by SUSAN MANN
Several Ontario commodity groups are working out details on revisions to the province’s risk management program plus how to divvy up its $100 million annual capped budget. Their goal is to have the revisions complete by mid fall.
The Ontario Commodity Working Group, made up of Ontario Pork, Ontario Cattlemen’s Association, Ontario Sheep Marketing Agency, Ontario Veal Association, and Grain Farmers of Ontario, submitted a proposal to revise the provincial risk management program in mid July. (The Ontario government announced in March that the program is being capped at $100 million annually starting in 2013).
Ontario agriculture ministry spokesperson Susan Murray says by email that since receiving the proposal ministry officials have met with industry leaders to clarify it and examine the implications of any proposed adjustments. “We continue to work on a redesigned risk management program that will support farmers in ways that are predictable for both government and producers.”
She notes the redesigned program will be implemented beginning next year but details haven’t been finalized so it’s too early to talk about them.
The commodity working group’s chair, Amy Cronin, who’s also chair of Ontario Pork, wasn’t available for an interview but provided comments through Keith Robbins, Ontario Pork’s director of communications and consumer marketing.
Robbins says the proposal includes the different ways the program could work considering the $100 million cap. “Many of the commodities may be accessing those funds and pulling down out of that $100 million very quickly.”
Specific details within each option have yet to be determined, he says, noting negotiations continue and that’s why the options aren’t being released publicly.
Erin Fletcher, spokesperson for Grain Farmers of Ontario, says the proposal was the working group’s overview vision for the risk management program under the $100 million cap. The cap includes administration costs but not premiums.
The finalized details must go before Ontario’s Treasury Board in October and “that’s sort of the timeline that we’re working on,” she says.
Ontario Federation of Agriculture president Mark Wales says part of the challenge in redesigning the program is how they’re going to deal with the premiums and with years when the demand is greater than the available money. “That’s what happens when you put a fence around a demand-driven program.”
The individual cattle, hogs, sheep, veal and grains and oilseeds risk management programs are based on a pilot price insurance program for grains and oilseeds introduced in 2007 and require producers to pay premiums. Farmers involved in edible horticulture use a self-directed program in which the province matches contributions (based on a small percentage of the farmer’s allowable net sales) to a special account.
Wales says he can’t release specific details but part of the proposal is an agreement that all the commodities covered will share the $100 million and “that’s a good thing.”
Earlier this summer Ontario Agriculture Minister Ted McMeekin wrote to the Ontario Agricultural Commodity Council, a group made up of more than 25 commodity organizations, urging them to work together to redesign the program. In a July 5 email summarizing the letter, McMeekin’s press secretary Mark Cripps, says the minister was concerned with the attitude of resistance he was encountering rather than a more constructive approach. Neither the minister nor the council would release the letter publicly.
The minister’s three principles for a reformed risk management program outlined in the letter were: fiscal constraints, measurable benefits from public investment and leverage federal dollars, Cripps says.
McMeekin also told the council he is committed to working collaboratively and would prefer to do so with the collective guidance of the farm and commodity groups. And he continues to press federal Agriculture Minister Gerry Ritz to maintain an effective suite of national programs. BF
Comments
All of these glowing words, and yet not one word about RMP being an advance on the provincial portion of AgriStability - what is it about paying premiums into two programs, but getting benefits from only one, which appears to escape all of these apparently intelligent, and well-meaning, souls? To that end, if, in 2012, RMP doesn't pay livestock producers significant amounts of money above and beyond what gets clawed back by AgriStability, RMP will be so dead none of these negotiations will matter.
Stephen Thompson, Clinton ON
Seems time those unaccredited farm groups no longer beholden to stable funding need to learn a little of the art of negotiation or just flat say no.
The agricultural budget is not just about payouts to farmers those insurance styled programs we pay into. The agricultural budget also pays bureaucrats wages and pension accounting for nearly half the budget, yet the only part of debit reduction is downloaded to be born by producers only.
I propose the non accredited leaders prove they are not like the bureaucrats and call for equal reductions from the administration side of the budget would be only fare.
We will be facing global food shortages with no carry-out into next year and a hungrier bureaucrat is a better representative negotiator. After all they designed and called for a hog industry here and established, eating corn, an industry that was allowed to fail for a glitzier ethanol industry. Another example of a plan ruined by a support plans often without reasonable logic or even common sense.
