GOODALE CALLS FARM BILL "FOUL" LEGISLATION:
According to a May 2 Canadian Press article, the U.S. Farm Bill is a foul piece of legislation that must be fought by Ottawa, government House Leader and Minister responsible for the Canadian Wheat Board Ralph Goodale said in the House of Commons. "There is complete consensus on the Canadian side that it is a foul and insidious piece of legislation and that we must fight it by every means at our disposal," Goodale said. Howard Hilstrom, chief agriculture critic for the Canadian Alliance, said Goodale's remarks mean little because they contain no specific commitment to protect and compensate Canadian farmers from the subsidies. "The Liberal government has failed to protect Canadian farm families from massive U.S. subsidy programs," he said in a news release. "Any additional delay could be disastrous for our agriculture industry and rural Canada as a whole."

In Saskatchewan, where the impact is expected to be dire, Liberal politician Jack Hillson said the federal government has an obligation to protect farmers. Federal Agriculture Minister Lyle Vanclief said Ottawa is looking at ways to mitigate any pressure the subsidies will put on Canadian farmers, but he did not provide any clear alternatives. Ottawa will continue to pressure the U.S. and ensure any moves south of the border are compatible with World Trade Organization rules, Vanclief said.

IS OTTAWA UP TO THE CHALLENGE OF TAKING ON THE U.S.?:
The Globe and Mail reported on May 3 that the Liberal government says it is preparing to go to battle with the U.S. on a variety of trade fronts as the dream of free trade collides with the reality of U.S. protectionism. The question is; Does Ottawa have the resolve and the ammunition to go toe to toe with our "allies" to the south? Agriculture Minister Lyle Vanclief, who met his U.S. counterpart, Ann Veneman, in Ottawa, has threatened to take the U.S. to the World Trade Organization (WTO) over huge increases to subsidies contained in a farm bill. According to the article, the U.S. seems unmoved by this somewhat idle threat. The WTO process seems to take forever and seldom seems to resolve anything. On May 2, the softwood lumber dispute intensified with Canada's Natural Resource Minister Herb Dhaliwal warning that Canada may fight back by throwing northern natural gas into the mix. The Liberal government is under increasing pressure to spend hundreds of millions -- if not billions -- of dollars to offset U.S. trade actions in softwood lumber and in agriculture. It is hard to say where all of this money will come from and how understanding the citizens of Canada will be when they are asked to contribute.

MINISTER VANCLIEF MEETS WITH USDA'S ANN VENEMAN:
According to an Agriculture and Agri-Food Canada (AAFC) press release dated May 3, 2002, AAFC Minister Lyle Vanclief told U.S. Department of Agriculture Secretary Ann Veneman that the U.S. Farm Bill will be a protectionist measure that creates harm internationally and turns American farmers into wards of the state. "My messages to the United States Secretary of Agriculture Ann Veneman were clear: this Bill will undoubtedly provide U.S. farmers with incentives to over-produce, now even including pulse crops," said Vanclief. "I have again stated my concerns to Ms. Veneman about the damage this Bill will have on world agricultural trade, both in terms of world market prices and ongoing trade negotiations. "Not only will the Bill distort production and trade in grains, oilseeds and pulse crops, but we are also concerned about the impact of this Bill on the World Trade Organization (WTO) agriculture negotiations, and the objective of achieving agriculture reform. "The Bill's protectionist elements, like price-based subsidies and the introduction of a restrictive country-of-origin labeling requirement for meat and fish, will undermine the world trading community's long-standing efforts to move towards trade liberalization. This will only increase Canada's determination to press for global trade liberalization at the WTO, particularly for effective disciplines on trade-distorting domestic support and export measures." Vanclief advocated Canada's new policy direction at the meeting.

The Agricultural Policy Framework (APF) is being developed with provinces and industry as an alternative to ad hoc subsidies by moving towards a forward-looking, risk management framework. In a related press release, Vanclief declared that ending "trade-distorting subsidies" would be Canada’s top objective in the upcoming WTO negotiations.

CANADA CAN'T MATCH U.S. SUBSIDIES. WILL TRY TO "MITIGATE" IMPACT:
According to the May 6 edition of Good Morning Ontario, there is no way Canada can match the spend happy U.S. government's farm subsidy package but it will try to mitigate the impact, federal agriculture Minister Lyle Vanclief said on May 3 at the International Policy Council on Agriculture, Food and Trade convention. He wasn't forthcoming with any specific details.

