WTO : t he t ail w agging the d og

Gib Drury

QFA President

The World Trade Organization is the rule making body that sets the terms of international trade. It has been deadlocked since the Dhoa Round of negotiations began in 2002 over the terms of trade in agricultural goods. The impasse is due to the reluctance of the exporting nations to abandon their export subsidies and internal support programs.

When a new agreement is reached, the new rules will apply to all countries and will override any national programs. Here’s where the tail is trying to wag the dog. Only ten per cent of all agricultural goods are traded internationally, the other 90 per cent are consumed domestically. Why should the terms of trade for the ten per cent exported overrule the national policies developed for the 90 per cent that are consumed domestically?

A fine example of this irrationality is the threat to Canada’s supply managed commodities in these negotiations. The WTO wants us to remove our import restrictions (high tariffs and limited access) on milk, chicken and eggs and “open” the Canadian marketplace to a flood of cheaper imports. This would send whole sectors of our agriculture industry into a tail spin, not just the production sector but the processing and manufacturing sectors as well.

Surely it makes sense to preserve and protect an agricultural policy (supply management) that has served us well since its inception. It has required no government subsidies, it has supplied the processors and consumers with as much top quality product as they want and need at fair prices and it has no waste or surpluses requiring dumping on the international market.

Let us not be naïve when negotiating a new WTO agreement. The Americans will not abandon their highly successful Farm Bill that has served their farmers so well, nor will the Europeans give up their common agricultural policy that protects the common market farmers. In this context why is the Canadian government considering sacrificing our supply managed industries in the negotiations for a new agreement? Why should we be the sacrificial lambs on the altar of free trade?

The mantra of free trade is bandied about as a basis for the negotiations but few of the negotiators seem to be concerned with making trade fair. There is a major difference between fair trade and free trade. In a fair trade each party gets their just share of the benefits, but in free trade there are no notions of equity. It is a no-holds barred contest and to the victor goes all the spoils. The only “free” thing in free trade is your right to withdraw from the trade. But when we are talking about food products and one party is starving, it is hard to walk away from an offer no matter how unfair it is.

Let’s hope that the deadlock continues long enough for a new concept called “food sovereignty” to take solid root as the basis for international trade. Each country would be permitted to set its own domestic agricultural policy to feed its own people allowing it to have complete control, not only over quality and quantity, but also safety and security, no matter what! Any surplus production would trade internationally on a “fair trade” basis with no subsidies or dumping allowed. Now that would please everyone and the dog would wag its tail, not the other way around!

CAIS gets replaced as ag policy grows forward

Andrew McClelland

Advocate Staff Reporter

Federal and provincial policy makers met last month to talk over the basics of a new income stabilization program for Canada’s farmers. While many of the details of the newly created agricultural policy framework are yet to be sketched in, one thing is clear—the Canadian Agricultural Income Stabilization (CAIS) program will be done away with and a new set of programs will be ushered in under the heading ‘Growing Forward.’

Canadian Minister of Agriculture Gerry Ritz held discussions with his provincial counterparts in early November and agreed to a policy statement that will “respond to farmer demands for more responsive, predictable and bankable programs.” Among other things, governments are hoping that the new policy framework will create a thriving agricultural industry that is more profitable while better managing the risks involved in farm business.

“Farmers didn’t like CAIS,” says Ellen Funk, manager of the new set of programs for Agriculture Canada. “They said that it wasn’t responsive or timely and that it wasn’t predictable—they couldn’t count on the amount of money that would be given to them. In developing the business risk management programs we held consultations with farmers to see what they would like.”

The new ‘business risk management programs’ (BRM) are designed to respond to different degrees of financial loss that can be suffered by agricultural producers. Running the gamut from compensating for minor loss of funds to providing insurance in case of widespread natural disaster, the four new programs are titled, AgriInvest, AgriStability, AgriRecovery and AgriInsurance.

