A major drop in the farm-income index

Pierre-Yvon Bégin

The farm-income index, as calculated by the Financière agricole du Québec, dropped below zero and reached -0.7 in 2006. This economic indicator, a reference tool reserved exclusively for the farming sector, registered a seven per cent decrease in net farm income for Quebec producers, which will probably total about $600 million at the end of the year. In its second year of use, as this economic barometer drops below zero, it predicts a worsening of the agricultural financial situation.

The president and CEO of the Financière agricole du Québec, Jacques Brind’Amour, noted that farmers were not able to avoid the general market trends. In addition to the increase in the Canadian dollar and rising energy costs, they had to deal with a major disease in the pork sector and falling prices in the grain sector. As a result, the net farm income of farmers in 2006 will probably be down by about $50 million. “People do not realize it yet, but the impact will be major,” he stated. “It has really mushroomed.”

The Financière agricole’s CEO also concluded that the various programs available to producers “play a critical role” in stabilizing their incomes. In 2005, they received about $750 million, including the CAIS program and the tax reimbursement program. Of this amount, $436 million was paid out through the Income Stabilization Insurance program (ASRA). In 2006, ASRA payments will practically double to about $862 million.

More productive

Looking at the big picture, Jacques Brind’Amour believes that Quebec agriculture is doing well. He noted that studies of production costs indicate that farmers are more productive than ever, with increases of about $700 million over the last five years. He also mentioned that the insurance coverage values have increased steadily, with a 6.6 per cent rise during the last year. “Crop yields are also up,” he added. “For corn, our production model uses 7.2 tons per hectare. We will no doubt be increasing that to eight tons per hectare. This means that some farmers will reach 11 or even 13 tons per hectare. That is excellent.”

Unfortunately, Jacques Brind’Amour admitted that production costs have also been increasing constantly since 2001. He was optimistic, however, when looking at the unexpected rise in the price of corn to $160 a ton. In this regard, he believes that ethanol will eventually play an important role in determining prices. And finally, the pork sector seems to be on the road to controlling diseases.

“In hog production, we are relatively optimistic,” he acknowledged. “If the grain situation can stabilize, it will certainly be a significant break.”

With the numbers shown by the farm-income index, Jacques Brind’Amour thinks that bankers will receive a message of “caution.” Looking to the future, he believes that the work of the Commission on theFuture of Agriculture and Agri-food will probably be a “determining factor.” His organization plans to follow these developments closely.

“Slowly but surely, Quebec’s agriculture is diversifying towards new emerging productions. In blueberries, for instance, production will reach 60 to 65 million pounds this year and prices are very good. The same is also apparent in cranberry production.”

Liberalization of trade for specific grains at CWB

Thierry Larivière

The Harper government’s project to give western producers free choice in the marketing of wheat and barley seems to have taken a new turn.

The parliamentary secretary to Canada’s minister of agriculture, Jacques Gourde, confirms that his government’s project to give free-choice marketing to producers is mostly aimed at specific grains, such as organic grains.

“This is for more specific grain. It isn’t for the usual large volumes,” explained the parliamentary secretary in an interview with French-language newspaper La Terre de Chez Nous. Gourde believes that the major part of the volumes of wheat and barley will remain in the hands of the Canadian Wheat Board (CWB). It should not be too difficult, then, for the CWB to negotiate rental contracts for the elevators with the multinationals who own the majority of this equipment, which is essential to exports.

Along with organic wheat and barley, grains with pharmaceutical properties and other specific varieties could benefit from the end of the CWB monopoly. “There is an important demand for organic wheat and they (producers) have to provide it illegally. It’s nonsense,” says Gourde, who adds that this particular grain is currently mixed in with the rest in large elevators. “This is the root of the problem,” says the Conservative member. One solution would be to introduce a type of preserved identity (PI), which was successful with Quebec soya, by enabling grain segregation with a view to commercialization.

Gourde does not understand that the Bloc Québécois and other parties are opposed to this liberalization of trade for specific grains. “These are partisan games of opposition parties who don’t think of the producers,” he believes.

In spite of this entreaty, the private law project of Conservative MP Gerry Ritz (C-300), which would have put an end to the Canadian Wheat Board’s monopoly, was defeated 149 votes to 111, the opposition having voted against the government.

