September/October 2007

Index

• Safety Net Policy Committee
  • Canada's Federal Government on Track to Deliver $1 Billion in Funding to Farmers
  • "NEW" CAIS
    • AgriInvest
    • AgriStability
    • AgriRecovery
    • AgriInsurance
  • Cost of Production (COP) Payment
  • McGuinty Government Helps Relieve Cost of Production Pressures for Ontario Farmers
  • Risk Management Program to Help Farmers Compete and Succeed

   

• Environment, Technology and Research Committee
  • Agricultural Policy Framework (APF) Research Funding Update
    • Next APF
  • Grower Requested Own Use (GROU) Program
  • Clean Water Act
  • Corn Specialist Named as 2007 T.R. Hilliard Award Winner

 

• Grain Trade & Marketing Development Policy Committee
  • Canadian Corn Producers (CCP) Four-Pronged Approach Update
    • Historical
    • Income Support
    • Request for WTO Consulation
    • Antidumping/Countervailing Duty Case
  • Ethanol Update
  • ecoAgriculture Biofuels Capital Initiative (ecoABC)
  • ecoENERGY for Biofuels

Safety Net Policy Committee Notes

OCPA SEMI-ANNUAL MEETING
Ontario Corn Producers’ Association
September 11, 2007

Canada's Federal Government on Track to Deliver $1 Billion in Funding to Farmers

As you may recall back on March 9, 2007, the Prime Minister announced $1 billion in new funding for agriculture, with the intent to improve national farm income programs. There were actually 2 parts to this funding announcement; $400 million was to be spent on a cost of production payment and $600 million was to be used as seed money to fund a farmer savings account program under a new business management suite that will replace the Canadian Agricultural Income Stabilization (CAIS) program.

"NEW" CAIS
The ministers have agreed to an evolution towards a new business risk management suite. The new suite intends to replace CAIS with programs that are said to be more responsive, predictable and bankable for producers. The new programs can be described under the following 4 titles:

AgriInvest
A savings account for producers supported by the federal, provincial and territorial ministers of agriculture at their June meeting, which provides coverage for small income declines and allows for investments that help mitigate risks or improve market income. This is the program the $600 million is targeted to.
AgriStability
This is designed to provide support when a producer experiences larger farm income losses. The program covers declines of more than 15 percent in a producer's average income from previous years.
AgriRecovery
This is a disaster relief framework which provides a co-ordinated process for federal, provincial and territorial governments to respond rapidly when disasters strike. This will fill gaps that are not covered via existing programs.
AgriInsurance
This is an existing program which includes insurance against production losses for specified perils which include weather, pests, and disease. The intent is to expand the program to include more commodities.

Stay tuned, as further details on program design and enrolment will be made available this fall.

Cost of Production (COP) Payment
The $400 million COP payment is a direct payment to producers to help them deal with rising costs in recent years. Producers of non-supply managed commodities reporting farm income for tax purposes for 2004 are eligible for the program. These same producers who are part of the CAIS program do not need to apply for the program. New producers of non-supply managed commodities reporting farm income for the first time in 2005 and 2006, or producers that are not part of CAIS, are also eligible but need to apply for the program. These applications were available in late May, with the first payments occurring in late June. The deadline to apply for the program was September 1, 2007

For producers who farmed in 2004, the initial payments were based on 2.36 percent of an average of their net sales of qualifying commodities for the 2000 to 2004 period. Producers who began farming after 2004, their payments were based on 2.36 percent of an average of 2005 and 2006 net sales. The federal government will administer the program for all provinces except Quebec, and they hope to have all the initial payments out by October which should use most of the allotted funds. Final payments will be distributed in December if any funds remain.

In the future, the federal government has also committed $100 million annually that would be paid into producer savings accounts to address increasing production costs.


McGuinty Government Helps Relieve Cost of Production Pressures for Ontario Farmers

In a September 4th news release, the McGuinty government announced that it is following through on their June 8th announcement to provide a 40 percent provincial match on the $400 million federal cost of production payment program. Ontario is participating on a cost share basis, which amounts to approximately $55 million. The Ontario Cost Recognition Top-Up Program, administered through Agricorp, will start to flow dollars as a direct payment within days, promised Ontario's Agricultural Minister Leona Dombrowsky. Agricorp has been working with both the federal and provincial governments to co-ordinate data, and deliver the program in a timely manner.