Canada just doesn't have the cash, or the will, to match the U.S. subsidies, which total US$180 billion over 10 years "We can't match it," said Vanclief. "What we have to do is find ways to mitigate it and we will be seeking ways to do that." He said the American move will make it hard for the European Union to wean itself off price supports for farm products and could prompt developing countries to become more protectionist. It isn't even good for American farmers, he said. "Instead of encouraging American producers to reap the rewards of trade liberalization, the new farm bill will encourage them to harvest handouts from the American treasury." In a conference call on May 7, Vanclief said that the Government of Canada will seek to "challenge" the U.S. Farm Bill and "counter" its effects.

AGRICULTURE MINISTERS WORK TOWARD FORMAL AGREEMENT ON NEW AGRICULTURE POLICY FRAMEWORK:
Canada's federal, provincial and territorial agriculture ministers made progress in Ottawa, May 6-7, toward signing an umbrella agreement on the proposed Agricultural Policy Framework (APF) for their annual meeting next month in Halifax. The APF has five key elements: (1) business risk management; (2) food safety and quality; (3) environment; (4) sector renewal; (5) science and innovation. An agreement next June would allow governments, in partnership with producers and other industry stakeholders, to continue with detailed discussion on the specific programs that will make up the framework.

Instead of encouraging American producers to reap the rewards of trade liberalization, the new U.S. Farm Bill will encourage them to harvest handouts from the American Treasury, predicts Lyle Vanclief, Minister of Agriculture and Agri-Food.

"The devil is in the details, and I don't like where the devil is driving," said Minister Vanclief, as he expressed his concern and frustration with the U.S. Farm Bill. "U.S. Secretary of Agriculture, Ann Veneman, has said the Bill is ‘market-driven.' If anything, it is mailbox-driven."

On April 26, 2002, a Congressional Conference Committee of key Senators and Representatives announced that they had agreed on the final version of the Farm Bill. The details have now begun to emerge. The Farm Bill will lock in a high level of trade-distorting support for major commodities for six years and introduce new support measures for certain pulse crops (dry peas, lentils and small chick peas).

"The emphasis on price-based subsidies and the introduction of country-of-origin labeling certainly looks more like a drive towards protectionism than trade liberalization, and I intend to make that point with U.S. Agriculture Secretary Veneman when I meet with her later this week in Ottawa," said Mr. Vanclief. "As I said after my trip to Washington earlier this month, it is the view of Canada and other countries that the final version of the U.S. Farm Bill must set the kind of example that the world trading community, especially developing countries, badly needs to see.

"We want a global trade environment in which Canadian producers can compete in international markets on the basis of comparative advantage of their products. Handouts from government treasuries will throw international trade markets into chaos," he added. "It is sad to see that the American farmer has asked to be maintained as a ward of the state."

"The Farm Bill is a serious blow to the U.S.'s credibility in the current round of WTO negotiations. We are examining overall implications of the new Farm Bill as more details emerge. On the basis of this analysis we will decide how best to defend the interests of Canadian producers," concluded Mr. Vanclief.

The following is based on an April 17, 2002 press release from the Prime Minister’s Task Force on Future Opportunities in Farming. Bob Speller, Chair of the Task Force on Future Opportunities in Farming, presented the Task Force's Interim Report to the Prime Minister and members of the National Liberal Caucus.

"The dialogue over the past year between Task Force members and stakeholders in the agriculture and agri-food industry has been invaluable," commented Speller. "While today's producers certainly face constraints and challenges, there are also opportunities in the industry's future, provided that appropriate actions are taken today. The Interim Report addresses both the challenges and the opportunities."

Prime Minister Jean Chretien established the Task Force on Future Opportunities in Farming on March 29, 2001. Since then, the Task Force has visited all provinces, met with Canadian producers, processors, exporters, educators, researchers and governments, and received hundreds of written submissions from individuals and organizations from across Canada.

In its Interim Report, the Task Force identifies some of the challenges currently facing the industry, including low commodity prices, distorted global markets and corporate concentration in the agriculture and agri-food industry. Addressing these challenges, and ensuring the full realization of future opportunities for the industry, requires that actions be taken in a number of areas. The Task Force identifies a need for immediate action with respect to a long-term national agriculture policy, safety nets, pesticide registration and cost containment. However, actions must also occur today in a number of other areas if we are to safeguard the long-term vitality of the agriculture and agri-food industry. The Task Force believes that decisions must be made, and actions taken, regarding a range of international trade issues, adequate rural infrastructure, environmental protection, food safety and security, transition into and out of the industry, value-added and diversification opportunities, and the research and development that will help in securing the industry's future. The Task Force's final report will be presented to the Prime Minister by September 2002.

