FPLQ to loan 10 kilos of quota to new recruits

Jean-Charles Gagné

Quebec dairy producers have created an innovative program to help launch new dairy farms. The provincial Fédération des producteurs de lait du Québec will, in effect, loan a quota of 10 kilos of milk fat per day to aspiring farmers who satisfy certain conditions. The loan must be reimbursed over a ten-year period at a rate of one kilo per year, beginning in the sixth year of the loan.

“The federation has put aside quota for ten dairy farm start-ups in the current production year,” declared its president, Marcel Groleau. “We will not have trouble finding ten applicants. There are already four in the Quebec region alone.” Groleau also noted “it is rare nowadays to see groups in our society who support the initiation and development of new players in their sector of activity, all professional corporations included.”

According to Groleau, it represents “an additional opportunity offered to young farmers under 40 years old to establish their own dairy farm.” Otherwise, this avenue would be effectively impossible for them. “However, we are aware of the challenge facing young farmers in starting new dairy farms, even with this assistance,” he added. Since they are obliged to acquire 10 kilos of quota themselves to be eligible for the equivalent loan from the FPLQ, the young recruits find themselves with a total quota equal to about half the Quebec average. The federation believes that this size of enterprise can be viable with a limited cost of living. This program is in addition to the one already offered by the FPLQ to facilitate family farm transfers from one generation to the next. Last year, Quebec lost over 300 dairy farms.

Conditions

The applicant must never have been an owner or part owner in a dairy operation. He must commit to owning at least ten kilos of quota before the FPLQ makes its loan, which means an investment of over $300,000 at present prices. He must be eligible for the establishment grant administered by the Financière agricole du Québec for aspiring farmers. The dairy production must be done in a new installation or at a site unused for at least 24 months. The applicant may not sell quota to reduce his ownership to below 10 kilos per day and he must own the totality of the dairy operation. The loaned quota cannot be sold or transferred.

And that’s not all—the future milk producer must have the solid backing of his community. In particular, he must obtain a favorable resolution from the milk producers’ syndicate in the region where he is located. He must also show that he has received the support of local milk producers (through donations of animals, equipment, etc.), service suppliers (veterinarians, banks, etc.) and other stakeholders, such as municipalities and support organizations like the Centres locaux de développement (CLD).

“Over and above the financial benefits, this program is having a ripple effect in the dairy industry,” explained Groleau. “The Centre d’insémination du Québec (CIAQ) and very soon Valacta (formerly known as PATLQ or DHAS) will launch their own measures to help support the establishment of dairy farms.”

Projects located in the regions of Saguenay-Lac-Saint-Jean, Abitibi-Temiscamingue, Bas Saint-Laurent and Gaspesie will be given a slight priority. Loans will be distributed in the order that the completed applications are received at the FPLQ.

A better control over egg surpluses

Jean-Charles Gagné

After five years of procrastination, the Quebec egg industry has a new marketing agreement, decreed last July 25 by the Régie des marchés agricoles et alimentaires du Québec.

The Fédération des producteurs d’oeufs de consommation du Québec (FPOCQ) met with the main classifiers several times before the public audiences, which were held on May 3 and 4 2006, in order to reduce the number of contentious issues. One of the classifiers, Ovale, did not attend. The Régie was finally called upon to settle a dozen or so points that were still causing tensions between the FPOCQ and classifying centres. The agreement will end on December 31, 2006, and will automatically be renewed unless it is terminated by one or more of the parties. Included in it is the most important objective—to supply the table egg market with eggs produced in Quebec, already shared with the egg industry. Therefore, a classifier lacking eggs to fill his orders will have to acquire supplies from another Quebec classifier first. The convention reiterates that the transformation market (industrial) is only a secondary or alternative market. In that sense, it aims at minimizing eggs that are declared as surplus and then sold on that market.

For president Serge Lefebvre, this convention “supplies the boundaries which will enable a better control over the use of eggs coming into Quebec and will ensure greater equity between Quebec egg classifiers.”

