Evidence of meeting #14 for Agriculture and Agri-Food in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farm.

On the agenda

MPs speaking

Also speaking

Stuart Person  Farmer, As an Individual
Kalissa Regier  As an Individual
Barb Stefanyshyn-Cote  As an Individual
Ed Sagan  As an Individual
Ryan Thompson  As an Individual
Rodney Voldeng  As an Individual
Jason Ranger  As an Individual
George E. Hickie  As an Individual
Colin Schulhauser  Farmer, As an Individual
Dixie Green  As an Individual
Carter Bezan  Farmer, As an Individual
Brad Hanmer  As an Individual
Ajay Thakker  Communications Consultant, Agricultural Producers Association of Saskatchewan
Layton Bezan  Farmer, As an Individual

12:50 p.m.

Conservative

The Chair Conservative Larry Miller

I call this meeting to order.

It is ten to one, ten minutes earlier than our scheduled start, but we have five of our witnesses at the table, with a couple of empty spots, and we welcome others to join us as we go. One of the reasons I'm trying to start early, if possible, is because we always seem to run out of time, and the more we hear from witnesses, the better.

Before we start, I'd like to welcome all our witnesses here today, and thank you very much for taking the time out of your busy schedules to come and speak to us. We're looking forward to your opening remarks.

Try to keep your opening remarks to five to seven minutes. At the five-minute mark I'll give you a bit of notice. I won't be too tough on you, but try to be brief; it will leave more time for questioning, and through questions you can always enlarge on some of the parts that maybe you didn't get to address.

With that, I'm going to go from the list I have.

Mr. Stuart Person, you can open it up, please, for five to seven minutes. Thank you.

12:50 p.m.

Stuart Person Farmer, As an Individual

Thank you very much for the invite.

Good afternoon, ladies and gentlemen. My name is Stuart Person. I'm a grain farmer in the Prince Albert area and I'm also an agriculture business advisor. For today I'm here as a grain farmer and not representing my organization.

The topic I was told we were going to discuss today is challenges and issues facing young Canadian farmers, so I've come up with a few things I thought it would be interesting to note.

One thing with the industry is public awareness. How do we get the general public behind agriculture in Canada? I've spent some time in the United States in the past, and it seems they rally around their farmers a lot more, and there's a lot more hype about it, so I think in the United States it attracts more people to agriculture. I think that's one of our challenges, to make the industry more attractive to young people, maybe give it some more positive attention, and make sure the public understands the importance of this industry to our country.

The second thing is profitability. In order to attract young people, the industry has to be profitable. This new generation is very mobile. They're no longer content just staying at home. They're becoming very educated. There's lots of competition out there for careers.

We have to ask ourselves how important food supply security is to Canada, and also to the world, as exporters. We need to consider things like markets for our products. International trade is a very political issue, and the cost of trade barriers is felt right down to the producer level here in Canada. Canada is a large exporter of ag commodities, so we have to keep those things in mind when we're talking about agriculture. In addition to the markets for products, we need to consider continuing to invest in more value-added here in the west. We need to be exporting finished products more than raw products.

Access to capital for new young farmers is a big issue. I'll just throw out some quick numbers here. When you're looking at a new farm, in the west anyway, you're looking at a machinery investment of $250 to $300 an acre. Land prices are on the rise, $500 to $1,000 an acre for farmland, and annual cashflow requirements could be anywhere from $225 to $300 an acre for a grain farmer. I should step back for a second here and say that I'm talking more from a grain farming perspective because that's what I do.

So when you look at those kinds of numbers, you know, the farms need to be larger to be sustainable, and you're talking three-quarters of a million for equipment, three-quarters of a million for cashflow for a 3,000-acre grain farm, which is just an average to below average size of farm now. So how does a young person really go into this industry and tackle it with that kind of cashflow requirement?

It's the same thing if you're a successor farmer as well, taking over from a parent. Your parents need to retire. They need their cash out of their business. Most of them have their entire retirement tied up in the farm, so how do we get these young people transitioned into the farms to take over and be successful?

