RESTRICTED
WORLD TRADE G/SCM/N/3/CAN
L/7611/Add.2
ORGANIZATION Limited Distribution
2May1995
(95-1119)
Original: English Committee onSubsidies andCountervailing Measures
SUBSIDIES
Notifications Pursuant toArticle XVI:1 oftheGATT 1994
andArticle 25oftheAgreement onSubsidies and
Countervailing Measures
CANADA
Thefollowing fullnotification hasbeenreceived from thePermanent Mission ofCanada.
Inview ofthedecision taken bytheCONTRACTING PARTIES oftheGATT 1947 on
AvoidanceofProceduralandInstitutionalDuplication(L/7582,dated13December1994)thisnotification
isdeemed tobealsoanotification under Article XVI:1 oftheGATT 1947.
TABLE OFCONTENTS
Page
PART I: GENERAL PROGRAMMES
1. Special Agricultural Income Assistance Programme (1990) 4
2. Canadian Agricultural Market Development Initiative (CAMDI) 4
3. Canadian Agri-Food Development Initiative (CAFDI) 5
4. Farm Income Protection Act-Revised Statutes Canada Chapter 22(1991) 6
5. NetIncome Stabilization Account (NISA) Programme 8
PART II: LIVESTOCK AND PRODUCTS
A. DAIRY PRODUCTS 9
1. Agricultural Support forDairy Products 9
B. LIVESTOCK AND MEAT PRODUCTS 11
1. National Tripartite Stabilization Programme forLambs 11
2. National Tripartite Stabilization Programme forHogs 12
3. National Tripartite Stabilization Programme forCattle 14
4. Feed Freight Assistance Programme 17
5. Atlantic Livestock Feed Development Initiative 18
6. Special Atlantic Livestock Initiative 19
7. Livestock Drought Assistance Programme (LDAP) 20G/SCM/N/3/CAN
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PART III: CROPS AND PRODUCTS
A. GENERAL 21
1. Advance Payment forCrops Act(APCA) 21
2. Crop Insurance 23
3. Farm Support andAdjustment Measures I&II(FSAM) 24
4. Greenfeed Programme 25
5. Gross Revenue Insurance Programme (GRIP) 26
B. GRAINS AND GRAIN PRODUCTS 27
1. Western Grain Stabilization Programme (WGSP) 27
2. Western Grain Transportation Act(WGTA) 28
3. Cash Flow Enhancement Programme (CFEP) 29
4. Agricultural Stabilization Act(ASA) (forGrains
andGrain Products Outside theCanadian Wheat Board Designated Area) 30
5. Prairie Grain Advance Payments Act(PGAPA) 33
6. AtandEastGrain andFlour Subsidy Programme 35
7. Freight Charges Equalization Programme 36
8. Special Canadian Grains Programmes (SCGP IAND SCGP II) 36
9. Two-Price Wheat Programme 37
C. OILSEEDS AND OILSEED PRODUCTS 38
1. Agricultural Stabilization forOilseeds andOilseed Products 38
D. FRUITS AND VEGETABLES 39
1. Agricultural Stabilization forFruits andVegetables 39
2. National Tripartite Stabilization Programme forApples 41
3. National Tripartite Stabilization Programme forWhite PeaBeans and
Other DryEdible Beans 42
4. National Tripartite Stabilization Programme forOnions 44
E. SUGAR AND RELATED PRODUCTS 45
1. National Tripartite Stabilization Programme forSugar Beets 45
2. National Tripartite Stabilization Programme forHoney 46
IV. TABLES
Table 1 Milk Products -Supply andDisposition 49
Table 2 Beef: Supply andDisposition 54
Table 3 Veal: Supply andDisposition 55
Table 4 Mutton andLamb: Supply andDisposition 56G/SCM/N/3/CAN
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IV. TABLES (Cont 'd)
Table 5 Pork: Supply andDisposition 57
Table 6 Supply andDisposition forGrains andOilseeds, Canada
Crop years 1987-88 to1992-93 (KLT) 58
Table 7 Fresh Fruits -Supply andDisposition 64
Table 8 Dried Beans 67G/SCM/N/3/CAN
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I.GENERAL PROGRAMMES
1. Special Agricultural Income Assistance Programme (1990)
(a) Nature andextent ofthepayments
(i) Background andauthority
Theprogramme wasapproved under theauthority ofSection 5oftheDepartment ofAgriculture
Act. Itprovided onlyonefederal contribution ofalmost $500 million toprovinces contingent upon
matching provincial funds. Thepurpose oftheprogramme wastoprovide financial assistance through
Federal-Provincial initiatives forthebenefit ofproducers whohadexperienced dramatic income drops.
These payments wereinresponse tosuccessive years ofpoorreturns ingrains andoilseeds, horticulture
andother commodities. Itwasanticipated thatthe1990 netcashincome ofthegrains andoilseeds
sector would decline by55percentcompared to1989. Horticultural andother commodities were
facing similar, though lessserious, financial difficulties.
(ii) Incidence
Theprogramme offered aidbased onprovincial participation. Italsoincluded structural
measures, changes inFarm Debt Review Fund regulations, credit relief andcontributions tocrop
insurance.
(iii) Amount ofpayment
Federal contribution amounted to$486.4 million during fiscal year1990-91.
(b) Effect oftheprogramme
Theprogrammehelpedtostabilizeproducers'incomesintheshort-termagainstunusualfinancial
difficulties. Theexisting stabilization programmes hadnotprovided anadequate cushion against the
acute problems producers faced inthemarketplace atthattime.
2. Canadian Agricultural Market Development Initiative (CAMDI)
(a) Nature andextent ofthecontribution
(i) Background andauthority
CAMDI resulted from theamalgamation, intooneprogramme, ofthevarious grant and
contribution programmes, including theformer Fruit andVegetable Storage Construction Financial
Assistance Programme andtheCanadian Agricultural Market Development Fund. Theestablishment
ofone"new" programme wasintended toensure greater flexibility andresponsiveness oftheinitiative
toindustry needs, andtoincrease operating efficiency. TheCAMDI terms andconditions were in
effect upto31March 1990.G/SCM/N/3/CAN
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(ii) Incidence
Projects which were eligible forCAMDI funding included:
(A) Commercial andtechnical feasibility studies andmarket identification projects.
(B) Development projects which could haveincluded abroad range ofmarketing initiatives
intheareas ofpromotion, transportation, facilities, distribution, andproduct/process
development, involving neworimproved foodproducts orprocesses which would have
ledtoincreased sales.
(C) Canadian capability projects which aimed toestablish arequired technical, production
ormarketing ability orskillthenunavailable inCanada.
(iii) Amount ofthecontribution
Funding wasprovided upto50percentofeligible project costs, toamaximum of$250,000
annually or$750,000 overthelifeoftheinitiative. Where there wasmore thanonesource of
government assistance, thelevelofsupport from allfederal sources could notexceed 50percentof
eligible costs, norcould support from allgovernment sources (provincial andfederal) exceed 75per
centofeligible costs.
(iv) Estimated contributions perunit
Actual levels ofassistance offered wereoften lower thanthemaximum 50percentrateand,
onaverage, werelessthan$50,000 overthelifeoftheproject. Infiscal year1988-89, $834,727 was
committed towards 36projects, foranaverage contribution of$23,187 perproject. In1989-90,
$2,197,219 wascommitted towards 36projects, foranaverage contribution of$51,098 perproject.
(b) Effect oftheprogramme
TheCAMDIfacilitatedimprovementsinthemarketingofCanadianagriculturalandfoodproducts
byproviding financial assistance forselected projects concerned withmarket development fortraditional
andneworimproved projects inbothestablished andnewmarkets.
3. Canadian Agri-Food Development Initiative (CAFDI)
(a) Nature andextent ofcontribution
(i) Background andauthority
TheCanadian Agri-Food Development Initiative (CAFDI) istheconsolidation oftheformer
Production Development Assistance Initiative (PDAI), including theCrop Development Fund (CDF),
andtheCanadian Agricultural Market Development Initiative (CAMDI) which were ineffect from
1April 1985 to31March 1990. CAFDI isafinancial contribution programme administered bythe
Market andIndustry Services Branch (MISB). Itoperates under Terms andConditions approved by
Treasury Board on28September 1989 andamended on10April 1992. Theprogramme came into
effect in1990-91 andwillexpire 31March 1995.G/SCM/N/3/CAN
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(ii) Incidence
Projects eligible forCAFDI funding include:
(A) Market Development projects which promote market opportunities forCanadian food
andagricultural products. Aswell, projects thatencourage costsaving andother
improvements tothemarketing system fortheCanadian agri-food industry.
(B) Production andProcessing Development projects which assist intheeffective evaluation
ofnewcrops andcropvarieties, andlivestock andpoultry production technologies
inCanada. Also, projects which accelerate thecommercial adoption ofnewagricultural
production technologies, andcontribute tothedevelopment ofsustainable agriculture
inCanada.
(C) Human Resources Development projects which enhance thelong-term viability ofthe
agri-food industry through thedevelopment andtraining ofitshuman resource base.
(iii) Amount ofthecontribution
Funding maybeprovided upto50percentofeligible project coststoamaximum of$250,000
ayearor$750,000 overtheproject 'sduration. Maximum government assistance maynotexceed 50per
centfrom allfederal sources nor75percentfrom allgovernment sources combined.
