Agriculture Committee on May 8th, 2007

[Pierre Corriveau]

I believe so.

[The Chair, Conservative, James Bezan]

Okay.

That should be enough. We can't increase it. As a committee, we can decrease, but this is money that for the most part is designated to go toward farmers.

Shall vote 10, in the amount of $595,783,000, less the interim supply that has been granted of $148,945,750, for a total committee examination of $446,837,250, carry?

Vote 10--Agriculture and Agri-Food--Grants and contributions..........$595,783,000

(Vote 10 agreed to on division)

[The Chair, Conservative, James Bezan]

Shall vote 15, in the amount of $1, less the interim supply that has been granted of $1, carry?

Vote 15--Pursuant to section 29 of the Financial Administration Act, to authorize the Minister of Agriculture and Agri-Food, on behalf of Her Majesty in right of Canada, in accordance with terms and conditions approved by the Minister of Finance, to guarantee payments of an amount not exceeding, at any one time, in aggregate, the sum of $1,500,000,000 payable in respect of cash advances provided by producer organizations, the Canadian Wheat Board and other lenders under the Spring Credit Advance Program and $1,500,000,000 payable in respect of cash advances provided by producer organizations, the Canadian Wheat Board and other lenders under the Enhanced Spring Credit Advance Program..........$1

(Vote 15 agreed to)

[The Chair, Conservative, James Bezan]

Shall vote 20, in the amount of $1, less the interim supply of $1 that was granted, carry?

Vote 20--Pursuant to section 29 of the Financial Administration Act, to authorize the Minister of Agriculture and Agri-Food, on behalf of Her Majesty in right of Canada, in accordance with terms and conditions approved by the Minister of Finance, to guarantee payments of amounts not exceeding, at any time, in aggregate, the sum of $140,000,000 payable in respect of Line of Credit Agreements to be entered into by the Farm Credit Corporation for the purpose of the renewed (2003) National Biomass Ethanol Program..........$1

(Vote 20 agreed to)

[The Chair, Conservative, James Bezan]

Shall vote 25, in the amount of $3,595,000, less the interim supply granted of $898,750, for a total vote amount that we've examined of $2,696,250, carry?

Canadian Dairy Commission

Vote 25--Program expenditures..........$3,595,000

(Vote 25 agreed to)

[The Chair, Conservative, James Bezan]

Shall vote 30, in the amount of $494,987,000, less the interim supply of $123,746,750, for a total vote amount that we've examined of $371,240,250, carry?

Canadian Food Inspection Agency

Vote 30--Operating expenditures and contributions..........$494,987,000

(Vote 30 agreed to)

[The Chair, Conservative, James Bezan]

Shall vote 35, in the amount of $19,735,000, less the amount of $4,933,750 voted in interim supply, for a total that we've examined of $14,801,250, carry?

Canadian Food Inspection Agency

Vote 35--Capital expenditures..........$19,735,000

(Vote 35 agreed to)

[The Chair, Conservative, James Bezan]

Shall vote 40, in the amount of $30,940,000, less the amount of $28,361,666.67 voted in interim supply, for a total examination of $2,578,333.33, carry?

Canadian Grain Commission

Vote 40--Program expenditures..........$30,940,000

(Vote 40 agreed to)

[Wayne Easter, Liberal, Malpeque, PE]

I have a question, Mr. Chair. When is their year-end?

[The Chair, Conservative, James Bezan]

They're on the same year--

[Wayne Easter, Liberal, Malpeque, PE]

It says 11 of 12 months, so they have one month left.

[The Chair, Conservative, James Bezan]

One month.

[Wayne Easter, Liberal, Malpeque, PE]

That's fine.

[The Chair, Conservative, James Bezan]

We're done with the votes.

Shall I report them to the House?

[Some hon. members]

Agreed.

[The Chair, Conservative, James Bezan]

Thank you.

Let's carry on with our business today. We want to welcome to the table as witnesses, from Grow Canada, Denise Dewar, who is the vice-president of CropLife, and Richard Phillips, who is the executive director of Grain Growers of Canada. From CFA, we have Bob Friesen, no stranger to our committee, and as an individual, we have Terry Betker, who is a former member of the National Safety Net Advisory Board, from my home province of Manitoba. Justin is doing this as well, from the CFA, so welcome, Justin.

I ask that all of you keep your comments to 10 minutes or less so that we have time for a good round of discussion.

Denise, I'll ask you to kick us off as we continue with our study on APF.

[Denise Dewar, Vice-President, CropLife, Grow Canada]

Thank you for the opportunity to speak at your meeting today.