Limits

The agreement contains dispositions aimed at limiting the quantities of eggs going toward the industrial market. The classifiers will not be able to declare eggs coming from another province or imported via a global or supplementary permit as surplus, as well as eggs coming from another classifier. Classifiers will have to provide the identity of their suppliers as well as the quantities obtained from them.

A classifier who declares egg surpluses will have to deliver at least 25 per cent of them as unclassified and, therefore, less expensive, in order to facilitate exchanges between classifying centres, thereby better supplying the table egg market. The FPOCQ will put in place controls to guarantee that eggs destined for shelling will have been.

The convention renews the existing mechanisms for determining compensations for eggs sent to a transformer or another classifier. This is also true of the price of eggs exchanged between classifiers which must be between a minimum price (OCCO) and a maximum price (the FPOCQ price raised to $0.175 per dozen, as decreed by the Régie last fall).

The Régie has refused to recognize the right to access the Quebec market to some eastern Ontario producers, who sell some twelve thousand cases of eggs each week in Quebec, as requested by Ferme St. Zotique Ltd. A request that would have had the effect of restraining inter-provincial free trade, explain Régie representatives. The Régie has also refused the request of certain classifiers to restrict the FPOCQ’s verification prerogatives.

The Régie has left the task of submitting proposals for brown eggs, of establishing classification fees used to determine the Federation compensation for eggs sent for transformation, as well as that of implanting an indexation rate mechanism for transport fee compensations, to the parties for the next round of negotiations.

Federal and provincial ministries agree on nematode problem

Pierre-Yvon Bégin

The embargo imposed by the United States following the discovery of golden nematodes in a field of potatoes south of Montreal ought to be limited to the affected zone. Following a telephone conversation with his federal counterpart Chuck Strahl, the minister of Agriculture, des Pêcheries et de l’Alimentation du Québec (MAPAQ) , Yvon Vallières, stated that he had received confirmation that Quebec and Ottawa share the same point of view.

“On the political level”, he declared, “Chuck Strahl and I are on the same wavelength concerning the golden nematode problem. I wanted to be sure that we would treat it on a case-by-case basis and that restrictions would be applied farm by farm, not on the entire territory.”

Yvon Vallières also confirmed to have come to an agreement with his federal counterpart to ensure that the Americans deal with cases of contamination on a scientific basis. Quebec’s minister of agriculture also added that he hoped that the federal government, which is responsible for negotiations with the U.S. will proceed rapidly in this matter. “There have already been negative effects,” acknowledged Yvon Vallières, confirming that the mistrust towards other farm products in the area is unfortunately very real. The minister also stated that he was keeping a careful watch on new requirements that could be imposed on farmers. In this regard, he considers the idea of obliging producers to wash the potatoes in the field “very complicated.”

“The economic impact could be disastrous,” confirmed Yvon Vallières, who is pressing Ottawa to provide financial support, not only for potato producers, but also for all the other producers indirectly affected.

Nematodes under close scrutiny

Thierry Larivière

Few insects have received the attention of humans as much as the golden nematode, since its discovery in a field of potatoes in the MRC de Lajemmerais, near Montreal earlier this past August.

“The nematode is limited to one farm,” explained Alain Boucher, a potato specialist and spokesperson for the Canadian Food Inspection Agency (CFIA). Until now, all of our inspections indicate that the nematode is confined to a single production site of a single village.

The investigations are ongoing and will take time. Thousands of soil samples will be taken and the movement of machinery and potatoes will be verified. No soil or equipment will be allowed to move out of the affected area.

A meeting with the U.S. Agriculture (USDA) and Trade representatives was held last week. “Our U.S. counterparts wish to visit and examine the findings,” explained Alain Boucher, who nonetheless confirmed that arguments would be presented to convince them of the low risk for certain imports, such as vegetables or even washed and packaged potatoes.

