Can you tell we're in an election campaign? This was the press release earlier this week, it's promising news but still a lot of open questions about how deep the support might be post-election.
ONTARIO GOVERNMENT SUPPORTS GRAIN AND OILSEED FARMERS
Risk Management Program to Help Farmers Compete and Succeed
PICTON The provincial government is supporting Ontario's 25,000 grain and oilseed producers with a new risk management program that will provide the stability they need to compete and succeed in the global economy, Premier Dalton McGuinty said.
"Farmers are the backbone of our rural communities and they help put food on tables across this province," said Premier McGuinty. "We're standing behind our farmers so they can succeed in international markets and continue to strengthen our economy and build opportunity in rural Ontario."
The Risk Management Program is a three-year pilot program designed to help farmers offset losses caused by low grain and oilseed commodity prices. The program will begin with the 2007 crop year. Farmers must enroll for the full three years but their premiums will be waived in the first year.
The province will fund the three-year program at the traditional 40 per cent share, while continuing to encourage the federal government to provide its 60 per cent share.
"We recognize that, from time to time, these producers encounter extraordinary pressures on their incomes," said Leona Dombrowsky, Minister of Agriculture, Food and Rural Affairs. "That's why we are keeping our promise to provide effective risk management programming that will help them compete in the world marketplace."
The Risk Management Program was developed in consultation with the Ontario Federation of Agriculture and representatives of the grain and oilseed sector.
"We are very pleased with the announcement today of the Risk Management Program for Ontario grain and oilseed producers," said Leo Guilbeault, Chair of the Grain and Oilseed Safety Net Committee. "We would like to thank the McGuinty government for committing to their share of RMP and their support for Ontario's Grain and Oilseed industry. This is one more step towards helping to ensure the long term viability of Ontario agriculture."
"The Risk Management Program provides another tool for Ontario grain and oilseed farmers to help meet the challenges of a volatile international commodity market," said Geri Kamenz, President of the Ontario Federation of Agriculture. "We will be calling on the federal government to recognize this important program and to contribute to its success. This brings Ontario producers closer to the same type of companion programs that have stabilized farm incomes for our colleagues in Quebec."
Grain and oilseed production in Ontario is valued at about $1.7 billion, and is a key input into the livestock industry, the food processing industry and ethanol production.
The Risk Management Program is just one more example of how, working together, Ontarians have achieved results in rural Ontario. Other examples include:
Delivering more than $1 billion in farm income support over the past four years
Providing $55 million to Ontario farmers through the new Ontario Cost Recognition Top-Up Program, which provides a 40 per cent matching provincial contribution to the $400 million federal cost of production payment
Investing $12.5 million in a Pick Ontario Freshness strategy
Creating the five-year, $2.5-million Premier's Awards for Agri-Food Innovation Excellence ? 55 awards totaling $425,000 were presented this year across the province, and
Providing $6 million to the Ontario BioAuto Council, a multi-industry initiative to position the province as a global leader in manufacturing auto parts and other materials from agricultural and forestry feedstocks.
"Ontario farmers are among the most creative and innovative in the world, and together we're building a world-class agri-food sector in this province," said Premier McGuinty. "We're going to keep working together to help our farmers succeed so we can strengthen our economy and build prosperity for everyone."
ONTARIO'S RISK MANAGEMENT PROGRAM
On June 8, 2007, the McGuinty government committed to the development of a three-year pilot Risk Management Program (RMP) to support the grain and oilseed sector.
The Risk Management Program is a price insurance program designed to offset losses caused by low commodity prices in a given year. This three-year pilot program will provide much-needed income stability to Ontario's 25,000 grain and oilseed farmers. It implements the program proposals developed by the Ontario Federation of Agriculture, representatives of the grain and oilseed sector and other farm groups. The RMP is based on a cost of production formula and funded partly by farmers through premiums. Payments would be made if the average price of a commodity falls below an agreed support price.
The Government of Ontario is committed to providing effective risk management programming for Ontario producers. The province has spent more than $1 billion on farm income support over the past four years.
The provincial and federal governments have pledged to work together to improve the system of food safety nets and secure short and longer-term programs that work for Ontario farmers.
With the recent announcements of the three-year pilot Risk Management Program and the Cost Recognition Top-Up program funding, the McGuinty government is helping Ontario farmers meet current needs and plan for the future. Ontario farmers will have more bankable support and be in a better position to deal with the challenges that nature, global competition, and fuel and input costs present.
Eligibility
All producers who grow one of the grain and oilseed crops previously supported through the Market Revenue Insurance program will be eligible to participate in RMP.
These crops include: Seed, Popping and Grain Corn; Soybeans; Spring and Winter Wheat; Canola; Barley; Oats; White and Coloured Beans; Sunflowers; Rye; Buckwheat;
Field Peas; Flax; Triticale; Faba Beans; Millet; Sorghum; and Spelt. It also includes farm-fed grain crops such as corn silage.