As I understand it, today's hearings are about a new agriculture policy for Canada, the next generation of agriculture.

In looking at how we could participate in this review, CropLife Canada members and our Grow Canada partners discovered that we share optimism about the future of agriculture and the opportunities for innovation.

Joining me today is Richard Phillips, executive director for Grain Growers of Canada. Also attending are representatives from the Canadian Seed Trade Association and the Canola Council of Canada. And of course the Canadian Federation of Agriculture is here before you. We are all part of the Grow Canada partnership.

While production agriculture has endured major challenges in the past few years, the Grow Canada partners are united in our belief that plant science innovation can be, at least in part, a solution to the challenges facing agriculture. We see this as an opportunity to articulate a vision that offers a value-chain perspective with innovation at its core. The end result is this publication, “Innovation and Partnership in the Bio-Economy: A Discussion Paper on the future of Canadian Agriculture”.

In addition to CropLife Canada, there are eight allied stakeholder organizations that have lent their names in support of the document and the vision it has for the future of agriculture. They are the Grain Growers of Canada, the Canadian Federation of Agriculture, the Canadian Canola Growers Association, the Canola Council of Canada, Pulse Canada, the Canadian Horticultural Council, the Canadian Seed Trade Association, and the Canadian Renewable Fuels Association.

Organizations like the Canadian Federation of Agriculture have worked hard on their vision as well. CropLife Canada certainly supports the CFA's strategic growth pillar and its recommendations for the next generation of agriculture policy.

Grow Canada is focused on innovation, and we think this is an important and sometimes overlooked component.

What is this collective vision for the future of agriculture? We envision by the year 2015 a prosperous, sustainable, and competitive agriculture sector in a flourishing bio-economy built on leadership and scientific research, innovation, and the adoption of new technologies and on working together in win-win-win value-chain strategic alliances to be a world leader in providing new products and new solutions for agriculture, nutritional health, energy, and environmental challenges facing consumers here in Canada and in markets around the world so that all Canadians will enjoy economic, environmental, and social benefits of the bio-economy.

What does this vision, this opportunity, look like in real terms? We believe by the middle to latter half of the next decade there is the potential for a $500 billion global bio-economy, driven by discovery and innovation in plant sciences. Contrast that estimate with the size of the global plant science industry today, estimated at approximately $40 billion. This means translating our substantial investment and research and development, some 7.5% of sales, into new directions for agriculture.

This committee is very familiar with the opportunity for agriculture from biofuels. Let me add to that crops producing vaccines and pharmaceuticals; crops delivering nutraceuticals and functional foods; crops generating biodegradable plastics and other biomaterials; and crops that can better withstand heat and drought, disease, cold, and frost, and that grow in saline soils.

Today's measure of success for agriculture is increase in yield. In the future we can imagine the evolution of quite different benchmarks, for example, doses of medicine per acre, or litres of biodiesel produced, or the number of kilometres per acre. All this innovation has positive impacts on downstream processing, such as the expansion of canola-crushing capacity in the prairies or ethanol plants across the country. What all of these innovations represent are solutions for some of the most daunting challenges facing our society in agriculture, nutrition, health care, energy, and the environment in both developed and developing economies.

They also represent solutions for farmers, for their most daunting production challenges as well as economic opportunity for farmers and for the entire agriculture value chain.

While scientific innovation is a pivotal and key driver for the bio-economy of the future, it's not enough on its own. Forging strategic alliances and partnerships throughout the value chain is pivotal to ensuring the sector's commercial success. It is also about government looking at regulation in new and different ways.

How do we turn this vision into reality? While I have outlined the role that industry can play, an important partner to make this happen is government. The recommendations to government in the paper are really the centrepiece of the entire document, and they fall into four broad categories.

First is to implement policy framework and regulation to enable innovation, not disable it. We are not talking about compromising health and environmental safety; we are talking about using a smart regulatory approach to accelerate the development of science-based policies and regulation. As innovative companies we need a predictable set of rules. We're also talking about communicating to the public to build confidence in the regulatory system.

Second, we need to help farmers adopt and adapt to innovation opportunities. That means assisting with on-farm infrastructure changes and the implementation of quality assurance programs, ISO certification, safety programs such as HACCP, environmental farm plans, and behind-the-farm-gate stewardship. It also means providing training for new technologies through best management practices and environmental stewardship and by closing the pesticide technology gap with the United States.

Third is to promote marketing acceptance, communicate technology's contribution to agriculture, and assist with regulatory capacity-building both at home and abroad.