In spite of this, the government continues to forge ahead and Minister Chuck Strahl has unveiled a four-step plan, recommended by his work-group, which outlines the transition towards a commercialization system whereby the CWB would be voluntary and would belong to the producers. The minister has not made a decision yet on this issue but the government has always promised to give producers free choice as to commercialization.

Liberalization of joint marketing plans

“This vote (C-300) leads us to believe that Mr. André Bellavance, MP of Richmond-Arthabaska and Bloc agriculture critic, would like to take away the right of Quebec producers the freedom which they possess to choose how they will market their products, freedom that the government of Canada also wishes to give to western farmers,” declared Jacques Gourde, in an official memo.

La Terre de Chez Nous asked the parliamentary secretary if the numerous joint marketing plans in Quebec (milk, maple syrup, wheat, cull cattle, pork, goat’s milk, etc.) were threatened by this willingness to let Quebec producers “commercialize their products as they see fit.” “Quebec producers have taken themselves in hand. That’s voluntary and we are for freedom of choice”, replied Gourde, who adds that Quebec producers can always modify their marketing systems to adapt to new markets.

Following this logic, the parliamentary secretary believes that western producers should also have the choice and the power to vote for changes to the CWB. “I have no problem with that,” he says. Manitoba producers will be holding just such a vote in the near future.

The debate rages on out west. For instance Wendy Holm, an ex-columnist for the Western Producer, the main farm news magazine for western Canada, claims that she has lost her job as farm journalist for having defended a position that went against the Harper government’s project for the CWB. Jacques Gourde flatly denies that the minister’s cabinet was involved in this affair. “That’s utterly false. That was a decision of the magazine,” replied the parliamentary secretary.

EDITORIAL: Autoroute 30—going the wrong way!

Laurent Pellerin

UPA President

There is always skepticism in the air when it comes to announcements regarding the construction of Autoroute 30, and November 6 was no different. However, it is certainly not a laughing matter for farmers who are seeing their land being expropriated to build a section of an autoroute. If the project goes ahead as planned, more than 600 hectares of Quebec’s best farmland will be sacrificed, even though there is an alternative route that would be beneficial both for agriculture and for the government coffers! Furthermore, farmers are not the only dissatisfied group, since 96 per cent of Quebecers support them regarding the protection of the agricultural zone.

By insisting on the present project, the government is saying noto an alternative route (by way of Highway 132) that is respectful of the collective agricultural heritage that has served the livelihood of entire families for generations. It is saying no to a route that would cost considerably less money; no to a route that would be completed much faster; no to a route that would be several kilometres shorter; no to a route that observes the basic principles of good land-use planning; no to a route that has already undergone the necessary expropriations and which is already zoned industrial and commercial, for the most part; no to a route that many citizens and merchants are counting on to unclog Highway 132 and at the same time restore vitality to the local economy.

Moreover, it is much too easy for them to justify their actions by hiding behind the recommendations of the Bureau d’audiences publiques sur l’environnement (BAPE) , which never really came down decisively in this particular case (“the impact study did not permit us to conclude unequivocally,” wrote the BAPE). And rightly so, since the Commission de protection du territoire agricole (CPTAQ)—another agency under the jurisdiction of the same government—also declared, not once, not twice, but three times, that it was against the project—a viewpoint which our decision-makers clearly try to ignore.

In addition, this choice does not comply with the principles supposedly highly valued by this government. For instance, according to estimates obtained from the Ministère des transports, it would cost $217 million to build within the present right-of-way of Highway 132, compared to between $666 million and $766 million on agricultural land. Three times the cost! This is certainly paradoxical for an administration that advocates—and rightly so—the careful management of public finances. This paradox is no less evident when it comes to the basic principles of sustainable development, which this government elevated to the ranks of measures that are above the law. Also, it is difficult not to see in this decision an encouragement to urban sprawl and the disintegration of the agricultural zone. Did all of these fine principles fall by the wayside…of an autoroute?

