Agriculture Committee on Feb. 10th, 2009

[The Chair, Conservative, Larry Miller]

We don't have a full table, but seeing that it is 11 o'clock and our guests are here, we're going to proceed.

First of all, this meeting today is to discuss questions on the supplementary estimates, which we'll have a vote on later today.

At this point, I want to thank the Honourable Gerry Ritz, the minister, for being here today, and all our witnesses.

With no further ado, Mr. Minister, I'm going to turn it over to you.

[Gerry Ritz, Conservative, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board]

Thanks, Mr. Chairman.

Congratulations on your election to that chair. I know that it's a great job. It's one that I certainly look back on with fond memories. The cut and thrust of the committee is always well served and producers are well served by the great work that's done around this table. Congratulations on that.

With me today I have Pierre Corriveau, who of course is the expert on the supplementary estimates B and probably will be very busy fielding questions. I know that's what we're here for today.

Yaprak Baltacioglu is my deputy minister. If you have problems with her name, just call her Smitty.

Carole Swan is the president of CFIA, and of course with her is Stephen Baker. We have another supporting lineup: Dr. Brian Evans, chief veterinarian, and Cam Prince, in charge of programs at CFIA.

For any questions that I can't handle, I certainly have a great field of people behind me.

Thank you for the invitation to be with you here today and tell this austere committee about what the government is doing for Canadian farm families.

In the current global economy, Canada needs a strong, profitable agriculture industry now more than ever. That's why this government is taking a proactive approach to moving the sector forward. We are working with industry to build a stronger, more profitable agricultural sector here in Canada.

Farmers don't want to farm the mailbox; they want to earn a living from the marketplace, as we all know. We're getting out on the world stage to open doors for our producers so they can make deals that will make a difference at their farm gates.

Today's business-minded producers refuse to stay in the same old rut. Their business plans are based on the opportunities they see out there.

Our economic action plan for Canada will make sure agriculture comes out of this current global situation stronger than it ever was. Through our action plan, we're building roads and bridges across Canada to create jobs in the short term and strengthen our communities for the long term. We're cutting taxes for families and businesses to make sure farmers have the cash in their pockets to keep our economy running strong.

We're getting the job done for Canadian farm families by moving forward to tap new marketing opportunities at home and around the world, build stable, bankable, predictable programs, and, of course, strengthen Canada's food safety system.

We're being proactive on food safety, Mr. Chairman. Our food safety action plan is ensuring that consumers have confidence in our standards, which are second to none. We are reinvesting in food safety after spending cuts through the nineties. We have invested $113 million to strengthen our food and product safety system. We've hired over 200 food safety inspection personnel and are hiring more every year. We're constantly reviewing our food safety regulatory systems and improving our procedures.

Budget 2009 allocated $250 million to improve our federal labs. These labs, long ignored by previous governments, are key links in Canada's health and food safety systems.

We've initiated an independent investigation into last summer's recall to find ways to strengthen the system even more. We welcome the appointment of Sheila Weatherill, a very qualified lead investigator. We look forward to her recommendations as we continue to strengthen Canada's food safety system.

We're taking a proactive approach to agricultural programs. We listen to farmers as we develop these programs. We now have a suite of stable, bankable programs to make sure farmers weather economic storms and continue to drive the Canadian economy.

AgriStability has significant improvements that were requested and welcomed by the farm community as we replaced CAIS. AgriStability delivers where CAIS failed, with coverage for negative margins, targeted advanced payments, inventory evaluation, which covers both the beginning and the end of the year, interim payments, deadline flexibilities, and online tools that allow farmers to spend less time filling out paperwork.

AgriInvest is a responsive, predictable, and bankable addition. Producers can trigger the money to cover a drop in margin, or they can use the money to invest directly in their on-farm operations. That's responsive, Mr. Chairman.

AgriInvest makes it easy to predict the government contribution each year. That's predictable and bankable. We invested $600 million to kickstart the AgriInvest program.

We introduced Canada's first ever program to allow federal and provincial governments to provide rapid assistance when farmers are hit by regional national disasters. AgriRecovery has already been successfully applied. A few examples would be potato coverage in Prince Edward Island and Quebec, flood damage in Manitoba's Interlake region, tuberculosis in central B.C., and other situations that have arisen across this country.

