Agriculture Committee on Oct. 27th, 2009

[The Chair, Conservative, Larry Miller]

I will call our meeting to order. We have a quorum.

As per our discussion at the end of the last meeting, we're going to save some time towards the end of the meeting for business. We have the steering committee report, a housekeeping matter to do with the budget, and you know we have some motions.

At this point we'll go directly to our witnesses. We have, from BioEnterprise Corporation, Mr. Dave Smardon; from Okanagan Kootenay Cherry Growers Association, Mr. Greg Norton; and from Prince Edward Island Potato Board, Ms. Brenda Simmons.

I'm going to reverse the agenda. Ms. Simmons, we're going to allow you to go first.

You have ten minutes or less, please.

[Brenda Simmons, Assistant General Manager, Prince Edward Island Potato Board]

Thank you very much.

Good afternoon, members of Parliament, ladies and gentlemen.

My name is Brenda Simmons, and I'm the assistant general manager at the Prince Edward Island Potato Board. Our organization represents the interests of potato farmers in our province, and we're also active in some national and international organizations that share that interest.

Our chairman, Boyd Rose, couldn't attend today, because like almost every Prince Edward Island potato farmer, he is still in the field trying to harvest his crop. At this point we have about 40% of the crop still out. We've had over 11 inches of rain in October, so we're in a serious situation. However, our directors do strongly support the questions you've identified in your letter of invitation to today's hearing.

I'll try to address several of the discussion points, and I'll start with a bit of background. Over the past 10 years we've decreased from over 500 potato farmers in Prince Edward Island to about 360 today. Our potato acreage has also declined drastically. We planted our biggest crop in 1999, at 113,000 acres of potatoes. Acreage has declined since that time, for many reasons that relate to your study of competitiveness, and in 2009 we dropped to 85,000 acres. That's a decrease of 28,000 acres, or 25%, in 10 years. We've seen about the same decrease in the percentage of farmers. It is severe and it's very real.

I will address your points on competiveness, beginning with competition levels in various agricultural sectors--retail, processing, and inputs. You know about the consolidation in retail and processing. We have basically three main retailers we sell to in the eastern part of Canada, and we deal with five processors, both large and small, for potatoes. We are fortunate that these retailers and processors seem to be viable and they pay their bills. We definitely value them as major customers of our potatoes, and we could not exist without them.

However, we do have concerns. One processor buys about half of the crop in Prince Edward Island, as they are also active in the buying and selling of fresh or table stock potatoes as well. Many P.E.I. potato farms have grown over the years, as this company has grown. It has been a valuable relationship, and it still is. However, with that level of dependence, as an industry, on one company, it's obvious that if that company experiences difficulty, our farms experience that directly and their viability is weakened.

We have situations where buyers of our potatoes are also suppliers to our farms. What I mean is that some of the buyers are also major vendors of crop inputs, fertilizer and crop protectants. It makes good business sense for a farmer to buy some of his inputs from a company that buys some, or the majority, of his potatoes. However, for that farm to be competitive, it has to buy inputs at the best possible price. We do have competition at the input supplier level, but this buying and selling back and forth can create a challenge in this regard. In some cases growers are buying higher-priced inputs as a result of this influence with their buyer, and it is not good for farm viability or competitiveness.

As you likely know, on the retail side for some chains, purchase decisions are being consolidated into a single office for most areas of the country. This year a retailer advised its potato suppliers across Canada that they will pay a certain price for potatoes. This price will be the same across the country, and it must be met regardless of the supply situation or costs in an area. If you want to sell to that retailer, you'll meet that price.

A few weeks later we heard from other potato suppliers in our province that a second major retailer was going to follow this new pricing strategy. These two companies further advised that the set price would apply to all 10-pound bags, regardless of whether they are white, red, or yellow potatoes. Normally, reds and yellows sell at a premium due to supply and production differences, but with pricing policies like this, we have difficulty achieving those required premiums.

This is a new policy. It's the first time we've had experience with it, and we'll have to see how it plays out over the marketing season. But it does give us concern at this point.