Any producer who was eligible and received a federal payment will automatically receive a provincial top-up equal to two thirds of the federal payment. These payments have been delayed compared to the federal payments; the main reason being the Ontario government was not able to begin making payments until the federal government transferred the payment data to Agricorp.

In an August 22, 2007 announcement on the farm of OCPA director Lloyd Crowe, the McGuinty government showed their support for Ontario Grains and Oilseeds farmers by introducing the Risk Management Program (RMP). It will be administered as a three year pilot program designed to help farmers offset losses caused by low grain and oilseed commodity prices that are a result of foreign subsidies. The program will begin with the 2007 crop year, and Agricorp will deliver the program for grains and oilseeds producers.

The program Premier McGuinty announced is nearly identical to the RMP proposed by the grains and oilseeds safety nets committee over the past couple years. Producers who want to participate in RMP must also participate in Production Insurance (PI) and the Canadian Agricultural Income Stabilization (CAIS) Program. Producers must enroll in all three programs for all three years, with the exception being 2007 PI as some of those deadlines have already passed.

In order to participate in RMP, producers must grow one of 20 eligible grains and oilseeds crops. They need to enroll all their eligible crops for the full three year pilot. Since there are a number of "minor crops" which don't have PI programs available, the PI requirement will be waived for any year in which no PI plan exists for a particular crop. As part of the announcement, the RMP premiums are being waived for the first year of the program (ie. 2007).

Applications are planned to be available in September. Any producers who are currently enrolled in PI will automatically receive RMP handbooks and applications in the mail. Those producers whom are not enrolled in PI are encouraged to contact Agricorp for an application or download one from their website when they become available.

Payments for the program will be triggered when prices for eligible commodities fall below their specific support price. For most eligible commodities, two payments could be issued for each crop year (likely spring and fall). The first payment (typically fall) will be based on the average of forward contract prices for six months prior to harvest of each commodity. The second payment (typically spring) will be based on the average of cash or spot prices for six months during and after harvest. Each payment will be based on the difference between the support price and the average market price from the preceding six month period, multiplied by 50 percent (or 100 percent if only one payment) of the producer's current acreage and long term yield. Finally, this amount is multiplied by 40 percent to reflect the provincial government's normal share of funding in a cost-shared program.

RMP payments will be counted as an advance on the provincial portion of an individual's CAIS payment for the corresponding program year. Producers will be allowed to keep the greater of either the RMP or provincial CAIS payments. If the provincial portion of a final calculated CAIS payment exceeds the previous RMP payments, the producer will receive the additional payment for the difference. If the provincial payment is less than the combined RMP payments, the producer will keep the entire CAIS payment and it's not considered a CAIS overpayment. However, in instances where overpayments have occurred from other provincial programs (ie. previous CAIS advances), they will be recovered from RMP payments.

As per the original grains and oilseeds design of RMP, the three year pilot will include an annual cap on the total payment a producer may receive; these are $130,000 per individual (sole proprietors) or $390,000 (maximum of three individuals) per corporation or partnership.

A review committee has been struck to look at many aspects of the program in order to make improvements where necessary.

As was mentioned earlier, this program is technically only being funded 40 percent, which is the typical federal/provincial cost sharing that occurs with these types of programs. More work is being done at the federal level by the federal coalition, Ontario-Quebec Grain Farmers Coalition (which is comprised of the Ontario Grains & Oilseeds Safety Nets Committee and the FPCCQ), to secure the other 60 percent the program is currently lacking, in making it the effective program for grains and oilseeds producers it was designed to be. In addition, producers are strongly encouraged to contact their local MPs to discuss the need for a fully funded RMP.

