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Times Advocate, 1994-12-28, Page 17FARM 1JPDATE Times -Advocate, December 28, 1994 Page 17" Small producers focus of report Steckle reports on Canadian agriculture and agri-food By Heather Vincent T -A staff OTTAWA - Paul Steckle, Huron -Bruce MP has put together a report, the product of the Huron -Bruce consultations of Agriculture and Agri -Food in Canada held in October. Steckle is a consultation advocate and plans to con- tinue to use the process. As a result of the discussions, several areas of concern have been brought to light. The ev- olution of the family farm, deficit control, the whole farm concept, trade and the environ- ment were among the issues which Steckle's report addresses. Steckle states that in a new climate of global trade, with the advent of NAFTA and GATT, the Canadian agriculture industry must re- define its priorties. A goal of $20 billion in exports by the turn of the century was put forth in Steckle's paper. The poulty producers meeting, held in Wingham on October 11, emphasized the need for continued support of the small producer. Small and young farmers should be offered in- centives and allowances in order to establish themselves in the marketplace. The fruit and vegetable growers meeting was held in Exeter on October 12. Although it was agreed that the most reliable source of seasonal labour comes from Mexico and Ja- maica, this labour is expensive for producers. The local work force has proved not to be de- pendable, leaving if they find permanent work. It was concluded that producers do not need to devlop futher local labourer retraining efforts. It was expressed that practical legislation and regulation of crop insurance is required in or- der for the small producers to make claims and lessen the financial burden. The agri-business meeting was held in 3-len- sall on October 12. Deficit control is the lead- ing concern of the federal government to en- sure economic stability. It was discussed that a balance between eastern and western Canada must be established by the government to pro- vide trade equality between provinces. Spe- cialty crops which are grown for the sake of subsidy distort the markets for other pro- ducers. Maintaining high quality standards and global standardization of chemical and pharmaceutical development were also rec- ommended. Additional meetings included the "Line in the Dirt" meeting held in Amberley; the farm implement dealers meeting in Seaforth; the fi- nancial planning meeting in Clinton; the crop/ commodity meeting in Varna; the pork pro- ducers meeting held in Clinton; the beef pro- ducers meeting held in Formosa and the dairy/ milk producers meeting held in Lucknow. Further recommendations included more at- tention to value added products such as eth- anol, canola(rapeseed) and hemp. Steckle sup- ports these products as means to revive the local economy while helping to preserve the existing resources. Canadian and U.S. Cooperatives join hands MISSISSAUGA - Local agricul- turally -based cooperatives in Onta- rio have cast their lot with a large U.S. regional cooperative. At a press conference in Missis- sauga, Norm Jones, chief execu- tive officer of GROWMARK, Inc., announced that GROWMARK purchased United Co-operatives of Ontario's (UCO) assets for $34 million (U.S.) or $45 million (Ca- nadian), Tess adjustments. This marks the first time an American agricultural cooperative has under- taken this type of venture. GROWMARK is a regional agri- cultural supply and grain market- ing cooperative with headquarters in Bloomington, I11. It markets products under the FS trademark retailed through a system of more than 90 local member cooperatives in Illinois, Iowa and Wisconsin. Grain marketing services are pro- vided by nearly 100 grain member cooperatives in the same three states. In 1994, it posted operating earnings of $19.4 million on sales of $884 million (U.S.) and re- turned $17 million in patronage re- funds to its members. Terms of the deal include the purchase of feed mills, dry fertiliz- er storage facilities, a distribution centre, and 50 percent ownership in UCO Petroleum, Inc. (UPI). UPI is a marketing subsidy jointly owned with Sun Oil of Canada. A four percent investment in CF In- dustries, the world's largest fertiliz- er supply cooperative, was also ac- quiredrby GROWMARK. The Ontario member companies have agreed to make an initial in- vestment commitment in GROW - MARK of $3.4 million (U.S.) or 4.5 million (Canadian). In exchange they will re- ceive stock ownership in the U.S. cooperative. Even though the groundwork for this deal began several months ago, it was formalized on October 12, when UCO agreed to sell its assets to GROWMARK pending member cooperatives' approval. In November, the Ontario coop- eratives voted overwhelmingly to sell those assets. By mid- December,these same cooperatives signed a membership agreement authorizing GROWMARK to be- come their regional supplier. Dur- ing the same time frame, the U.S. member companies voted on a by- law change that would add two seats to the board of