Back in January 2003, the construction of Autoroute 30 had been authorized along the axis of Highway 132. Had it not been for a reversal of this decision, the work would no doubt have been started in the same year and would probably have been finished in 2006. Last Sunday, we would not have had to witness such a show to convince us of the merits of this construction; we would have been there to cut the ribbon. This is precisely the problem with Autoroute 30: a project that has repeatedly being re-started and that would be headed in the right direction if not for the numerous detours it keeps taking, which are detrimental to agriculture’s heritage, to sound public financial management, to sustainable development and generally speaking, to basic common sense.

The UPA faces the federal finance committee

Pierre-Yvon Bégin

Without a vigorous and rapid intervention by Ottawa, the survival of the agricultural sector is in jeopardy. That’s the message, which could not be clearer, that the second Vice-president of the Union des producteurs agricoles (UPA), Denis Bilodeau, delivered to the members of the federal finance committee of the Chamber of Commons in Quebec, last Wednesday.

“The situation of Quebec and Canadian producers keeps deteriorating,” said Denis Bilodeau, referring to the decrease in farmers’ net income, to the increasing debt-load of farms and to the direct impact of American subsidies. In a substantial memo of about 30 pages, which was presented to the committee, the UPA targets the crisis of net farm income while focusing on the pork and grains sectors, international trade, as well as agricultural and forestry taxation.

Denis Bilodeau urged the Conservative government to change its wall-to-wall approach. He demonstrated that Quebec is a loser in this exercise, having only collected 6.8 per cent of the 2.2 billion dollars dedicated to agriculture in the last federal budget. Because of its level of production, Quebec should have collected almost 18 per cent of this amount. The same can be said of the Options Program for poor farm families, “a welfare program” of which Quebec has only received 6 per cent to date.

“Not only are the projected amounts insufficient in the context of the crisis that we are currently facing, but the formula used to divide the funds between the provinces does not take into account the value of their respective productions. As such, Quebec receives less than half of what it should be getting. This is inconceivable.”

As to international trade, Denis Bilodeau hammered home to the committee members that maintaining supply management is “non-negotiable.”

Abandonment

Friday, the spokesperson of the Bloc Québécois on agriculture and member for Richmond-Arthabaska, André Bellavance, brought the subject back up in the Chamber. After referring to the 6.8 per cent, which Quebec producers received in 2006, via the main support programmes (CAIS), he asked if the government had abandoned grain producers.

“In Quebec, our producers have already received $135 million,” replied the parliamentary secretary to agriculture and MP for Lotbinière Chutes-de-la-Chaudière, Jacques Gourde. The latter added that producers will receive more than $300 million by the end of the year.

Producers who want to apply for the Options Program, which aims to help poor farm families, will benefit from a three-week extension to apply. The final application date is set for November 20. Based on their 2005 income declaration, families could obtain a maximum of $25,000, and individuals could benefit from a maximum of $15,000. To apply, call 1-800-367-8506 or visit the web site at www.agr.gc.ca/options .

Ten-metre buffer strips approved in Nicolet-Yamaska

Thierry Larivière

Nathalie Normandeau, minister of the Ministère des Affaires Municipales, has finally accepted the MRC Nicolet-Yamaska’s interim control by-law (RCI), which prescribes a ten-metre protection strip along all riverbanks within its territory.

The ministry had originally refused the RCI because it was found to be not conforming to government regulations concerning agricultural activities. It had even been described as “abusive and without justification.”

The MRC decided to re-submit its RCI along with new justifications and has recently obtained approval. The prefect, Raymond Bilodeau, explained that the affected zone includes only 3.4 hectares divided among 25 farms, so the impact is minimal. In addition, the MRC has already confirmed the right to grow perennial plants in this zone. This means that, in reality, the regulation actually prohibits only the tilling of the soil and the spreading of manure. Regarding municipal taxation, the buffer strips, as well as watercourses, benefit from a “taxation differential,” which provides for an evaluation of about $240 per hectare instead of the normal evaluation of $9,000 per hectare in the region. Stéphane Nourry, the MRC’s hydrologist, also explained that the notion of variable-width buffer strips based on the risk of erosion were not practical.

The Minister’s decision does require that studies be continued on specific stream bank erosion problems and that research continue to find the best-adapted solutions. This work should then be taken into consideration by the MRC in the final adoption of its land-use planning and development plan in 2007.

