We'll now move to Mr. Brad Hanmer.
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.
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.
April 28th, 2010 / 3:05 p.m.
Brad Hanmer As an Individual
Thank you, Mr. Chair. Thank you, committee members.
It's a tough act to follow, Carter. Great job. By Carter's standpoint, too, as of this year I'm no longer a young farmer. I turned 36 this year.
Before I get going, I also would like to, for the record, again thank the committee for allowing me the opportunity, but also for being here in what is basically a unique part of Saskatchewan. It's almost dead centre—north, south, east, west—in the grain-growing region, so it's kind of a unique part of the world.
I currently sit as a board of director with Farm Credit Canada, and I want to make sure that my statements and comments here are strictly those of a farmer and a businessman and have nothing to do with Farm Credit--for the record.
Also, for my family, who may be watching this on the Internet, and staff, thanks for holding down the fort. We're hitting the field today with three drills, getting the crop in the ground, but I took the time out because it's very important for me to be here.
The one thing I would like to start off by saying is that there are a lot of different business models out there. I have to apologize. I came in kind of at the tail end of the last presenters. There has been some really good information given. But there are business models out there making money. There's also one thing that'll drive this whole thing, and that's profitability. I think we've heard this on some of the other things, and I think, Mr. Hoback, you had that comment.
It's a very capital-intensive business; we all know that. There are models that are allowing young farmers to get in. Now, first, how I got into the farm is my parents were on the line to get me in. And if you don't have a viable farm today to hand over to the next generation, in my perspective, it's very tough. You can't pick a kid off the street and say, “Here's $1 million, go farm.” It's not to say that I like that, but that is the reality of the business: if you don't have a viable farm today, it's very tough to get in.
I see Layton and Carter side by side, and I can rest assured that Layton, like my dad, Ron, got his sons into the business. And that's what I intend to do with my son as well.
How it can be transferred: there are models out there to suggest that. In our case, we have a larger farm. We have five staff, who we've brought into the business. They're all farm kids.
The other thing we have to worry about is that with a farm like mine, and in some of the rhetoric I see in some of the publications about corporate farming, there isn't anything more family about my operation. It's a fourth-generation farm. My great-grandfather broke the soil. I have three brothers, my parents, and I have four staff. They're all part of my farm. Their ability to get into the business is by partnering. There are models out there to say that this is how it can be done, if you don't have the equity to get in.
When I was 15 years old, I wanted to buy the Edmonton Oilers and bring back Wayne Gretzky. There are kids out there with a dream to farm, and sometimes—I'm not saying I agree with it—it's not possible. It's very tough.
The other thing is—and I don't say that I agree or disagree—farms are getting larger. This is the reality. This trend not only is going to continue, it's going to escalate, and I have some reasons for that. Some of the points that Carter brought up are very important. One is quality of life. If you have to work 24/7 to keep this thing going, you really are going to get worn out quickly.
When you get to a larger farm, you can specialize, and when you can specialize, then your workload can be shifted. That is one of the reasons why large farms don't think they're the enemy. It is a business model that can work. In my opinion, when you look at the way technology is going, this is not going to stop. We're going to see bigger farms.
The other thing I would like to see for young farmers who are coming in...I know there was a real scare with losing the right to patent a plant cell a few years back when I was at the canola association. If that would have changed.... The profitability on my farm, and in this part of the world, is based on the canola crop. Without the canola crop and investment, I wouldn't have a business plan right now. That's the way the markets are. So the message I would like to make to you as legislators is please, please, keep a good environment for regulatory applications. I think that was also brought up by some of the past speakers. Innovation is our key for young farms. It's not low cost; it's being able to leverage our smarts in this country. Without that, we cannot compete, as Carter had said, with some of these offshore countries. Leveraging our smarts is what we have.
The other thing is managing risk. Risk is the biggest thing I manage every day, and it's a calculated risk. CAIS, for a lot, doesn't work; for some it does. In our case, CAIS was a lifesaver. In the frost of 2004, when it went to minus 7 on August 14, CAIS saved me.