(iv) Estimated contribution perunit
Actual levels ofassistance areusually lessthan$250,000 peryearand$750,000 overthelife
ofeachproject. Infiscal year1990-91, $1,788,865 wascommitted towards 111projects. In1991-92,
$1,669,168 wascommitted towards 103projects, averaging about $16,000 perproject withfunding
ranging upto$150,000. In1992-93, $1,177,229 wascommitted towards 97projects andin1993-94,
$927,206 wascommitted towards 86projects. Generally, contributions areinthe$5,000.00-$50,000.00
range.
(b) Effect oftheprogramme
TheCAFDI encourages economic development intheCanadian agri-food sector byproviding
financial assistance forselected projects which contribute toimproved competitiveness, more market
responsiveness andgreater self-reliance intheagri-food sector. TheCAFDI encourages national policies
which reflect regional diversity andsustainable agricultural practices.
4. Farm Income Protection ActRevised Statutes Canada Chapter 22(1991)
(a) Nature andextent oftheprogramme
(i) Background andauthority
TheFarmIncomeProtectionAct(FIPA)providesincomestabilizationforfarmersacrossCanada.
Ittookeffect 1April 1991. FIPA reflects acollective government-industry effort tocreate anintegrated
safety netforfarmers.
(a) anetincome stabilization account programme (NISA);G/SCM/N/3/CAN
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(b) agross revenue insurance programme (GRIP);
(c) arevenue insurance programme (eg: National Tripartite Stabilization Programme
(NTSP));
(d) andacropinsurance programme.
Collectively these programmes offercomplementary protection fortheagricultural industry.
These programmes areguided bythefollowing principles:
(i) market neutrality,
(ii) equity among commodities andrecognition ofregional diversity,
(iii) long-term social andeconomic sustainability offarmfamilies,
(iv) consistency withinternational obligations,
(v) long-term economic andenvironmental sustainability.
FIPA reflects atripartite approach toriskprotection. TheFIPA programmes aremanaged
inconjunction withthefederal government, provinces andproducers. Byvirtue oftheirtripartite nature,
theprogrammes share many common characteristics such asshared responsibility forfinancial
contributions, policy andprogramme development.
These programmes:
- stabilize farmer incomes through market riskoryield protection,
- aretripartite inthattheyarecostshared byproducers, provincial andfederal
governments,
- arenational, notregional inscope,
- arevoluntary withfarmers, whomaysignupforany,all,oracombination (except
forproducers subject toNTSP agreements),
- areestablished through federal-provincial agreements,
- areadministered andfunded through Agriculture andAgri-food Canada andthe
Consolidated Revenue Fund atthenational level,
- promote equity among regions andproducers,
- address short-term production andmarket riskswhile permitting farmers toadjust to
long-term price andmarket trends.
Products covered byFIPA account for90percentofallfarmproduction, interms ofnumber
ofproducts, about 73percentofthevalue offarmproduction, measured byfarmcashreceipts, and
over99percentofCanada 'sseeded acreage.G/SCM/N/3/CAN
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(b) Effect ofprogramme
FIPA callsforthese various complementary agreements inorder tocreate acomprehensive
riskprotection programme. Theuseofseveral components isnecessary because thediversity of
products, prices, costs, markets, cycles anddatacollection capabilities within theagricultural sector
make itdifficult tostabilize farmincome through anysingle method.
5. NetIncome Stabilization Account Programme
(a) Nature andextent ofprogramme
(i) Background andauthority
Under theauthority oftheFarm Income Protection Act,theNetIncome Stabilization Account
(NISA) programme wasestablished toassist producers instabilizing theirfarming income. Producers
reporting netsales ofgrains, oilseeds, special crops, edible andnon-edible horticulture, honey and
ranch furswereeligible toparticipate inNISA. Thecommodities eligible forcontribution wereprovince
specific. Theprogramme isongoing.
(ii) Incidence
Participants annually deposit 2percentoftheireligible netsales intotheirownindividual
stabilization account. Participants 'deposits arematched bycontributions fromthefederal andprovincial
governments at1percenteach. Producer participation isvoluntary.
Producer withdrawals fromtheiraccounts areallowed iftheircurrent yeargross margin declines
relative totheiraverage margin fortheprevious fiveyearperiod. Also, withdrawals areallowed if
theirnetincome isbelow aminimum threshold of$10,000 (or$20,000 forafamily).
(iii) Amount ofpayment
These amounts represents payments intoproducer 'sNISA accounts fortheidentified taxyear:
Contributions
($million)
Stabilization year Federal Provincial
1990 $87.3 $75.5
1991 $66.3 $59.8
1992 $64.8 $63.3
1993 $75.8 (est) $76.0 (est)G/SCM/N/3/CAN
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(iv) Payment perunit
Payments perAccount ($/account)
Stabilization year
1990 $989
1991 $883
1992 $969
1993 $1,223.4 (est)
(b) Effect oftheprogramme
Theprogramme allows producers theopportunity forlong-term farmincome stabilization.
Theprogramme reduces thepotential impact ofvarying income levels resulting inthemisallocation
ofresources.
II.LIVESTOCK AND PRODUCTS
A. DAIRY PRODUCTS
1. Agricultural support fordairy products
(a) Nature andextent oftheprogramme
(i) Background andauthority
TheFederal Government supports theprice received bydairy farmers through anoffer to
purchase programme complemented bydairy subsidy. Agovernment agency, theCanadian Dairy
Commission, supports theprice ofindustrial milkthrough offering topurchase butter andskimmilk
powder ataprice incombination withadirect payment sufficient tomaintain thetarget return setfor
dairy farmers. Milk production inCanada isrestricted through farmlevelproduction quotas. The
nationalsupplymanagementsystemforindustrialmilkisgovernedbyajointfederal/provincialagreement
administered bytheCanadian Dairy Commission.
InJuly1990, theMinister ofAgriculture gavetheCanadian Dairy Commission themandate
toestablish dairy target andsupport prices for1August 1990 and1February 1991, afterreceiving
advice from itsConsultative Committee. Prior to1August 1990, federal cabinet determined these
prices. Thisauthority hasbeenextended tothe1994-95 dairy year.
(ii) Incidence
Federal dairy support policy consists ofsupporting themarket prices ofbutter andskimmilk
powder through anoffer-to-purchase programme andmaking direct payments under aquota system
tofarmers formilkandcream usedforthemanufacture ofindustrial dairy products.G/SCM/N/3/CAN
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(iii) Amount ofpayment
For1994-95, theamount ofdirect subsidy payments bytheCDC onindustrial milkandcream,
wassetatarateof$5.43 perhectolitre ofmilkmeasuring 3.6kilograms ofbutterfat foratotalpayout
of:
Dairy year ($million)
1988-89 279.593
1989-90 265.795
1990-91 254.286
1991-92 238.280
1992-93 238.728
1993-94 222.907
(iv) Support prices: ($/Kg)
Dairy year Butter Skim milkpowder
1988-89 5.102 3.013
1989-90 5.167 3.046
1990-91 5.331 3.130
1991-92 5.331 3.304
1992-93 5.317 3.304
Feb1/93* 5.363 3.339
1993-94 5.324 3.498
1994-95 5.324 3.708
* CDC announcement toincrease support price forbutter andskim milkpowder.
(b) Effect ofprogramme
Thefundamental objectives oftheCanadian dairy support programme aretoprovide efficient
milkproducers withtheopportunity toobtain afairreturn fortheirlabour andinvestment andtoprovide
consumers ofdairy products withacontinuous andadequate supply ofhighquality dairy products.G/SCM/N/3/CAN
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(iv) Payment perunit(total)
($/Head)
Feeder Slaughter Cow/Calf
1988 Q1 0.00 37.91 0.00
Q2 0.00 42.45 0.00
Q3 32.79 100.95 0.00
Q4 38.56 87.92 0.00
1989 Q1Jan. 0.00 17.09 0.00
Feb. 0.00 3.02 0.00
Mar. 3.96 0.00 0.00
Q2Apr. 16.62 44.50 0.00
1989 May 23.68 59.83 0.00
(Cont 'd) Jun. 9.32 68.58 0.00
Q3Jul. 0.00 49.30 0.00
Aug. 0.00 10.28 0.00
Sep. 1.65 17.35 0.00
Q4Oct. 0.00 12.93 0.00
Nov. 0.00 29.21 0.00
Dec. 0.00 5.16 0.00
1990 Q1Jan. 0.00 0.00 0.00
Feb. 0.00 0.00 0.00
Mar. 11.45 11.96 0.00
Q2Apr. 0.00 0.00 0.00
May 0.00 10.23 0.00
Jun. 0.00 0.00 0.00
Q3Jul. 0.00 0.00 0.00
Aug. 0.00 0.00 0.00
Sep. 0.00 0.00 0.00
Q4Oct. 0.00 0.00 0.00
Nov. 0.00 0.00 0.00
Dec. 0.00 0.00 0.00G/SCM/N/3/CAN
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Feeder Slaughter Cow/Calf
1991 Q1Jan. 0.00 0.00 0.00
Feb. 0.00 0.00 0.00
Mar. 0.00 0.00 0.00
Q2Apr. 0.00 0.00 0.00
May 0.00 0.00 0.00
Jun. 0.00 0.00 0.00
Q3Jul. 0.00 33.68 0.00
Aug. 0.00 98.09 0.00
Sep. 0.00 131.06 0.00
Q4Oct. 11.44 137.53 0.00
Nov. 51.59 189.67 0.00
Dec. 55.34 132.86 0.00
1992 Q1Jan. 68.01 90.25 0.00
Feb. 54.13 17.13 0.00
Mar. 31.35 0.00 0.00
Q2Apr. 2.60 0.00 0.00
May 0.21 0.00 0.00
Jun. 0.00 0.00 0.00
Q3Jul. 0.00 0.00 0.00
Aug. 0.00 0.00 0.00
Sep. 0.00 0.00 0.00
Q4Oct. 0.00 0.00 0.00
Nov. 0.00 0.00 0.00
Dec. 0.00 0.00 0.00
1993 Q1Jan. 0.00 0.00 0.00
Feb. 0.00 0.00 0.00
Mar. 0.00 0.00 0.00
Q2Apr. 0.00 0.00 0.00
May 0.00 0.00 0.00
Jun. 0.00 0.00 0.00
Q3Jul. 0.00 0.00 0.00G/SCM/N/3/CAN
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Feeder Slaughter Cow/Calf
Aug. 0.00 0.00 0.00
Sep. 0.00 0.00 0.00
Q4Oct 0.00 0.00 0.00
Nov. 0.00 0.00 0.00
Dec. 0.00 41.55 0.00
(b) Effect oftheprogramme
Payments helpstabilize producers 'income byreducing short-term price shocks.
