1



## Changes to the Renewable Fuel Standard Program Aggregate Compliance for Canadian Crops and Crop Residues

Data Analysis and Justification for 201 2

1

. 0 Census of Agriculture 2011 Data

1.1 The 2011 Census of Agriculture was conducted on May 10, 2011 and the data were published on May 10, 2012. The r esults obtained from the compilation of the 2011 Census of Agriculture data show that in 2011 Canada had 92.6 million acres of cropland and summe r fallow, and 13.7 million acres of tame or seeded pasture , a reduction of 5.4% and 2.8%, respectively, from 2006 ( please see the Census2011 worksheet of the attached Excel file AnnualReport_Data_2012 .xlsx)

. The data for 2011 and 2012 will be revised late r this year following the census trend.

1.2 The Census of agriculture does not collect data on agricultural land area under conservation practices , except that for wetlands combined with woodlands

. The acreage for

wetlands and woodlands in 2011 dec rease d 8.8% compared to 2006. For other conservation practices, binary data on various conservation practices are collected and the data on the number of farms reporting conservation practices are published. In 2011, the number of farms reporting conservation pr actices decreased in all categories and the overall rate of decrease was higher than the rate of decrease of the total number of farms

.



### 2

. 0 Crop land and Summer Fallow

2 .1 Estimates from the 2012 field crop surveys, some of which are preliminary, indicate a

increase in the acreage for field crops and specialty crops from 63

. 9 million acres reported in

201 1 to 71.9 million acres in 201 2 . This increase is mainly due to increased seeded areas of wheat, canola, barley and dry field peas

.

2 .2 The area s in specialty crops, hay 1 and forage and summer fallow , however, decreased

in 201 2 . The acreage for hay and forage is estimated to be 20. 1 million acres in 201 2

, a slight

decline from 20. 2 million acres in 201 1

. The summer fallow area shows a significant decline

from 10

. 5 million acres reported in 2010 to 4.6 million acres in 201 2

. T he estimated land a rea s for fruit and vegetables

, and for nursery, sod and Christmas tree

, h owever, remain unchanged

at 0.5 million acres and 0.2 million acres 2 , respectively, as in the previous year

.

2 .3 Adding up the acreage for all crops and summer fallow, the total cropland and summer

fallow area in 201 2 stands at 97.3 million acres.

1 The land area for hay will not be estimated and published until De cember 5, 2012. Therefore, the area has been estimated based on last 6 years published data ( please see the HayEst worksheet of the attached Excel file AnnualReport_Data_2012.xlsx ).

2 The land areas for Christmas tree, sod and nursery are taken from the Censuses of Agriculture and trended over the years between the censuses.2



### 3 .0 Tame or Seeded Pasture

3 .1 The annual surveys of field crops and hays (as mentioned in Section 3 of Canada’s petition, page 4) do not collect information on land area segregated for tame or seeded pasture (pastureland) 3 . In order to obtain tame or seeded pasture acreage in 201 2 , the data on tame or seeded pasture area were obtained from the l ast 6 Censuses of Agriculture from 1986 to 20 11 and analyzed for trend. The acreage of tame or seeded pasture for these census years were regressed on a constant and a simple linear time trend. The adjusted R

- square value of the regression, which is a measure of the goodness of fit and the power of the model in predicting future outcomes, is 0.9 193 . In other words, the regression coefficients are capable of explaining

about 9 2 % of the variability in the data.

3 .2 Estimates ( Estimate_1 on the worksheet “PastureEst” in the attached Excel file) for the years between census cycles are derived by adding the immediate past census year’s data to the coefficient of the time trend ( T ) distributed over the years between two successive census

yea rs (i.e., the coefficient divided by 5). Following the standard practice of benchmarking survey estimates for the census years with the census data, the census acreages for tame or seeded pasture are kept unchanged as benchmarks.

3 .3 The annual estimate s thus derived have not been smooth over the years. Therefore, a second set of annual estimates ( Estimate_2 in the attached Excel file) is derived by distributing the difference in acreage between two successive censuses over the years within the two

cens uses. In distributing the differences between 2001 and 2006, both current and immediate past period’s differences have been accounted for at a ratio of 2:1 to keep the estimates at a

lower level. Th is factor has been used for extrapolating the acreage be yond 2006 to derive Estimate_2 for the years 2007

- 2010. While t he same factor s ha ve been used to derive the estimates for 2012, an additional standard deviation has been deducted from the estimate s to

minimize the divergence of the projection from the 2011 census number

. As evident in Chart 2 in the attached Excel file, the Estimate_1 and Estimate_2 virtually overlap in all years except the periods 199 4

- 1995

, 2004

- 2005 and 2009

- 2010 , and tend to diverge slightly at the end (i.e., in

20 12 ). T o avoid higher and lower estimates, a simple average of Estimate_1 and Estimate_2 is

taken to derive Estimate_3 , which has been used in this Annual Report.

3

. 4 Based on the model estimate, the total area for tame or seeded pasture in Canada was

13.8 million acres in 201 2

. However, in view of a general trend of declining crop acreages and

cattle numbers , the actual area of tame or seeded pasture is expected to be lower than the

model estimate

.



### 4 .0 Agricultural Land under Conservation Practices

4 .1 Estimates for agricultural lands under conservation practices are obtained from the FEMS data. As noted earlier, the FEMS is conducted every five years

. T he last FEMS was

conducted in 2007 for the reference year 2006 and the data were released in 2008. W h ile the
next FEMS is scheduled for 2012 for the reference years 2011 , the data will not be released

until 2013

. An analysis of the 2007 FEMS data shows that in 2006

, Canadian farms had an estimated 9.8 million acres of agricultural lands under conservation practices.

3 Annual crop survey data on land for pasture, which includes several categories of land in pasture (such as tame/seeded pasture and rangeland), does not segregate pastures by type.3

4.2 The 2011 Census of Agriculture data ( released on May 10, 2012 ) reveal that the number

of farms reporting conservation practices decreased at a hig her rate than the total number of

farms in Canada

. Based on the census data

, it can be rationally assumed that the amount of agricultural lands under conservation practices in 201 1 did not increase compared to 2006

. Therefore, the estimate for agricultural lands under conservation practices derived from the last

FEMS (9.8 million acres) has been used for 20 1 2

.



### 5 .0 Total Agricultural Land in 2011

5 .1 Summing up the acreages in 2

. 3

, 3

. 4 and 4

. 2 above, the total agricultural land in Canada

in 201 2 is estimated at 12 0

. 9 million acres. Th is total agricultural land area includes 97.3 million acres of cropland and summer fallow, 13.8 million acres of pastureland and 9.8 million acres of agricultural land under conservation practices.