We continue to work with livestock producers, who still face challenges. The new business risk management programs are delivering more than one billion dollars to livestock producers. We extended emergency cash advances of up to $400,000 with the first $100,000 interest-free. That's delivered another half a billion dollars in cashflow directly to the farm gate.

Working with producers, I announced a stay of default on that particular program for the next 18 months. That gives them a long-term viability as they face the challenges that they do. That stay covers almost a half a billion dollars in advances to the livestock sector. That will stay with them.

As you know, credit is tight for Canadian producers, livestock being no exception. By giving them extra time to repay these advances, we're making sure they have the time they need to get back on their feet. The government will continue to pay the interest on the first $100,000 of these advances and there will be no penalty attached. Livestock producers told us these measures are on the right track.

The president of the Canadian Pork Council, Jurgen Preugschas, said, and I quote, “We are pleased that the government recognizes the financial difficulties hog producers are experiencing”.

Ron Bonnett of the Canadian Federation of Agriculture said, “We want to thank Minister Ritz for listening to the concerns of farmers and providing the repayment flexibility essential for the industry to emerge as a strong global participant.”

Farm support programs make sure farmers can weather the storms, but the long-term viability of the sector depends on our ability to get out there and sell Canadian agriculture on the world stage. Everywhere I go in the world, people want the safe, high-quality foods that Canadian producers are famous for.

Working with industry, we launched the Market Access Secretariat to aggressively and proactively go after new markets and keep pace with our international competitors. Growing Forward makes sure Canadian farmers have a firm foundation behind them, and it's creating the opportunities they need to succeed over the short and long term.

Governments are investing over $1.3 billion over five years in Growing Forward programs. That's $300 million more than the agriculture policy framework delivered on the same framework. Growing Forward is a recognition that every farm is unique, and that the one-size-fits-all approach is no longer workable or acceptable. We have responded under the Growing Forward model by providing much greater potential for tailoring programming to regional needs. Flexibility is a key element of Growing Forward, because that's the best way to make sure every investment hits the target at the farm gate.

The budget makes a similar proactive approach to responding to the emerging needs of the sector. As a government, we are not afraid to work with farmers to redirect money that is not hitting the target. One example, of course, is the cost-of-production program. It simply did not trigger effectively or efficiently. With the new Growing Forward sweep, cost to production is factored into a wide range of farm support programs. That's why we're reinvesting that money in key priorities for Canadian farm families.

We're also looking to the future to help young farmers get established in this great business. We're moving forward on changes to the farm improvement and marketing cooperatives loan, or FIMCL, as it's better known. These changes will make it easier for new farmers to get the credit they need to get started in their new operations. We're investing $500 million in the agricultural flexibility program. A recent survey of 4,300 producers by Farm Credit Canada shows that one in four farmers is planning to expand. That's great news for the future of this vibrant industry. Agricultural flexibility will help farmers by helping them grow their business, manage risk, adopt sustainable practices, capture new market opportunities, and of course, commercialize the great ideas designed in the farm shops over the winter. We continue to work with industry and provincial governments to get these programs to producers.

We're also getting out in front of our competition on world markets. My top priority this year is to get a foot in the door with our key customers, as well as build new markets for our farmers. As is often said, and it bears repeating, farmers don't want to farm the mailbox, farmers want to make their money from a vibrant marketplace.

This government is opening and expanding markets so that our farmers can sell more products to more customers around the world. We've had significant wins in the United States, in Russia, and in Mexico. Over the past few weeks, we've reopened beef access in Hong Kong and Jordan, and worked to expand pulse and canola markets in burgeoning markets like India. We will keep up the pressure, Mr. Chairman. We're making sure we have the capacity to meet this new demand by investing $50 million in slaughter and processing capacity. That funding will fill gaps in jurisdictions such as Manitoba that have no federally inspected slaughter plants.

Next week I'm planning to travel to the Middle East to open more markets for our beef producers over there. We're also continuing to plan trade missions to Japan, Korea, and China. We'll be back to the U.S. and back to Mexico to expand on what we've started, Mr. Chair. Of course, we'll continue to build a respectful relationship with our biggest trading partner south of the border.

A week ago I spoke with the new administration's Secretary of Agriculture, Tom Vilsack. We agreed it's vitally important to make sure our integrated North American livestock continues to move smoothly across our borders. Every time we resolve a trade irritant or expand a market, we're adding to the bottom line for Canadian farmers. We're making sure our producers can continue to drive the economy, as we all weather the current global economic uncertainty.

