Thank you. I appreciate the invitation I received from this committee. I understand you may not have the outline with you. I did not have time to get it translated, and I apologize for that.
I'd like to touch on the income crisis, the Canadian Corn Producers' Coalition, the multi-pronged approach we took, and the solution that we see in the future.
Since 1997 the entire expansion in demand for corn in Canada has been met entirely by U.S. imports. The injurious impact of U.S. subsidies through artificially low prices means corn production in Canada has not been economically viable. Corn users have also recognized that farmers face a significant financial crisis.
In late 2004, when market revenue was running out, we were asked, as part of a coalition that was formed, to discuss what we could do to counter this. We had not done it earlier. We had been asked much earlier to form this coalition. At that time in Ontario we still had a market revenue program. We had an income support program, but that was running out. CAIS had been active for a year or two, and we were starting to see that it was not working for grains and oilseed farmers. So at that time we formed a coalition among Ontario Corn Producers' Association, the federation from Quebec that produces grain, and the Manitoba Corn Growers Association, totalling 26,000 Canadian corn producers.
We came up with a multi-pronged approach, the first being the Byrd Amendment retaliation, a WTO case, income support programs, and an anti-dumping countervail duty case.
The Byrd Amendment retaliation. I won't spend too long there. We requested that it be added to the list. After a long deliberation it was not added to the list, and I understand it is now going to be repealed, but to date corn is not on that list.
The WTO case. We asked the Canadian government to commence WTO proceedings in 2005 by requesting consultations with the U.S. regarding the illegality of U.S. corn subsidies. Canadian corn producers believed we would win a WTO serious prejudice case because Brazil had won challenging the cotton subsidy and moving on from there. To help the Canadian government appreciate the nature and scope of the opportunity, we presented a turnkey brief. I personally was in Jim Peterson's office when we presented that, and it did not get taken up.
Now, as of January 2007, it has been taken up as consultations, and 32 other countries have joined those consultations. That is a long lag for a guy who is trying to produce corn, and that's just the beginning of the consultations as well.
One of our major efforts over all of those years has been trying to support the income support prong. CAIS did not work for G and O farmers due to suppressed reference margins, even from the very beginning of CAIS. The Canadian government has recently announced a second $1 billion improvement to national farm income programs, and we appreciate that, but as stated, that is flowing mostly through CAIS and does not reach grains and oilseed farmers.
As for some of the new proposals that are out there, we're not sure how they are going to flow. We're a little skeptical after previous experience.
We've asked the Canadian government to provide additional funding to income support programs in Ontario, such as the risk management problem and different programs in other provinces, which leads to the anti-dumping countervail case.
CCP's attack on U.S. corn was the exercise of its legal rights under domestic trade remedy laws by launching an anti-dumping countervail case against U.S. corn. We had been told many times in Ottawa to address the income support prong, that we had legal tools to use and we had not used them. We were told this by MPs and we were told this by bureaucrats, so we went ahead in August 2005 and filed our complaint with the Canadian Border Services Agency.
The anti-dumping countervail process in Canada has two main stages, and you deal with two main agencies. The Canadian Border Services Agency determines whether U.S. corn is dumped or subsidized, and the Canadian International Trade Tribunal determines whether that dumped or subsidized corn causes injury. Each of these stages has a preliminary and a final determination.
On December 15, 2005, Canadian Border Services Agency came up with a preliminary dumping figure of $1.65 U.S. a bushel, which was $1.91 Canadian a bushel, given the exchange rate at that time. The Ontario spot price at Chatham, which is a benchmark price area in Ontario, was $2.71 a bushel. When you do the math, that's a 70% assessment on what we're receiving in Ontario at this time.
In the CBSA's final determination in March 2006, that was lowered to $1.47 a bushel. CITT had originally taken up the case in the preliminary decision that there was enough there to investigate; however, in their final decision they decided that dumped and subsidized imports were not the cause of injuries suffered by Canadian producers--this despite the fact that on their own finding, U.S. imports set the price of corn in Canada, and that the margin of dumping and the amount of subsidy was significant.
I'd like to refer you to those figures I quoted previously. We believe the CITT made key errors by confusing the concept of price suppression with price depression and refusing to consider the 44% margin of dumping and the equally high amount of subsidy as required by law. We have therefore applied for judicial review of the no-injury decision, and that was done in November 2006. A hearing will be coming up in early June in Ottawa. We'll continue to pursue it for many reasons, even though, as many of you may have heard on the news, there have been price increases over the last six months. There have also been price decreases. One USDA report put a 50¢ drop in the market within a very few days, and that was just in mid-March.
The average market price our farmers are receiving is much below what the news would have you believe. To March 31, the average weighted market price our producers were receiving was $3.42 a bushel. Input costs have increased severely. I know in my own area, urea has gone up from $350 a tonne a year ago to $525 a tonne this spring. That is a significant increase.
We've come off two of the worst marketing years ever. The next U.S. Farm Bill has been mentioned to you, I'm sure, many times. Different methods of delivery have been spoken about, but the same amount of money or more in direct payments will go to the American farmers. The agricultural attaché at the U.S. embassy in Canada has said the U.S. farmers will have the tools they need to be competitive.
That brings me to the solution. I believe, and Canadian corn producers and Ontario corn producers believe, we need national income support companion programming with regional flexibility. We need this to effectively target funding for future sustainability. Relying totally on inputs is not the way to run the rest of Canadian agriculture. In Ontario, we believe that would be the risk management program. In Quebec, they have the ASRA program, which they feel it should flow through, and we feel it is up to the other provinces to bring forth what is correct for them.
CAIS, as has been well pointed out, has shortfalls. Income stabilization on decreasing and long-term suppressed margins does not work for grains and oilseeds producers. Ad hoc payments do not work. They are not predictable or bankable. I know the Canadian Banking Association has asked agriculture for years to come up with a program that is bankable. How can one of my growers produce a cashflow statement or a budget for his bank for his yearly inputs if he doesn't have a program that can say, this is what it may bring if the price drops below this?
With that, I'd like to thank you very much. I look forward to your questions.