Will Canada sacrifice supply management at the World Trade Organization?

Jean-Charles Gagné

Canadian agricultural producers under supply management (milk, eggs, poultry) still think it is possible to maintain the integrity of their marketing system at the World Trade Organization thanks to the sensitive products category included in the 2004 framework agreement. However, they are concerned about what looks like a weakening in the federal government’s position.

They fear that Canada is ready, despite its official position, to repeat the same scenario that almost became reality at the WTO’s 5 ^th ministerial meeting in Cancun in September 2003. According to the a brief intended for the Cabinet on the mandate for the WTO negotiations, Canada would not refuse to sign an agreement even if it did not get what it wanted in terms of supply management.

“In any case, that is what we heard recently,” declared the president of the Fédération des producteurs de lait du Québec, Marcel Groleau, who had just arrived in Geneva on November 8.

A bargaining chip?

According to Groleau, Canada considers that agriculture is only a small part of its economy, which is greatly dependant on trade. Hence its habit of making concessions in order to maintain and increase its access privileges to foreign markets. Statements made by the Agriculture Canada’s parliamentary secretary, Wayne Easter, about the concessions that Canada should make regarding access to markets by increasing tariff quotas have not helped to ease producers’ fear. Neither the minister of Agriculture, Andy Mitchell, nor the chief negotiator for agriculture succeeded in easing these fears.

“Supply management is part of the position that Canada defended at the WTO,” declared the International Trade spokesperson, Brooke Grantham, in Geneva on November 8. According to Grantham, it is still too early to speculate on what is going to happen during the month in Hong Kong. On the same day, Minister Mitchell declared from Geneva that Canada is still looking for conditions fair for all so that all producers are able to compete and trade on an equal footing.

According to Groleau, Canadian farmers will not benefit from a significant increase in access to other markets if tariffs decrease while foreign countries will invade the dairy, egg and poultry sectors. Groleau complained that Canada has still not tabled a formula forcing countries that give limited access to their markets to open their border more quickly. Otherwise, Canada, which already gives quota tariffs corresponding to five per cent of domestic consumption, will be penalized, unlike the United States where access is limited to three per cent. The most recent American proposal talked about increasing the quota tariffs by 7.5 per cent. “Canada admittedly declared that the proposals submitted by the United States and the European Union regarding the access to markets were not ambitious enough to protect Canadian supply management. However, Canada has not made its formal demand known to ensure the protection of agriculture,” stated Groleau.

Hong Kong

The intense talks that took place in Geneva will be decisive for the outcome of the WTO’s sixth ministerial meeting.

The Federation’s Director General, Pascal Lamy, already mentioned that two thirds of the negotiation cycle launched in Doha should be finalized in Hong Kong. However, with that meeting only a month away, expectations are still fairly modest. The American and European proposals did not deliver the expected goods and talks are at a standstill regarding cotton. Some are even discussing the possibility of a “plan B” in case of failure. The United States representative for trade, Bob Portman, did not reject the idea of an extension of the negotiations to 2007, which would force them to renew the fast track mandate that is ending in the summer of 2007. Fast track is a process that allows the president of the United States to negotiate a trade agreement that Congress must either approve or reject afterwards.

Certification to be ahead of standards for Boeuf Qualité Plus

Julie Mercier

Now that beef production is slowly returning to normal after the mad cow crisis, the Fédération des producteurs de bovins du Québec (FPBQ) is bringing back its “ Boeuf Qualité Plus” certification program.

At the beginning of October, the FPBQ took advantage of Expo-Boeuf to launch its official certification brochure. As a result of the Beef Steer Marketing Committee’s think-tank, Boeuf Qualité Plus (BQP), was created in the summer of 2003 with the adoption of its terms and conditions. The FPBQ’s Canadian counterpart—the Canadian Cattlemen’s Association—and its Quality Starts Here program inspired the foundation of the BQP. Following a pilot project, the certification program had to be put on hold because of the mad cow crisis. “Producers were more concerned with the survival of their farms than improving their production methods,” admitted Guy Beauregard, coordinator of the certification program at the FPBQ. “Things have been moving again in 2005. We brought the project back on the forefront,” declared the project coordinator.

BQP is based on the Hazard Analysis Critical Control Points principles (HACCP). It includes nine critical control points: identification and treatment of animals, use of pharmaceuticals, cleanliness and maintenance of the manure management facilities, biosecurity, grading parameters, feed and water as well as equipment, transportation and storage.

