Agriculture Committee on April 27th, 2010

[Gordon Butler]

That's a very simple request. When I found out about this, I went to her and asked her why she didn't want to come back. Her answer was regulation and the lack of property rights.

Yes, we aren't making money in the cattle industry right now, but I believe if there's less regulation and we could get back into a free market, the future is good, because people are going to keep eating. Whether they like it or not, they're going to keep eating. A lot of people probably eat too much, but I think the future of agriculture is good if we could lessen the regulations, lessen the control, and have security of our property.

[The Chair, Conservative, Larry Miller]

Thanks.

Mr. Hanson.

[Wyatt Hanson]

I would like to be able to advance the farm, and I would like to be able to allow my parents to have enough money to retire. So I would have to see a future in it before I'd jump in. Currently there isn't a future.

I had suggested earlier that there needs to be some way, when the consumer is buying it, that a percentage goes back to the producer. I'm thinking that a little bit of government regulation would be a good thing for that, and I think that would protect the base of the agriculture industry.

I know everyone after the farmer is making between 8% and 12%, and the farmer makes a loss. So he or she is not really making anything, then. Before I jump in, I need to at least know that I'm going to break even.

Does that answer your question?

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Yes. Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much.

As always, there's never enough time. We always seem to have time restrictions. Again, I'd like to thank all of you for being here today and participating. I know that as producers, as I said earlier, how hard that is to do. We appreciate that.

At this point, I forgot to do it at the start, but we had help with some of the set-up here. A number of grade 11 students from the W.G. Murdock High School here in Crossfield helped with the set-up, and they're going to help with the tear-down, so we'd like to pass on our thanks for that.

I understand there's going to be a token of our appreciation that will go to their graduating dance. We're very happy to do that in appreciation for their help. I thought we should do that.

We're going to break for five minutes. Perhaps I could ask our presenters here to vacate so our next presenters can move in. We would appreciate that.

Thank you.

[The Chair, Conservative, Larry Miller]

All members back to the table, please.

Again, to keep things moving and not to shortchange our presenters at the table, I'd certainly like to welcome all of you here and thank you for taking the time out to come before us.

With no further ado, we'll turn to Mr. Latimer.

If I could ask each one of you to try to keep your comments to five or seven minutes, it just leaves a little more time for questioning. I also don't want to take away from the fact that your presentations are very important too.

Anyway, Mr. Latimer, you're first.

[Michael Latimer, As an Individual]

Thank you, Larry.

I've met Larry and I've met Blake. For those of you who don't know me, I'll give you a bit of background about myself. I'm 35 years old, so I've been through university. I have a bachelor of arts degree in recreation and administration, which makes you wonder why I'm sitting around a table talking about agriculture. Anyway, currently I work as the assistant general manager of the Canadian Angus Association, with the largest beef breed in Canada. I'm also a partner in our family's purebred Angus and Hereford operation.

As a little background on that, just for the scope of it, at its peak, we ran approximately 1,000 purebred black Angus and 1,000 purebred polled Herefords on about 6,450 acres of land: 2,450 of that was crop, 1,000 hay, and the balance of that was in pasture. We dispersed our big herd in 2008 and reduced some of the land in 2009. Now we currently operate on 1,750 acres and have about 250 head of black Angus.

After the herd dispersal, one of my brothers, along with my father, continued to operate the farm day to day. My youngest brother now works in the oil and gas industry, and of course, just as I mentioned, I work for the Canadian Angus Association.

In light of what we're talking about here today, I think I'm a pretty good example to know what happened. I know the background on why the three of us, when we came to the fork in the road, all chose a different path.

I'll talk about the challenges of agriculture. Agriculture is in a very difficult position. Many of the decisions that will be made within the five years will affect the industry for decades. There are many areas of concern that need to be addressed. There's no single answer and there are no quick fixes.

One specific issue is the relatively small number of young individuals choosing primary agriculture, specifically beef production, as their sole business or profession. Through my work with the Canadian Angus Association, we keep statistics on these kinds of things, and the average age of an Angus producer is reaching 60 years old. So they're looking to retire.

Although the solution is complex, the reason young Canadians are not choosing primary agriculture is simple. That reason is simple economics. It's cost-prohibitive to start a farm, and there are many more attractive options. A viable farm operation is a multi-million-dollar proposition, and if you manage this operation with above-average standards, you could expect to see about a 4% return on operating. This would be with no regard for any capital investment. This is not an attractive business plan to take to a bank or to any investor to invest in your farm operations.

For those who do choose to enter agriculture, they are faced with many challenges to starting or continuing with an existing operation. The current financial reality, the ability to access funding for either operating or capital is difficult or even non-existent. As everyone knows, farming is weighted very heavily in capital investments. The cost of purchasing enough land, cattle, and machinery and to have a viable operation is very expensive. In most cases, interest rates are generally higher than the expected rate of return. This is even in well-managed operations.