For a lot of business models that didn't have a reference margin for whatever reason, it was too late, as Carter said.
I'm not here to pick holes, but AgriStability is a huge program, and please deliver as timely and efficiently as you can.
The other thing on delivering risk is commodities. We need stable markets. I know there are some releases as of late where we have some pretty big wins in some of the trade for the commodities I grow, and I encourage you as legislators to think of us all the time in this part of the world; it is so important for us to access markets.
As one final note that I would like to end on with commodities...there is a lot of debate on the Wheat Board. In my view, it's not much more than marketing. We are going to get slammed in the coarse grain industry very quickly. Corn yields will double within 10 years. In Canada, if we do not get the genetic potential to compete with wheat and barley on a per acre basis with other crops, we will be slammed. As it turns out now, on my farm, there are multinationals that are coming in and developing cold-tolerant corn varieties. If we continue this debate over the monopoly and all these things, I'll be growing corn more successfully within the next 10 years. I'll be forced to. It's coming.
The best thing the Wheat Board can do for those of us who don't like it is to continue on the pace they're on, because they're becoming redundant. One speaker said not to grow it. That is exactly what is happening. We cannot use that marketing agency. We want the same rights and freedoms as people in eastern Canada have, that I have with my canola, flax, oats, lentils, and peas. If we don't have that, it will be redundant and we will be growing corn.
With that, I'd like to turn it over, Mr. Chair, and thank you very much for the opportunity.
3:15 p.m.
Ajay Thakker Communications Consultant, Agricultural Producers Association of Saskatchewan
Thank you, Mr. Chairman and members of the Standing Committee on Agriculture and Agri-Food, for the invitation and the opportunity to provide input into your proceedings today. And of course welcome to Saskatchewan.
On behalf of the thousands of agricultural producers who make up APAS, all farmers and ranchers in the province of Saskatchewan, I commend the standing committee for travelling to our province, which we see as the very heart and soul of agriculture, to hear from and about young farmers.
And I commend and thank today's speakers and presenters for taking time away from their farms, because I know what it's like out there.
APAS is Saskatchewan's general farm organization, formed to provide farmers and ranchers with a democratically elected, grassroots, non-partisan, producer-based organization based on rural municipalities. The mission of the Agricultural Producers Association is to improve the economic well-being of Saskatchewan's agricultural producers and to support viable rural communities and infrastructure through lobbying for progressive agricultural policies. Our vision is of a future where agriculture is profitable, rural communities are viable, and the role of agriculture in our society is recognized and appreciated.
I think it's appropriate to begin by pointing out that I am not a young farmer, as the standing committee has requested, which I believe you define, for your purposes, as a farmer under the age of 35 or 40. In truth, I don't farm. And I have been involved in farm policy for far too long to call myself young any more.
However, it is spring, it is Saskatchewan, and as long as there is no snow on the ground, almost every farmer I know, other than the ones who are here, is hauling grain, moving cattle, repairing equipment, or preparing to seed. So that means that every member of the board of directors of APAS is already either in a tractor cab or eagerly preparing for the 2010 crop season.
Our president, Greg Marshall, is in Ottawa attending the CFA board meeting and sends his regards.
However, I do have some ideas to share and would be prepared to share them with you now.
In December 2008, a resolution was adopted at the annual general meeting of APAS and ratified at the February 2009 annual general meeting of the Canadian Federation of Agriculture in support of improved intergenerational transfer programs to attract young people to agriculture.
In order for APAS's directors and representatives to fully understand the scope of programs tried or considered across Canada and around the world, APAS commissioned A.N. Sholz & Associates of Saskatoon, in the spring of 2009, to undertake a comprehensive study, with the stated objective of providing an overview of the intergenerational transfer, new entrant attraction, and immigration programs currently offered across Canada, with recommendations for the Province of Saskatchewan.
