AIC Notes Top         Issue 2012-08    February 23, 2012 
In This Issue
Record Breaking Net Farm Income in 2011, Says Agriculture Canada
Federal Funding for Cover Crops Research
Funding for Manitoba Agroforestry Project
Funding for New Products from Ag Approved
PEI Farmers Divided On Increasing Land Ownership Limits
PM Urged To 'Ungag' Scientists
Ivey Offers Leadership Training for Farmers
A Failure to Innovate
Models Underestimate Future Temperature Variability: Food Security at Risk
Prairie West Position
Standing Committee on Agriculture and Agri-Food
Coming Events

Record Breaking Net Farm Income in 2011, Says Agriculture Canada


Net farm income in the agricultural sector is forecast to hit a record-breaking $11.7 billion for 2011, says a senior Agriculture and Agri-Food Canada official.


The 2011 figure is a nearly 24 per cent increase over the record high of $9.5 billion set in 2010. It's also a new record both in nominal terms and when adjusted for inflation, says the official who couldn't be named under terms set by the federal agriculture department in releasing the information. For 2012, net farm income is forecast to be $11.2 billion.


The 2011 forecasts are based on information that was available as of mid December. 


Officials released the rosy farm income picture during a telephone technical briefing held Monday morning to discuss two reports issued by the department - the farm income forecast and the medium term outlook report.


The official describes net farm income is a measure of the cash generated overall by Canadian farm businesses. It is money available to farmers to use as they choose, for example, to repay debt, invest or for other things.


For 2012, department officials are forecasting continued growth in farm income. Despite a projected pull back in grains and oilseeds prices, crop receipts are slated to climb slightly as planted acreage will increase and carry-in stocks are high, it says in the farm income forecast report. There will also be a small increase in livestock receipts. But high feed costs will restrain income gains for most livestock producers.


The farm income forecast, released annually, is a short-term outlook for the entire industry and each sector. The official says it's the federal department's measure of the financial strengths of the farming sector and its contribution to the Canadian economy. The medium term outlook is a projection of how current policy and market conditions influence farm incomes over time. Many of the factors currently influencing farm income will continue to be felt over the next 10 year, including a continued increase in the world demand for feed grains, rising petroleum prices, slow to moderate growth in the Canadian population and a Canadian dollar near par with the American dollar.


For 2011, average net operating income per farm will be $65,129, while for 2012 it's projected to be $63,500. Net operating income is an estimate of the profit or loss of an individual farm operation, she says. The 2011 figure is 11 per cent higher than 2010 levels and 16 per cent higher than the average for the previous five years.


One of the other two other key measures of farm economic strength outlined in the report is net worth; assets minus liabilities. The net worth of the average Canadian farm is forecast to grow by five per cent in 2011 to reach $1.6 million and another five per cent in 2012, hitting $1.7 million.


The other key measure is farm families' average total income, including all farm and non-farm income sources. In 2011, that's projected to hit almost $119,000 or 11 per cent higher than 2010.


Despite difficult growing conditions last year in parts of the country and higher operating expenses driven by fertilizer, fuel and feed costs, there was an overall increase in farm income because of higher prices for hogs and grains and oilseeds, the report says. Disaster assistance and production insurance payments to Prairie farmers also contributed to income levels.


Canadian Federation of Agriculture president Ron Bonnett says from a financial perspective things are looking fairly sound for farmers.


In some areas there are going to be some fairly huge increases in farm income. "I know the livestock sector has had quite a turnaround, particularly in the beef sector where prices are quite a bit higher than they have been," says Bonnett, noting he's not surprised the federal agriculture department's figures are showing a fairly substantial increase.


Bonnett says the figures showing increased net worth can be partly attributed to increases in land values.