The financial funding model for primary agriculture needs to be changed in order to allow farmers to have access to financing or to be able to attract investors. As one generation looks to exit agriculture, we look for ways to encourage another to enter, and succession planning is critical. On a typical farm, there's a backlog of generations. In many of these cases there are multiple generations operating within one farm operation. It's possible to have a generation in their eighties who still own the land, a generation in their sixties looking to retire and still waiting to inherit their land, a generation in their forties who are fully involved and waiting for their parents to inherit the farm, and yet we are still expecting the younger generation in their twenties, who have just completed college or university, to become involved. They're expected to dedicate their life to a promise that they will take control of their land at about the time they're looking to retire. This is not an attractive option for a young individual.

There was a time when capital purchases were more in line with the revenue and were not as cost-prohibitive as they are today. In central Alberta, within my lifetime, it was possible to purchase a piece of land and pay for it with two good crop years. During this time it was feasible to purchase land from the older generation and move on. Today this is not feasible.

I believe we need to change the approach to farm succession from a tsunami—which would be all at once, where you just buy the other generation out and move on—to gentle waves coming in and out. As we phase one generation out, we can bring another generation in, and not have one generation completely waiting to try to just take all the burden on themselves.

We need to change the culture and mentality of succession in Canada. This change may be more attractive for outside investment in primary agriculture. This could be accomplished with government assistance for farm operations to consult with financial planners to develop long-term intergenerational programs for succession of ownership similar to the way the environmental farm plans are set up. This would need to be done in conjunction with training for accountants, lawyers, and financial planners and with tax incentives structured for people to enter agriculture and not just exit from agriculture, as in the case of the capital gains program. This structured transition would allow each prospective generation to have the security that they're not giving the farm away or working for nothing.

Another option is to develop a mentorship program. This would see financial assistance or tax incentives for farm operations to bring on a new member, family or non-family, and provide on-the-job training. Farm operations are generally asset-rich and cash-poor. They are unable to compete with the salaries provided by other industries. There are young individuals who would love to work on a farm but who are unable to because the salary provided would leave them close to poverty.

There would be a benefit to administering this mentorship program through the municipality, at a county level, through agricultural societies, or even through agriculture-based associations. The reason for this is to keep its focus narrow. This narrow focus is to keep it to people who are local, who are in agricultural fields that they are interested in and have previous experience in, and who wish to continue in that industry. The financial assistance from the government could be viewed as similar to the cost of training at a post-secondary institution using farmers as professors. There is no better teacher than someone who has made a living in the business.

Because of the diverse nature of agriculture, many of the current and previous government programs are complicated.They are intended to serve a broad range of farming operations, and through that, in the end, they end up helping very few. They're often not understood by farmers and even by some financial professionals. If the program method is the answer, they need to be flexible and simple in design to allow for better understanding by farmers and by financial professionals.

When there is a financial model developed that allows agriculture to be profitable, people will choose it as a business. It's a great place to work and raise a family, and it has a long and proud history. However, until there is a more feasible financial model, we'll see people, including workers and investors, migrate away from agriculture and move into other professions that are more lucrative.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We'll now move to Mr. Buckman and Mr. Brecka, who are together. You will have five to seven minutes, please.

[Brian Buckman, As an Individual]

I'll start out.

I'm not much of a speech person and I didn't get much written up. We're a family. My wife and I run a mixed grain farm in the Nobleford area. I got an invitation about two weeks ago, right in the middle of spring, so I didn't get much put together. Two days ago we were seeding.

When I left high school, I got a technical ticket and worked at the John Deere dealership for ten years. In the meantime, I farmed for four years while working full time, and in 1997 I quit my job to go into farming full time.

We've had ups and downs in our area. I bought my first property in 1994 at a price of $400 an acre. Right now land in our area is trading for $1,400 to $1,500 for dry land. If you watch the markets, you know there's no way to ever pay for that land at $1,400 or $1,500.

My biggest trouble in our area is competing with the subsidized market. Our crop insurance program and risk management are very costly in terms of the amount that we pay versus our protection. The U.S. is protecting their producers. An example would be durum; we don't grow primarily durum, but we grow some durum in our rotation. For the 2010 crop year the U.S. is giving them $6 per bushel for durum, while we're over-produced; I can't sell the product I have in my bins from two years ago, and I can't pay my bills that I have from two years ago.

Flax is another crop we grow. We have a GMO issue with it. Our market has dropped. We have more bills to pay.

In 2003 BSE hit and borders were shut. We're in a major cattle-feeding operation area. After the millions of dollars handed to select corporations, it's very tough to compete with them as a grain farmer. They're importing products from the U.S. when they could be using our own locally grown products.