4. Feed Freight Assistance Programme
(a) Nature andextent oftheprogramme
(i) Background andauthority
Under thisprogramme, theFederal Government paysaportion ofthetransportation costs
incurred inshipping feedgrains tousersinfeeddeficit areasofBritish Columbia, theYukon, Northwest
Territories,AtlanticCanadaandtheperipheralregionsofOntario(suchasNorthernOntario)andQuebec
(such asGaspé). Thisprogramme isadministered bytheLivestock FeedBureau, Grains &Oilseeds
Branch, Agriculture andAgri-Food Canada.
(ii) Incidence
Thefreight assistance ratesareseteligible individual destinations based upon theweighted
average costoftransportation overtheleastcostroute.
(iii) Amount ofthepayment
Expenditures onfeedfreight assistance were $18.2 million inthe1988-89 cropyearon1.9
million tonnes ofgrain; $16.6 million in1989-90 on1.5million tonnes; $16.6 million in1990-91 on
1.4million tonnes ofgrain; $17.7 million in1991-92 on1.4million tonnes ofgrain; $17.5 million
in1992-93 on1.4million tonnes ofgrain and$17.8 million in1993-94 on1.4million tonnes ofgrain.
(iv) Estimated payment perunit
During the1989-90 cropyear, theaverage expenditure was$10.97 pertonne shipped under
theprogramme; during the1989-90 cropyearitwas$10.31; during the1990-91 cropyear, itwas
$11.82 pertonne. Theaverage expenditure pertonne shipped was$12.27 in1991-92, $12.25 in1992-93
and$12.97 in1993-94.
(b) Effect oftheprogramme
Thefeedfreight assistance programme reduces thefreight costoftransporting feedgrains to
eligible areas.G/SCM/N/3/CAN
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5. Atlantic Livestock Feed Development Initiative
(a) Nature andextent ofprogramme
(i) Background andauthority
Theinitiative wasapproved under theauthority ofSection 5oftheDepartment ofAgriculture
ActandSubsection 6(2)oftheGovernment Organization Act,Atlantic Canada, 1987.
TheAgreement wasdesigned topromote thedevelopment ofthelivestock feedindustry in
theAtlantic provinces andtoassist them toachieve livestock feedself-sufficiency.
TheAgreement included anumber ofprogrammes which were designed to:
- increase thequantity andquality oflivestock andpoultry feedproduced intheprovinces;
- promote thedevelopment andproduction ofnewand/or improved feeds;
- improve feedproduction, processing andutilization systems;
- improve producers 'technical andmanagerial skills related tofeedproduction.
Theagreement wasadministered byajointfederal/provincial management committee, assisted
byanimplementationcommitteeforeachprogramme.Thefundingratiowasan80/20federal,provincial
commitment.
Theprogramme terminated attheendoffiscal year1993-94.
(ii) Incidence
Applications were made throughout thetermoftheagreement andreviewed foreligibility
purposes onaregular basis overthelifeoftheAgreement. Payments were made intheform ofa
contribution when project approval wasgiven.
(iii) Amount ofpayment
Fiscal year Federal funds
($'000)
1988-89 7,800
1989-90 7,385
1990-91 8,887
1991-92 4,951
1992-93 1,424
1993-94 848
These funds were distributed intheform ofcontributions.G/SCM/N/3/CAN
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(iv) Payment perunit
Notapplicable. (Notallprojects were on-farm.)
(b) Effect oftheprogramme
Theoverall effect oftheprogramme wastoimprove thequantity andquality offeedproduction.
6. Special Atlantic Livestock Initiative
(a) Nature andextent oftheprogramme
(i) Background andauthority
AttheFederal/Provincial Ministers 'andDeputy Ministers 'meeting atPrince Albert in
August 1989, special assistance of$6.0million wasagreed toasatemporary support measure toassist
hog,sheep andbeefproducers inAtlantic Canada experiencing financial difficulty.
Theprogramme isnolonger active.
(ii) Incidence
Hogproducers received support forallweaners andhogsmarketed andindexing 100andabove
onbackfat, between 1April 1989and31March 1990. Beefproducers received support onallcarcasses
grading A1,A2and/or beeffeeder cattle andreplacement heifers marketed in1989fromabeefcow/calf
herd. Sheep producers received assistance formarket lambs and/or breeding stock thatwerebothless
thanoneyearofageandmarketed in1989.
(iii) Amount ofpayment
Total Payment*
($'000)
Fiscal year Hog Beef Sheep
1989-90 1,424 899 0
1990-91 2,040 674 120
1991-92 256 292 44
*Including grants andcontributions.
(iv) Amount perunit
Hogproducers received $1.77 pereligible weaner marketed and$2.66 pereligible feeder
marketed between 1April 1989and31March 1990. Beefproducers received $37.19 pereligible feeder
marketed from abeefcow/calf herd, and/or $37.19 pereligible carcass grading A1andA2from a
feedlot.Beefproducers raising ananimal from abeefcow/calf herdthrough toslaughter received
$49.64 pereligible carcass grading A1andA2.Sheep producers received $13.97 pereligible market
lamb ofbreeding stock.G/SCM/N/3/CAN
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(b) Effect ofmarketing programme
Theeffect oftheinitiative wastoassist hog,sheep andbeefproducers experiencing financial
difficulty.
7. Livestock Drought Assistance Programme (LDAP)
(a) Nature andextent oftheprogramme
(i) Background andauthority
Under theAuthority ofthePrairie Farm Rehabilitation Act(PFRA), theLivestock Drought
Assistance Programme wasusedtoprovide financial assistance tolivestock producers within adrought
affected areasothatthese producers could avoid areduction oftheirbreeding herds. Unusually low
winter andspring precipitation combined withunusually hotspring resulted insevere reductions in
pasture andforage yield. Approximately 70percentofprairie livestock wereindrought affected areas.
Afederal-provincial coordinating committee recommended theprogramme toprovide assistance to
producers tohelpthem maintain theirbreeding herdnumbers.
(ii) Incidence
TheLivestockDroughtAssistanceProgramme(LDAP)provided$112millionindirectpayments
tohelplivestock producers maintain theirbreeding stock. PFRA wasresponsible foradministering
LDAP inManitoba andSaskatchewan andforassisting withprogramme administration inBritish
Colombia, Alberta andOntario. LDAP wasfunded equally byCanada andtheprovinces. Payment
levels were calculated onaregional basis ineachprovince. Payment rates ineachregion were
determined onthebasis of1988 forage yields compared tonormal forthearea. cropInsurance and
other available datawere usedtomake thedeterminations. Payments werepro-rated based onland
locations where theproducer normally produced forage, orifforage wasmostly purchased, where
his/her cattle were wintered.
Eligible animals were bredcows andheifers forbothbeefanddairy operations, bredewes
andnanny goats, mares andfillies aswellasherdsires. Elkfemales werealsoeligible inSaskatchewan.
Aninitial andfinalpayment system wasusedforthisprogramme. Maximum payments were
$60/head forcattle, horses, andbison, and$12/head forsheep, goats andelk.Minimum payments
were $5/head forcattle, horses andbison, and$1/head forsheep, goats andelk.
Final payments were contingent onproducers enroling inforage insurance programmes.
(iii) Amount ofpayment
TheLivestock Drought Assistance Programme (LDAP) provided twopayments tolivestock
producers indrought-stricken areas tohelpthem maintain theirbreeding stock. Thefirstonewasin
the1988-89 fiscal yearandthesecond oneinthe1989-90 fiscal year.G/SCM/N/3/CAN
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Provinces Applicants paid Eligible animals Federal contributions
1988-89
($'000)1989-90
($'000)
British
Colombia 139 * 632 238
Alberta 13,820 1,194,057 12,824 10,523
Saskatchewan 19,529 997,858 14,282 11,774
Manitoba 8,685 498,810 5,464 4,794
Ontario 14,415 756,799 2,225 1,889
Total 56,588 3,447,524 35,428 29,218
*InBritish Colombia, payment wasbased onthelesser ofeligible animals ortonsoffeed
purchased.
(iv) Payment perunit
Notapplicable. Thisprogramme paidoutdiffering amounts, varying byregion andspecies
ofanimal.