To close, Mr. Chair, I want to work with the industry, provinces, and territories, and of course this committee, to help build a base for producers to grow and prosper. I want to work with this committee on amendments to the Canada Grain Act, which we intend to reintroduce very soon this session.

On this, and a whole range of issues, we can and will work together to help producers and the whole value chain to proactively capture new opportunities.

Thank you, Mr. Chair.

I look forward to your questions.

[The Chair, Conservative, Larry Miller]

Thank you very much, Mr. Minister, and we look forward to your answers to some of the questions that I'm sure are going to come forward here.

Just as a note, I think it's been a long time since we've seen this room this full, so I guess it shows a lot of interest in agriculture and obviously people are here to hear your comments. So that's good.

I know that in our committee reports we had agreed to have seven- and five-minute rounds, and I would just suggest today, because the minister has committed to the first hour and his staff to the second hour, that we go with five and five. I would ask for the indulgence of the committee to carry through with that, if that's okay.

[Wayne Easter, Liberal, Malpeque, PE]

No, I disagree, Mr. Chair.

[The Chair, Conservative, Larry Miller]

Did you want to go with seven and five, Mr. Easter?

[Wayne Easter, Liberal, Malpeque, PE]

The opposition parties deserve seven minutes. I might say the reason for that, Mr. Chair, is that five minutes makes a lot of sense by times. The government members can meet with the minister any old time at all. We only have one opportunity as opposition parties. In the first round, our share is larger.

If the minister wants to stay two hours instead of one, then we'd agree to the five minutes.

[The Chair, Conservative, Larry Miller]

Your comments are out. It was a suggestion to get everybody to pose a question.

So I would urge everybody to keep their questions to the estimates; that's what we're here for today.

I'll turn it over to you, Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Welcome, Minister. I will have to admit that I do disagree with a lot of the rhetoric in your comments, because the reality on the farm is far different from the rhetoric you outlined in your comments.

In beginning—and there will be questions to you on that later—I would just say one thing on Ms. Weatherill, the listeriosis investigator. Certainly we disagree strenuously with your view on Ms. Weatherill. First of all, contrary to what you said, Canadian confidence has dropped in terms of food safety in this country. If you look at what's happening in the United States and with President Obama, they are clearly making that a big issue and want to get to the bottom of the problems in the food safety system. But we have an investigator who has no authority to call witnesses, no authority to subpoena documents, no authority to investigate either your office or the PMO's involvement, and the reporting process is such that there's no public report but a report to the Minister of Agriculture, which is you, sir, which we hold in some respect responsible for the mess we have in the food safety system, and you can decide on your own whether parts of that report are made public or not. So on that point we respectfully disagree.

In terms of the farm sector, you said you believe you're getting the job done. If, on the farm side, allowing farmers to go broke and out of business is getting the job done, we don't consider that a success.

The reality of the numbers is cruel. Agriculture Canada's own figures show that over the last five years, not including 2008, 3,600 farmers per year went out of business—each and every year over five years. Last weekend, when the big numbers were coming out, 129,000 jobs lost in this country, the highest proportion of jobs lost in any industry in Canada was in agriculture. Proportionately, 9.6% of the jobs lost were in agriculture. That compares to 7.4% in manufacturing.

The stimulus package that the government put forward has very little stimulus for agriculture. In the budget, you talked about $500 million for AgriFlex. We know that's really only $190 million, so you broke the promise you gave during the election, of $500 million. There's only $190 million of new money. I believe you did mention in your remarks that the old cost of production program is done away with, and that $400 million. That's interesting. That's the first we knew of it.

On this $500 million that in fact doesn't go to the farm safety net programs in Ontario and Quebec, this $310 million reallocated, can you list with this committee today the programs that you're cutting?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you, Mr. Easter, for your interventions. There are quite a number of questions there.

I will begin with Ms. Weatherill. She certainly has the capability and the capacity to do the job set out before her. She has the full cooperation of all parties involved, so at this point there's no sense that there would even be need for subpoenas and so forth. Full cooperation is expected. Her report will definitely be made public. I'll have someone read it to you when she tables it, Mr. Easter.

