Beef with income relief

Dig that application for the Ontario Whole Farm Relief Program out of the dusty paper pile on the corner of your desk. You may yet be eligible for a piece of the financial stress-relieving pie.

Beef producers in particular may benefit from changes that are being considered at Queen's Park, but it will take a political decision at the top to implement them.

Fact is, few beef farmers have benefited from the whole farm relief program as it stood. "Most accountants say very few farmers qualify," says feedlot operator and Ontario Cattlemen's Association director John Gillespie, Ayr.

Gillespie points out that the program was brought into place to help nose-diving hog and grain incomes last year. Because of new trade rules any relief program couldn't be commodity specific, so the beef industry and others should be able to have a piece of the action as well.

But the provincial relief programs compared grain, oilseed and pig farmers' drastic income shortfall last year against pretty good prices in the previous three years. Farmers would be compensated up to 70 per cent of the difference between the gross margin, the spread between products purchased and products sold in 1998, and the average of the previous three years.

Beef producers, especially those in the cow-calf sector, had a terrible previous three years, so 1998 was not of particular significance to them.

The OCA is pushing the province to make the relief program retroactive to 1995, the beef industry's worst year, with farmers being able to use the two worst income years of the four to develop a base for a support payment.

This will help beef producers and farmers in other commodities who have been hit by income-crippling disasters of one sort or another: an area-specific drought, a crop failure, or even a fire. "The need is there for the program," Gillespie says. "Calf prices were extremely low. You couldn't put a pencil to keeping a cow." Returns for a beef calf were $300, far less than was needed to keep a brood cow on the farm for a year.

A similar Alberta program has been in place since 1995, when tripartite stabilization ended.

But bringing a program similar to Alberta's into Ontario requires political, not bureaucratic, action. Gillespie says OCA leaders are expected to meet with provincial Agriculture Minister Noble Villeneuve on this issue early May.

The OCA is asking that beef producers be allowed to make the program retroactive and include two of the worst years between 1995 and 1998 in calculating their reference years.

Even if farmers aren't able to dig back into previous years to find a level of income where they would be eligible for assistance, some changes to the program may already be a help.

One of those changes is to allow applicants to use a modified accrual accounting method rather than a simple cash system to estimate your income last year. Farmers would only use this program if it is advantageous to them, Gillespie says. It would allow farmers who were building inventories during 1996 and 1997 to benefit. But once they start using the modified accrual system to calculate their eligibility for income relief they must stick with it. - Don Stoneman

© copyright 1999 Agricultural Publishing Company Limited.


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Experts bullish on trade talks

By JOHN MUGGERIDGE

D-Day for world trade talks in Seattle Nov. 30 fast approaches, but Canadian farmers shouldn't expect instant Armageddon, says Canada's top farm trade negotiator.

Mike Gifford told members of the Eastern Canadian Farm Writers Association at the Farm Museum mid-April that in the event of an agreement at the coming World Trade Organization (WTO) round, rules wouldn't be in force for some commodities until 2014 or 2015. "The last round was supposed to last four years and it lasted seven," said Gifford.

At the very minimum, if the next round lasted three years, it would take another year to translate any commitments into domestic legislation, and another five to 10 to phase in any enhanced market access or export subsidy cuts, said Gifford, who has helped broker international trade agreements for Canadian farmers since the mid-1960s.

Canada's long-awaited opening position heading into WTO will be forthcoming following a late-April trade seminar in Ottawa, Gifford said.

While admitting that countries have indulged in "game playing" to fudge the numbers since the Uruguay round ended in 1995, Gifford maintains a somewhat bullish outlook heading into the next round. For all its failings, the last round made a "big breakthrough" in converting import quotas and variable import levies to fixed tariffs, or "TRQs" - tariff rate quotas.

"Don't underestimate the sea of change that has occurred with WTO," said Gifford. Based on rules and enforced by international law, "the system is a lot better today than it used to be - ineffective and loosey-goosey."

Bob Seguin, OMAFRA ADM for policy and farm finance, also cited "the increasingly legalistic nature" of trade agreements. "It's nice to talk about the rhetoric, but it's the details that are important," he said. The industry could have pre-empted the current dispute over tariff classification of butteroil blends if it had read the fine print in 1995, said Seguin.

