Agriculture Committee on March 24th, 2009

[The Chair, Conservative, Larry Miller]

We'll call this meeting to order and move right to our witnesses.

I'd like to thank our witnesses for coming here today. As everyone knows, we're continuing our study on competitiveness in Canadian agriculture.

I would ask that each of the three groups we have here today keep their opening remarks to 10 minutes or less, please. We'll go into questioning after that.

Welcome to our first witnesses, Mr. Darcy Davis and Ms. Sandra Marsden, from the Canadian Agri-Food Trade Alliance. Go ahead, please.

[Darcy Davis, President, Canadian Agri-Food Trade Alliance]

Good morning, Mr. Chairman.

I am the elected president of the Canadian Agri-Food Trade Alliance. I am joined by Sandra Marsden, president of the Canadian Sugar Institute and member of the CAFTA board of directors. We welcome the opportunity to be with you today to discuss competitiveness in Canada's agrifood sector.

CAFTA represents producers, processors, and other agriculture and agrifood organizations with a strong interest in trade. In fact, the sectors represented in our membership--cattle, pork, sugar, and grains and oilseeds--rely on international trade as a market for their products. Many of our members have already appeared or will be appearing before this committee in the coming weeks to discuss competitiveness in their own sectors.

Our remarks will focus specifically on trade, the role that trade plays in supporting a competitive agriculture and agrifood sector in Canada, and the need for Canada to remain committed to trade liberalization and the implementation and maintenance of a rules-based trade arena.

Canadian agriculture depends on trade. We rely on it. According to Statistics Canada, we exported $34 billion in agricultural products in 2007, an increase over our 2006 levels and a number that is estimated to have grown again in 2008 to $41 billion. The WTO ranks Canada as the fourth-largest exporter of agricultural and agrifood products in the world, behind the EU, the U.S., and Brazil. To put this in perspective, in 2007 we exported over half our beef and pork production, 70% of our wheat production, and almost two-thirds of our canola production.

Trade matters, and it matters to farmers. Almost 80% of total farm cash receipts come from export-dependent commodities. In every province, including Ontario and Quebec, the majority of farm-gate receipts are now derived from export-dependent products.

We have built an industry that relies on trade. Without it, our agriculture and food production sectors would contract significantly. We need international markets, and we need a transparent and fair set of rules to govern our trading activities.

For several years, CAFTA has promoted agricultural trade liberalization through the multilateral agreement being negotiated under WTO. As a multi-country agreement, the WTO can address a comprehensive range of trade issues and barriers, including market access, export subsidies, and domestic support, in a manner that is transparent and rules-based.

In late 2007, CAFTA engaged the George Morris Centre to analyze the potential benefits to Canadian agriculture under a WTO agreement. Using draft modalities introduced by the WTO in July 2007, the centre estimated that Canada's beef, pork, canola, and grain sectors would realize $3 billion a year in increased exports through increased volumes and increased values in a post-WTO world, or a post-Doha world.

The most recent WTO agriculture text and modalities, presented in 2008, represent substantial progress towards a WTO outcome that will provide significant gains for Canadian agrifood exporters. Its adoption will eliminate export subsidies, substantially reduce trade-distorting support, and expand access to export markets. It will increase transparency, fairness, and discipline.

Canada has benefited greatly from the reduction in trade-distorting barriers in the NAFTA and other trade agreements. We believe that Canada and Canadian agriculture will continue to benefit from an expanded rules-based trading environment under the WTO.

I'll now ask Sandra Marsden to make a few comments about the impact of the WTO on competitiveness in the sugar industry. Then I'll conclude with a few comments.

[Sandra Marsden, President, Canadian Sugar Institute, and Director, Canadian Agri-Food Trade Alliance]

Thank you, members of the committee.

The Canadian Sugar Institute represents sugar refiners in Canada. We have cane sugar-refining operations in Vancouver, Toronto, and Montreal, and a sugar beet processing plant in Taber, Alberta. The industry also has two further processing facilities in Ontario that produce products such as iced tea, hot chocolate, and gelatin desserts.