This brings us to the Competition Act. We are dealing with buyers on the retail and processing side who are national, and in some cases multinational, in scope. They have access to supply and demand information from across North America, and often globally. The producer side has not had access to the same information, and that is not a level playing field.

We know we can talk about pricing and supply within our own provincial boundaries due to the powers our organization has under the Natural Products Marketing Act, and most potato organizations across the country have similar powers within their own province. However, we understand that under the Competition Act, it is not proper for us to talk about pricing and demand with provincial potato organizations in other provinces, whether it be Ontario, Quebec, New Brunswick, or B.C. It may also be improper to talk to them about their movement and supply situation.

Our buyers have this type of information, but we don't. How can producers make informed decisions about the production and marketing of their crops without this type of information? We operate in a highly integrated North American market for potatoes, and we are also affected by the global supply situation. We need to be able to discuss this with other producer organizations and to devise a system to better track supply and demand. We've been told that fishermen have exemptions under the Competition Act. If that's correct, could a similar exemption be granted to farmers?

On the solution side, we have an organization, the United Potato Growers of Canada, that was formed in 2006 to try to bring the supply of potatoes produced in Canada more closely in line with the demand. United of Canada has provincial potato organizations as members, and together we represent over 96% of the Canadian potato acreage. We've had some success trying to build our capacity to better understand the market, but we do need help. We're modelled on our sister organization, United Potato Growers of America, which was formed the year before us to do the same thing in the U.S. I have to emphasize that we don't want to short the market or any buyer, and we don't want to see prices go to unrealistic levels. However, stable grower returns should result when producers have better information about the market and what the market requires and can produce accordingly. All segments of the industry and the economy should benefit if we can achieve this.

United of America has access to very good pricing, shipment, and supply information that is gathered and published by the USDA. We can access this data, too, in Canada, as it's published on the Internet. United of America uses this information in weekly marketing calls. Through their analysis of this data, they now know that the U.S. market can absorb approximately 1.8 million hundredweight of potatoes each week without oversupplying and causing a price drop. We have no idea what that number would be for Canada, and we're not even close to finding out. We need a system that is similar to what the USDA has. We feel very strongly that farmers will make the best possible decisions about what to produce and how to market it if they have access to accurate, timely information. We've had some success with this through United on both sides of the border, but we need more information to take us to the next level.

We know that business risk management and safety nets are not keeping farmers in business over time. Federally, we've moved away from market information in favour of other priorities, but we need to go back and build a proper, accurate, and timely system similar to what the USDA has. Some work has been done on this recently by Agriculture Canada, but it was done on a project basis by third-party suppliers. This soft money will not build and maintain the system we need. The USDA has staff and resources for their system, and we'd like to see Agriculture Canada and CFIA do the same. It isn't a project. It needs to be an ongoing line of work for our federal government. We further understand that if the government collects and publishes this type of information, it's available to all Canadians, and that is positive as well.

Another issue is market access. P.E.I. seed, table, and fresh-for-processing potatoes are exported to over 30 countries around the world each year. However, we see potential in other markets for our products, particularly the Asia Pacific region and North Africa. We're pleased to see the emphasis on negotiating more trade agreements recently, but we'd also like to see more resources for the CFIA's potato section so that they can negotiate country-specific phytosanitary potato agreements with key countries. The section is understaffed, and they seem to lack the necessary budget to get the work done. The U.S. industry gets a great deal of support from their federal government in terms of support and market access funding. This has enabled them to go after potato markets that were traditionally Canadian. We'd like to see that addressed as well.

“Buy local” initiatives are very problematic for us. The increase in these initiatives has made it more difficult for us to get shelf space, particularly in Ontario and Quebec. As a country, we should be supporting “buy Canadian”, as goods manufactured in other parts of Canada move freely and are sold in the Atlantic region. Some “buy local” initiatives, while well intended, are almost acting as trade impediments within our own country. Perhaps the Agreement on Internal Trade should look at this. We also realize that “buy local” initiatives are provincial rather than federally funded, but federal dollars are transferred to provinces, which are then able to support their farmers accordingly.

The exchange rate and transportation systems are also major issues for us. They impact all farms. We'll leave it at that for now.