Environment, Technology and Research Policy Committee Notes

OCPA SEMI-ANNUAL MEETING
Ontario Corn Producers’ Association
September 11, 2007

Agricultural Policy Framework (APF) Research Funding Update

It was 2½ years ago at the first joint corn/soybean/wheat annual general meeting, that Ryan Brown presented the details of this Research and Development initiative to be funded via 'wedge dollars' (these were transition dollars designed to move agriculture into the new world of the APF). The new program is referred to as the CORD 4 (Canada-Ontario Research and Development) program and will allocate approximately $4.5 million to the field crop sector.

A committee called the Ontario Field Crops Research Coalition (OFCRC), which includes 12 commodity groups (corn, soybeans, wheat, small grains, forages, white and coloured beans, canola, seed corn, sugarbeets, Ontario Soil and Crop Improvement Association and Innovative Farmers of Ontario), is charged with reviewing research project proposals to be funded by the CORD 4 program. The funding levels for each commodity are based on farm gate receipts, with accommodation made to provide the smallest commodities with a minimum level of funding such that meaningful projects can be conducted. New for this round was an allocation called 'cross commodity'; in a gesture of good faith, the three largest commodities based on farm gate receipts (corn, soybeans and wheat) allocated a small percentage of their funds towards this 'cross commodity' allocation intended to encourage project collaboration within the sector. This placed OCPA's final allotment at just over $1.2 million. Once the research projects are approved by the OFCRC, they are forwarded by the secretariat to the Agricultural Adaptation Council (AAC) for final approval.

As we reach the conclusion of the current APF, this program is also set to finish in early 2008. Research reports for all OCPA CORD funded research are due December 2007 and OCPA is on target to meet this deadline. During the life of this program, OCPA has provided an on-going update as new projects have been undertaken. In this instance, all the OCPA projects which have been funded via the CORD program have been listed for your benefit below:

One other thing that should be pointed out - the dollar amounts indicated above only includes OCPA contributions to the project. In many cases, there are additional funds from other associations and industries that support these projects.

If any members wish to gain more detail around these projects or any other research related material, feel free to contact your local or regional OCPA Director, or the OCPA office in Guelph. You can also visit our website at www.ontariocorn.org to view our most recent call for proposals.

Next APF
As many of you are aware, the federal government has been working towards designing the next APF that will be implemented when the current program expires in the spring of 2008. The OFCRC has been working hard to make government aware of the importance of research programs such as the CORD 4 program; a program which has shown its tremendous value as a result of a number of continuations. Since the future of CORD in unknown as this time, and the member groups of OFCRC feel so strongly regarding the continuation of the program, two letters attached at the end of this report are a result of OFCRC doing its part to support the renewal/continuation of the CORD program.

Grower Requested Own Use (GROU) Program
(The following update is provided by Jackie Fraser, the Executive Director for AGCare, which is a coalition that represents the environmental interests of OCPA on issues such as this)

The Grower Requested Own Use (GROU) program is up and running. The American equivalents of the following five products are now available under the GROU program:

* Basagran liquid herbicide
* Banvel II herbicide
* Roundup Weathermax with Transorb 2 Technology liquid herbicide
* Reflex liquid herbicide
* Touchdown iQ liquid herbicide

To access these products, growers must apply for an Import Certificate for the GROU program. See www.pmra-arla.gc.ca/english/appregis/grou/grou-how-to-apply-e.html for details on how to apply.

A maximum of 20 products with significant price discrepancies between Canada and the US will be considered for inclusion in the GROU program on an annual basis as chosen by the grower-led GROU Nomination Committee (made up of the Canadian Federation of Agriculture, Canadian Horticultural Council, Grain Growers of Canada, and Pulse Canada). AGCare forwarded 22 products to the nomination committee on behalf on Ontario's growers, including OCPA's nominees of Atrazine, Dual II Magnum, Frontier, and Prowl.

The nomination committee met on September 4, 2007 to consider products to nominate for next year. They will meet again to whittle the list down to 20 nominees, to forward to the Pest Management Regulatory Agency (PMRA) for consideration for 2008. The PMRA plans on announcing the successful candidates in January of 2008.

AGCare has written the PMRA to express concern about some of the early challenges within the new GROU program. They have committed to performing a program evaluation following an 18 month period, to determine GROU's progress in meeting its objectives. It has been stated they will re-open the old Own Use Import (OUI) program if pesticide manufacturers are not willing to cooperate with the GROU program.

