Agriculture Committee on April 18th, 2007

[Lynette Keyowski, Executive Director, Agricultural Producers Association of Saskatchewan]

Thank you, Mr. Chair.

I wanted to come back to Ken's comments about adding more value at home. I believe that is accurate, but we will always play on the international stage as well to a certain degree. But if we come back to the notion of having an attitude to win if we're going to go to WTO and negotiate--and I agree with Mr. Wildeman's comments that we need to be there and there is absolute value in being there and negotiating hard for our positions--let's not come home and give those positions away. We have done that historically. We went to WTO and negotiated hard for a tariff line on beef and came home and gave just as much away in free supplementary import quotas to compete with our product at home. Let's marry those. Let's build the value with them. Let's agree to our agreements that we make on the international stage.

[Roger Gaudet, Bloc, Montcalm, QC]

Most farmers tell us that the Americans and Europeans heavily subsidize their agricultural sector. How come we cannot do the same? My question was really very simple, how come the United States and the European Union can subsidize their farmers without getting slapped and we cannot do so? This was my real question.

[The Chair, Conservative, James Bezan]

Mr. Wildeman.

[Brad Wildeman]

First, a very brief history. As Mr. Easter would know, in the Uruguay Round we really took all sorts of different import restrictions, whether it was TRQs, duties, or non-tariff trade barriers, and we tried to lump them into these boxes, and we were successful in that. Unfortunately, that's as far as we got in that round. This round is about trying to put disciplines on these people. I think one of the key things from Canada's perspective is that first we need to know what those rules are. Once we know what the rules are, then we should be developing our programs around those rules. Unfortunately, I think we developed our programs before we knew what the rules were. So we need to be there. We need to get that thing settled. We need to figure out what the rules are and then design our programs to fit within those rules and bring maximum benefit to our producers. It's the chicken before the egg.

[The Chair, Conservative, James Bezan]

Ms. Keyowski, very short.

[Lynette Keyowski]

It will be short. I will address that in line with the same comments I made earlier. As Mr. Wildeman said, at the Uruguay Round we did a lot of negotiation, and when we came home we got rid of everything we agreed to the day we came home. Other countries retained their ability to subsidize, and we are still fighting with that. We are still living with that every day, and now we're negotiating rules that are going to say we'll negotiate what we have now by the same level down. We came home and gave everything away, and they did a little bit, but now we're going to negotiate down by a proportionate amount. We're our own worst enemy when it comes to these negotiations, and we need to be our best friend.

[The Chair, Conservative, James Bezan]

Thank you. Merci beaucoup.

Mr. Miller, five minutes, please.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you, Mr. Chairman.

Ladies and gentlemen, thanks for being here today.

Over the last few days we've heard lots of good suggestions. In some ways, maybe we've created more questions than answers. But one thing we did hear the other day, and I think it's worth noting here, is that there are many pieces to the puzzle for solving the problems in agriculture.

One that I know a young lady told us—I believe it was yesterday in Alberta—is that awareness and educating our urban cousins is part of the puzzle. I think that needs to be noted today.

I see more media here today than I've seen anywhere we've been in our travels. I think that says something for you producers and groups here in Saskatchewan, because the media does have a role and a responsibility in helping us as politicians and you as agriculture groups to educate.

Another thing we've heard here, and I think it's starting to be a fairly consistent thing--Mr. Wildeman, you commented on it—is about having a national disaster program. I agree with you 100%. One question we need to sort out is what, exactly, a disaster is. You mentioned some of them. Two of the most recent ones were BSE and the avian bird flu, and of course there was the flooding in Manitoba not too many years ago, and I'm sure there are a couple I've missed. How could we set up something so we could actually define what a disaster is, what qualifies, that doesn't start duplicating what another program is supposed to do, whether it be crop insurance or CAIS or something?

[Brad Wildeman]

I think if you look at current trade agreements internationally, and WTO particularly, it's defined quite clearly there. It says that if your production is less than 70% of your normal production, you would then qualify for disaster relief. The problem is that it's only designed right now for production, so in natural disasters, when you may have massive reductions in income, if your production doesn't go down, it doesn't qualify. So that needs to be clarified. Our understanding is that in this round of negotiations, that's going to be talked about. I think other countries have learned that lesson.

I think one of the things we found with BSE, because we never got to the stage of declaring it a disaster, was that you try to tie us to these other programs. So then we get into this problem of whether it is margin or isn't margin. So really, we just delay it. Lots of people got payments, and they were clawed back, and that caused a lot of animosity.

There are a few things that need to happen. Define what a disaster is. I think that's relatively easy. Define the cost sharing, which is a huge issue we fought with, and many of you in this room know that very well. What is going to be the federal-provincial cost sharing when those are declared? That's what stopped a lot of these declarations from being made.

Lastly, we need to have those payments independent of other income support programs, or else you give it away with one hand and claw it all back with the other.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I have just one more thing. You mentioned the federal and provincial part of it. Should there be any producer part of that?

[Brad Wildeman]

Yes. I think what they're saying is that the first 30% is a producer problem. You should be able to live within those 30% losses. Now, these other income support mechanisms that we have within business risk management will compensate for those. I think it's when you trigger below that that you need to have intervention and prop up that thing, or else those other ones fall apart, because you don't have the margins to support it. That's what has given our industry problems.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you.