Participation in the program is done on a voluntary basis. Interested operations have to go through a six-month tryout period. The FPBQ will perform audits at the farm to ensure that the principles are applied. “The purpose is to reassure consumers. The two major points are feeding and medication, such as antibiotics and hormones. We know how consumers are concerned about this. The certification also allows improving management methods,” declared Beauregard.

As of October 3, 14 operations, representing 12 per cent of steer production in Quebec, were certified. “Approximately 20,200 steers are finished according to this production method,” stated Beauregard. In addition, two farms are at the tryout stage and 14 are going through the registration process. “We are still at the stage of ‘selling’ the certification to producers. There is still no official premium on price. For the time being, abattoirs are not paying more for BQP beef,” he said. However, producing quality beef pays off and producers are beginning to make a name for themselves.

Concrete advantages

Josée Chalifoux, co-owner of Bovi-Pro farm in Saint-Charles-de-Richelieu, is full of praise for the Boeuf Qualité Plus program. “Certification is bringing us credibility. People are sure of the quality we produce. Even if there is no extra money, it is still advantageous. If one day, there are 15 trucks at the auction and the demand is for ten, the certified animals will go first,” said Chalifoux. “Even though Bovi-Pro is a young operation, its steers are the first ones to be sold and in the highest price bracket,” confirmed Beauregard. Josée and her husband Guillaume Langlois obtained their certification in March 2005; their farm has a capacity of 800 head.

Information tour about the purchase of the Colbex abattoir for beef producers

Julie Mercier

The Fédération des producteurs de bovins du Québec is going on the road to explain the next reorganization of the marketing of cull cows.

Last October 26, some 40 beef producers from the Mauricie region attended the information session. They were able to find out more about the progress made in the acquisition of the Colbex abattoir and the Produits de viande Levinoff processing plant. “We are in the process of finalizing the transaction. We should be signing on November 15,” indicated Michel Dessureault, president of the Federation. He took advantage of the opportunity to set the record straight about the rumours circulating concerning the condition of the abattoir. “Those who think that Colbex has problems with water and the environment are wrong. Substantial investments have been made in recent years.” He also denied the rumour about the Cola brothers getting involved in a competitive abattoir from Ontario. “These people signed a five-year work contract. If they leave, we have a non-competition clause anywhere in North America,” added Dessureault.

New payment method

The participants received explanations on the new sales method based on carcass weight. The base price will be calculated from the cow cutout value by taking into account the historic difference between Quebec and the United States, the exchange rate and of an adjustment factor for bovine spongiform encephlopathy (BSE). This factor incorporates the difference between Canada and the United States due to the closing of the borders and the additional slaughtering and recuperation costs. The base price will be adjusted according to live grading and the weight of the carcass. “No more estimated yield. Producers will be paid for the actual meat yield of their cows. The base price in Quebec will not be lower than the average Canadian price,” explained cull cow Marketing Director, Louis Hébert.

Some concrete action

Participants in the information session also witnessed a price simulation. With a base price of $0.82 per pound of carcass weight (the equivalent of $0.37 per pound of live weight, the average price in 2005 for all categories), a cow graded “very good” with a carcass of more than 650 pounds would be paid $0.94 per pound of carcass weight, the equivalent of $0.47 per pound of live weight. The sales price would be set on Friday for the following week. The Federation hopes to begin selling on a carcass basis as early as December 1. Currently, Colbex and four abattoirs have signed the agreement. The auctions will become assembly points, where cull cows will be weighed and graded. Payment will also be the responsibility of the abattoirs. Since the beginning of the tour, the proposed modifications have been well received. “Changes are disturbing and make people insecure. The objective is to increase the amount of money received by producers,” concluded Dessureault.

EDITORIAL: Patience has its limits

Laurent Pellerin

UPA President

In a few weeks, snow will cover most regions of Quebec and farmland will be dormant for the winter. Is there a better indication that the year is nearly over? However, the year is not over for the municipal taxation issue for which the government had announced a solution—before the end of the year.

As an old saying goes, patience has its limits. Well, the Quebec government clearly exceeded these limits by letting things drag on; it is truly inconceivable.

How many commitments were made on this issue by all levels of government? How many work groups were there? We only have to consult past editorials to see that this issue is dragging on and has been manipulated from deadline to deadline. Three years! The last committee, the “last chance” committee, announced in May by the minister of Municipal Affairs has not even been formed. At this time, they are still looking for a president. When will the first meeting be held, considering that Mrs. Normandeau declared to the media three weeks ago that “there is a strong will from the government to settle this issue”?