With the government helping out select groups, I find it financially very tough to compete in that market. At my age, at 40 years old, I don't see a future left in this for me or for my next generation. I think something has to change on the program side of it and with the way the government has handed out some of this money and continues to hand out some of this money.

[The Chair, Conservative, Larry Miller]

Could I have some examples of the groups you're referring to, Brian, if you wouldn't mind?

[Brian Buckman]

In our area, the biggest area of the group is the cattle. There's the BSE money that's been handed out, multi-million dollars into the BSE into the fed cattle market. We can't compete with that. We have a situation where we can't move our product anywhere, not even locally. Where they get multi-million dollars, we have to sit on product for two or three years before we can even market it. With the CWB only taking 60% of my durum production, I have to use every dollar from that crop produced to pay my bills, and if I can only move 60% of that, I don't pay my bills. If you don't pay your bills, do you know what happens? You don't continue.

I think I'll let Alan read his little speech and give us each a few minutes.

[Alan Brecka, As an Individual]

This is quite similar, actually. I too had a trade.

First of all, I'd like to thank the panel for being here today to meet with us. And I thank the weather, because now I don't feel guilty about taking a day off from the tractor.

As a little intro, my name is Alan Brecka. I operate an 1,800-acre cereal, grain, pulse, and oilseed farm near Picture Butte, Alberta. I'm what you'd call a young farmer, even though I'm 30 years old. This is my tenth year of actively farming. I also worked off the farm for ten years as a heavy duty mechanic to build equity until two years ago and then I went full-time into farming. I'm a third-generation farmer and hoping to have a fourth generation with the recent birth of our son. Please note that I'm a separate operation from my father. I have started out basically on my own. I'm not one who stepped into an operation with cash ready in the bank and new machinery.

I feel that anyone who is a grain farmer these days has to be an outstanding farmer, due to all the outside circumstances affecting our daily living. I can honestly say that without change in the near future for us, there'll be no new young individual farmers, including myself.

My first issue is with the lack of government support for the grain industry alone. This year we have seen China reduce its canola imports; a record world durum crop; a massive U.S. corn crop, which affects our feed barley and wheat prices; the rising dollar; GM flax in shipments; as well as a recession. Those are a few of the more pronounced problems we have. Yet the government will do nothing but take the high road with regard to NAFTA and the World Trade Organization. The American government pretty well guarantees a base price for their farmers, and yet we can't.

A young grain farmer with land payments, land rents, and machinery loans can't make ends meet with $4 grain. It's time the feds stood up for Canadian agriculture instead of stepping down on the world stage to appeal to other countries.

That leads me to our current safety net programs. What was CAIS is now AgriStability. It's the same idea, roughly, but it still doesn't work for my operation. Anyone who grows average to above average crops and is diversified will almost never get a payment. Usually the losses incurred from one crop will be overshadowed by the rise in price of another. So your margin never changes, even though you budgeted for an increase based on current prices.

When I discussed this with my local Agriculture Financial Services Corporation office, they pretty much told me I was hedging my own risk anyway, so that's why AgriStability doesn't work for me. I've heard numerous horror stories about CAIS and AgriStability asking for money back with interest and administration fees. That is why I do not enrol in these programs.

What we need is a floor price for our grain or a cash payment based on either grain contracted through permit books or through end-use companies--i.e., grain companies, feed mills, maltsters, or feedlots. The aforementioned commodity can only be sold once and not again on paper to create losses, which I do see around in other sectors. I do believe there should be a cap on programs based on gross income of a farm and farming corporation. I feel the primary producers, either corporations or family farms, who gross more than $1 million should not be eligible for certain programs. If a company is that large, the economies of scale apply, making them more efficient.

My next concern is with the Canadian Wheat Board. My father is an avid supporter, and I am to a certain extent, but these days it's hard to say whose side I'm on. Are they controlled by the government or not? How many millions of dollars of our money has been spent worthlessly on lawyers and advertising? I used to say that I seeded durum that was worth $7.50 at seeding, was worth $4.50 a bushel at harvest, and is now worth $4.00 as we speak. We can only haul 60% this year, so essentially it's now only worth $2.40 a bushel. Of course, the fertilizer and chemical costs are still the same as when we were seeding it at $7.50. Where are they to support us? They say they aren't a lobby group, but who is lobbying at the World Trade Organization?

As you can tell, the odds are stacked against the grain farmer when it comes to any type of support. Many of us sit idly by and watch as other sectors in agriculture struggle yet receive provincial and federal support. There's the Canada-Alberta BSE recovery program, the high cost of feed and fuel, the Alberta farm recovery programs, the current hog industry buyouts and loans, to just name a few. These programs have given billions of dollars of ad hoc support to the red meat sector of agriculture. This has, at least in southern Alberta, created an abundance of multi-millionaire feedlot owners on the taxpayer dime. It's also created a large resentment among neighbours between those who received money and those who didn't.