As a final comment, I'd like to emphasize that we are very concerned about the decline in other types of agriculture in our province and nationally. Potatoes are grown in rotation with other crops, such as forages and cereals. With the red meat sector in crisis, our ability to produce and market the rotation crops is badly impacted.

We need a balanced agricultural economy in this country, and if we lose major sectors like hogs and beef, everything else becomes more vulnerable.

Thank you for the opportunity to address you today. I'll be happy to take questions later on.

[The Chair, Conservative, Larry Miller]

You are right on time.

Now we'll turn it over to Mr. Dave Smardon from BioEnterprise Corporation, for ten minutes or less, please.

[Dave Smardon, Chief Executive Officer and President, BioEnterprise Corporation]

Thank you, Mr. Chairman and members of the committee.

I truly appreciate the opportunity to speak to you in the hopes of helping to advance our shared goal of building and maintaining Canada's leadership position in the global agricultural marketplace.

BioEnterprise Corporation is a not-for-profit company that focuses on the commercialization of agri-technology. We are supported by 40 agricultural organizations, we have strategic partnerships with 15 groups in five provinces, and we work with the technology transfer organizations of the major agricultural universities.

At BioEnterprise, we see innovation on a daily basis. In just the past 15 months, our company has been introduced to over 300 new agri-based opportunities from across Canada, each with unique innovative products or technologies ranging in the areas of agri-health, agri-food, agri-forestry biomass, bioproducts, and clean tech. Unfortunately, the vast majority of these innovations will never make it to the marketplace. Most will languish for a period of time, then fade away because they cannot obtain the support necessary to commercialize their products.

My message to you today is that there is a new wave of agri-technology innovation occurring globally, and Canada can be part of that wave if we get our formula right. We can create new opportunities for farmers and create new high-value-added jobs. With leadership, we can create the environment in which Canada can compete on the world stage. That leadership involves developing the tools to move our innovations from the research stage through to commercialization.

This new wave of agri-technology is going to be revolutionary, just as the development of computing technology has been. That is a field with which I am very familiar. I began my career in computing technology and have founded several successful software companies, some of which are still active today. I have worked for a number of high-tech companies focusing on venture capital and investment, including Apple Computers, where I headed the Canadian arm of their venture capital group.

My experience in the computer technology revolution tells me that the same scale of revolution is happening today in agri-technology. To highlight a few examples, consider the addition of omega-3 to dairy products, which stemmed from research done at the University of Guelph.

In the automotive and aeronautics industries, agriculture-based oils are being used in bio-based composites. The dashboards of BMWs, Chryslers, and Mercedes are made partially from bioplastics containing agricultural oils. The foam in the car seats of Mustangs contains agri-products from Canada. Wine pomace, which is the part of grapes usually discarded in making wine, is now transformed by a Niagara region company into high-value food and cosmetic ingredients.

These are leading Canadian innovations. However, unfortunately, in Canada, successes like these are extremely rare because we fail to commercialize the vast majority of our innovations.

Canada spends hundreds of millions of dollars annually on agri-based research, but study after study has shown us that while Canada has been among the leaders in agricultural research and innovation, our position on the world stage continues to fall. This is partly because of our inability to commercialize new, innovative agricultural technologies.

Other countries are now focusing on commercialization. Two years ago France created a $250 million fund focused on the commercialization of new agri-based technologies. Brazil has a similar $500 million program. These are not to be confused with research programs. They are focused solely on commercialization. On the other side of the world, India and China are quickly building world positions in new, innovative agricultural and agri-food products. In the United States, Indiana, Wisconsin, Illinois, Kansas, Iowa, and Texas have each developed new funding programs focused on commercialization. Lastly there is western Europe, where they are becoming leaders in the bio-economy through funding programs and commercialization clusters.

I would like to bring your attention to a study that was completed in February 2009 for Agriculture and Agri-Food Canada. The report, which is called “The National Commercialization Assessment: Taking Commercialization National”, found a lack of support for commercialization within the agriculture and agri-food sectors. Furthermore, it linked Canada's abysmal track record in commercialization of new agriculture and agri-food products to the lack of support programs focused on commercialization of innovation.

