Pork board rebirth
If the black cloud parked over the Ontario pork industry has a silver lining, it must be that producers are taking a sober second look at the nearly discarded haven they created to weather lesser storms more than a half-century ago.Almost since the pork board's inception producers have denounced it during low price periods. Now, during the worst industry crisis ever, support is bursting out all over for its single-desk system, flying in the face of the industry task force that called for an end to the pork board's monopoly selling powers.
But who could have foretold events between the striking of the task force last March, its tabled recommendations in September - when Serecon Management Consulting Inc. served up option A or B - and today? An unprecedented price crash; loss of a 15,000-pigs-per-week market to Detroit's Thorn Apple Valley; a strike at Quality Meat Packers; and angry export markets threatening toshut out Canadian pigs. "Serecon and the task force are history," concludes Ontario Pork past chairman Carl Moore, who is also Canadian Pork Council vice-chairman.
Christian Farmers Federation of Ontario says there can't be
fairness when
producers have to compete for shackle space at just two packers.
CFFO wants
Ontario Pork to start fully exercising its monopoly powers by
negotiating
all deals.
CFFO executive director Elbert van Donkersgoed says many CFFO
members
involved in private contracting with packers did an about-face
after
comparing each others' contracts.
At a meeting in Alexandria last month, 31 representatives from 10 eastern counties - lead by Hammond farrow-to-finisher Robert Perras - voted to adopt a Quebec-style system that would see Ontario Pork control all pigs in the province. Cliff Howse, Ontario Pork's eastern counties director, says it's natural for producers experiencing low prices to realize "that you're going to have to work together."
When asked his personal view of the industry's future, Howse said "there's room for single-desk selling, but whether there's acceptance is another thing." There was no support for the eastern counties' proposal among several pork board directors polled by Farm & Country.
Ontario Pork directors have been discussing a plan dubbed the Ontario Alliance, which wouldn't involve Quebec-style collaboration on hog allocation and price. Few details are known beyond a call for more producer/ processor dialogue.
Quality Meat's vice-president and general manager Don Collis says his company is open to discussion of any vision producers put forward. He says if the Quebec model had been implemented sooner in Ontario "we had a tremendous opportunity."
He notes, however, that the Quebec system depends on a single grading grid that restricts packers' ability to serve unique markets, and its allocation system handicaps new entrants and small packers wishing to expand. Don Davidson, senior vice-president and general manager, Maple Leaf Pork, rejects the Quebec structure. He insists it keeps its players happy only because that province's ASRA stabilization program ensures its packers get cheaper hogs while producers end up with more money.
Davidson says Maple Leaf has always been willing to meet with the
pork
board to discuss common goals. He says the company has
communicated its
specific needs through its Signature program, but when asked to
provide his
company's long-term vision replied, "I'm not prepared to do that
right
now." - Robert Irwin
back
BY BERNARD TOBIN
Ontario farmers hit by low commodity prices and drought should receive assistance in February.Last month, federal and provincial governments cobbled together a farm income aid program that could be worth $1.5 billion over two years. Some $900 million will come from the federal government, with the provinces contributing the balance. Ontario has pledged $30 million in the first year, and a further $10 million in Year Two.
Federal Agriculture Minister Lyle Vanclief said the objective of the program was to "help farmers, who over the long term will succeed, but due to circumstances beyond their control need help right now." Provincial Agriculture Minister Noble Villeneuve said his government's $40-million contribution "is the anticipated portion of the federal disaster program at present." If more money is needed, he will have to take the request back to provincial cabinet. For now, the federal contribution is capped at $900 million, Vanclief said. How much money will ultimately be needed to assist farmers is not known, but Vanclief said the program could be pro-rated if needs exceed funding.
The money will be paid to farmers whose gross margins drop below 70 per cent of the most recent three- or five-year average.
Villeneuve says his ministry plans to have aid applications in the mail in January and expects the province to make an interim payment to farmers in February. It will likely be April before federal dollars reach farmers.
How do hard-hit farmers get by until April? "They will have to work with their bankers and suppliers and the provincial government," Vanclief said, noting that he will continue to ask banks, credit unions and input suppliers to be "patient and compassionate and work to be part of the solution."
Vanclief said the aid program will assist all farmers suffering income loss: "This program is not directed to any commodity or type of livestock. If the program is triggered, it doesn't matter if you are a pork producer or a grain producer or any other type of livestock producer."
As an example,Villeneuve said the program would aid farmers in drought-stricken Grey and Bruce counties as well as apple producers who have suffered extensive frost damage.
The program, based on a whole farm income strategy, would not trigger trade retaliation or be countervailable, Vanclief said.
back
Details, details...
Before aid money flows to farmers, some important details have to be hammered out. For instance:
- Will farmers have to exhaust their NISA funds before qualifying?
- Will 1998 gross margins be compared to the average of the previous three- or five-year period?
- The federal program is capped at $900 million. What happens if demands exceed the cap?
- How will gross margin be defined?
back
NISA rolls show wide disparities
With grain and pork prices at record lows, farmers are being told
to dip
into their Net Income Stabilization Accounts to help carry them
through the
price trough.
But not all farmers have the same resources to draw on. Agriculture and Agri-Food Canada statistics reveal that 142,000 Canadian farmers hold NISA accounts. About 92,000 farmers have balances under $13,000; of those, 60,000 have less than $6,000 in their accounts.
It appears that NISA works best for farming's bigger operators:
4,900
participants with annual sales of $500,000 or more have an
average balance
of $83,000.
back
Bedggood acclaimed for second term
by John Muggeridge
Thorndale farmer Bob Bedggood has the right résumé for the job as he heads into his second term as president of the Christian Farmers Federation of Ontario. As a Christian, he shares the 4,100-member CFFO's vision for agriculture; as a pork producer, he can offer first-hand experience as the CFFO moves the pork crisis to the top of its 1999 agenda. "I pray that I will represent you well as a farmer, a Christian and a CFFO president," Bedggood, 55, told 200 delegates following his acclamation as president at the CFFO convention in Guelph last month. Also acclaimed were two vice-presidents: Oxford pork producer Jasper Vanderbas, who returns for a second term; and Dundas egg producer John Beking.Fresh from the pork rally at Queen's Park, Bedggood left little doubt as to Job One for the organization: the farm income crisis, and pork in particular: "Sixty-cent pork is not a low price. It is a disastrous price.
People are hurting. We must work together." Despite the industry shifting in the opposite direction, CFFO is calling for a single-desk sales agency for pork: "Producers of a commodity need fewer sellers, not more, to deal effectively with fewer buyers," said Vanderbas.
Also high on CFFO agenda will be water use and quality, an "emerging issue," Bedggood said: "We may not have enough groundwater for everyone. Who has the right and need to grab this water?"
Bedggood said CFFO will continue to monitor world trade talks, which get underway later this year: "Some want border protection and others want it wide open."
CFFO heads into 1999 with a budget based on 4,050 members and
$600,000 in
revenue, on par with 1998.
back
Green money
The carrot-versus-stick approach to making Ontario farms more
environmentally friendly has enticed 14,000 farm families and 3.7
million
acres to Environmental Farm Plans since 1992. Farmers receive a
$1,500
incentive to undertake projects on their farms. EFP recently
received $2.9
million in federal money from the Guelph-based Agricultural
Adaptation
Council, allowing it to continue into 1999. EFP offers 200
workshops a
year, with project claims to date of $6.2 million. For every
grant dollar,
farmers invest another $3, says Essex county workshop leader
Ernie Konrad.
1-800-265-9751. http://www.ontariosoilcrop.org
back