Remember the interest free loans for ethanol plant start up based on 10% cap rate returns? There was never a farm program based on 10% cap rate returns.
when high grainprices evaporate in 1 to 2 years all the geedy farmer will want new a New RMP maybe govt should say no and let them sink or survive .
we had better watch our corn prices from elevators Ontario elevators will bid minus 75 under dec then export to usa the world pick 70cents free and our grain farmers of ontario organization sucks on a pop.
look at Iowa bids
Delivery Month Bid Price Basis Price Opt Mth Futures Price Delivery Date
Sep 2012 7.8400 -0.1500 Z 7.9950 September 30
Oct 2012 7.8400 -0.1500 Z 7.9950 October 31
Nov 2012 7.9900 0.0000 Z 7.9950 November 30
Dec 2012 7.9900 0.0000 Z 7.9950 December 31
Jan 2013 7.8700 -0.1500 H 8.0250 January 31
Feb 2013 7.8700 -0.1500 H 8.0250 February 28
Mar 2013 7.8700 -0.1500 H 8.0250 March 31
Not near the carry either from Sept to Dec. Takes $.03/mo just to pay the interest for 3 month till Jan
We've got bins too, but some may stay empty, easier to own on paper.
Yes design new programs I can see it now, Hello,,,,,,, is agricorp demanding 30 million dollars be paid back by farmers , weres the expert farmer organizations on this? Between $8 corn $17 beans and farmers paying high rents purchasing $13000 land we screw our selves and then ask govt for hand outs. and livestock farmers are not sinless. And then our farm organizations in Ontario as of yet are not accredited yet for Farm business registration, the farm tax rebate is in danger. Please remember the legacy the last 2 Ontario Agriculture ministers left farmers. Ontario government debt $400 plus millon /billion and they should finance our RMP?
Europe is slipping further into recession.
The purchasing manufacturing of China and Europe have slipped below growth levels , China is easing money policy, There is a fiscal cliff approaching post USA election where some hard core political and financial choices have to be made and Canada will feel the hit along with farmers
So were is our smart farm leaders and politicans?
totally agree, these farm "leaders" are so out of touch and stuck in the past. They use their lobbying and eventual inplementation of subsidy programs as way to justify their existence and pat themselves on the back. I have talked to very few farmers who think we still need such programs (the younger farmers are especially against handouts). It is the old way of doing business and is not sustainable or good policy into the future. The definition of insanity is doing the same thing over and over and expecting different results. These programs have never worked or accomplished what they were intended for in the past, time for a new approach.
These programs are set up to punish the well managed farms and reward the poorly managed by keeping them in business for another year. Get rid of handouts and the poor managed farms will shut down and the well managed will thrive and our industry will be more efficient for it.
Like you say Sink or swim, cut the cord. If farmers can afford to pay $16,000 plus for an acre of land and rent of $400 plus we have a management problem, not a government support problem.
The Practical Farmers of Ontario, see's the danger in business risk management programs, this is why we will lobby for a complete over haul to government farm subsidies.
Two ways to innovate farming, end supply management and all farm subsidies and farming will find a way to stand on its own 2 feet and reinvent it self ...
Sean McGivern
President Practical Farmers of Ontario
The family farm is a dinosaur and time for it to be gone (yeah, I'm a family farmer scratching the dirt on a few acres but even I can smell the coffee.
Big farms are the new future... Because they will work tens of thousands of acres they can justify (and pay for) big, efficient machinery... A large family of several brothers and cousins and work thousands of acres with pooled machinery.
If you want to milk cows buy quota,It is absolutely ridiculous that you think Canada will produce its current volume of milk without supply management.There may be more opportunity for niche markets or farm sales but they would not be any more profitable than through the current system.
If my understanding is correct, milk quota can be readily sold, but not readily bought - therefore your advice to buy quota would appear to be somewhat nonsensical, if not literally impossible. In addition, your understanding of basic economics is rather-sketchy - without supply management, there would be more milk consumed (because the retail price would no longer be 38% higher than in the US), and therefore, more milk will be produced. Finally, you don't understand there is an entire generation of farmers (and aspiring farmers) under the age of 40 who hate supply management with a passion, and would like nothing better than to see it gone. Unless you can produce some sort of elixer which keeps people from aging, this generation is soon going to be in the "driver's seat" and then supply management will, therefore, be scuttled from within.
Stephen Thompson, Clinton ON
It is precisely the arrogance which is evident in the post, of quota holders, which perturbes people. First of all buying quota 100 grams at a time is not a very efficient way to enter dairy farming - if it is even available. Secondly, unless you have a rich uncle who is going to leave you a bag full of $$$$$, for most people it is out of their reach. $25,000/kg, then one still needs land, cows, barn, house, machinery, etc. It is only a very small, select group of people who can get into it. This is unfortunate.