It identified and reconfirmed the following critical issues: first, there is a lack of support within Agriculture and Agri-Food Canada for commercialization; second, there is no link between research conducted and the need to commercialize resulting innovations; third, while regional and provincial networks have been created, there is little collaboration or cooperation among them; fourth, there is no coordinated national strategy that will deliver best practices and the necessary suite of services needed within this sector; fifth, there is a lack of experienced entrepreneurs and no national mentorship or coaching programs to help them; and last, the agriculture and agri-food sectors have been almost entirely ignored by the venture capital and investment community.

This report makes a number of recommendations, but the most critical are the calls for the development of a national commercialization expansion program and for the creation of a national agri-technology commercialization funding vehicle. As an organization that eats, sleeps, and breathes innovation, BioEnterprise strongly concurs with the results and recommendations contained in this report.

I would like to elaborate on these two recommendations.

The first is for the development of a national commercialization expansion program. While there are a variety of regional and provincial service organizations across the country, they have the following problems: they operate in a regional or provincial vacuum, yet innovation and commercialization are global. Their services are incomplete, and most focus only on providing networking and introductory services. They're incapable of shepherding entrepreneurs through the commercialization process. Most organizations have no mentorship or coaching capabilities; expertise is available from coast to coast, but no organizations have the means of finding such mentors, nor do they have access to other mentorship databases that may exist. Best practices that exist in one part of the country may not be transferred to other regions. Finally, there is no formal collaboration or cooperation among these organizations.

The national commercialization expansion program would resolve all of these issues quickly and efficiently. A single entity would manage the development of a full suite of commercialization services that would be made available to entrepreneurs across Canada.

The second recommendation is for the creation of a national agri-technology commercialization funding vehicle.

By now most of us understand what is meant by the investment gap. Since 1999, the number of venture capital firms in Canada has dropped from 145 to fewer than 50. Investment incubators are gone, labour-sponsored funds are quickly disappearing, and the big Canadian banks have left the industry. The few remaining venture capital firms either have no money to invest or are focusing on later-stage investments.

Traditionally, agriculture and agri-food have never been able to attract investment capital to their sector. Today there's very little capital available for commercialization in any sector, and this is particularly problematic in agriculture and agri-food.

The creation of a national agri-technology commercialization funding vehicle has three major objectives. The first is to accelerate the commercialization and growth of agri-technology and of innovative new companies in Canada. The second is to increase receptivity in the investment community for future investments in agri-technology. The third is to attract private sector investment from both domestic and foreign sources to Canada's agri-technology sector. These objectives are of equal importance, because successful commercialization of innovation will not take place without private sector investment.

The creation of a national commercialization expansion program and a national agri-technology commercialization funding vehicle would be a catalyst to drive agri-technology commercialization and greater participation by the private sector. For governments and society, new ventures represent jobs, innovation, new products in the economy, wealth creation, a wider tax base, and a healthier sector, but the problems in management of enterprise funding, product development, and market penetration are formidable hurdles for all new ventures. Addressing these problems is vital if Canada's agricultural sector is to evolve to produce high-value innovative products. Our ability to commercialize these innovations is what will drive success for Canadian agriculture and agri-food.

In closing, Mr. Chairman, I would urge the committee to look at the recommendations of this new national commercialization report on agriculture and give them careful consideration as a model for improving competitiveness in the agriculture and agri-food sector.

Thank you for the opportunity to speak today.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Mr. Norton, you have up to ten minutes.

[Greg Norton, President, Okanagan Kootenay Cherry Growers Association]

Thank you, Mr. Chairman.

Thank you, members, for taking time to invite us over here. It has been a long journey, since late last night.

Anyway, we're here, and we're ready to talk about competition, and we're here to talk about cherries and related competition. For a bit of background, I'd like to give you a brief history of our organization.

We represent about 60% of the cherry production in British Columbia, which translates into more than 50% of Canadian cherry production. We were formed in 1998 and have experienced in our industry in the last 10 or 15 years a revival of the cherry industry, only because we've had a great partnership with Summerland's Pacific Agriculture Research Station. All the varieties that produce our top-quality cherries today, to make us competitive, were bred and developed in Summerland at the station.