AgriInvest is being described as a savings account for producers that will provide flexible coverage for small income declines. It will replace the coverage under CAIS for margin losses of 15 per cent or less. The program will work through farmer contributions to the savings account, which will then be matched by contributions from government. The federal government has announced that it has already contributed a $600 million “K [Author ID1: at Mon Dec 03 13:47:00 2007 ] k [Author ID1: at Mon Dec 03 13:47:00 2007 ]ickstart to AgriInvest.

“AgriStability and AgriInvest will involve the same amount of paperwork as CAIS did,” said Funk when asked if the new program will add even more paperwork for producers. “Nearly all of the information needed will come from existing forms already used in the CAIS program, so farmers should not see an increase in the paperwork they have to complete to obtain their payments.”

For farmers suffering larger losses of income in a year there is AgriStability. The aptly named program provides financial security for a drop of more than 15 per cent in a producer’s average income from previous years. When a farm business’s program margin (the allowable income minus the allowable expenses in a given year) falls below 85 per cent of the reference margin (the business’s average program margin for three of the past five years), the producer will receive a program payment. Along with AgriInvest, AgriStability replaces the coverage previously offered by CAIS. Agriculture Canada says that it has structured the program this way to “respond to the long-standing desire of producers for programming that allows them to better predict their government contribution in a given year.”

“The Growing Forward program is a little improvement,” says Union des producteurs agricoles (UPA) President and Canadian Federation of Agriculture (CFA) Vice-president Laurent Pellerin. “It’s not entirely what we—the UPA and the CFA—wanted and asked our governments for, but it definitely will benefit producers.”

“The modifications, such as having a personal account, will be a help to producers,” said Pellerin. “The horticulture sector was particularly asking for this.”

In addition to these business risk management schemes, ministers also spoke of AgriRecovery and AgriInsurance, two programs intended to grant disaster relief protection and funds. AgriRecovery will provide assistance for producers hit by smaller natural disasters that affect a region and have a relatively small impact on the Canadian agriculture industry. At their November meeting, ministers agreed to supply disaster relief funds on a 60/40 federal/provincial basis.

“In Quebec, producers will apply through La Financière Agricole when participating with AgriStability,” said Funk “Regarding AgriInvest, we are still seeking authorities and agreeing on the details but hope to have them in place before Christmas.”

While the AgriInsurance program is already offering insurance against production losses caused by “specified perils” such as weather, pests and disease, ministers said that they are looking to expand the types of insurance provided to better meet the needs of producers.

Minister Ritz and provincial ministers of agriculture also spoke of how their governments would respond to larger, widespread disasters that could cost their territories billions of dollars and potentially impact the health of the Canadian population. The federal and provincial governments committed themselves to work quickly at both levels of government to ensure that such disasters do not affect trade and the health of the farming industry.

Although many details still need to be fleshed out, industry leaders say that the new farm support programs are a step in the right direction.

“Years ago, before the Agricultural Policy Framework, we didn’t even have anything that resembled a real agricultural policy,” said Pellerin. “And we still need something as strong as, say, the US Farm Bill. When the APF started, we said that it was something we can build upon, and that is finally happening.” [Author ID1: at Mon Dec 03 13:52:00 2007 ]

Armchair a ccess to i nformation from La Financière Agricole

Ivan Hale

QFA Executive Director

Instead of getting into your truck to drive an hour or more to an office, imagine slipping into your slippers pouring yourself a cup of coffee, sitting down to your computer and being able to review your entire file with La Financière Agricole. Sound too good to be true? No longer!

Since November 12, farmers who participate in programs with La Financière Agricole can have complete on-line access to their files 24 hours a day, seven days a week.

The day after its launch I took it for a “test drive”. Here’s my first experience.

Visiting the newly revised website was easy. It is attractive and loaded quickly on my system, although I must confess I have high-speed internet access, which is a rare treat if you are a rural resident. It will definitely be slower for someone with a dial up connection—but it will still save driving to their office. I had no difficulty entering the section of the website called “Access,” using the temporary user name and password sent to me by mail. After changing them so as to ensure my privacy I was quickly able to explore the information they have about my farm operation. Everything was in order.

