Agriculture Committee on May 8th, 2007

[Denise Dewar]

I think a lot of it will be driven by the price of oil. The signals are there that the price is going to continue to be high. At the same time, I think the innovation that's going into the industry now is going to make the cost effectiveness of agricultural products and potentially also agricultural waste products that much more cost competitive with oil. I believe the industry will continue to be competitive. It's competitive now and I think it will continue to be in the future.

The important part of that is it provides another market opportunity for farmers in which to sell their product.

[Richard Phillips, Executive Director, Grain Growers of Canada, Grow Canada]

Following on that thought, when you have another source looking for the products from the farmer, you see a sustained higher price for our products on the farm. Maybe there are some public dollars going in on the one side of it, but then you'd be saving dollars on the business risk management side on the other side. I think it does have a viable future for us.

[The Chair, Conservative, James Bezan]

Go ahead, and then I'll go to Mr. Friesen for a comment.

[Justin To, Executive Director, Canadian Federation of Agriculture]

To answer your question, I think there is a cause to be concerned. As with almost anything, you can move into a niche product, but that niche product becomes a commodity pretty soon, just like ethanol will. I think the key is continual science and innovation.

The first in will always make the most profit. The U.S. and Brazil have gotten into this ethanol game very quickly and they have gotten benefits. We're late in the game, so we're not getting as much. If we are smart and we continue to do that research, and we're into cellulose ethanol first, or biobutanol, or whatever, that's the way we're going to guarantee that farmers get benefits and ensure benefits moving into the future. If we stay in the same game and we produce grain-based ethanol five years from now, we're probably going to be high-cost producers and we're going to lose for sure. Innovation is key.

[The Chair, Conservative, James Bezan]

Mr. Friesen, do you have anything you want to add to that?

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

I still have a bit of time.

Bob, you talked a bit about a disaster program and what have you. Maybe you can enlarge a bit on some of the key or main components of how you would see that disaster program. My thoughts on a disaster program are that it deals with major things like BSE, the avian bird flu, or the flood in Manitoba. I'm sure there are other examples like that. Maybe you could talk a bit about that.

[Bob Friesen]

The catastrophic disaster component to the suite of programs is something we look at exactly as you described. If you have an AI breakout or a BSE breakout, how can we make sure the program responds faster, how can we make sure the program responds to rebuilding an infrastructure if it's damaged almost beyond repair, or how can we make sure that farmers are compensated for business interruption perhaps and rebuilding whatever they have to rebuild on their farm to get back in business?

[The Chair, Conservative, James Bezan]

Thank you, Mr. Miller. Your time has expired.

Denise, I didn't think Mr. Strahl had a big enough handle yet either, so let's make it the Minister responsible for Agriculture, Agri-Food, Bioresources, and let's throw Rural Development in there too.

[Voices]

Oh, oh!

[The Chair, Conservative, James Bezan]

Mr. Atamanenko.

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

Thank you for being here.

I'm just going to throw some questions out and you can decide who would like to answer them.

I'd like to change the direction a little bit, if I can formulate my thoughts.

Agriculture has traditionally been associated with food. We produce to feed people in the world, ourselves and others. We're talking in Canada about how we can sustain our farming community. One topic that has come up in our hearings was that of food security. Some even suggested that maybe we were at a crossroads, that we have to have a vision, and our vision has to either say we want food security for our nation, and then we set our policy, or we move into this whole multinational global field and take our chances with basically the survival of the fittest, and maybe we'll produce some food and maybe we won't. These are extremes, but these are some ideas that were thrown at us.

When we talk about innovation, the assumption is that we need innovation all the time, that we have to move forward, that we have to make drugs from food, clothes, and of course biofuels. I'm just wondering if it's an assumption that's correct, or are we just moving in this direction? And what does it do for food production and feeding people in the world? The more we move into this—we've had this debate with biofuels—does that mean we have less available food to feed people of the world? Are there dangers in innovation and science and technology?

There have been some disturbing studies in regard to GMOs and their effect on human health. I'm wondering, are we not moving too quickly? There is a movement—and I'm getting letters and letters—against the idea of terminator seed technology, that seeds can't be reused, and placing farmers in the position of becoming dependent on these seeds, the danger it is, and what it is to communities in the rest of the world.

These are ideas, and I'd just like your comments.

The other thing is that we need innovation, and somehow we have to have more and better business models, yet the message we get when we talk to farmers is, “We're good at what we do; we just need some kind of support, some kind of vision from the government to help get us through, get the markets, get that response to anti-dumping and all that kind of stuff, and we'll do the job.”