Susan Mann, AgMedia, February 21, 2012


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Federal Funding for Cover Crops Research 


New research investment will help vegetable producers become more productive and profitable. Minister of Justice Rob Nicholson, Member of Parliament (Niagara Falls), on behalf of Agriculture Minister Gerry Ritz, announced today an investment of more than $230,000 for the Ontario Processing Vegetable Growers (OPVG) to discover the optimal soil conditions for growing cover crops as part of crop rotation.


"Our government's top priority remains the economy, and Canada's vegetable growers play an important role in driving jobs and economic growth in Niagara," said Mr. Nicholson. "This investment will help vegetable producers implement economically and environmentally sustainable weed-management practices, leading to increased production and a stronger bottom line."


Cover crops help replenish the soil by reducing erosion, sequestering nitrogen and improving pest management. This two-year study will assess how cover crops such as annual rye, wheat, oats and oilseed radishes are affected by residual herbicides that have been applied for previous crops like soybeans or corn.


The study will be conducted by the OPVG, which represents about 600 processing vegetable growers across Ontario. The organization annually negotiates prices and terms and conditions of sale for growers of 13 crops - tomatoes, cucumbers, sweet corn, green peas, green and wax beans, carrots, cauliflower, cabbage, beets, peppers, pumpkin, squash and lima beans.


"As growers continue to make their farms environmentally sustainable, this project will help determine the compatibility of potential cover crops within vegetable production systems," said Phil Richards, OPVG chairman, a processing tomato grower from Dresden, Ontario.


AAFC Press Release, February 22, 2012


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Funding for Manitoba Agroforestry Project 


Producers will have the opportunity to increase their profits through green agriculture technologies thanks to a partnership among industry, academia, and the Government of Canada. Member of Parliament Robert Sopuck (Dauphin-Swan River-Marquette), on behalf of Agriculture Minister Gerry Ritz, announced today an investment of $160,000 to the Upper Assiniboine River Conservation District to study how agroforestry systems can increase farmers' productivity while mitigating their environmental impact.


The Upper Assiniboine River Conservation District will use the funding to study how agroforestry-the integrated approach of planting trees and shrubs on farms-can reduce the costs associated with livestock production and mitigate greenhouse gas emissions. The project will evaluate various beneficial management practices on the farm to see if they can be easily adopted by the farming community. Results of this research have the potential to reduce production costs, improve energy savings, and enhance nutrient cycling and biodiversity while simultaneously protecting the environment.


"Making the business case for properly placed rows of trees is pretty easy; what we lack is the recording and reporting tools used in business to guide adoption," said Ryan Canart, manager of the Upper Assiniboine River Conservation District. "Over the next four years, Upper Assiniboine and the Rural Development Institute will be engaging grain and livestock farmers in a conversation about the value of trees in the agricultural landscape, as well as the tools and practices needed to achieve the numerous benefits of agroforestry in the modern agricultural setting."


Funding for this project is through the Agricultural Greenhouse Gases Program (AGGP), a five-year, $27-million initiative that focuses on the development of on-farm greenhouse gas mitigation technologies. The AGGP will provide funding to various partners across Canada to investigate innovative mechanisms, tools, and approaches that provide real solutions for the agriculture sector.


The AGGP represents Canada's initial contribution to the Global Research Alliance on Agricultural Greenhouse Gases, an international network of more than 30 member countries that will coordinate and increase agricultural research on greenhouse gas mitigation and make new mitigation technologies and beneficial management practices available to farmers. For more information about the Global Research Alliance, visit


AAFC Press Release, February 21, 2012


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Funding for New Products from Ag Approved


A federal investment of more than $4.4 million through Western Economic Diversification Canada will enable the Alberta Crop Industry Development Fund Ltd. to lead an initiative to test and commercialize new products derived from crops and grains. Additional support is also being provided through the Alberta Barley Commission and Alberta Innovates Bio Solutions.


Through this initiative, the Alberta Crop Industry Development Fund will establish and equip a manufacturing facility to produce substances known as crop-based protein and cellulose derivatives. These substances can be used as ingredients for a variety of commercial products.