Then one very interesting feature attracted me. I was able to view a map of my farm showing all the fields and the size of each. I could even zoom in on the aerial map to calculate the area of a specific section of my property in either hectares or acres, and I could view road names, contour lines showing elevation and many other features. And there’s more. It’s even possible to print out maps. Unfortunately the option to download a “pdf” version of the file did not work but this is probably just a bug in the system that will be resolved shortly.

Next I viewed the details of my cow-calf income stabilization program. I could see the insured number of animals going back to 2004. There was information on the amount I paid in premiums and the amount paid out. I checked the latest status of my file to see if there was missing documentation needing up-dated.

I do not participate in crop insurance so I will have to leave that to someone else to check out, but presumably it is equally useful and impressive.

The website also contains a very handy document library where you can consult every information pamphlet or brochure or general mailing that you have been sent by La Financière over the past five years.

Lastly, you can declare your production volumes online, and even start the process for filing an application for funding without leaving your coffee to get cold!

Sadly, the only drawback about the whole experience is that it is only available in French. Even when I checked the English side of their website there was no news releases in English and a very interesting new economic tool called l'Agroindicateur could only be accessed in French. I left a message asking when it will be offered in English. Within a week I received a phone call. I explained that farmers who are not comfortable reading or writing French would be unable to access this valuable tool. The customer service agent explained that La Financière Agricole must comply with the official language laws. I responded that this section of La Financière’s website is not communicating with the general public. It is restricted to clientele of La Financière and that they should be able to communicate in English. On December 5 the QFA met with La Financière staff to discuss services to their English clients. We discussed a number of ways that services can be enhanced, including providing sample forms in English for farmers to compare—much like that done on the web site of Quebec’s Ministry of Revenue. We agreed that La Financière will review their options and will officially respond to QFA’s concerns in writing. More news to follow.

A beef production centre of expertise

Pierre Réhaume

Communications and Liaison Officer

FPBQ-CCP-CCRBQ Interim Committee

A centre of expertise is a place of excellence and convergence. For the beef sector, it grants control over the management of genetic improvement programs and technological transfer activities. This new organization was created after extensive consultations in 2006 with both producers and their many partners. The centre will be an efficient, simple and flexible institution, which will create a vision for the development of beef production in Quebec and revitalize the entire industry. That won’t be accomplished quickly, as there are a number of steps to be taken one at a time. But soon, through a cooperative effort, beef producers and their representatives will be sure to get the job done.

Until recently, genetic improvement services for purebred and commercial beef breeders in Quebec were under the stewardship of the Ministère de l’Agriculture, des Pêcheries et de l’Alimentation (MAPAQ). However, MAPAQ has announced its intention to give more responsibility to the beef industry, as has already been done for several other sectors of livestock production (pigs, lambs and sheep).

A broad consultation

A feasibility study was conducted in several stages. One of the high points was the consultation of 21 associations and/or coalitions of associations, MAPAQ, Agriculture and Agri-Food Canada (AAFC), the Comité consultatif provincial en génétique bovine, research centres, universities, beef production financial cooperatives, genetic evaluation stations, and all organizations concerned with the question.

The consultation was an opportunity to sound people out, to build awareness and to mobilize the sector regarding the importance of services for the improvement of beef production, particularly services adapted to the needs of purebred and commercial beef breeders in Quebec.

Given the tough economic situation for Quebec’s beef producers, the discussion and consultation process was essential for the needed changes to take place in a spirit of partnership and open-mindedness.

Agreement for the centre

The various players involved in genetic improvement in the beef sector participated in the consultation enthusiastically and seriously, agreeing with the creation of a centre of expertise in beef production. The centre will not be limited to genetics, however, but will also deal with other aspects of production such as health and feeding. In other words, the centre’s mission will be to contribute its expertise toward improving the profitability, efficiency and sustainability of purebred beef production in Quebec.

With techno-economic tools adapted to their needs, and the setting up of a structure to improve the efficiency of the beef industry as a whole, new opportunities will be opening up for beef producers. In the next issue, we’ll talk about the stages to come in creating the beef production centre of expertise.