Despite supply managed producer concerns about increasing market access, both bureaucrats believed free trade has been a net benefit to both countries, with north-south agricultural trade increasing 10 per cent per year. "Life did not end in this country" in the last decade, which has seen three trade deals ratified in Canada, said Seguin. Over the past decade, Canada has negotiated some seven trade agreements with countries such as the U.S., Chile and Israel. Meanwhile, Ontario agri-food exports have doubled to $6.2 billion, of which more than two-thirds is value-added.

Still, irritants remain, such as the butteroil dispute, the EU beef import ban, and the WTO ruling against Canadian dairy processor subsidies. Pulling numbers from the Canadian supply management WTO booklet "First Things First," Dairy Farmers of Ontario director from Bruce county Bruce Saunders said Canada has already offered more market access to dairy products than the U.S.: four per cent versus 2.7.

Key to Canadian poultry and dairy farmers' so-called "SM-5" position is eliminating all export subsidies, capping domestic subsidies, maintaining "overquota tariffs" to protect domestic supply management, and reducing "in-quota" tariffs to zero, guaranteeing minimum access.

Gifford said Canada's push for zero in-quota tariff will likely pressure over-quota tariffs down, but "nobody thinks [they] will go to zero."

Gifford added that the U.S.'s fixation with single-desk sales was "theoretical," ignoring large U.S.-based single-desk grain multinationals "many of which are privately held." Biotechnology will be a new issue on the table in Seattle, he said.

As a domestic issue, supply management "is not up for negotiation," said Saunders: "The whole deal has to centre around rules....Free trade is a beautiful economic model - the only problem is it doesn't exist. What you need is fair trade."

© copyright 1999 Agricultural Publishing Company Limited.


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Spring saps syrup yields

Final numbers aren't in, but it appears Ontario's maple syrup production could fall by more than 30 per cent this year.

"My call at this point is we're running around 60 to 70 per cent of the crop," says Ken McGregor, secretary-treasurer of the Ontario Maple Syrup Producers' Association.

Final yield results should be available mid-May. McGregor says growers had reasonable weather throughout tapping, but "we did not get the variation in temperature that we need." Yields will also be affected by producers in the Grey-Bruce area, who due to droughty conditions, "were taking it easy on their tapping," McGregor says.

Producers in eastern Ontario who had trees damaged by the ice storm also reduced the number of trees they tapped. "They didn't want to stress the trees that they had," he says. - Bernard Tobin

© copyright 1999 Agricultural Publishing Company Limited.


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End "state-run" trade, says U.S.

By Robert Irwin

U.S. Agriculture Secretary Dan Glickman invoked the spirit of "The Great One," Wayne Gretkzy, and his contribution to cross-border NHL commerce, in an upbeat speech to hundreds of government, agribusiness, and farm leaders gathered for a World Trade consultative session in Ottawa last month. Still, several great ones in Canadian agriculture remained unconvinced by Glickman's pitch.

Jack Wilkinson, past president of the Canadian Federation of Agriculture (CFA), challenged Glickman to show that the United States is serious about free trade by getting rid of U.S. agricultural subsidies before beginning the next round of negotiations.

While Glickman conceded that "every nation does what [it thinks] is best for their particular nation," he challenged Wilkinson and Canada to "reduce your tariffs to our levels and get rid of the Canadian Wheat Board, then we'll take care of getting rid of our subsidies."

The Canadian Wheat Board came in for repeated jabs. Referring to "agriculture state-run trading enterprises," Glickman later related "it is my feeling that we need to look at all activities that WTO members feel distort markets or otherwise circumvent the fairness that the WTO process is trying to achieve."

John Kolk, past chairman of Chicken Farmers of Canada, asked why Canada should waste time on the next round when the United States remains unwilling to fast track any agreement reached. Any deal made by American negotiators could still be turned down by congress.

Glickman confided that he and U.S. President Clinton are in favour of fast track. He characterized the American system as difficult, but predicted the president would be able to get trade negotiation authority passed just as he "got NAFTA [North American Free Trade Agreement] through."

Glickman also reassured current CFA president Bob Friesen that his concerns about a rumoured U.S. stabilization program for livestock producers were unfounded. He said the U.S. is trying to find a way to include livestock producers in its crop insurance program but doesn't have the money for stabilization.