We do collect a voluntary levy from our membership. We generate $30,000 to $60,000 a year in levies, which we partner up through the old MII, and hopefully soon with the DIAP program. We attract outside funding to do research projects, not necessarily to develop new varieties, but new techniques on how to handle and process our fruit and store them. We've had tremendous success with PARC. Our industry is truly a real federal-British Columbia cherry grower partnership that has produced a wildly successful story, up until recently, which is where I get to turn the page.

We have enjoyed great success. We do produce top-quality fruit, very large, firm, green-stem, flavourful cherries, which is what the markets want. We are known throughout the world as top-quality producers, again thanks to that partnership.

However, in the last few years we've seen a dramatic increase in cherry planting in eastern Europe, and particularly in the northwestern United States, which is where we really want to concentrate our comments in dealing with what we think is the unfair flooding of U.S. cherries into our Canadian markets. They're hurting us everywhere in the world. We saw cherries arrive throughout the world and, in the 2009 shipping season, on consignment from the United States, from Washington State. It's really hard to demand a top-quality price for a top-quality piece of fruit if the Americans are offering it at 50% of what we're asking, to be profitable. It's very difficult, no matter what market we're in, to face a sale at those prices.

Really and truly at the base of this thing is that we're Canadian; we represent Canadian farm families. Like most Canadian agriculture producers, we're not corporate farms. We're Canadian farm families, as I am. I'm third generation. I have the fourth generation coming up, and the fifth one was born a year and a half ago. So we're looking to keep on going in this industry.

The question is, can my family farm compete with corporate America and the methods of business they carry out? That is the crux of this discussion. Like all commodities available, cheap American cherries in the markets have had a dramatic negative effect on Canadian farmers.

I'll speak specifically to the Canadian producer trying to sell cherries to Canadians. We estimate that considerably fewer than 50% of our producers this year will show a profit; they'll be operating at a negative level this year for cherry production in our province. As an example of that, last summer in B.C. we saw Canada Safeway offering Canadian cherries. They made a big deal out of supporting Canadian farmers. They were offering retail $1.88 a pound. Doing some very quick and dirty math, that would be a loss to the producer of 5¢ a pound. It was really nice to see Canada Safeway telling us that they support Canadian food producers, but the reality is we're going broke while they're getting some advertising dollars out of it.

Why is that? It was because American cherries were available to them at severely low prices, at below our cost-of-production prices. So yes, they did buy Canadian cherries, but what's a sale without making a profit? I mean, anybody can understand that. That's only one example.

Again, before NAFTA the Canadian government made.... You know, we used to have rules and regulations that said that as long as there was Canadian stuff available, the Americans couldn't dump into our markets. It was great. We basically didn't have a guaranteed living built into that, but we certainly had market access. That was before NAFTA. Of course, that's all gone now.

We're not saying we should open up NAFTA and revisit all those old things, because we know it's probably not going to happen. Look at what happened to the cattle industry and to softwood lumber. Opening up NAFTA and these trade agreements is long, clumsy, complicated, and expensive, and we don't think it's going to happen.

What else can we do? It's really quite simple, Mr. Chairman. We think the Americans are dumping cherries here at below cost-of-production levels.

What we're saying is, why doesn't the Canadian government do its job and enforce the regulations that exist today? There are anti-dumping regulations. There are cost-to-production formulas within those regulations. We think those cost-to-production figures are woefully low. The numbers we've seen are so low that they don't even reflect the cost of production in this century. Just get out there and enforce the regulations and the laws that we already have. We think that would make it a little less easy for the Americans to dump into our markets, and that would be a good first step.

There were 8,448 tonnes of cherries sold into Ontario from the United States last year. This comes from the Northwest Cherry Growers, the marketing folks out of the Pacific Northwest. We produce less than that in Canada. According to numbers issued on August 17, Ontario produced 750,000 boxes, and they sold 850,000 boxes into Ontario. I don't want you to think that Ontario is the only bad guy. They do that all over the country. The United States, the Washington and Pacific Northwest shippers, target Canada because we're an easy mark. They can sell into Toronto and our other markets on consignment. It is against the law to do that, but it is common practice throughout the industry. They ship them over and tell the Canadian buyer to do what they can with them: “Make what you can and send us what's left over.” This is common. This is decades-old stuff. We know this because our marketers try to sell cherries into Toronto and we get an awful lot of push-back from our Canadian wholesale houses. This is against the law.

