Mr. Speaker, yesterday I was at the point where I was discussing the biofuel example in Manitoba. Manitoba wants to get concrete results for farmers. The introduction of co-ops is also being considered, which is the way to go. If farmers can somehow get involved in the whole aspect of the industry, not just as suppliers, that is the way to go.
Both the federal and Manitoba governments have a subsidy for blenders. Federally, it is 10¢ per litre for ethanol and 20¢ per litre for biodiesel, guaranteed for three years. A $20 million biofuels opportunities for the producers initiative program runs from April 1 of this year until the March 31, 2017. In Manitoba, subsidies to the blenders will start at 20¢ a litre but will decrease by 5¢ every two years so that by 2016 there will be no subsidy to the industry.
This seems a more reasonable approach. In other words, by this time if this industry is not making a profit and there is a downturn in biofuels consumption, then government should not be injecting new funds into this enterprise.
It is important to look at the politics of the whole biofuel industry, not only in North America but in the world. While we were in Washington, the agriculture committee was told that the U.S. government's ethanol corn initiative was there to fulfill its need for increased consumption of fuel. In other words, the U.S. does not want to import any more oil as its consumption goes up. This increase is to be met by the production of corn and other commodities to make ethanol.
What we are seeing is a dangerous precedent. Instead of encouraging a decrease in oil consumption on fossil fuels, the U.S. government is encouraging an increase by growing corn. As we have seen from the research, corn is not an efficient energy input-output commodity. For every one unit of energy of corn, we may get 1.5 units of fuel, if that.
If we look at all of the input from fertilizer for fuel for machinery and transportation, we need to question the efficiency of corn ethanol production. This is why I advocate and my party is saying that we must discuss this bill in committee as part of an overall discussion in our country on the whole aspect of biofuels.
Today the reality is that big agriculture, big oil and big biotech are in the biofuels driver's seat. It is Husky Oil that has opened the ethanol refineries in Manitoba, which is a good idea and it is helping farmers, but it is the big corporations that are in the driver's seat. Our challenge and the challenge of governments is to work with them and ensure the benefits of this industry go to the producers and Canadians who always strive to meet their obligation to reduce greenhouse gases.
For example, of the 119 ethanol plants in the U.S., currently 49 are still owned by farmers. However, of the 90 plants currently under construction in the U.S., about 90% are corporate owned. By having the biofuel industry firmly in control by the major multinationals, the role of the farmer is reduced solely to that of supplier. If refineries then are allowed to import feedstock from underdeveloped countries or even from heavily subsidized U.S. farmers, our primary producers will once again be left out in the cold and at the mercy of these multinationals.
There is also the question of genetically modified foods. When major corporations step up biological research, we will be faced with the issue of GMOs. For example, there is the contamination of other crops, the debate in Europe about Monsanto corn, and so on.
Biofuels have a role to play in a comprehensive renewable energy strategy, but we have to continue to keep a close eye on them to avoid problems like the ones that have occurred in the south.
If taxpayers are to assume the burden of funding this industry, then we must make sure that our ability to ensure food safety is not threatened or diminished. We also have to make sure our policies do not threaten another country's food safety, that we get real results when we reduce greenhouse gas emissions and that the industry is not subsidized once it is established, as is the case in Manitoba.
Finally, we must continue to encourage a decrease in fuel consumption. In the long term, this is the most important factor in a fuel-based economy.
As we begin debating the idea of biofuels as a possible solution to part of our energy needs, we must not forget food.
For the first time we are seeing the emergence of a truly global agricultural market driven by the underlying force of all economic activity. The scarcity of goods, wheat supplies for example, have reached a 30 year low. In only one year, inventories in the European Union have dropped from 14 million tonnes to only 1 million tonnes.
We need to ask ourselves how humankind will be able to feed itself in the future and at what price. How can agriculture feed the world that grows by 80 million people each year? When we take land out of food production to produce fuel, we obviously complicate this matter and we need to find a balance.
If we come back to our local agricultural industry, we have seen that the demand for biofuels has driven up the price for corn, which is good if one is a corn producer but not so good if one is raising cattle and already competing with the high Canadian dollar, the rising cost of inputs and other factors that are driving the cost production up.
Only yesterday we heard once again from representatives of the pork and cattle industry saying that their industry was in crisis. Some producers in Ontario are saying that they are losing at least $300 for every steer sold. We are seeing that they are not getting any immediate assistance from the loan program that they asked for. Small communities are going under. Part of this is because of the rise in prices of corn that they must use in that industry.
Somehow we must get a balance and also assist those in parts of the agriculture industry who are suffering because of this demand for biofuels. The government still has not been able to address the fundamental needs of these producers who are struggling to survive.
We are seeing more critics in the world speaking out against the biofuels industry and we need to take that into account. For example, the verdict of the OECD, consumer organizations like FoodWatch and even major food corporations like Nestlé, is devastating.
According to the OECD, expanded biofuels production will lead to untenable strains on the commodities markets without yielding significant benefits for the environment. FoodWatch is convinced that the strategy, while benefiting farmers, will do nothing to protect the climate. Germany's environmental expert counsel says that the industry raises expectations that fly in the face of acceptable science. Nestlé's CEO bluntly characterized biofuels production as environmental lunacy.
That does not mean we need to stop the whole aspect of moving forward in this industry. What this means is that we must undertake a very logical approach. We must see that as this industry moves forward we help the primary producer. We have seen that this has given the primary producer a stimulus to at least start making some money but at the same time we have a responsibility to feed not only ourselves but the world.
We must ensure that we do not get on the band wagon that we see happening south of the border where the American ethanol industry is creating what I would say in many respects havoc in other parts of the world where countries are scrambling to supply this growing demand for fuels.
As I said before, instead of the growing demand for fuels, we should be concentrating on decreasing our demand for fuels and fossil fuels in particular.
Much of what the energy farmers produce is offset by the amount of energy that goes into producing the plants in the first place. They consume fossil fuels to harvest plants, for shipping, for storage and for drying, not to mention the energy required to produce pesticides and fertilizers. The economic possibilities are also limited.
Even in the U.S., if the entire corn crop were converted into fuel, it would satisfy only about 12% of the demand for gasoline. For example, to fill a 100 litre tank of an SUV, an ethanol producer has to process about one-quarter tonne of wheat. This is enough wheat for a baker to bake about 460 kilograms of bread which has a total nutritional value of about one million kilo-calories, enough to feed one person for a year.
I would like us to take this debate forward and to look at biofuels from the aspects of the environment, of food security and from our ability as a nation to assist our primary producers, who are basically the best in the world, to continue producing food with help from us here in Parliament and, at the same time, not to make life more difficult for people in countries like Malaysia, Brazil and other places where family farmers are being forced from their farm to finance the big plantations for palm oil and ethanol from sugar.