directors. According to Jones, operations in Canada will be divided into two re- gions, with an office in Mississau- ga. It is expected that the regions and operating facilities will be staffed primarily by current em- ployees. "Our strategy was to offer em- ployment to those from UCO who can best manage the assets and op- erations in these regions. We in- tend to blend our cultures for the benefit of our member coopera- tives on both sides of the bor- der," Jones said. Jones added that this ven- ture will enhance the Onta- rio cooperatives' already strong marketplace presence through a network of local cooper- atives and the expertise of their personnel. "This transaction will let us use our most important resource - peo- ple - as we work toward the num- ber one goal of ensuring the health and vitality of our member cooper- ative system," Jones continued. "This move into a wider geography combined with broader produce lines will enable our system to market more effectively." He also said there is a potential for solid growth in this new mar- ketplace that could significantly in- crease sales volume to the local Ontario cooperatives. Last year purchases by these cooperatives from UCO was approximately $134 million (U.S.) or $179 mil- lion (Canadian). They also pur- chased more than $150 million (U.S.) or $200 million (Canadian) from UPI. Claude Gauthier, UCO's board president, said the cooperative looked at several options for revita- lization before entertaining GROWMARK's purchase offer in October. "UCO wasn't equipped to handle the high level of service our customers deserve. As a result, we entered negotiations with GROW - MARK to ensure a strong regional would serve the needs of Ontario's ag-based cooperatives." Until this transaction, UCO was the largest farm supply and market- ing cooperative in Ontario. It pro- vided its 40 member cooperatives, several affiliates and 21 indepen- dent dealers with purchasing, mar- keting, distribution, consumer goods and a wide range of value- added services, like livestock nutri- tion and crop services. This year, UCO's sales were estimated to to- tal $134.2 million (U.S.) or $179 million (Canadian). Sales for UPI exceeded $150 million (U.S.) or $200 million (Canadian). One Foot in the Furrow By Bob Trotter Buchanan - a strong voice in Ontario A year ago I recall writing about the two big names in agri- culture in Canada and Ontario and the effect they might have in 1994. Agminister Ralph Goodale was mentioned as being a wel- come face for farmers when he took over the post in 1990 but a government that was broke could not add to the help given to farmers. The same could have been said about Elmer Buchanan in Ontario but this former vice- principal has plodded doggedly ahead in Cabinet even though his party, the New Democrats, have never been known for helping agriculture. The NDP favor labour and small husiness although this base of support has been eroded recently. Buchanan, one of the best ag- riculture ministers in 20 years, in my opinion, has shown sk much dedication and determina- tion in his portfolio that -it is dif- ficult to find any fault with him. • He had a near -fatal car acci- dent which would have nuked many men in his position. In- stead, he was up and running in a few days from a couch in the livingroom of his Bancroft home. No matter that his government has cut more than $100 million from his budget since 1990, Bu- chanan's appeal still remains high among farmers. The thing that makes him pop- ular, I'm convinced, is his grasp of the facts of agriculture. Al- though born on a farm, he was an educator for many years be- fore getting into politics but he knows farming. He has said many tines that most people have no idea about what goes on in agriculture including his cabi- net bolleagues. He has, on occa- sion, taken some well -aimed shots at the media for a lack of knowledge or concern about farming. Agriculture, he says, affects the entire economy and he is so right. It is a $6 -billion industry and cannot be ignored. Nobody seems to have a bad word to say about Elmer who candidly reported that he was chosen to be the agminister be- cause he came from eastern On- tario and his name is Elmer, a country name. Farmers, looking forward to the new year, may have Elmer to thank if the year's fortunes improve. He will be remem- bered, of course, for getting the legislation passed which pro- vides stable funding for farm or- ganizations. But he has worked quietly and efficiently in many other areas. He got $20 million for Niagara fruit farmers a couple of years ago. His minis- try has sunk $17 million into a food technology centre in Guelph which could have a ma- jor impact on consumers in the years to come. He has made it easier for farmers to borrow money, especially young farm- ers, through the Agriculture In- vestment Strategy. He has pooh-poohed the idea that he is a lone voice in the Cabinet speaking for agriculture by saying that he is listened to and often heeded by his peers. Many changes are coming to the boondocks in the next few years and having a representa- tive in Cabinet with