Our industry has been in Canada since the mid-1800s and was founded on the principles of free trade. The Canadian sugar market is not supported by any domestic or export subsidies, and we do not limit imports through restrictive barriers, such as tariff rate quotas. The only protection we have is a $30-per-tonne tariff—about 8%—that serves as modest insulation from residual refined sugar prices on the world market. This is in sharp contrast to our most significant competitors, the U.S. and the EU, who have generous price supports amounting to two or more times the world price; export incentives; and small quotas protected by high over-quota tariffs. In the case of the U.S., these are 150%, and for the EU they are 175%, on both refined and raw sugar, and on many sugar-containing food products.

Canadian sugar attracts the world market. This provides consumers and food processors in Canada with a significant cost advantage. This price benefit, combined with the phase-out of duties under the NAFTA, on many finished sugar-containing products did result in significant investment in Canada and further food processing in industries such as sugar confectionery, bakery, and biscuit manufacturing.

In the years following NAFTA, annual sales growth was in the range of 4% to 8% for major sugar-using food manufacturers. Since 2004 that growth has slowed considerably. Domestic and export sales of sugar and sugar confectionery products in particular have been falling, as major multinational companies realign their businesses based on NAFTA and global goals. Since 2003, exports of sugar and sugar confectionery have fallen 12%, or by $215 million.

The reason I raise this is that in the absence of a WTO agreement to begin the process of sugar reform affecting both sugar trade and trade in many food products containing sugar, we have little optimism for improved market access and increased exports to the U.S., EU, and many other countries. As of January 1, 2008, the U.S. and Mexico have duty-free trade in sugar and sugar-containing food products. We still face zero or small quotas on refined sugar and many food products.

With the passage of the recent U.S. Farm Bill, the U.S. has cut off imports of an important product to our Taber, Alberta, plant and Canadian sugar beet producers—beet thick juice. The new sugar program in the Farm Bill also contains restrictive administrative provisions that will make it more difficult for us to export refined sugar at times of market openings. We also face more competition in the Canadian market, as large sugar-producing countries in Central and South America seek access improvements in Canada while U.S. market access remains essentially closed.

For all of these reasons, we strongly support a renewed effort to re-engage Canada's trading partners in the WTO towards a new agreement on agriculture. A comprehensive move towards reduced market access barriers and reductions in price supports and other domestic and export subsidies will strongly enhance the competitiveness of both the Canadian sugar industry and our customers in the food processing sector.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you.

[Darcy Davis]

Can I just conclude, Mr. Chairman?

[The Chair, Conservative, Larry Miller]

Okay.

[Darcy Davis]

On the risk of protectionism, Canadian agriculture has weathered some difficult years, with BSE, circovirus, the rise in the Canadian dollar, and an increase in input costs. All of these have challenged our competitiveness. But we now face one of the greatest threats yet: the rise in protectionist sentiments in the face of the global economic crisis. Fearing this very trend, G-20 leaders signed a pledge last November to avoid protectionist measures. In a report released last week, the World Bank reported that since the beginning of the global financial crisis, countries, including 17 G-20 members, have implemented 47 protectionist trade measures. Another 19 measures have been proposed but are not yet implemented.

This trend extends beyond agriculture and is worrisome. The World Bank has cautioned that as the global recession continues there is every risk that countries will begin to raise tariffs to bound levels or utilize unused subsidy room to help support their domestic industries.

Now is not the time for countries to close their borders. If our trade opportunities contract, so will our industries, our jobs, and our economy. Trade must be part of the solution. The WTO, the World Bank, and G-20 leaders have all underscored the importance of pressing forward with the WTO's work. It is essential that Canada continue to support the WTO Doha negotiations as well.

Without a trade agreement, the future competitiveness of Canada's agriculture industry is at stake. Canada will be increasingly disadvantaged in international markets as countries use existing rules to maintain export subsidies, further support domestic producers, and use the flexibilities in existing rules to protect markets from competitive imports from countries like Canada.

Finally l'd like to comment on the Canada-EU trade agreement. Since its inception in 2001, Canada's main focus has been the multilateral trade agreement being negotiated under the WTO. Perhaps it's not surprising, given the slow pace of multilateral negotiations, that there has recently been an increased emphasis on bilateral trade agreements.

