Agriculture Committee on Nov. 30th, 2010

[Randy Hoback, Conservative, Prince Albert, SK]

We had a similar situation in my riding two years ago. It wasn't a tornado; it was a plough wind. It did a tremendous amount of damage. It blew over poplars that were two feet across. It's amazing, the damage they can do. You can fix things, but there are always those things you can't fix that you have an emotional attachment to, that you can't get back.

I believe in that situation it was the same scenario. The province came out and told the communities what was going to happen. Basically, they got local groups to start cleaning up, because there was a lot of debris. The Mennonite group is really excellent for doing stuff like that.

But you're saying that in this situation, because of the government support you actually.... For a young farmer starting out, this would be the scariest thing he's ever seen. He's just taken out a loan, he's getting ready to pick his apples, and now they're all gone. But he's still there to live to fight another day, is he not?

[Brian Gilroy]

Yes. And one of the unique things about the tree insurance plan is that it's one of those plans that in Ontario—I think it's unique to Ontario. A new farmer isn't allowed to have tree insurance until they prove their record. He bought an existing orchard that had been there for 40 years, and those trees were going to live. His father, who'd been an apple grower for 30 years, was managing it, because his son works on the coast guard. So there's no good reason why he shouldn't have had access to tree insurance either.

[Randy Hoback, Conservative, Prince Albert, SK]

I guess the ownership structure, then, and how he purchased the farm would have a major impact there. If he had bought the shares of the farm and inherited that record by simply buying the shares, he would have been fine in that case, right?

[Brian Gilroy]

But it was his own farm that he bought. They kept it that way.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay. Thanks.

[The Chair, Conservative, Larry Miller]

Mr. Eyking, you have five minutes.

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

Thank you, Mr. Chair.

I thank the witnesses for coming today.

As a vegetable farmer, I know what it's like growing horticulture crops. My dad is in the beef business, and he bought a small herd in the early 1970s. He kept the slips. I think his average price for the cows and heifers when he bought them was around $800, and I think he's getting $700 for them now. I hear it when I come home. It bothers me a bit what the government side is saying about the farmers kind of being on welfare, that it's a social program.

[Randy Hoback, Conservative, Prince Albert, SK]

That's not what I'm saying.

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

In the EU and the United States, the farmers make a good living from the mailbox. The cheques come in the mailbox and they make a good living. Farmers are not sitting home wanting to make a living out of the mailbox. If the weather was right and the cost of production wasn't going up so high.... The share of the consumer dollar seems to be going down all the time. So these are various things that the farmer has no control over.

Since the spring, we've been hearing from a lot of farmers, and we hear the programs are not working. You guys alluded to that strongly here today. There's a lot of questioning about why it's not working. Now the numbers are out. I think overall in Canada agriculture programs total $8 billion, federally and provincially. For some reason, a lot of that money is not getting into farmers' hands. You guys mentioned the reasons why.

So let's look at how we could change the programs. You alluded to some. One of the things we have heard, for example, is that this Olympic average has got to go, because you have these various years in a row on the margins. So I'd like to hear some suggestions on that.

The other thing that bothers a lot of farmers is that the programs aren't uniform across this country. You might see immigrants, young farmers, going to one part of the country because they have better programs than others. So what can we do to change the programs? Should they be more uniform? Should we change the years? If you people were sitting down starting from scratch, and you knew you had $8 billion to go into agriculture across Canada, where should it be going and how should it be changed?

[Brian Gilroy]

That's a good question, and one that we've thought about quite a bit.

Before CAIS and AgriStability and the suite of programs, we had a program called NISA, the net income stabilization account. There were challenges with NISA. Growers, farmers, would have huge account balances and still be saying, “We can't access that money, but we're hurting here.” There were a lot of ad hoc payments taking place at the same time. To me, the simple fix was to adjust those triggers so that the money could be accessed when it was needed. The approval rating among farmers for net income stabilization was extremely high, and the cost of administration was extremely low. Something is needed, and that seemed to do a pretty good job.

Now before that, there was Tripartite, which was a price stabilization system that was extremely effective. It was one-third, one-third, one-third, producer-province-federal. The program was slow in paying because you had to get all your numbers in. It was two years lagging, but it allowed people to access the funds they needed to cover their cost of production, plus a reasonable profit.

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

NISA was good.

[Brian Gilroy]

Now it looks quite good.

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

And the banks liked it too.

[Ernie Mutch]

The NISA program was a good one. Probably farmers were to blame for why it was scratched, because a lot of producers used that money for retirement. If it had been set up so that it automatically had to be withdrawn on a down year, it might still be going.