Disguised expropriation

Farmers of the UPA du Centre-du-Quebec used the term “disguised expropriation” to describe the MRC’s interim control by-law at their annual meeting on October 6. They passed a resolution asking the UPA to oppose any regulations that were more strict than the government’s Politique de protection des rives, du littoral et des plaines inondables, which requires three-metre buffer strip.

Jacques Corriveau, the president of the regional federation, fears that the Normandeau’s decision will now serve as a precedent for the rest of Quebec. Apparently, several MRCs are watching the debate closely and have asked for copies of the MRC Nicolet-Yamaska’s documents.

It is likely that the debate will continue when the land-use plan is tabled, along with the erosion studies and the research on the best solutions to deal with such problems. It could be shown, for instance, that a permanent wooded buffer strip of a lesser width could be just as good or even more effective than ten metres of hay.

Quebec insures the Oka Abbey will stay agricultural

Denise Proulx

The payment of three million dollars to the Corporation de l’abbaye cistercienne d’Oka has enabled the acquisition of the 270-hectare estate from the Trappist monks, which includes the monastery and a dozen farm buildings in good condition. The corporation now wants to solicit an equal amount from the federal government within the framework of the Programme d’infrastructures Québec-Municipalité. In spite of this good news, the agricultural sector of the area remains worried. It is fearful that pressure to de-zone the abbey’s land will start anew should the corporation not find all the required sums it claims to need in order to bring “oxygen” to the “autonomous” operation of the regional entity.

“We can never rest on our laurels,” replied Éric Saint-Denis, when questioned on the guarantees that the local UPA of Deux-Montagnes received for the complete protection of the farm lands. Saint-Denis has only recently become involved with this issue and has only attended one board meeting of the corporation as the UPA representative replacing Jude Lavigne, who has been following the matter since it began in 2003.

The producers are still left with a bitter after-taste following the attempted parcelling out of the property, which would have been undertaken last year by Yvan Patry, the mayor of Oka and interim president of the Corporation de l’abbaye d’Oka.

“Yes, we weathered the storm and several people were quite shaken up, but I think that’s behind us now, because this crisis has strengthened us. We have a common vision that all members of the board share,” declared Michel Boisclair, director general of MAPAQ. “The risk will increase over time. If the corporation is not successful in its business plan, the promoters of the incorporation of the estate of the Parc d’Oka will go on the offensive again,” worries Lavigne.

Rented land

Currently, the lands of the estate of the Trappist monks are rented out annually, by verbal agreement, to surrounding farmers. According to Michel Boisclair, the corporation does not foresee rental agreements surpassing five to ten years.

Finally, Paule Fortier, president of the Seigneurie des Mille-Iles school board (CSSMI), would like to come to an agreement as quickly as possible with the corporation in order to occupy the site and to develop new agricultural projects that would consolidate the agricultural vocation of the land. In this spirit, the CSSMI already uses farm implements from the Trappist farm for its training courses in farm mechanics. Fortier hopes to interest farmers fieldwork apprenticeship and farm building maintenance. In coordination with the Centre de coordination et d’innovation en alimentation, which just received a $300,000 subsidy to promote networking between enterprises, the CSSMI would like to use the kitchen implements of the Trappists to continue apple jelly and sauce production. Moreover, the CSSMI is studying the possibility that the Centre de formation de Mirabel invest in the “ Maisons familiales rurales” program and that it receive students who would live on-site in puruing their agriculture education.

A year of change in Outaouais-Laurentindes

Julie Mercier

After a busy year, with a rezoning and more than 25 per cent new faces on the board, the Fédération de l’UPA Outaouais-Laurentides is bracing itself for its next challenges.

For regional UPA President Richard Maheu, the major issue in Outaouais-Laurentides remains land zoning and management. The area covered by the federation (14 MRCs) does not leave them much respite. The federation directors have already begun working towards the Commission sur l’avenir de l’agriculture (Commission on the Future of Agriculture). “We aren’t going to the Wailing Wall. We’re going to say what we want for the future of agriculture,” warned Maheu. One participant even suggested that each farm in Quebec put up a sign with the slogan “Just like back in Mirabel”. In this area—already hard hit with the expropriation of 1969— the pressure for de-zoning is relentless. In 2006, the Commission de protection du territoire agricole du Québec (CPTAQ) refused construction projects for a suburban train station and a bypass lane. Wanting to retain their green zone, delegates were opposed to the implantation of interregional trails for off-road vehicles.

