Evidence of meeting #12 for Agriculture and Agri-Food in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was organic.
A recording is available from Parliament.
4:50 p.m.
General Manager, Organic Meadow Co-operative
The existing infrastructure is usually focused on something else, not on serving the local market.
4:50 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Ms. Van Rossum, one of the things I was curious about is that in certain areas of the country, the price of land is fairly inexpensive compared to the price of land, for example, in Quebec—and probably in Quebec it changes from region to region.
For the younger farmers who are growing and expanding, what barriers are they facing in Quebec in terms of access to capital that might be unique to an area of high population. Could you give me some insight on what's going on there?
4:50 p.m.
President, Fédération des groupes conseils agricoles du Québec
Do you mean on the plan de relève, that is, the younger ones taking over the farm?
4:50 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Yes, the younger farmers taking over their family operation and then expanding that operation.
What are the challenges they are facing? Again, it's different in a high-population area from in Saskatchewan, which has lower population and where the price of land is less. We're not competing, necessarily, with the city to build a house on that piece of property, whereas in Quebec you might have more of those pressures.
4:55 p.m.
President, Fédération des groupes conseils agricoles du Québec
I am going to answer in French, since it is easier for me.
The main challenge is investment, having the capital needed to start a business—Mathieu can add to my answer. When the time comes to transfer the business to other family members, parents usually give up a considerable part of its value so that the next generation can continue running it. The amount required to invest is a big obstacle. Business owners are in competition. For example, it is a serious challenge when a company wants to make investments, or rather, has extra cash, and starts competing with a young person who wants to go into business.
Mathieu might want to add something.
4:55 p.m.
Management Agronomist, Réseau d'expertise en gestion agricole, Fédération des groupes conseils agricoles du Québec
I would like to add that access to capital is tough and that the price of land is extremely high. In some cases, farmers' lands and businesses are their only pension. They sometimes get donations, but at other times, they have to sell the business. In the future, producers should put money aside for retirement and for an easier transfer. The price of land will not go down, and access to capital is not going to be easier in the future.
Does that answer your question?
4:55 p.m.
Conservative
Randy Hoback Conservative Prince Albert, SK
Exactly.
Depending on where you are in Canada, that issue is more relevant than others. There are parts of southern Ontario that would have the same issue. It's more valuable to put a greenhouse up, a house up, or a windmill up than it is to actually grow soybeans or something else.
When you look at your next set of programs, I'm not sure if there's a role for the federal or provincial government to actually claim that or not.
4:55 p.m.
NDP
The Vice-Chair NDP Malcolm Allen
I'm sure there might be, Mr. Hoback, but you're well over time.
Perhaps someone else will help with the question.
Mr. Rousseau.
4:55 p.m.
NDP
Jean Rousseau NDP Compton—Stanstead, QC
Thanks, Mr. Chair.
The first question is for Mr. Zettel.
You said that organic farming is much more complicated in Canada. Does this make your products less competitive compared to non-organic products? What can we do to reduce this gap on the market?
4:55 p.m.
General Manager, Organic Meadow Co-operative
The fact that it's more management and labour intensive to produce organic crops adds to the cost, and results in a differential at the retail level. I don't think it's up to the government to try to change that.
What the government could do would be to assist new producers who want to learn those methodologies to make them efficient—that would go back to my earlier suggestion of extension—and to assist in encouraging the infrastructure necessary to get the product from the farm to the consumer.
4:55 p.m.
NDP
Jean Rousseau NDP Compton—Stanstead, QC
Do you think we can be more competitive internationally, on the international market, with measures like that?
4:55 p.m.
General Manager, Organic Meadow Co-operative
Yes.
I believe we probably have great potential to be competitive in the organic food business internationally. As a matter of fact, there is a large trade in organic product going out of Canada already. Emerging markets in Asia, Europe, and the U.S. are very significant and present a very significant opportunity for the Canadian agricultural sector. The problem is that we don't really have enough producers now to meet that demand.
4:55 p.m.
NDP
Jean Rousseau NDP Compton—Stanstead, QC
I now have a question for the people from the Fédération des groupes conseils agricoles du Québec.