I'll quickly touch on farm programs. Growing Forward is a very good program the government has come out with. It encourages education and innovation. It assists with succession, and it's assisting with the new start-ups by helping farmers be better businesspeople. It could use some more money. I'm not sure $4,000 is enough per farmer right now. These guys could probably use a lot more to get themselves going. We should watch how much red tape it actually takes to put these programs through, because there is a lot of cost to administering them. Maybe we can take a look at trying to make that a little more efficient.

AgriStability is an excellent concept. It still needs some adjusting. It's working really well for grain farmers at the moment, but not so well for livestock producers. It kind of penalizes mixed farmers who are diversified on their own, but it does provide the stability for the young farmers who are coming into the marketplace by giving them a little additional insurance.

AgriInvest is a very good program as well, but it's not overly effective for large farms right now. With the cap in place at $22,000, it's a little bit too low. We should consider maybe a cap based on the reference margin so we make sure these farms are able to cover that 15% of the margin they're supposed to be able to cover. Possibly a preferential interest rate if they're going to leave the money invested in their accounts would encourage more of them to leave it there. Right now, the accounts aren't paying very much interest at all, which encourages most of them to just take it out when they have the opportunity.

Saskatchewan crop insurance, I'll just touch briefly on. I know it's not a federal program, but it's a good program. For young farmers, it just needs to be tweaked a little bit, for new farmers to get proper averages.

The cash advance program is a very good program, but it might be a little bit outdated for western Canada. The limits are a little bit too small now. We're starting to see farms in that 5,000- to 10,000- to 15,000-acre range, and the cash advance limit of $400,000 isn't enough for these guys, especially when they're dealing with restrictions on when they can market their product due to the Canadian Wheat Board. Possibly a per acre basis for the cash advance would be beneficial; let's say, $150 an acre.

On the Canadian Wheat Board monopoly as well, I think we need to continue to look at this and make sure it's right for us. Personally I don't see it as an accountable enough organization to allow farmers to maximize their profits going forward.

Infrastructure is something we need to consider in this country. Especially in western Canada, we've had our rail lines taken away and it's having an effect on our profitability. It's also having an effect on our road infrastructure big time in this province. It's something we need to consider how to handle. We also need to look at maybe making it more competitive in Canada in terms of what other rail companies would be allowed to operate here and what other ports we can make use of in North America.

Lastly, research and development is a great place for funding to be directed. Everybody benefits from research and development, and I would encourage investment to continue to go there in terms of new grains and new products for our farmers to grow and market.

My closing comment is in terms of who is subsidizing agriculture in Canada. All the young farmers I deal with—or a lot of them, I should say—have off-farm jobs. They go out and work their butts off all winter long to bring home the money to invest back in the farm. They wouldn't have to do that. A lot of them could live quite well off the money they earn all winter, but they bring their money back and they invest it. So when we talk about who is subsidizing who in agriculture, farmers are definitely putting a lot of external money into this industry. They obviously love it and want to do it, myself included. It's too bad it's that way, but maybe in the future we can get away from that.

12:55 p.m.

Conservative

The Chair Conservative Larry Miller

Thank you very much, Stuart.

To the gentleman at the back of the room with the camera, we're trying to conduct a meeting here, if you wouldn't mind....

12:55 p.m.

A voice

[Inaudible--Editor]...it's a public meeting. Why isn't the media--

12:55 p.m.

Conservative

The Chair Conservative Larry Miller

The media is allowed in here, sir. It's something I didn't know until right before--

12:55 p.m.

A voice

[Inaudible--Editor]

12:55 p.m.

Conservative

The Chair Conservative Larry Miller

Sir, don't shoot the messenger. I don't have an issue with it being taped, but under parliamentary rules, permission was supposed to be granted ahead of time. I wasn't aware of that. Anyway, we always learn something and that's one of the things we learned today.

You're welcome to stay. The media is never banned. We're here to hear about the future of farming and we want to continue on with that.