"Result-orientated research is what the agriculture industry needs," said Matt Sawyer, Chair, Alberta Barley Commission. "This kind of producer investment highlights the value of renewable agricultural products, while raising awareness and creating value for Alberta barley farmers."


This initiative builds on research being conducted through the University of Alberta's Cereal Protein and Cellulose Program, which has resulted in the development of high value, natural industrial products derived from agricultural sources. The new manufacturing facility will partner with commercial manufacturers to assist them with the pilot scale production, testing, and demonstration of these products and technologies. Successful products and technologies will then be licensed to, and manufactured by, industry partners.


"Alberta has the reputation of producing high quality crops that we export across the globe," said Stan Blade, Chief Executive Officer, Alberta Innovates Bio Solutions. "Our shared investment in this initiative is focused on creating innovative new products from grains and other plant biomass that will enhance value and create new business opportunities for Alberta."


As new products are successfully licensed and manufactured by private sector partners, there may also be increased opportunities to develop manufacturing in Alberta's agricultural sector through the production of crop-based ingredients for commercial applications.


"This initiative will create additional demand for barley and other crops while providing new market and contract growing opportunities for western Canadian farmers," said Doug Walkey, Executive Director, Alberta Crop Industry Development Fund. "The pilot plant is another step leading towards realizing the potential for both branch plants of international companies and the development of new manufacturing companies here on the prairies."


AAFC Press Release, February 22, 2012


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PEI Farmers Divided On Increasing Land Ownership Limits 


Do 21st century farms in Canada's smallest province need more land to be economically and environmentally sustainable? That's the question being asked on Prince Edward Island these days.


PEI holds the distinction of being both the country's smallest jurisdiction and the most densely populated in terms of people per square mile. As a result, land issues are always hot topics of debate.


For the past 35 years, the Lands Protection Act has limited Islanders to owning a maximum of 1,000 acres while corporations cannot own more than 3,000 acres. Leased or rented land is included in both totals.


The provincial government has indicated it intends to review the legislation, and the province's two general farm organizations have already staked out their turf.


The PEI Federation of Agriculture wants the limits raised to 1,500 acres for individuals and 4,500 acres for corporations. They argue today's modern farms require more land to implement crop rotations.


Long-time potato producer Morley Wood proposed the change at the federation's annual meeting in January, saying he would like to see only arable land included in that total for farmers. He says not having arable land in the current definition leaves producers on an unlevel playing field.


"One producer might have only 550 acres of their 1,000 acres they can use while another producer might have 950 acres," Wood said at the meeting. "It is a very different world today than when the Act was first passed."


However, the National Farmers Union is opposed to the move. District director Elwin Wyand is worried the change would allow large corporations to obtain more land. Wyand says changes to the Act in 2009 excluded margin land, wood land and buffer zones from the total.


"Why do farmers need to increase their acreage and work harder for less returns?" he asks, arguing the move counteracts efforts to bring more young farmers into the industry. If farms increase in size, he says, young producers will not be able to afford them. "The NFU fears foreign investors could swoop in and purchase the land for speculative purposes."


Agriculture Minister George Webster told the federation meeting, "it is obvious the Act has to change."

Webster, who was a potato farmer before he entered the political arena, said he realizes today's larger farms need more land in order to implement three- and four-year crop rotations. He said the government has already taken environmentally sensitive land out of the limit.


"I understand the need for economics of scale," he said. "We need to have a full discussion on this matter and now you have put it on the table."


Andy Walker, FCC Express, February 17, 2012


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PM Urged To 'Ungag' Scientists 


Groups representing scientists and science writers sent an open letter to PM Stephen Harper on Friday calling on his government to stop "muzzling" federal researchers.


Attendees at the American Association for the Advancement of Science's annual conference in Vancouver heard numerous examples of alleged government interference and reporters being denied access to scientists.


Such control is hitting morale among scientists and denying the public access to important information about climate, agriculture and the environment, the conference heard.