Sholz & Associates presented the study's findings, “Strategies and Recommendations for New Entrant and Intergenerational Transfer Program Needs”, at the December 2009 APAS winter mid-term meeting. It became obvious early in the study that there are no quick answers or solutions evident in the existing new entrant programs across Canada or internationally. Improving the atmosphere and climate to attract new entrants to primary farm production is a complex and long-term process. There are different funding support models across Canada for new entrants to farming. Alberta, Manitoba, and Nova Scotia have crown financial credit agencies attached to the ministry of agriculture that lend to farmers at reduced rates. Ontario and Quebec provide reduced interest rates and funding through a subsidized lending function provided by industry-based farm organizations. The supply managed sectors are internally financing pilot projects, with financial assistance for new entrants to obtain a quota.
Programs in Australia and the U.S. are moving away from subsidized interest rates and loan guarantees towards investing in management training, business skills development, and succession planning.
The magnitude of need for new entrants to replace retiring farmers is elusive. Some farm leaders believe it's an urgent need and others feel that the situation will resolve itself on its own. Nonetheless, the truth is, the average age of farmers is increasing and the number of new entrants is declining.
The agriculture and agrifood sector is also changing quickly, driven by new global competitors, trade restrictions, climate change, and consumer demand for local foods that are safe, healthy, and nutritious. It will be important for new entrants to have the business skills and marketing abilities to adapt to continuous change in order to be successful both today and in the future.
In the past, it was the general belief that farming was the best option for those who couldn't finish high school or do anything else, whereas today the skill sets and competencies required of a successful farmer are astounding and surpass the capabilities of most professionals. The entry skill set that's required of a beginning farmer is much higher today. Government and industry support programs must help them attain the required business skill sets as their first priority.
Recommendations to governments for policy change and programs must be forward-looking and anticipate the needs of the industry five to ten years from now. If new intergenerational or new entrant attraction programs were planned and initiated today, it would take several years for tangible results to flow out of the pipeline. Therefore, the needs five to ten years forward must be anticipated, rather than developing programs on the needs of today that are based on the past five years of experience.
While attracting new entrants to farming has been identified as a near-crisis situation, there seems to be an unfortunate leadership gap in addressing this challenge. It's one we thank the standing committee for addressing through meetings and proceedings such as this.
So who takes the lead? Another way to ask the question is, who has the most to gain or lose in farm ownership?
The government should and must play a role in developing policy and appropriate legislation, but it's only one of several key stakeholders. The agricultural industry itself, in its myriad of purchases, must also take leadership responsibility to meet the challenges and seek solutions. While it will take a collaborative and committed approach by all stakeholders to fully address the challenges and develop a thoughtful and effective long-term solution, there are numerous things we believe we can do and can be started immediately by farm organizations, the government, and industry today to attract new people to become the farmers of the future.
There is no silver bullet to attract new entrants of any age to agriculture, but our recommendations, directed collaboratively to groups like APAS, both levels of government, and the agriculture and agrifood industry as a whole, do address the key elements of a multi-faceted approach to making a difference.
These recommendations were presented under a number of key headings, the first being succession planning. We believe we need to make succession planning a priority program. Our other key headings--and you can read about them on our website--business training, mentoring and apprenticeship, messaging and imaging, financial tools, first nations and immigration, and coordination.
Most importantly, we believe that the federal government and the provincial ministries of agriculture must work on a strategy to quickly improve the inter-agency communications and coordination amongst all stakeholders directly supporting programs in attracting new entrants to agriculture, facilitating intergenerational transfers, and imaging and messaging.
Subsequent to the study's official release and adoption at our 2009 meeting, APAS has printed and distributed copies of the report to the Canadian Young Farmers Forum and all members of the CFA. We are encouraging other interested parties to download and review a digital version of the study or the executive summary at our website. We are working independently and cooperatively with various industry partners to develop a number of new opportunities that can address the more timely recommendations.
I thank you once again for the opportunity, and I encourage you to get the executive summary and complete report under the heading of “intergenerational transfer” in the policy section of our website at www.apas.ca.
Thank you.
3:20 p.m.
Conservative
The Chair Conservative Larry Miller
If you have any cards with that on it, they might be good to pass around to members after the meeting.
Thank you.
Layton.
3:20 p.m.