The Canadian confidence in foodstuffs, as I understand it, I would argue that question most vociferously. When you look at one of the indicators, the share trading value of McCain's is right back up to where it was before the incident last summer. So I think Canadian consumers are showing great respect to the job done by McCain's, to the excellent job done by the food safety people from CFIA, to public health at the provincial and federal levels, and are more than willing to get back into that marketplace. So I guess I would argue that point, in that the issues you're discussing really aren't based on anything solid.

I had the great opportunity to be at a round table in your neck of the woods last Friday, Mr. Easter. All three maritime ministers, as well as representatives from every farm commodity, as well as the agricultural alliances of New Brunswick, Prince Edward Island, and Nova Scotia were there, and the basic message out of that two-hour-long meeting was that there are challenges but they create opportunities. They're showing farmers stepping up to meet those challenges by embracing that opportunity and thinking outside the box, getting on top of what needs to be done. The great message coming out of that is a renewal of agricultural sectoral agreements on working together. We haven't seen that since the turn of the century, when a barn raising was a communal function. Farmers and producers across Canada are starting to talk in terms of how to integrate their systems to the betterment of all of the systems. I think that's a tremendous opportunity for us to move ahead.

When you talk about farm job losses, of course we're concerned, and we are analyzing that report. I have some concerns as to the way that's being reported. In my department we can't seem to make the numbers add up the same as Statistics Canada did. I'm asking for a briefing from them on how they arrived at those numbers. Of course the indices that are used, North America wide, incorporate other industries outside of agriculture, and we'll wait to see if that's the case here.

Having said that, any job loss is a concern to this government. That's why we put things in the budget like the billion-dollar package for communities that will be in peril. That's why we have a number of issues in there. I talked to Farm Credit's Greg Stewart last week, and he tells me, of the billions of dollars they have invested in the farm gate, less than half of one percent is considered in trouble--less than half of one percent, Mr. Easter. Of the poll they did that I mentioned, 4,300 producers Canada-wide, region-to-region, a full 25%, one in four, say they're going to expand their operation. That's good news. That shows they see the strength out there in the farming sector beyond what governments have to offer. Farmers are looking within themselves and within their region and within their communities to build a stronger farm gate, and I welcome that. We're here to support them at every juncture.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Minister.

Your time is up, Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Chair, could the minister answer the question we asked? What programs have been cut to reallocate the $310 million?

[The Chair, Conservative, Larry Miller]

Your time is up, Mr. Easter. There will be more time; you will get another turn.

Mr. Bellavance.

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

Thank you for being here, Minister. I would have liked to have a copy of your remarks. We had a short debate on this point at one of your previous appearances. I don't want to spend the seven minutes allotted to me deploring this, but I would have liked to have a copy of your statement.

I would like to go back to the budget, in which $500 million was announced for agriculture. That announcement differs from what you promised during the election campaign. You talked about $500 million over four years, whereas the budget now provides for that same amount over five years. In addition, we have learned that, of that $500 million, $190 million is new funding, and the rest will come from the department. I wonder where it will come from. For example, the secret plan for cuts to the Canadian Food Inspection Agency provided for a 5% cut to the operating budget. I hope that's not where the money will be taken from.

You have been talking about hiring 200 new inspectors for a very long time now. It's funny, but the union hasn't confirmed any such hiring for us. We would need to know exactly when those inspectors were hired, what they are doing, where they are and even who they are. We will definitely have an opportunity to ask the Agency people that. In your remarks, you even talked about hiring some 100 persons a year. Over how many years will that be done? How many other individuals do you intend to hire and what exactly will those people do?

Going back to the budget and to that $500 million amount, just before the budget was tabled, you adopted the same attitude as a number of your colleagues. Sometimes I call your government the marketing government. When you arrive in power, you're called the new government, for two years. That became a running gag on Parliament Hill, and you must have stopped going by that name. When you were re-elected, you didn't get a majority, and you called yourselves the stronger government. All that reminds me of a product that appears on a shelf bearing the words “new and improved”. There's marketing underneath that.

The ministers' disclosure of certain budget details in their respective files even before the budget was tabled was designed to make people think that it was going to contain good things. However, we realize that what you had announced and what we found in the budget were two different things.

