December 2006

Index

Canadian Corn Producers: Canadian Agriculture Ministers Miss Chance to Strengthen Foundation for Agriculture in Canada

Canadian Corn Producers

The following news release from the Canadian Corn Producers was released on November 23, 2006.

Canadian Agriculture Ministers miss chance to strengthen foundation for agriculture in Canada

Guelph, ON. Canadian Agriculture Ministers met in Calgary last week with the stated purpose of “building a stronger future for agriculture in Canada”
according to the headline of their press release of November 14, 2006. “When you look at the details of the Ministers’ press release, however, the headline rings hollow – especially from the perspective of Canadian corn farmers”, says Doug Eadie, President of the OCPA and one of the Ontario spokespersons for the CCP. “Frankly, we are surprised and very disappointed that the Ministers have once again overlooked the importance of the grain and oilseed sector as one of the pillars of a stronger future for agriculture in Canada”.

Although the Ministers have said many times in the past that the grain and oilseed sector has suffered serious harm due to price suppression caused by US Farm Bill subsidies (a view echoed by many corn user representatives over the past year such as the Ontario Agri-Business Association and the Ontario Pork Producers Marketing Board ), in their recent press release, the Ministers have provided no solution for the income crisis plaguing Canadian corn farmers who are now in dire straits.

The Ministers’ missed opportunity compels the CCP to continue its Federal Court of Appeal challenge of the Canadian International Trade Tribunal’s perverse noinjury finding of April 18, 2006. Last week, the CCP filed with the court and served on its opponents an application record requesting the court to overturn the CITT’s decision on the basis that the CITT made threerelated and overriding errors:

(1) it confused the concept of price suppression with that of price depression and refused to consider price suppression as a separate head of injury as required by law;
(2) it refused to consider the 44% magnitude of the margin of dumping and amount of subsidy as a separate head of injury as required by law; and
(3) it based its decision on the supposedly widening price “gap” between American and Canadian corn. In doing so, the CITT based its decision
on an issue that was never raised by anyone before it found its way into the CITT’s reasons and thus breached the rules of natural justice.

Laments Christian Overbeek, President of the FPCCQ and one of the Quebec spokespersons for CCP, "Regrettably (because it pits us against some of our best customers), the CCP must continue to deploy the domestic trade remedy tools at its disposal to protect Canadian corn farmers from unfairly traded American corn. Otherwise, the “harm on the farm” caused by these US subsidies is borne entirely by Canadian corn producers and that is unfair. Everyone knows our corn farmers are competitive with the Americans in terms of both product quality and cost of production. What everyone (including our customers and our governments) also know is that Canadian corn farmers cannot compete with the US Treasury which
every year hands out obscene amounts of already-declared WTOillegal subsidies to American corn farmers - $US 21.1 billion during the 3 year period 2003-2005 to be exact. In fact, had American corn farmers been forced to rely only on market revenue (as their Canadian counterparts
must), these American farmers would have lost $11.7 billion over that same period. Faced with the horrible price-suppressive effect of these American subsidies and the deepening farm income crisis in Canada that is not of our farmer’s making, the CCP must also continue to press the Canadian Government (and their provincial counterparts) to implement a fully-funded farm income support program (to offset the serious trade injury caused by massively subsidized and dumped US corn imports).

Adds Doug Eadie, “With the US Farm Bill up for renewal in 2007 and the collapse of the Doha Round of WTO trade negotiations that aimed through negotiation to discipline some of the worst tradedistorting excesses of the existing suite of US agricultural subsidies, the CCP must also continue to lobby the Canadian government to launch a WTO legal challenge. Last year, our trade counsel provided a detailed brief to the Government of Canada confirming how such a challenge could successfully be brought. Two months ago, the Canadian Government received another detailed brief
making the same point – this time from the Geneva office of one of the leading WTO law firms in the world, Sidley Austin LLP (who acted for Brazil when it successfully challenged the same suite of US subsidies in Upland Cotton). Both briefs point to the same conclusion: Canada can viably make a claim under the WTO dispute resolution process that these US subsidies cause adverse effects and serious prejudice to its interests and the time for Canada to act is now.”

