Index
Ontario Grain & Oilseed Group Position on "Wedge Funding"
At the March 1 meeting of the Ontario Agricultural Commodity Council (OACC), agreement was reached on recommendations to be made to Ontario Minister of Agriculture Steve Peters. The
recommendations concern distribution of funding in the three-year "wedge period" under the Business Risk Management pillar of the Canada-Ontario Implementation Agreement of the Agricultural Policy Framework:
1. Self-Directed Risk
Management (SDRM) is a program that provides protection for those producers (primarily in edible horticulture) where Crop Insurance programs do not provide adequate coverage. As a program offsetting the lack of effective Crop Insurance, SDRM should be funded from the new Production Insurance (Crop Insurance), not from the
"wedge". Therefore, the Ontario Grain & Oilseed groups (G&O) support the OACC
recommendation that funding for the continuation of the SDRM program during the wedge period and beyond be taken "from Production Insurance in lieu of wedge dollars since it is horticulture's alternative to production insurance."
2. Funding SDRM from Production Insurance, where it more properly should be funded, will free-up dollars within the "wedge". OACC recommended "that the dollars freed up be redistributed to Ontario agriculture." The G&O groups support this OACC recommendation and implied distribution as per recommendation 4 below.
3. The OACC recommended that "wedge" funds be allocated for year one as follows and the same allocation for the second and third year "be adopted in principle pending a decision on moving SDRM (based on criteria equivalent to existing SDRM) to Production Insurance":
4. The OACC recommended that remaining "wedge"
funds, after the allocations as detailed in recommendation 3 above, be distributed
equitably to those enrolled in the Canadian Agriculture Income Stabilization
program (CAIS). The OACC recommended that distribution of annual
residual "wedge" funds should be in the form of payments made directly to producers
enrolled in the CAIS based on their individual rolling average Eligible Net
Sales of the previous five years and be subject to existing NISA program payment
caps. The G&O group supports both the allocations as
detailed in recommendation 3 above and the distribution of residual funding
as in recommendation 4.
5. The OACC recommended that "the Market Revenue Insurance
program be extended to the end of the "wedge" period to use up the existing
funds." It is the understanding of the OACC that there is approximately $97
million left in the MRI pot after payout of 2002 crop-year payments. The G&O
group strongly supports the extension of the MRI program to the end of the "wedge"
period with maximum flexibility "to use up the existing funds".
Ontario Grain & Oilseed Group Requests Extension of MRI
At the March 1, 2004 meeting of the Ontario Agricultural Commodity Council (OACC), an agreement was reached concerning the extension of the Market Revenue Insurance (MRI) program. The OACC and groups representing the Ontario grain and oilseed sector (G&O) asked Minister Peters to negotiate maximum flexibility for MRI program modifications in the Federal-Provincial bi-lateral agreement needed to extend MRI for the 2003, 2004, and 2005 crop years. The previous safety net agreement, which included MRI for the 2002/03 crop but not the 2003/04 crop, expired March 31, 2004.
Maximum flexibility is essential to ensure that the existing MRI pot (approximately $97 million after 2002 crop-year payments) will be allocated to grain and oilseed producers by the end of the APF/BRM "wedge" period (i.e. March 31, 2006). For example, the 2005 crop year for corn does not end until August 31, 2006, and 2005 crop-year MRI final payments would not normally be completed until December 2006. Therefore, flexibility will be required so that this "MRI program payment lag" beyond March 31, 2006 can be accommodated. The G&O groups also asked that Mr. Peters ensure the methodology of MRI payment calculation be flexible for the 2003, 2004, and 2005 crop years.
The G&O groups asked for the ability to move MRI support prices and support yields above 100% of their historic values should that be necessary to ensure all existing MRI funds are used up. In fact, the OACCs recommendation required "that the Market Revenue Insurance program be extended to the end of the "wedge" period to use up the existing funds." Maximum flexibility is essential to ensure that this happens.
The G&O groups also asked for the ability to waive the one-third premium holdback for the 2003, 2004, and 2005 crop years. The rationale supporting the request for this option is that the MRI program will end with the 2005 crop year, why would there be a premium holdback on a program that is ending?
New Business Planning Services Available
As a result of the signing of the Canada-Ontario Implementation Agreement of the APF, two new joint Canada-Ontario programs designed to help agricultural producers improve their businesses are now available in Ontario: the Planning and Assessment for Value-added Enterprises program (PAVE); and the Specialized Business Planning Services program (SBPS).
