Farmers walking income tightrope

A rare thing happened in the House of Commons the day before MPs went home for turkey and pumpkin pie. Agriculture Minister Lyle Vanclief's knees got a work out. The Belleville boy was on his feet not once, not twice, but four times fielding questions from the opposition.

It's rare an ag minister gets that much floor time these days. It generally means it's Friday - when only bit players are left to give reporters something to do before the weekend - or farmers are in real trouble. This time it was both.

The cries from the opposition benches were coming straight from the heartland. The farm income crisis has hit the big time.

Thank the Canadian Federation of Agriculture, which has circulated some projected income numbers to Hill folks. They're not good. CFA predicts net realized farm income - net cash income minus income in kind and depreciation - could decrease more than 35 per cent this year, to $2.1 billion from $3.3 billion in 1997.

Provincially, most of the hurt is being felt on the Prairies, where cash receipts fell between about nine per cent and 13 per cent in the first six months this year. Cash receipts were also down in Ontario, by almost two per cent.

CFA predicts that net cash income will decrease more than 20 per cent this year and hit a 10-year low. Agriculture Canada's official projections are supposed to be released this month.

So far, the minister's response has been to weather the storm. He's said the crisis was created by forces out of his control; farmers have $2.5 billion sitting in their NISA accounts to get them through; they're supported by one of the best income support programs in the world.

That doesn't wash with Jack Wilkinson, CFA's president. He has numbers that suggest Canadian support for farmers is among the worst in the OECD, the organization of the world's 29 richest industrialized countries.

Federal and provincial spending on agriculture has decreased by 60 per cent since 1993, to $1.1 billion last year from $2.8 billion. Around the same time Vanclief was being tested in the Commons, U.S. President Bill Clinton was turning down a US$4-billion farm aid package because it wasn't rich enough. He wants US$7 billion.

But Wilkinson wasn't panicked in an interview after the board meeting. The CFA had a plan, which Wilkinson presented to department officials at a meeting of the National Safety Nets Advisory Committee mid-October.

Wary of countervail, board members agreed to lobby for a federal whole-farm-income-support program similar to companion programs in Alberta, British Columbia and Price Edward Island.

It would be permanent, the missing "third leg on the stool," as Wilkinson puts it, that already includes NISA and crop insurance. It would kick in when profits dropped more than 30 per cent and cover up to 70 per cent of average income. Farmers would apply when they file their income tax returns.

Wilkinson conceded the plan will require some intricate detail work to balance - and appease - commodity and provincial interests. It's a price he's willing to pay.

"We wanted to come up with something the government could implement quickly," Wilkinson said. "All the numbers say we're right. We're serious. We want a response quickly and I'm comfortable it will happen." That's as a light a toss as government will ever get from the CFA's famed warrior president. It's Vanclief's ball. - Kevin Carmichael

© copyright 1998 Agricultural Publishing Company Limited.


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Income outcomes

Numbers being circulated around Parliament Hill describing farmers' incomes aren't pretty. According to CFA:

- Net realized farm income could drop 35 per cent this year to $2.1 billion from $3.3 billion in 1997 before depreciation is factored in

- Net cash income could fall by almost 23 per cent to $5.4 billion from $7 billion last year

- Income projection by commodity (and year-over-year gain or decline): Crops: $13.1 billion (-17 per cent); Livestock: $13.6 billion (-4 per cent)

- In the first six months of 1998, cash earned from wheat was down more than 41 per cent compared to the same time last year. Barley was down almost 17 per cent. Hogs were down almost 19 per cent. Cattle and calves were down four per cent

- Not every commodity was suffering. Canola returns were up 24 per cent. The supply managed commodities posted modest increases. And some other sources of farm income were up in the first half of this year: NISA withdrawals increased by 70 per cent, to $92 million from $54 million, and crop insurance payments increased almost 12 per cent to $86 million from $77 million

© copyright 1998 Agricultural Publishing Company Limited.


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OFA seeks ban on school closures

The Ontario Federation of Agriculture (OFA) wants a two-year moratorium on rural school closures. At a board of directors meeting last month, directors took dead aim at the government's new funding formula, and even suggested it could be interpreted as a formula to close rural schools.

"This government is creating factory education for our kids," said OFA president Ed Segsworth. "They do not have the interests of our children at heart."

Since it was introduced last June, Ontario's new education funding model has drawn plenty of flak from rural parents and political opponents for its one-size-fits-all-approach.

Local school boards have been given until Dec. 31 to submit the names of schools that could be closed.

Brant's Larry Davis wondered about the formula's logic considering the government's commitment to rural jobs. Last month, the Conservatives announced the first installment of the $35-million Rural Jobs Strategy designed to keep rural youth in their communities. Davis predicted the schools issue would blow up in the government's face: "What good is a rural job strategy if all the kids are going to the city?"