Finally, there is one more recommendation. In order to help impress upon the public, the value-chain stakeholders, and our global customers that it is not business as usual in agriculture, and to change the mindset from the old agriculture to the new agriculture, we recommend a name change. It should be changed from Agriculture and Agri-Food to the Department of Agriculture, Food, and Bioresources. This change, while symbolic, would help make clear that we are entering an era of transformed agriculture.

In conclusion, what's in this new vision for Canada? For Canada and Canadians it is about environmental sustainability and economic opportunity. It is about job growth, increasing our productivity as a nation, rural and regional economic diversification, our international competitiveness, a safe and secure food supply, and prosperity for all. It's about growing Canada.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you.

Richard, do you have anything you want to add to that? Okay, thank you.

Mr. Friesen, CFA has already made a presentation on BRM. I believe you want to talk about the broader issues on the other pillars, so if you can bring those comments, we'd appreciate it.

[Bob Friesen, President, Canadian Federation of Agriculture]

Thank you very much, Mr. Chair.

I was asked late last week whether I could bring some of the former NSNAC members with me. You know what most farmers are doing this time of year, so regrettably, several of the ones I invited couldn't make it. But I do have Terry Betker with me, who was an industry person from NSNAC, so he can certainly answer questions as well.

I would also like to preface my comments by saying we support 100% what Ms. Dewar has talked about. We are signatories to that science and innovation document. In fact, that science and innovation document fits very well into our strategic growth pillar in the Canadian farm bill, so I would like to express and emphasize that support.

CFA members hosted a farm income symposium several years ago, and at that symposium they decided to start looking at solutions, at how we can develop policy that will create an environment within which farmers can be successful. We decided not to talk about how much more money we needed. We decided not to talk about redesigning business risk management programs at the time, but rather focus on solutions. That's exactly what they did for two days. What we came up with is what we call a Canadian farm bill that has three pillars. It's not meant to be in contradiction to the current consultation work that's going on for the next generation of the agricultural policy framework, but instead to give members an opportunity for input and to submit the ideas from the Canadian farm bill into the process that's going on in developing the next agricultural policy framework.

They recognized--and this emphasizes the strategic growth pillar we have--that while the first APF was an important collage of funding programs, that's really all they were. We didn't spend enough time on strategy, on what are some strategic things we can implement to create policies that will make us more profitable.

As I said earlier, we divided the farm bill into three pillars. As the chair has already mentioned, we were here talking about business risk management. We are continuing to do the work on that, together with the minister. There has already been some very good work done. We continue to work on the catastrophic disaster component, production insurance, as well as a definition of supply management as a business risk management program. We look forward to continuing that work, as well as the details on the top tier that the minister announced a while ago.

The other two pillars that we have in the Canadian farm bill are a public goods and services pillar and a strategic growth pillar. I'm not going to ask you, of course, to have us read the documents that we put in front of you, but let me first read the vision that members decided to develop for agriculture. It kind of prefaces our entire Canadian farm bill and all three pillars.

The vision is that Canadian agriculture and agrifood be a vibrant, dynamic industry where all partners of the production chain have the opportunity to succeed, be profitable, and are world leaders as solution providers for the world's economic, environmental, and health objectives.

Within that context, let me talk briefly about the public goods and services pillar. For that, I'll go to the four principles that we set for the public goods and services pillar: one is sustainability of public good initiatives. That basically says if farmers don't have an ability to pass on additional costs for programs that are provided for the public good, if they can't pass those costs on to the marketplace, then they need the public to help them pay for some of those costs.

Another principle is continual innovation.

Third is policy coordination.

Last is integrated management systems. All of you who are farmers around the table know that farmers have an increasing number of system management documents that they have to fill out, and we need some sort of integration there.

To drill down a little deeper on public goods and services and ecological goods and services, we'd like to continue the funding for the environmental farm plans we got funding for in the first APF. They're important. They have helped farmers set indicators. They have helped farmers measure and analyze what they are doing within the context of environment on their farms. It has helped them identify areas where they need to continue to improve.

Ecological goods and services--you're all familiar with the ALUS program. Again, we believe that incentive programs can really help farmers do things they otherwise could not afford to do for the environment. It continues to keep that land in the hands of farmers, but they can implement an environmentally friendly program.

It's really a win-win-win for governments, producers, and the public. It's a win for the public because, again, it helps maintain and improve Canada's natural capital. It's a win for governments because eventually, we believe, it would decrease the load on business risk management. And it's a win for farmers because they would be able to do things that they otherwise could not afford to do.