The PAVE is available to qualified producers who are considering establishing or expanding a value-added enterprise. Eligible producers (engaged in agricultural production and have a minimum of $10,000 in annual gross farm sales) will be able to access funds to help pay for the services of a business-planning professional to develop feasibility assessments and/or comprehensive business plans for specific, value-added enterprises. Eligible participants may receive funding up to 50% of the consultant's eligible costs to a maximum of $10,000 per farmer. Group applications may also be considered for funding to a maximum of $25,000.
The SBPS helps producers prepare detailed plans for their farm operations and provides funding to help pay for consultants. These plans can cover areas such as diversification, marketing human resources, expansion, risk management or succession. These services will be available to producers who are seeking targeted business or succession plans. Eligible participants may receive funding up to 50% of the consultant's eligible costs for preparing a business or succession plan up to a maximum of $8,000 per farmer.
OCPA Supports Call For Canada To Join U.S. WTO Challenge
The OCPA endorses the request by the Grain Growers' of Canada to the Honourable James Peterson, Minister of International Trade, for Canada to join the U.S. WTO challenge against Mexican sugar taxation. The United States has launched a World Trade Organization (WTO) challenge against Mexican taxes that discriminate against sweetened beverages that do not utilize cane sugar. In a March 17 letter to Minister Peterson, the GGC wrote, "The GGC is a strong supporter of trade liberalization for agriculture commodities and their process products. The future viability of the our industry largely depends upon the opening up of foreign markets to our commodities and processed products, the significant reduction of our competitors' domestic subsidies, and the elimination of all export subsidies.
In addition to directly increasing farm income, accomplishing these goals will encourage the development and the expansion of our value added processing sector.
We believe supporting the U.S. in its WTO challenge is consistent with our trade liberalization goals for two reasons. First, because trade barriers like the Mexican taxes discriminate against processed products, they hurt the development and expansion of Canadian value added processing. It is our understanding that these particular taxes have already influenced a Canadian processor to reconsider the expansion of a Canadian operation that would have been designed to access the Mexican market.
This measurable harm to Canadian farmers and the Canadian value added sector is reason enough to challenge the Mexican taxes.
We also believe that these discriminatory practices, especially those targeted against processed products, must be fought at every opportunity. A positive ruling by the WTO in this case will set an important precedent that will assist the Government in protecting and promoting our value added processing industry in the future.
This important precedent will also
help give farmers confidence that the agreement which comes out of the Doha
round of agriculture negotiations will be effective in liberalizing agriculture
and expanding international market opportunities."
"Ontario's Support For Agriculture Plummets"
The following is a verbatim excerpt from the March 9 "Good Morning Ontario":
"The latest provincial expenditure estimates show how far agriculture has
fallen on the priority list of Ontarians, says an article by Jim Dalrymple and
Don Stoneman in this month's Better Farming Magazine. In 1987-88, 1.6% of the
Ontario budget went to Agriculture and Food. 10 years later that had dropped
to 0.8% and today it stands at 0.57%. And to make matters worse while the total
provincial expenditures have increased from $35 billion to $70 billion since
1987-88, Ag's cut has declined from $580 million to only $405 million in 2003-04.
And that's up sharply from $288 million in 2001-02. In 1987, agriculture spending
was $61.50 per person. In 2003, it was only slightly more than $33."
Chinese Incentives For Agriculture
Compare the item above with this item from the Wall Street Journal March 18.
"Noting the debate in the U.S. between those on the right who push growing
the economic pie as the highest good and those on the left who favor making
the slices of the pie more equal, the Journal in an editorial argues that new
Chinese Premier Wen Jiabao seems to be favoring growth. As U.S. Democratic Presidential
hopeful John Kerry could tell Mr. Wen, a good redistributionist believes in
taxing the rich. Mr. Wen, however, is approaching things from the other perspective:
cutting taxes on those sectors he would like to incentivize. He announced that
all taxes on agricultural byproducts will be eliminated, except for tobacco.
From this year on, agricultural taxes will be reduced by one percentage point
every year and will be completely eliminated in five years."