Advance Payments Program

Jean-François Thiffault, B.Sc.

Project Officer, APP

FPBQ

For several decades now, the Advance Payments Program, better known by the acronym APP, has been offered to producers of crops like cereal grains, truck crops, apples, potatoes and even maple products. Not long ago, Agriculture and Agri-Food Canada (AAFC), which administers the APP, expanded access to include livestock production.

In Quebec, the relevant producer federations act as program delivery agents for AAFC. They perform the financial operations, see to the reimbursement of cash advances and represent producers’ interests with AAFC.

In concrete terms, the APP lets producers obtain a cash advance on future production. The maximum advance is $400,000, of which the first $100,000 is interest-free. The remaining $300,000 carries interest at a very attractive rate, less than the prime rate (currently 6.25 per cent).

The funding mechanisms of the APP are governed by the Agricultural Marketing Programs Act (AMPA). This act therefore provides the framework under which the Fédération des producteurs de bovins du Québec (FPBQ) must administer the APP. It is important to note that for each producer, the amount of the advance is tied to the anticipated value of that producer’s inventory, as determined by the current reference price for each agricultural product, which is jointly set by the federation and Agriculture Canada.

There are two possible repayment formulas; which one is applied depends on the production method in use. The producer who operates under the continuous production method will have to repay the advance according to a predetermined schedule. For producers operating in “all-in-all-out” mode, APP repayments will be made when livestock are sold.

In its constant search for ways to improve its services, the FPBQ is currently working in close collaboration with other livestock federations that will also be administering the APP, so as to offer a program that is attractive and accessible to as many producers as possible. The program launch is set for spring 2008.

The federation is also working to ensure that all of its members receive, in a timely fashion, useful information needed to understand the APP. Publications and other information are therefore on the way, as both the FPBQ and the producers it represents are eager to see the program up and running.

A guide for preconditioning and backgrounding feeder calves

Guy Lapointe, agronome

Beef production and agri-environmental advisor

MAPAQ – Outaouais sector

As is the case for many farm productions, the beef sector must adapt to both the needs of consumers and to changes imposed by the industry. They must look to increasing their productivity, by producing more meat per square foot of building area.

Feedlots are high-production units. Operators do not always have enough time to tend to sick animals, and in addition, the cost of medication is constantly rising. As a result, one of the trends that can be observed is the purchase of animals in the 700 to 800 pound range, which have been preconditioned or backgrounded. The added advantage of this type of animal is that they are rarely sick and start growing rapidly. For the past several years, many Quebec feedlots have been buying Manitoba steers that fit this description.

To meet buyers’ demands, preconditioning and backgrounding have become unavoidable production techniques for the cow-calf sector. In particular, since the calves do not move to a new location, the weaning process is much less stressful. Furthermore, animals that have been vaccinated, weaned and become accustomed to eating solid food (like excellent quality forage, for example) are much less likely to be sick on their arrival at the feedlot.

A working committee, composed of a beef producer and personnel from the Fédération des producteurs de bovins and MAPAQ, have put together valuable information to produce a “Feeder Calf Preconditioning and Backgrounding Guide.” In it, the techniques of producing this type of calf are detailed excellently. However, in order to increase your changes of success with preconditioning and backgrounding, it is highly recommended that you also rely on the advice of a beef advisor you can have confidence in. Preconditioning, as well as backgrounding, is considered an art that must be mastered in order to achieve good results.

Preconditioning and backgrounding can indeed increase the profitability of your operation, but it can also increase production costs—without any guaranteed return on your investment—if the final product does not meet the buyer’s requirements. The best way to determine what buyers want is to examine the data from specialized auctions in Quebec, where demand for calves weighing over 750 pounds is increasing rapidly. During the period between 2002 and 2006, an average of 900 calves in the 801-900 pound category were sold per month through these auctions, while feedlot buyers were purchasing an average of 5,600 head, with an average weight of 860 pounds. In other words, interested buyers had to look to other markets than the specialized auctions, resulting in a large number of their livestock being purchased from Western Canada.

