Evidence of meeting #60 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 industry.
A recording is available from Parliament.
9:25 a.m.
NDP
Malcolm Allen NDP Welland, ON
Thank you, Chair, and thank you to you folks for being here.
Mr. Otto, clearly your preference is this commercial system that's now being established whereby buyer and seller will enter into an agreement of some sort, but you did say there are some challenges inside that arrangement, one of them being tracking grain and finding out when it left, who it came from, where it's going, and that sort of thing?
Who do you see needs to play a role in that, making sure that information becomes available to you as the seller so that you can try to find price discovery and know the stuff is moving?
9:25 a.m.
Director, Western Barley Growers Association
Certainly I think there's a role for the Canadian Grain Commission to track the shipments. They are involved in that industry already.
As I said, as far as the loading of ships goes, we have to find somebody to track where they're going and what they're loading as the ships come into harbour. Certainly if we have a number of ships sitting there, we have to find out why they're sitting there.
If we don't have efficient flow of grain, it can back up into the country, which can impact the industry. I would say there is a role for the Canadian Grain Commission in doing some of this tracking.
9:30 a.m.
NDP
Malcolm Allen NDP Welland, ON
The other side is about the inward inspection piece. You talked about it being a commercial arrangement and that you wanted it to be that way so that you as the seller and someone as the buyer can agree to have this arrangement, get it weighed, and get the quality checked by some one you'll decide on. Is your sense, in taking your position of that being the arrangement, if CGC were allowed to participate in that arrangement from the perspective that it is a commercial arrangement and they become another option so you can have SGS or you can talk to the Grain Commission and set up commercial arrangements, would you be in favour of that? Would you see that as another alternative company you could go to that would be in the marketplace for you to arrange that commercial arrangement?
9:30 a.m.
Director, Western Barley Growers Association
When I made my presentation, I didn't mean that the Canadian Grain Commission wouldn't be an alternative. If the buyer and seller agree to use the Grain Commission as their source of inspection to determine grade and the other parameters they want in the contracts being handled, that's fine, but the Western Barley Growers' position is that the Canadian Grain Commission should not be the only choice. Allow the marketplace to determine who is going to do the inspection.
9:30 a.m.
NDP
Malcolm Allen NDP Welland, ON
You did articulate it that way, Mr. Otto, and I appreciate that.
The reason I asked the question from your producer group's perspective is that CGC is actually saying that they're not looking to be that other option in the marketplace. In other words, they would take themselves out and not be an option for you to enter into a commercial agreement with.
I just wondered whether you'd like to see them as another option in a commercial arrangement. You wouldn't have to use them, obviously—you don't have to, under the new legislation—but obviously the fewer players there are in the market for you to enter into a commercial relationship with, the less competition there becomes. You end up perhaps with one, two, or three—or, if they merge, perhaps one, in which case there is no competition for you when you actually enter that commercial arrangement.
That's why I was wondering whether you were okay with their doing that piece, because it would become a voluntary piece, obviously. It would be a commercial arrangement. They would just simply become a seller of a service that you could purchase, if you chose to purchase from them or from whomever else.
9:30 a.m.
Director, Western Barley Growers Association
Certainly we have no problem with that concept.
9:30 a.m.
Director, Western Barley Growers Association
We'd consider that to be part of the commercial system.
9:30 a.m.
NDP
Malcolm Allen NDP Welland, ON
I appreciate it.
To my friends in P.E.I., you talked about soybeans, and I'm interested in that aspect. You're saying an Ontario company came down east to grow soybeans to sell to Japan. I'm always geographically challenged, but that seems a long way to go.
Can you help me understand what is unique about those soybeans that would open up a Japanese market?
9:30 a.m.
Chairman, Atlantic Grains Council
It was a really interested farmer from P.E.I. who went searching to Ontario, and he met up with a gentleman by the name of Dave Hendrick just outside your city there, Ottawa. At the same time, they were looking to expand.
Now those companies have come together, with PRO Seeds and another company, and they call it Sevita International. They have grown their acreage in P.E.I. from basically nothing five or six years ago to about 10,000 acres today, which is quite an acreage for the Maritimes.