You said you have helped a number of producers to make their management practices healthier in order to be more competitive. Have you noticed any recurring problems that producers are dealing with? Are they lacking management skills? Is it an administrative burden? Is there a way to help producers in difficulty to have healthier management practices?
5 p.m.
President, Fédération des groupes conseils agricoles du Québec
I would say that all of that. As we mentioned, the adaptation strategy that is now in place, the multidisciplinary approach, would be a good solution. Our management consultants have told us that, once the assessment was done and should the cost of feed be too high, they would not be able to provide producers with a concrete solution and tell them specifically which expenses to cut down on. If we know that the cost of feed is too high, the multidisciplinary approach seems to be the best option to lower it. But at the moment, this approach is strictly used for businesses in difficulty. In order to have access to those services, there are very strict criteria to be met. Those services are accessible only when things are going very badly. In the long run, we would like this approach to be available to as many producers as possible.
5 p.m.
Management Agronomist, Réseau d'expertise en gestion agricole, Fédération des groupes conseils agricoles du Québec
Basically, you want us to list the recurring problems. We can easily name two: the price of feed and the price received for products.
A study was done on the price of feed. I don't have all the details, but I know that the price of feed is higher in Quebec. That's recurring. I am not just talking about dairy products. In all areas, we see that the price of feed, such as grains, is increasingly higher. That's a recurring problem for businesses. Given that feed is the biggest expense for businesses, this is one of the main concerns.
In terms of prices received, we are talking about marketing. Earlier we were talking about marketing on a smaller scale and the regulatory burden for abattoirs. That can be one of the solutions to help producers stand out on the market.
5 p.m.
NDP
Jean Rousseau NDP Compton—Stanstead, QC
I have a quick question for Mr. Seguin.
You talked about a changing global market. You have a few graphs showing that the agricultural market is growing but that Canada's share of exports keeps going down. What are the main reasons for this trend?
5 p.m.
Excutive Director, George Morris Centre
Unfortunately, it's the competition--Brazil, the United States, and other countries--doing as well or better in the marketplace. It's also partially the value of the dollar, as well as the ability to have enough supply in the marketplace at a time when we want it. For some commodities we're doing exceptionally well, and for a couple of others we're not doing as well. For some of the processed foods, sadly, we're not as aggressive as we have been in the past.
There are probably some corporate decisions about how companies are allocating resources, but we should be looking at our competitors as the primary reason we've slipped just a few notches down.
5 p.m.
NDP
5 p.m.
Conservative
Joe Preston Conservative Elgin—Middlesex—London, ON
Thank you very much, Chair.
It's great to be here today. We've learned some good things here today.
One of the pieces I've just heard from the federation is, I think you said, that 15% of farms have a business plan, and in your document you said that 20% have one. Either way, as a businessman myself, I certainly know that if my sector were down at that level I could be a lot more successful. If my competitors were planning that little, I'd be a lot better off. How do we fix that?
Mr. Seguin, you mentioned measurement, and I'll get to you with a second question on that if I have time.
Obviously, if we're not working from a business plan or even trying to follow one and actually measuring our results or failures against it, how do we get people there? How do we make that better?
I ask this because we can get out of the way if someone else is measuring and being successful.
5 p.m.
General Manager, Canadian Farm Business Management Council
I hope you don't mind if I answer.
I'm seeing a huge discrepancy in the definition of business management, and I think it is taken for granted. I think it's assumed that business management is the everyday practice, the common sense, and it's not taken as something that you need to work at and continue to work at. And whether it's 15% or 20%, the numbers are consistently low, for sure, and the Agricultural Management Institute just confirmed those numbers in Ontario as well.
I think it's in the messaging. I think we can simplify that messaging to make it more meaningful. If we're saying that you need this business plan, and it's going to take you five years to get to the end of it and then it's just a piece of paper, that's not the right message and it's not very sexy or appealing to the farmers. But if we say, “Do you have vision? Do you have goals? Do you want your family farm to be around for the next five or ten years?”, I think those are the messages we need to be communicating.
It really is the messaging and the communication that we need to work at.