(b) Effect oftheprogramme
Themost significant impact oftheprogramme wastheretention ofthebreeding herdinthe
drought areas. Farmers hadtokeeptheirbreeding herds toqualify forprogramme payments. The
payments helped topayforneeded feedornewsupplies fortheirherds.
III.CROPS AND PRODUCTS
A. GENERAL
1. Advance Payments forCrops Act(APCA)
(a) Nature andextent oftheprogramme
(i) Background andauthority
TheAdvance Payments forCrops Act(APCA) isavoluntary programme enacted in1977.
Itapplies toallstorable crops grown inCanada, except wheat, oatsandbarley grown intheCanadian
WheatBoarddesignatedarea(seenextsectiononPGAPA).Itprovidesguaranteesandfundsonprincipal
theinterest thereby allowing producer organizations tomake acashadvance (loan) tomembers up
to$250,000. Advances arerepaid when thecrops aremarketed. Thecommodity secured loanprovides
producers withfinancial flexibility todefermarketing tomorefavourable times. Producer organizations
usetheloanguarantee tonegotiate more favourable interest ratesfromcommercial lending institutions.
Theprogramme isadministrated byAgriculture andAgri-Food Canada andvarious producer
organizations across Canada, which signanagreement toestablish alineofcredit withalendingG/SCM/N/3/CAN
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institution tofundtheadvances. Theinterest-free aspect ofAPCA wasremoved forthe1989-90 crop
year,andtheadvances became interest-bearing atcommercial rates. Interest-free provisions, invarious
forms, werereinstated forthe1990-91 andsubsequent cropyears through theCashFlow Enhancement
Programme (CFEP).
AgricultureandAgri-FoodCanadaguaranteesrepaymentof98percentoftheamountaproducer
organization borrows from abank andtheinterest onbankloans made inaccordance withtheAct.
Agriculture andAgri-Food Canada alsoprescribes therateofadvance perunitofcropanddetermines
themaximum guarantee foreachcommodity organization.
(ii) Incidence
During 1993-94, advance payments wereavailable toproducers ofpotatoes, carrots, rutabagas,
onions, cabbage, apples, pears, sunflower seeds, oats,corn, barley, honey, rye,tobacco, soybeans,
canola, alfalfa seed, leeks, andflax.
(iii) CostoftheAPCA
Total Interest Costs
($million)
Crop year
1988-89 $11.2
1989-90 $0.0
1990-91 $11.2
1991-92 $8.3
1992-93 $4.0
1993-94 $2.0
(iv) Costperparticipating producer
Interest Costs perParticipating Producer
Crop year
1988-89 $1,160
1989-90 $0
1990-91 $1,125
1991-92 $767
1992-93 $550
1993-94 $347G/SCM/N/3/CAN
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(b) Effect oftheprogramme
Theprogramme supports orderly marketing byproviding cashflowforproducers atharvest
time, thereby reducing pressure tomarket untilsupply anddemand arebetter balanced.
2. Crop Insurance
(a) Nature andextent oftheprogramme
(i) Background andauthority
TheCrop Insurance Actof1959, revised in1990, enabled theFederal Government toenter
intoanagreement withanyprovince tomake contributions towards thepremium, orthepremium and
theadministration costs ofthatprovince 'sinsurance scheme. Risk-sharing arrangements could also
bemade bywayofloans orreinsurance ofpartoftheprovince 'sliability whenever indemnities greatly
exceeded premiums andreserves. InApril 1991 theFarm Income Protection Act(FIPA) received
Royal Assent. Asaresult, theCrop Insurance Actwasrevoked andthecropinsurance programme
isnowcovered under FIPA asacomponent ofanintegrated safety netsystem.
(ii) Incidence
In1988-89 shared costagreements were operative withalltenprovinces. Theprogrammes
operated onajointbasiswithproducers, provincial governments andtheFederal Government sharing
thecostofoperating theprogrammes. InQuebec andNewfoundland theFederal andProvincial
Governments eachpaid25percentofthetotalpremium andshared thecostofadministering the
programme. Theproducers paidtheremaining 50percent. Inallother provinces, farmers andthe
Federal Government eachpaidonehalfoftheinsurance premium andtheprovincial governments
absorbed theadministration costs. The1990amendments provided forasingle costsharing formula
allowing foreachlevelofgovernment tocontribute 25percentofthecropinsurance premium and
anequal sharing oftheadministration costs.
Farmers paid50percentofthepremium costs.
(iii) Amount ofthepayment
SeeGross Revenue Insurance Plan(GRIP) inCROPS AND PRODUCTS section, subsection A,
item5(a)(iii).
(iv) Payment perunit
SeeGross Revenue Insurance Plan(GRIP) inCROPS AND PRODUCTS section, subsection A,
item5(a)(iv).
(b) Effect oftheprogramme
CropInsurance stabilized afarmer 'sincome bymoderating theeconomic effects ofcroplosses
caused bynatural events. Producers andgovernments paypremiums intocropinsurance accounts.
Payouts arebased onafarmer 'saverage cropyield andaretriggered when afarmer suffers ayield
lossduetoacovered hazard. FIPA authorizes cropinsurance asanoption under GRIP orthrough
separate cropinsurance agreements. Theproducer share ofcropinsurance premiums is50percentG/SCM/N/3/CAN
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andtheFederal andProvincial Government shares areeach25percentunder bothcropinsurance
agreements andthecropinsurance option ofGRIP.
3. Farm support andadjustment measures
(a) Nature andextent oftheprogramme
(i) Background
InApril1991,theFarmSupportandAdjustmentMeasuresI(FSAMI)wasannouncedproviding
financial assistance toproducers ofgrains andoilseeds, special crops andhorticulture. Itprovided
additional income andcashflowstability toproducers through initiatives thatcomplemented thesafety
netprogrammes,encouraginggreaterproducerparticipationintheGrossRevenueInsuranceProgramme
(GRIP), theNetIncome Stabilization Account Programme (NISA).
TheFSAM IIinitiative wasannounced inOctober 1991, toprovide financial assistance to
producers ofgrains andoilseeds, special crops, horticulture andother commodities. FSAM IIwas
developed primarily inresponse tothedevastating effects oftheongoing downward trend inprices
forgrains aswellasthepoormarket returns received byhorticulture producers andother commodity
growers.
Theshort-termincomeassistanceinitiativesaddressedfarmers'immediateincomeneedsthrough
measures which builtonlonger-term adjustment andincome stabilization programmes thusbridging
thegapbetween short-term needandlong-term protection. These provisions fellunder theauthority
oftheFarm Income Protection Act.
(ii) Incidence
FSAM Iprovided aGRIP premium reduction, anincentive forNISA participation, anextension
oftheCash Flow Enhancement Programme, anenhancement ofthePermanent Cover Programme,
andspecial measures forthehorticulture sector.
FSAM IIwasalmost entirely anacreage payment tograin producers.
(iii) Amount ofpayment
FSAM I/II
Fiscal year Total payment*
($'000)
1991-92 $632,492
1992-93 $475,497
1993-94 $24,746
*Onacashaccounting basis.
(iv) Payment perunitG/SCM/N/3/CAN
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Given thevariation inthecomponents ofFSAM, average payments perproducer orperunit
aremeaningful.
(b) Effect oftheprogramme
While assisting producers whowere experiencing significant income declines FSAM Iand
FSAM IIwere partially responsible forhigh levels ofparticipation inthelong-term safety net
programmes suchasGRIP andNISA.
4. Greenfeed Programme
(a) Nature andextent oftheprogramme
(i) Background andauthority
Under authority ofthePrairie Farm Rehabilitation Act(PFRA), theGreenfeed Programme
wasusedtoprovide financial incentives toencourage production ofsummer andwinter feedsupplies
forareas significantly affected bydrought intheprairies andtoassist insoilconservation. Unusually
lowwinter andspring precipitation combined withanunusually hotspring resulted insevere reductions
inpasture andforage yield. Approximately 70percentofprairie livestock wereindrought affected
areas. Afederal-provincial coordinating committee recommended theprogramme toprovide livestock
feed, moderate feedprices andencourage theseeding ofbareland.
(ii) Incidence
TheGreenfeed Programme allocated $38million (50/50 costsshared between thefederal and
provincialgovernments)forincentivepaymentstoencouragePrairieproducerstoharvestdrought-affected
grain crops aslivestock feed. PFRA negotiated thecost-shared agreements withtheprovinces and
issued payments onbehalf ofAlberta.
Otherwise,theprogrammewasprimarilyadministeredbyprovincialcropinsurancecorporations.
Thelistofeligible crops varied byprovince andbydateofplanting. Fields required inspection
toascertain thatgreenfeed wasproduced.
(iii) Amount ofpayment
Provinces Applicants paid Acres paid Federal contributions
1988-89
($'000)
Alberta 4,820 535,000 4,009
Saskatchewan 10,673 1,350,000 10,812
Manitoba 5,521 673,000 4,219
TOTAL 21,014 2,558,000 19,039G/SCM/N/3/CAN
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(iv) Payment perunit
Theprogramme paidout$15peracre. TheFederal contribution was$7.50 peracre(50/50
costshared withtheprovinces).
(b) Effect oftheprogramme
Theoverall effect oftheprogramme wastoincrease theproduction ofgreenfeed which offset
some ofthefeedshortage inthedrought area. Associated soilconservation benefits were realized
byhaving cover onlandthatmayotherwise havebeenleftbareforanextended period.