some clout -- as Buchanan seems to have -- is most important to farmers. GATT agreements, the ero- sion of the power of marketing boards, no -till farming, new crops such as canola surfassing even corn acreage in the east and wheat in the west are all fundamental changes for agri- To Ail Residents of the Township of Tuckersmith The Township will provide for the DISPOSAL OF NATURAL CHRISTMAS TREES if dropped off at the Township Shed or Municipal Office prior to January 6th, 1995. Marry Christmas and Health and Happinsss , for tit* New Year. Reeve. and Council of the Township of Tuckersmlth culture which many farmers are finding difficult to accept. Elmer Buchanan, although not a fanner, has been a strong ' voice in Ontario and even though his party seems doomed to defeat in the next provincial election, he will probably garner a great many rural votes simply because of his determination, his honesty and his tenacity in ,Cabinet. Seems to me that agriculture has a brighter outlook this year than any in the past decade. To all you wonderful people out there who pursue this deathless prose every week, have the hap- piest of New Year's. Bless you all. Season's Greetings to al[ my friends and customers Beef Linkages alms to end adversarial approach with government Dialogue started to bring produc- ers, retailers and consumers closer together TORONTO - Bob Kerr is bullish these days about a new, more prof- itable way of doing business in On- tario's beef industry. It's called the Beef Linkages project, and the idea is to develop better communica- tions and strategic alliances among suppliers, producers, packers and retailers so that the entire industry can respond more efficiently to consumer demands. "In the past, we've had fairly ad- versarial relationships within the in- dustry, and we're trying to change that - the idea now is co-ordination, not domination," says Kerr, a beef producer, past -president of the On- tario Cattlemen's Association (OCA), and driving force in the Linkages project up and run- ning. The three-year, $850,000 project is being run and partially funded by the OCA. The Ontario government, through jobsOntario Community Action, and Agriculture and Agri - Food Canada are also providing funding. The Linkages project reflects the spirit and substance of the Vision 2020 process. Vision 2020 started two and a half years ago when On- tario Minister of Agriculture, Food and Rural Affairs Elmer Buchanan met with leaders from Ontario's producer, supplier, processor, re- tailer and food service groups, as well as labour and consumer groups. They talked about how the industry as a whole could remain competitive in a fast -changing glo- bal trading environment. "I think what the process has done is given everybody a better idea of the issues faced by every- body else involved in the food chain," Paul Oliver, president of the Ontario Restaurant Association said. "It used to be that we each worked in relative isolation, and were wary that the other players were making a fortune - now we know that while no one is making a fortune, we can do better both indi- vidually and as a sector by working with one another." Oliver says that people in his husiness are now more comfortable talking directly to producers, and working with them to focus more closely on meeting consumer de- mands. During the Vision 2020 process, which has included two conferenc- es and numerous sector meetings, the industry has examined strengths and weaknesses, identified ways to improve, and developed a vision for the future that says: "Ontario will be a world leader in agriculture and food markets, creat- ing a sustainable, profitable and dy- namic environment in which its stakeholders can compete, prosper, grow and serve the needs of consu- mers. The workplan sets out ways the industry and government are work- ing on improving education and training, focusing research, har- monizing current regulations and tightening up the efficiency of the industry. It also documents efforts to build new partnerships, explore niche markets and develop value- added products. The last is exactly the kind of ini- tiative the Beef Linkages project was set up to accomplish. The pro- ject basically will put two facilita- tors in place whose jobs will be to help match up customers and sup- pliers in the beef industry in mutu- ally beneficial business arrange- ments. Participation is strictly voluntary, and Kerr is optimistic from the- positive -reception -the -idea - has already garnered that several industry players will give the con- cept a try. "For example, if a retailer sees that his customers want smaller portions and higher tenderness in their beef cuts, the facilitator Would work with the packer and producers to supply that market," Kerr said. "It's creating a win-win situation. "We decided to walk the talk," Kerr said. "We agreed that in order to maintain our market share, we had to start acting like the beef in- dustry is a supply chain, that in- cludes not only cattle producers, but also suppliers, packers and re- tailers." 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