Ms. Regier for five to seven minutes, please.

1 p.m.

Kalissa Regier As an Individual

Good afternoon--

1 p.m.

Conservative

The Chair Conservative Larry Miller

Excuse me.

Mr. Bellavance.

1 p.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

I would like some clarification regarding the filming of this meeting. I'm not sure what the journalist is looking for. If he wants to film the proceedings in their entirety, it could take a while. However, if he just wants a few shots of the committee in action, without necessarily filming everything... There needs to be some footage for television, of course. After the committee meeting, I think that members and witnesses will be available for interviews. That could be an acceptable arrangement, but I do not know if it will be possible.

1 p.m.

Conservative

The Chair Conservative Larry Miller

As I said, André, I have absolutely no issue with him sitting here. I have no problem whatsoever with that. It's about the parliamentary rules. If there's an avenue for us to deal with it through unanimous consent, that would be great.

Wayne, go ahead.

1 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

I think committees are masters of their own destiny, Mr. Chair.

There must be a procedure. Usually if you have the unanimous consent of the committee, with all parties and people present, you can do what the committee wants and decides to do.

So is there an option there, Isabelle, or not?

1 p.m.

Conservative

The Chair Conservative Larry Miller

What it says is we must have the approval of the House of Commons. That's the wording of it, but we are masters of our own destiny.

This is unfortunate. There is another group here that asked ahead of time.... They were told no, so we had to be consistent. I don't know whether you want to carry this any further or just leave it as is.

1 p.m.

NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

I think if any media are here and folks want to film us, I don't see a problem with that. After all, we're here to show what's going on with young farmers. So I would think that if we could encourage that and come to a consensus on it, that would be great. I'd be willing to run out and try to get that guy and bring him back, if you want.

I know we have some other folks who would like to film.

1 p.m.

Conservative

The Chair Conservative Larry Miller

We'll deal with this quickly. Do I have a consensus to follow the rules, or—

1 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

I move, Mr. Chair, that we allow the media in. If they want to film, it's fine. One of our problems in the agriculture sector is that we don't get enough coverage to outline the problems and the possibilities.

So I would so move.

1 p.m.

Conservative

The Chair Conservative Larry Miller

It is seconded by Mr. Hoback.

I'm not going to ask for any discussion of it.

(Motion agreed to)

It is unanimous.

So the media can carry on, and if anybody can catch the two gentlemen who just left, that would be great.

Anyway, Ms. Regier, go ahead.

1 p.m.

As an Individual

Kalissa Regier

Thank you, Mr. Chair.

I'll try to keep it brief. You'll be timing me, will you?

1 p.m.

Conservative

The Chair Conservative Larry Miller

My apologies. We have very many witnesses, and if we all took 10 minutes we wouldn't have any time left for questions.

1 p.m.

As an Individual

Kalissa Regier

Okay.

I farm about 70 kilometres north of Saskatoon, close to the little town of Laird. I've been there for seven years now. I moved back home after having a life outside of farming for several years. I decided to come back to see what I could do to make a difference in my community, and what I could come up with on the farm. It has been nothing but learning and amazing experiences since the beginning.

I am here as an individual, as a young farmer. I have invested a great deal of the last four years of my life working with the National Farmers Union, and I can't separate myself from those experiences. I've had opportunities to spend a fair amount of time abroad in other countries, talking with young farmers from developing countries and around Europe about a lot of the things we're discussing here today.

It's my impression that the Standing Committee on Agriculture and Agri-Food would not be conducting a nationwide study on young farmers and the future of agriculture if we weren't in an absolutely dire situation. Unfortunately, it is my opinion that this study is being conducted about two decades too late. We are in a crisis situation with our young farmers. We have all the statistics to prove it. We have lost 62% of farmers under the age of 35 in 15 years--between the 1991 and 2006 agriculture censuses.

There isn't an industry on earth that would tolerate that kind of drop. It doesn't matter what kind of model of agriculture you're following, that kind of drop is unsustainable. We are losing our farmers.