We believe we need to spend a lot of time and energy on a renewable energy strategy. We think there's a lot of potential for farmers within renewal energy. We' like to develop a strategy there.

We would also like to get a real handle on carbon credit trading. We think there's a potential here to create a revenue stream for farmers. We know that, say, in the U.S., farm organizations are already publicly trading carbon credits for their members. We think we need to move fast on this one and create regulation so there is some stability so we can address liability issues and so on. Then we can create that revenue stream that we think is there for farmers for the contribution they have made to carbon sequestration.

Lastly, we talk a bit about the strategic growth pillar. Again, this is something we thought we needed to spend more time on when we developed the last agricultural policy framework. It can include things like bio-energy. Are we developing competitive policy in the bio-energy field? Are we making sure, say, in the biofuel industry, that production of our feedstock will be competitive? Will we be competitive at the manufacturing level? Do we have adequate criteria or standards for farmer ownership at the manufacturing level so they can accrue benefits from that industry as well?

We have four specific suggestions. One is to develop Canadian agricultural business development and innovation centres across Canada. For farmers to be competitive and to avail themselves of opportunities, we feel that we need cutting-edge information for farmers so they can be where they need to be at the right time.

I've often used this analogy in the last little while. When Wayne Gretzky was asked once why he was so good, he said that he learned to go where he thought the puck was going to be. It wasn't where the puck was or where the puck is, but where the puck was going to be. And we believe that these innovation centres across Canada could help farmers do exactly that: be where the opportunity is going to be.

Second, in addition to maintaining the marketing structures that are empowering farmers, we believe there's a lot of potential for helping farmers invest in co-ops and for developing co-ops for farmers so they can build alliances with each other as well as with downstream industry.

We would really like to look to Quebec for an example on co-ops. In Quebec they have what they call a cooperative investment plan. It has leveraged $6 million in Quebec in the way of tax deductions. It has leveraged a lot of capital investment in co-ops. That, then, has resulted in more investment, as much as $100 million in co-op investments, in rural areas. We think the federal government, say, for a mere $20 million, could leverage hundreds of millions of dollars in investment in co-ops and the resulting investment in rural areas. We think that would be an excellent way to empower farmers, without a huge cost to the government.

We also emphasize the need for more public research. Research is very important. Private research is important, including proprietary rights for those researchers. But we also believe we should have more public research. And we should make sure that the results of that research get into the hands of farmers and that they can get some real utility out of the research results.

Lastly, some of you may have already heard about the green label initiative we started. It is to identify what the Canadian public would be willing to do to buy Canadian products. We talk a lot about branding Canadian products internationally, but we feel we should also brand Canadian production domestically. We found that 90% of Canadians would be willing to buy Canadian products if they were identified as Canadian products, and almost 50% said they would be willing to pay a premium for those Canadian products if they knew the premium would go to farmers.

So we believe there's real potential there for us to identify Canadian products, say, through a green label that would identify that it is Canadian produced, that it is produced within very high Canadian food safety and environmental standards, and that farmers have received a fair price.

I'll briefly hand it over to Terry Betker, who will talk a little about renewal, which again fits very well into our strategic growth pillar.

[The Chair, Conservative, James Bezan]

Mr. Betker, are you going to be talking about some things as a former member of the safety net committee?

[Terry Betker, Former Member, National Safety Net Advisory Board, As an Individual]

I could, or I could respond to questions, if you like. I could do it either way.

[The Chair, Conservative, James Bezan]

It's your play and it's your time.

[Terry Betker]

Thanks very much, Bob.

Thanks to the CFA for providing me with this opportunity.

Thanks for the opportunity from the committee to come and attend this meeting.

I'm a partner and farm management consultant with Meyers Norris Penny. Some of my comments on the renewal program, which I'll start, Mr. Chair, are based on our observations working within that program. In western Canada, we probably have over 15,000 farmers as clients, and we've had a fair bit of exposure through working with some of these programs.

From a renewal perspective, first, over the period of time in which the program has been active, we've observed some positive changes in farm management in a lot of situations. I think it quite closely correlates to some of the original intent in the design of renewal and to some of the programs within the renewal pillar.

But we've also noticed some changes, from some of the earlier discussions in which we were involved, in terms of program design and how it's been rolled out and administered over a period of three or four years. As we think back on the three or four years that we've been working within the program, we would question whether or not the benefits to farmers have been optimized to the extent they could have been.