For more information, contact Jackie Fraser at AGCare (519-837-1326, jfraser@agcare.org).

Clean Water Act
(The following update is provided by Jackie Fraser, the Executive Director for AGCare, which is a coalition that represents the environmental interests of OCPA on issues such as this)

Source Protection Committees (SPCs) for each of the 19 Source Protection Areas/Regions (SPA/R) throughout the province are currently being formed under the Clean Water Act. These are the groups that will be tasked with coming up with Source Protection Plans for each watershed, which will essentially "draw the lines" on the map and dictate where and how certain farm practices can occur.

Each committee will consist of one-third municipal members, one-third agricultural / industrial / commercial, and one-third other (e.g. environmental groups, members of the public). Members of an SPC would serve for 5 years and SPC meetings would occur at least once per month until the proposed terms of reference are submitted to the source protection authority (SPA).

Agricultural representatives (ag reps) for each SPC are being elected locally. In August, ag reps were elected for 7 different SPCs. Meetings for the remaining 12 SPCs will occur throughout the fall.

The Ontario Farm Environmental Coalition (OFEC), made up of AGCare, the Christian Farmers' Federation of Ontario, the Ontario Farm Animal Council, and the Ontario Federation of Agriculture, will be providing training for all ag reps at the end of November. OFEC will also provide technical support for ag reps throughout the process.

For more information, contact Jackie Fraser at AGCare (519-837-1326, jfraser@agcare.org).

Corn Specialist Named as 2007 T.R. Hilliard Award Winner

OAC announced June 20, 2007 that they are pleased that the recipient of the 2007 T.R. Hilliard Distinguished Agricultural Extension Award is Greg Stewart, who has served as Provincial Corn Lead for the Ontario Ministry of Agriculture, Food & Rural Affairs since 1998.

The Hilliard award was established by the OAC Alumni Foundation to recognize individuals who are making significant contributions in agricultural extension in the province of Ontario.

Described by his nominators as "a leader among extension specialists", Stewart is responsible for field-scale demonstrations and research and collects corn research from around the world to determine its applicability for Ontario producers. He collaborates with researchers, provides input on project direction and value at the farm level, and liaises with farm organizations. His outreach efforts include the Growing Ontario's Corn website (www.gocorn.net), regular articles in a number of agricultural publications, new releases and presentations. He is a popular speaker at grower meetings.

Stewart was nominated for the Hilliard award by the Board of Directors of the Ontario Corn Producers' Association and Dr. Tony Vyn, Cropping Systems Specialist, Purdue University, Lafayette, Indiana. The nomination was supported by primary producers, farm businesses and associations, seed industry representatives, OMAFRA and crop research specialists at the University of Guelph.



Grain Trade & Market Development Committee Notes

OCPA SEMI-ANNUAL MEETING
Ontario Corn Producers’ Association
September 11, 2007

 

Canadian Corn Producers (CCP) Four-Pronged Approach Update

Historical

Over the past couple years in many different forums, you should have heard some reference to a multi-pronged approach being taken by the CCP to address the issue of unfairly traded U.S. grain corn. The four prongs can be defined as focusing in the following areas; Byrd Amendment retaliation, World Trade Organization (WTO), income support programs and antidumping and countervailing duty (AD/CVD) case. These four prongs were part of a strategic plan to address short term survival needs and the necessary support to successfully transition to the long term where the unfair trade situation would be resolved. While the 'self help' AD/CVD case remedy has received the most attention to date, CCP has also utilized substantial resources on the WTO and income support prongs as well.

Income Support

One of the most important pieces of the income support strategy has been the design and implementation of the Risk Management Program (RMP). The August 22 RMP announcement by Premier McGuinty at the farm of OCPA director Lloyd Crowe was a major step forward. Additional details on the RMP are included within the Safety Nets report.

Request For WTO Consultations

On January 8, 2007, the Honourable David Emerson (Minister of International Trade) and the Honourable Chuck Strahl (Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board) announced that the Government of Canada had 'requested consultations with the United States at the World Trade Organization (WTO) on subsidies provided to U.S. corn growers, as well as on the total level of U.S. trade-distorting agricultural support'. When Minister Strahl was asked why Canada was taking this action, he explained that Canada is concerned that these U.S. subsidies continue to cause economic harm to our corn farmers.