We should not be surprised if producers are disillusioned. Nobody can accuse them of not being fair. We have collaborated, explained, demonstrated, negotiated, and trusted. We even proposed solutions. Then, we waited and waited. But now things have lasted too long. Of course there was Law 93, implemented by MAPAQ and accompanied by an acceleration in the payment of the tax reimbursements, but that only solved part of the problem. Furthermore, it was announced at our 2004 general congress that this measure would be temporary, long enough to implement a final solution in the coming year—a year which is now almost over.

Should we be surprised, under these conditions, if producers from many regions have decided to stop snowmobile and ATV users from going onto their land? The frustration is such that the movement will likely benefit from a “snowball” effect. In fact, the cause is so just that after receiving approval from more than 250 municipalities, the snowmobiles associations are backing it and are giving us their full support. They are also asking for the government’s diligence to correct the situation.

The producers were reluctant to make this decision, as they have had a good relationship with snowmobilers for the last forty years, to the benefit of the winter tourism industry that generates economic consequences of nearly $1.5 million in some regions. Farmers have used all other avenues. They no longer have a choice. The future of the next snowmobile season is in the hands of the government. It is up to the government to respect its commitments and to finally correct the situation once and for all.

Lower Saint-Lawrence deplores the lack of support to private forests in regional plans

Pierre-Yvon Bégin

While recognizing the government’s efforts to reduce the impact of the 20 per cent forestry possibility, the Syndicat des producteurs forestiers du Bas-Saint-Laurent deplores the lack of support for private forests.

“After all the work that has been done since 2003, we are still very worried as producers,” declared the syndicate president, Jean-Maurice Lechasseur. Due to the long lasting forestry crisis in his region, Lechasseur said he is disappointed to see that the government does not consider private forests in the regional plans. It should be pointed out that the Ministery of Natural Resources announced a sum of $450 million to compensate the 20 per cent decrease.

“We have many solutions for private forests in our sustainable development plan. Has it been forgotten already?” he added.

In addition, private forests partners are asking the Minister of Natural Resources to postpone his decision to increase the industry’s contributions to regional agencies. In a settlement project published on August 31, the Minister intends to increase the contribution from $1.20 to $1.35 per cubic metre.

The Fédération des producteurs de bois du Québec, the Regroupement des sociétés d’aménagement forestiers and the Conseil de l’industrie forestière were not able to come to a consensus regarding the financing of the Private Forest Development Program. Nevertheless, these various partners are asking the Minister to postpone his decision until after the meeting that is planned for next winter.

The Financière agricole will help support syrup inventory

Pierre-Yvon Bégin

Quebec’s 7,000 maple syrup producers are no longer facing the financial burden of 56 million pounds of maple syrup in inventory alone. The Fédération des producteurs acéricoles du Québec (FPAQ) has just reached an agreement with La Financière agricole in which each party will invest $25 million over the next five years in order to take over the unsold stock in equal parts.

In a press conference held in Saint-Pierre de l’Île d’Orléans, Laurent Lessard, minister of Agriculture, des Pêcheries et de l’Alimentation (MAPAQ), stated that the agreement targeted the “consolidation” of the sales agency and the development of markets. But the question remains, will we see support for the sales agency? “It encourages the sale of the product. That is the real message because we will pay when the product comes out of inventory,” he said.

According to the president of the FPAQ, the agreement shows the government’s will to support the world reserve of maple syrup, Quebec being the biggest producer with 80 per cent of production. “This confirms that ordered marketing is here to stay. It is an important signal. The reserve will no longer be a burden,” he added.

Jacques Brind’Amour, Director General of La Financière, has mentioned a 50/50 partnership agreement with the producers. In terms of the take over of the inventory, Brind’ Amour believes that that La Financière’s contribution could reach $13 million to cover storage expenses, insurance, interest expenses and losses resulting from a decrease in quality. “It is long-awaited news. It will decrease the financial pressure put on producers by supporting a 56 million pound inventory,” declared Brind’Amour. He thinks that the strategic threshold should be around 30 to 35 million pounds.

Production break

The agreement also includes a promotional component for developing new markets. La Financière expects to spend $10 million to this end. Its participation will be directly proportional to the sale of inventory. Voluntary producers will finally be able to take a break from production, which, it is hoped, will translate into a decrease in production of three to four million pounds per year. To support this plan, La Financière will spend $2 million through payment advances to producers. Lemieux recommends that producers join this program as the advances are being paid according to each producer’s inventory.