There are many reasons to prefer a multilateral trade deal. CAFTA supports high-quality, comprehensive bilateral trade agreements. In particular, we support and encourage the federal government to continue discussions toward a free trade agreement with the EU. But we stress that to be effective any agreement needs to be comprehensive. In that spirit we encourage the government to adopt a broad negotiating mandate for all agriculture products and ensure that nothing is excluded at the start of the negotiations.

Mr. Chair, we thank you again for this opportunity and we look forward to answering your questions.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Next, from the Grain Growers of Canada, we have Mr. Doug Robertson and Mr. Richard Phillips, for 10 minutes, please.

[Doug Robertson, President, Grain Growers of Canada]

Good morning, Mr. Chairperson, members of Parliament, and fellow guests.

My name is Doug Robertson. I'm the president of the Grain Growers of Canada.

With me today is our executive director, Richard Phillips.

First, I'd like to thank you for the opportunity to be here today to share our thoughts on the competitiveness of Canada's agriculture sector, especially as it relates to trade.

Grain Growers of Canada represent grain, oilseed, and pulse commodity associations from every province in Canada except Quebec, but even there we are now forming a coalition to work together with the FPCCQ on the funding of public research.

Today in our remarks I'd like to touch first on international trade, then on domestic competitiveness, and then on some key areas where we need to see investment and progress to keep Canadian producers competitive.

Darcy was just talking a little bit about bilaterals, which are a good thing in that we can target key markets for Canadian exports. For example, we have the NAFTA agreement. We have the South Korean agreement, this proposed EU deal that is in the works, but they can also come back and bite us. They can be bad because we're not as large a market for imports so we don't have the same bargaining clout that, say, a country like the U.S. does. In South Korea, for example, the U.S. can negotiate a better bilateral deal because they have a large import market for Korean goods, which is attractive to the Koreans. This then permanently locks in Canadian exporters at a competitive disadvantage on tariffs.

A more competitive deal for Canada would be multilaterals, like the ongoing world trade talks. The multilateral process is crucial because it's the only meaningful way to get at the key issues of domestic and export subsidies. It is critical, as a new U.S. administration comes to grips with its trade policy and India finishes its elections, that Canada take a lead role in pushing for the resumption of talks at the WTO.

Subsidies from other countries can be direct and indirect, for example, with EU oat subsidies. Although the EU doesn't export cheap oats into Canada, they do sell cheap oats into the States, and that depresses our prices in Canada because most of our marketing is done into the States as our main market. We have no ability to sell into the EU because that's restricted.

Every country in the world wants to protect its farmers, so we see multitudes of subsidies and tariffs preventing the movement of agricultural goods into every country in the world. We are not unique in wanting to protect our farmers. A multilateral deal provides the rules for fair trade that everyone has to follow, whether it's a large, powerful country or a small one like Canada. It also provides dispute resolution to solve disagreements that have dragged on for years and years.

Another area that would increase our competitiveness is the harmonization of regulations among our trading partners, specifically the U.S. and the EU. The GROU program is an excellent example of how difficult it can be to bring in a virtually identical although lower-cost product from the U.S. While we don't want to risk food safety or lower our own standards, the regulatory burdens to import even identical products seem to be enormous. The program, as it stands now, is not working. We must remember that the ultimate goal is to allow the same scientific testing that's done in the U.S. and in Canada and the EU to be accepted by each country so that the same agricultural products are available to Canadian producers that our competitors in the U.S. and the EU can already access. The problem is that the way things are right now, if you want to get a product registered in Canada, or even any other province within Canada if it comes into Canada already, it requires added testing costs, and companies are not able to recover those costs because of our smaller market up here. It is called minor use registration for those products.

A useful and often safer and cheaper product cannot be purchased by Canadian farmers. If regulations were harmonized, this artificial disadvantage would be alleviated and every province would benefit.

Domestically some files also need some action. One of them is smart regulations. A major initiative was started under the former government to clean up Canada's regulatory environment, but we have not heard of any emphasis or progress on this file for some time. We would strongly encourage the government to make this a priority. Regulations that add either unnecessary costs or time for approval processes simply discourage innovation, and innovation is key to our competitiveness in Canada.

