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?