5. Gross Revenue Insurance Plan(GRIP)
(a) Nature andextent oftheprogramme
(i) Background andauthority
Attheclose ofthe1990-91 cropyear, theWestern Grain Stabilization Act(anActtoprovide
incomestabilitytograinsandoilseedsproducersintheCanadianWheatBoarddesignatedareaofWestern
Canada) wasrepealed andsuperseded bytheNetIncome Stabilization Account andtheGross Revenue
Insurance Programme under theauthority oftheFarm Income Protection Act.
(ii) Incidence
GRIP isavoluntary planconsisting oftwocomponents: cropinsurance andarevenue protection
component. These canbedelivered asasingle integrated programme ortwoseparate components.
Bothcomponentsarefundedthroughtripartitepremiumcontributions.Thetwocomponentsaredescribed
more fullybelow.
Crop Insurance:
"Crop insurance" stabilizes afarmer 'sincome bymoderating theeconomic effects ofcrop
lossescausedbynaturalevents.Producersandgovernmentspaypremiumsintocropinsuranceaccounts.
Payouts arebased onafarmer 'saverage cropyield andaretriggered when afarmer suffers ayield
lossduetoacovered hazard. FIPA authorizes cropinsurance asanoption under GRIP orthrough
separate cropinsurance agreements. Theproducer share ofcropinsurance premiums is50percent
andtheFederal andProvincial Government shares areeach25percentunder bothcropinsurance
agreements andthecropinsurance option ofGRIP.
Revenue Insurance:
"Revenue insurance" stabilizes afarmer 'sincome bymoderating theeconomic effects oflosses
duetoshort-term market risks. Itisprovided through agreements thatestablish funds intowhich
producers andgovernments paypremiums. Under these agreements premiums paidbygovernments
andproducersplusinterestmustequalpayoutsovertime.Atargetrevenueandpremiumsareestablished
eachyear. Payments aretriggered when themarket revenue foranenrolled cropfallsbelow thetarget
revenue. Thefarmer receives apayment making upthedifference.
Producers contribute atleast33percentofthepremiums required andtheFederal and
Provincial Governments sharetheremainder ofthepremiums (41 percent)bytheFederal Government
and25percentbytheProvincial Governments.G/SCM/N/3/CAN
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(iii) Amount ofpayment
Federal Contributions
($million)
Crop year Crop insurance premiums GRIP premiums
1988-89 185.28 n.a.
1989-90 305.37 n.a.
1990-91 147.12 n.a.
1991-92 105.78 637.0
1992-93 131.26 584.30
1993-94 126.15 468.60
(iv) Amount perunit
Federal Contributions
($'000)
Crop year Crop insurance premiums GRIP premiums
1988-89 1.0 n.a.
1989-90 2.0 n.a.
1990-91 1.0 n.a.
1991-92 1.0 5.0
1992-93 1.0 5.0
1993-94 1.0 4.0
(b) Effect oftheprogramme
"Gross revenue insurance" stabilizes theincome offarmers through income andyieldprotection
andrepresents acombination ofrevenue insurance andcrop insurance. Thefederal-provincial
implementing agreement istheNational Agreement Establishing aTripartite Gross Revenue Insurance
PlanforCrops (1991).
B. GRAINS AND GRAIN PRODUCTS
1. Western Grain Stabilization Programme (WGSP)
(a) Nature andextent oftheprogramme
(i) Background
Thisvoluntary programme hasbeensubsumed bytheFarm Income Protection Act(FIPA)
since the1991 cropyear. WGSP wasdesigned tostabilize theincome ofwestern grain, oilseed andG/SCM/N/3/CAN
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special cropfarmers byprotecting themagainst asudden dropincashflow. Theprogramme covered
theseven maingrains -wheat, barley, oats,rye,flax,canola, mustard seed-andalistofspecial crops
including triticale, mixed grain, sunflower seed, safflower seed, buckwheat, peas, lentils, fababeans
andcanary seedgrown intheCanadian Wheat Board area. Participating producers paidaspecified
yearly levyrateranging fromalowof2percenttoahighof4percentuntilanallowable individual
maximum ineligible grain saleproceeds wasrealized. Thefederal government 'scontribution equalled
thelevyratepaidbyproducers plusanadditional 2percentonalleligible producer proceeds. The
programme wasadministered bytheWestern Grain Stabilization Administration andthefederal
government paidalladministrative costs.
(ii) Incidence
When thecalculated aggregate netcashincome toproducers ofthecovered commodities was
below theprevious fiveyearaverage, apayment approximately equal tothedifference adjusted for
producerparticipationwastriggeredfromtheStabilizationFund.Theshareofthetotalpaymentaccruing
toeachindividual producer wasinproportion tohis/her contribution intotheprogramme overthelast
three-year period. Participating producers paidin1987-88 alevyatarateof4percentofeligible
grain saleproceeds.
(iii) Amount ofthepayment
There werenopayments made during the1988-89 or1989-90 cropyears. In1990-91 there
wasa$119 million payment triggered.
(iv) Estimated amount perunit
In1990-91 theaverage payment perparticipating producer wasapproximately $948.
(b) Effect oftheprogramme
While compensating producers foruncertainty andvariation intheirreturns duetotemporary
market fluctuations, theprogramme isneutral withrespect toproducers 'choices ofoutput andinput.
2. Western Grain Transportation Act(WGTA)
(a) Nature andextent oftheprogramme
(i) Background
Until January 1984, freight ratesongrains moving outofWestern Canada werebased onlevels
firstsetin1897. Although thesefixedratesoriginally covered therailways 'costsoftransporting grain,
bythe1970'ssignificant problems began tooccur. These problems included large annual railway
revenue losses onhauling grain, reluctance bytherailways toinvest inthegrain transportation system,
andagricultural production distortions inWestern Canada. TheWestern Grain Transportation Act
(WGTA), which became effective 1January 1984 wasdesigned toalleviate these problems.
(ii) Incidence
Under theWGTA, thefederal government isrequired topayabasic portion oftotalrailway
costs oftransporting grain thatisbased onthedifference which existed in1981-82 between thetotal
costoftransporting grainandwhatproducers werethenpaying fortransporting theirgrain. ThefederalG/SCM/N/3/CAN
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government canalsoberequired topayanadditional amount asaresult ofaninflation-sharing provision
oftheWGTA. Alimitwasalsoestablished forproducers 'freight rateincreases sothatfreight rates
donotexceed afixed percentage ofaverage grain prices.
(iii) Amount ofthepayment
Inthe1988-89 cropyearending 31July1989, therailways received $723.5 million fromthe
federal government fortransporting grains andoilseeds, $723.5 million in1989-90, $724.9 million
in1990-91, $724.5 million in1991-92, and$726.1 million in1992-93.
(iv) Estimated amount perunit
Inthe1988-89 cropyear, government payments under WGTA totherailways averaged about
$21.88 pertonne; $21.31 pertonne in1989-90, $21.06 pertonne in1990-91, $21.10 in1991-92,
$21.10 pertonne in1991-92, and$20.14 for1992-93.
(b) Effect oftheprogramme
Theprogramme increases theportion oftransportation costs paidbyprairie grain producers;
provides railways withadequate revenues toinvest innewrolling stock andinfrastructure thereby
improving andexpanding thegrain handling andtransport system; andpartially reduces thedistortions
affecting prairie agriculture because crops andproducts benefit more equitably fromregulated freight
rates.
3. Cash Flow Enhancement Programme (CFEP)
(a) Nature andextent ofthepayments
(i) Background andauthority
CFEP provides non-taxable rebates ofinterest onadvances oflessthan$50,000 forparticipants
intheAdvancePaymentsforCropsAct(APCA)andthePrairieGrainAdvancePaymentsAct(PGAPA).
Itwasdevelopedforthe1990-91cropyear,asproducerswereexperiencingcashflowdifficultiesbecause
ofdepressed markets. Theprogramme hassincebeenextended onayear-to-year basis. ForCFEP IV
(1993-94), theinterest costwasshared onalladvances withtheproducer paying thefirst2¼percent
andthefederal government paying thebalance onthefirst$60,000 ofadvances repaid.
(ii) Incidence
Forthe1993-94 croyear, theinterest-shared provisions ofthecashadvances applied toall
crops covered under thePGAPA andtheAPCA, uptoamaximum of$60,000 forbothprogrammes.G/SCM/N/3/CAN
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(iii) CostoftheCFEP*
Crop year Total interest costs
(million)
1990-91 $85.4
1991-92 $53.0
1992-93 $46.0
1993-94 $15.0
* Costs reported areforboththeAPCA andPGAPA programmes combined.
(iv) Estimated programme costs perproducer
Forthe1993-94 cropyear,44,631 producers under PGAPA and5,560 producers under APCA
participated intheCFEP programme.
Crop year Costperproducer
1990-91 $1,220
1991-92 $757
1992-93 $743
1993-94 $299
(b) Effects oftheprogramme
Theprogramme helps easethecashflowdifficulties forproducers byfacilitating cashadvances
under theAPCA andPGAPA andprovides income assistance through theinterest-free benefit.
