Agriculture Committee on Nov. 25th, 2010

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Eyking.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Mr. Chairman.

I thank the officials for coming here today. I'm sure it's the day of the year that you all look forward to, coming in front of this committee, and we welcome you.

I have a collection of questions here, mostly dealing with programs and coming out of some of the presentations we've had from farmers over the last few months. One thing was about the reference margins. As many of you know, whether it's weather cycles or price cycles, if you get it for three or four years in a row, what happens is that the reference margin gets so low that there's no uptake. The Olympic average going to 10 years was brought up a couple of times: is there any appetite for that? Is there a trade problem with that?

[Danny Foster]

Just as a reminder, the reference margin under the current AgriStability program is based on five years. What we use is called an Olympic average. We look at the previous five years, drop the high and low, and average the remaining three years. That becomes the producer support level going forward.

I've heard the 10-year comment. In fact, the five years was something requested by industry. The industry said that if they had their druthers they would prefer a five-year reference margin, because if you go to 10 years it's not reflective of the current operation. You get too far from where the operation is today. Certainly, the grain producers of today would not want a 10-year average reference margin. They would much prefer an Olympic average margin.

Anyway, industry asked for five years. But we also have to meet our WTO commitments, and a five-year reference margin would not allow us to report AgriStability payments in a disaster tier as green, so we had the option of using the Olympic average or the previous three years. We did an extensive analysis and found that the Olympic average tracks closest with the five-year average, and that's how we ended up with the AgriStability program.

So the 10-year average is something that would depend on the sector. Some sectors would say, “Yes, that's better because I had stronger years 10 years ago or seven years ago”. But others would be saying, “No, I'd rather be going with my last three or four years, because they're my best”. When we consulted with industry, they felt that five years was best.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

If certain industries wanted it, would it be doable?

[Danny Foster]

It wouldn't be doable because we wouldn't be able to report the AgriStability payments as green under the WTO rules.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

We had hog producers here, and they were talking about the hog program, HILLRP. Could I have a couple of quick answers on this one? How many producers are receiving that support? And how are the funds allocated?

[Jody Aylard]

Under HILLRP, there were 263 loans issued for a total of $408 million. That program is finished now, so that's the maximum amount that will be issued under the program. They're distributed across the country in terms of the number of loans.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

My final question deals with programs across the country overall. When we were doing our report on the future of agriculture, many times we had complaints, especially in Ontario and maybe in Atlantic Canada, about the different programs across the various provinces and how some are so different from others.

I have a couple of questions on that. Are they that drastically different? Is what's happening that young farmers and immigrants might be coming to certain provinces because of the programs?

Also, you mentioned, I think, that some programs could be looked at as a trade problem if one province has too lucrative a program. We hear about it. I don't want to point fingers and name names, but it's a given. I don't like the way the trend is going. You're going to have the have provinces and the have-not provinces in agriculture because of the treasuries of those provinces. Can you comment on those questions?

[Greg Meredith]

It is a concern for us as well. As I mentioned earlier, one of the reasons we moved to a national joint federal-provincial-territorial framework was because of the very points you're making, Mr. Eyking.

At the time, risk management programs were very different. There was a lot of inequity across commodity groups and across individual producers and provinces. The effort to construct the policy framework was to pull together, in one common framework, the business risk management programs and to make them as equitable as possible across the country. There has been drift and a number of provinces have built their own programs to top up. However, the federal government has refused to participate in those because it just exacerbates the inequity.

I want to make one distinction, though. In the context of business risk management programming, we really do try to keep them national and equitable. In the construct of the current framework, Growing Forward, the provinces asked, and quite rightly, I believe, that the proactive programming designed for promoting food safety, environmental sustainability, or innovation.... They said they knew better what that particular commodity group in that region needed. They wanted flexibility to design programs that would advance those goals and that would keep the outcomes national in focus, but then for the “how”, they wanted to implement them on a regional or provincial basis.

That seems to have worked very well, because it means that programs are more responsive to the needs of the local producer. But that applies to the proactive programming. We really do want a common national program in terms of business risk management.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Do I have any time left, Chair? I have one quick question.

[The Chair, Conservative, Larry Miller]

You're over your time. We'll move to Mr. Shipley--

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Mr. Hoback got a lot more than I did, Chair.

[The Chair, Conservative, Larry Miller]

--for five minutes.

You were well over. You were seven minutes.

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

Thank you, Chair.

Thank you, witnesses.