I suppose there could be lots of reasons for that. Some things are tied to administrative costs and the requirement for the administration of the program. Some things are tied to administrative intent. There are inefficiencies within the program and software design delays. There's the requirement to produce written reports, etc. There's then the interpretation and probably the evolution of the program from its inception to where it exists today.

We think there's a real opportunity to leverage input from the private sector. By “leverage”, at least from our perspective, I mean the more people we can get working with farmers in a practical way to get them to think differently about how they're going to manage their farms, the better it would be.

On what Denise talked about, it's what farmers are going to be required to think about in the future. The more people who are leveraged within that relationship, the better it will be. I think the renewal program had an opportunity, and indeed still has an opportunity, to leverage the private sector. By leveraging the private sector, you then get many more people's time invested in having an impact and effecting change in farm management. I think it's a good thing.

I'd note the previous comment I made about some of the positive changes we've seen in some of the farms in which we've had an ongoing relationship that started with some renewal contact. We think there's a real opportunity in renewal. I don't think it's been capitalized on to the extent it could have been within the first few years of the first round of the APF.

It's to tie renewal programming to other pillars of food safety and food quality. Primarily, I guess business risk management would be one that clearly comes to mind, as well as the environment. All of them tie back to farm management, and a lot of the changes in that reside within the renewal pillar.

Those are some of our comments, Mr. Chair, on renewal programming.

From a safety nets advisory committee perspective, I was on the committee for four years. It think it was disbanded in December of last year. I thought the committee had some real strengths. Over time, it served as a good way to bring together a bunch of organizations that had cross-sectoral interests and a multidisciplinary approach. You had government people, producer groups, industry groups, associations, and others who were sitting at the table to discuss business risk management. It was pan-Canadian, and it brought together people from across Canada. From that perspective, it was good.

On my observations from the first few meetings I attended, when recalling some of those meetings and where we ended up, I thought it was an approach that was preferable to an ad hoc approach, where you gather people together for a day to discuss some issues. The benefits are that over time you gain some familiarity with the people who are sitting around the table.

The issues are complex. The issues aren't singularly focused on business risk. It's the basic intent of a safety net. But the issues in farm management are multifaceted, and they span areas other than business risk. When you have people there over time, you begin to understand what their positions are. I think it's a more effective use of time.

On the negative side, there were some constraints I think in terms of the focus on CAIS. It didn't allow us to get as deeply as would have been possible into discussion of other areas that would complement business risk management decisions from a farmer's perspective; there was a lack of regularity in terms of the meetings; we were disappointed, or at least I was disappointed, in the lack of ministerial presence at these meetings; and there seemed to be a bit of a gap in terms of follow-through. There would be a safety nets meeting, and there would be presentations made on behalf of the administration and a lot of discussion. Then people would go back to their businesses, and then when we'd come back to the next meeting, there seemed to be a gap in terms of what was said or what kind of follow-on discussion occurred.

Mr. Chair, those are some comments, both pro and con, in terms of my participation in the safety nets advisory committee.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Betker.

We'll kick off with the first round of questioning.

Mr. Easter is first.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Mr. Betker, on the matter of the safety net advisory committee, I think we're seeing from the new government that if the advice doesn't suit what they want to hear, the advisory committee won't be around. We're seeing that across the piece; they don't want to hear what the community is really saying. They're ideologically driven, and that's the way they're going to go. That's the reality for the moment.

The lack of follow-through with the advisory committee by government and by the bureaucracy is something we've heard right across the country. That isn't just with the new government; it's been there for 30 years, and it really seems hard for the farm voice at the primary producer level to get the message up through the system. This committee passed a motion just a week or two ago trying to get the advisory committee meeting changed from being in the height of seeding time.

Bob, the CFA has been promoting the Canadian farm bill, and I think a lot of us agree with that concept. The difficulty is in implementing that kind of concept in the Canadian system of government, with its shared jurisdictions and so on, and across departments that, for whatever reason, are like stovepipes and don't want to work with one another.

If you look at the U.S. farm bill, there are school milk programs that are funded. They're funding a lot of programs that are GATT green in terms of environment, in terms of inspection fees, and so on and so forth.

We had the CFIA here. Maybe the researcher can tell me if I'm wrong, but I think they said they cost-recover 10%. Well, I would wager that if all they're cost-recovering is 10%, probably that full 10% is taken up in administration, in sending out bills to the farmers to collect it. They'd be better off not charging it at all; it would be a huge saving to the farm community.

How do you see doing a Canadian farm bill that's all-encompassing across several departments in the Canadian context?