“The expertise is in Quebec and we are one step ahead with regards to technology. The reference price is still the Quebec price, less than ten to 15 cents. Producers from outside the province have a lot of work ahead to reach our level of profitability,” added Lemieux, saying that seeing producers from outside the province benefit from a decrease in production in Quebec is only a rumour.

Charles-Félix Ross, secretary general of the (FPAQ), pointed out that the agreement will also bring money to producers. He said that when stock will be sold, half of the money will be given to the producers while the other half will be used to decrease the sales agency’s $118 million debt. The production debt for the year 2000 alone reached $60 million. In addition, the agreement stipulates that La Financière will conclude an agreement with financial institutions to reunite and merge with the sales agency all the credit lines negotiated individually by producers. In 2000, for example, 1,000 producers were not paid.

Single desk for cull cows worries abattoirs

The single sales desk for cull cows proposed by the Fédération des producteurs de bovins du Québec (FPBQ) concerns some abattoir members.

To counteract Colbex, 17 producers formed the Association des abattoirs de bovins de réforme du Québec (AABRQ). “The FPBQ is in a conflict of interest. It will want to yield a profit to the detriment of small abattoirs,” said Carol Lévesque, executive secretary of the AABRQ and controller of the Viandes Giroux packing plant.

“Supply guarantees are what is at stake. At the first meeting, the FPBQ’s representatives were guaranteeing us 20 percent of the volume. At the second meeting, they were down to 15 percent,” added Lévesque. AABRQ members are worried that they will run out of raw material. “We can talk about the gradual disappearance of small abattoirs in Quebec,” stated Lévesque. The Association proposes to leaves 60 per cent of the volume to Colbex, thus leaving 40 per cent to other buyers. Once these abattoirs have their supply, any surplus could be redistributed to Colbex. “Before the mad cow crisis, small abattoirs were buying very few cull cows, approximately nine per cent of the volume. It became interesting at the time of the BSE crisis because of the price of the animals,” explained Louis Hébert, marketing director of cull cows at the FPBQ.

The FPBQ would like to keep 84 per cent of the volume for Colbex and allocate the rest of the volume to the 107 remaining abattoirs. “The Régie [ des marchés agricoles et alimentaires du Québec] gave us 15 percent to serve small abattoirs,” recalls the president of the cull cow marketing committee, Omer Bouchard.

“The majority of buyers are ready to negotiate an agreement on a per carcass basis, but not at any condition,” declared Carol Lévesque. He also criticized the FPBQ’s pricing formula. He believes that the adjustment factor for BSE minimizes the abattoirs’ losses. “The mad cow crisis created additional costs and closed the internal organs market. Products that were bringing us $25,000 are now costing us $400,000. It is $84 per cow. It will have to be reflected in the BSE adjustment factor,” declared the AABRQ secretary. After an information meeting and a negotiation session with the FPBQ, the AABRQ submitted a request for conciliation before the Régie des marchés agricoles et alimentaires du Québec (RMAAQ). Before this can go ahead, the RMAAQ must certify the AABRQ.

Windmills run into trouble at the Lower Saint-Lawrence AGM

Marc-Alain Soucy

Claude Guimond, president of the Lower Saint-Lawrence UPA Federation does not try to hide his frustration at the way windmills are being implemented in his region. “This is bringing us back to a system of colonisation in which the industry is getting ready to reap the profits while leaving nothing to the local population,” he declared in a press conference after the 75 ^th Annual General Meeting of his federation, held in Rimouski on October 18. According to Guimond, individuals mandated by the large companies are going door to door to negotiate, on the sly, conditions presumably advantageous for agricultural and forestry producers of the region. “They are told not to talk about what is proposed to them so that neighbours are not aware of the attractive proposals that are offered to them. If we do not get our act together as agricultural and forestry producers, the windmill dossier will be a good example of what not to do in regional development,” added Guimond.

A resolution unanimously adopted by the general assembly is asking the Lower Saint-Lawrence UPA federation to take the necessary means to ensure that agricultural and forestry producers’ rights are protected with regards to windmill development. The delegates believe that Hydro-Quebec should act as crown corporations do in other countries, with a windmill development program controlled primarily by owners and other stakeholders. Many think that if the current model is used, profits will be taken out of the region and perhaps even out the province. There is a rumour that the workers in charge of building the windmills will come from Ontario and that they will go back once the work is done. Laurent Pellerin, the UPA president, declared to the delegates that an agreement negotiated between the UPA and Hydro-Quebec would allow opening the contracts signed by producers. “It is up to you to put a foot in the door and to negotiate better conditions,” he declared. “Better conditions negotiated collectively,” added Claude Guimond, who also announced that there will be a national symposium on wind energy in December.