Canadian Corn Producers (CCP) are a coalition of Canada’s main corn producer associations – namely, the Ontario Corn Producers’ Association (OCPA), the Fédération des producteurs de cultures commerciales du Québec (FPCCQ), and the Manitoba Corn Growers’ Association (MCGA). Together they represent over 26,000 corn farmers who last crop year produced 364 million bushels of grain corn (valued at roughly $CAN 1.4
billion).

1 For instance, in March 2006, the President of the Ontario Agri- Business Association wrote to the Federal Minister of Agriculture stating, “It is increasingly apparent that the negative financial situation facing the Ontario grain and oilseed sector is a direct result of the subsidy levels established by the U.S. Farm Bill.”

For more information, please contact:

Ryan Brown, General Manager, Ontario Corn Producers’ Association
rbrown@ontariocorn.org
519-767-4135
or
Benoit Legault, Directeur – Général, La fédération des producteurs de cultures commerciales du Québec
blegault@fpccq.qc.ca
450-679-0530

Spokespersons for Canadian Corn Producers

or

Bill Hearn, Partner, McMillan Binch Mendelsohn LLP
bill.hearn@mcmbm.com
416-865-7240
International Trade Law Counsel to Canadian Corn Producers

CFA Expresses Disappointment on CAIS Reform

The Canadian Federation of Agriculture (CFA) expressed their disappointment in a November 15 press release to see Canada’s ministers make no new progress on details for reforming the CAIS program to address issues such as declining margins and flexibility.

The membership of the CFA, representing families across Canada, agrees that CAIS does not work for all commodities in all regions. A safety net program must be predictable and bankable for farmers, be flexible to accommodate regional needs, and address the issues of declining margins
and high foreign subsidies. The CFA has proposed solutions that can help achieve those goals and need not cost governments more money.

CFA stresses that the time for change is now.


 Agriculture Ministers Seek New Policy

At the meeting of the federal, provincial and territorial ministers of agriculture in Calgary,November 14, changes to Canada’s agriculture industry were discussed. Federal Minister of Agriculture, Chuck Strahl, stated in a press conference that the sector needs to seek out new opportunities
to ensure its future success and profitability. While much work has been done on a new suite of business risk management programs, ministers
acknowledged that more work still needs to be done to identify and address gaps and make improvements in it. Consultations with the sector will continue, starting in January, in conjunction with the next generation policy development process.


 Next Generation of Agriculture and Agri-Food Policy

The ministers launched a series of consultations for the development of the next generation of policy and are challenging the sector and those interested in it to put forward innovative ideas and solutions to address the challenges.

A series of consultation documents have been developed and are accessible on the Agriculture and Agri-Food Canada website, http://www.agr.gc.ca/pol/consult/, including:

* Discussion Paper – outlines current and future challenges and proposes a vision for the sector
* Principles Paper – provides proposed guidelines for developing agriculture and agri-food policy
* Series of Economic Backgrounders, will be made available, for trends experienced by the sector and what is happening in other countries and how
they manage policy
* A set of discussion papers, will be made available, covering five topic areas including: science and innovation; market development and trade; food safety; environment and renewal.


AALP Recruitment Underway

Established in 1984, the Advanced Agricultural Leadership Program (AALP) is an executive leadership and personal development program for men and women actively involved in Ontario’s agriculture and food sectors. Its aim is to provide current and future leaders with the skills, knowledge,
broad perspective and positive attitude needed for the future within the agrifood industry. AALP is delivered by The Centre for Rural Leadership.

With a proven track record for using leadingedge training and development, this 48-day program is delivered over a period of 19 months. Participants learn through instruction and practical application, national and international travel, distance education, as well as through learning,
dialogue and networking opportunities with today’s business, government and community leaders.

Graduates use their increased skills and knowledge of the entire agri-food system to work with others to lead, direct and manage change. They
are recognized for their courage and confidence to move forward building stronger agriculture and rural communities, within the province and beyond. To date there are over 290 AALP graduates who are using their leadership skills directly within the industry – provincially, nationally
and internationally.

With Class 11 almost wrapped up and expected to graduate in April 2007, The Centre for Rural Leadership is currently recruiting for Class 12
which will begin in September 2007. Information and recruitment sessions are being held across the province between November 2006 and
February 2007. These informal evenings provide the best opportunity for potential applicants to get more information about AALP and talk to graduates about how the program has impacted their businesses and careers. Further information about the recruitment sessions and application forms are available online at http://www.aalp.on.ca/application.aspx or by contacting The Centre for Rural Leadership office in Guelph at (519) 826-4204.


