Agriculture Committee on April 28th, 2010

[Ryan Thompson]

I sure could. I know that you probably have--

[Wayne Easter, Liberal, Malpeque, PE]

There are problems everywhere with CFIA, and we need to have them on the record. That's what I'm saying.

[The Chair, Conservative, Larry Miller]

On that note, any written submission to the committee by anybody sitting at the table or by anybody in the crowd is always welcome.

[Ryan Thompson]

You do have lots from CCA, the Canadian Cattlemen's Association, I believe?

[The Chair, Conservative, Larry Miller]

I mean from any individual or any agricultural organization, of course, Ryan.

Does anybody else want to comment on Wayne's comments?

No? Okay.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I have a question on the future of agriculture and growing crops for more than just food, in terms of sustainability of an industry.

[Stuart Person]

If you're talking about growing crops and exchanging food for fuel, if that's what you're getting at, then yes, as long as there's enough food in the world, we can replace fuel sources with agricultural products. That's a touchy field. If we're burning up wheat in our cars while people are starving, that's a political issue for you guys, right?

I don't know. I'm all for it if it's going to make my farm profitable, but at the same time, is there an ethical issue there to be dealt with? Is that what you were asking me?

[The Chair, Conservative, Larry Miller]

Your time has expired.

Randy, you had a follow-up, just a comment. Can you be brief?

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

You all touched on promoting agriculture. I have some questions about that. What would be the promotion item you would use to get more people involved in agriculture? I don't know if we have time to answer that question, but if you could think about that and do a written submission, that would be helpful. I think you're right; we don't promote agriculture in the proper light.

[Rodney Voldeng]

Currently in Canada, everybody sees the farmer as a 65-year-old farmer. I think one of the ways you could promote agriculture would be to take some young farmers and use them in your campaign. All of a sudden, other young people would look at it as an industry that young people are involved in, instead of just older farmers.

[The Chair, Conservative, Larry Miller]

We have run out of time, but there are a couple of things I want to follow up on a little bit before we close.

Those were great presentations today by all of you. Again, thank you for that.

One thing you talked about, Barb, was agriculture in the curriculum in high schools. I believe it was you who mentioned that.

Oh, I'm sorry, it was Ryan.

I have one high school that did this seven or eight years ago. It's in a very rural area. It is similar to where we are today. There are other schools looking at expanding that. I've often wondered whether some kind of agriculture curriculum could also work in urban cities, in the large cities, not to convince that young generation but to educate them about the issues and problems in agriculture.

I see you shaking your head.

[Ryan Thompson]

I agree with you. In the rural areas, you're preaching to the choir. It's very important to get it into the urban setting, not only to get them into agriculture but to teach them a little bit about what we do. The challenge we run into a little bit here in Saskatchewan is that it's tough to change the curriculum. You start running into all the levels to try to change the curriculum. If anybody can help us out with that, I'm all ears. But it is difficult.

[The Chair, Conservative, Larry Miller]

Thank you.

Barb, I believe you mentioned scaled subsidies at different levels. Just to be clear about what you meant by that, I took it that you were thinking that there should be--how can I say it?--a bigger premium payout the younger you are or the closer you are to being a beginning farmer.

I'm 53, and if I were still at home farming--my youngest brother's farming my land--would I be scaled out of there? Is that the kind of formula you're looking at? I just wanted a little bit more on that.

[Barb Stefanyshyn-Cote]

That's kind of the idea. By the time they're 65, let's retire these farmers. Let's not keep them there until they die. If that's what it takes to make space to bring new farmers in, then maybe that's one way of doing it. It's a disincentive to keep going. Maybe it's time to let that farm roll over, and that might be one way of doing it.

[The Chair, Conservative, Larry Miller]

Thank you. That was an interesting comment. Anyway, thank you for following up on it.

Mr. Hickie, the last comment is to you.

[George E. Hickie]

As farmers, we produce the most necessary item to sustain human life, and that ability to produce that food is being greatly hampered by a few transnational agriculture corporations. That is a problem we have to solve. We will not solve our economic problem until we're able to solve that one. I don't think it'll be easy or quick, but we must face it. That's the problem we must solve. They have too much control over farmers. We are basically captive customers to them.

[The Chair, Conservative, Larry Miller]

Okay. Thank you for that.