That's particularly the case of the AgriFlex program. You decided not to include income support measures in it. And yet that's precisely what was requested by Quebec producers, who moreover felt that your budget displayed a disturbing insensitivity to the agricultural community. Those were the words of Christian Lacasse, president of Quebec's Union des producteurs agricoles. You even appropriated the term “agri-flexibility” corresponding to the program put in place by the Canada Federation of Agriculture and encouraged by the Fédération des producteurs de cultures commerciales du Québec and the Grain Farmers of Ontario. However, you adulterated it. In reality, by excluding income support measures, it is no longer the AgriFlex program at all, as sought by agricultural producers.

You're going to tell us that there are risk management measures, in particular the AgriStability program. However, it should never be forgotten that we're facing enormous competition from the Americans, who will be extending their colossal Farm Bill until 2012. It's the same for the Europeans, who heavily subsidized their agricultural industry. Existing programs don't enable us to cope with this situation. We've traded the Canadian Agricultural Income Stabilization Program for the AgriInvest, AgriStability and other programs. However, a number of producers tell us that we've exchanged five quarters for a dollar. A real AgriFlex program, as requested, could have met the needs of those producers, who don't necessarily live off fluctuations, such as grain growers. However, that is not the case.

You haven't kept your promises in two respects. First, the funding is spread over five years instead of four, in addition to the fact that only $190 million is new funding. Second, you are proposing an AgriFlex program that isn't at all consistent with producers' demands.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

That's quite a long list there. I tried to take as many notes as I could.

I actually had a meeting with Laurent Lessard, the newly re-elected minister from Quebec who was put back into the agriculture and fisheries portfolio. He's a tremendous gentleman and a great ambassador for Quebec farmers, and he's excited about what's in this budget, as are farmers in Quebec generally. So I'm not sure who the member is talking to.

[Some hon. members]

Oh, oh!

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

No, no.....

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

This is my time now, André.

I'm very concerned with his focus on the budget when, days and weeks before the budget was even tabled, he'd already said he wasn't going to support it. So I guess if the concern is that we're not delivering for Quebec, I would suggest that by not supporting this budget he's delivering even less for Quebec, because these moneys will certainly assist operations like Levinoff-Colbex and will certainly affect the potato cyst nematode area around St-Amable; we're addressing that.

When it comes to reinvestments and reallocations, I will never apologize for making sure that the programs offered by a government are bankable and predictable. If we find something during our strategic reviews and our reassessments and reallocations that is not working in the best interest of the farm gate, we will change it, and we have changed it. That's the bottom line. We'll continue to do that.

This idea that somehow AgriFlex is not designed in the way people demanded is absolutely ridiculous. When the CFA first talked about AgriFlex a number of years ago, they talked about a $50 million pot of money that would address marketing and get beyond the business risk suite that was available at that time and place. We have done that with this AgriFlex. I had the great opportunity to co-chair a federal-provincial meeting with my ministerial counterparts yesterday, and the general consensus around the table was that no one argued against making AgriFlex a proactive market-driven solution-finding pillar. We have the facilities in the other four pillars, under the business risk side, to backstop producers for the negative reactive side; we need something on the proactive side. That's what agriculture flexibility is all about, and I'm pleased to deliver it for farmers.

I agree with the member when he makes the statement about the American farm bill, but then I disagree with the member when he says we should walk away from the WTO, which eventually will have the power to pull back that farm bill. You can't have it both ways, Mr. Bellavance. You have to be there on the global supports for the WTO in order to address things like the U.S. farm bill, which goes way beyond what anybody wants it to do.

When it comes to the budget, we're doing our best. We're striving hard in these times of economic downturn to deliver for farmers what farmers are asking for. I think we have hit the target time after time. I had this discussion with my provincial colleagues yesterday. We're not against reassessment and reviews of the programs to make them work in the best interest of the farm gate. We'll continue to do that for every program at every juncture.

[The Chair, Conservative, Larry Miller]

Mr. Bellavance, your time has expired.

Mr. Atamanenko.

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

Thank you very much, Minister, for being here.

I'd like a comment from you. My office received 500 e-mails today in regard to food inspection, and I'd just like to read a couple of excerpts from an e-mail. I think it's standard. It says, “I object to the idea of giving food companies more self-policing powers when it comes to safety. Please urge the minister to provide the Canadian Food Inspection Agency with adequate resources to ensure all food products--Canadian and imported--are safe to eat. We need to request from the industry to establish better policies that respect regulations and standards related to the safety and nutritional quality of food in Canada”, and so on.

I just wanted you to know that we're getting these e-mails. People are concerned.

