Evidence of meeting #19 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 program.
9:55 a.m.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Would you be in favour of the idea of Canadians—not necessarily those who are dismantling their farms—being able to invest in a fund to help the next generation of farmers? For example, they could invest in your land or some of the buildings. That money could come back to you. It could become passive capital.
9:55 a.m.
President, Fédération de la relève agricole du Québec
The Government of Quebec announced that solution in its budget in the middle of March. It wants to move forward in that direction. People want to invest in agriculture. We have to see whether this will become reality and if it does, how it will work. If young people cannot have a decision-making role, we are not interested. However, if the goal is truly to help young people through farming agencies responsible for managing these funds, then this is an avenue worth considering.
9:55 a.m.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
My other questions are for Mr. Groleau and Mr. Lapierre.
You have already made a commendable effort to support the next generation of farmers. I am talking about lending or donating quota. Your quota loan is for life. Is it transferable to the next generation?
9:55 a.m.
Table egg producer, Fédération des producteurs d’oeufs de consommation du Québec
Yes.
9:55 a.m.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Are you planning other measures for the future? I know this was implemented roughly two years ago. Will this be developed further in the future or remain as it currently exists?
9:55 a.m.
Table egg producer, Fédération des producteurs d’oeufs de consommation du Québec
For now, things will remain the same. We founded this system in 2006. We are in our fourth year. There are five new farmers and we want to give them enough time to get established.
As far as acquiring quota is concerned, a program favours the next generation, the newcomers, over existing farmers. When new farmers acquire quota then they can be loaned up to 10% to 20% more quota depending on the relative size of the population in the region where they operate.
9:55 a.m.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
When a farmer dismantles his farm, he can currently sell his quota to other farmers. Have you already considered developing policies to finance these quotas through those who are selling them? Currently, those who are buying the quotas are borrowing money from the banks or credit unions. Could the quota owners do the financing?
9:55 a.m.
Table egg producer, Fédération des producteurs d’oeufs de consommation du Québec
I can tell you that in my case, a new business was created out of a business transfer. The income from this new business allows me to buy shares in the former company. This entitles me to have control over the business in a way. Supply management allows us to plan our potential income for the long term. We are better able than other productions to plan a farm transfer even if we do not know whether we will still be making money in two years.
10 a.m.
Conservative
Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC
Mr. Groleau, do you have anything to add?
10 a.m.
Chairman, Fédération des producteurs de lait du Québec
To pick up on what Mr. Lapierre was saying, it is quite often the vendors who finance the acquisition of the farm by the next generation. As Mr. Marcoux was explaining, it takes a very significant amount of shares in farming in order to get a return. Therefore, the current generation almost always finances the transfer of farms to the next generation. Whether we are talking about the grains sector, supply management or any other sector, the price of land, quotas, shares do not allow the purchaser to fully finance the acquisition through the bank. It is the current generation that finances the next generation.
For the next generation, market prices are the main problem. We are able to maintain the number of farms we have through supply management because it offers a price that more or less corresponds to our production costs. For other productions, the difficulty is the market price and the insecurity that comes with it.
I think that in the framework of international negotiations, especially since they tend to drag on, Canada should play a role in addressing the way in which market prices are regularized for farmers throughout the world. It is a global problem. Farmers are suffering because of the prices they are getting and more and more people are going hungry. Stabilizing commodities prices is a global problem.
10 a.m.
Conservative
The Chair Conservative Larry Miller
Okay, thank you.
Mr. Groleau, there was something you said there. You mentioned that the parents were basically the bankers for the sons and daughters, and I think that is probably prevalent across Canada.
Do you think that non-family members are being bankrolled by the farmer? For example, if I bought your farm, not being a relative, in the large percentage of those cases, is the guy who is selling holding the mortgage? Any comment on that?
10 a.m.
Chairman, Fédération des producteurs de lait du Québec
I think people rarely support or finance someone who is not family. The fact that this rarely occurs is not unique to agriculture. That is the case in almost all industry sectors. I am sure that Pierre Karl Péladeau, who bought Quebecor, did not pay market price when he acquired his shares. We are always closer to our family than anyone else.
10 a.m.
Conservative
The Chair Conservative Larry Miller
Of course. I just wanted to clarify that. Thank you.
And there's one other clarification I'd like for the record. Ms. Delomier, you made a comment about government, both provincial and federal, going together to help with assistance and what have you. I'd like you to clarify what you meant. Did you mean some kind of program on top of the capital gains allowance that's allowed now by the federal government? Could you talk a bit on that?
Did I explain myself?
10 a.m.
Conservative
The Chair Conservative Larry Miller
You mentioned that you thought the government should have some kind of program with the provinces and the feds working together. What exactly did you mean by that? I may have lost it in translation.
10 a.m.
Director General, Fédération de la relève agricole du Québec
In fact, it would be a fund that producers contribute to. The federal and provincial governments would match the contributions. During the transfer, the money would go back to the producers.
10 a.m.
Conservative
The Chair Conservative Larry Miller
What would this fund be for? Is it for the purchase of land? Is that what you meant?
10 a.m.
President, Fédération de la relève agricole du Québec
It is a question of helping young people acquire a business at a lower price. People who transfer their business rely heavily on the value of the assets. Farmers are not in the habit of putting money aside. The goal is to encourage farmers to invest in a retirement fund. If they transfer their business, this fund could be supplemented with the contribution from the government.
10:05 a.m.
Director General, Fédération de la relève agricole du Québec
This would encourage the farmer to transfer his farm and not dismantle it for retirement income.
10:05 a.m.
Conservative
10:05 a.m.
Conservative
The Chair Conservative Larry Miller
Okay. I just wanted to be clear on that.
We'll now move to Mr. Eyking for five minutes.
May 10th, 2010 / 10:05 a.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Thank you, Mr. Chair.
I thank the witnesses for coming here today.
In Nova Scotia, where I'm from, when you talk about egg producers or dairy producers, there is a minimum number you should be at to make an operation viable. We say you should have between 15,000 to 18,000 layers because of the size of the barn, and maybe with dairy cows you should have a minimum of 40 to 50 dairy cows milking.
I don't know if 4-H is very strong in Quebec, but it's very strong in Ontario. We had the 4-H people talking about, and you alluded to, the interests of non-farm people coming out of agricultural university or really wanting to get into farming. What would it take? You are talking about the marketing boards helping. If I were a young person wanting to start up a laying operation of 15,000 or 18,000, or a dairy farm, what would it cost? And right now, how would the two levels of government or the marketing boards help me to get one of those operations?
10:05 a.m.
Chairman, Fédération des producteurs de lait du Québec
It is not necessarily easy to get started in agriculture or any other sector. In agriculture, if you so desire or have the ambition, you should be able to get started. I would first like to bring everyone up to speed on the situation.
Whether we are talking about broadcasting or operating a store, not everyone can get started. People need to raise capital to get started. In my opinion, we should focus more on securing existing farms and ensuring their profitability rather than setting up more and more new farms. The solution is not in increasing the number of businesses, but in the prosperity of the existing businesses.
We are living in very difficult economic times. Even the supply management system is not necessarily making things easy. Again, this is a matter of market price. We have to address these issues before thinking about setting up other businesses or helping all those interested in agriculture to start up a business. This may go against the intention of building up the next generation of farmers, but I believe we must also ensure that the current generation survives.