The Rural Voice, 1991-05, Page 14FARM
SAFEIY
FACTS
AGRICULTURAL
CHEMICALS MUST BE
PROPERLY STORED TO
PREVENT DAMAGE AND
ACCIDENTS!
Safety Tips
• Lock chemical storage areas securely
and post warning signs.
• Never store protective equipment
with chemicals.
• Always store pesticides in original
containers.
• Read label for proper storage
instructions.
• Store herbicides away from insecticides
and other materials including feed
and seed.
When you need Insurance call:
Frank Foran
R.R. 2, Lucknow 528-3824
Lyons & Mulhern
46 West St., Goderich 524-2664
Kenneth B. MacLean
R R. 2, Paisley 368-7537
John Nixon
R R 5, Brussels 887-9417
Donald R. Simpson
R.R. 3, Ripley 395-5362
Delmar Sproul
R.R. 3, Auburn 529-7273
Laurie Campbell
Brussels 887-9051
Slade Insurance Brokers Inc.
Kincardine ..396-9513, Port Elgin 389-4341
Owen Sound 376-1774
West Wawanosh
Mutual Insurance
Dungannon
Ont. NOM 1R0
519-529-7922 (69
10 THE RURAL VOICE
WILL GRIP LEAD TO
OVERPRODUCTION?
Robert Mercer is editor of the
Broadwater Market Letter, a weekly
commodity and policy advisory letter
from Goodwood, Ontario LOC 1AO.
Although government officials deny
the new safety net programs will be pro-
duction stimulating, there is hardly one
economist or analysis to date that suggests
acreage will be less than last year.
As the end of March, Statistics Canada
released the prospective plantings report
for Canada which was taken prior to the
implementation of the GRIP programs
across the country. Now that most of these
programs are in place, the farmer response
is seen to be greater than expected. Of ma-
jor concern to all farmers and farm leaders
should be the international reaction to
Canada's new programs if they are seen as
counteracting the GATT standstill agree-
ment on subsidy levels. If Canadian grain
production increases, then our shipments
could be countervailable.
A detailed study from the U.S. sug-
gests Canadian wheat acreage this year
could be an all time record, with the west
at 34.88 million acres (ma), up from 33.78
ma last year. This is based on the estima-
ted returns to prairie wheat in the area of
S4.15 per bushel. This is well above the
current market returns. Other beneficiaries
of the GRIP will be corn and soybeans.
The major losers will be the input indus-
tries as the way the program works, it
appears to be of greatest benefit to those
with the lowest costs.
It is expected in the west that sales of
fertilizer and pesticides will fall in relation
to total acres, but because summer fallow
acres will be cut, actual input sales may
hold their own. Not only is the program
seen as stimulating to current acres, but it
is expected to bring a reduction in summer
fallow acres in the west by as much as 1.4
ma. This land, plus new acres brought into
cultivation, will boost Canadian grain po-
tential this year.
In Ontario, the immediate result of the
program has seen much of the benefit capi-
talized into land rent with the landlords the
gainers, not the farmers. This has often
been the case for government assistance
programs, especially those of interest rate
reduction.
Ontario's corn acreage has been set by
the early Statistics Canada report at 1.8
ma, up fractionally from last year. Some
feel this level could rise to the near two
million mark if seeding conditions favour
corn over beans. The soybean acres are
expected, by some, to surpass the Statistics
Canada figure of 1.431 million acres due
to the winter wheat acres that did not get
planted last fall, rising prices, and the pro-
duction incentives in GRIP. There is also
some thought that the closure of one of the
three remaining soybean crushing plants in
Ontario may have a negative influence on
farmers' confidence this planting season,
thus offsetting the GRIP boost. In any
case, the 15 per cent Statistics Canada in-
crease is too high.
Analysis by The United Grain Growers
in Winnipeg says there will be more grain
in the west looking for a home in the east,
once the harvest is over, because of GRIP.
Both approaches to GRIP say the
greatest benefits of the GRIP will be in the
early years. The U.S. study finds that the
level of government subsidy payments for
all forms of grain assistance will peak in
1992, with 1993 being lower by 37 per
cent from that level. This confirms the
fears of some producers who see changes
in the program possibly increasing premi-
ums, while decreasing returns the longer
the program runs. One thing to look for in
Ontario is a form of control over acreage
such as in Saskatchewan, where the maxi-
mum cap is 110 per cent of the producer's
three-year moving average of cropped
acres.
Remember the sign-up conditions spe-
cify you must sign up all eligible crops and
give three years' written notice to drop out.
After dropping out, you must stay out two
years, and when re-entering, you only get
50 per cent coverage the first year, 75 per
cent the second, and full coverage in the
third.
If Ontario farmers do carry through
with the expected increase in cropped ac-
res, coin will likely be priced on the export
basis, (also lower demand from Quebec)
and some of the small grains could move
to a premium. There is strong potential for
good prices for milling oats and even
mixed grain by the end of 1991, and these
crops will be poor cousins to corn, wheat,
and soybeans in seeded acres.
Take care not to follow the crowd too
closely, you may get trampled on in the
world of the real market -place. Govern-
ments have to get elected.0
T