News release

AGRICULTURE MINISTERS FOCUS ON NEW OPPORTUNITIES FOR THE SECTOR AT THEIR ANNUAL CONFERENCE

St. John's, Newfoundland and Labrador, June 27, 2006 - Federal, provincial, and territorial ministers of agriculture met in St. John's Newfoundland and Labrador for their annual conference where they discussed the future of agriculture and agri-food in Canada, enhanced programs to support the economic foundation of the sector, and ways to build further confidence in Canadian agriculture and agri-food products at home and abroad.

Preparing for the Future

Looking to the future, ministers reaffirmed a commitment to work towards the next generation of agriculture and agri-food policy. Early policy work and initial discussions with sector representatives on how best to ensure a more stable, predictable and profitable sector have begun. In St. John's, ministers committed to a broad, multi-phased and national consultation process with industry across the value-chain and with Canadians generally. It is scheduled to begin later this year and carry on into 2007, with the new policy framework to be implemented in 2007-08.

Ministers discussed progress towards implementing, nationally, 5% average renewable fuel content in transport fuel by 2010, acknowledging that Manitoba, Ontario and Saskatchewan have already regulated renewable fuel standards. The strategy will be built with collaboration among governments and industry and will ensure Canadian farmers have an opportunity to be involved in the value chain supplying this new industry. Support for additional research in technology to use other biomass feedstocks to create biofuels and to extract other value-added components using a bio-refinery concept was addressed as an important part of the biofuels strategy.

To ensure prosperity and growth in Canada's agriculture sector, ministers expressed strong support for Canada's active participation in the World Trade Organization (WTO) negotiations. They emphasized the importance of Canada's efforts to achieve a more level international playing field for Canada's producers and processors. Recognizing the importance of pursuing the best possible outcome for all of Canadian agriculture, ministers further reaffirmed their support for pressing for significant market access improvements for Canada's exporters as well as the right of producers to choose to use orderly marketing systems. The provinces and industry play a key role in supporting Canada's effective participation at the WTO. Several provincial ministers will accompany Ministers Strahl and Emerson to the negotiations in Geneva this week.

Ministers also received a report on progress to date on the development of an Ecological Goods and Services policy framework and agreed to continue policy development and implementation of pilot projects.

Strengthening the Foundation

Industry consultations undertaken at the direction of ministers have reaffirmed producers' needs for a stronger foundation of predictable, bankable, and responsive business risk management programming.

Responding to industry, ministers strongly endorsed the need to create a new, more responsive catastrophic disaster assistance program that is separate from income stabilization programming. They tasked officials with returning in the fall with a framework for this new approach.

In moving towards separating catastrophic disaster assistance from income stabilization, Ministers further agreed they will take the steps necessary to implement a new margin-based system that will build on the proven elements of existing business risk management programming, while incorporating recommendations for change put forward by industry, and considering affordability. Among changes agreed upon for this new margin-based program are: an improved P1/P2 inventory valuation method that will make the program more predictable and responsive; expanded coverage that provides better support to more producers with negative reference margins; and better interim and targeted advances, again improving timeliness and responsiveness to producers in need.

Ministers were pleased to announce that through the amending formula, sufficient parties have now authorized an agreement that will make negative margin coverage available to more producers. This is an important move forward in addressing industry concerns for better income stabilization programming.

Furthermore, ministers tasked officials with reviewing the Production Insurance program and reporting back in the fall with recommendations on options for expanding it to include livestock and other commodities.

To further address industry requests for a more producer-friendly system, ministers tasked officials with creating national performance indicators for program delivery and making maximum use of technology to ensure better service to producers across Canada. While recognizing that margin-based programs can be complex, they re-emphasized the importance of responding to producer needs with programming that is easily accessible as well as predictable, and bankable.

Building Confidence

Ministers also underscored that the success of Canada's agriculture sector depends in large measure upon buyer and consumer confidence in the safety and quality of Canadian agriculture and agri-food products.

Ministers were updated on Canada's avian influenza response capacity. They endorsed continuing work with stakeholders to enhance biosecurity, in particular the need to promote awareness of basic biosecurity measures. Ministers stressed the need for clear roles and timely, effective communications during disease outbreaks, and received a progress report on the updating of Foreign Animal Disease Emergency Support (FADES) agreements, which specify the responsibilities of different levels of government during a response. FADES agreements have now been signed with six provinces and territories with the remaining ones to be signed in the coming weeks.

Ministers underscored the importance of Canada's move to ban cattle tissues capable of transmitting bovine spongiform encephalopathy (BSE) from all animal feeds, pet foods and fertilizers. The new regulations come into force on July 12, 2007. These enhancements will significantly accelerate eradication of the disease from our national cattle herd. As well, they will provide more stability and expanded market opportunities to industries affected by BSE. The federal government will be putting $80 million towards this initiative, and will be working closely with provinces and territories to address the needs and concerns of industry, particularly small establishments, in complying with enhancements to Canada's feed ban.

Recognizing industry's leadership and foresight in building the foundation for livestock traceability, ministers committed to phasing-in an enhanced National Agriculture and Food Traceability System applicable to all livestock and poultry. They agreed to create an industry advisory group to work with officials to develop an implementation plan. Within the national framework, provinces/territories have agreed to lead the implementation process for multi-commodity premises identification, with a goal to have the infrastructure for animal and premises identification in place by December 2007.

