Farm leaders glum on budget
BY BERNARD TOBIN
Budget day produced a mingling of happy and sad faces around the lobby at Queen's Park. Teachers lamented education spending, business cheered tax cuts, while glum farm representatives simply felt forgotten.This spring, the farm lobby mounted an aggressive reinvestment campaign, but after the speeches were read and the numbers crunched, "There's not a lot" for farmers said Ed Segsworth, president of the Ontario Federation of Agriculture.
While Finance Minister Ernie Eves applauded "the resurgence of the Ontario agriculture and food sector" in his budget speech, farm representatives unearthed only one new agriculture ministry initiative in the budget - a four-year, $35-million Rural Youth Job Strategy.
The Farmers of Ontario, made up of 37 provincial farm groups, had asked the government to invest $160 million in agriculture over the next two years.
When the books are closed on 1997-98, the ministry estimates spending at $291 million. The budget's financial tables show the agriculture minister plans to spend $340 million in 1998-99, an on-paper, year-over-year bump of $49 million. That increase is expected to cover Grow Ontario spending and both the Rural Jobs Strategy and the new Rural Youth Job Strategy. Some of the money will also cover ice storm compensation and volatile crop insurance payouts.
"Government listened, but they didn't react," said Segsworth, adding farmers need money for research, third-party verification for food inspection and safety nets - "and we didn't get it.
"The success of agriculture has been investment by previous governments, and we can't sustain agriculture the way it is without investment by this government."
Agriculture Minister Noble Villeneuve emerged from the House after the budget in a fighting mood and quickly defended his government's farm record.
"We've just lowered the taxes, we're going to balance the budget next year. The climate is created for Ontario to boom. Ontario is booming, and if [farm groups] aren't happy with that then they should put that on the record, too," Villeneuve said.
"We are spending more than Quebec and Alberta put together in research and development.
"We've just spent $30 million in eastern Ontario to support the agri-food sector in storm relief...and the farm tax rebate has been looked after," the minister said. He also noted that his government would be re-investing in municipalities, and that he had just announced an extension to the Retail Sales Tax exemption on farm building supplies.
Villeneuve bristled at the suggestion that the ag ministry's financial and human resources are increasingly going toward the administration of its rural affairs mandate, and cited the rural youth jobs initiative in defence: "I can tell that the average age of our farmers is getting up there, and we want to keep our rural youth where they were born, raised and educated."
Christian Farmers Feder-ation of Ontario president Bob Bedggood said he was pleased to have the youth job strategy, "but I think research is more important.
"I thought the budget was a decent pre-election budget and did put some money back in health care, but I was hoping they would put some dedicated money back into research in agriculture. We need some research on nutrient bacteria levels in the soil to try to improve water quality...research that allows us to handle manure better so we don't have the fiascoes that we had at Grand Bend."
The government currently spends about $55 million on agricultural research.
© copyright 1998 Agriculture Publishing Company Limited.
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Farm couple "Outstanding"
Murray and Linda Porteous walked away winners of Ontario's 1998 Outstanding Young Farmer Award after juding in Peterborough last month. The couple home-school four children and farm 450 acres of orchard at Townsend, Norfolk county. In accepting the award, the Porteouses stressed that it was something "to be shared with all the employees on our farm." As Ontario winners, the Porteouses will represent the region at the national competition, judged in November at the Royal Winter Fair. Watch for a profile of their farm business in an upcoming issue.© copyright 1998 Agriculture Publishing Company Limited.
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Villeneuve ruffles feathers
Like the proverbial fox in the henhouse, Ontario Agriculture Minister Noble Villeneuve is ruffling feathers in the Ontario chicken industry.As the final touches were being put to a complex quota allocation and export policy for the Ontario chicken industry late last month, Villeneuve made the rare move of intervening directly in a Farm Products Appeal Tribunal decision involving Smithville based processor Niagara Country Fresh Poultry.
Despite arguments to the tribunal from the Chicken Farmers of Ontario and the Association of Ontario Chicken Processors that granting the new Niagara plant more birds would skew the market, in a letter to CFO and AOCP lawyers dated April 30, 1998, the minister said he was "inclined" to increase the 100,000 kg allotted by the tribunal to Niagara by 400,000 kg to a total 500,000 kg for period A-20, June 7 to Aug. 1.
At presstime, CFO chairman Mike Scheuring and a Farm Products Marketing Commission spokesman were tight-lipped about the affair. But the AOCP had voiced strong disapproval and was expecting to meet with Villeneuve.
In comments outside the Legislature after the provincial budget was brought down May 5, a feisty Villeneuve was clearly intent on giving producers and processors a wakeup call to get on with business after months of wrangling: "I have listened to both producers and processors, and you know the message from the processors is 'We should get rid of supply management. We want to open up the market.' Producers are saying, 'We can produce.' Are you telling me that both groups are unhappy because they have a little more quota? That's interesting."
Villeneuve said he sent a strong signal at the CFO annual meeting in March "that it was going to be Ontario first. And I mean that...Chicken is coming in from all over to fulfill the shortfall that we're not producing."
The principals of the Niagara venture, including Niagara grower Robert Beliak, did not return phone calls. Niagara's bid was supported at the Tribunal hearings by Frank Sheehan (MPP, Lincoln), a Tory who's in charge of the provincial Red Tape Commission. The new plant is in Sheehan's riding, and the MPP says following a request from the Niagara group he helped set up a meeting with Villeneuve: "It was my job."