As shown in the table below, for the 2001-2006 period, the average price of calves decreased by about five cents for each 100-pound increment in weight. Consequently, a 600-pound calf ($1.25 x 600) sold for $80 more, on the average, than a 500-pound calf ($1.30 x 500). As for extra feeding costs, they vary depending on the forage quality—but on the average, the cost per pound of gain is about 85 cents per pound. However, for steer calves over 605 pounds, this extra cost is normally compensated by income stabilization insurance (ASRA—certain norms must be respected—consult with a Financière agricole du Québec representative). In 2006, the net ASRA compensation for steers was 33 cents per pound of gain.

Table – Income from the sale of feeder calves at Quebec specialized auctions, in 100-pound weight increments (average of 2001 - 2006)

Reference: Centre de référence en agriculture et agroalimentation du Québec (CRAAQ) – Cow-calf production, 2007.

Therefore, from a financial perspective, backgrounding can be profitable for the feeder calf producer. In addition, these calves are more apt to meet the needs of the buyers. This type of production also makes it possible for producers to sell animals at a relatively heavy weight, between 700 and 850 pounds. By selling the calves at different periods during the year, there is a better chance of attaining the average annual price, compared with selling them at a single auction. It is important to plan production cycles in order to be able to sell the backgrounded steers during periods where demand is highest, namely early in the fall or during the winter to spring period. It is even possible to do backgrounding on pasture, but only if the pasture is of excellent quality and if the animals are sold at the end of August or beginning of September.

However, before starting any backgrounding, you must be sure that you have all of the ingredients for success. For example, both the quality and quantity of your forage must meet the requirements of your livestock. The “Feeder Calf Preconditioning and Backgrounding Guide” describes everything you will need and the steps you should take to optimize your backgrounding or preconditioning experience. It also includes examples of feed rations and methods to ensure the good health of your animals, etc. A copy of the guide is available at all MAPAQ offices, as well as from the Syndicat des producteurs de bovins.

Finally, do not hesitate to contact a beef production advisor, who can certainly help you plan this type of production.

Office québécois de la langue…anglaise?

Andrew McClelland

Advocate Staff Reporter

A newly established advocacy group has started turning some heads in Quebec. The cleverly-named Office québécois de la langue anglaise (OQLA)—which takes its name from the Office québécois de la langue française, the province’s official bureau responsible for overseeing the use of the French language—was established last month, and reported that its membership grew to 250 in the first three days of its existence.

“English is not taboo,” says OQLA founder Gary Shapiro. “This is a French province, I think we have all accepted that, but we’re just saying ‘English is okay, too.’”

The OQLA states that it is mostly concerned with what it calls “the slow and methodical disappearance of the English language in Quebec.” Citing a lack of businesses who identify themselves in English, or include English signage in the stores, the OQLA maintains that its mission is about preserving English identity, not insulting Quebec’s status as a French-speaking province.

“We are not concerned with a business’s name—Home Depot and Second Cup should be allowed to call themselves what they wish—but when a person cannot go into a place of business and read safety signage in English, or a menu, that’s a problem,” says Shapiro.

The OQLA fully respects Quebec law as stated in Bill 101, says Shapiro, and does not encourage businesses to disrespect rules stipulating that French be written twice as large as English on commercial signs in the province. But, says the OQLA founder, the pendulum has swung too far and English is at risk of being extinct in Quebec.

“We Anglophones have stayed quiet in Quebec, and that’s how we bought our social peace,” says Shapiro. “We said, ‘No, stay, don’t separate,’ but now it’s gone too far. English is being threatened by the five per cent of québécois who have nothing better to do than dump on the English, and these people are radicals, they’re extremists.”

However, says Shapiro, French-speaking Quebeckers should stand up against those who give Francophones a “bad reputation” in Quebec.

“What bothers me is that the silent majority of French Quebeckers don’t do anything to silence the extremists in their midst.”

Those interested in learning more about the Office québécois de la langue anglaise can visit their website at www.oqla.org