We in the agricultural industry, as farm leaders, are always interested in the value-added aspect and looking for new markets, and the Japan one fitted really well. The downside is that because our growing conditions are different from Ontario's, we have some problems with growing the proper varieties. The Japanese market is much tougher to meet when you compare it with selling soybeans to the PEI Grain Elevators Corporation, in that they can't be dried at an excessive heat the way normal soybeans can. That's one of the challenges, as is the wet weather we quite often run into.
Therefore, we need research. Research is very important to the grain and oilseeds sector too, not only soybeans. We talked about wheat and about Dover Mills in Halifax. Because we quite often have wet summers, we have a problem with fusarium. That has been brought up to this committee before. It all comes back to research. We need new and better varieties, not only in the soybean industry but also in barley and wheat and whatnot.
I hope that answers your question.
December 4th, 2012 / 9:35 a.m.
Conservative
Blake Richards Conservative Wild Rose, AB
Thank you.
Most of my questions are for our Atlantic guests, but I'll start first with a question for Mr. Otto.
I wonder if you could tell us a little bit about some of the steps the barley industry has taken in recent years to develop and diversify both market access and value-adding for your products. I'd also ask if you could tell us a little bit about how you might view the federal government and our role in that, both in how things have gone over the last few years and what role you see for both government and industry in the future in developing and diversifying market access and value-added.
9:35 a.m.
Director, Western Barley Growers Association
On the role of the government as I see it, it's very important that we get these partnerships with our customers in the international marketplace. We're working on TPP and an agreement with Europe, and it's very important that we get trade agreements with these other countries because we are an exporting country and, especially in the part of the world I live in, we depend on export markets for a lot of what we produce.
The role of government is that we have to be out there. These trade agreements are very important to our industry.
9:35 a.m.
Conservative
Blake Richards Conservative Wild Rose, AB
Are you generally pretty happy with the work that we've been doing in trying to open up markets for your products?
9:35 a.m.
Director, Western Barley Growers Association
I'd like to speak a little bit about when you talk about building the barley industry.
Under the old monopoly system, the barley industry was not being represented very well. Just to reflect a little bit on it.... It will be very simplistic and very short.
The domestic price of barley was definitely influenced by the prices quoted by the Canadian Wheat Board, and certainly back inland in western Canada, we weren't getting a true signal of world barley prices. What we're seeing today with the elimination of that board is true international price signals coming back to the farm. We felt the feeding industry was always sheltered by a domestic price, as compared to what the true price was in the international marketplaces.
That's not to say that the international price was always higher than the domestic price, but certainly we did see at times that the international price was significantly higher and it was not reflected back inland. That's where our true competitive marketplace brings all prices together, and certainly that's what producers need: a transparent pricing system so that we can make better decisions on our farms.
9:35 a.m.
Conservative
Blake Richards Conservative Wild Rose, AB
Obviously I think value-adding is an important component in ensuring prosperity for agriculture going forward. Do you think that the open market we've created by eliminating the monopoly and allowing barley farmers freedom to market wherever you choose and however you choose is going to open up value-added opportunities?
9:40 a.m.
Director, Western Barley Growers Association
I'm certain it will open up value-added opportunities. I think we've missed a couple of opportunities in the malt industry in the last 10 years. We've watched two malt plants be built outside of western Canada when they were considering western Canada. There's a lot debate about why that happened, but we did lose those opportunities.
I see a number of key things happening in the barley industry today that present some opportunities. Number one is the health food claim by barley. Certainly there's an opportunity there; lowering cholesterol in the health-food-conscious society that we have today is certainly something we have to look at. Will it attract value-added opportunities? We have to wait and see. Certainly it's there.
I think the other opportunity we have is to grow our barley industry. We know that our barley production has been significantly impacted in the last few years with circumstances around the marketplace and how we're marketing barley. This year we've seen our barley acreage increase. The competition for acres out in western Canada, of course, is what your net return is in growing a crop, and barley faces some very stiff competition from other crops, so there are some challenges there.
However, as we move forward, we have a very positive atmosphere that I think will attract investment. Will it come in the form of value-added? I think that down the road, it will.
9:40 a.m.
Conservative
Blake Richards Conservative Wild Rose, AB
Oh, shoot. I had all kinds of questions for the Atlantic guys, Mr. Chair.