The embargo becomes clearer

Exports, other than potatoes as such, do not seem to be much affected by the embargo put on this vegetable and also anything that contains soil. “Trucks were crossing without problem on Friday,” declared Lise Leclair, president of the Fédération des producteurs maraîchers du Québec, referring to the first day of restrictions at the border on all products not “exempt of soil.”

The Fédération des producteurs de pommes de terre hopes that washed and packaged potatoes will be exported soon, which will solve the problem for 80 per cent of exports. Some $12 million of potatoes are exported every year, which represents five per cent of the final destination value for Quebec producers. “For the moment, the impact is not great,” indicated Denis Pelletier, agronome for the federation, referring to local surpluses created by the embargo.

At Premier, an exporter of peat moss, company officials are beginning to breath easier after an initial scare. “My biggest problem is Idaho and Montana,” explained Robert Arbour, head of exports for Premier. It should be noted that the American border is organized by district, each with a supervisor with “considerable autonomy.” The potato-producing states are therefore more restrictive.

“Most of the business in ornamental horticulture is done in the spring,” notes Luce Daigneault, general manager of the Fédération interdisciplinaire d’horticulture ornementale du Québec. It still remains for producers of sod and fall chrysanthemums to show they are clear before exporting. A tag from the CFIA, equivalent to a phytosanitary certificate, allows greenhouse producers to continue to export because of their low risk of infestation.

Pork prices: the FPPQ denounces slaughterhouses

Thierry Larivière

The Fédération des producteurs de porc du Québec (FPPQ) has had enough of the low current pork prices, which could be explained by the lack of competition between the seven Quebec slaughterhouses that buy through electronic auctions.

“The choice of the slaughterhouses is to pass on their losses to the producers,” said Claude Corbeil, president of the FPPQ, in an interview with La Terre on the matter of prices. According to the federation’s calculations, the gap with American prices since the beginning of 2006 has only widened. That means $7.43 per100 kg less than the average of the last five years, which is roughly the same price as our neighbours south of the border, at $.02. The dollar exchange rate only partially explains the problem. By using the 2004 exchange rate for the same period, producers would have received $147 since the beginning of the year instead of the current $129, a difference of almost $18 which could be “logically” explained by the money exchange, and which the Federation understands. The remaining gap, once the American price is converted to Canadian dollars, is a harder pill to swallow for the producers. It is worth noting that the cost of production stands at about $145 per 100 kg since the beginning of the year.

The FPPQ does not go as far as to say that there is collusion between Quebec buyers. “The other buyers are hiding behind the big one (Olymel). They are using each other(…). They have all agreed to pay the least possible for pork,” explains Claude Corbeil, alluding to a competition problem. The president would like the intervention of the Quebec agriculture minister, Yvon Vallières, to attempt to release this deadlock, which has cost the Financière agricole du Québec, through the Assurance-stabilisation du revenue agricole (ASRA), some 32 million dollars more than under “normal” market conditions. Corbeil feels that it could be possible, for example, to fix a floor price, such as was done with the Colbex slaughterhouse, and then to call a special meeting to find solutions favourable to the entire industry. For the FPPQ, the ASRA money should not be used to finance the slaughterhouses. The producers’ representatives have no explanation as to why the abattoirs would let the prices drop but they question their competitiveness and efficiency. Many are saying that a problem of this nature explains slaughterhouses’ incapacity to pay the American price that has already been converted to Canadian dollars. The parliamentary commission on agriculture is being firmly awaited to discuss these important financial stakes.

Scathing reply

“It is easy to understand (the gap between American and Canadian prices). It reflects the capacity to pay of Quebec and Canadian enterprises, which is no longer there,” retorts Paul Beauchamp, vice-president at Olymel. “You can’t always be looking back,” adds the vice-president, who says that you cannot compare the state of the industry in previous years with the current situation. The Olymel director has also stated that the exchange rate has made our abattoirs less competitive not so much because of pork, the price of which varies according to the exchange rate, but because of other expenses, paid for in Canadian dollars. The Loonie has also fared well against the Japanese yen, which “decreases the margins” on these exports. The Canadian market has also become more difficult since American imports are much more competitive.