I'm not here today asking to become a millionaire with programs and payments, just enough to pay my bills and eke out an honest living. I love what I do, but at today's prices they don't pay the bills.

Thank you.

[The Chair, Conservative, Larry Miller]

Thanks, Alan.

Now we'll move to Darcy Davis. Good to see you again, Darcy.

[Darcy Davis, As an Individual]

Thank you, Mr. Chair.

My name is Darcy Davis. I farm about 30 miles east of here, straight east. I have a slight grain operation--it's not very large any more--and a cow-calf operation.

I'll tell you a little bit about myself. I'm the past chair of the Alberta Beef Producers. I'm on the board of directors of the Canadian Cattlemen's Association. I'm a past president of the Canadian Agri-Food Trade Alliance. And I'm still working on some other efforts.

Another thing about me is that I have two daughters. One is taking horticulture in college right now. The other is on the farm and working off the farm. I have three nephews in my brother's operation who are working on the farm, trying to find their way through it. They just bought a herd of purebred cattle from a retiring farmer. So they're kind of going against the odds. I thought I'd put that in, as you've heard some things going the other way. How it turns out for them remains to be seen.

I really appreciate this opportunity to speak to you on this important subject. The lack of young farmers has been an issue since I was one myself.

The facts are fairly clear that the consolidation in farming has led to fewer young people staying on the farm. The consolidation has been a result of technology, larger and more efficient farm equipment, and thin profit margins, a result of variable input costs and market prices.

One other challenge is the cost of entry for a young person to start farming. The price of land and equipment is a barrier that many see as being too high to get over. Even generational farms have difficulties as young farmers buy out the older relatives' holdings.

But these are not new issues. For decades we have seen young people choose careers outside of agriculture even though they may have wanted to stay on the farm. The fact that it has been an issue for decades raises the question of whether the problem has a solution or is a fact of life.

Governments, both federal and provincial, have done a lot of work trying to assist and encourage young farmers. Success has been hard to gauge, which I am sure creates frustration. Government has a role to play, but we need to be very careful not to interfere in ways that create more problems than are solved.

Farming is a highly competitive business that operates for the most part in a free enterprise system and always has people exiting and entering the industry. Where government could play a role is doing its part to create markets that are as distortion-free as possible and that could provide opportunities for today's and tomorrow's producers. A business environment where we can use our Canadian advantages in a global market is achievable.

While the Doha Round of negotiations continues to drag on, Canada needs to do its part to be part of the solution and bring the negotiations to a successful conclusion. The George Morris Centre did a study where $30 billion a year could be gained annually for Canadian export agriculture through the Doha Round. So we need that to continue.

While the conclusion to Doha may take some time, I would encourage the present government in its efforts to negotiate a free trade agreement with the European Union. This is a massive market that would give a boost to the bottom line of a lot of Canadian farms.

Another trade avenue would be to become engaged in the trans-Pacific partnership agreement being worked on by a number of our existing trade partners. This multilateral agreement could give us the access we need to growing Asian markets. Pursuing and completing these free trade agreements and seeking new trade relationships are an excellent way to provide for another generation of farmers to have profitable operations.

Another signal to young people to stay in agriculture would be some changes in the regulatory environment that western Canadian farmers operate in. When the malt barley industry declares that it will not be making any further investments in Canada until we have an open market for barley, that is telling us that we have reached a dead end. We need our products to be processed in Canada.

I took part in a plebiscite in which a full two-thirds of prairie barley producers supported an open market for barley. Anyone looking to enter an industry would want to know that the government is listening to the producers of that industry and responding.

The last suggestion I will make is that while we acknowledge the fact that we operate in a very competitive world, the young Canadian farmers should be the best competitors they can be. I often tell young people that if they like driving a tractor, then they should get a job driving a tractor. If they want to farm, they need to like being business managers.

Agricultural colleges and universities need to be supported to give our farmers of tomorrow a chance to compete. These farmers of tomorrow need to have the technical understanding of growing crops and raising livestock, but they also have to have knowledge of markets, financing, and management. As well, it would be excellent if we valued those young people who get education and take on careers that support agriculture as much as those involved in production.

For Canada to be competitive, we need research scientists and agronomists who understand our advantages and challenges, but we also need new ideas in thinking. We need our colleges and universities to produce young people with degrees in agriculture policy. When I was chair of the Alberta Beef Producers we could find young people with marketing degrees, communication degrees, and business degrees, but nobody with anything in general agriculture policy.

Many of the land-grant universities in the U.S. have whole faculties teaching agriculture policy. The graduates of these schools go on to work for industry associations, and then take positions in government, both elected and bureaucratic. We need a talent pool of young people who can analyze regulations and legislation to figure out what the intended and unintended consequences of such actions will be. You're hearing a number of those issues today, whether it's payments to some sectors and not others, regulations on environmental situations, or those kinds of things.