New E.U. Members Have Deadline to Reform
Compare the item on support for agriculture in Ontario with this item. E.U. Agriculture Commissioner Franz Fischler warned the 10 new countries joining the European Union May 1 that they would miss out on agricultural aid if key reforms aimed at meeting E.U. standards are not implemented ahead of the entry date. All recommended rules, regulations, and agencies must be up and running by entry date, including setting up local systems for registering livestock. If such systems are not functional by May 1, farmers in the new member states will miss out on E.U. support or national budgets will face claw-backs on farm subsidies. If such systems are functional, farm income in eastern Europe (the 10 new members are all from eastern Europe) would increase by more than 30% even though subsidies in the new member states will not be equivalent with subsidies in existing member states until 2013. Apart from the intervention aid, farmers will also benefit from EURO 5.1 billion in rural development aid over the next two years, and will also get access to phased-in aid over the next 10 years worth EURO 40.83 billion.
U.S. National Pork Producers Council Files Dumping Charges
The U.S. National Pork Producers' Council (NPC) filed antidumping and countervailing duty charges against live hog imports from Canada on Friday, March 5, 2004. The NPPC filed the charges with the U.S. Department of Commerce and the U.S. International Trade Commission requesting that duties ranging from 5% - 20% be assessed on imports of live swine, excluding breeding stock, from Canada. The U.S. Department of Commerce has 40 days to decide if the NPPC's claim has merit worthy of an investigation.
The charges cover benefits received by Canadian hog producers from recurring subsidies during the period January 1, 2003 through December 31, 2003, and from non-recurring subsidies
during the period January 1, 2001 through December 31, 2003.
The petition alleges countervailable benefits to producers of live swine in Canada from the following programs:
Monsanto, Ceres, DuPont To Share Gene Data
Public efforts to sequence the corn genome received a significant boost with the announcement March 15 that Ceres Inc., Monsanto Company, and DuPont subsidiary Pioneer Hi-Bred International will combine their gene data with corn gene sequence data already in the public domain. In making the announcement, the U.S. National Corn Growers' Association said that combining gene data from these three private industry leaders with existing public gene data will significantly accelerate the identification of genes within the entire corn genome.
The data will be available to research
scientists through a searchable web-based database hosted by Donald Danforth
Plant Science Center, a not-for-profit research institute. To gain access to
the data, scientists must complete a licensing agreement that will be downloadable
on the NCGA web-site, www.ncga.com. The NCGA
says that with the availability of sequencing data from Ceres, DuPont and Monsanto,
the corn genome could be completely sequenced by 2007, potentially years ahead
of when it would have been completed without this initiative. Completion of
the corn genome sequence will increase breeding efficiency, streamline the delivery
on new traits, allow the discovery and enhancement of properties such as drought
tolerance and further the recognition and understanding of traits that will
enhance corn's position as the ideal crop for food, feed, fuel and industrial
uses.
New York Board Of Trade To Launch Ethanol Futures Contract
The New York Board of Trade (NYBOT) will launch trading in an international ethanol futures contract in May 2004. The first listed ethanol futures and options contract month will by July 2004 with trading hours from 0850 to 1200 ET. Trading in ethanol futures will start May 7 and options on May 10. Thirty one countries and the U.S. will be physical delivery points for the international ethanol futures contracts. The NYBOT international ethanol futures contract will trade in cents per gallon with fluctuations of a 10th of a cent. Contract size will be 7,750 U.S. gallons, the amount usually produced from the 112,000 pound CSCE world sugar contract (about 60% of world ethanol production comes currently from sugar and about half of that is produced in Brazil). Contract months will be similar to those in world sugar and are March, May, July, and October, with the addition of a December contract. Brazil has had domestic ethanol futures contract trading on the BM&F in Sao Paulo since 2000.
Argentina to Create Royalties Fund For Biotech Seed Companies
According to published reports on February 21/04, Argentina's government plans to create a royalties fund to help seed companies such as Monsanto recoup their investments in biotech soybean and wheat technologies threatened by the black market. The government expects to levy a tax on both soybean and wheat sales. This is expected to generate about $34 million U.S. per year. As you may recall, Monsanto announced last month that it would stop selling genetically modified soybean seeds in Argentina because of the black market that is rampant and keeping the company from making any money.
Even Organic Farming Adds Chemicals to the Process
Growing crops organically does not add chemicals to the environment in the way that conventionally grown crops are nurtured with fertilizers and treated with pesticides. However, natural elements such as nitrogen and phosphorus are part of every plant's cycle of growth. Therefore, whether cultivated organically or conventionally, when it comes to protecting the environment, using organic growing practices alone is not enough.