Recognizing Women in Agriculture

In a November 15 press release, Farm Credit Canada announced that they will be accepting nominations for the FCC Rosemary Davis award. The award recognizes innovative women in agriculture who demonstrate a passion for the industry and serve as role models.

There will be five award winners who will participate in the 2007 AT HENA International Conference in Chicago. The focus of the conference is
on building strong leadership skills.

People can nominate someone or apply for the award by February 1, 2007 at www.FCCRosemary DavisAward.ca.

Ontario Government Promotes Agricutlural Awareness at the Royal

The Ontario government supported an exhibit, The Journey To Your Good Health, at the 2006 Royal Agricultural Winter Fair that promoted the role of Ontario agriculture in contributing to the health and wellness of all Ontarians.

The focus of the exhibit was to educate visitors about healthy and active living and the significant role of Ontario agriculture through interactive
displays, product sampling and live presentations.

Through the Rural Economics Development (RED) Program, $973,800 will be contributed over three years to the Royal Agricultural Winter Fair and Ontario Agri-Food Education Inc. to promote the role of Ontario agriculture in contributing to the health and wellness of Ontarians.

In addition, the Ontario government has signed a one-year Memorandum of Understanding with the Royal Agricultural Winter Fair and invested $140,000 to help the Royal promote and support agriculture innovation and food production, and to increase agricultural awareness.

Proposed Amendments to Seeds Regulations

The Canadian Food Inspection Agency (CFIA) recently announced that it is proposing changes to the seeds regulations. These regulations govern the testing, inspection, quality and sale of seeds to facilitate the availability of pure, effective seed for Canadian consumers and export markets. The proposed amendments were posted in Canada Gazette, Part I, on September 16, 2006. Comments can be submitted on the amendments for 75
calendar days from this date.

The proposed amendments to the regulations cover off many areas, more specifically some of the following:

1. Update of the scientific names of species listed in Schedules I, II and III
2. Clarification of terminology and the intent of the legislation
3. Updates to better reflect current industry practices
4. Removal of fractional standards
5. Small changes to germination, disease and purity standards for some species
6. Changes to grade names for forage and turf mixtures
7. Additions to, or the movement of, species within the grade tables

Dow AgroSciences, Dupont Expand Access to Herculex Traits

In a United States press release, Dow AgroSciences and Pioneer Hi-Bred International Inc. announced they will make their new and increasingly
popular family of insect resistant biotech traits more readily available to growers. The co-developers of the Herculex family of insect resistance for corn have agreed to eliminate a provision that would have delayed when Dow AgroSciences could license Herculex RW Rootworm Protection and Herculex XTRA Insect Protection to other seed companies. The companies agreed to allow the making of molecular stacks with the Herculex traits, as well as breeding stacks with their own or other traits. Financial terms of the agreement were not disclosed.

Agriculture is Embracing Third Edition Environmental Farm Plan

The latest version of the environmental farm plan (EFP), now in its third edition, continues to be popular with the Ontario agricultural community
with 7,300 producers taking part since its May 2005 introduction. Close to $35 million has been allocated for 7,600 projects across the three federal cost share programs. Producers recognize the importance of keeping current with environmental issues and education is a prime motivator to participate in an EFP workshop. The program is delivered by the Ontario Soil and Crop Improvement Association (OSCIA) on behalf of the Ontario FarmEnvironmental Coalition, of which OCPA is a member.

Costs Limit Bigger U.S. Move to Biomass Ethanol

Scientists have developed ways to make ethanol from corn stalks, switchgrass, wood chips and other plant materials, but high production costs and lack of easy access to those materials have slowed the technology’s move to widespread commercial use. Ethanol is made primarily from corn, but industry experts have said waste materials from agriculture or forestry could be a cheaper alternative in the future.

Martha Schlicher of Renewable Agricultural Energy, Inc. was quoted as saying some corn-based ethanol plants are not getting built because people
are worried about corn supply. She went on further to say that she does not think investors want to fund a biomass plant because of their concerns about feedstock supply and the potential for undetermined price increases for those biomass feedstocks.