On the public research front, this is probably the one area where we have seen complete solidarity right across producer groups in Canada and across all the commodity groups in Canada. We are currently in the process of forming a coalition with the FPCCQ, the Ontario grains group, and the Western Grains Research Foundation to formally raise awareness and ensure that resources are committed to public research.

The private sector does make substantial investments in corn, in soybeans, and in canola, but there simply isn't the return in cereals and pulses under our system to spur private research at the levels necessary. Crops like wheat, barley, oats, and peas must have public research as their chief research base. In many cases producers have check-offs on those crops and they're very willing to contribute to research funding, but we need the federal government to step up and be an even bigger partner in this critical area of competitiveness.

Work on agronomics, which is the basic research, has suffered the most neglect at a time when our seeding techniques are fundamentally different now--with low- or no-till seeding--than they were 20 years ago. Things like fertilizer placement, cereal-pulse rotations, and optimization of fertilizer and chemical use for both environmental and economic reasons are critical to the long-term sustainability of agriculture.

As well there is a serious concern that when the current group of plant breeders retire they're not going to be replaced and their programs will die out with them. Before we lose these experts, we must have their replacements working under them, or agriculture R and D in Canada will falter and take years to be rebuilt.

Spending on maintenance of existing facilities has been cut back, and in some cases we have the new facilities but there is no funding to put lab equipment or tools into the buildings to do any work. This has happened in Agri-food Discovery Place in Edmonton--it's a beautiful building but there's not much in it.

Research and development in primary agriculture is the backbone of our ability to compete as a nation with crops that will flourish in our challenging Canadian climate. Simply adopting a formula for funding and research that exists in another country--like Australia, for instance--as a solution for all our problems is ludicrous. We need a made-in-Canada solution that recognizes our realities.

Regarding grain transportation, the perpetual challenge of shipping grain and other commodities in a timely and predictable manner is in the midst of a level-of-service review by Transport Canada. The government must take firm and timely action to implement the findings of this panel, and it has taken years of work by the shippers to get to this point.

Regarding safety nets, we are supporting the efforts of the Canadian Canola Growers, which has already started work on the next generation of safety nets for the grains and the cereals and pulse sectors. Reliable and predictable safety nets are key for Canadian farmers to be able to make investments and production decisions that improve our competitiveness. This initiative involves having a thorough look at the pluses and minuses of a number of past and present programs, then starting with a clean slate to bring together the best ideas of those programs. We in the canola growers would be pleased to share our findings with you in the near future.

In terms of biofuels, the regulations to implement the legislation passed last spring appear to be bogged down in a department either unwilling or unable to move this file forward on a timely basis. Biofuels create a strong base for crop demand, which provides a floor price for farm income. You must ensure these regulations receive priority for this industry to be functional in 2010.

In summary, these are only some of the many issues that our members are asking us to work on here in Ottawa, but if this committee puts its support behind these initiatives, this would be an excellent start to improving the competitive position of our sector both domestically and internationally.

Our final point to take home today is that for all agriculture and for the innovation and research we need, decisions must be based on sound science.

Thank you.

[The Chair, Conservative, Larry Miller]

Thanks very much, Mr. Robertson, for keeping within the time.

Now we turn to the Western Barley Growers Association, Mr. Brian Otto and Mr. Rick Strankman, for ten minutes, please.

[Brian Otto, President, Western Barley Growers Association]

Thank you, Mr. Chairman.

I'm Brian Otto, president of the Western Barley Growers Association, and with me is another director, Mr. Rick Strankman.

My presentation is going to be a little closer to the farm. We represent western barley producers in western Canada, so I'm going to try to hone my presentation around western Canadian farmers and their production.

My presentation is going to be based on two main areas. One area is production agriculture and the growing, marketing, and transportation issues we face. The other very important issue that we consider to be a backstop to western Canadian agriculture is the value of publicly funded research.

I'd like to start with the production side of agriculture, and I'd like to start with a personal experience I had when I travelled to Australia to visit some of my friends in the farming industry last November. I had the opportunity to do a little bit of combining. I combined some Australian hard white wheat. I also had the opportunity to get in the truck with my friend's son and deliver that grain straight to port, an hour away. We didn't have to face any restrictions of railway or elevators to deliver in to. It was delivered right straight to port.