I would like to start by outlining what I see from my experiences as some of the major problems. Then I will talk about what I see as short-term solutions that can possibly make a difference.

It is no surprise that young farmers and new farmers start out small. It's exactly the same principle as in any other career. It would be akin to asking any member of Parliament where they started their political career. It likely wasn't in the House of Commons. So when we are talking about young farmers and new farmers, we are also considering small farmers. We're considering this group of people who have been highly underrepresented in government and industry. They're the ones we need to think about here.

The young farmers who are here today and the young farmers in Canada--approximately 29,000 of us are left under the age of 35--are people who have grown up watching the elimination of these small farms. This has been our life. This is the only example of agriculture we've seen in our lives. As a result, we are among the most resilient, creative, risk-taking people in Canada today.

Unfortunately, the mechanisms that support small farmers are being eliminated all over the world, and Canada is no exception. We're sitting at about $62 billion in farm debt in Canada today. If that is going to be transferred to the next generation, we really have to consider some creative financial solutions.

For financing on a small scale, we need regionally administered programs that allow young people in rural communities to access the capital they need to start their small operations. If they choose to grow big, that's their choice, but they need that opportunity to be small.

In terms of crop insurance programs under provincial legislation, we need to get some programs in for young farmers that guarantee the cost of production for the first five years. If you can do five years, it should be done. We need a land transfer system that is finished making money for the banks. We are putting so much money in the form of interest into this system, and that's what is subsidizing agricultural production right now.

We also need to really look at lowering the AgriStability cap to $500,000. There is no reason that we need a $3 million cap on the AgriStability program. It's quite ludicrous, really, so I don't think I need to explain that any more.

In conclusion, Mr. Chair, the writing is on the wall, the evidence is clear, and the numbers are dropping. It's a few decades too late to be doing this, but I thank you for the opportunity to be here and to represent my peers across Canada. I really acknowledge the fact that the standing committee has made the effort to come out to do this tour. I think it's high time.

Thanks.

1:10 p.m.

Conservative

The Chair Conservative Larry Miller

Thank you, Ms. Regier. I appreciate that comment. It's great to be out here. We felt that it was better to go to young farmers than to expect them to come to Ottawa, so we appreciate that.

Ms. Stefanyshyn-Cote is next, for five to seven minutes.

1:10 p.m.

Barb Stefanyshyn-Cote As an Individual

Good afternoon. I apologize for my husband, John Cote, not being here, but when the invitation came out to attend this, we both wanted to attend, and I'm really sorry to say that John's a very poor arm wrestler.

John and I both farm at Leask, which is about 70 miles north of Saskatoon. We have four children who are involved in the operation. It's called Lumec Farms, and it's a grain farm. Our farm turns 90 next year. Now, there are not many businesses that can boast that, and in Saskatchewan, if nothing else, we're one of the young guys.

It's no secret that farming has been good to us. Over the years our farm has changed from a mixed farm to a grain farm, to an extensive grain farm, to a diversified grain farm, which included an animal nutrition consulting business and partnerships in a fuel and fertilizer dealership. About the only thing constant in our farm is constant change.

Farming has been a fantastic business to three generations: grandparents, parents, and now my husband and I. But who knows if it's going to carry on to the next generation? And is that a bad thing? Maybe not. If my kids don't go back to farming, it doesn't mean that the land is going to sit idle. It doesn't mean that world production is going to drop. I have seen a lot of farmers leave the industry, but I haven't seen one farm sit idle yet. Ever since we've switched from hunter-gatherers to being involved in the agriculture community, to growing our own crops, people have been leaving that type of business and moving to the town. It's a pretty hard trend to buck. If we're going to look to increasing rural Saskatchewan or rural wherever--if that's what we want to do--maybe we have to look outside of agriculture.