In conclusion, for the government to be of assistance to young farmers it needs to be on their team, supporting, educating, and providing opportunity, but ultimately having the wisdom to know when to get out of the way.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Now we have Mr. Townsend, from Wild Rose Agricultural Producers.

[Lee Townsend, Director, Wild Rose Agricultural Producers]

Thank you, Mr. Chairman.

Good morning. I would like to thank the honourable members of the standing committee for allowing me the opportunity to come before you to discuss some of the issues regarding youth in Canadian agriculture.

To provide some background on myself, I'm a second-generation beekeeper from the Stony Plain area. I operate 2,500 colonies along with my father, strictly for honey production. I sit on the board of directors of the Wild Rose Agricultural Producers. I'm the vice-president of the Alberta Beekeepers Commission and sit on the executive of the Canadian Honey Council.

I've had the opportunity over the past four years to be involved with two young farmers' groups in Alberta, the Alberta Young Farmers and the Future Agricultural Business Builders, as well as the Canadian Young Farmers' Forum.

There are a number of issues that current potential young farmers face across Canada right now. A recent report done by A.N. Scholz & Associates Incorporated with APAS in Saskatchewan, called “Strategies and Recommendations for New Entrant and Intergenerational Transfer Program Needs”, lists succession planning, business training, mentoring and apprenticeship programs, messaging and image, financial tools, immigration, and coordination as their seven major focus areas. I would like to focus on mentoring and apprenticeship programs, as well as messaging and image, in relation to youth in agriculture.

In Alberta there is a great deal of discussion and exposure regarding the lack of knowledge of our youth about where the food they eat comes from and how agriculture has an influence on their life, directly or indirectly. It's very unsettling when I hear people make light of a child saying that milk, meat, eggs, and bread come from Sobeys and not from cows, chickens, and grains. While it may be amusing to hear the innocence in their voices when they say it, it reinforces the growing disconnect the next generation has with agriculture.

As they progress through their schooling, a lot of energy is directed towards educating children on the many things they can do with their lives in the form of a career. Very seldom is primary agriculture ever discussed or promoted as an option. More often than not, the educators don't take a student's interest in agriculture seriously. I've heard numerous students tell me that the educators ask them, “Why would you want to do that?”, in a negative tone. If you go to a career fair, the number of booths dedicated to primary agriculture is limited as compared with those for other professions.

Alberta is fortunate to have the green certificate program, which is an approved complementary program of study available to all Alberta high schools. Becoming a competent farm production technician, completing a level I green certificate, requires taking three courses and upon completion receiving 16 credits. I am a tester in this program for the beekeeper production technician curriculum, and I believe that this program is a great tool available to all high school students in Alberta. The inherent problem with the program is that generally the only students who take it are those who are already active in some variety of agriculture, as it has a tendency to be used for easy credits.

That's not to say that the course is poorly written, as its content is very detailed and could definitely pose a challenge to students with and without an agricultural background. The problem I have seen with this course is that there are virtually no students from non-agricultural backgrounds taking part in the program.

How do you change this?

The people involved with creating, administering, and testing of this program are an extremely dedicated group who work towards the advancement of a student's understanding of agriculture and the continued growth of these students once they finish high school and move on to post-secondary education or move directly to a career in agriculture. Outside of this program there is very little mentorship or leadership available to students, and that outside mentorship and leadership is what's needed to get students with little to no agricultural background involved in the program.

We need to look at programs that have been successful in accomplishing such mentorship and leadership from the U.S.A., Australia, and even, within our own country, from Quebec, and find ways to incorporate that foundation in our education system in Canada.

Another area of concern for agriculture and future generations is the image agriculture has among the general public, the media, and even within government itself. In his report, Mr. Scholz states that one of the top barriers the industry faces in attracting new entrants, youth in particular, is the messaging and image attached to agriculture and farming.

Celebrating success on farms and of farmers may be the easiest way to make a difference. Recognizing the efforts of individuals puts a tangible element to the message in a way the public can understand. Federal government financial support to Bombardier, GM, and Chrysler is rationalized and promoted as a critical stimulus to the national economy, but support to agriculture is often reported as a handout. Why? The agriculture and food sector is the largest employer in every province across Canada and is the real driver of the national economy. The federal government has a vital role and responsibility in developing a positive and progressive image of farmers in the agricultural industry at large.

This is something I'm sure we've all heard numerous times. Now it's up to all of us to work on changing this image and making farming more socially acceptable and appealing for young people. Farmers generally have skill sets that cover a number of broad areas because of the unique nature of the agricultural profession, and it's imperative that we use that fact to our advantage in drawing people to agriculture.