What I learned from this experience was that the difference between their agriculture and ours, and what we face in western Canada, is that we are at a distinct freight disadvantage when we come to competing with Australia in a marketplace. It was a concern to me. What also compounded the situation, in my mind, was that Australia is selling into the same Southeast Asian markets that we are. Besides the landlocked freight rate of about $30 to $40 a tonne to get my barley from my farm to Vancouver for export, I also face an ocean freight rate that is much more than what they would face in Australia.

It brought home the point to me that we're going to have to do something in western Canada if we want to stay competitive with the products we're growing on the farm, and we're going to have to focus more on domestic processing of what we're growing in western Canada. We can't continue to focus on exporting raw product.

Unfortunately, the Canadian Wheat Board focuses on exporting raw product. There's very little focus on developing a domestic processing industry in western Canada, and that disturbs me.

I was at a meeting with Minister Ritz a little over a year ago, in January 2008, at which we were talking about market choice for barley producers in western Canada, which is something the Western Barley Growers Association has been striving for, for a number of years. At that particular meeting, Canada Malting made a public statement that they were looking to expand their malt capacity in the world, but they were not willing to look at western Canada to do it, because they were not willing to try to access their barley product through a single-desk marketing system such as the Canadian Wheat Board.

Three years ago, there was a malt plant being considered for western Canada. The people who built the malt plant decided to build it in Great Falls, Montana, because they were well aware of the difficulties in accessing barley product through the Canadian Wheat Board marketing system.

Last week Agriweek said that Canada is a net importer of American-milled flour. That disturbs me. Why are we importing American flour into western Canada when we are the number one producers of hard red spring wheat? It just doesn't make any sense. In this article it says that the main losers of milling capacity are in western Canada. Why is this happening? I think one of the contributing factors to this is our marketing structure. We can't continue to have a single-desk seller when we're trying to develop a value-added processing industry in Canada.

The last three examples clearly point out that we need to establish a positive investment climate in western Canada that will attract investment in value-added processing. There has to be something wrong with what we're doing, and we still think it's our marketing setup.

The Canadian Wheat Board likes to think they are emulating an open market system, a market choice system, with what they offer through fixed price contracts, basis contracts, cash-plus contracts, and other programs. The problem is that in any other country, when you're offering a basis contract, a fixed price contract, or what they refer to as a cash-plus contract--a direct contract between maltsters and barley growers--you need to have more than one player bidding for that contract. Right now all we have is the Canadian Wheat Board. They're a single player. You need a number of players in order to establish a clear price discovery system. Therefore I don't believe their particular approach to what they call market choice is working. There are no clear market signals to farmers that allow them to make good business decisions around their farming operations. We need to have clear market signals, and these are being masked today under the present system.

We firmly believe in the importance of research, and Doug Robertson talked a lot about that. I want to refer to a study done about three years ago by Richard Gray, an economist from the University of Saskatchewan. He talks about the return on research investment in wheat and barley. For every dollar invested in wheat research there's a $4 net return, and for every dollar invested in barley research there's a $12 net return. This clearly points to the value of public funded research to not only the agriculture community but the economy of Canada.

I'd like to give you an example of an experience I had on my farm in the beginning days of safflower. There was a little research programming going on at the Lethbridge Research Centre run by Dr. Hans-Henning Mündel. It was a safflower breeding program. He developed a variety called Saffire that was adapted to the very southern growing regions of western Canada. A group of farmers got involved and started with breeder plots, trying to see if we could grow it. We moved to field-scale trials and finally to what we called commercial production. Through all of this we needed the help of Henning, who was doing the breeding, and Dr. Bob Blackshaw, with chemical controls for weed control.

At the end of the day, a group of us formed a business and our own marketing company. We have markets in Japan and the U.S., and we've established a customer base across Canada. It's one small example of the value of public funded research and where it goes, but there are numerous other examples.

I have only one minute and lots more to say, so I'll leave it.