Here are some thoughts. Farms are growing right now in size because that is what makes them profitable. We're not growing in size because we say, “My God, I want to be big.” We're not a Conrad Black. It's not that we want to dominate the industry. We are just trying to put some money back in our pockets, and it's the economies of scale that earn us dollars. There's only so much land out there. If you're going to divide it up, if you're going to need to go to economies of scale, what you're going to have is bigger farms. But maybe that's not the way we want it. Maybe we do want people to come back into agriculture, and if we do want them to come back into agriculture, there are a few things that we need to do.

But here's another thing about not coming back to the farm. If my kids don't come back to the farm, as I said, the land is still going to be farmed and the production is going to continue. The only problem that I really see is that the community is going to suffer because my kids aren't staying there. My kids are gone because there's no industrial base, there's nothing else to keep them there. So if they leave, the community gets smaller. Services dwindle. The farmers who do stay are penalized even more for being where they are, because now we have limited access to health services, we cannot get quality education, and we don't have a dentist within a hundred miles. Those are pretty high prices to pay for being on the land and producing food for everybody, and I don't think that's really fair.

It's the lack of emergency health care that we really are concerned about. I don't need a doctor in my hometown if I have the flu. I can drive for that. But if I chop my arm off in a baler, I want somebody there instantly, and I want good care. I've had four children. I've delivered in a hospital that is 70 miles away. There's nobody in any other town who would say that. If you go to Toronto, if you go to Saskatoon, for that matter, nobody travels an hour-plus to deliver a baby. Why should I have to pay that price just because I've chosen to farm?

If we do want to bring farmers back on the land, I have a few ideas. My husband and I sat down and put a few thoughts together. We do think agriculture is a great place to be.

The first thing we want to take a look at is subsidies. Right now, Canadian farmers are subsidized through various levels and various programs. So be it. Common-sense thinking leads us to believe that these subsidies are useful, but what ends up happening is they get recapitalized back into the farm. Therefore, the price of land goes up, the business goes up, and young entrants have a really tough time stepping into the business.

Someone who's been farming for 20 or 30 years, subsidized to that level, can afford to pay more for an asset than somebody who's a new entrant. There's just no question about it. Maybe a solution is that we start decreasing the subsidies. Have them in place, as Kalissa said, for the first five years for those who need them to get their feet on the ground. Drop it down as the farmers get older in years and more established. It might be an incentive for them to leave the farm to somebody else who's new and coming in.

Tie subsidies to education: if you don't go up for advanced training, you don't qualify for subsidies. If we don't improve our farming education and have a very strong, smart group of farmers, I don't think we'll see a future in farming.

Something else Stuart mentioned was promotion. We have a bad rap out there. But we're also drawing on agriculture replacements to come from the current agriculture pool. That's dwindling, so we have fewer and fewer people to pick from. We need to move it out. Increase the total amount of agriculture happening, whether it's on large farms, small farms, or whatever. Just keep it rolling. That way we have more activity, more economics, and more things happening.

Let's get solar farms and wind farms and the bio-economy going. It hasn't been economical, right? That's where you guys come in. Legislate it in if that's what it takes. The ethanol business didn't get going until it was mandated that ethanol be included at a certain level in fuel. If that's what it takes, maybe that's the taxpayers' way of paying for looking after the environment. That's the way of moving it back.

There are so many things to say and there is so little time. I would love it if you could come out to the farm any time. We'd love to talk about this.

One last point I want to make is that when you're making your assessments and you're making your decisions, please don't make programs for local agriculture at the expense of the environment. Agriculture should be agriculture without borders. We should be planting things, growing things, and producing things where they're best suited on the planet.

Agriculture is by far the most noble profession in the world. We have two challenges. First, we have to feed the planet. Second, we have to sustain the environment. There's nobody else who's going to do it. It's not up to the religious leaders. It's not up to the medical profession or the politicians. We are on the ground. We are the ones who can do this. I think we have the capability to do it. I listen to the passion in these young guys. They can take us forward. We just need a little bit of help to get things rolling.

Thank you.

1:15 p.m.

Conservative

The Chair Conservative Larry Miller

Thank you. That was a great presentation.

We'll move to Mr. Sagan and Mr. Hickie. I understand you're presenting together. You have five to seven minutes, please.