It is also important to convey the message of what farmers contribute to society as a whole. There are provincial and national young farmers' organizations out there that are available to draw on for this, and I feel that government has a real opportunity to join with these groups to work together on these ideas.

It is apparent to those currently in agriculture that this is something our government takes seriously, given the announcement of funding from the Government of Canada for the Canadian Young Farmers' Forum and the fact that these discussions are taking place across the country right now. But more needs to be done to spread the message and to educate our youth as to the prospect of becoming agricultural producers.

In 2006, the Statistics Canada census found that only 9.1% of farmers in Canada are under the age of 35. The average age of the Canadian farmer is 52. The same census also found that 80% of Canadians live in urban centres and 20% live in rural areas. The final disturbing number is that less then 3% of our population farms. Even though our post-secondary education is doing a commendable job in giving new entrants into farming the knowledge they need to become involved, more has to be done at an earlier age to prevent the results of the Statistics Canada census from getting worse.

I would like to thank you all for taking a greater interest in future generations of agricultural producers. I would hope that as a result of these sessions across Canada, everyone works together to solve these issues as well as the many others out there.

Thank you for your time.

[The Chair, Conservative, Larry Miller]

Thank you, Lee.

We'll go to Mr. Scarlett from the Canadian Young Farmers' Forum.

[Rod Scarlett, General Manager, Canadian Young Farmers' Forum]

Just a little bit about myself: I'm obviously not a young farmer; I'm the general manager of the Canadian Young Farmers' Forum.

I'd certainly like to thank the standing committee for coming to Crossfield. It's just down the highway from where I was born. I was born and raised in this constituency, Didsbury, Cremona, and Carstairs, so I'm quite familiar with this area.

I hope each of you is aware of the Canadian Young Farmers' Forum. It really is Canada's primary organization for young farmers between the ages of 18 and 40. The mission of the CYFF is to promote the exchange of ideas and to foster collaboration between young and future farmers of Canada. Our purpose is to provide a multi-faceted educational and development opportunity for young and beginning farmers from across Canada. Briefly, as an organization, we try to identify problems, promote the exchange of ideas, prepare young farmers for active roles in other organizations, consolidate opinion, and facilitate the development of young farmer organizations across the country, of which there is at least one young farmer organization throughout every province in Canada. We have access to probably over 10,000 young farmers through e-mail and contacts.

The CYFF is not a lobby organization, but we're certainly willing to provide ideas and information. As such, the board met a couple of weeks ago in Montreal and discussed a number of issues that we feel should be raised in these discussions. To begin with, it's quite clear that more information is needed before any detailed discussion about young farmers can effectively occur. We need to get current and accurate information on the number of young farmers in Canada, their locations, their size, scope, and type of operation. We need to know how those farms are structured, where they are in their business plan, and what the future business plan has in store. Obviously these are not questions that are answered easily. Farmers are surveyed a lot, and some are not willing to provide any more information.

What we do believe is that we can, as an organization, help you, the policy-makers, in finding that information. We know that through the delivery of some of our programs, young farmers relish the opportunity to exchange information with other young farmers. We believe that given proper resources, we can survey young farmers across Canada and get that much-needed information for you. We have a good base from which to start, in that every province has a young farmer organization. By obtaining this good information, you, the policy-makers, can ensure that the programs and the assistance that may be offered are directed properly.

We know, for example, that there is a tremendous amount of dollars that are going to have to be transferred in the upcoming decade, and that succession planning is an important tool in this transfer. What we don't have is a good handle on how many young farmers are on this track, where they are in the process, and to what extent the dollar transfer will be, and what are the implications.

Obviously, good information is very important, but there are some immediate issues that can and need to be addressed. A number of the fellow speakers here have touched on them. Farmers, ranchers, organizations, and politicians must be on the same page to improve the image of agriculture. Providing Canadians with safe and healthy food at affordable prices in an environmentally friendly manner only serves to promote the industry. It is important that we promote a positive image to the consumers of our product. This sends a strong message to those in the industry that there is support, there is concern, and there is a future. A strong and vibrant industry image will only serve to attract new entrants.

The promotion of the industry also corresponds to promoting agriculture as a career choice. This should start in schools but is not restricted to educational institutions. The industry itself needs to take a better, proactive role. Certainly one of the differences I've seen between established farmers and new and beginning farmers is optimism. There seems to be a pervasive feeling among some farmers that the young generation shouldn't be encouraged into the field. There may be legitimate reasons, but they must be overcome in order for the industry itself to have a succession plan.

You as politicians can assist by offering support to institutions to have agricultural courses and training, training core courses, and putting a positive spin on the industry, for the industry. Simply referring to aid to the industry as support or subsidies is a good starting point to change your language.