The cherry growers are asking for government action. This is not a partisan comment. This is a government committee. You're all the government to us back there in B.C., regardless of what stripe you are. We are asking why the government is letting this go on. There are people breaking the law every day. It's not going to be easy to get to the bottom of this. It's very difficult. A lot of Canadians are making a lot of money off dumped or consignment cherries out of Washington State. They're not going to cooperate with us. But it's not impossible. If I'm able to convince you to get these agencies to go out and do their work, take the taxman with you. I'd sure like to see what that looks like. Go down to the old Ontario food terminal with the taxman at your side and see how that works out. We have to do something and we have to do it sooner rather than later.

As for the Canadian market, there should be some effort made to inform Canadian consumers that buying Canadian product is an investment in their communities, their provinces, and their country. We're selling a product that's raised, produced, and processed under Canadian health and regulatory guidelines on food safety. Americans can put in whatever the heck they want. The PMRA has been woefully slow in getting us the tools to fight pests. Guess what? Our competitors have those tools. That spray residue is coming in and forcing us out of business. That's taking the Canadian way one step farther than we think we should. It's time we started playing hardball with these guys. My stories aren't made up. They're all absolutely true. This is the reality of the cherries.

One minute? Geez, I've got so much more to say.

Okay. I just want to leave by saying that you all have my brief; I hope you do.

Selling cherries at less than a profit means nothing to us as Canadian producers.

Mr. Chairman, I will just point out to you that I got 10 days' notice of this meeting. I dropped everything. I asked my board to drop everything. We prepared that brief. Do you wonder why we did that? We did it because we think you're good Canadians. We think you care about Canadian agriculture. We think you'll help us and be part of the solution, so we can preserve this Canadian farm and family way of life. That's what this deal is all about. I hope for that.

Thank you.

Time flies, eh?

[The Chair, Conservative, Larry Miller]

Thank you.

You had 12 seconds to spare. We're glad that you dropped what you were doing. I know it's hard when you're a producer. I'm a farmer myself, so I can relate to that.

My thanks to all of you for being here.

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Chair, and thank you, folks, for coming.

Greg, the dumping question is a serious one. We have several industries in trouble. We're losing the hog industry. We have beef in trouble. Potatoes are not exactly the cat's meow these days either, and you're saying that cherries are in trouble. What are you saying to charge dumping under? I do think our international trade department never seems to want to challenge anybody else. We're used to being challenged, but they never seem to stand up and challenge somebody else. On the country-of-origin labelling, our producers will be all out of business even if we win that challenge.

So what are you saying to charge the dumping under? Under NAFTA, under the Canada-U.S. trade agreement, or what?

[Greg Norton]

I don't have knowledge of trade agreements. I just know that the trade agreements woefully underprotect Canadian producers. It's my understanding that within some of these agreements there are cost-to-production numbers. Have I read them? I haven't read them. I'm sorry. But I've been told that and I believe that because—

[Wayne Easter, Liberal, Malpeque, PE]

We could certainly get from your organization some of those figures to look at what our costs are.

[Greg Norton]

We would certainly go to work and try to find it for the committee if they request that.

[Wayne Easter, Liberal, Malpeque, PE]

I think we need to consider that strategy, Mr. Chair.

Brenda, this new pricing strategy off the retail sector, the same price for yellow, red, and white potatoes—that's unbelievable. I didn't know that. Can you tell us what stores or what chains are doing that?

[Brenda Simmons]

I could, Wayne. I guess I don't know if I want to.

[Wayne Easter, Liberal, Malpeque, PE]

Well, you don't have to put it on the record here.