In Outaouais-Laurentides, as in many other regions, 2006 was the year for the tax rebate issue. Judging the new program to be flawed, the assembly demanded the withdrawal of the minimum revenue per evaluation unit in order to be eligible for the municipal and school tax rebates. Always on the subject of taxes, the delegates expressed their concern with the implementation of “abusive water taxation regulations unfavourable to agriculture.” The regulation project on security and circulation norms relative to farm machinery is also a source of preoccupation. The delegates want to be certain that this regulation is acceptable to farmers. Moreover, they denounce the practice of certain municipalities that charge farmers up to $1,000 for regulation changes to authorize the construction of structure-type buildings with a sealing layer for manure storage.

The assembly also adopted some provincial resolutions such as the one on the Canadian Agricultural Income Stabilization Programme (CAIS), mandatory labelling of genetically modified organisms (GMOs), the use of dairy proteins and the import of food products.

On another note, the suspension of dairy quota transactions had repercussions on the regional congress, forcing delegates to debate a last-minute resolution. This resolution demanded that the Fédération des producteurs de lait du Québec (FPLQ) consult its members on the changes to come and then to hold a referendum on the issue. Seeing the “discomfort” of several members who did not want to become involved in the affairs of a specialized federation, the resolution was rejected.

Pork federation requests a one-year suspension

Thierry Larivière

The Fédération des producteurs de porcs du Québec (FPPQ), has resumed the auction’s activities at the American price minus $16, after a ten-day suspension.

This reopening could be short-lived, however, since the FPPQ has decided to turn to the Régie des marchés agricoles to request a one-year suspension for the three auction sale mechanisms. The price would be fixed according to a formula that resembles that of pre-payments (US minus $1), but which remains to be negotiated. All Quebec pork would then be offered at an equal price to all slaughterhouses. As a result, the FPPQ has also asked the Régie to suspend its deliberations on the marketing agreement since the main clauses would have to be revised.

This is the first element of a three-step plan. The suspension should facilitate an “important deliberation on the part of producers” as to marketing and production models. “We have to see how the producers see themselves in the Canadian restructuring,” says Dominique Blanchard, communications director at the federation. Guests from other provinces and other countries will come to stimulate the producers’ discussions during a forum next January. A tour of regions will follow to discuss the suggestions that will come out of the forum. A complete new plan of action will then be on the agenda for the next annual general assembly. The last step will be to put into place the adopted plan.

Important discussion

The regional tour, which has gotten underway this week, will focus on the three-step plan, which in turn focuses equally on marketing and the production model. The question of collective maternity operations, for example, could be brought up. The scarcity of specialized labour has begun to create problems in several regions. The question of what will replace the current auction format will also need to be addressed.

While awaiting negotiation at the Régie, the auction continues to encounter difficulties after the average price plummeted from $22 to $24 per 100 kg under the American reference. The residual auction price dropped to $85 per 100 kg at the beginning of the week, which is $46 less than the price in the United States. It must be said that the number of pigs awaiting slaughter was still around 20,000 at the beginning of the week. It could then become more advantageous for some producers to sell their pigs directly on the American market. It is difficult to say if a majority of abattoirs will be able to rally around a common proposition for a price formula for the pigs. Those who held many pre-payments might be tempted to stabilize their price in the long term but those who did not hold many could see their price increase compared to the current market.

The FPLQ rethinks its position on quota holdbacks

Jean-Charles Gagné

The planned holdbacks on dairy quota sales took a new direction in Longueuil on November 3. The directors of the Fédération des producteurs de lait du Québec unanimously voted to re-open the centralized quota sales system (SCVQ) as of November 20, 2006. Any quota acquired after that date will be subject to a 30 per cent holdback when it is re-sold. In addition, dairy producers will vote regionally next winter on the implementation of a 10 per cent holdback in 2007 on all sales of quota owned before November 20, 2006. This holdback would increase to 20 per cent in 2008 and 30 per cent in 2009. The annual assembly of the FPLQ will finally settle this thorny issue in April 2007.

