Agriculture Committee on Nov. 25th, 2010

[Rita Moritz]

Thank you.

Perhaps I can just start by very quickly highlighting what we call the BRM one-pagers.

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

Okay.

[Rita Moritz]

These are documents that I understand we send to members and we also deposit in the Library of Parliament on a regular basis; every time, we deposit in up-to-date detail what total government contributions are as well as federal contributions by province. We will use this to maybe give you some statistics, and then we're always willing to answer questions on what is in these one-pagers as we go through.

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

Okay.

[Danny Foster]

I'll give you the high-level breakdown of that $6.4 billion.

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

Well, okay. I'm sorry, just the high level was how much...?

[Danny Foster]

It was $6.4 billion.

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

Okay. So $6.4 billion has flowed through to the agriculture sector through BRM programming alone since 2007.

[Danny Foster]

Yes. That's the federal-provincial cost-shared programming.

As an example, the AgriInvest contributions to date are over $566 million. In addition, the federal government topped that up with $563 million as a kick-start to the AgriInvest program, which is a new program that was brought in as of 2007.

AgriStability has paid out $1.9 billion since 2007. On AgriInsurance.... And this is only the government contribution to the premiums. This is not the indemnities that have been paid out, which are much higher. The reason we report on that basis is that indemnities reflect, in part, the producer contribution to the program. AgriInsurance contributions to the premiums are almost $3 billion since 2007. AgriRecovery has actually paid out $457 million. I think you'll recall that Ms. Moritz mentioned the commitment of $773 million in terms of what's been announced. Of that amount, we've actually paid out $457 million to date.

So that's the $6.4 billion. I would also point out that this in essence, reflects two years, two program years. On 2009, aside from the AgriInsurance, we're still very much into the processing of AgriStability for 2009, and AgriInvest, so those numbers will continue to climb for the 2009 program year.

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

I think it's important to know that over $6 billion is flowing out into the agriculture sector through the BRM programming alone.

Second, pork and beef are in a particularly difficult situation. What do we expect will be paid out through BRM programming in 2009-10? Do we have a feel for how much the sector might receive through BRM programming?

[Danny Foster]

With respect to the hog and cow sectors, the livestock sector, we're always a little sensitive about the numbers for trade reasons, but in our forecast for the livestock sector for 2009-10, we're looking at over $1.1 billion.

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

Those are big numbers.

I want to ask a second question about CAIS versus AgriStability. There have been times when people thought they were the same program, with different names. There were changes made to AgriStability, to improve it over CAIS. Could you highlight some of the key changes that would actually benefit farmers, something the farmer would see as a benefit? Could you put it in context for me?

[Danny Foster]

Sure. I'll speak to the changes to AgriStability and to the whole suite. We went from production insurance and the CAIS program to a four-program suite, which included AgriStability.

The main differences between AgriStability and CAIS are in inventory valuation. That was an important change long demanded by the agriculture sector, especially the livestock industry. It reflects declines in prices of inventories in the year that they happened. That was a significant change. We've also expanded the eligibility rules for negative margin coverage. We realize that the industry is asking for further changes, but we significantly expanded the eligibility rules for negative margin coverage so that more producers could become eligible.

We put in the targeted advance mechanisms so that sectors like the hog sector, which has been in dire straits for the last three years--with some sign of recovery this year, until last month--could access AgriStability funds earlier. For example, the targeted advances for 2009 totalled some $140 million. That money was sent out to producers. In provinces that wanted to participate, they gave the producer a letter that said: “You're eligible for x amount. Sign below”. If the producer signed, he got a cheque immediately. The targeted advance mechanism has been an important feature for the hog industry over the last few years.

Those are the main ones.

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

There was talk about the province having a role to play in BRM programming. Sometimes people say the federal minister should take leadership and implement these changes. Can you tell me about the relationship between provincial agriculture ministers and the federal agriculture minister and how it affects changes in programming? Can the agriculture minister just charge forward, say he is making changes, and tell the provinces, “By golly, these are the changes, take it or leave it”? Or is there some sort of consensus that must be raised? What might be some of the driving factors that the province uses to make its decisions on whether it will support pending changes right now or not?

I realize that I'm short on time, so just a short answer on that, perhaps, would be helpful.

[Greg Meredith]

Oh, rats!

[Voices]

Oh, oh!

[Greg Meredith]

The short answer is that the rationale for having the federal and provincial governments participate jointly in these kinds of programs was a very destructive, inter-regional competition that existed before the agricultural policy framework, in which certain commodity groups and certain sectors would be very heavily subsidized, and that would force another province to try the same thing.

It was very, very destructive to producer groups and very inequitable to producers across the country. So the decision was made and has been sustained by ministers that it would take a certain number of majority provinces to agree to a change and covering a certain amount of agricultural production.

So the short answer is no, the federal minister can't make these changes; they are genuinely federal-provincial-territorial collaborations, and there is no unilateral movement.

[The Chair, Conservative, Larry Miller]

Thank you.

Now I'll move to five-minute rounds.

Mr. Easter, I understand you're splitting your time with Mr. Valeriote.

[Wayne Easter, Liberal, Malpeque, PE]

Yes.

The fact is, though, on that last point, the federal government could provide some leadership, Mr. Chair.

I'd like just a little clarification on the targeted emergency advances so I get this correct. Due to economic conditions, a farmer defaults on the targeted advance, but Agriculture Canada will give the farmer a break on interest. Is that correct?

[Jody Aylard]

I apologize, but I didn't hear the second part of the question.

[Wayne Easter, Liberal, Malpeque, PE]

Okay. The farmer is going to get a break on interest.

[Jody Aylard]

Yes.

[Wayne Easter, Liberal, Malpeque, PE]

However, the farmer will be charged interest on the default amount, albeit at a lower rate. Is that correct?

[Jody Aylard]

That is correct.

[Wayne Easter, Liberal, Malpeque, PE]

Okay. So the farmer is in effect going to end up paying more money. Further to that, then, the interest will be applied on the previous interest-free portion?