Rural schools are part of the social fabric of a community, said Segsworth: "School boards are moving too fastŠand need to slow down and assess what they are doing more carefully."

The formula does not address rural concerns, said OFA executive committee member Ron Bonnett. "We would like to know if anyone has carefully assessed the cumulative cost associated with an agricultural community losing its community centre, its recreation centre, adult learning centre and community hall."

Bonnett added that rural students already spend too much time on the bus commuting to school. With more closures, the rides only get longer.

Directors also voted to protect the "uniqueness and desirability" of rural schools. - Bernard Tobin

© copyright 1998 Agricultural Publishing Company Limited.


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Horsey set

Lots of people have a horse, but a horse or two does not make a farm, apparently.

That's the simple version of how Ontario horse operations will be assessed under the new provincial property tax system, says Bill Mantel, OMAFRA manager of farm business registration.

The ministry has received inquiries from horse operators who feel they have had their property unfairly classified residential, making them ineligible for the new farmland tax rate set at 25 per cent of the residential rate.

Mantel says the tax rules for horse farms are clear: "If you're a boarder, you buy in all your feed and you board horses, you're not eligible." But, he says, boarders who grow their own feed valued at $7,000 "are generally eligible."

Small operations that basically provide a service or larger riding stables that provide riding lessons are generally excluded. "They're buying some feed, but are they farming? We're saying no," says Mantel.

Mantel says purses won by racehorses do not qualify as farm income, but horse breeders can include sale proceeds from any horse bred on the farm in the income category.

Horse owners who find themselves in a pinch do have options. If a 50-acre farm requires only five acres for the boarding facilities, for example, the other 45 acres could be rented out to a neighbouring farmer willing to cash crop the land. Rental proceeds would then be considered farm income, says Mantel, who adds that the farmer must have a valid farm registration number. - Bernard Tobin

© copyright 1998 Agricultural Publishing Company Limited.


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Vanclief wants trade talk input

Have any thoughts on the posture Canadian Agriculture Minister Lyle Vanclief should present at world trade talks next year? Tell him. Vowing to seek "the feeling from as many people as we can," Vanclief urged agrologists and farmers in Ancaster last month to contact him with ideas on Canada's trade policy heading into World Trade Organization (WTO) talks late 1999.

While insisting that with 130-plus countries "it will be impossible for everybody to come up with 100 per cent of that they want," Vanclief vowed to "ensure that the field is as level as possible for all Canadians...We have to shape a solid, well-thought-out position," aiming for a "stable, rules-based trade environment" and "a more open, secure, predictable trading framework for our industry."

Recent border skirmishes with South Dakota underscore the importance of trade rules, Vanclief said, adding that in the case of the U.S. governors it was more a case of "silly season" electioneering and plain misinformation. They were unaware, for instance, that Alberta will import 200,000 tonnes of barley from the U.S. this year. He also found irony in U.S. farmer complaints of Canadians having access to more pesticides - "That's not usually what [Canadian Federation of Agriculture president] Jack Wilkinson tells me," Vanclief said.

As to how to handle American trade harassment, Vanclief said "a big stick" was needed; to which Carluke dairyman Doug Cranston, irritated at the federal government's allowing U.S. butteroil imports, muttered "but what's it made of - willow?" - John Muggeridge

© copyright 1998 Agricultural Publishing Company Limited.


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Villeneuve rules the roost

Agriculture Minister Noble Villeneuve has stepped into the breach once more and handed a processor supply - in this instance Farm Fresh Poultry Co-op of Harriston. After the Farm Products Appeal Tribunal thwarted Farm Fresh's efforts to hold onto an additional 200,000 kg of supply, the co-op appealed to Villeneuve.

The additional supply granted was 105,000 kg in quota period A-24, which takes into account 95,000 previously granted to the co-op by the Special Request Panel.

The co-op's other appeal to Villeneuve was for accelerated growth to two million kg. It was not granted by the minister. While Jim Judge, president of Farm Fresh, is pleased with the extra supply, the growth factor was "the more important part" of the co-op's request, he says. Creating a method for rapid growth is important to the future of the chicken industry, as demand continues to outstrip supply, says Judge.

In a letter to Robert Shapiro of the Association of Ontario Chicken Processors (AOCP) and Mike Scheuring - chairman of the Chicken Farmers of Ontario (CFO) - Villeneuve said it is "imperative that the Ontario consumer demand for chicken be supplied by Ontario producers and processors."

He also thinks Ontario production should be "meeting the limits of the allowable cap" under the National Allocation Agreement. That's a point Shapiro wants clarified.