1:15 p.m.

Ed Sagan As an Individual

Good afternoon. I'm Ed Sagan.

I farm in the Melville area. That's about 400 kilometres from here. We're on a grain farm and also a crop farm.

This hearing gives me an opportunity to give input on the problems of agriculture for the young farmers of today.

The debt load of farming today is higher than total income. In today's society, a young person can get an education or trade of his choice for between $50,000 to $100,000, depending on the work.

Young farmers always seem to need financial help. To start farming today you need at least $1 million, or some 15-year-old equipment and an outside job to subsidize your income. In 1974, wheat was selling for $2.74 a bushel; diesel fuel was selling for about 8¢ a litre. Today, one bushel of wheat equals one gallon, or four and a half litres, of fuel.

Our forefathers came to Canada because of the feudal system in Europe. The barons controlled the system. In Canada, farmers are controlled by multinationals and the insane farm policies of our government. Deregulation in agricultural policy imposed that. It's getting harder and harder to farm.

The task force on agriculture, in 1980, indicated that two-thirds of farmers had to leave the industry to be more efficient. Well, that's what happened. Today we have superior landlords with offshore investments from the United States and China acquiring landholdings. We also have grain companies leasing lands that young farmers should be farming.

Our farm consists of two families of seven children. We have a total of 2,400 acres of grain farm that should be transferred to our children. None of our children are taking over this farm. Why?

Our farm has been in the Sagan family since 1905--a hundred and five years. I'm a third-generation farmer. I have discouraged our children from farming. I have demanded that our children get an excellent education or trades of their choice so they will not get financial abuse in farming, as has happened to me. There will not be a fourth-generation Sagan family farm carrying on the business.

StatsCanada, over 25 years, indicates that input supplies have captured 99.6% of the wealth generated on our farms. Farmers have produced and sold an average of $388 per acre per year, but farmers have been forced to make do with $1.45 an acre in the form of net income. The corporations that produce farm input and services--fertilizer, chemicals, banks--captured $386, the share of the wealth flowing to the farmers' inputs, and the corporations picked up 266%. How did we get there?

Very importantly for the people who know anything about agriculture, we lost the Crow rate. It was a big fight in western Canada. We used to pay 20¢ a bushel to export our grain into the international market. Today we are paying $1.50.

There has been the elimination of a two-price wheat system.

To put our crops in at spring, fertilizers and seeds have also placed a very big burden on our operations. Today a farmer and his wife have to work off the farm just to pay for the power, telephone, and gas bill. No other segment of society does that.

Many of our problems were created by Canadian agriculture food policies that can be traced to senior bureaucrats' understanding of the fundamental difference between competition and competitiveness.

Bigness and growth is enhanced by mergers of corporations, takeovers, and reduction in the number of players. For example, ten years ago there were more than 20 chemical companies. Today, we have six chemical companies and interlocking directorships.

Mergers and acquisitions have reduced competition in every agriculture business. Farmers have fewer companies.... IH has absorbed tractor companies like Ford, Case, IH, and Steiger. Few companies sell our grains. Viterra is an amalgamation of SaskPool, United Grain Growers, and Manitoba Pool. Monsanto, Syngenta Seeds, and Bayer have bought up dozens of seed companies, concentrating and creating controls. Agrium, CF Industries, and Terra Industries are also concentrated in fertilizer.

The farmers' right to save the seed and reuse seed are under sustained attack, ever since the 1978 convention to cut funding for research and variety development and turn the seed section over to private grain companies. Recent moves in Canadian food inspection have changed the way seed varieties are registered. All of this diminishes the farm's ability to save and reuse the seed--very important for you guys.

In conclusion, the Canadian Wheat Board, which sells our grain, is the only organization that returns profits to our farmers, yet the Tories, in their wisdom, the ones in government, want to destroy it, and why they want to be in the government, I don't know.

That's it.

1:25 p.m.

Conservative

The Chair Conservative Larry Miller

There are days I wonder too, sir.