4. Agricultural Stabilization Act(ASA)
(forGrains andGrain Products Outside theCanadian Wheat Board Designated Area)
(a) Nature andextent oftheprogramme
(i) Background andauthority
Themainobjective ofthenowrepealed Agricultural Stabilization Act(ASA) wastostabilize
theprices ofagricultural commodities byreducing theriskofshort-term income losses duetofalling
commodity prices and/or rising costs. Thiswasachieved bymaking deficiency payments toproducers
fornamed anddesignated commodities andfederal contributions totheNTSP. Thefunctions ofthe
ASA were subsumed bytheintroduction oftheFarm Income Protection Act(FIPA) in1991.G/SCM/N/3/CAN
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(ii) Incidence
Anamed commodity wasidentified under theASAasanyoneofthefollowing commodities
produced inCanada: cattle, hogs, lambs andwool, industrial milkandindustrial cream; cornand
soybeans; andspring wheat, winter wheat, oatsandbarley notproduced inthedesignated areas as
defined bytheCanadian Wheat Board.
Adesignated commodity wasidentified under theASA asanynatural orprocessed product
ofagriculture (including oatsandbarley produced inthedesignated areas asdefined intheCanadian
Wheat Board Actandnotmarketed through theCanadian Wheat Board) designated bytheGovernor
inCouncil asanagricultural commodity.
Deficiency payments were made directly toproducers forthedifference between theannual
average market priceandasupport levelbased onapercentage oftheprevious five-year average market
price foreachproduct, indexed forchanges incashcosts ofproduction. Payments foraparticular
cropyearcould continue overseveral years, asfarmrecords aresubmitted.
(iii) Amount ofpayment
Payments made inthe1990-91 cropyear
Year forwhich farm
records aresubmittedCommodity Payments
(Total)
1985 corn $5,587
1985 soybeans $2,661
1986 barley $29,421
1986 corn $60,592
1986 oats $1,098
1986 spring wheat $4,096
1987 barley $38,499
1987 canola $3,222
1987 corn $329,122
1988 canola $216,533
1989 canola $237,278G/SCM/N/3/CAN
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Payments made inthe1991-92 cropyear
Year forwhich farm
records aresubmittedCommodity Payments
(Total)
1985 barley $232
1985 soybean $1,261
1986 barley $2,811
1986 corn $9,398
1986 spring wheat $949
1987 barley $9,275
1987 corn $32,261
1987 oats $12
1988 canola $18,341
1989 canola $19,495
1989 soybean $17,917,882
1990 oats $57,872
1990 soybean $1,854,528
1990 spring wheat $496,416
1990 winter wheat $8,232,897
(iv) Payment perunit
Payments made inthe1990-91 cropyear
Year forwhich farm
records aresubmittedCommodity Payments
perunit
1985 corn $8.92/t
1985 soybean $15.53/t
1986 barley $17.69/t
1986 corn $29.70/t
1986 oats $12.88/t
1986 spring wheat $13.44/t
1987 barley $19.77/t
1987 canola $81.25/t
1987 corn $11.85/t
1988 canola $14.28/t
1989 canola $12.39/tG/SCM/N/3/CAN
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Payments made inthe1991-92 cropyear
Year forwhich farm
records aresubmittedCommodity Payments
perunit
1985 barley $2.46/t
1985 soybean $15.53/t
1986 barley $17.69/t
1986 corn $29.70/t
1986 spring wheat $13.44/t
1987 barley $19.77/t
1987 corn $11.85/t
1987 oats $0.51/t
1988 canola $14.28/t
1989 canola $12.39/t
1989 soybean $16.35/t
1990 oats $1.36/t
1990 soybean $2.01/t
1990 spring wheat $42.96/t
1990 winter wheat $6.94/t
(b) Effects oftheprogramme
Agricultural Stabilization Board payments helped stabilize producers 'incomes byreducing
theimpact ofshort-term priceshocks. Byinsulating incomes against short-term disruptions inmarket
conditions, thisprogramme helped prevent themisallocation ofresources.
5. Prairie Grain Advance Payments Act(PGAPA)
(a) Nature andextent oftheprogramme
(i) Background andauthority
PGAPA isavoluntary programme enacted in1957 andapplies towheat andbarley grown
intheCanadian Wheat Board (CWB) designated area. ThePGAPA allows producers toreceive a
cashadvance (loan) priortocropsales/delivery when salesopportunities arerestricted duetodelivery
quota constraints, congested elevators, shortage oftrains onsome trainrunsandother delivery and
marketing problems.G/SCM/N/3/CAN
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Under thestatute, advances toindividual producers areavailable upto$250,000 minus advances
taken under theAdvance Payments forCrops Actbased oncrops instorage. Theadvances arerepaid
ascropissold, either bydeduction from CWB initial payments orbycash. ThePGAPA provides
afederal guarantee offunds advanced andassociated interest costs.
Theprogramme isadministrated bytheCWB. TheCWB usesitsexisting lineofcredit with
thefinancial institutions tofundtheadvances.
(ii) Incidence
Theinterest-freeaspectofPGAPAwasremovedforthe1989-90cropyear,andadvancesbecame
interest-bearing atcommercial rates. AsinthecaseoftheAPCA, interest-free provisions, invarious
forms, werereinstated forthe1990-91 andsubsequent cropyears. Advances made toproducers totalled
$1.1billion in1992-93 while $800 million wasadvanced inthe1993-94 cropyear.
(iii) CostofthePGAPA
Crop year Total interest costs
(million)
1988-89 $14.7
1989-90 $0.0
1990-91 $74.2
1991-92 $45.1
1992-93 $42.0
1993-94 $13.0
(iv) CostperProducer
Crop year Interest perproducer
1988-89 $680
1989-90 $0
1990-91 $1,071
1991-92 $743
1992-93 $769
1993-94 $291
(b) Effects oftheprogramme
Theprogramme supports orderly marketing byproviding cashflowatharvest, thereby reducing
pressure tomarket untilsupply anddemand arebetter inbalance.G/SCM/N/3/CAN
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6. AtandEastGrain andFlour Subsidy Programme
(a) Nature andextent oftheProgramme
Thisprogramme wasterminated asof15July1989 withfinalsubsidies paidin1990.
(i) Background andauthority
TheAtandEastGrain andFlour Subsidy Programme, which wasadministered bytheNational
Transportation Agency, provided subsidies totherailways on:
- grainmoving forexport, received atportsonGeorgian Bay,LakeHuron, Lake Ontario
andtheupper St.Lawrence asfarasPrescott, andtransported byrailtoports east
ofandincluding Montreal; and
- flour moving forexport from points eastofThunder Bay,andtransported byrailto
ports eastofandincluding Montreal.
(ii) Incidence
Theamount ofthesubsidy wasequal tothedifference between therevenues received bythe
railways from freight ratesfrozen atthelevelwhich wereineffect inthe1960s, andtheactual costs
which theyincurred onthese movements.
(iii) Amount ofpayment
Payments were$33.7 million forcalendar year1988and$18.8 million forcalendar year1989.
Thefinalpayment, in1990, was$288,896.
(iv) Payment perunit
1988 Flour
Grain$65.99/tonne (average)
$26.43/tonne (average)
1989 Flour
Grain$65.84/tonne (average)
$25.63/tonne (average)
1990 Flour $69.80/tonne (average)
(b) Effect oftheprogramme
Thisprogramme evolved inresponse toa1959 ratereduction byUnited States railways for
grain movements frompoints "atandeast"ofBuffalo, NewYork toAtlantic ports. Theintent ofthe
programmewastoensurethatCanadiangrainandflourshipmentswouldcontinuetobeexportedthrough
Canadian eastcoastports, rather thanthrough competing United States ports. Thiscompetitive concern
nolonger exists since thecostofshipping byrailtoUnited States ports isnowconsiderably higher
thanthecostofshipping bywater through theGreat Lakes/St. Lawrence Seaway. Thesubsidy had
theeffect ofdiverting traffic awayfromtheSeaway infavour ofsubsidized railmovements, inconsistent
withthegovernment 'smarket-oriented transportation policy. These programmes were terminated
effective 15July1989 andareexpected toresult inannual savings ofabout $40million.G/SCM/N/3/CAN
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7. Freight Charges Equalization Programme
(a) Nature andextent oftheprogramme
IntheApril 1989 Budget theannouncement oftheelimination ofthe"atandEast" subsidy,
alsoreferred tothetermination, effective 15July1989 ofpayments towestern flour millers through
thisequalization programme.
(i) Background andauthority
Section 272oftheRailway Actfroze the"stop-off" ratetoflourmills inEastern Canada "for
thepurpose ofencouraging thecontinued useoftheEastern ports fortheexport ofgrain andflour".
Appropriations under theFreight Charges Equalization Programme aredesigned toequalize freight
charges between eastern andwestern Canada onthetransport offlour forexport markets. This
programme wasadministered byAgriculture Canada.
(ii) Incidence
Payments wereissued tomillers inWestern Canada inorder toequalize thefreight "stop-off"
charges between Eastern andWestern Canada ongrain which isprocessed intoflour forexport.
(iii) Amount ofthepayment
Payments under thisprogramme forfiscal year1987-88 were$770,800, forfiscal year1988-89
were $526,300 andforfiscal year1989-90 were $306,178.
(iv) Estimated payment perunit
Thestop-off ratetoEastern mills wasfrozen under Section 281oftheRailway Actat$0.66
pertonne. Thestop-off ratetoWestern mills wassetatcompensatory levels which wasdetermined
tobe$6.90 pertonne.
(b) Effects oftheprogramme
Thispayment provided Western andEastern Canadian millers withequal access toflourexport
markets. Itremoved thedisadvantage faced bywestern millers whowereconstrained bythehigher
compensatory "stop-off" ratesonthetransport ofrawgrain visàviseastern millers whopaidafixed
rateof66cents pertonne.