Beauchamp rejects accusations of lack of competitiveness of the slaughterhouses alluded to by the FPPQ. “It is easy to make that criticism,” he counters, adding that Olymel owns three export offices (Korea, Japan and Australia) and produces pork for Japan in Vallée-Jonction (chilled pork). “I don’t pay any less for my pork than my competitors,” replies Paul Beauchamp, who does not believe that his enterprise profits from its dominant position at the electronic auction and challenges anyone to prove the contrary. Since its fusion with Supraliment, Olymel controls more than 60 per cent of pork slaughter in Quebec. La Terre contacted four other pork abattoirs on the same issue but had received no other response at press time.

Farm income on the decline

Thierry Larivière

Canadian farmers collectively received a bit less money for their livestock and crops in the first six months of 2006, as compared to the same period last year.

Statistics Canada announced that the earnings of Canadian farmers in the first six months of 2006 have dropped by 1.1 per cent in contrast to the same period last year, for a total of $15.4 billion.

The situation is more stable in Quebec, with a moderate decrease of $25 million for this same period. New Brunswick and Prince Edward Island managed to see small increases in their sales, but Ontario, Manitoba, Saskatchewan and Alberta all experienced reductions of between 8.2 and 5.4 per cent for this same interval.

The Canadian pork sector was one of the biggest losers in the beginning of 2006, with a drop of 19.4 per cent in revenues. This can be explained by a slight decrease in the number of animals, but more importantly, by a drop in prices attributed mainly to the strength of the Canadian dollar. On the other hand, cattle and calves sold for a 12.5 per cent higher income than last year, thanks to an increase in the number of head and also better prices. Although these numbers are positive, they are not up to the revenues of 2002, before the closing of the border. Sales of piglets to the U.S. are on the increase, but because of poor prices, the total receipts are less than last year.

Grain production has again generated low returns. Income from corn was up 12.8 per cent from last year, totaling $328 million, due to increases in the price and volume. However, it should be noted that the first six months of 2005 represented the worst period in 12 years. Soybean sales were only $266 million, due to a 12 per cent decrease in price and a 24 per cent decrease in volume sold. Barley and oats were also on the decline. Only canola did fairly well, with a 35 per cent rebound in receipts for the first part of 2006.

All productions under supply management did, however, show increases in earnings, except for chickens, which suffered a 7.6 per cent price drop, due mainly to the cost of feed.

Revenues from support programs were also down by 21 per cent. Nonetheless, 2005 was a record year. The federal CAIS program paid out $836 million in 2006, compared to the $1.1 billion for the same period in 2005. Grain producers across the entire country received $652 million through new programs.

Long-awaited truce in sight on maple syrup

Thierry Larivière

After years of heated debate, often reaching the boiling point, it seems that the maple syrup industry is about to take an historic turn towards quieter climes.

This is the general impression given following the signature of a negotiated two-year marketing agreement. This is almost certainly a departure from the climate of chicanery and fisticuffs, which has prevailed until relatively recently. No previous agreement had ever been adopted without the arbitration of the Régie des marchés agricoles.

The new document outlines slight price increases for 2007 and 2008, which would once again narrow the gap between light and dark syrup classes. A consumer price index not exceeding 2.25 per cent is also expected. The majority of the other 2006 provisions will remain unchanged.

“There will most certainly be peace between the Fédération des producteurs acéricoles du Québec (FPAQ) and the buyers, which will enable us to do our job and market maple products,” declared Luc Bergeron, director of L.B. Maple Treat. “Everyone was in favour of this agreement, which led to a consensus,” stated Jean-Marie Chouinard, assistant general manager of Citadelle cooperative. At least seven important buyers, including Citadelle, have approved the agreement project that will soon be transmitted to the Régie. It is therefore likely that there will be audiences to hear from the smaller buyers. Nevertheless, nearly 80 per cent of bulk syrup volumes are transacted by those who negotiated and accepted the agreement-in-principle this summer.