I want to stress the importance of A-base funding for public research. We have to continue to fund our research. We can't continue to withdraw money and reallocate it to other areas. Producers have stepped up to the plate. We have check-offs in place to support research, but we need the government to show their support for it. We have to address the inflationary aspects that have taken place in research and how that has taken away from their ability to do it.

Thank you very much, Mr. Chairman.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Otto.

We'll start our first round with Mr. Easter, for seven minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Thank you, folks, for your presentations.

To the Grain Growers, you talked about the service review and the need for the government to act on whatever the recommendations might be when they come down. What about the costing review? We do know--it's basically been proven--that the railways have been gouging the farm community for some time. The government fails to move ahead or to order that a costing review be done.

Where are you at on the costing review side?

[Doug Robertson]

Wayne, we're in favour of having a costing review done, but we would like to see the service review finished first. We're very afraid that if the service review is not finished first, things will get tangled up between the two.

So if we can get the service review done first, we're certainly not opposed to seeing a costing review get done.

[Wayne Easter, Liberal, Malpeque, PE]

One of the problems, though, in the costing review is that every day that goes by, the railways are profiting basically at farm expense. That's the difficulty. At any rate, you can think about that as well.

To CAFTA, there's one thing I've always wondered about: how is CAFTA financed? Do you have direct farm membership?

[Darcy Davis]

We are a coalition of farm groups, producer groups, companies, and processor associations. Our membership includes the Canadian Cattlemen's Association, Alberta Pork, Canadian Canola Growers, and Grain Growers of Canada, who then include the farmers.

As well, we have members such as the Canadian Meat Council and the Canadian Oilseed Processors Association, or COPA, who represent the processing sector and all the jobs and investment at stake in those sectors.

We have a couple of companies as well: Sunterra, who are hog producers, processors, and exporters as well as retailers; and Viterra, the grain company.

So we represent a scope of companies and producer associations and processors.

[Wayne Easter, Liberal, Malpeque, PE]

Basically from field to export position, you might say.

[Darcy Davis]

Yes, exactly.

It includes the Sugar Institute as well, I should add.

[Wayne Easter, Liberal, Malpeque, PE]

Yes.

Thank you for that, Darcy. I've always wondered that, and I've never asked you before.

A key point that I think you've all made is that the United States and the EU are certainly financing their primary producers far more than we are.

I don't disagree with you on your trade position--although I do disagree with you some on supply management--in that we have to get to a trade position where we have the playing field a lot more level than it currently is. However, if you look at the record over the last 20 years, and we're seeing that here, you can see that while exports have gone up on a plane of about 30 or 45 degrees, farm income has gone down.

The figures are just absolutely dramatic when you put them in constant numbers. The fact of the matter is, we've lost 3,600 farmers a year over the last five years. Farm debt is four times higher per farm in Canada than it is in the United States, hitting $54 billion.

While the objectives may be good in getting to that level playing field, what are we going to do in the meantime? I mean, we cannot sit back and let our industry go broke, folks. We just can't do it. What are you suggesting we do in the meantime?

I know I'm going to run out of time, but to the Grain Growers, I don't know which one said it, but perhaps you could be a little more specific on the public research front where the federal government needs to step up to the plate. I agree 100%. But our research now seems to be short term. We're still living off the benefits of the public research that was done in the late 1960s and early 1970s. It was a shot in the dark, often, but it was paid for by the public.

Those are the two questions. What do we do in the meantime for our farmers? The U.S. will put farmers number one and trade number two. Canada, whether it's a Conservative government or a Liberal government, tradition has shown, has put trade number one and farmers number two. It can't go on that way any longer.

[Darcy Davis]

I think you raise a good point about the challenges that Canadian agriculture faces. A number of us are farmers ourselves, so we understand that.

As we've seen agriculture policy develop around the world and in Canada, we've seen these...I'll call them weapons used by different countries to see them support their domestic industries or push aside any exports that come into their countries. As the WTO has developed, it's always been kind of blamed. It's been put forward that because of the WTO we can't support our farmers. It's always been my belief that we didn't go far enough in the Uruguay Round. If we had put proper things in place to stop the domestic subsidies in other countries and the export subsidies, it would have created that level playing field that you're talking about. I think that's what the Doha Round was aimed at doing. When you try to take the U.S. from a support of $50 billion and get them down to $14 billion, or even less, in what they can do through the Farm Bill, you're effectively making us more competitive.