Ministers had the opportunity to see the results of the Branding Canada initiative including the new brand look that was launched earlier this year. Building on Canada's strong international reputation, the branding initiative will raise awareness of and confidence in Canadian products and strengthen the sector's international reputation as a supplier of high-quality and safe foods. Federal, provincial and territorial governments are working to encourage the participation of all industry partners involved in exporting Canadian food and agriculture products.

Ministers received and reviewed a report on Genetically Modified Organisms (GMOs) provided by the province of Quebec, and decided to create a working group committed to further studying this issue and to report back at the next annual meeting.

The next meeting of ministers is expected to be held in the fall and the next annual conference of agriculture ministers will be held in Whistler, British Columbia, in June 2007.

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BACKGROUNDER

Proposed changes to BRM programs - What they mean for producers

At their June meeting, federal, provincial and territorial ministers endorsed moving forward with three key changes to Business Risk Management (BRM) programs:

Development of a new catastrophic disaster program.
Implementation of a new margin-based program to stabilize income.
A review of Production Insurance.

Proposed change	What does it mean for producers?
New catastrophic disaster assistance program	A new and separate disaster assistance program with dedicated funds and clearly defined parameters will be developed to provide producers with predictable support and to deliver funds quicker than already-existing programs.
New margin-based program to stabilize income.	Both levels of government will work to address key issues producers have raised such as predictability, bankability and complexity through a variety of changes. New Inventory Valuation method Under the Canadian Agricultural Income Stabilization (CAIS) program, year end prices are used to value inventory. A new method is proposed which would use beginning and end of year prices. For producers, this means losses would be reflected in the program year in which the loss occurred. Broader negative margin coverage With the proposed change, producers with negative reference margins will be eligible provided they have three positive years in their five-year reference period; there would be no limit on the number of negative margin payments. Improvements to advances Targeted advances are proposed so that producers who are in disaster situations can access stabilization funds quicker and through a simpler process. Cash Advance Programs The Spring Credit Advance Program and the Advance Payment Program are being combined into a single program available through the year with higher limits and increased availability to more commodities including livestock. Program delivery improvements National performance indicators and delivery improvements - such as on-line calculators for estimating benefits, simplified forms, enhanced predictability of structural change, and a reduction in the amount of information producers must submit - will be created with the producer in mind.
Production Insurance program review	A national review of the program will identify gaps and recommend options for enhancement so that producers can benefit from an improved Production Insurance program.

BACKGROUNDER

Industry Consultations on Business Risk Management Programs

Federal, provincial and territorial governments recognize the need for a strong partnership between governments and industry to address key issues facing the agriculture and food sector.

At a March 20, 2006 meeting of federal, provincial and territorial ministers, officials were directed to evaluate options and carry out consultations including on the possibility of replacing the current integrated Canadian Agricultural Income Stabilization (CAIS) program with one that separates disaster relief from income stabilization.

A Task Team, which included producers, accountants and representatives from federal and provincial governments, was established to develop options. Producers and their organizations were then consulted on the future direction for BRM programming.

At a national level, the following groups were consulted:

the Minister's National Safety Nets Advisory Committee, which includes representatives from 22 industry from across the country
the National CAIS Committee, which includes representatives from both levels of government and 22 producers
an industry roundtable, which included the Canadian Cattlemen's Association, the Canadian Egg Marketing Agency, the Canadian Federation of Agriculture, the Canadian Horticultural Council, the Canadian Pork Council, the Dairy Farmers of Canada, and the Grain Growers of Canada.

In some provinces, consultations were also held with provincial industry groups.

BACKGROUNDER

National Branding Strategy for the Food and Agriculture Sector

The federal and provincial governments are working in close partnership with Canada's food and agriculture sector to implement a national branding strategy that will raise the profile of Canadian food and agriculture products and foster increased demand by international customers.

Despite the successes that Canada's food and agriculture sector has achieved, research shows that Canadian products are not well-known. But the research also shows that international customers do know Canada.

Canada's international branding strategy is designed to capitalize on the positive impressions that people tend to have about Canada, and build on those images to broaden awareness of Canada and its products. By presenting a consistent message to customers, in every interaction, the organizations and companies that make up Canada's food and agriculture sector can leverage the existing image of Canada into something stronger - widespread recognition of the excellence and diversity of Canadian products, and a corresponding increase in demand.

Through repeated exposure to consistent images and messages about Canadian products, awareness and recognition of the Canada Brand will grow and can help to positively influence buyers' purchasing decisions.

The success of this branding strategy will depend upon collaboration among governments and industry. It is a voluntary initiative, in which individual organizations and companies determine how best to use the Canada Brand in their own business strategies.

Through sectoral National Value-Chain Roundtables, for example, many sub-sectors are taking action to benchmark themselves against competitors and are developing strategies aligned with the Canada Brand. Systems are also being strengthened in the areas of food safety and quality and environment through investments under the Agricultural Policy Framework. The branding initiative will help Canada to gain recognition for these systems and maximize the return on the investments being made.

An International Branding Working Group has provided a collaborative vehicle to ensure the development and roll-out of the strategy benefits fully from industry input.

For further information about this initiative can be found at www.brandcanada.agr.gc.ca.

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