The industry itself has taken a proactive role in mentorship with commodity organizations. I've used the Canadian Cattlemen's Association as an example, and certainly some general farm organizations. Downstream industry players, a lot of private industries, have adopted successful mentorship programs. It is, however, not just mentorship between generations that is important, as our experience into what we've given as training in our best management practices courses across Canada has illustrated.

Younger producers are excited to exchange ideas and information with their peers. They are open and receptive to new ideas and innovative management techniques that other young producers have developed. We need to continue to promote this exchange of ideas between young producers throughout the country, as it may represent one of the greatest opportunities.

The last point I wanted to raise is the idea of farm programming that at the very least does not discourage young farmers and new entrants.

We seem to have taken the easy way out in designing programs. New entrants and beginning farmers are often forced to take area averages or average production as a basis for starting out in a program. While it's easily calculated and somewhat justifiable, it often places young producers at a disadvantage, since margins have not been particularly high in the last few years. We need to put program parameters in place that allow stability and growth early, encouraging both industry and long-term participation.

I'm really focusing on some broad general themes here. I know the other participants here at the table probably have more specifics, but I've raised some concepts that our members, young farmers from across Canada, have raised in meetings and discussions. I'm sure you'll hear similar messages from some of our members as they make presentations to your committee in these other provinces.

Finally, I just want to thank you once again for taking the time to engage in discussions on young farmers in the future.

[The Chair, Conservative, Larry Miller]

Thanks, Rod. You've got a great organization there. We appreciate it.

Mr. Lucas, last but not least. Five to seven minutes, please.

[Paul Lucas, Director of Agriculture and Food, Northlands]

Good morning, and thank you very much for the opportunity to speak with you today.

My name is Paul Lucas and I'm the director of agriculture and food for Northlands in Edmonton, Alberta. While my discussion with you today is not directly related to issues of farming, it is related to youth and youth development in agriculture and my observations that are cause for concern.

As the largest and oldest agricultural society in Canada, Northlands engages approximately 2,200 volunteers in our events and programs throughout the year. Our role as an agricultural society is to provide the platform for business of agriculture and food. One of our major pillars of the business is youth development in agriculture. As a non-profit association, without volunteers, programs and events would not take place on our site. One of the many challenges we all face as agricultural societies is an aging volunteer base and finding a better way to engage with youth in our programs and events.

I was recently elected to the Royal Agricultural Society of the Commonwealth, with one of my roles as a member liaison for Canada. The Royal Agricultural Society of the Commonwealth is headed by Prince Phillip, with a mission to encourage the interchange and development of sustainable agriculture, forestry, fishing, and rural development throughout the Commonwealth, working with and through these leading national agricultural show societies throughout the Commonwealth.

Canada is not considered a player in the eyes of the RASC, and I hope to change that with the collaboration and integration to a united voice with common goals and objectives around youth and agriculture for Canada. I know we have the ability and the resources to make a difference. The audience with you today I hope will encourage discussion and engagement into promoting and developing youth in agriculture, a program of the RASC called “The Next Generation”.

The next generation are the successors to the RASC as the older generation retires. With a billion Commonwealth members under the age of 25, the Commonwealth is not widely thought of in Canada to engage with. The Canadian membership in this association is very low, and we need to become a player in the Commonwealth, as we have a lot to offer.

The RASC wants to draw attention to the possibilities for youth to engage more and widen their horizons and share experiences, skills, and advice to encourage enterprise. This was from the Queen's message in 2009. Many agricultural societies across Canada lack resources, motivation, and drive to lead the next generation, as they could play a key role in promoting this throughout their agricultural regions. Agricultural societies need to be more strategic, proactive, creative, inspirational, and challenge youth of today to step up and get involved in all aspects of agriculture, not just farming.

Being involved in putting together agricultural trade shows and livestock shows, we have tried to encourage universities and colleges to participate in the career fair targeted to the urban and rural youth, to learn what types of careers there are in agriculture. One of the main messages that I have heard from several institutions is that youth are being discouraged by their parents and told not to get involved in careers in agriculture but to find a paying job. Their parents do not generally encourage their children to get involved in farming as a career. This, I believe, is a critical issue to review, because I think it is impacting on the future of farming. This is a generalization, of course, on my part, but it is what I believe.

One recruiter recently told me they were finding it more and more difficult to encourage youth to take agriculture at university because of their parents' lack of encouragement to get involved. If this is true, what will agriculture look like in 2050, when the food demand expands three times from its current levels? Agriculture is a critical component to our everyday lives. Farmers feel unappreciated by the urban public and lack the respect they deserve as a critical resource for the world. And this aging farming population struggles to make a decent return on their investments in time and money.

How many youth are prepared to take over from this generation, and how many don't really care to follow in the footsteps of their parents? Farming is changing. It's becoming specialized and requires major capital to keep up with technology and trends to reduce input costs. The conglomerates are coming, and they're consolidating the land.