These consultations occurred in February 2007 with the United States and did not resolve Canada's concerns. As a result, on June 8, both Strahl and Emerson announced that the government of Canada was making a request to the WTO that a dispute settlement panel be established to resolve this issue of U.S. agricultural subsidies. As expected, the U.S. blocked Canada's request. Under WTO rules, a request can be blocked only once and the panel is automatically established at the time of the second request. Canada's intention was to make their second request for the panel at the next scheduled WTO Dispute Settlement Body meeting that was set to occur the end of July.

On July 11th, Brazil requested consultations with the U.S. on its domestic agriculture support and export credit guarantees. This is similar in process and targeted the same issues as the Canadian government January request. On July 20th, the government of Canada asked to participate as a third party in these consultations requested by Brazil. As a result of this action, Canada did not proceed with its second request for the establishment of a dispute resolution panel; the strategy being that if Brazil does not obtain satisfactory results from the consultations with the U.S., both Canada and Brazil could facilitate the possible alignment of cases should Brazil also proceed with requesting a panel.

OCPA, as part of the CCP, will continue to work with the Canadian government to monitor the developments with respect to the WTO Doha negotiations, as well as the drafting of the new U.S. Farm Bill. CCP will also continue to provide support to the WTO consultative process as it develops further.

Antidumping/Countervailing Duty Case

The update provided at the 2007 OCPA Annual Meeting explained how CCP was continuing with the Federal Court of Appeal challenge of the Canadian International Trade Tribunal's (CITT) 'no injury' finding. As a point of clarification, the CITT was not arguing that dumping and subsidization (at the substantial amounts which the Canadian Border Services Agency calculated) wasn't occurring, but that Canadian corn producers as a result of the dumping and subsidizing were not materially injured. CCP disagreed strongly with this initial ruling and still does today despite the Federal Court of Appeal's decision on June 5th to dismiss CCP's application for judicial review of the CITT ruling.

The Federal Court of Appeal's ruling essentially means the court concluded the CITT did not make any reversible error in reaching the conclusions it did. The CITT is entitled to make a mistake; however, in most cases that mistake must be a 'patently unreasonable error' for the court to intervene and remand the case to the Tribunal for re-consideration. In terms of possible next steps with the AD/CVD case, CCP had the option to challenge the judgment through a motion for leave to appeal to the Supreme Court of Canada. Appeals to the Supreme Court of Canada do not exist as a right and therefore, permission from the Court is required.

CCP's latest defeat is certain to raise questions and concerns; with the strength of the CCP case, is seeking a 'self help' domestic trade remedy case under Canada's Special Import Measures Act (SIMA) really an option for relief? On an interesting note, Canadian anti-dumping and countervail cases are at their lowest number since the SIMA was enacted in 1984. There are no active investigations currently underway by the Canada Border Services Agency and no new inquiries by the CITT scheduled for the remainder of 2007 or into 2008.

As was mentioned earlier, CCP had until September 5th to decide on the option to challenge the judgment through a motion for leave to appeal to the Supreme Court of Canada. After deliberation at the board of directors of the three associations that comprise CCP, it was decided not to move the case forward by seeking leave. CCP issued the following news release on September 6:

Canadian Corn Producers

For Immediate Release
Thursday, September 6, 2007

Canadian Corn Producers To Focus Fight Against Trade-Distorting U.S. Corn Subsidies on Supporting Canada's WTO Challenge

Guelph, ON. Canadian Corn Producers (CCP) announced today that they will not be seeking leave to appeal to the Supreme Court of Canada the Federal Court of Appeal's June 5, 2007 decision to dismiss their application for judicial review of the Canadian International Trade Tribunal (CITT)'s May 2006 "no-injury" finding.

"We still believe that last year the CITT got it horribly wrong," said Ryan Brown, a spokesperson for CCP. "While the Federal Court's decision not to return the case to the CITT for reconsideration is disappointing and unfortunate, we have made the business decision not to take any further legal action at this time," added Mr. Brown.