We have another session with another bunch of witnesses, similar to you.

Once again, thank you very much. Those were good presentations today. And being a farmer, I know how hard it is to take half a day away or whatever. We appreciate your doing that. So thank you very much.

We'll adjourn for 10 minutes. I'll ask the witnesses to leave the table so that the next ones can move in. And to the members, please be quick. In 10 minutes we're going to restart.

[The Chair, Conservative, Larry Miller]

We'll now get into our second portion here.

Thank you to all of our witnesses for taking time out of your busy schedules to be here.

We have a number of presenters. If you could keep your presentations to five to seven minutes--I'll give you a two-minute warning. I'll still be a little flexible; it's just so we can get everybody in and leave some time for....

I will start with Mr. Schulhauser for five to seven minutes, please.

[Colin Schulhauser, Farmer, As an Individual]

I would like to take this opportunity to thank the committee for allowing me to appear today.

My name is Colin Schulhauser. I farm with my father in the Cupar district of Regina. I have been farming since I was 19, and the farm has been in the family for four generations.

The issue of how best to encourage young farmers to enter the agriculture industry is a very important one, because there are many changes and challenges facing agriculture today. Land prices are skyrocketing, out-of-province land ownership is increasing, and trade challenges such as closure of European borders to Canadian products are all making it difficult for young farmers to enter the agriculture industry. In addition, these same challenges also inhibit succession planning and transfer of farm ownership from one generation to the next.

There is no magic bullet, no single answer to the question of how best to encourage young farmers to enter the field. From a practical standpoint, I would suggest that a loan program for land and equipment be introduced that would incorporate low down payments and no interest payments for up to two years. This kind of financial program would allow young farmers an opportunity to get established and free up working capital.

As a way to protect the government's investment, the person would be required to have some education or a course in agronomy, accounting, or general agriculture. By this I mean to say that young farmers with this kind of education would demonstrate a long-term commitment to agriculture. Such a financial program would be designed to encourage a progressive, forward-thinking young farmer, not meant as a subsidy.

On the related matter of succession planning, with the transfer of a farm from one generation to the next, I feel the most important element here is family and the idea that the young farmer must learn from his father or grandfather. Young farmers today are facing challenges that were unknown to their fathers and grandfathers. There are food safety requirements, trade challenges, trade stability issues, and changes to food policy. In addition, there are many financial challenges, such as skyrocketing land prices, increases in land rent, and an ever higher number of out-of-province landowners.

I'm happy to see the Standing Committee on Agriculture is addressing issues related to young farmers and development of the agriculture industry in Canada at this critical moment in history. There are very important changes occurring in the industry these days, and these challenges need to be addressed.

I thank the committee for allowing me to appear before it today.

[The Chair, Conservative, Larry Miller]

Thank you.

Mrs. Green.

[Dixie Green, As an Individual]

Thank you for the opportunity to talk to you about my outlook. I would have sent a young farmer. You defined it as under 35; in my area I don't know one. I know two or three farmers in their forties who are working so hard to survive that they couldn't come.

So I'm here in the category that I should be retired. I'll tell you why I'm not retired.

The number one reason is that I'm the eternal optimist. I believe that if I can hang on, maybe there will be something for my grandchildren. That would be one. The other is that if I sell out, where do I put my money that is safe? That makes me very nervous. At least there's no more land being produced. Maybe there's some stability in owning some land. Having worked for 35 years on a mixed farm, doing anything on and off the farm--I also earned a living off the farm--I need to wean myself off a life of hard work. I don't want to be in the category that stops everything and dies. So I will continue. My passion is to make it better for the next generation. I have worked very hard in my life. I've worked hard enough that when people talk about television programs, etc., I don't know what they're talking about because I never have time to watch television.

I see the potential farmers, people like my sons and daughters, not interested in farming because there are other, less risky, less demanding ways of making a living.

I want to highlight this. We talk about the corporations that are controlling our inputs and also about the sale of our product and that they're taking too much. I have no doubt they're taking too much, but my vision is that it's going to continue, and instead of being small farmers—that's almost non-existent, too—we're going to be workers for the big corporations. I'm not so sure that a further lack of control of what we do with our time and how we make our living is going to be good.