"Why are we suppressing really good news to Canadians - that is, successful science being done in federal government labs?" asked Andrew Weaver, a climate scientist at the University of Victoria. "Why don't we open it up? There's nothing to be feared but success."


The National Oceanic and Atmospheric Administration in the United States recently adopted a policy that encourages its scientists to talk freely to the media without an intermediary.


Under the new policy, scientists are allowed to express their own opinions, on the condition they make it clear that they are not speaking for the agency.


The letter addressed to the prime minister Friday urged the government to take a similar approach.

"Despite promises that your government would follow principles of accountability and transparency, federal scientists in Canada are still not allowed to speak to reporters without the 'consent' of media relations officers," the letter read.


It was signed by several groups, including the Canadian Science Writers Association, World Federation of Science Journalists, Canadian Journalists for Free Expression and the Professional Institute of the Public Service of Canada, the union that represents 23,000 federal scientists.


The Prime Minister's Office referred questions Friday to the office of Gary Goodyear, minister of state for science and technology.


Spokesman Jay Jacobson said the government's communications policy is designed to ensure that "interviews or technical information on specialized subjects, are directed to knowledgeable managers or staff designated to speak as official representatives."


He added that science-based departments and agencies produce publications - available to the public - highlighting research activities and findings.


Postmedia News senior science writer Margaret Munro described how, in the past, reporters could get interviews with government scientists within an hour of submitting a request.


That changed in 2007, she said, when Environment Canada issued a new "media-relations protocol" that required scientists to refer inquiries first to communications officers, who would help craft responses to reporters' questions.


Douglas Quan, Postmedia News, February 19, 2012


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Ivey Offers Leadership Training for Farmers 


Today's farmers run sophisticated business enterprises, often as the sole employee - and boss.


But as directors of agricultural marketing boards, co-ops and other agencies, farmers need additional skills, such as how to collaborate with others, grasp the big picture and lobby politicians and bureaucrats on domestic and global trade policy.


A new executive leadership program, partly underwritten by the Farm Credit Canada and run by University of Western Ontario's Ivey School of Business, will offer leadership training to farm directors and senior staff of boards and co-ops across the country.


"When you are farming, you are used to being the boss and boss yourself around," says David Sparling, Ivey professor and chair of agri-food innovation and regulation. "There are quite a few programs out there on managing your farm business but there aren't programs on helping to manage or lead your industry better."


The five-day course, believed to be the first of its kind in Canada, is expected to attract directors and senior staff of farm organizations, with training on how they can work with each other and across sectors on industry leadership, strategies and policy direction.


"These people [farmers] are not afraid of change or taking on risk," observes Prof. Sparling. "They are not afraid of getting in to brand new areas and doing new things all the time."


The price-tag for the intensive session is $4,250, about half the cost of similar executive training programs, because Farm Credit Canada has put up $400,000 over five years to defray tuition costs.


"This is a needed advancement," says Lyndon Carlson, senior vice-president of marketing for FCC, the leading agricultural lender in Canada. "We will attract directors and senior managers from across the country."


With agriculture and food production increasingly global in nature, Mr. Carlson says those who lead producer associations in Canada need to be influential at all levels of government.


"Farmers need to take control in a business-like negotiation," he says. "That means when they talk to government, they are not just asking for a safety-net program, they are developing policies that need to be sustainable and that the taxpayer will be supportive of."


Jennifer Lewington, Globe and Mail, February 17, 2012



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A Failure to Innovate 


At the recent Davos World Economic Forum gathering, the Harvard Business School trumpeted a multi-year project on U.S. competitiveness, itself defined in a novel way as "the extent to which firms operating in the U.S. are able to compete successfully in the global economy while supporting high and rising living standards for Americans." Their resolution is both beguilingly simple in concept and devilishly complex in practice: competitiveness with rising wages and improving living standards hinges on continually increasing productivity. And, for high-income economies, a prime driver of productivity growth over the long run is innovation.