I have to tell you that many of the producers in Ontario are very optimistic about agriculture. I think it's actually one of the industries that has some the biggest opportunities in Canada, recognizing that in some of the programs we have some issues.

First, I would like to know what the agriculture budget was before 2006.

Second, I have specific issues when I talk about programs. On AgriInvest, some producers have been calling because they are not getting, are just getting, or haven't got their 2008 AgriInvest apps. Mostly these are corporations, but not 100% of them, and they can't get their 2009 until this is complete. It seems that if the form is not 100% right, it gets put into a non-compliant file. Rather than somebody picking up the phone and having it fixed, it drags out.

We also work with Agricorp in Ontario. Can you help me understand whether they have all of the hardware capacity needed to deal with the situation?

Next, can you tell me a little about where we are on traceability for pork and beef?

Finally, there is the importance of education. I'm so glad to see the uptake in terms of the youth employment program. But when we were meeting with young producers and looking at the future of farming, there was a key point with these producers. Some of them are the ones who--and I often sit down and talk to producer groups--never even talk about programs because they are focusing on the significant issues we want to deal with: research, sustainability of our industry, and how we are going to partner with them, because they believe in partnerships. That may be more of a comment, but on education, do you see that portfolio growing?

I'm sorry. That was about four questions, but I'll leave it at that.

[Rita Moritz]

Perhaps I can start and then have my colleagues jump in on some of these.

On the agriculture budget for 2006, we'd like to come back to the committee with that number. We don't have the details today.

On AgriInvest, it's true that we have had some growing pains in the implementation of this new program and, in some cases, in the exchange of information on this from provinces to the federal government. As you know, 2008 was the first year in which producers made deposits. Before that, we had the Kickstart program and the initial government-only deposits. To date, I'm told, the vast majority of 2008 deposit notices have gone out, with 2% still outstanding.

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

That is two years late.

[Rita Moritz]

We totally understand and we're moving as quickly as we can to put those out. In fact, in terms of timeliness, with all of the devolution that has happened in Winnipeg, we have brought back a number of employees on casual status to make sure we address those issues of timing. For sure, we're--

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

Is the system in place, though, so that in 2009 and 2010 we're actually going to be current?

[Rita Moritz]

One of the things that we did deal with this year was the implementation of a new system to do exactly that very thing and to automate more of the process. That was also implemented this spring. I entirely understand the concerns of the community. We're very aware of it and are doing our very best to get those out. In fact, on the 2009 ones, I think we'll do much better in terms of getting them out, and we'll rectify the 2008 ones.

On the Agricorp capacity in particular, not only are we working with Agricorp, but we're starting discussions with all of the provinces that deliver to see if there is an easier way for us to share technology and define data together in the same way, so that data sharing and information sharing happen more quickly and consistently. Then we'll be able to report, know what the service levels are across the provinces, and where the federal government delivers. We're working closely with Agricorp in discussions on what it would take and what we can leverage of investments that we've already made around technology, so that we don't make those investments 10 times over and that we share them across the country.

[Greg Meredith]

So maybe--

[The Chair, Conservative, Larry Miller]

Did you have something further on that?

[Greg Meredith]

Yes. There were a couple of other questions on youth and traceability.

On traceability, the pieces of the system that have to come into play are animal identification premises--identification and movement. The federal, provincial, and territorial ministers agreed, with the exception of one minister, that we should move to a mandatory system. They set priorities for cattle, hogs, poultry, and sheep.

We're actually very advanced in some areas towards a mandatory system; Quebec and Alberta have been very ahead of the game and have implemented mandatory traceability. We already have mandatory identification of sheep, cattle, and bison.

We do have to work on movement. In part, what needs to occur is that a regulatory and legislative framework needs to be put in place. Ministers asked for that and CFIA is working towards it, with the goal of having mandatory systems in place by 2011.

I think the two main institutions or governance mechanisms that are working towards full traceability systems include the traceability task team, made up of federal, provincial and territorial officials, and another body that works very closely with industry and is called the industry-government advisory committee, IGAC.

We think we're well on track with pork and will be able to implement full and mandatory traceability within the other sectors over the course of 2011, and hopefully before the end of 2011, as ministers requested.

[The Chair, Conservative, Larry Miller]

We'll now move to Mr. Storseth for the last round.

[Greg Meredith]

I'm sorry. I neglected to answer the youth question.

[The Chair, Conservative, Larry Miller]

I'm sorry. I thought you were done, Mr. Meredith.