Layton Bezan Farmer, As an Individual
I just want to make a few comments, but they're not based on our own operation, Carter's and mine.
In our business we deal with a number of producers from across western Canada and into eastern Canada and the U.S. Despite the colour of my hair, in a lot of places when I go in to look at their cattle, I'm the young guy. There's certainly a lack of entrants into the business, and as everybody here has spoken eloquently about, we've got to be profitable. When I got started, one of my good friends in Manitoba told me that he got into business for fun and profit, and it's a hell of a lot more fun when there's some profit. Unfortunately, in this business, it hasn't been a whole lot of fun since 2003.
Some of the things I think we have to look at include, obviously, financing capital. That's a big concern for young farmers. At one point in time, when I started farming, Farm Credit was a source for capital funding. I think we've got to seriously look at getting them involved in operating funding. Right now, they've got what they call industry alliances. I think that's a mistake, because what we're doing is we're going down the same path as the Wheat Board. You've got what we call in the livestock sector “dealer finance”. It limits where these young farmers can purchase their animals and where they can sell them. I think the same thing is somewhat evident on the crop production side, with crop production loans that are funded by Farm Credit but that can only be obtained by going to one of the big multinational companies to get funding.
One of the things we're seeing throughout all of agriculture is that consumers are imposing their values and therefore increased costs of production onto us as producers. Unfortunately, they're not prepared to pay for that additional cost. They still want to source their food products, whether they be at Safeway or at Wal-Mart, for significantly less than what is passed onto the producer, as Carter and everybody else said.
It's obvious from what everybody has talked about that we want to make our living from the marketplace. We don't want to live off government programs. It seems ironic that since the start of government programs such as GRIP in the late seventies, early eighties, we have unfortunately depended upon those subsidies more and more. In actual fact, in 2003, during the BSE crisis, when the government gave a subsidy of $350 a head to the feedlot operators, all we did was launder the money for them, and I think that's happening with all of our programs. We are not subsidizing farmers. In effect, we're subsidizing consumers, and I don't think that's quite right.
I don't think we're going to be able to attract the next generation and generations further down the road into taking up this vocation.
One of the other things that I think has had an adverse effect on agriculture in terms of technology transfer viability is a diminished role of Agriculture and Agri-Food Canada in the past 20 years. When I moved to this province in 1984, we had all kinds of field people on the ground working with producers, working with industry, to try to make everybody more profitable. I think right now Agriculture and Agri-Food Canada has become more of a reporting agency, reporting what the condition is and not working with the industry hand in glove.
We've got to make agriculture not just sustainable economically; it's got to happen environmentally, but we've got to get the funds passed from the consumer through the retailer, a bigger portion of which has got to come to the producers, especially the younger ones.
One of the things I think we can do to get more young people involved is get them involved on our farm boards. They've got to become the leaders. Unfortunately, as we can see today, it's pretty easy to avoid coming to meetings such as this when you're trying to keep the wolf from the door and you've got more pressing things to do that put money in your pocket. If there's some way for the government to have a fund, whether it be an endowment or whatever it may be, so that these guys can hire somebody to be at the home farm when they are going to be involved, whether it be with the Wheat Growers Association, the Cattlemen's Association, or coming to speak to a committee such as this....
3:30 p.m.
Conservative
The Chair Conservative Larry Miller
Thank you very much, Layton.
We'll now move to questions.
Mr. Easter, five minutes.
3:30 p.m.
Liberal
Wayne Easter Liberal Malpeque, PE
Thanks, Mr. Chair.
Just on Layton's last point, “dealer finance”, I think you called it, Layton, I'll give you a potato example, because I think it's easier to understand than the cattle example. I'm aware of what you're talking about.
If you're going to get a loan from a bank in my neck of the woods, you have to have a contract with one of the potato processors, if you are a potato producer. When you have a contract with them, you are obligated to sell them the crop, but you are also obligated to buy their inputs. We had some people last year who could buy fertilizer inputs at about 65%. They were bringing it in from Russia, and that is the price they could purchase it from the company they were going to sell their potatoes to. As a result of bringing it in, their contracts were cut. Then they were in trouble with their lending institutions. Is that what you mean?