My second point is very brief. You mentioned the WTO. I would just like to know how we can stay in negotiations and ensure that our dairy farmers don't lose $70,000 per farm, as they told us last week, if we cave in to some of the demands. Also, how can we ensure that we still protect our Canadian Wheat Board, given the pressures coming from the WTO?

I want to zero in, Minister, on slaughterhouses. There is $50 million in the budget for slaughterhouses. There seems to be, according to an article in The Western Producer on February 5, some difference of opinion. I quote a financial official at an off-the-record budget briefing who said, “Agriculture Canada will write the rule, but the intent is primarily to modernize and improve the competitiveness of existing plants”.

I'd appreciate your comments. He said that money should be available to help finance new slaughter plants in areas without access to an existing plant, and you are quoted as saying that you will fight any finance department attempt to limit the funds to the improvement of existing plants. So I'd like some confirmation that in fact people who want to put in new plants will have access to this money.

I have some examples. The president of the Grand Forks and Boundary Regional Agriculture Society says that because of the meat inspection regulations in B.C. they're scrambling to put in a mobile abattoir. They have some money from the province. They're wondering, specifically, if they can tap into this funding. I have the same question from a producer in the Peace region. Peace Country Tender Beef Co-op has purchased land. They're ready to start building within 120 days. Are they able to somehow tap into this funding? I also have an e-mail from a person in New Brunswick. They have had pressure also to conform to new regulations. Can they tap in? The last example is a Brussels slaughter facility in Ontario that was refused funding before, but they're wondering, once again, if they can tap in.

Fifty million dollars is not a lot. We have new plants ready to go. Will they see some of this money?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Thank you, Alex. Those are all good questions.

On the 500 e-mails, I get a copy of those as well, of course. That's a small sampling of the total numbers we get on any given issue.

Certainly, I agree with them that food inspection is a shared jurisdiction. We are the regulator and industry is the applicator, but at the end of the day, we have never gone to self-policing, nor are we intending to go to anything that is self-policing.

At the end of the day, we are the regulator. Depending on the facility, we do that in conjunction with provincial governments and, in some cases, municipal governments, but at the end of the day there are regulations in place that we enforce.

All of these facilities have certain standards to meet. If they exceed them, even better, but there are certain standards out there that we enforce. We continue to do that. This idea that we're somehow dropping the ball is absolutely ridiculous.

I look forward to the independent investigation. I look forward to the investigations the CFIA constantly does in looking for best practices that can be implemented. I look forward to the work that's being done at the public health level, both federally and provincially, in regard to food safety.

A lot of it, too, is educational. There is a point where governments are no longer involved in that food supply. You buy it at the grocery store. Was it handled properly there? Was it handled properly within the kitchen itself? Did the chicken stay out on the counter all day before it was cooked? We have some 11 million to 14 million incidents of a food-borne something every year, and the vast majority of those happen right in the kitchen, not at the processing facilities and so on.

It's a constant struggle to stay on top of those types of things. That's why we have reinvested in the CFIA. That's why we have hired 207 new inspectors since March 2006. Someone wanted to know where they have been put into place. I could have Dr. Evans or Mr. Prince come up and actually identify that for you. We know where they are and we're hiring more. It's always a problem getting qualified people in today's economy, but we are out there actively headhunting.

As far as the WTO is concerned, the only way you can support supply management and continue to support supply management like this government has done is if you're at the table. This whole concept that we somehow walk away and take a deal is not in anyone's best interests. You stay at the table and you help make a deal.

I think we have done that very well. I don't see any resurgence against anything that Canada is doing at this time. Of course, we're seeing countries become more protectionist, as opposed to trading internationally. The U.S. is a case in point with some of the things we've seen there.

On state trading enterprises, you're specifically talking about the Wheat Board. We have always said that those decisions need to be made domestically, not enforced on us from outside, and we continue to say that. I continue to work with the Wheat Board in the best interests of producers.

I'm very concerned when I see them put out a press release saying they're closing the malt barley pool because they don't want to destroy the high price they have. They're now forcing everyone, for the rest of this year, to go into CashPlus, which does not serve farmers. If the Wheat Board is not offering a pool, they're going against their mandate. I need to have that discussion with the Wheat Board.