8. Special Canadian Grains Programmes (SCGP IandSCGP II)
(a) Nature andextent oftheprogramme
(i) Background andauthority
Under theauthority ofAgriculture Canada, theSpecial Canadian Grains Programme (SCGP)
reduced theimpact oftheEuropean Community/United States subsidy waronCanada 'sgrain sector
byenhancing thecashflowofCanadian grain producers.G/SCM/N/3/CAN
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(ii) Incidence
Beneficiariesweretheeligibleproducersofspecificcropsin1986/87forSCGPI,andin1987/88
forSCGP II.TheSCGP Ispecial cashpayment wasmade onthe1986-87 crop, withpayments to
producers in1988. Payments were calculated onthebasis ofseeded acreage ofeligible crops and
average yields. Assistance ratesreflected theprice declines thatarose ineachcommodity from the
European Community/United States trade dispute. Payments forSCGP IIwere received in1989.
Cropscoveredundertheprogrammewerewheat,barley,oats,rye,mixedgrains,corn,soybeans,
canola, flaxandsunflower seeds, specialty crops andhoney.
SCGPIIpaymentswerealsomadeonsummerfallowwithintheCanadianWheatBoarddesignated
area. Grains usedforsilage, forage seed, green feedandhaywereexcluded. Payments werelimited
to$25,000 perproducer.
(iii) Amount ofpayments
UnderSCGPII,programmeassistanceof$1,067millionwaspaidto214,559recipients.SCGPI
paidoutapproximately $984 million. Administration costs wereapproximately $8million foreach
programme.
(iv) Estimated payment perunit
Average payment perrecipient was$4,974 forSCGP IIand$4,913 forSCGP I.
(b) Effect oftheprogramme
The programmes helped offset low world grain prices caused by the
European Community/United States subsidy warbyenhancing cashflowofCanadian grainproducers.
9. Two-Price Wheat Programme
(a) Nature andextent oftheprogramme
(i) Background andauthority
Theobjective oftheTwo-Price Wheat Programme (TPWP) wastoprovide price stability to
domestic millers byinsulating thedomestic wheat price from international fluctuations. Protection
wasthereby afforded consumers against highworld prices andproducers against depressed prices.
TheTwo-Price Wheat Programme waseliminated asof31July1988. Itwasreplaced with
aone-year transitional programme entitled "Two-Price Wheat Assistance Payments". Thisprogramme
wasdesigned tomaintain thesame levelofdomestic producer benefits asthere otherwise would have
been.
(ii) Incidence
Prior toAugust 1988, theCanadian Wheat Board maintained thedomestic price tomillers at
$7.00 perbushel. Thecorresponding export pricewasapproximately $4.00 perbushel. Thedifference
between thedomestic price andtheworld price hadbeenpaidindirectly byconsumers.G/SCM/N/3/CAN
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Thedomestic price ofwheat isnowbased ontheNorth American market. Payments under
theTPWP were made through thepoolaccounts toproducers.
(iii) Amount ofpayments
TotalpaymentsthroughTwoPriceWheatassistanceforthecropyear1988/89were$87million.
(iv) Estimated payment perunit
RedWheat $36.90/tonne
White Wheat $47.97/tonne
Durum Wheat $3.83/tonne
(b) Effects oftheprogramme
Theprogramme helped protect consumers against highworld prices andproducers against
depressed prices. Thetransitional programme wasaoneyearadjustment programme forproducers.
C. OILSEEDS AND OILSEED PRODUCTS
1. Agricultural stabilization foroilseeds andoilseed products
(a) Nature andextent oftheprogramme
(i) Background andauthority
UnderauthorityoftheAgriculturalStabilizationAct(ASA),theAgriculturalStabilizationBoard
stabilized therevenues ofnamed commodities including soybeans. Support prices were setata
percentage oftheprevious five-year average market price indexed forchanges inthecashcosts of
production. Other commodities suchascanola could bedesignated forsimilar support from timeto
time. TheASA hasbeensubsumed bytheFarm Income Protection Act(FIPA) since 1991.
(ii) Incidence
Fornamed commodities, deficiency payments weremade directly toproducers forthedifference
between theannual average market price andapercentage oftheadjusted previous five-year average
market price foreachcommodity.
(iii) Amount ofthepayments
Asoftheendoffiscal year1990/91, payments forthe1986/87 soybeans cropyeartotalled
$10,458,608; asoftheendof1991/92, payments forthe1989/90 soybeans crop yeartotalled
$17,917,882 andpayments forthe1990/91 soybeans cropyeartotalled $1,854,528.
Asoftheendoffiscal year1989-90, payments forthe1986/87 canola cropyeartotalled
$3,050,439, asoftheendof1990/91, payments forthe1987/88 canola cropyeartotalled $1,515,049,
payments forthe1988/89 canola cropyeartotalled $216,533 andpayments forthe1989/90 canola
cropyeartotalled $237,278.G/SCM/N/3/CAN
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(iv) Estimated payment perunit
1986/87 Soybeans $11.40/tonne
1989/90 Soybeans $16.35/tonne
1990/91 Soybeans $2.01/tonne
1986/87 Canola $51.37/tonne
1987/88 Canola $87.25/tonne
1988/89 Canola $14.28/tonne
1989/90 Canola $12.39/tonne
(b) Effect oftheprogramme
Agricultural Stabilization Board payments helped stabilize producers 'incomes byreducing
theimpact ofshort-term priceshocks. Byinsulating incomes against short-term disruptions inmarket
conditions, thisprogramme helped prevent themisallocation ofresources resulting from short-term
price orincome stimuli. Long-term price movements were allowed toprevail.
D. FRUITS AND VEGETABLES
1. Agricultural stabilization forfruits andvegetables
(a) Nature andextent oftheprogramme
(i) Background andauthority
Under thenowrepealed Agricultural Stabilization Act(ASA) fruits andvegetables were
designated forsupport. Designated commodity prices weregenerally supported atthesame levelas
named commodities. Inaddition, national tripartite stabilization plans wereinplace for:sugar beets
(starting in87-88), dryedible beans (87-88), apples (87-88), onions (88-89) andhoney (88-89).
Oneofthefunctions oftheAgricultural Products Board, asestablished under theAgricultural
Products Board Act,wastotakeaction insupport ofthestabilization activities oftheASA. Bybuying
surplus commodities andselling themlater, theBoard 'sactivities helped stabilize farmincomes. The
Board could sellproducts atprices lower thanthepurchase price plushandling andstorage, onlyif
authorized bytheGovernor-in-Council.
Thefunctions oftheASAweresubsumed bytheintroduction oftheFarm Income Protection
Act(FIPA) in1991.G/SCM/N/3/CAN
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(ii) Incidence
Deficiency payments were made directly toproducers forthedifference between theannual
average market priceandasupport levelbased onapercentage oftheprevious five-year average market
price foreachproduct, indexed forchanges incashcosts ofproduction. Payments foraparticular
cropyearcancontinue overseveral years, asfarmrecords aresubmitted.
(iii) Amount ofthepayment
1987/88 B.C. Pears: Pears grown inBritish Columbia marketed by30June1988 were
designated forsupport under Order-in-Council P.C.1988-2590 dated 17November 1988. Adeficiency
payment of$9.96 per100kilograms wastriggered. Total payments made during thefiscal year1988-89
amounted to$1,289,000. In1989-90, payments were $16,694, butrefunds totheprogramme were
$23,049.
1987/88 B.C.Peaches: The1987British Columbia peach cropwasalsodesignated forsupport
during 1988-89. Under theOrder-in-Council P.C.1988-2589 dated 17November 1988, adeficiency
payment of$23.16 per100kilograms wasapproved. Total payments amounted to$2,289,000 in
1988-89. In1989-90, payments were $99,137.
1987/88 B.C.Prunes: The1987British Columbia prune cropwasdesignated forsupport under
Order-in-Council P.C. 1988-2591 dated 17November 1988. Adeficiency payment of$11.98 per
100kilograms wastriggered. During thefiscal year1988-89, totalpayments amounted to$380,000.
Fortheyear1989-90, payments were $10,532.
1987/88 SourCherries: Sourcherries marketed by30June1987weredesignated forsupport
under Order-in-Council 1988-1460 dated 21July1988. Adeficiency payment of29.62¢ perkilogram
wastriggered. Total payments in1988-89 were $2,156,000.
Other programmes administered bytheASA:
1987/88 RedDelicious Apples
Order-in-CouncilPC1988-2/2588dated17November1988authorizedtheprovisionofassistance
of2cents perpound forallRedDelicious apples produced inCanada in1987 inanamount notto
exceed $5.3million. Thisassistance wasprovided intheformofacontribution togrowers under Vote
15,Agriculture Grants andContributions, pursuant toSection 5(2)oftheDepartment ofAgriculture
Act. Theassistance wasprovided tocompensate theproducers forreduced returns caused bylarge
imports ofWashington State product atdepressed prices. Total payments in1988-89 amounted to
$4,449,000 and$4,000 in1989-90.
1988 Nova Scotia Apple Transportation Assistance
Duetoalarge supply ofjuice apples andalackoffacilities forprocessing, authority was
provided pursuant toSection 5(2)oftheAgriculture Acttomake acontribution ofone-half oftheactual
costoftransportation ofjuiceapples tofacilities inOntario. Thiswasapproved byOrder-in-Council
PC1988-1/2588 dated 17November 1988. Payments were$0.015/lb. toamaximum of$150,000.