According to its president, Marcel Groleau, this is a question of re-positioning and not “back-peddling.” “Ontario’s decision to take a different direction has forced the federation to rethink its strategy,” he declared on November 6, 2006. “The debate is on-going and the message that I have been receiving from dairy producers who have contacted me is that it should not stop until something concrete is achieved regarding quota sales.”

The federation has differentiated between old quota and new quota obtained after November 20, 2006. It has decided to apply a 30 per cent holdback on new quota immediately unless it continues to be used on the same production site, as in the case of a family farm transfer. “The objective is clear: it is aimed at limiting the transactions of speculators who are buying and selling quota between farms,” explained Groleau.

A fair return

According to Groleau, the FPLQ’s initial proposal (a 50 per cent holdback on new quota and up to 30 per cent on quota already owned) was not a “test balloon.” “If Ontario had stayed their course, it would have been implemented.” The federation did not yield to pressures from certain dairy-producer groups either. “The pressures are probably greater from producers stating that something concrete must be done regarding quota transactions. Even producers who were against the original proposal share this view.” It was not a question of bowing to opponents’ arguments either. “We were not on the same wavelength as they were. At the heart of our action is the desire to guarantee the future and longevity of the dairy sector.”

According to the FPLQ, these holdbacks should not be seen as theft. “The quota system has been generous to producers when they quit the profession,” explained Groleau. They have benefited from a stable income throughout their career and they leave with a quota that has increased in value more than 100 per cent over the last ten years. The holdbacks are a way to make a contribution to the system in favour of those who remain in production.”

The FPLQ will distribute the holdbacks to all dairy producers, thus contributing to their quality of life and potentially avoiding their having to purchase quota to cover the increased productivity of their herds. Moreover, Groleau added that this outlay is less than that of parents when transferring their dairy operation to their children. In such cases, they forfeit at least 70 per cent of the quota’s value in order to ensure the continuity of the business.

The UPA and Ultramar reach an agreement on Lévis pipeline

Pierre-Yvon Bégin

Last week, the Ultramar petroleum company and the Union de producteurs agricoles signed the agreement relative to the construction of a 245 kilometre pipeline between the Lévis refinery and the East-End Montreal fuel depot. This global-agreement concerns the mitigation measures, the legal aspects and the compensations for agricultural producers who will have to authorize a right-of-way. The responsibility of a final choice for the layout rests with each federation.

“We wanted for producers to be compensated accordingly, but mostly to avoid hindrances to the pursuit of our agricultural activities,” comments the first vice-president of the UPA, Martine Mercier. The Hydro Quebec agreement, concluded several years ago, served as a starting point for the negotiations. Improvements were brought forward and should serve as a basis for projects to come, in the energy field. Incidentally, a study is currently being undertaken in order to lay the foundations for a general negotiating framework.

“We no longer want to negotiate piece-meal for each one of the projects,” states Mercier. “The energy files are increasing in magnitude and, for us, the interest is not in energy but rather on the impact on agriculture and how to protect agricultural land. We took stock of what was done elsewhere, in the case of royalties, for example. There is talk of a 2007 deadline but, at the same time, there is certain urgency to this because we know that Hydro Quebec is going to come along with the need to repair and update its network.”

The global-agreement reached with Ultramar will be presented and explained to the farmers in each federation concerned by this project and will be held in the coming days. Finally, the Bureau d’audiences publiques sur l’environnement (BAPE) could begin the consultation process by the end of the month.

Rabaska

Among current energy projects, there are the methane carrier ports in Lévis and Cacouna. In the case of the Lévis project, Rabaska, the BAPE indicated last week that the consultation process will begin next December 4. Last week, an information session demonstrated that citizen opposition to the project remains fierce. The disclosure of a notice from the Health ministry brings up several issues.

Rabaska and the town of Lévis have recently announced that they have concluded a second agreement aimed at reforestation and agriculture. Rabaska agreed to compensate for the loss of 18 hectares of woodlot with the reforestation of ten hectares of large plants, and the reforestation of small plants on 18 hectares. Finally, as previously announced, Rabaska has formally committed to rent out land that it purchased but is not currently using to farmers.