For release:

December 10, 1998

Ontario announces income relief for farmers

Toronto - The Ontario government is committing up to $40 million in much-needed income relief for farmers suffering from extremely low commodity prices and weather-related disasters, Agriculture, Food and Rural Affairs Minister Noble Villeneuve announced today. Up to $30 million of the Ontario Whole Farm Relief Program will help farmers through the current crisis until a national whole farm income disaster program is up and running, and the balance will become available at that time.

"Farmers told us they need immediate help and we're committed to ensuring that they get it now, while we're waiting for a national program to start," Villeneuve said. "Our farmers and their contributions to the rural economy are far too important which is why we're acting now."

The program will provide targeted support to participating farmers in cases where their gross margins fall below 70 per cent of their three to five year average. This program is in addition to existing safety net programs. At the same time, Ontario, along with all other provinces, is re-negotiating a multi-year federal-provincial safety net agreement that will provide useful risk management tools to farmers.

"Ontario is pitching in to support all the province's farmers who have battled falling prices and extremely adverse weather conditions this year," Villeneuve said. "This program complies with international trade agreements, so that we can maintain the industry's access to critical export markets over the long-term."

"We are committed to continuing our work with the federal and provincial governments on safety net programs that are fair and equitable for all Canadian farmers," Villeneuve added.

Program applications will be mailed to registered farmers in early January. Further information is available at 1-877-838-5144 (toll-free) or on the Internet at www.gov.on.ca/omafra

Ref:

John Wehrstein	Bob Seguin
Minister's Office	Guelph (519) 826-3204
(416) 326-6439	Toronto (416) 326-3204

Backgrounders on the Ontario Whole Farm Relief Program and other safety net programs attached.

Ontario Whole Farm Relief Program

Background

· up to $40 million in interim funding up to $30 million until a national whole farm income disaster program is established, and $10 million once it's up and running
· funding will be provided to individual farmers whose gross margins for 1998 fall below 70 per cent of their three to five year average
· available to eligible farmers of all commodities in Ontario
· for farmers whose incomes have dropped due to falling prices and extremely adverse weather conditions
· Ministry of Agriculture, Food and Rural Affairs working to set up program quickly and ensure it is administered as fairly and equitably as possible
· applications are expected to be mailed to registered farmers in early January
· further information is available at 1-877-838-5144 (toll-free) or on the Internet at www.gov.on.ca/omafra

Why now?

· severe, worldwide downturn in prices for several commodities - hog farmers losing more than $50 per pig, some cattle feeders are operating at negative margins, and grain and oilseed prices are between seven and 31 per cent below last year.
· extreme weather-related disasters - extended drought in Grey and Bruce counties, severe hail damage to apple crops in Northumberland
· for hogs prices down due to severe reduction in demand for exports, especially to Asia, and oversupply of animals throughout North America

What else is the Ontario government doing?

· will complete negotiations with the federal government and other provinces to develop a national whole farm income disaster program in the coming months
· negotiating with federal government and other provinces for a multi-year safety net agreement - current agreement expires March 1999, although one-year extension provided at the last federal-provincial Agriculture Ministers conference in July.
· hotline providing advice/counselling on finances/animal welfare for pork producers - 1-888-599-5584
· technical/production advice provided through field offices/farm organizations
· list of services available to farmers Farm Family Advisor Program, federal Farm Consultation Service and Farm Debt Mediation Service
· also supportive of efforts to seek additional credit from financial institutions, suppliers, grain elevators
· providing ongoing safety net programs (see second backgrounder)

 Overview of Current Safety Net Programs for Ontario

Although safety net programs vary from province to province, there is essentially a mix of three basic components: Crop Insurance (CI), Net Income Stabilization Account (NISA) and a number of provincial companion programs tailored to recognize specific needs of individual provinces and territories.

Crop Insurance - provides farmers with protection against income reductions resulting from crop losses caused by natural hazards (dry weather, flooding, etc. )

· available for more than 50 major crops grown in Ontario, but primarily used by producers of field crops

· administered by AGRICORP, a Crown agency, on behalf of the federal and provincial governments

Net Income Stabilization Account (NISA) - national program in which participating producers contribute three per cent of their Eligible Net Sales (ENS), the federal government contributes two per cent of ENS and the provincial government contributes one per cent of ENS to individual stabilization accounts.

· contributions cover production from the previous tax year

· funding available to farmers when incomes are down

· not available to supply-managed commodities dairy, eggs, poultry

· currently, an estimated total of $500 million, including both producer and government contributions, is available to Ontario producers in individual accounts

Provincial Companion Programs - include adjustments, adaptations and other programs based on individual province's needs. In Ontario, these include Market Revenue Insurance, Self-Directed Risk Management Pilot Program, and NISA top-ups:

· Market Revenue Insurance - provides protection for grain and oilseed producers against reduced revenues when market prices are low. The program is revenue-based, and payments made when the average annual Ontario price for the current crop year is less than the support price for that commodity.


· Self-Directed Risk Management (SDRM) - a pilot program for edible horticultural crop growers and maple syrup producers. The SDRM project is a shared-cost initiative with contributions from the province, the federal government and the producer, based on a producer's net sales. Eligible Ontario producers can participate in the program by completing the appropriate area of their NISA application. An alternative to crop insurance.


· NISA Top-Ups - Federal and provincial governments currently each provide an additional one per cent enhancement in contributions, which is matched by the producer, for all edible horticulture commodities. These were done to enable producers to build more sizable safety net accounts faster.


· Research and Development Fund - as part of the federal/provincial safety net agreement, $3 million is allocated for research-related projects. In Ontario, the fund is managed by the Agricultural Adaptation Council, and projects are reviewed by a committee of farm stakeholders.