"Is Villeneuve asking us to increase supply levels without regard for the current market?" Shapiro asks. Such a move would definitely impact on price, he says. At press time, the AOCP and CFO were planning to meet with Villeneuve by the end of October.

In his letter to Judge, Villeneuve reiterated his concerns that "Ontario producers and processors are not meeting consumer demand." Judge says he interprets that as meaning, "we can go back later if we need further assistance." - Christina Selby

© copyright 1998 Agricultural Publishing Company Limited.


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Ellsworth chairs world egg body

Brian Ellsworth, general manager of Ontario Egg Producers, was elected chairman of the International Egg Commission at a recent annual meeting in Cape Town, South Africa. The commission comprises 30 member countries representing over 70 per cent of the world's egg production.

The International Egg Commission brings producers, processors and other industry partners together "for the betterment of the egg industry," according to the Cackler newsletter.

Ellsworth is a member of the Canadian Agri-Marketing Association and former president of the Ontario Institute of Agrologists. He also operates a 300-acre farm in the Niagara region. - Christina Selby

© copyright 1998 Agricultural Publishing Company Limited.


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BST report prompts calls for review

Critics of rBST, the milk production enhancing drug that is under consideration in Ottawa, have been slagging Health Canada on the issue for years. The stuff is finally starting to stick.

Dairy Farmers of Canada has asked Prime Minister Jean Chrétien to order an auditor general's review of Health Canada's Bureau of Veterinary Drugs, citing concerns about the safety of the drug and the lack of public faith in the system that approves the drugs farmers use to produce dairy products.

Early this year Health Canada's Health Protection Branch commissioned an internal study of how the pending approval of Monsanto's rBST product Nutrilac has been handled. The internal study, known as the "Gaps Analysis" report, found substantial "procedural and data gaps were found which fail to properly address the human safety requirements of this drug under the Food and Drugs Act and Regulations."

The report was completed by an internal review team April 21. Only recently have complete copies of the report been available to the public. The report - which can be read on the National Farmers Union web site - says several human health questions remain unaddressed. A key question - whether rBST and Insulin Growth Factor One (IGF1) can be absorbed by people drinking milk from treated cows - hasn't been adequately addressed, even though rBST has been under consideration by Health Canada since 1990. IGF1 is produced in greater quantities in the milk from treated cows.

IGF1 is normally digested in the human intestinal tract. There are now some concerns that it escapes digestion when it is drunk along with casein, a milk protein. High IGF levels are considered to increase the risk of colon cancer. The study says that "many potential health concerns remain unresolved."

The senate agriculture committee launched hearings into the safety of rBST late October. - Don Stoneman

© copyright 1998 Agricultural Publishing Company Limited.


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Bug spray on web

If predictions of widespread y2k problems with your farm systems have you concerned about getting blown away by a bug, look to the web for potential farmer-specific solutions.

Canadian Federation of Agriculture and the Canadian Farm Business Management Council's "Time to Act" service is now available on line (in French and English) at CFA's site <www.cfa-fca.ca> and at CFBMC's .

© copyright 1998 Agricultural Publishing Company Limited.


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Flax farmers first in line for failure dollars

Quebec and Ontario growers say flax is looking brighter following a successful court action last month against Gilflax, the Quebec-based company that contracted for their production. By all accounts yields were higher than expected and the sought-after long fibres were plentiful.

Unfortunately, Gilflax, which had promised to pay $150 per tonne plus substantial quality premiums, locked its doors and stopped answering the phone when harvest rolled around. Under the contract growers signed before planting, the company was required to harvest the crop, and Gilflax's specialized harvest equipment remained locked inside the company's scutching mill at Valleyfield, Que.

Grower Robert McDonald, Bainsville, about 40 kilometres east of Cornwall, was one of five Ontario growers among a coalition of 37 farmers from both provinces who petitioned the company into bankruptcy. They secured their interest with a first charge against the Valleyfield property.

"It was a $5-million building when the company put it up. It's going to go for a lot less than that," McDonald speculates.

Nevertheless, he predicts producers will recover 100 cents on the dollar. McDonald says it appears they will also receive compensation for disposing of the unwanted crop.

World demand for flax fibre has been increasing, and flax is well suited to eastern Ontario's 2,500 -2,700 heat units. Local growers hoped the fledgling industry would continue to expand. "It's a super crop," says McDonald, who found it fit well with a corn, soybean and hay rotation.

No one knows yet whether the Valleyfield plant will be sold intact or be stripped of its equipment and offered as a bare industrial building. McDonald hopes someone revives it. "There's still a lot of interest in flax," he notes.

Would he and his neighbours grow flax again next year? "We would if the company was bonded," he replies unhesitatingly. - Robert Irwin

© copyright 1998 Agricultural Publishing Company Limited.


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