In terms of all of us around the table who are eaters, the consequence if the corporations are in charge is that I would see our food prices rising. Perhaps like the garment industry we'll be moving agriculture offshore. I see now we import from Mexico. Now we bring in food from Israel, from Greece, from wherever. Get the corporations owning the land. They're moving into that now. They control the price of the inputs. They're controlling prices that we get for our products. It goes on and on. They will be able to raise the price of food, but the quality probably will go too when we import most of it.

It surprises me, at my age, that I hear eastern Canada is more likely to buy their food product from the States than from western Canada, because of the free trade organization. I'm not convinced that we do better with free trade. I really don't want us to go into free trade with Europe and find that we're losing more of our abilities to look after our own interests. I'm thinking of things like being able to keep our own seed and reuse it, etc. It's one of the few things that still is not too expensive here. But Europe doesn't have that guarantee.

I have submitted my speech and I'm diverging from it. You can look at what I have prepared.

In eastern Canada I have talked to some small farmers who are involved with community-supported agriculture, and that is small landholdings, producing fruits and vegetables, etc., for populated areas. I think that is laudable. They are farmers and they're small scale.

In the west, that small scale doesn't happen and we don't have these CSAs, community supported agriculture, to any extent. We're into a bigger scale, and the bigness of the scale is exactly what is keeping young farmers out. There's just no question. When you've got to start and you budget $15,000 for a tractor, but the smallest tractor you can look at is $150,000, we're talking about a scale that's very hard for young people to get their heads around. How can they raise this kind of capital?

I think there are two potentials right now for people who are going to enter the farm industry. One is if you're a third- or fourth-generation farm and the older generation is backing away from having a fair return on their investments over the years--they're pretty well giving you the machinery and most of the land to operate on. The other potential source of farmers are people who have made it big in some industry, such as the oil industry, and who come back with a pocket full of money, or they're selling their smaller farms in Alberta, for instance--I've heard of that--and coming in to Saskatchewan where the prices are still lower.

Neither of these potentials yields enough to sustain the industry, so we're having to find farmers somewhere else. As Kalissa Regier stressed, we have to make it good for small farmers. I'm upset that the wheat and barley producers have had at least some guarantee that they'll get paid for their grain and that they'll reap the benefit of farmer-controlled monopoly on sales. Certainly the big corporations want the Wheat Board gone because they want the monopoly. They want the bigger profit. It's not hard for me to understand that there is a problem with farmers having the control. That's not how the industry likes to see things. It needs to be the corporation.

So, for goodness' sake, don't do away with the Wheat Board. Farmers have enough of a challenge to grow their product and to get it into the bin, let alone to sit at computers and figure out if they can market their own grain to Egypt or somewhere, and time the market. I don't want to be against my neighbours who got $2 a bushel because he sold this week and I got less because I sold last week. I'll go with some kind of an average price. Let's at least not cut each other's throat in that direction.

I believe if you do away with the Canadian Grain Commission, the quality of Canadian grain will also be gone. They have been the stalwarts that have protected the quality of our wheat and barley. For those who do not like the Wheat Board and their many options for marketing--they've now got it so you can even price your grain in the future, etc.--then don't grow barley and wheat. That's all that's under the Wheat Board.

I see the other structures that have supported the smaller farmers being undermined, the support mechanisms like supply managed production. Lots of people don't want that to stay in the dairy and the egg industry. We absolutely have to have risk management through subsidized insurance programs. The collective marketing, the preservation of farmers' rights to save and reuse seed, concessions to the railways.... We gave them a big one when we gave up the Crow, but now at least we've got some cap on their revenues, and we had the concession that they provide producer car-loading sites--and we need them.

If I'm to wind down now--it looks like your finger might mean that--I'd just like to say that farmers are slowly disappearing. It has been a good lifestyle. If you ask people throughout the integrated industry if they're making profits, they all say no. I don't believe it. I don't believe the retailers aren't, the wholesalers aren't, the railways aren't, the big packers aren't.

Regarding beef, I have cows. There are two packers left in western Canada. Two packers. That is not competition for sales. We're given the sales.

Regarding the CCIA about tags in the ears--now it's buttons--I totally support that. But you know what? If it's good for Canadian beef to have that identification, which it is, then somebody needs to pay for it besides the people who are not making any money. We pay all of it, the expense of tagging, of buying the tags, etc. That's a place where some help could come through to the producers.