According to this story, high levels
of phosphorus can build up if organic farmers add manure based compost every
year. That excess phosphorus can be carried by runoff water into surface water
and cause environmental problems. Tim Hartz, a vegetable specialist affiliated
with the University of California says "just because you are organic, it does
not exempt you" from becoming phosphorus polluter. In a random survey Hartz
conducted, three of seven samples from organic farms had high levels of the
element.
Monsanto Receives Final Safety Certificates From Chinese Government For Biotech Imports
According to this story on February 23rd 2004, the Chinese government approved some final safety certificates for the importation of grain produced from biotechnology. This is good news for growers who plant these types of crops, as China is a very important market. Issuance of these final safety certificates will allow for a more predictable process for traders and continued trade of biotech crops.
Apparently, Monsanto received safety certificates for import of 5 commercial products. They include Roundup Ready soybeans, one version of Roundup Ready corn, YieldGard corn borer, Bollgard cotton and Roundup Ready cotton. Monsanto hopes to receive a final decision on Roundup Ready canola, a second version of Roundup Ready corn and YieldGard rootworm from the Chinese authorities in the near future. This decision allows farmers greater choice in how they produce their crops, control insects and decrease weeds.
In 2002, China issued new regulations requiring safety certificates for imported grain derived from crops improved through biotechnology. Monsanto submitted extensive safety information for these products, many of which have already been approved in other countries globally. "Pacific Rim countries are very important markets for customers' products and these approvals in China add to the extensive numbers already granted in Japan, Korea, Taiwan and the Philippines" said Jerry Hjelle, Monsanto's vice president of regulatory affairs.
Manitoba Corn Acreage To Increase Again
Corn acres planted in Manitoba are expected to increase again this spring as feed use increases and farmers continue to stretch the crop's traditional boundaries. In 2003, 177,000 acres of grain corn and 47,000 acres of silage were planted in Manitoba, said Pam de Rocquigny a special crops agronomist with Manitoba agriculture. This planted acreage was well above the previous years 140,000 acres of grain corn and 35,000 acres of silage.
The growth is expected to be the most prominent in western and northern parts of the province, where corn growing is still relatively new. In addition, acreage east of the Red River continues to climb as hog producers use it for feed. Cash prices have been lower than where farmers can make good money. However, good yields this past fall are helping to compensate somewhat.
Manitoba grown corn is sold mostly in the local and Alberta feed mills. Roughly a quarter of the production goes to the distillery in Gimli, Manitoba.
Long-term Fertilizer Use Increases Soil Organic Matter
Research being conducted by the University of Saskatchewan shows long-term use of fertilizer at recommended rates contributes to the building organic matter content in soil. A multi-disciplined project being conducted at the University is evaluating the effects of repeated applications of swine manure at various rates for comparison to the use of commercial fertilizer. The work is being conducted at four sites and has been underway for the past five to eight years. After a number of years, the organic matter content in the soil has been rising and the increased plant growth is resulting from using fertilizer.
Even though the swine manure itself does not add a lot of organic matter directly, the nutrients in the manure do certainly stimulate plant growth. After a period of years, the increased additions of crop residue are expected to and indeed are starting to show the effect of increasing amounts of humus in the topsoil. When the effects of increased humus are analyzed, it is a storehouse of nutrients and it improves soil tilth.
In the experiments, the application of swine manure and the application of commercial fertilizer are producing similar results in terms of enhancing the organic matter content of the soil.
2004 Corn and Soybean Conference
OCPA and the Ontario Soybean Growers wish to express our appreciation to the following sponsors of the first joint Corn and Soybean Conference. o BASF Canada Inc., for sponsoring the banquet entertainment - Second City
Marc Roszell A new director has joined the OCPA board 2004-2005. Marc Roszell, from the Chatham area, will represent the growers in Region 15 (Kent County). Marc replaces Dennis Jack who has retired from the OCPA board.
Dennis Jack Dennis Jack has retired from the OCPA board after serving as Director for Kent County (Region 15) since 1991. He served as OCPA President for 2001-2003. At the March Corn and Soybean Conference, OCPA President Mat Menich presented Dennis with a plaque in recognition of his dedicated service to the organization and agriculture industry in Ontario.