I'm throwing out some ideas. I'm not sure how many minutes we have, but I'd like to get some comments from you.

[The Chair, Conservative, James Bezan]

Mr. Friesen, and then Mr. Phillips.

[Bob Friesen]

I did a radio interview a while ago, and the interviewer said, “Why should we continue to invest in agriculture if our farmers aren't competitive?” I said the problem isn't that our farmers aren't competitive. We have some of the most competitive farmers in the world. The problem is that we don't have competitive policy, and there are some other countries that are out-competing us in agricultural policy.

This is why we talk in our strategic growth pillar about market intelligence, market development, and innovation centres across Canada, so our farmers can be on the leading edge of technology. If we don't do that, if we decide to be complacent about it, we will lose our competiveness. So we have to move as fast as we can and look for opportunities to remain competitive.

[The Chair, Conservative, James Bezan]

Mr. Phillips.

[Richard Phillips]

You said that farmers say they're good at what they do, and that's very, very true. I think we have some very distinct advantages here within Canadian agriculture that a lot of other countries don't have. Our farmers are very well educated. We also have a huge infrastructure in Canada that not everywhere else in the world has, which can accommodate types of innovation. For example, we have grain bins on all the farms. Most farmers would have a wide range of grain bins. We have our elevator system, commercial handling set up to handle products very specifically, inspection systems to ensure the purity of what's going through those systems--and those are natural advantages that a lot of other countries don't have. For example, if you farm in Australia, a lot of farms don't even have grain bins. Everything goes into one bulk pile.

So when we're talking about why innovation and do we need to keep moving ahead, I think we do, because if we don't go in that direction, we risk going back, as Justin said, into just producing commodities, and then you're competing with everyone in the world to be the lowest-cost producer of whatever commodity it is.

With the innovation, and again, going back to the infrastructure we have and the education that farmers have, I think we can produce niche market products that can command a premium so that we move off just the reliance on being the lowest-cost producer in the world.

That's where I see innovation going. Whether it's in specific food products, perhaps a wheat for celiac disease, or whether it's some of the bioproducts, I think we keep moving ahead, because we're naturally suited to take advantage of that.

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

Are there any other comments?

[The Chair, Conservative, James Bezan]

Mr. Betker.

[Terry Betker]

I have a comment. I would agree that from our perspective in working with farmers on a business management perspective, innovation is a good thing, but there would be two correlating concerns with that: oftentimes with innovation there's a requirement for investment, and oftentimes the innovation is cutting edge or leading edge and there's not a lot of traditional models or a lot of historic information upon which to make investment decisions.

If we're asking farmers to invest in some of that innovation, and there's no history, they are going to want to know that their risk in that investment is mitigated. I think that creates challenges--and I'm not intending to change the topic here--to the whole business risk management programming. That's comment number one.

My second comment is that with the investment in capital that's required for some of this innovation or to capitalize on some of the biofuels opportunities, what we're getting is more and more investment. Some of the margin-based programs are investment neutral--or at least the CAIS is investment neutral. What happens then is that some of the opportunity becomes capitalized, and the gap between the investment and the narrow profit margins widens and the risk increases. So it's another way of thinking about the increasing risk and some of the decisions and the supports that farmers are going to need to make if we're going to want them to invest in some of these opportunities that we think are heading in the right direction.

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

This is maybe just a question for CFA. Canada traditionally hasn't, in the last while, been super supportive of banning terminator seed technology. We've kind of gone against the trend in spite of the fact that there's a moratorium now. Other countries, such as India and Brazil, have legislated a ban. What's the CFA position on terminator seed technology?

[Bob Friesen]

That issue is still under discussion with CFA.

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

Thanks.

[The Chair, Conservative, James Bezan]

Does anybody else want to comment on that?

[Denise Dewar]

I would just make the point that there is not a global moratorium, although I think that view has been articulated out there. What has been requested is that adequate research be done before you begin your field trials. That is the Canadian position.

[The Chair, Conservative, James Bezan]

Mr. Boshcoff, you'll kick us off on the five-minute rounds, please.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Thank you very much.

When the pillars were presented, we were really talking about fundamentals and getting back to some basics that perhaps government and public policy and Canadian people can also relate to. So for a national organization, should there be a stronger emphasis that no matter what we're doing, no matter where we are negotiating, whether it's WTO, NAFTA, or any of these, the countries from which we are importing goods should follow the same ground rules that we have to follow to send our goods to market either domestically or internationally?