Glickman heralded the accomplishments of the Uruguay round of WTO negotiations as "a giant step forward for trade." He notes it was the "first time in history agriculture was brought into the world trading system."

However, Glickman warned that the Uruguay round, which took eight years to complete, "was a piece of cake" compared to the coming round scheduled to begin in December. He said countries will have to accept "that some of their traditional practices and internal systems will have to give way to a new way of doing business."

He singled out China as an example of a country that is anxious to join WTO, but which has been slow to agree to many of the requirements.

Glickman says the U.S. wants export subsidies eliminated in the next round. "Export subsidies depress world commodity prices and discourage production by producers who would otherwise be able to compete," he warned.

He said producers in the developing world are hurt most by farm subsidies, noting European Union subsidies totaled US$6.1 billion in 1997 and accounted for 80 per cent of global subsidy expenditures.

Like Canada's, but unlike many other WTO members', U.S. policy calls for science-based decisions on biotechnology, which have been widely rejected in Europe. Glickman stressed the need to maintain public trust in the process so that "they don't think we are just cheerleaders for the industry."

At the conclusion of the Ottawa conference, Glickman and federal Agriculture Minister Lyle Vanclief emerged from private discussions to announce formation of a new federal level consultative committee to deal with Canada-U.S. trade irritants. The committee will form a state and provincial advisory group and include bilateral industry groups.

At a press conference following the announcement Vanclief was optimistic about the "pre-emptive" approach, but noted the large volume of business done between the two countries. "I don't think we'll ever see a day when we don't have some concerns."

Canadian agri-food imports from the U.S. were nearly $5.8 billion between January and July 1998, up 13 per cent from the same period in 1997. Canadian exports to the U.S. during the same period were $7.2 billion, up 12 per cent from a year earlier.

© copyright 1999 Agricultural Publishing Company Limited.


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Exporters want market access

While Canada's dairy and poultry farmers wrestle with the tariff issue leading up to World Trade Organization talks in Seattle Nov. 30, export-dependent red meat farmers want the doors thrown wide open.

"Ontario Pork is in the business of exports, to over 80 countries," Ontario Pork chairman Will Nap told farm writers in Milton last month. Pork exports have grown from $0.6 to $1.4 billion in seven years, Nap said.

Still, the playing field isn't level. North America has become the "shock absorber," taking the market hit for unfair trading practices such as price-distorting "speculative inventory buildups" in Japan, said Nap.

He's also miffed that the U.S. used China's entry into WTO as a "bargaining chip" in a pork sales deal.

Canada's $2-billion fresh fruit and vegetable business is "import-sensitive yet export-dependent," said former potato board chairman Les Armstrong. While horticulture, notably the greenhouse industry, has benefited from free trade with the U.S., Armstrong cited some "glaring issues," such as pesticide regulations, which have yet to be harmonized.

Ontario Federation of Agriculture trade specialist Terry Otto called for a "fair and balanced" position, reflecting the domestic and export needs of the 230 commodities OFA represents. OFA calls for eliminating export subsidies, defining domestic support rules, accepting international pesticide regulations, and maintaining farmer premiums for risk-sharing programs.

© copyright 1999 Agricultural Publishing Company Limited.


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European confidence shattered

One day Europe may accept genetically modified (GMO) foods, but not until the processors prove that there is a benefit to consumers, says a world-renowned expert on food safety.

Speaking in London, Ont., last month as the 1999 William A. Stewart Foundation lecturer, David Hughes, professor of agribusiness and food marketing, Wye College, University of London, said North American marketers forgot about consumers when they tried to sell their products into Europe. "It benefits stockholders in the U.S. and large-scale farmers in the U.S. That is the perception," Hughes said.

And he warned that GMOs may still get a rough ride in North America.

"We haven't had the discussion that is necessary before it is embraced wholeheartedly. European consumers view with suspicion products that they feel have been tampered with, and don't benefit them."

Most of the GMO benefits so far are agronomic and don't benefit consumers, said Stewart. But if you tell a housewife that a GMO product is guaranteed salmonella free, she will buy it. The fact that marketers blew it the first time around "will slow the rate of acceptance and the rate of scientific advancement, and that is a shame."