"Often when one door closes another one opens. While we are surprised by the result from Canada's legal system, we are encouraged that within 3 days of the Federal Court's disappointing decision, the Canadian Government stepped up its fight at the World Trade Organization by requesting a WTO panel to investigate U.S. agricultural subsidies," said Benoit Legault, another spokesperson for CCP.

And Canada is not alone. Eight other WTO members (32 countries in all) have supported Canada's WTO challenge. In a June 8, 2007 Government of Canada press release explaining the rationale for Canada's WTO case, Minister of Agriculture and Agri-Food Canada Strahl said, "We are standing up for Canadian farmers by taking this concrete action against harmful U.S. agricultural subsidies." This sentiment was echoed by Minister of International Trade Emerson who said, "We remain concerned that the U.S. is providing agricultural subsidies in breach of its WTO commitments."

CCP is also encouraged that on July 11, 2007, Brazil took the first step toward its WTO challenge of U.S. agricultural subsidies. "We understand that Canada and Brazil will likely coordinate their efforts so that their challenges can be heard together," said Theresa Bergsma, another CCP spokesperson. "Many of the subsidies in the WTO challenges brought by Canada and Brazil are the same subsidies that CCP challenged last year in its domestic trade remedy complaint to the CITT," added Ms. Bergsma.

Supporting Canada using its international trade rights at the WTO to combat trade-distorting U.S. farm subsidies has been part of CCP's multi-pronged strategy for over two years. "With CCP's fair-trade resources now focused on Canada's WTO prong, we hope to do what we can to help Canada win the case. That said, as surprising and frustrating as the CITT's 2006 "no injury" finding has been, we will continue to do all we can to be sure that Canada applies its domestic trade remedy laws, enforces its rights under international trade agreements and provides Canadian farmers with relief from trade-distorting U.S. agricultural subsidies through effective WTO-compliant safety net programs," cautioned Mr. Brown.

Canadian Corn Producers (CCP) is a coalition of Canada's main corn producer associations - namely the Ontario Corn Producers' Association (OCPA), the Federation des producteurs de cultures commerciales du Quebec (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 $CAD 1.4 billion).

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For more information, please contact:

Ryan Brown, General Manager
Ontario Corn Producers' Association
rbrown@ontariocorn.org
519-767-4135

or

Benoit Legault, Directeur - Général or
La fédération des producteurs de cultures commerciales du Québec
blegault@fpccq.qc.ca
450-679-0530

or

Theresa Bergsma, Secretary-Manager
Manitoba Corn Growers Association, Inc.
Theresa Bergsma
mbcorn@mts.net
204-745-6661

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


Ethanol Update

Since the Annual Meeting in March, the Collingwood Ethanol plant has started production, with expectations that they will be running at full capacity by the end of September, and the Integrated Grain Processors Cooperative (IGPC) held a ground breaking ceremony at their Aylmer location in August. We have had reports that progress is being made at other ethanol plant locations as well.

With the current and proposed ethanol plants (shown in the map below as of March 2007) provided by the Ontario Ministry of Agriculture, Food and Rural Affairs, it is estimated that Ontario may be producing as much as 1.93 billion litres of corn-based ethanol by 2009.

ecoAgriculture Biofuels Capital Initiative (ecoABC)

In April 2007, the federal Minister of Agriculture and Agri-Food launched the ecoAgriculture Biofuels Capital Initiative. This initiative, announced in December 2006 under the name of Capital Assistance Formation Program, is a federal $200 million four-year initiative that will provide repayable contributions of up to $25 million per project to help farmers overcome the challenges of raising the necessary capital for the construction or expansion of biofuel facilities. Additional information can be obtained through Agriculture and Agri-Food Canada.

ecoENERGY for Biofuels

The federal government announced ecoENERGY for Biofuels in July 2007. This initiative will invest $1.5 billion over 9 years to boost Canada's production of renewable fuels such as ethanol and biodiesel. It will make investment in production facilities more attractive by partially offsetting the risk associated with fluctuating feedstock and fuel prices. Additional information can be obtained through Agriculture and Agri-Food Canada.

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