“We’re now at another stage, towards the development of the industry,” declared Pierre Lemieux, president of the FPAQ.

With possible new inventory reductions looming and the threat of smaller-than-normal harvests linked to warmer climatic conditions, several buyers felt the need to insure stability and access to the reserve at a more reasonable price. The cornerstone of the accord is, without a doubt, the prolonged access to the maple syrup reserve from previous years until March 31 of each year, and access to model syrup lots containing light syrup at the average price of $2.30 per pound. The price of light syrup in inventory could go up to $2.65 per pound with marketing fees. In the case of a reduced harvest, the risk was real for transformers. These lots also contain darker syrup classes. Meaning that, even at $2.30, producers still stand to gain on certain classes and lose on others. In total, there will be a small loss that will be compensated by the support programme of the Financière agricole du Québec.

There were few criticisms in the buyers’ comments. “I think that it is a good thing, that it will bring stability,” declared Guy Bolduc, of Produits de l’érable Bolduc, speaking on the agreement. “I find that it makes sense. I’m comfortable with it,” commented Réal Bureau, of Produits de l’érable Jacques et Bureau. Eliott Levasseur, from Décacer, notes that this is the first time that buyers are talking to each other and that they are the ones who proposed the two-year convention where the Federation only proposed a one-year contract at the outset. “There cannot be more than a 0.05$ difference between classes,” denounces Gary Coppola, of Produits de l’érable du Grand Nord, who would have liked the convention to encourage the greater use of darker syrup. “The margin between the classes must be reduced, but not to the point of promoting mediocrity,” insists Luc Bergeron. In short, the buyers used the word “compromise” repeatedly. Maple Grove, Industries Bernard et Érablière des Alléghanys are also reputed to have been in agreement with the two-year convention but la Terre was not able to contact the owners of these enterprises.

Important figures

The following are the minimum prices convened for 2007 and 2008, respectively: the A and the AA remain at the same price of $2.25, then $2.30, the B at $2.22, then $2.27, the C at $2.00, then $2.05, the D at $1.90, then $1.94 and the NC at $1.70, then $1.74. The Federation had classified 56.3 million pounds of syrup as of August 21 ^st. There remained seven million pounds of 2006 syrup not sold, without counting another five hundred thousand pounds of industrial class syrup. It will remain to be seen if the 47,4 million pound inventory (without counting the 3.2 million pounds at the RCPEQ) will be able to be reduced this year.

Dairy substitutes—supply management’s Trojan Horse?

Jean-Charles Gagné

The importation into Canada of dairy ingredients, an ongoing story that has been heavily covered by the media, has undoubtedly been the object of “the great discord” within the dairy industry over the 2005-2006 dairy year. An even more worrisome occurrence during this period which ended July 31, 2006, according to the president of the Conseil des industriels laitiers du Québec (Quebec Dairy Industry Council), Pierre-M. Nadeau, is the entry into the country of dairy substitutes such as soy-based mozzarella. Last August 30, he qualified this phenomenon as the Trojan Horse of supply management. Negotiations at the World Trade Organization (WTO) and a strong Canadian dollar have also retained Nadeau’s attention.

“The importation of dairy ingredients constitutes a problem which is more visible than real,” explained Nadeau. “And this is nothing compared to the legal entry into the country of dairy substitutes such as soy-based mozzarella (except in Quebec), to an agreement at the WTO which would have lead to a slight decrease in import tariffs, and to the strength of the Canadian dollar which makes the borders more porous.”

Cold sweats

“The WTO negotiations gave us cold sweats because even small changes in the import tariffs would have had extremely disastrous consequences. We realized that the dairy transformers in Quebec did not have a Plan B to face such an eventuality, except of course for the multinationals and the big national players.” The breakdown of the WTO talks has given the transformers the opportunity to redress this situation, considering that a medium or long-term change seems inevitable.