Program Requirements
RMP is designed not as a stand-alone program but as part of a complete risk management package offered to producers. For that reason, producers who want to participate in the new program are required to participate in both the Production Insurance (PI) and Canadian Agricultural Income Stabilization (CAIS) programs.
However, for 2007, participation in the Production Insurance program will be waived as the enrolment deadlines have all passed. As a number of the "minor crops" do not have PI programs available to them, the PI requirement will also be waived for any year in which no PI plan exists for a particular crop.
Producers are required to participate in CAIS for 2007.
Producers are required to enrol all RMP-eligible crops they grow on their farm.
Enrolment
Producers will be required to participate in all three years of the RMP pilot program. Sign-up for the program will begin in September.
Premiums
The province has agreed to waive farmer premiums for 2007.
In subsequent years, as recommended by the grain and oilseed industry, premiums for each commodity will be calculated by taking the provincial share (40 per cent) of 30 per cent of the difference between the support price and the most recent 10-year average market price.
Cost of Production
Support prices will be established individually for each commodity based on the cost of production. The cost of production will be calculated using the last three years of producer data as reported the Canadian Revenue Agency (CRA), with resulting averages indexed forward from the middle year using the Eastern Canada Farm Input Price Index (FIPI).
For example, costs of production for major crops in 2007 have been estimated using 2003, 2004 and 2005 tax data and indexing forward to 2007 using the Eastern Canada FIPI.
Support Prices
In 2007, there will be a single support level available for each commodity. In 2008 and 2009, there will be four support levels available for each commodity, with the estimated cost of production being the highest level. Three lower levels will be created at intervals of 25 cents per bushel between each level. Lower support levels will potentially result in lower payments for a producer but will also mean lower premium costs.
Payment Schedule
Two payments will be issued for most eligible commodities in each crop year. In a few cases, because of data availability, only one payment per crop year may be provided.
The first payment will be based on the average of forward contract prices for six months prior to harvest of each commodity. The second payment will be based on the average of cash or spot prices for six months during and after harvest. The specific months that compose these six-month periods will depend on the harvest dates of each commodity.
The province will pay its 40 per cent share of this program and will continue to encourage our federal partners to assume their traditional 60 per cent share of funding for this program.
Producer payments are expected to commence in December 2007.
Payment Caps
The grain and oilseed industry has recommended that the Risk Management Program include caps on the total payment a producer could receive.
Further Information
Agricorp will communicate directly with producers about the sign-up process, eligibility requirements and additional program details in September.
- 30 -
Contacts:
Kelly Synnott
Minister's Office
416-326-6439
Brent Ross
Communications Branch
416-326-9342
ONTARIO GOVERNMENT SUPPORTS GRAIN AND OILSEED FARMERS
Risk Management Program to Help Farmers Compete and Succeed
PICTON The provincial government is supporting Ontario's 25,000 grain and oilseed producers with a new risk management program that will provide the stability they need to compete and succeed in the global economy, Premier Dalton McGuinty said.
"Farmers are the backbone of our rural communities and they help put food on tables across this province," said Premier McGuinty. "We're standing behind our farmers so they can succeed in international markets and continue to strengthen our economy and build opportunity in rural Ontario."
The Risk Management Program is a three-year pilot program designed to help farmers offset losses caused by low grain and oilseed commodity prices. The program will begin with the 2007 crop year. Farmers must enroll for the full three years but their premiums will be waived in the first year.
The province will fund the three-year program at the traditional 40 per cent share, while continuing to encourage the federal government to provide its 60 per cent share.
"We recognize that, from time to time, these producers encounter extraordinary pressures on their incomes," said Leona Dombrowsky, Minister of Agriculture, Food and Rural Affairs. "That's why we are keeping our promise to provide effective risk management programming that will help them compete in the world marketplace."
The Risk Management Program was developed in consultation with the Ontario Federation of Agriculture and representatives of the grain and oilseed sector.
"We are very pleased with the announcement today of the Risk Management Program for Ontario grain and oilseed producers," said Leo Guilbeault, Chair of the Grain and Oilseed Safety Net Committee. "We would like to thank the McGuinty government for committing to their share of RMP and their support for Ontario's Grain and Oilseed industry. This is one more step towards helping to ensure the long term viability of Ontario agriculture."
"The Risk Management Program provides another tool for Ontario grain and oilseed farmers to help meet the challenges of a volatile international commodity market," said Geri Kamenz, President of the Ontario Federation of Agriculture. "We will be calling on the federal government to recognize this important program and to contribute to its success. This brings Ontario producers closer to the same type of companion programs that have stabilized farm incomes for our colleagues in Quebec."
Grain and oilseed production in Ontario is valued at about $1.7 billion, and is a key input into the livestock industry, the food processing industry and ethanol production.
