THE GOVERNMENT OF CANADA ANNOUNCES FEDERAL ASSISTANCE
FOR CANADA’S GRAINS AND OILSEEDS PRODUCERS

OTTAWA, November 23, 2005 – Agriculture and Agri-Food Minister Andy Mitchell today announced almost $755 million in emergency federal assistance for Canadian grains and oilseeds producers to address the severe economic hardship they are facing. These targeted emergency funds will help sustain the sector while federal, provincial and territorial governments work with industry to implement long-term solutions to address the root causes of declining farm income in Canada.

“Grains and oilseeds producers have encountered unprecedented challenges in recent years. This funding provides stability at a critical time as they struggle to deal with pressures beyond their control,” said Minister Mitchell. “Financial stability is essential to placing grains and oilseeds producers on a solid footing to take advantage of innovations arising from our agricultural science investments, and to capture new market opportunities that could open up through global trade talks.”

The value of grains and oilseeds production is down approximately $2 billion this year compared with the average over the past ten years. U.S domestic support for specific commodities, rising fuel prices, and a high Canadian dollar have had a major effect on these producers, along with poor weather conditions in some parts of the country.

Earlier this year, the Government of Canada announced the farm income payment program, which provided $439 million to grains and oilseeds producers. Combined with today’s announcement, the Government is providing nearly $1.2 billion to address the needs of the grains and oilseeds sector. It is determined to work with the provinces on short term needs as well as longer-term transformative change.

It is a Government of Canada priority to facilitate transformational change for the sector to ensure long-term profitability for Canadian producers. Agriculture and Agri-Food Canada has a number of initiatives underway that will create new opportunities for all producers.

To help create sustainable competitive advantage, the Government of Canada is actively supporting ongoing innovation for the entire agricultural value-chain, based on Canada’s traditional leadership in agricultural science. AAFC is currently consulting with stakeholders across the country to ensure that our science and research investments are used to Canada’s greatest advantage in the coming years. This review of science priorities is culminating in an Agriculture Science and Innovation Symposium being held in Gatineau this week.

To create new opportunities, the Government of Canada continues to strive to level the international playing field for Canadian businesses through negotiations at the World Trade Organization. Canada's agricultural sector stands to benefit significantly from the realization of the goals Canada is pursuing: the elimination of export subsidies, substantial cuts to domestic subsidies (particularly in the U.S. and E.U.) and significant improvements in access to foreign markets.

As part of its long term strategy, the federal government is committed to ensuring that farmers, along with all other players in the sector, profit fairly from these advancements and opportunities. This was one of the significant points raised in Parliamentary Secretary Wayne Easter’s report earlier this year.

The Canadian Agricultural Income Stabilization (CAIS) and Production Insurance programs continue to help all producers manage the business risks of farming on an ongoing basis. During the first three years of the CAIS program, it is estimated that over $4 billion will have been paid to producers to help ensure stability in the agriculture sector.

The payments to grains and oilseeds producers from today’s announcement will be considered as farm income in the calculations used to determine the benefits they receive under CAIS, resulting in a partial reduction in payments received through that program.

Steps are being taken to ensure this payment will be delivered as quickly as possible. Further details on it will become available in the coming weeks.

For more information on this announcement visit www.agr.gc.ca.

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