Our competitiveness is a lens we have to look at everything through, whether it's our domestic supports or our farm programs and how they deal with other farm programs. I think what happened--and history will tell different tales--is we had a low currency and a number of other things going for us, and we used that to our advantage. When those things changed, we didn't see that coming. We needed to have the things in place so that other countries understood that they can't go beyond certain levels of support or export subsidies. That's where we're seeing backsliding now.

We're seeing a pork export subsidy in the EU that's hampering our industry internationally. We're seeing country-of-origin labelling and those things. You see those kinds of things that can be looked after in trade deals. That's the problem with bilaterals. If we have a bilateral with the EU, I hope it reflects somewhat on domestic supports. Bilaterals don't generally do that. But we need that kind of enforcement worldwide so that we can be competitive.

[Wayne Easter, Liberal, Malpeque, PE]

But what do you do with our farmers in the meantime?

[The Chair, Conservative, Larry Miller]

Your time has expired, Mr. Easter.

You'll get a chance to come back to it.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

I will follow up along the same lines. It appears that a number of governments and organizations, rather than representing specifically producers in the field, really represent lobby groups from the industry and the processing side who consider agriculture and food more as a commodity and look more and more to the opening of markets as the way forward. We are obviously not opposed to opening markets, quite the contrary. We want to find buyers for our products all over the world. However, a philosophy seems to be taking hold where, as Mr. Easter pointed out, trade trumps the interests of the farmers who produce this food.

This leads me to look at what is happening in other sectors. On the international scene, when negotiations took place regarding cultural products, for example, Quebec stood up strongly in favour of cultural diversity, arguing that culture should not be considered as just another commodity. There seems to be a whole trend taking shape. People talk about food sovereignty. The idea is that we can trade food products but that we must ensure that producers can remain on the land they have farmed for many years and feed the people in the surrounding area. This is their primary role.

In your view, is it relevant to start a discussion on the notion that agriculture should not be considered as a mere commodity? Should this be considered?

[Darcy Davis]

I'll try to be as brief as possible. That's a huge question, and I think it raises a number of issues around food sovereignty and those kinds of things. The reality is that as a Nordic country we raise certain commodities, probably better than others, but there aren't a lot of orange groves in Alberta or Quebec, so we import those products. What do we do to balance that lack of food sovereignty on some sides of things? I'm using citrus crops as one example. We do a darn good job of growing barley, canola, wheat, and with our beef and pork industry. Why not sell those products in places like California?

The idea that we can simply support ourselves and live like an island is an interesting idea, but it's pretty impractical. We can get away with a lot fewer farmers, and the shrinkage that Wayne talked about is real. But the fact is, if we don't export 70% of our wheat, if we don't export 60% of our canola, we can sow those acres to alfalfa or something else or set them aside. But we won't need any people in the countryside to grow anything then. We can depopulate a good portion of rural Canada if we want to quit exporting. That's the bottom line.

If we're not fierce about competing and fierce about working our way through this and selling value-added products and doing those kinds of things, I think we'll be looking at shrinking it down to that, which I see as a big failure.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Allow me to clarify.

Obviously, I know that we do not grow oranges and this is why I said that in this debate no one wants to ban trade. But we have to put our priorities in the right place. What do we priorize? The fact that farmers are there essentially to feed the surrounding population? This does not mean that we would surround ourselves with fences. Of course, everytime we have an opportunity to export products, we do so. I am thinking about maple syrup from Quebec. In Japan, for example, they just love maple syrup and that is fine. I would never tell our producers to keep this product in Quebec. There is a demand for it throughout the world. The same goes for beef, pork and grain from Western Canada.

However, I go back to the fundamental issue. Are we not more and more placing trade above people? Are we turning food into a commmodity just like any other? If that is so, should we not rather return to the basics and ensure first and foremost that agriculture is viable here? Once that is done, whatever we can export, we export.

There is this philosophy, which you share, I believe, that this is all just about trade, nothing else, and that the main object is to sell the greatest quantity possible of our products to whoever pays most.