3:30 p.m.
Farmer, As an Individual
Yes. These aren't through the existing banks. It's not hinged on whether or not you have a contract. If you purchase your inputs and get a crop production loan from company A, you have to sell your product back to company A.
On the livestock side of things, let's face it, this industry is extremely volatile and extremely risky, and profits have been virtually zero since 2003. The bank isn't going to borrow feedlot money to go and buy cattle, or very seldom. Those producers who buy their feeder cattle go to a dealer-financed program where they have to buy the feeder cattle. Often they are marked up, and then they have to sell them back to that same producer, whether they have a contract or not.
3:30 p.m.
Liberal
3:30 p.m.
Farmer, As an Individual
Farm Credit is the alliance partner in those programs.
3:30 p.m.
Liberal
Wayne Easter Liberal Malpeque, PE
Just so I'm clear, Carter, in your presentation you talked about the Saskatchewan livestock loan guarantee program. Are you suggesting the federal government emulate a program like that?
3:30 p.m.
Farmer, As an Individual
Yes. For me, going to the bank when I was 18, they would have said no and kicked me out the door. The livestock loan guarantee program allowed me to buy some cows and get started in this industry; otherwise doing it with cash on hand would have taken me a long time to build up to where I'm at now without that program. So I think the bank would look favourably on a loan program through the federal government that is guaranteed 80% or 50% by the government.
3:30 p.m.
Liberal
Wayne Easter Liberal Malpeque, PE
It's interesting that when the federal system wants to work, it can. I think when we finally came to agreement on the Canadian Agricultural Loans Act it went through in one day. I think that was three readings in one day, and then we had a hearing, right? We had a hearing somewhere in the middle. It can happen.
AgriStability could be fixed in a very short period of time if we wanted to.
Carter, these safety net programs are interesting. You said you're not happy with AgriStability, but Brad said CAIS basically saved his bacon, and I agree, in single commodities. These programs will work in single commodities when you have the traditional boom and bust cycle. They just won't work in a long-term decline. In Ontario you'll find producers with as many as 17 or 18 commodities that don't work there.
How are you suggesting that program be fixed so it works for everybody?
3:30 p.m.
Farmer, As an Individual
I don't know how AgriStability could be fixed for me personally. I got into the cattle industry right before BSE, paying top dollar for cows, bulls, everything. Then everything hit the crapper, and for three or four years I'm paying them back money for feed bills and pasture bills, stuff like that. So my profit goes back to them to pay off loans through BSE and stuff.
I did receive a payment from AgriStability, and that was great, but when you're going on so many negative margins over so many years, eventually you are not accepted by the program any more. You're paying your money to them for nothing.
3:35 p.m.
Liberal
Wayne Easter Liberal Malpeque, PE
But if you changed the averaging so that you could drop your best year and worst year, if you went to your three best years, it would make a difference. Do we need to look at doing that kind of thing?
3:35 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
Good afternoon.
Mr. Thakker, I found your presentation interesting, especially when you talked about the report that your organization has drafted on the future of farming. Since the committee is looking into that issue, it would be very helpful if you would send your report to the clerk of the committee. We should take it into consideration when drafting our own report.
Carter, your testimony really spoke to me, especially since we have one thing in common. You said that you did not agree with Mr. Blackburn. That is something that happens to me quite often as well. When I ask questions in the House, as a Bloc Québécois member of Parliament, it is always Mr. Blackburn that answers me and never Mr. Ritz. So, the actual Minister of Agriculture never responds to the concerns of Quebec farmers. The responses always come from the Minister of State, Mr. Blackburn. I sometimes get the impression that this gentleman has his own agenda. Occasionally, when I talk to Mr. Ritz, he does not seem to know just what Mr. Blackburn is doing.
Something that we know for sure is that last December, Mr. Blackburn went on a tour regarding the future of farming. As I have already mentioned, we are duplicating his efforts by also embarking on a tour. I know that he will draft a report, but some of the details have escaped me. Did you say that you met with him? I know that he came to Saskatchewan, that he visited only five Canadian cities and that he will draft a report on the future of farming. I would like to know if you met with him during his tour. Were you aware of the fact that he was on a tour regarding the future of farming?