When the BSE hit in 2003, the CAIS program was in place. I had a feedlot. Overnight, I lost $300,000 in inventory. It was gone. The CAIS administrator said, “You'll get it back over the timeframe of the program.” I never got anything back.

It has to be changed from your reference margins. In the beef industry, since BSE, we've lost that seven-year cycle. We used to have that before. You'd have your good years and your bad years. I made a living out of it for 30 years before that. But since then we've lost that cycle in the industry. I think that's part of the problem with our federal programs.

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

I don't want to cut you off.

Can Ms. Oliver say a few words there?

[The Chair, Conservative, Larry Miller]

If she's brief, because you're out of time.

[Linda Oliver]

I agree with these gentlemen. The biggest problem is that we have highs and lows in the cattle industry, but not year after year after year. That is the biggest problem: the negative margins are just sitting there.

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

If we expanded the years, would it be better?

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Lemieux, you have five minutes.

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

Thank you very much, Chair.

Thank you for being here.

I guess when we're talking about disaster relief programs, it's important to understand that it's the provinces that have to identify that a disaster has struck a particular area. It wouldn't be appropriate for the federal government to reach inside a province and say, “You have a disaster there”, and for the province to say, “No, we don't”. So I understand that there is frustration in terms of how you have to work with the provincial government first and then they have to approach us.

I've given great thought to this, and I have a hard time seeing it working any other way, because it just seems to be that it would be inappropriate for the federal government to be going up and down the different provinces, saying, “There's a disaster. How come you're not doing anything about it? There's another disaster over here.” It really does have to start with the provinces.

I think as well the idea is that the AgriRecovery addresses those extraordinary circumstances that arise. It's not meant to be a long-term solution or a long-term payment process; it's meant to address a discrete event. Something happened, and there's a payment that goes out based on it.

I think we saw that, for example, out west, with the flooding. That was a massive AgriRecovery payment, when one stops to think about it: $450 million, and it reaches over three provinces. So three provinces and the federal government were involved in it. It's one of the largest payments or payouts ever made in Canadian history, and it was done faster than ever before.

So I think there are some success stories, but I don't argue that everything's fine everywhere. I'm just pointing out that it's a system that does work, even though there are times when it doesn't seem to work well in certain circumstances.

I just wanted to follow up on the discussion about NISA versus AgriInvest, which to me is similar to NISA in that farmers themselves put away money. It's matched by the federal government, and the federal government in fact put in $600 million right up front to kick-start AgriInvest. Farmers have tremendous latitude in drawing from their AgriInvest accounts to support their first 15% in losses.

Perhaps, Ernie, you could comment on this: do you see AgriInvest as a valuable program? Are farmers making use of it? How do you see it being different from NISA?

[Ernie Mutch]

Yes, it's kind of like NISA, only you can't use all your.... It's not the total program, but it's still tied to your reference margin. Until we can get a program that's tied to your cost of production, I don't think it can work for producers. It has to be tied to your cost of production, any kind of a program that's going to work for producers.

The AgriFlex program, that was supposed to help with regional differences. If our region had more costs in something than other provinces, it was supposed to help in that circumstance. But it seems that any proposal we took as a region to the federal government, it always included some BRM programs, and they were non-allowable under the AgriFlex program.

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

If I could, I'll just follow up on that. As a parliamentary secretary, I've been around Canada, talking to the different leaders and different farm commodities, the different farm groups. Certainly one of the messages I receive is that farmers want a level playing field. They want to know that if you're a farmer in P.E.I., you're being treated the same as a farmer in Alberta, especially, for example, if it comes to beef. If it's pork, you want to know that in other provinces you're being treated the same way; there's not a regional advantage given to one part of the country that's not given to the other.

What's that?

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

It's called the Alberta advantage.

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

Yes, well, from a federal government perspective, it's very important that we level the playing field. But I often explain, too, that in terms of regional advantages or regional programs, because farmers also want unique circumstances to be taken into consideration, I do feel that should come from the provincial government, because that's where you get your regional flavouring, so to speak. Every province might be more responsive to a particular sector, but the federal government can't really do that because then we would be removing the level playing field.

I don't know if you have any comment on that approach. Do you see that the province has a role to play in terms of delivering regional-specific programs?

[Ernie Mutch]

Definitely, yes, but because I live in a have-not province, it's the dollars that they struggle with for agriculture. There are a lot of other provinces that are in the same state.

Yes, I know, definitely some of it falls back on the provincial government; there's no question about that.