Since BSE, our organization has seen a decline of 50% in heads shown in the purebred beef industry. We have seen a further 60% decline in purebred breeders registering for a show we put on called Farmfair International.

With the impending food demand of three times the current level by 2015--a mere 1% increase per year in food demand--and the necessity of having more arable land, we need to encourage, promote, appreciate, and celebrate the importance of agriculture in this country.

In Commonwealth circles, Canada is not seen as a player in promoting the next generation or in supporting the RASC. I have tried to connect with every major provincial agricultural society across Canada, with a view to creating an awareness of the importance of youth. Not one association has expressed interest in participating, citing money as the issue.

The old-thinking agriculture societies need to embrace and lead the way in promoting and supporting youth development in agriculture. Most put on agricultural events, fairs, and livestock shows. How many support the development of youth? This should be part of their mandate and mission statement as ag societies in Canada. The world is changing, and I fear that ag societies in this country need to step up and take the challenge of promoting the development of youth and youth engagement in agriculture.

As a G-7 nation, we are rich beyond our dreams. Little is done to support developing countries. While I know that this is far from the truth for Canada, we should be pooling our ideas. Associations across this country should better promote what Canada does in support of the RASC and Commonwealth countries through engaging the younger generation.

There is much we can tap into as a country in the Commonwealth. And I hope that some of what I am saying will be of assistance in drawing attention to this tremendous opportunity.

In order to promote the next generation, I would like to see every provincial ag society review the proposal to create a rural achievers program. Every ag society could promote rural achievers within their regions. They could be judged at each provincial association's annual convention. The prize for winners could be a work experience across the country at fairs, exhibitions, rodeos, and agriculture events. As an example, first prize for the winner of the Australian Rural Achiever Award is a trip to the Calgary Stampede.

One of the final proposals we're working on with the RASC is the development of a farm in a developing country--Ghana, in Africa--that becomes a sustainable agriculture centre of excellence for a developing country. It would have the support of the next generation and the RASC, universities, and colleges throughout the Commonwealth.

In my recent conversations with the U of A and Lakeland College, I learned that a major focus is supporting education in developing countries as an initiative for creating connections for student enrollment and education for the future.

I want to thank you for the opportunity to speak to you today.

[The Chair, Conservative, Larry Miller]

Thank you very much, Mr. Lucas.

We'll now move to questioning, and we're going to go to five-minute rounds.

We'll go to Mr. Valeriote.

[Frank Valeriote, Liberal, Guelph, ON]

Gentlemen, thank you all for taking time out of your schedules to be with us today.

I am going to ask either Michael or Darcy the first question. Whoever feels comfortable can answer, or both of you can answer. It's with respect to succession planning.

The Canadian Bankers Association came before our committee in Ottawa a couple of weeks ago, if not last week. We talked about succession planning issues. Yesterday, in Kelowna, we heard the same about the problem of succession from one generation down to the next, to a certain degree, but more so, from one sibling over to another sibling when the same opportunities and the same tax incentives aren't there.

I was just thinking about what ideas you might have to incentivize the transition from one generation to the next, even to someone non-related. If somebody wants to buy your farm, and you don't have a child or another relative who wants to do it, they would be provided some opportunity, through capital gains exemptions or a deferral of the capital gains of some sort, if the promise and commitment were made to continue to farm for 10 or 15 years, or that kind of thing.

Do you have any thoughts on that, and do you propose to make some lobbying efforts or propositions to the government?

[Michael Latimer]

Why it becomes important is that when a young person is coming into this, they don't have any equity to put in. Why I'd talked about it earlier, to get into a viable farming operation, you're going to be over $5 million. The interest alone on that will eat you up before you even get started, and you'll be done and bankrupt before you can even get your first calf crop on the ground.

So I think I talked about it earlier: you can't afford to borrow it all at once. The older generations, people who are looking to retire, they have all this equity in the land and no cash. It's almost like a reverse house mortgage, which is probably a dangerous topic to bring up now. But they could almost pay the new generation coming in, in that equity, and let the new generation build up equity through their work—kind of phase one generation in and phase another out.

It's simple economics on this. If you can't afford to get into it, then it doesn't even matter what the returns are when you are in it because you can't even get started. I don't think you as a government want to see the big multinationals take this over, but I don't think it should be a bad word to see big, privately owned farms either. We talked about—and I've heard it here a few times—where everybody wants to be able to expand, but then, on the other hand, they're saying they want to keep small family farms.

[Frank Valeriote, Liberal, Guelph, ON]

Do you think it should be extended to non-related people—the incentives under the Income Tax Act—to encourage the transfer from one generation to another, even non-related generations?

[Michael Latimer]

Yes.