3:35 p.m.
Farmer, As an Individual
I read the article in The Western Producer and what his comments were towards the attitudes of young farmers. I don't know exactly where he thought they had negativity towards farming. I know I and the guys I've grown up with in this industry have no negativity towards this industry. We see nothing but potential in this country, nothing but potential in this industry to grow and expand. But no, I did not have the opportunity to talk with him.
3:35 p.m.
Bloc
André Bellavance Bloc Richmond—Arthabaska, QC
He said that he was going on a tour because he wanted to see how relevant and practical the programs were. I am not against doing that. In fact, I have been trying for a long time to get the committee to conduct a review of our farming programs. If you had the opportunity to meet with him when he was preparing his action plan on the future of farming, which shed light on several issues related to cattle production...
What would you like to see come out of the government's plan, especially in terms of the future of farming and that of young people in this sector?
3:35 p.m.
Farmer, As an Individual
The biggest thing for me to see in this action plan for young producers is the capital thing. I know for myself, if I could go to the bank with a strong business plan and I could prove to them that a ranch could make money in this industry without any kind of government subsidies, without any kind of AgriStability, that even in a bad year we could make it work, we could make money in the cattle business; we just need the opportunity to do so.
Diversification is a big thing for me. We've been looking into getting into bison, getting into meat goats, marketing our own meat in city butcher shops, and stuff like that. I know if the banks would back a young farmer or rancher, there would be nothing stopping us.
3:35 p.m.
Farmer, As an Individual
I hate to use the words “safety net”, but if AgriStability was structured in terms of what it's done for Brad, it's what any young farmer in any sector of the industry would need, which is a stop gap. He needs something that's bankable. AgriStability is not bankable right now. Therefore, unless we can come up with an insurance program for livestock that's similar to an insurance program for crops or a whole-farm program, which AgriStability is supposed to be, that would guarantee that at least loan payments are made and the cost of production is paid, the banks are not going to be interested, even with an 80% loan guarantee such as the livestock cash advance that Carter talked about.
We've become low-cost producers. It's unfortunate that we've been forced to become low-cost producers, but we had to do that. The entire industry had do it too.
It's the same thing with the economies of scale that Brad talked about. We all have to become bigger. It's not because we want to be bigger, but it's a fact of life if you want to be viable in this industry.
An old customer of mine in Wyoming once told me that if I wanted to live a little better than a gas pump attendant but not quite as well as a school teacher, I'd have to run a thousand mother cows. Unfortunately, that's where we are today.
3:40 p.m.
Conservative
3:40 p.m.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
I'll try to be brief, but I'd like each one of you to comment.
I often feel that we're trying to put out various fires here and there. Some things work; some things don't work. There's a debate in regard to trade in this country. Some people feel we should take agriculture right out of trade; others feel we have to get more trade agreements.
There's a debate on food sovereignty. People have different opinions on it. The solution obviously lies somewhere in between. We're a trading nation. We have to trade. At the same time, we need to have some type of control over our food supply. People are demanding good quality food from more farmers. Farmers can deliver it.
I'm going to talk about something that came out of a committee travel meeting such as this one a little while ago. I'd like each one of you to comment on this.
We were on a similar tour a couple of years ago. We made recommendations. One recommendation was that the federal government should encourage a policy of local procurement for federal government institutions. If there was a federal hospital for prisoners, we would encourage the institution to buy locally from farmers. This was agreed to unanimously by members of all parties on the committee. The push-back we had from the department was on the need to be very careful in administering our trade obligations.
I read an article in the Chicago Tribune last summer. The State of Illinois had mandated that 20% of procurement for state institutions would come from local farmers by the year 2020. We're a trading nation. The U.S. is a trading nation. They're doing things there that we're told we can't do here.
Within that context, what do we do? Maybe we could have one or two comments. Mr. Schulhauser or anyone who's ready to start could comment.