The Risk Management Program is just one more example of how, working together, Ontarians have achieved results in rural Ontario. Other examples include:
Delivering more than $1 billion in farm income support over the past four years
Providing $55 million to Ontario farmers through the new Ontario Cost Recognition Top-Up Program, which provides a 40 per cent matching provincial contribution to the $400 million federal cost of production payment
Investing $12.5 million in a Pick Ontario Freshness strategy
Creating the five-year, $2.5-million Premier's Awards for Agri-Food Innovation Excellence ? 55 awards totaling $425,000 were presented this year across the province, and
Providing $6 million to the Ontario BioAuto Council, a multi-industry initiative to position the province as a global leader in manufacturing auto parts and other materials from agricultural and forestry feedstocks.
"Ontario farmers are among the most creative and innovative in the world, and together we're building a world-class agri-food sector in this province," said Premier McGuinty. "We're going to keep working together to help our farmers succeed so we can strengthen our economy and build prosperity for everyone."
ONTARIO'S RISK MANAGEMENT PROGRAM
On June 8, 2007, the McGuinty government committed to the development of a three-year pilot Risk Management Program (RMP) to support the grain and oilseed sector.
The Risk Management Program is a price insurance program designed to offset losses caused by low commodity prices in a given year. This three-year pilot program will provide much-needed income stability to Ontario's 25,000 grain and oilseed farmers. It implements the program proposals developed by the Ontario Federation of Agriculture, representatives of the grain and oilseed sector and other farm groups. The RMP is based on a cost of production formula and funded partly by farmers through premiums. Payments would be made if the average price of a commodity falls below an agreed support price.
The Government of Ontario is committed to providing effective risk management programming for Ontario producers. The province has spent more than $1 billion on farm income support over the past four years.
The provincial and federal governments have pledged to work together to improve the system of food safety nets and secure short and longer-term programs that work for Ontario farmers.
With the recent announcements of the three-year pilot Risk Management Program and the Cost Recognition Top-Up program funding, the McGuinty government is helping Ontario farmers meet current needs and plan for the future. Ontario farmers will have more bankable support and be in a better position to deal with the challenges that nature, global competition, and fuel and input costs present.
Eligibility
All producers who grow one of the grain and oilseed crops previously supported through the Market Revenue Insurance program will be eligible to participate in RMP.
These crops include: Seed, Popping and Grain Corn; Soybeans; Spring and Winter Wheat; Canola; Barley; Oats; White and Coloured Beans; Sunflowers; Rye; Buckwheat;
Field Peas; Flax; Triticale; Faba Beans; Millet; Sorghum; and Spelt. It also includes farm-fed grain crops such as corn silage.
Program Requirements
RMP is designed not as a stand-alone program but as part of a complete risk management package offered to producers. For that reason, producers who want to participate in the new program are required to participate in both the Production Insurance (PI) and Canadian Agricultural Income Stabilization (CAIS) programs.
However, for 2007, participation in the Production Insurance program will be waived as the enrolment deadlines have all passed. As a number of the "minor crops" do not have PI programs available to them, the PI requirement will also be waived for any year in which no PI plan exists for a particular crop.
Producers are required to participate in CAIS for 2007.
Producers are required to enrol all RMP-eligible crops they grow on their farm.
Enrolment
Producers will be required to participate in all three years of the RMP pilot program. Sign-up for the program will begin in September.
Premiums
The province has agreed to waive farmer premiums for 2007.
In subsequent years, as recommended by the grain and oilseed industry, premiums for each commodity will be calculated by taking the provincial share (40 per cent) of 30 per cent of the difference between the support price and the most recent 10-year average market price.
Cost of Production
Support prices will be established individually for each commodity based on the cost of production. The cost of production will be calculated using the last three years of producer data as reported the Canadian Revenue Agency (CRA), with resulting averages indexed forward from the middle year using the Eastern Canada Farm Input Price Index (FIPI).
For example, costs of production for major crops in 2007 have been estimated using 2003, 2004 and 2005 tax data and indexing forward to 2007 using the Eastern Canada FIPI.
Support Prices
In 2007, there will be a single support level available for each commodity. In 2008 and 2009, there will be four support levels available for each commodity, with the estimated cost of production being the highest level. Three lower levels will be created at intervals of 25 cents per bushel between each level. Lower support levels will potentially result in lower payments for a producer but will also mean lower premium costs.
Payment Schedule
Two payments will be issued for most eligible commodities in each crop year. In a few cases, because of data availability, only one payment per crop year may be provided.
The first payment will be based on the average of forward contract prices for six months prior to harvest of each commodity. The second payment will be based on the average of cash or spot prices for six months during and after harvest. The specific months that compose these six-month periods will depend on the harvest dates of each commodity.
The province will pay its 40 per cent share of this program and will continue to encourage our federal partners to assume their traditional 60 per cent share of funding for this program.
Producer payments are expected to commence in December 2007.
Payment Caps
The grain and oilseed industry has recommended that the Risk Management Program include caps on the total payment a producer could receive.
Further Information
Agricorp will communicate directly with producers about the sign-up process, eligibility requirements and additional program details in September.
- 30 -
Contacts:
Kelly Synnott
Minister's Office
416-326-6439
Brent Ross
Communications Branch
416-326-9342