What is innovation and why does it matter? Innovation is our ability to create new products and services, or produce existing products in different ways, or develop new markets. It lies at the heart of modern competitiveness. It drives growth and improves productivity. It raises our living standards and gives consumers new choices. It is the answer to the question of how a high-wage economy like Canada can compete with emerging countries with lower wage costs.


Consider innovation at the level of an individual Canadian firm. The world around it is constantly evolving. Consumer tastes are fluid. Technology is morphing. Markets are changing. Competitors are shifting. In this dynamic environment, innovation is how a firm "stays ahead of the competitive curve."


But such corporate innovation does not happen in the abstract or by chance; it is achieved through structured and distinct channels of innovation within successful firms for product innovation, market innovation, process innovation and organizational innovation.


So, with innovation so vital to our future, how is Canada doing? Not well. While basic research in our universities is reasonably strong, Canadian business spending on R&D is only one per cent of GDP, half of what U.S. corporations spend and one-third of what the leaders Sweden, Finland and Korea invest annually. Canada has slipped to 20th place among OECD countries for business spending on research and development. And it shows: the productivity level of the Canadian business sector is only 72 per cent that of U.S. businesses.


How do we tackle our innovation deficit? By being less complacent: We have a strong dollar and weak productivity; strong public research capacity in our universities and weak commercialization of it; deep trade links with a slow growing U.S. and weak linkages with the dynamic emerging economies. And, by being more collaborative: innovation in a market-driven economy has to happen in individual companies, with governments providing a supportive framework and universities creating talented graduates and world-class research that supports business innovation.


To achieve these objectives, we need to act and learn, not debate and delay. Five reasonable candidates for early action include: competition, financing, talent, research excellence and leadership.


Competition matters to corporate behaviour. Governments, both federal and provincial, should increase market competition in Canada, particularly in protected sectors where productivity and innovation gaps are largest. Governments can also encourage information-driven competition by supporting public productivity and innovation benchmarks for the main sectors of the economy measured against the world's best.


And new trade agreements with dynamic emerging economies would help reinforce a global mindset and orientation and increase competition.


Financing is crucial, both for innovative startups and established firms looking to invest more in innovation. The venture capital industry in Canada is simply not functioning the way it should. We seriously lag other countries as diverse as the U.S., Israel, Singapore and the U.K. The federal government could consider establishing a review panel to plot a new blueprint for venture capital in Canada.


Government support for business innovation is predominantly delivered through the tax system, with one of the most generous research and development tax credits in the world. Unfortunately, judging by corporate R&D levels, this mechanism is not working as intended. Some of these innovation tax expenditures should be redirected to more direct support for innovation, in line with best practices in other knowledge intensive economies.


Talent matters in a knowledge-based economy. It is essential for our education systems to be geared to the needs of a global, knowledge-based economy. Business leaders of tomorrow need to be experts in global marketing, to understand the core technologies for their sectors and to be comfortable in risk assessment of innovation. Research in our universities is the backbone of an effective innovation system. We need to continue to fund this public good. But we also need to insist on accountability for global excellence and better commercialization.


Most importantly, leadership is needed, in government, business, universities and labour if we are to improve Canadian living standards and competitiveness. Productivity and innovation lie at the intersection between public policy and private sector behaviour.


Prime Minister Stephen Harper's speech at Davos signalled a willingness to "undertake major transformations to position Canada for growth over the next generation." As part of this, we should be desperately seeking a more innovative Canada.


The Honourable Kevin G. Lynch is vice-chair of the BMO Financial Group. From 2006 to 2009 he was clerk of the Privy Council.


This piece is drawn from a longer paper written for Canada 2020's project 'The Canada We Want in 2020: Towards a strategic policy roadmap for the federal government' (


Kevin Lynch, Ottawa Citizen, February 22, 2012


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Models Underestimate Future Temperature Variability: Food Security at Risk 


Climate warming caused by greenhouse gases is very likely to increase the variability of summertime temperatures around the world by the end of this century, a University of Washington climate scientist said Friday. The findings have major implications for food production.


