Mcguinty Government Helps Relieve Cost Of Production Pressures For

Ontario Farmers

Cost Recognition Top-Up Provides $55 Million to Improve Farm Net Income

GUELPH - The McGuinty government will provide $55 million to Ontario farmers through the new Ontario Cost Recognition Top-Up Program, Leona Dombrowsky, Minister of Agriculture, Food and Rural Affairs, announced today.

The payment provides a 40 per cent matching provincial contribution to the $400 million federal cost of production payment program outlined in the most recent federal budget.

"Our government recognizes that the last few years have been difficult for many producers and that farm net incomes have suffered," said Dombrowsky. "With the new Ontario Cost Recognition Top-Up Program, we are helping our province's farmers overcome these challenges."

The provincial government also announced a three-year Risk Management Program to support the grain and oilseed sectors, starting with the 2007 crop year. The government will develop this program through discussions with the Ontario Federation of Agriculture and representatives of the grain and oilseed sector.

The Risk Management Program is a price insurance program designed to offset losses caused by low commodity prices in a given year. The province will fund its traditional 40 per cent share for three years, while continuing to push for federal participation in this program. Farmer premiums will be waived in the first year of the program, but farmers must enroll for three years.

"Ontario needs a multi-year strategy to stabilize and strengthen the province's agriculture industry in the way it needs and deserves," Dombrowsky said. "While I will continue to invite our federal partners to work with us, Ontario is moving forward with a three-year plan to provide effective risk management programming for our grain and oilseed sector."

"These announcements are good news for many of Ontario's rural communities whose economies are closely linked to the success or failure of their farmers," said Geri Kamenz, president of the Ontario Federation of Agriculture. "The long-term commitment of the McGuinty government will bring stability to agriculture and will support the people employed in industries."

"We want to thank the McGuinty government for listening to Ontario's grain and oilseed producers," said Leo Guilbealt, Chair of the Ontario Grains and Oilseeds Safety Net Committee. "What we have with today's announcement on RMP, a program designed by farmers, is a true partnership. The Ontario government is taking a significant step in providing the long-range predictability we need to keep our farms economically viable."

Strengthening business risk management programs is only one way in which the McGuinty government is working to build a successful future for Ontario's agriculture sector. Strategic investments in research, innovation, and marketing and branding will position Ontario's farmers as the suppliers of the goods and services that are in the highest demand in the marketplace.

The Ontario Cost Recognition Top-Up program is just one more example of how, working together, Ontarians have achieved results in rural Ontario. Other examples include:

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Contacts:
Kelly Synnott
Minister's Office
416-326-6439

Brent Ross
Communications Branch
416-326-9342

Backgrounder

COST RECOGNITION TOP-UP PROGRAM AND THE RISK MANAGEMENT PROGRAM

The Government of Ontario is committed to providing effective risk management programming for Ontario producers. Working with the federal government and our stakeholders, the provincial government has pledged to improve the system of food safety nets and secure short and longer-term programs that work for Ontario farmers.

The province has provided more than $1 billion in farm income support over the past four years and, since 2004, more than $620 million has been delivered to Ontario farmers through the CAIS program. The provincial and federal governments have pledged to work together to improve the system of food safety nets and secure short and longer-term programs that work for Ontario farmers.

With the recent announcements of Ontario's Cost Recognition Top-Up program funding, and a commitment to a 3-year pilot Risk Management Program, the McGuinty government is helping Ontario farmers meet current needs and plan for the future. Ontario farmers will have more bankable support and be in a better position to deal with the challenges that nature, global competition, and higher energy and input costs present.

Cost Recognition Top-Up Program
This spring, the federal government announced that it would allocate $400 million for cost of production payments to Canadian farmers. Ontario is providing $55 million to this province's farmers through the new Ontario Cost Recognition Top-Up Program. This is our 40 per cent match of the total federal funds.

The Ontario Top-Up program will be distributed as soon as the federal government releases their payment information details.

What producers need to know
The Ontario Cost Recognition Top-up is a matching 40 per cent contribution to the national cost of production payment announced by the federal government in March. It is a direct payment to producers in recognition of rising production costs over the past few years.

Who is eligible?
Any producer who received a federal payment will automatically receive a provincial top-up equal to two thirds of the federal payment. If you are not sure whether you qualify for the federal payment, you can contact the federal government by calling 1-866-367-8506 or visit the federal program website at (www.agr.gc.ca/cop).

Who will deliver this program?
The federal payment is being administered by the federal government. The Ontario Cost Recognition Top-Up will be administered by Agricorp.

When will payments be made?
Because this payment is a top-up to the federal cost-of-production payment, the Ontario government will not be able to make payments until the federal government transfers the payment data to Agricorp.

Risk Management Program
The McGuinty government is committed to the development of a Risk Management Program to support the grain and oilseed sectors.

The Risk Management Program is a price insurance program designed to offset losses caused by low commodity prices in a given year, starting with the 2007 crop year.

The provincial government will develop this made-in-Ontario, 3-year, risk management pilot program building on discussions with the Ontario Federation of Agriculture and representatives of the grain and oilseed sector.

What producers need to know
The province has made a three-year commitment to implement the program at its traditional 40 per cent provincial share. Ontario needs a multi-year strategy to stabilize and strengthen the province's agriculture industry in the way it needs and deserves. While we will continue to invite our federal partners to work with us, Ontario is moving forward with a three-year plan to provide effective risk management programming for our grain and oilseed sector.

Program design will be developed in consultation with the Ontario Federation of Agriculture and representatives of the grain and oilseed sector.

Program criteria to be developed include:

Who will be eligible to participate in the Risk Management Program?
Eligibility for the Risk Management Program will require producer premiums as well as participation in other risk management strategies, including Production Insurance and enrollment in Canadian Agricultural Income Stabilization program. Farmer premiums will be waived in the first year of the program, but farmers must enroll for three years.

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Contacts:
Kelly Synnott
Minister's Office
416-326-6439

Brent Ross
Communications Branch
416-326-9342