I have more.

[The Chair, Conservative, Larry Miller]

Well, I've let you go way over, but if you have a closing remark, I'll allow it, Ms. Green.

[Dixie Green]

My final remark is that we need to have at least the cost of production. If young farmers are going to get into the industry, there has to be some way that they're not going to lose their shirts. We need to increase that pool, while making sure that the farmers who are still in business can stay in business and find a way to pass it on.

Thank you very much.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We'll move on now. I understand we have a father-son combination here--I think they're the first so far. Carter and Layton Bezan, welcome here.

I guess, Carter, you're going to do the speaking.

[Carter Bezan, Farmer, As an Individual]

My name is Carter Bezan. I'm a rancher and a cattle farmer from north of Regina. I was really excited when I was asked to speak on this topic today, so thank you.

In the February issue of the Western Producer, there was an article about the feds offering a carrot to young farmers. In this article, junior ag minister, Jean-Pierre Blackburn, stated that it was not an issue of money keeping young people from entering the farming sector, that he was bothered by young farmers' negative attitudes toward agriculture and that these negative attitudes toward farming came from their parents.

I strongly disagree with that statement. There are so many more young farmers, as you've seen today in this industry, that are enthusiastic about farming, about ranching, who want to grow, expand, and even diversify their operations, and hold no negativity toward the industry.

Speaking for myself, it is a money issue. When it comes to my own operation, all profits that my cows make go toward feed bills accumulated through BSE due to poor cattle prices, loan payments, or into buying more cows or better bulls so I can continue to grow my operation. The biggest problem I find with the industry is the inability to keep growing as a young farmer and the inability to access capital. As young farmers, we are competing for land, cattle, and equipment against established farmers who are working on a cash basis, or have so much equity built up that prices or the ability to make a return on that investment are not an issue, as well as competing against fellow young farmers who have off-the-farm jobs to supplement their farm income or have returned from the oil patch with money in their pockets.

In my eyes, there's nothing but potential in this industry and in this country, and if it were easier to secure large amounts of capital, there would be no stopping me from continuing to grow and diversify my operation. To be classified as a beginning farmer by Farm Credit Canada or the Canadian Agricultural Loans Act, you must have less than six years of farming experience. So by the lending institutions and government standards, I would be classified as an old farmer at the age of 25. It would be better to change that to a pure dollar amount invested or have a set age bracket in order to be classified as beginning farmers. The way the industry is now, a 35-year-old farmer is still a young farmer, since he is expanding. The government and lending institutions need to change their criteria. Often when existing farmers are selling out, those farms are being purchased by retirement-aged farmers who are usually the only interested buyers. This is why I say farmers under 35 should be classified as young farmers. That is where the bar needs to be set.

Programs announced by Prime Minister Harper in May 2009, allowing farmers to access credit more easily, are great. But for young farmers, the amount we need for a down payment and the interest rates charged need to be reduced. The Agricultural Loans Act is a great idea and allows farmers to receive much-needed funding at low interest rates with minimal down payments. But, to me, even 10% can be too much to ask for when we're working on such small margins.

A program structured similar to Saskatchewan's livestock loan guarantee program, where the government guarantees 80% of the loan, might allow young farmers to purchase land or equipment at lower interest rates with a lower down payment. The Saskatchewan livestock loan guarantee program is the only reason I have been able to grow my cow herd to its current size. It has allowed me to continue growing my cow herd when the banks in this country would not even look at my applications. As with the livestock loan guarantee program, any lending programs for young farmers need to be government guaranteed and not show up on a credit report. Speaking for myself, my farm and my personal credit are two separate things. But that is all the bank will look at when considering my application, even with the Agricultural Loans Act in place, and because I currently own a house in a city, they will not even look at it as equity.

Programs like the Canadian Agricultural Loans Act should not look only at an applicant's credit score, or total debt service numbers, and judge exclusively on that either. They must allow for a young farmer to present a solid business plan of what he wishes to do with the money, what it will cost, and how he plans to pay it back. Getting started in this industry is the hardest part. Any kind of lending program needs to allow young farmers a one-year or two-year grace period to put money against initial inputs like seeding land to grass, building fences, or putting in water systems. In the cattle business, once the land is developed, it can begin to pay for itself, and that would give a young farmer a further boost in the right direction.