Maple Leaf Poultry vice-president of manufacturing Kevin Golding says for the minister to grant more quota "unilaterally" to one processor when Maple Leaf has shut a plant and laid off a shift is not "particularly fair. We're not happy the minister could even consider that...We could use the growth more than anyone in the industry."
A meeting with Villeneuve and the processors was scheduled for mid-May.
Meanwhile, chicken continues to come into the province from the West and the U.S. to meet demand. While industry growth in Western Canada is at the maximum eight per cent above base quota allowed under the national plan, Ontario is only growing at 3.3 per cent.
Watching intently from the sidelines is Harriston-based Farm Fresh Poultry Co-op, a processing plant purchased last fall by a group of 30 producers. Farm Fresh was recently granted 450,000 kilos for A-20, though it sought 650,000 and members combined hold two million. The co-op is in the midst of a 5,000-square-foot expansion and is targetting the air-chilled Cornish hen market.
"We didn't go into business to stay at the size that was there when we purchased it," says Farm Fresh president Jim Judge, a former chicken board chairman.
As well as Niagara and Farm Fresh, Grand Valley-based Premier Farms, a provincial plant, is seeking quota. Asked how he would deal with Farm Fresh's request for quota, Villeneuve said he "would cross that bridge when we come to it." - John Muggeridge, with files from Christina Selby
© copyright 1998 Agriculture Publishing Company Limited.
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Chicken players agree on exports and quota
After months of wrangling, Ontario chicken producers and processors appear to have reached an agreement on export policy and quota allocation. The agreement between the Chicken Farmers of Ontario and the Association of Ontario Chicken Processors is still subject to approval by the Farm Products Marketing Commission, and at press time was being reviewed by other industry players such as the restaurant association.Representatives of CFO and AOCP were unwilling to comment, but here are some of the highlights of the draft agreement released late last month and obtained by Farm & Country.
Processor Allocation- Christina Selby
* A base supply will be established for each current processor equal to its supply in quota period A-20. Amounts requested by AOCP in addition to total base supply for each period will be distributed to processors on a pro-rata basis.* The change in each processor's supply from period to period is called the "Growth Rate"; a processor can increase its supply over the Growth Rate by additional 50 per cent of rate and can bank the supply for up to four periods.
* A Special Request Panel, consisting of three individuals selected by each of CFO, AOCP and the Farm Products Marketing Commission, will review requests by existing and potential new processors for supply from the 800,000-kg-per-period Special Request Pool.
* In addition to the Special Request Pool supply, potential new processors can request a periodic supply from AOCP, which can recommend that CFO allocate supply.
Export Policy
* Processors will apply individually to CFO for export supply each period.* Export price will be determined by specific price adjustments relative to domestic price. Details on price determination were not included, but individual processors will have some leeway in requesting discounts.
* Export production will be allotted to producers on a per-capita basis, not to exceed 40 per cent of producer's domestic allotment.
* If more than 50 per cent of producers participate, all processor export requests will be allotted. If fewer than 50 per cent participate, export allocation will be double the producer participation rate (35 per cent participation means 70 per cent of processor requests will be allotted). Processors requesting the largest discount will have export allotment reduced first.
* Producer will forward a cheque to CFO made out to CFO-designated processor for the difference between average discount price and domestic price (1,000 kg produced at $0.15 discount: cheque for $150), due at the beginning of the period.
© copyright 1998 Agriculture Publishing Company Limited.
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Pulling up white beans
White bean growers may soon have the choice of selling their crops through the board's marketing pool or pricing them independently via contracts with bean elevators.The industry is struggling to find a way to pull itself up by the bootstraps. Plantings this year, forecast at 40,000 acres, are down nearly 50 per cent from last year, and are the lowest in over 30 years.
Dealers warn that small crops force U.K. buyers to go to other countries for their beans; it may not be possible to woo them back when, or if, the Ontario crop rebounds. Dealers say the elevator system is set up to handle 150,000 acres. If crops stay small, parts of the system will be permanently mothballed.
"We're looking for ways to save this industry," says Gord Pryde, bean buyer with Hensall Co-op and president of the Ontario Bean Dealers Association. Discussions between dealers and the board over the pool's future are amiable, he says. "This is not an acrimonious process...we're trying to keep the white bean crop viable."
Currently, all white beans must be sold through the bean board, with growers sharing the same pool price.
Bean board committee members told directors at their annual meeting in February to look for a way to introduce marketing flexibility to the crop, providing the pool's future isn't jeopardized. Now, the broad shape of the new plan is starting to emerge.
The board looked at the wheat board's forward contract system, says Martin Huzevka, bean board manager. The difference is, the wheat board can turn to the Chicago Board of Trade to lay off its risk when it signs a forward contract with one of its growers. Beans aren't traded on futures markets, so the only way such a system could work would be to back each forward contract with a sale to an end user.
In essence, that's what will likely happen, but the contracts will be between the grower and a dealer, backed by a commitment between the dealer and an end user. The board would collect a checkoff, but prices wouldn't be pooled.
The goal is to give everybody something they want, Huzevka says. Growers who want to sell on their own and get paid when they deliver - instead of taking the pool price and waiting up to a year for a final payment - would be able to take charge of their own marketing.
Dealers say they could be choosy about who gets forward contracts, so they could win extra sales by assuring end users a very high quality crop, much as they currently do with coloured beans. End users could lock in a price and also obtain the highest quality crop.
Huzevka says changes may be in place for the 1998 crop. "There are a lot of details to work out."
Among those details is whether individual growers could sell to both the pool and through forward contract, or whether -as with the new wheat board system - growers would be held to a strict either/or system. -Tom Button
© copyright 1998 Agriculture Publishing Company Limited.
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