still fairly unclear what information is going to be considered public through the Source Water Protection legislation. OFEC has gone to great lengths to make sure the Environmental Farm Plan stays confidential; it was suggested that only grower 'tombstone' information, the same kind of information that would be required for building permits be readily available. A good case can be made for this action; in Europe, there are issues of sabotage performed by extremist groups because of their 'full disclosure' approach. MOE was explained that it would be a major inconvenience if the Source Water Protection process was a duplication of the Environmental Farm Plan. If a best management practice approach is being considered, careful consideration needs to be made as there is the potential for significant site and sector differences across the province that may not fit well in a one-size-fits-all program.

There were some other issues raised by the OFEC group not outlined above. It was felt that the whole approach taken to Source Water Protection by MOE completely ignores the activities which are currently being implemented by producers across the province. In fairness to MOE, they committed to an early March response period to address OFEC's concerns.

Nutrient Management Act

As a quick update on where we currently sit with the Nutrient Management Act legislation, the regulations have changed significantly. A number of standards are no longer part of the regulations; the strongest example being the NMAN program. Instead, NMAN is now a best management practice. Nutrient management plans no longer need to be approved by OMAF; however, strategies still need to be submitted and abided by.

The farm operations that are smaller than 300 nutrient units do not currently have a timeline that will bring them under this regulation but are still encouraged to complete a nutrient management strategy. However, any expanding operation over 5 nutrient units that requires a building permit will also require an approved strategy.

Part of the reason many of the standards were pulled back to best management practices was the lack of science to support the standards. A researcher has been contracted to perform some work in this area.

Own Use Imports

The Own Use Import (OUI) program was initiated through the Pest Management Regulatory Agency in the early 1990's. OCPA was the first (and one of the only groups) to take advantage of this program for two reasons: pricing discrepancies with pesticides used in the United States, and to exert some pressure to move towards a harmonized pesticide registration system with the United States.

This past year, a group from Western Canada called Farmers of North America, applied for equivalency testing with a glyphosate product being sold in the United States called Clearout 41. This equivalency was proved with Cheminova's Glyfos and subsequently, 3100 permits were issued for roughly 5.75 million litres of Clearout 41. This has caused some concern from the crop protection industry, mainly issues around transportation, storage, container disposal and chemical carry-over. In response to this, a task force has been struck which has been diligently working on this issue. OCPA is represented on this task force through the Grain Growers of Canada.

The one proposed area of change that has really bothered OCPA is a '10% pricing discrepancy' in order to qualify for the program. OCPA's stance all along is that this 'pricing piece' steps outside of PMRA's mandate of proving scientific equivalency. More importantly, if the price differential is wide enough, then producers will take advantage of the program - which is the whole point of the program. Therefore, let the market figure out whether or not the program is used.

Variety Registration

The National Forum on Seed (formerly known as the National Seed Sector Round Table) has a working group looking into the issue of variety registration. This variety registration working group consists of representation from most of the major crop types in Canada. This group was presented a proposal from the Canadian Food Inspection Agency (CFIA) on October 25, 2005. Within this proposal, CFIA was suggesting some changes to the variety registration system. Corn enjoys an 'exempt' status under the current registration system.

For this coming year, there will be no major changes to the registration system. In terms of next steps, OCPA and other stakeholders in the corn industry are in the process of building a 'Crop Specific Consultative Group', whose mandate will be to deal with registration issues facing corn.

Coexistance

OCPA recently endorsed a CropLife article entitled 'Cultivating Coexistance'. Essentially, it is a piece that creates awareness around the issue of agriculture coexistence; the mutual sustainability of differing production systems in the same geographic region. It is based on the principal that farmers should be able to freely cultivate the crops of their choice using the production system they prefer, whether that be organic, genetically modified or conventional. OCPA has always supported the ideology of farmer choice; the most recent example of this was through 'Market Choices' and the awareness created around making sure the non-EU approved genetically modified hybrids are channeled to the appropriate markets.

Research

OCPA has research funds left unallocated from the Canada-Ontario Research and Development program, a program which will expire in March 2008. The research action team, under the direction of the Environment, Technology and Research committee, is in the process of securing new projects that will maximize benefit to the 'grass roots' membership.