Another thing that needs to be addressed is that support programs like AgriStability do not respond quickly enough or at all. In most cases, the damage is done and the farmer has already made changes to his operation before the funds get paid out. In order to qualify for any kind of payment, you must not show a negative margin for more than two years. For a young farmer who is working with such small margins, that can almost be impossible when you're continuing to grow and expand. Make the program more bankable and precise so that anyone can calculate it. As AgriStability stands right now, only the AgriStability office has any idea how the calculations are really made. Formulas are changing. And the livestock sector has experienced years of declining margins, making the chances of payout when it is most needed nearly impossible to trigger. The program does not work, and I am one of many producers who think it's an absolute joke.

A program this government needs to look at is a livestock insurance program for all levels of the cattle industry, as Ryan spoke about, a program for cow-calf producers similar to the insurance program available in Alberta that is directed primarily towards the feedlots. We need a program that allows young farmers and all farmers alike to ensure a certain level of revenue on their cattle ahead of time at all stages of the production chain. A program like this would allow young farmers to go to the bank with a minimum level of price insurance in their hands that their calves will bring x amount of dollars in the fall. It would allow them to cover their costs of production, make their payments, and make a basic living.

Over the last couple of years I have been looking into ranches and farms in South America, and for a young farmer in these countries it appears to be easier to make a living at what we love, not to mention the huge opportunities for farming in Russia, China, and the Ukraine. Their inputs are lower, their profits are higher, land is cheaper, and equipment is cheaper.

Everything we have developed relating to agricultural technology, equipment, and genetics in this country, we are giving away to our competition. They are taking over markets we once held, and as they learn from us, they will only take over more. I believe in free trade, but we have a superior product in this country and we need to keep ahead of the competition. If things don’t change in this industry very soon, more and more young farmers, like me, may sell their existing farms to buy larger farms in other countries. I know it's something I have considered.

We are about to see a mass exodus from farming as the population gets older and more and more young farmers leave for the oil patch, mining, or jobs in the city. Why stay in farming to just get by when you could go to the oil patch, the mines, or get a government job and make money, have weekends off, get holiday pay, and have more time with friends and your family? If you want young farmers who love doing this to stay in this industry, then we need to make enough money that we are happy to stick around.

My older neighbours and grandfather keep telling me of a time when farmers and ranchers were some of the wealthier people in society, and they were looked up to as well. Why can’t we get back to that? We supply this country and the world with safe, quality food and products, and we are not being paid for these products as we should.

The former Canadian Cattlemen's Association general manager, Charlie Gracey, completed a little study into producer shares of retail beef sales. His calculations, comparing the early seventies to 2008-09 numbers, showed up in a recent edition of Canadian Cattlemen magazine. In the early seventies the producer’s share of retail value of a finished steer averaged 80%. In 2007 that number had been reduced to less than 45%, as our costs of production have increased at a higher rate than those of the retailers.

The retailer/fabricators on this continent are keeping 55% for themselves, and no one says anything. Retailers, such as Wal-Mart and Safeway, are dictating what the prices will be for slaughter plants that dictate the prices to us. The retailers are selling beef and other agricultural products at a premium and continue to raise their prices, but you do not see any of those premiums or price increases trickling down to the producers.

The government needs to enforce more strict rules on the retailers as to how much profit is lining their pockets and how much is getting sent back to us. Presently, industry watchdogs and government boards, such as the Competition Bureau, appear to focus their attention on the effects that mergers and acquisitions have on consumer prices. The focus of the Competition Bureau should be changed to include the effect on prices paid to producers and suppliers.

Every government, when they are running to be elected, talks about helping farmers, but we have yet to see any change. We are here today to talk about securing the future for young farmers, and if the current government doesn’t do something soon, there will not be a future to secure. As our parents get older and wish to leave the farm, who do they leave it to? What young farmer will be around to step into that role? Who will feed the world’s population as it continues to grow? As a member of Parliament involved in agriculture, did I do enough with my time in office to secure a future for young farmers in Canada? These are the questions that I think you need to ask yourselves, because your predecessors never cared to answer them.