Commission on agriculture

The delegates also expressed their disappointment regarding the Ministry of Sustainable Development, Environment and Parks’ (MDDEP) policies and President Guimond did not hide his concerns. “The environment is our problem. It concerns us, but it also causes us headaches,” he declared. He criticized the government for, among other things, his recent regulation on stockpiling manure in fields, which will cause problems for young farmers in bovine productions, as they will have to build concrete storage facilities. A resolution from the general assembly is asking to correct this situation.

According to Guimond, it is the kind of regulations imposed by the government that make it necessary to have a regional commission on agriculture. “The government does not know where it is going. On one hand, it implemented policies to favour young farmers and on the other hand, it adopted laws and regulations to discourage them,” he deplored. According to Guimond, producers have a vision for the future, which does not seem to be the case for our politicians. He hopes that the various social, municipal, environmental and citizen organizations will participate in the commission, which will be run by the Quebec government. Guimond admitted that the idea of such a commission came from five agricultural producers from L’Isle-Verte who published a letter in La Terre de chez nous several months ago. “The letter belongs to our Federation’s general assembly and I will ensure that it gets to the UPA’s provincial general assembly,” he stated. This year, the Lower Saint-Lawrence UPA Federation was celebrating its 75 ^th anniversary on the same day as the Annual General Meeting. A banquet that was attended by more than 250 people was held in late afternoon and into the evening.

No systematic blocking of snowmobile trails in the Outaouais-Laurentides

Jean-Charles Gagné

There will be no systematic blocking of snowmobile and ATV trails going through farmland in the Outaouais-Laurentides in order to put pressure on the Quebec government to reform municipal farm taxation. The numerous delegates attending the UPA federation’s annual meeting, held on October 25 ^th, decided to stand by its actions with MNAs, municipal elected officials and snowmobiles clubs.

The position was adopted even though the president of the Laurentides snowmobile club, who is also an agricultural producer, mentioned the provincial federation’s support of producers’ pressure tactics. It should be pointed out that the federation’s board of directors had already concluded that a systematic blocking would not lead to a greater participation than the “We pay our fair share” campaign for municipal tax reform.

In a moving speech, President Richard Maheu deplored the lack of regional solidarity regarding farm taxation. However, he mentioned his pride concerning the regional gains obtained from the BAPE in the Niocan dossier. Maheu also spoke highly of the agreement with the Laurentides MRC to limit development in green zone (a first in Quebec) as well as the support received for the commuter train station in Mirabel to be located in the white zone. He also showed his determination to decrease the pressure placed on the agricultural zone in the North Shore, which would result in the construction of a bridge on Highway 25. According to Maheu, development within the Montreal Metropolitan Community should take place within the 30,000 hectares available in the white zone. “We will take care of the remaining agricultural land,” the Outaouais-Laurentides president said. Even though he still has not forgotten the failure in the Gatineau auction dossier that resulted in a loss of $254,000, Maheu said that they also have to talk about the positive developments, such as the Laiterie des Trois-Vallées.

Financing

The UPA’s financing plan (2006-2010), which includes a $25 increase to the dues as early as 2006 and a four per cent increase to the contributions per year, was accepted. The region is asking for additional financing to take into account the fact that it serves producers from three administrative regions (Laval, Outaouais and Laurentides). Still supporting the promotion of the profession, the delegates now would like to have educational activities for targeted clienteles rather than for the public at large, as done previously with the Open House on Quebec Farms days.

The delegates are asking for the implementation of a substantial surtax on agricultural land that has been voluntarily abandoned in order to avoid speculation and to make the land more available for producers. They are also demanding concrete measures to reduce the impact of the increase in the price of fuel on the profitability of farms while waiting for the sales price to reflect the additional costs. They do not want subsidies that would allow oil companies to make profits by maintaining a high price on their products. They also said that compensations must also cover the additional costs caused by the agri-environmental measures.

The assembly asked the provincial UPA to support cash crop producers who are trying to obtain the imposition of compensatory and anti-dumping rights on the importation of corn from the United States. The president of the regional pork federation, Pierre Lorain, voted against this measure that would have the effect of increasing the cost of feed for these animals, which represents 60 per cent of the production costs.

After 20 years of inaction, the delegates are demanding concrete measures from the Quebec government to counter the significant losses caused by damage done to the crops by the overpopulation of wildlife, particularly by white-tailed deer.