On slaughter and processing, you also said, and you're very right in saying so, that Agriculture Canada, not the Department of Finance, writes the rules on how that will be implemented. Certainly I am interested in slaughter and processing capacity. I want to build the economy here. When we started seeing the Americans lever things like country-of-origin labelling, we were very concerned that we've relied on across-the-line processing far too much. We need to build that capacity here in Canada and maintain it.

We're also getting calls from offshore enterprises. The Pacific Rim is looking for age verification on cattle. We lose that as it goes through the Americans into some of these markets. On organics, there's a tremendous opportunity to lever into that Korean market that's been rebuffing us. We need those capacities out there that can be lean, mean, and trim and that can dedicate themselves to those markets. That's what we're looking for: to fill some of the gaps out there.

I mentioned the Winnipeg facility. Right now, they have a process up and limping. They need some help. We're happy to help.

But on all of these applications--and you named off a bunch--with the exception of the mobile abattoir, which is totally provincially regulated because there are no federal regulations that cover mobile abattoirs, absolutely. So on the mobile abbatoir, it's no, but on the others you listed, absolutely. Get us in a sound business plan and an application and tell us what you're going to need. We'll take a look at it. It's a three-year program. There's $20 million available the first year and $15 million in the two following years.

We'll take a look at every business plan, Alex, and we'll assess them on their regional capacity. That was one of the things that came out of the meeting in Nova Scotia on the weekend. All of the beef producers within the Maritimes were saying let's put our pressure on ABP in Prince Edward Island, the Atlantic beef packers; lLet's make sure they have the feedstocks; let's make sure we don't start three other processing capacities with none of them having the economies of scale to move forward.

So that's what we're looking at, Alex, to fill those gaps. And I look forward to those business plans coming in.

[The Chair, Conservative, Larry Miller]

Thank you.

Your time has expired, Mr. Atamanenko.

I'll turn it over to Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

Mr. Chair, I'll be sharing my time with Mr. Richards.

Mr. Minister, I'd like to maybe reshape this conversation, looking forward to opportunities that farmers will have, based on a lot of the hard work you've done this past year. One of the areas I look at is the pulse crop industry and some of the work you've done in the pulse crop industry.

Can you give us an update on the benefits to farmers in the pulse crop area with your trip to India that you had this past while?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Well, it was an excellent trip to India. We had some expectations, but they were exceeded with the great welcome we had there. We had Gordon Bacon with us from the pulse industry. Gordon's a tremendous representative of that industry. In the discussions we had, there is a growing demand for supplies in India. They're talking about pulses and protein requirements doubling and tripling in the next five to ten years, and I can certainly see that happening. We see that same type of thing happening in China and other emerging markets around the world.

But specific to India, right now they're in the process of buying some million tonnes of pulse crops from us. Within the next two to three years we could see that double very easily. And it's not the Canadian capacity, it's the Indian capacity at the other end to be able to offload, handle, fumigate, and store this product. So we're working with them on that. There is tremendous opportunity to move forward with pulses and canola in India. We were quite surprised. They have access to palm oil and safflower and different things, but they are looking at the top-end oils like canola. They're talking about doing some wonderful things with that.

We toured one facility where all they use is organic soybeans and they're making the soy sauce and so on. They've been in business for quite some time. It's probably the highest-rated soy sauce in the Pacific rim. Again, they're looking at expanding their markets as they get their feet underneath them and move forward. So there are tremendous opportunities there.

There are great health advantages to the pulse crops when you talk about heart health and diabetes and so on. Studies have been done on pulses and more consumption of pulses, and those go over well in countries as they're emerging and buying more as well.

[Randy Hoback, Conservative, Prince Albert, SK]

As these new markets emerge, of course, in Canada it's important that we look at research. Is something being done in the budget on research and getting people on the ground for research?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Well, absolutely. When we look at these new markets and new commodities that they're asking for, we certainly have the capacity to develop those. I think the unfortunate part is research was sidelined over the last decade or so and we need to bring that back. We need to work in partnership with industry itself and with universities and government programs like we have. But it's that working with industry that actually delivers a product that the end user wants, not something that some scientist wants to develop. I'm not slighting scientists--they do a great job--but sometimes they need to be refocused in their work.

A short time ago we hired Dr. Marc Fortin, who is heading up that research side for us and doing a tremendous job as we look at and refocus our efforts in that sector. There are new moneys; there are new scientists being hired. I think the future is bright when it comes to research for Canada.