Mozzarella cheese, which is used on pizzas, represents a two billion dollar market in Canada, for large pizzerias alone. According to Nadeau, the soy-based substitute can replace up to 30 per cent of the mozzarella and could potentially deprive dairy farmers and transformers of major revenues, to the order of six hundred million dollars. The council has apprised Quebec Minister of Agriculture Yvon Vallières of this phenomenon. It remains evident that the greater part of the Canadian market (23 million people) will continue to lend itself to this insidious breach, even though Quebec has been able to control the importation of the product on its territory.

The strength of the Canadian dollar, translating into lower prices for dairy products on the international level, has put to the forefront “the possibility to upset the comfort of the supply management system, which has been in place for 35 years,” explained the president. “If this double trend continues, competitors could indeed pay the import tariffs on butter, for example, and ravage the Canadian dairy industry. Particularly towards the end of the dairy year, we were on the edge of the cliff, multiplying our calculations.” Nadeau evoked a scenario whereby large food chains, wanting to be completely independent of Canadian dairy transformers, could decide to import butter themselves in order to satisfy their customers’ demands.

Extra hunting on whitetail deer

Julie Mercier

Facing an overpopulation problem of whitetail deer, hunters in certain parts of the MRC Brome-Missisquoi area will be able to obtain a special tag to kill a second deer.

The Ministère des Ressources naturelles et de la Faune (MRNF) will be issuing 3650 permits in the hunting zones 5-West (2000 permits), 8-East (1000 permits) and 8-South (650 permits). These supplementary permits, called SEG (service, education and management) permits, will be available through a draw. Thirty per cent of them will be reserved for private landowners. Each farmer will be allowed to register two hunters of his choice.

As the Ministry explained, “(…) the winning hunters, who have the right to kill one deer on their regular permit, will also be allowed to shoot a second deer, this one necessarily without antlers. This privilege can be exercised whether the first deer (with antlers) has been shot or not.”

Originally, UPA representatives had requested the emission of double-kill permits, giving the right to two females per hunter. “The process is more complicated and will take time. The SEG permits are a transition solution. The government has received the request for double-kill permits. It is certain that we will have them for 2008,” reassured Claude Sirois, a wildlife technician with the Ministère des Ressources naturelles et de la Faune in the Montérégie region.

Registration forms for the draws will be sent to the Société des établissements de plein air du Québec (SEPAQ) before September 7. Further information is available on the SEPAQ website and also at the MRNF offices.

Natural catastrophes

Presently, the population of whitetail deer in the Montérégie region is in excess of what the milieu is capable of supporting, that is, three to six deer per square kilometre (km ²). “It is now up to 10-12 deer/ km ², or double the capacity,” explains Claude Sirois. This situation is not without consequences. “Through our vegetation measuring stations, we have discovered that there is hardly any vegetation left in the undergrowth,” declared the wildlife technician. Whitetail deer are responsible, in fact, for the disappearance of ground hemlock in the woodlots of the Montérégie region. “We can see deer all the time, even during the day. They come close to buildings. They are not even afraid. In this area, we do not plant soybeans any more. As soon as the beans come up, the deer eat them. We would have to plant fields specifically for them,” claims Thérèse Monty, an administrator for the Fédération de l’UPA de Saint-Hyacinthe.

Apples, forages, grain, vegetables, grapevines—there is not much that can resist the grazing of whitetail deer. “The problem affects just about everyone. Even the cedar hedges on private property are eaten,” confirms Claude Sirois. However, it is difficult to evaluate the monetary value of the agricultural losses. Often, farmers hesitate to declare them.

The deer do not only cause headaches for farmers. They also cause highway accidents. In 2004, deer generated 334 accidents in the MRC Brome-Missisquoi region alone.