Actual costexpenditure todateis$73,063.G/SCM/N/3/CAN
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Other payments
In1989-90 payments werealsomade to1982 ($693) and1983 ($10,536) apples, 1983 B.C.
pears ($366), 1983 B.C. peaches ($517) and1983 B.C. prunes ($66). Refunds were made to1985
($5,652) and1977 ($4,813) potatoes and1977 yellow seedonions ($2,350).
(iv) Payment perunit
1987/88 RedDelicious Apples 4.40¢/kg.
1987/88 SourCherries 29.62¢/kg.
1987/88 Peaches $23.16/100 kg.
1987/88 Pears $9.96/100 kg.
1987/88 Prunes $11.98/100 kg.
(b) Effect oftheprogramme
Agricultural stabilization payments helped stabilize producers 'incomes byreducing theimpact
ofshort-term price shocks. Thishelped prevent themisallocation ofresources.
2. National Tripartite Stabilization Programme forApples
(a) Nature andextent oftheprogramme
(i) Background andauthority
Under theauthority oftheFarm Income Protection Act(FIPA), theNational Tripartite
Stabilization Programme (NTSP) stabilizes apple returns.
Theprogramme costisshared equally between theFederal Government, theprovince and
producers, andhence, government contributions represent 2/3oftotalpayments. Under FIPA, NTSP
forapples isnowcovered asacomponent ofanintegrated safety netsystem.
(ii) Incidence
Thesupport levelforapples isbased ontheindexed national average market price overthe
preceding 10years, adjusted forinflation.
(iii) Amount ofpayment (total)
Adeficiency payment of$15,418,000 hasbeenreceived byapple growers forthe1987-88
crop. Government contributions account for2/3oftotal. Payments forthe1989 crophavereached
$16,637,000. There were nopayments forthe1988,1990, and1991 cropyears. Payments forthe
1992 crops were at$11,936,200.G/SCM/N/3/CAN
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(iv) Payment perunit(total)
Thepayment perunitfor1987apples was$35.50 pertonne. For1989apples, itwas$40.17 per
tonne. For1992 apples, payments were $5.50 pertonne inBritish Colombia, $26.77 pertonne in
Ontario, $41.03 pertonne inNova Scotia, $13.62 pertonne inNewBrunswick and$40.28 pertonne
inQuebec.
(b) Effect oftheprogramme
Payments helpstabilize producers 'income byreducing theimpact ofshort-term priceshocks.
Byinsulating incomes against short-term disruptions inmarket conditions, thisprogramme helpsprevent
themisallocation ofresources.
3. National Tripartite Stabilization Programme forWhite PeaBeans andOther DryEdible Beans
(a) Nature andextent oftheprogramme
(i) Background andauthority
Under theauthority oftheFarm Income Protection Act(FIPA), theNational Tripartite
Stabilization Programme (NTSP) stabilizes white peabeanandother dryedible beanreturns toreduce
income lostbyproducers from market risk. Support isbased ontheguaranteed margin approach.
Thesupport priceforayearwillequal thecashcostsofproduction inthecurrent yearplusapercentage
oftheaverage margin inthepreceding seven years.
Theprogramme isshared equally between theFederal Government, theprovince andproducers,
andhence, government contributions represent 2/3oftotalpayments. Under FIPA, NTSP fordried
beans isnowcovered asacomponent ofanintegrated safety netsystem.
(ii) Incidence
Support isbased ontheguaranteed margin approach. Thesupport price forayearwillequal
thecashcostsofproduction inthecurrent yearplusapercentage oftheaverage margin inthepreceding
seven years.G/SCM/N/3/CAN
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(iii) Amount ofthepayment
Total payments ($'000)
Crop year Commodity Amount
1987 white peabeans 26,963
1988 0
1989 0
1990 17,237
1991 20,441
1987 other coloured beans 2,210
1988 0
1989 549
1990 3,691
1991 2,997
1992 0
1987 kidney andcranberry beans 768
1988 0
1989 0
1990 352
1991 1,665
1992 0G/SCM/N/3/CAN
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(iv) Payment perunit
Payment pertonne
Crop year Commodity $/tonne
1987 white peabeans 237.25
1988 0
1989 0
1990 165,34
1991 171,74
1987 other coloured beans 112.85
1988 0
1989 46.08
1990 157.63
1991 83.55
1992 0
1987 kidney andcranberry beans 66.92
1988 0
1989 0
1990 25.57
1991 93.47
1992 0
(b) Effect oftheprogramme
Payments helpstabilize producers 'income byreducing theimpact ofshort-term priceshocks.
Byinsulating incomes against short-term disruptions inthemarket conditions, thisprogramme helps
prevent themisallocation ofresources.
4. National Tripartite Stabilization Programme forOnions
(a) Nature andextent oftheprogramme
(i) Background andauthority
Nowunder theauthority oftheFarm Income Protection Act(FIPA), thisNational Tripartite
StabilizationProgramme(NTSP)stabilizesonionreturnstoreduceincomelostbyproducersfrommarket
risks.G/SCM/N/3/CAN
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Theprogramme costisshared equally between theFederal Government, theprovince and
producers, andhence, government contributions represent 2/3oftotalpayments. Under FIPA, NTSP
foronions isnowcovered asacomponent ofanintegrated safety netsystem.
(ii) Incidence
Thesupport levelforonions isbased ontheIndexed National Average Market Price (IMAP).
Thisisthenational average market price overthepreceding seven years, adjusted forinflation.
(iii) Amount ofpayment
Nopayments havebeentriggered under thisprogramme.
(iv) Payment perunit
Nopayments havebeentriggered under thisprogramme
(b) Effect oftheprogramme
Payments helpstabilize producers 'income byreducing theimpact ofshort-term priceshocks.
Byinsulation incomes against short-term disruptions inmarket conditions, thisprogramme helpsprevent
themisallocation ofresources.
E. SUGAR AND RELATED PRODUCTS
1. National Tripartite Stabilization Programme forSugar Beets
(a) Nature andextent oftheprogramme
(i) Background andauthority
Under theauthority oftheFarm Income Protection Act(FIPA), theNational Tripartite
Stabilization Programme (NTSP) stabilizes sugar beetreturns.
TheprogrammeissharedequallybetweentheFederalGovernment,theprovincesandproducers,
andhence, government contributions represent 2/3oftotalpayments. Under FIPA, NTSP forsugar
beets isnowcovered asacomponent ofanintegrated safety netsystem.
(ii) Incidence
Support prices aresetatapercentage ofthecurrent cashcostsofproduction plusapercentage
oftheIndexed Moving Average Price received forsugar beets during theprevious 15years.G/SCM/N/3/CAN
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(iii) Amount ofthepayment
Total payment ($'000)
Crop year Amount
1987 14,524
1988 2,947
1989 0
1990 1,301
1991 2,493
1992 0
(iv) Payment perunit
Payment pertonne
Crop year $/tonne
1987 13.36
1988 3.59
1989 0.00
1990 1.23
1991 2.23
1992 0
(b) Effect oftheprogramme
Payments helpstabilize producers 'income byreducing theimpact ofshort-term priceshocks.
Byinsulating incomes against short-term disruptions inmarket conditions, thisprogramme helpprevent
themisallocation ofresources.
2. National Tripartite Stabilization Programme forHoney
(a) Nature andextent oftheprogramme
(i) Background andauthority
Under theauthority oftheFarm Income Protection Act(FIPA), theNational Tripartite
Stabilization Programme (NTSP) stabilizes honey returns.G/SCM/N/3/CAN
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Thesupport price foranygiven yearwillequal apercentage oftheIMAP. Theprogramme
costisshared equally between theFederal Government, theprovinces andproducers and,hence,
government contributions represent 2/3oftotalpayments. Under FIPA, NTSP forhoney isnowcovered
asacomponent ofanintegrated safety netsystem.
(ii) Incidence
Thesupport levelforhoney isbased ontheIndexed National Average Market Price (IMAP).
Thisisthenational average market price overthepreceding seven years, adjusted forinflation. The
support price foranygiven yearwillequal apercentage oftheIMAP.
(iii) Amount ofthepayment
Total payment ($'000)
Crop year Amount
1987 0
1988 8,308
1989 3,460
1990 0
1991 0
1992 0
1993 0
(iv) Payment perunit
Payment perpound
Crop year $/lb
1987 0.00
1988 0.12
1989 0.07
1990 0.00
1991 0.00
1992 0.00
1993 0.00G/SCM/N/3/CAN
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(b) Effect oftheprogramme
Payments helpstabilize producers 'income byreducing theimpact ofshort-term priceshocks.
Byinsulating incomes against short-term disruptions inmarket conditions, thisprogramme helpsprevent
themisallocation ofresources.G/SCM/N/3/CAN
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Table 8
Dried Beans
Year Production ('000cwt) Imports ('000Kg) Exports ('000Kg)
1988 1,877 2,839 73,552
1989 2,083 1,434 61,022
1990 3,083 744 85,487
1991* 2,800 879 75,330
1992* 2,500 1,363 95,073
1993** 2,840 60 49,930
Dried beans include white peabeans (HS0713.33.10) andkidney beans (HS0713.33.90)
* Estimation inlieuofofficial production datafrom Statistics Canada.
** Final yearforofficial production datafrom Statistics Canada.
Source: Trade datafrom "Trade ofCanada", Statistics Canada.