[Brenda Simmons]

Can we go off the record? Because, you know—

[Wayne Easter, Liberal, Malpeque, PE]

One of the problems I guess I have relates to the second question I'm going to ask you anyway. Everybody at this committee knows that when you contract with a processor for your production, you feel somewhat obligated to that processor, because if you lose that contract you may not be producing next year. It has happened, Mr. Chair, in Prince Edward Island, producers have told me that the two major processors in P.E.I. also sell crop protectants and fertilizer. Fertilizer has been brought in from Russia by container and other countries by container much cheaper. In fact a neighbour of mine saved $60,000 on 400 acres of potatoes by bringing the fertilizer in himself.

However, the big boys, the processors, decided they weren't going to take a loss on the fertilizer they had brought in at December prices, so they very clearly told some producers, “Look, if you didn't buy your fertilizer for your grain, you'll not get a potato contract.” I know the potato board is in a difficult position to even say anything on that. Producers are fearful that if they say anything or challenge anybody, they'll lose their contract.

This is a serious issue, Mr. Chair. I see you're shaking your head and I know you understand that.

I raise that, Brenda, because what I'm saying is true, from what you've heard, correct?

[Brenda Simmons]

On the way that deal is working, one retailer said they were going to use the Ontario board's minimum price. So when the Ontario board set their price at $2, delivered to the distribution centres in Ontario, they said that price would work in Quebec, New Brunswick, and Prince Edward Island. If our guys were shipping to the distribution centre in Moncton or Debert, they had to meet that price. That might be doable on the whites, but as you know, with Yukon Gold it's very difficult to get a yield from that variety. It deserves a premium, and must have a premium, if you want growers to continue to produce it for consumers.

We share that information with the retailers. The retailers are not bad people, but they set these prices, and there's always someone who's desperate enough or has a crop out and no storage who will sell at that. That's what we're working against. If someone sells it at that price, it's very difficult for others to turn down that business. It just can't happen. Our yellow varieties are down 25% in Prince Edward Island this year, and reds are down at a higher percentage than that.

People want choice in the stores, and our growers want to give them choice, but they can't do it at a loss year after year.

On the processing side, that's very real and very scary. It would be difficult for a producer to come to address these things. I'm glad Greg's doing what he can on his side with the cherries. But for our producers to come here and tell you they paid $1,100 a tonne for fertilizer this year while people in Manitoba paid $750 for potato fertilizer or $750 for Russian fertilizer--look at that price impact on a farmer.

[Wayne Easter, Liberal, Malpeque, PE]

As we did one time at the fisheries committee, we could have some individuals come before us in camera, so there's no public record of the meeting, to tell us how serious this is. That's one way we could do it. This is absolutely wrong. It's domination in the marketplace. It's linked purchasing and selling.

You said that producer organizations across the country--and I don't have this quite right--are not allowed to glean information from each other. The USDA has it for producers in the United States. It's illegal for you to do so in Canada, but the retail sector can basically do whatever they damn well like. There's something wrong with this picture.

[Brenda Simmons]

They're doing their job on the retail side. If one person is buying for all of eastern Canada or Canada and they call up our board to ask about our supply situation, we tell them. We're frank with them and say we may have too many russets this year, for example--not that we do this year--and if they need to feature more russets so the market moves well, we can do that. That same call is made to New Brunswick, Quebec, and Ontario. They have all the information.

If I call Don Brubacher at the Ontario Potato Board and say, “I know your minimum price is this, it's a published price, but what do you see for movement, and what do you think the price will be in six weeks”, that is supposedly not legal. That's not right.

[The Chair, Conservative, Larry Miller]

Thank you, Ms. Simmons.

Mr. Bellavance.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

A point of order, Mr. Chair. It's more a point of clarification, actually. I didn't want to interrupt Mr. Easter.

It is important to recognize that many of these are family farms, generational farms; therefore, they're going to be in the business for a significant amount of time. Anybody we do bring in should realize that the records are opened after three years, even in camera records.

[Wayne Easter, Liberal, Malpeque, PE]

They don't have to be.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

It is actually a standing order.

[Wayne Easter, Liberal, Malpeque, PE]

We've done it on the fisheries committee and they weren't. So we need to check into the legality of that.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Some guys would be hesitant, if that were the case.