Do I have any time? A little.

I have just another general one, and one or more of you can answer this. What one-liner can you think of as a real good way to encourage and keep young people from getting out of agriculture?

[The Chair, Conservative, James Bezan]

Go ahead, Mr. McBride.

[Ken McBride]

We need to have profitability. People need to start to recognize and realize some investment on their income.

I want to talk a little bit about the other question you had. How can we get the urban people that sort of information?

The one that really gets me is the Bombardier ad, where the guy is on a safari and he looks up and says, “That's my plane.” Now you can say that the guy is an employee of Bombardier and he's proud of that plane. You can say he's a taxpayer and he's proud of it because of his investment. It's always seen as anything going into that is an investment. Now, anything going into agriculture is always talked about as a handout, or whatever. It's not seen as an investment, and believe me, it is an investment. Any time that money goes in, it never sticks in my pocket; it always moves through into the economy. We need to recognize that. That guy in that particular picture looks to me like he's been pretty well fed.

Those are the types of things. How can we say suddenly that it's an investment for one part and it's a handout for another, and it's still doing the same for the economy?

[The Chair, Conservative, James Bezan]

Mr. Weber.

[Larry Weber]

At the University of Saskatchewan, I guest lecture third- and fourth-year ag-economics students, and a big thing is attitude. It's hard for them in the third and fourth year. Just two weeks ago I asked the fourth-year students how many of them were going home to the farm, and out of the 70 there, two were going back to the farm. That's unnerving to me. I did ask why, and part of it is attitude. We foster the environment of handouts, and agriculture over the past five years has been really negative; look at your negative farm income.

So it's difficult for those kids to see a promising career back home on the farm. We need to change the attitude.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Weber.

We're out of time.

Mr. Atamanenko, you're on.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you very much for appearing here today.

Ian, you mentioned an “uneven power struggle” nationally. I'd like to take this one step further and talk about that internationally.

Maybe, Ms. Keyowski, I'll start with you because you were talking about us negotiating and agreeing to things and coming back here and they don't seem to work. I posed a question to different people yesterday and today about supply management and how it fits into the whole framework of negotiations at the WTO, but when you were talking, I just thought of another thing. In our supply management sector we allow something like 5% of the poultry industry to come in, or 7.5% from NAFTA countries. But internationally, the European Union has a quota of 0.5% for pork, for example. So as an example, before we do anything, before we even think or talk about supply management—and our government has said it will guarantee supply management—should we not just be saying to these guys, look, we've got this 5% for poultry and it's a managed sector, so let's start here, Europe. Why don't you allow 5% of your pork production to come in as imports from outside Europe?

That's the first question I had. Maybe I'll get you to answer that.

[The Chair, Conservative, James Bezan]

Ms. Keyowski.

[Lynette Keyowski]

Thank you.

Just to be clear, your question is really more about, why aren't we looking for better access in other countries? Is that accurate?

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Yes.

The tendency is that while we have a couple of state-trading mechanisms or enterprises—the Wheat Board and supply management—and people are saying we've maybe got to look at them, I'm saying that before we even do any of that stuff, we should be getting those other people down to the playing field we're at, getting Europe, for example, to allow in 5% of their pork production.

Would you agree with that?

[Lynette Keyowski]

I wouldn't disagree at all with that.

The way our supply managed system works is that it reduces our supply here, of course, but it also restricts the ability of suppliers to expand supply for export into other countries. So for us to be successful, we need to maintain those restrictions very, very carefully. So if you're looking specifically at those commodities, I think it would reduce the competitiveness that supply management brings to those suppliers—and it is a profitable sector of the industry. And there are all of the arguments about supply restriction and those kinds of things, but those suppliers are a competitive sector of the industry, and it is something our competitors look at on the international market and target, the same as the Canadian Wheat Board.

So in terms of asking other countries to reduce their quotas or what they're allowing into their countries, or to expand those, yes, perhaps we should do so with those commodities in which we are more free trading. But I wouldn't encourage it from a Canadian perspective, because we absolutely want to retain that small piece of profitability we do have in our industry.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you.

[Brad Wildeman]

I think one of the issues is it sounds good. If everybody went to 5%, we'd all be happy. The reality is that for almost every one of our export markets that we deliver, whether it's beef, pork, canola, every one of those countries are exporting today at exports much higher than 5% of their domestic consumption right now.

So you're actually allowing them to go backwards by saying, “Well, if it's 5% clean, if it's 5% for everybody, we're happy with that, and we'll face increased tariffs, increased border restrictions for our export markets today.” So although it sounds good, it simply isn't true.

Remember that for the kinds of products that we're producing and the kinds of costs that we're incurring in producing them, there may be 140 countries in this world that trade, but very few of them will trade at the values we require in our industry. So I think that's a simplistic thing.

My final comment would simply be this. You can't go to these countries and say, “Open up your borders and reduce your tariffs, but, by the way, not for these products.” We're either going to be a trader or we're not going to be a trader. That's what got us into this disaster we're in with the WTO today.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Let's look at the power struggle here nationally. How do you look at this, and what role do you see that your organization, the Wheat Board, can play in this, or is playing?