The story says the U.S. Department of Energy has estimated the cost of producing a gallon of cellulosic ethanol is about $2.20 per gallon; about
twice the cost of producing ethanol from corn.

GM Crop Breakthrough Threat to Monsanto

A San Diego company plans to unveil a technology that can deliver the benefits of genetic modification without inserting foreign genes into a crop, in a move that could transform the multibillion dollar agricultural biotech market. Cibus, which has been funded quietly for several years by a group of biotechnology investors in the U.S., believes there is huge potential in its nontransgenic technology for introducing “traits” such as herbicide resistance into plants. It will be particularly appealing in regions such as Europe, where strong political and environmental opposition has blocked the introduction of GM crops. The company’s chairman, Stephen Evans-Freke, expects Cibus also to prosper in countries such as the U.S. where farmers have embraced Genetic Modification. He feels his company’s Rapid Trait Development System (RTDS) will provide a less expensive alternative to GM seeds.

Scientists Study Maize Smut Pathogen

A German-led international group of researchers has identified the genes that enable the maize smut pathogen to live as a parasite. Led by researchers from the Max Planck Institute for Terrestrial Microbiology in Marburg, Germany, the scientists have analyzed the U. maydis genome. Among the 7,000 genes of the fungus, they have found some with which the fungus lives at the expense of its host plant without killing it. Those genes, say the team of nearly 80 scientists from around the world, probably also help the fungus to circumvent the plant’s defenses. Researchers are now hoping to apply their findings to other fungi, which like Ustilago maydis, depend on living plants.

Europeans Broke Trade Regulations

The World Trade Organization (WTO) has ruled that Europe broke international trade regulations by preventing imports of genetically modified foods into European countries.

The decision of the dispute, which was launched with the WTO panel by Canada, Argentina and the United States, was that there is no scientific
evidence to justify the ban.

International Plant Nutrition Institute

The International Plant Nutrition Institute (IPNI) is a new global, scientific, agronomic organization founded by Potash & Phosphate Institute (PPI).
By the end of 2006, PPI will be fully integrated into IPNI and will no longer exist.

The new organization, IPNI, will be composed of fertilizer industry companies that are basic producers of nitrogen and/or phosphate and/or potash and/or sulfur for agricultural use.

Ontario and Quebec Sign Historic Agreement

Ontario’s Minister of Energy, Dwight Duncan, and Quebec’s Minister of Natural Resources and Wildlife, Pierre Corbeil, announced the signing of an agreement between Hydro-Quebec TransEnergie and Hydro One Networks for the construction of a new 1,250 MW Quebec-Ontario interconnection.

According to Minister Duncan, Ontario is modernizing and strengthening the province’s transmission lines to ensure the province will always have enough electricity to meet the demand. This project will help meet the needs of more than 400,000 average homes in Ontario.

The first phase of the project which is the new connection with Ontario will be in service by May 2009. Completion of the second phase which is a
reinforcement line is expected to be in the spring of 2010.

Cash Advance Program Update

Producers with Spring Credit Advance Program (SCAP) loans are reminded that the repayment deadline is December 15, 2006. There is still time to roll these loans into the Enhanced Spring Credit Advance Program (ESCAP) to take advantage of the extended repayment date of September 30, 2007.

Producers who received ESCAP Pre-Harvest loans are reminded that After-Harvest Reports are required by December 31, 2006.

ESCAP After-Harvest and Advance Payment Program for corn applications are available through your local elevators, the OCPA office or they can be downloaded from the OCPA website, www.ontariocorn.org. The application deadline for both programs is February 28, 2007.

OCPA Staff Take Farmers Feed Cities! to the Streets

On November 19, OCPA staff and their families took the Farmers Feed Cities! campaign to the Guelph Santa Claus parade. Special thanks
go to OCPA staff Kim Ratz and Kimberly Denommee for the time and effort they put into designing and building the float and costumes.
The message of the float was well received with the crowds whistling, clapping and yelling thanks to the farmers as the float passed by.


OCPA Announces General Manager

The Ontario Corn Producers’ Association (OCPA) has named Ryan Brown as the General Manager following the recent
retirement of Brian Doidge. Ryan Brown joined the OCPA Management Team as the Production Issues Manager in 2003 after graduating from the University of Guelph. press release

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