The BSE debacle in Britain was a complete folly, Hughes said, with the ministry of agriculture and fisheries (MAFF) touting the safety of beef loudly and then only four months later saying it may not be safe after all.

It will take a generation to regain consumers' confidence in the food system, Hughes predicted.

There is now a single food standards agency for all industries in Britain. The ministry of agriculture no longer regulates farmed food safety, Hughes said. Because MAFF was less than open with the truth, they had their power to regulate taken away from them.

This will be good for farming in the long term, Hughes said, although it causes pain now. - Don Stoneman

© copyright 1999 Agricultural Publishing Company Limited.


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F&C congrats

In honour of its 10th anniversary, the Ontario Farm Animal Council has recognized 10 "Friends of OFAC" for their contributions in promoting animal agriculture.

At the recent celebration in Guelph, recipients received plaques, and the "125 Years of Achievement" history book of the Ontario Agricultural College. Farm & Country also contributed rain ponchos (guaranteed to bring on rain) and helped promote the awards.

Winners are: Marion Newman, Craig and Cathy Smith, Walter and Sharon Petheram, John Hendrix, Ron and Sharon Douglas, Jean Szkotnicki, Dave Adams, the CNE agriculture committee, the Middlesex Federation of Agriculture, and the Ontario SPCA Investigations Department in Newmarket.

© copyright 1999 Agricultural Publishing Company Limited.


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This just in: Gaunt retiring

Veteran western Ontario farm broadcaster Murray Gaunt says he's hanging up the microphone at the end of this year. But it won't be another nail in the coffin of farming on the airwaves in Ontario: CKNX radio management in Wingham has full intentions of filling Gaunt's big shoes.

With Ontario AgRadio Network's Dennis Guy, Gaunt is in a select group of farm broadcasters, as major stations sideline the farm beat. CKNX general manager Jack Gillespie, however, says agriculture remains "a very important part of our market. We plan to fill Murray's position, but do not have an individual in place."

Gaunt, a Huron county farm boy and former MPP who spent 17 years at CKNX TV and radio, is a familiar voice to farmers. While cherishing the people he's met in the farm community and media, Gaunt says he won't miss the "wall-to-wall" farm meeting season. As CKNX farm editor, he turned out two daily five-minute news reports, plus a markets and analysis program.

"It's been enjoyable and challenging," says Gaunt, 63, who will spend time with his wife Pat, son and daughter and four grandchildren. The 1999 Royal Winter Fair in Toronto will be his "swan song," he quips.

While his position will be filled, Gaunt says it will "be tougher and tougher for farm broadcasters in the electronic media to survive in this kind of climate," with further concentration of ownership in the media. Non-farm owners "often are not sympathetic or knowledgeable about the farm industry. There's no place in their programming for it."

Gillespie, however, says the farm market is as important to the Wingham area as a traffic report is to Toronto - no matter the media owner. While CKNX TV was sold to Baton Broadcasting and then to Toronto-based CHUM, the radio side, owned by Blackburn Radio, isn't for sale, says Gillespie. - John Muggeridge

© copyright 1999 Agricultural Publishing Company Limited.


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New GM for CFO

After an arduous search, Chicken Farmers of Ontario recently announced the appointment of a new general manager. The previous GM, Bill Doyle, left the organization in May 1998 after 10 years in the job.

Bill Bearss has held numerous managerial positions at the Royal Bank of Canada for the last 20 years, all in the agriculture or agri-business sector, and will be taking up his new position May 3.

Bearss holds a Bachelor's degree in animal science and a Master's degree in animal physiology from the University of Guelph.

Mike Scheuring, CFO chairman, said in a press release that the search for a new GM has been hard work and described the job as "extremely demanding, very strategic and, of course, essential to the long-term success of the industry."

The amount of work involved had become a concern for the Ontario Farm Products Marketing Commission, as noted in Farm Products' chairman Don Taylor's address at CFO's annual meeting in March. The lack of a general manager, he said, "has caused considerable pressure on the individuals on the board and reduced, we feel, the performance of the organization."

Scheuring said Bearss and CFO are "a perfect fit," and is "very confident that the management of CFO's interests and affairs will be in extremely capable hands." - Christina Selby

© copyright 1999 Agricultural Publishing Company Limited.


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