Out of the 26 recommendations that were made to Prime Minister Chretien, several are quite notable. Among these, are, first, the recommendation that under the World Trade Organization (WTO), "green box" definitions must be renegotiated to "better reflect the reality of farm programs in Canada." Canada acknowledges that it cannot compete with the treasuries of foreign countries, and would like domestic support decreased. This particular recommendation implies that other countries should model their farm support programs on Canadian safety net programs.

Second, the report recommends that in the short-term, bridge financing is required to respond to the adverse and unpredictable effects of weather, markets and income fluctuations due to factors beyond farmers control. The GOC must ensure that these payments comply with WTO requirements so as to avoid trade actions.

Third, the report recommends that the Government of Canada (GOC) take "a strong stand" at the WTO for improved market access for Canadian products around the world. However, in the next recommendation, the task force asks that GOC continue to restrict the access of other countries to key Canadian agricultural markets by maintaining support for Canada’s five supply-managed commodities (dairy, turkey, chicken, broiler hatching eggs, and table eggs). In addition, the GOC is instructed to defend export state trading enterprises such as the Canadian Wheat Board (CWB) in international trade negotiations. This apparent contradiction in market access has isolated Canada from the other 17 Cairns Group countries.

Other recommendations that stand out are that the GOC support the development of ethanol and biodiesel processing plants as well as introduce a legislated requirement for bio-fuel content in gasoline and diesel; that Canadian agri-food products be branded with the maple leaf; that the GOC facilitate the development of a voluntary labeling standard for foods derived from modern biotechnology; and that the GOC provide assistance to organic farmers in the areas of research, certification and the exploration of export markets.

CACCIA EXPECTS MANDATORY GM FOOD LABELING:
According to the March 11 Ottawa Citizen, Liberal member of parliament (MP) Charles Caccia says he is confident that the Liberal government will "bite the bullet" on mandatory labeling of genetically modified foods. He also predicts that the House of Commons Agriculture and Health committees will reach different conclusions on the issue, leaving it up to the Canadian cabinet to break the deadlock. Caccia was the author of a private member’s bill C-287 last year that would have forced labeling of GM foods. The bill was defeated last fall by a vote of 126-91.

MANDATORY GM LABELING COULD PROMPT TRADE BATTLE, WARNS EXPERT:
Peter Phillips, co-chairman of the Canadian Biotechnology Advisory Committee, told the House of Commons Health Committee this week that mandatory labeling for genetically modified foods would likely violate trade agreements and trigger a trade battle with the United States. According to reports, Phillips noted that Canada's food industry is heavily export-oriented and is integrated with that of the United States. "Our deliberations have satisfied us that mandatory labeling, if (Canada) should choose that route, would be actionable and likely would be subject to an adverse decision which would affect our market access," he said. "It would undoubtedly complicate our relations with our major trading partner, the United States, and complicate the access of our market into to their market and vice versa." Last fall, the Standing Committee on Health announced that it had adopted a proposal from the Ministers of Health, Agriculture, Industry and International Trade, to study the issue of labeling of genetically modified foods.

Throughout 2002, the Committee will be examining a range of issues related to labeling of genetically modified foods and will produce a report and recommendations on the best options for meeting consumers' information needs.

CGC to Offer Kits to Identify Starlink Corn
The Regional Director of the Canadian Grain Commission (CGC) has contacted export elevators in eastern Canada to inform them that the CGC will be offering a test (when kits become available) to identify Starlink corn. Each elevator will be asked to supply a bin sample for testing corn that is already stored in Canada. Testing on lakers will be done on a random basis. After a specific time period (to be determined by CGC) the elevators will be responsible for ensuring the shipment is Starlink-free.

AAFC Moves Away from GM Durum Research, Proceeds with Spring Wheat GM Research
Agriculture and Agri-Food Canada (AAFC) has decided to back away from proposals to fund research into genetically modified durum wheat. According to Jim Boles, the head of AAFC’s cereal research center, the decision was made in part because of uncertainty about market reaction, but also because herbicide resistance is not such an issue for durum wheat as it is for bread wheat. The department will continue its eight-year matching investment initiative with Monsanto to develop an herbicide-resistant hard red spring wheat, which could be on the market by 2003. For an expected Agriculture Canada investment of $800,000 or slightly more, Monsanto will invest more than $1 million.

AAFC Launches GMO Environmental Impact Project
A long-term project to determine the impact of genetically modified crops on the environment has been launched at Agriculture and Agri-Food Canada’s Lethbridge Research Centre. The 12-year project is the first of its kind in Canada and will draw upon researchers from several disciplines. The research will involve a variety of crops, and will be based upon a four-year crop rotation, continued for three cycles.