Current climate models do not adequately reflect feedbacks from the relationship between the atmosphere and soil, which causes them to underestimate the increase of variability in summertime temperatures, said David Battisti, a UW professor of atmospheric sciences.


While warmer temperatures already have implications for food production in the tropics, the new findings suggest the increase in the volatility of summertime temperatures will have serious effects in grain-growing regions of Europe and North and South America, Battisti said.


"If there's greater variability, the odds of the temperature being so high that you can't grow a crop are greater," he said.


"In terms of regional and global food security, it's not good news."


Battisti presented his findings at the American Association for the Advancement of Science meeting in Vancouver, Canada. His discussion was part of a panel on climate and global food security that included Rosamond Naylor of Stanford University and Daniel Vimont of the University of Wisconsin, with whom he has collaborated on previous food security research.


Earlier research has shown that by the end of this century, the increase in average growing season temperature, if other factors remain the same, will likely reduce yields of rice, corn and soybean 30 to 40 percent. Already rice yields in the tropics are being affected by higher temperatures, affecting nations such as Indonesia, which frequently imports rice to stabilize prices, Battisti said.


In addition, the scientists say global warming will have greater impacts than previously thought on the El Niño Southern Oscillation, a tropical phenomenon that has global impact on climate and food production. Their conclusions are based on geological and other proxy records of climate and El Niño from the last 10,000 years, plus recent analyses of long-term climate changes because of global warming.


The Intergovernmental Panel on Climate Change, the United Nations body conducting ongoing assessments of climate change, has estimated that future month-to-month temperature variability during summer months is likely to be greater in some places and less in some places, but should stay roughly constant in many places.


But the new modeling work, Battisti said, shows most areas can expect to see greater variability in summer temperatures between now and 2085, with the biggest impacts in Europe, Africa and South America.


"The increased variability will be pretty ubiquitous. You will see it pretty much everywhere."


Increased temperature variability compounds the loss of production because of higher average temperatures, Battisti said. Add higher fertilizer prices and other market pressures to the mix "and food insecurity is likely to be higher than it has been for some time."


Story Source:

The above story is reprinted from materials provided by University of Washington, via Newswise. The original article was written by Vince Stricherz.

University of Washington (2012, February 17). Models underestimate future temperature variability: Food security at risk. ScienceDaily. Retrieved February 23, 2012, from­ /releases/2012/02/120217145320.htm


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Prairie West Position

The Prairie West Terminal, the second largest independent grain terminal in Saskatchewan, is seeking a Controller, responsible for all aspects of finance, payroll and accounting. For more information, click here.


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Standing Committee on Agriculture and Agri-Food


The Committee will meet on February 27 to hear witnesses on Growing Forward 2 (Meeting Consumer Demands) from the Canadian International Grains Institute, Canadian Restaurant and Foodservices Association, Consumers' Association of Canada and Humane Society International / Canada.  On February 29 witnesses will appear representing the Alberta Food Processors Association, Bioniche Life Sciences Inc., and Food Secure Canada.


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Coming Events


6th Annual Growing the Margins: Rural Green Energy Conference and Exhibition and 4th Annual Canadian Farm and Food Biogas Conference and Exhibition, London, Ontario, March 5-7, 2012


Canadian Society of Soil Science and Association Québécoise de Spécialistes en Sciences du Sol Joint Conference, Lac Beauport, Quebec, June 3-7, 2012


Joint Annual Meeting of ADSA - AMPA - ASAS - Canadian Society of Animal Science - WSASAS, Phoenix, Arizona, July 15-19, 2012


Joint Annual Meeting of the Canadian Society of Agronomy, Certified Crop Advisors and Canadian Society for Horticultural Science, Saskatoon, July 16-19, 2012

5th World Congress of Agronomists and Agrologists, Quebec City, September 17-21, 2012 


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Frances Rodenburg, Editor