There are some very good people out there who would be awesome dairy, chicken, turkey or egg farmers.
There are some very good people out there who would be awesome doctors, lawyers, dentists but don't have rich uncles to leave them $$$$$$$ to pay for the educational investment.
Then you still need offices, equipment, staff, etc while trying to manage the education debt load.
Posting modified by editor
You can inherit dairy quota (about the only way you can acquire it), but you can neither inherit a law degree, nor sell it - it has to be earned. It's apples and oranges comparisons like this which just further antagonizes people against supply management. Try again with something relevant.
Stephen Thompson, Clinton ON
It is proven over and over again that its pays off . I always said put your money in a great education or put it in a business venture, or borrow if you don,t have it. If you have something handed to you its like easy come easy go, but if you have to work hard for it you will look after it and prosper more in the end.
Quota is great if you have it and if you don,t try to get into something that hopefully will pay off, there is lots of millionaires out there who made their money off something other than owning quota.
You can cash flow purchasing a ongoing dairy operation better than buying just land at 15,000 an acre.
Dairy quota, and $15,000 per acre land, are both selling at dot.com level price/earnings multiples of anywhere up to 50:1 - conventional investment wisdom is that a price/earnings ratio of from 12 - 15:1 is a reasonable ratio, but when ratios get to over four times that, a collapse is inevitable. The problem with supply managed farmers is that they not only think a collapse isn't going to happen, they believe it can't possibly happen. News flash back at you - it can happen, and it will happen, it always does, and when it does, younger, non-supply managed farmers will be dancing in the street.
Stephen Thompson, Clinton ON
Go look in the U.S. and you will see they are not making money,your multiples are out of whack.If quota doesn't make sense then there is absolutely no way that buying land makes sense.Sorry to rain are your parade because supply management has a very long future
When the Dairy Farmers of Ontario admitted, in a full-page "advertorial" in late 2010, that Ontario consumers were paying almost 38% more for milk than US consumers, and that the farm gate price of milk in Ontario was within pennies per liter of the US retail price, there should have been a rush to the door to get out of at least dairy farming, if not poultry too. The simple fact of the matter is that any consumer product priced that far out-of-whack, given we have an increasingly-open border, doesn't have any future, except a troubled one. In addition, what is it about an entire generation of non-supply managed farmers (and aspiring farmers) under the age of 40, with a single-minded determination to get rid of supply management, that supply managed farmers refuse to understand? Therefore, the retail price of dairy and poultry products, as well as the demographics of the younger generation of farmers, are both too far out of whack to give supply management any sort of long-term future. BTW, people who claim supply management has a long future aren't likely to be given any "umbrellas" when the rain storms do fall on supply management. As for price earnings multiples - a farm a friend has been renting for $240 per acre just sold to a poultry farmer for $12,000 per acre. That is, according to my arithmetic, 50 times earnings. By way of comparison, I bought my first farm in 1973 for ten times earnings, which, by the way, was well-before supply management started to steam-roller over everything in its path.
Stephen Thompson, Clinton ON
When you make such a bowzo comment such as you have, can you now please show us proof, ? that buying an ongoing dairy farm cash flows ?that is a braod statement to make and i dont believe your correct please show me some numbers to back up your point ...
Sean McGivern PFO
Talk to your financial institution maybe they will let you in on a little secret,since you as a supposed leader can't even figure it out.
Nope, i am asking you, your the one spouting off that buying a dairy farm cash flows, so it is on you to provide proof of the statement you've make, i love jokers like you who spout off but never have any facts or figures to back up your foolish statements
Sean McGivern PFO
Dairy farms may "cash flow", but only to the extent that, as DFO admitted in late 2010, Ontario consumers were paying almost 38% more than US consumers for milk, and that the farm gate price of milk in Ontario was within pennies per liter of the US retail price. Therefore, while dairy farms may, in the narrowest sense of the term, "cash flow", this so-called ability comes at a horrible cost to consumers and other farmers who can't, and won't ever, be able to match the purchasing power supply management gives to the favoured few. You, and the Practical Farmers of Ontario, completely represent the views of every non-supply managed farm tax client I have under the age of 40, as well as the views of a lot of farmers older than that. Give 'em Hell - you're completely correct, and then some. If anything, people tell me all the time you don't go far enough. Supply managed farmers also know you're right, and they're posting these type of belligerent and obstructionist comments out of fear.
Stephen Thompson, Clinton ON
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