Agriculture Committee on Feb. 5th, 2013

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

Thank you, Mr. Robson.

Maybe I could enlighten you as to the reasons why so many agriculture producers support Conservatives. According to the farm financial reports, the total net income for farms rose $3.3 billion in 2011. The average net worth increased to $1.7 million in 2011. Capital investment increased by 23% since 2009, and farm cash receipts are up almost 12% over last year. I have to tell you, in my riding, which is predominantly, as Mr. Wells' riding was, non-organic farmers, the times have never been better. Guys are very optimistic. Now, we do have some problems when we talk about the amount of cashflow it takes to put your crop in every year, the amount of risk you have to take, but farmers in my area, even with the rising price of land, are still continuing to buy more and more of it, with more younger farmers getting involved because they see a future in farming.

So this is a very different story from what I heard pre-2006, and I think that could be the reason why Conservatives continue to get re-elected time after time.

Mr. Rosaasen, I'd like to ask you, you talked about research and development—

[Ian Robson]

Can I take a minute to comment?

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

Actually, I was commenting there, thank you.

[The Chair, Conservative, Merv Tweed]

We'll get back to you, Ian.

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

Could I ask you to comment on research and development dollars and how you see the future moving forward with that? Will the private companies put as much R and D money in as the Wheat Board did? I'm asking you to speculate, and if you don't feel comfortable, that's fine.

Secondly, we talked about organic farming and needing to do more with organic, yet I read a report recently that said the population of the world is going to come to nine billion people, so how do we move further towards organic and still feed the world?

I'll just ask you those questions to close out.

[Prof. Kenneth A. Rosaasen]

With respect to R and D, yes, it's important to spend money there. We talked about research into plant breeding and other kinds of things. If the government is saving money in terms of their risk management programs and the BRM reduction, if they're really interested in agriculture, much more should have been put back into public research, because some things just won't get done in the private sector.

In terms of—

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

You're talking kind of blue-sky stuff there, or...?

[Prof. Kenneth A. Rosaasen]

I'm not a plant breeder. I guess I would say that the rules you have around research and who's going to benefit might change the direction of what you look for. For example, if you're working for a chemical company and they say “Fight wild oats”, what do you want? You want to be able to spray it when it's this big to this big: you want a wider window. You want it mixable. You want it “rainfast” right away.

If you turned it over to a public researcher, they might look at a totally different direction—i.e., what could I do biologically to make it grow so that once you do that it's not hard to control? It's the dormancy that you have to break.

So the whole field of what you look for can change in public versus private research. In private research you must get dollars, because we expect a return on investment.

There are these big returns to public investment. All the research documentation about it, by Julian Alston and other people who study it, says that there are big benefits, yet governments choose to cut back.

In terms of organic, I haven't tried to take a look at it, but let's recognize places like China, where they do things quite intensively. For years they didn't even have any chemicals, and they managed to feed a lot of people in a relatively sustainable manner.

Does our farm rely on chemicals? Absolutely, because right now those are the recipes you use. Do other people, like Stewart Wells and others, learn how to get around it and produce effectively? Absolutely. I don't think it's an either/or situation.

I think you should recognize what consumers want. Some want organic products. Some want non-GMO products.

When I was talking with some of the people in the GM industry, I said, you know, if you look at history, it's always been the hog producer or the cattle producer with the poorest quality who never wanted the grading system so that their product was identified.

So with GM and not labelling, based on history, they're on the wrong side of history. They have the quality that consumers like least.

I think this issue will be coming back in the Canadian economy.

[The Chair, Conservative, Merv Tweed]

Thank you.

Ms. Raynault.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

Mr. Rosaasen, you spoke about a number of things, and there were many questions.

Among other things, you said that lands could be bought and have been bought by foreigners. Do you think that this could put our food security at risk in the long run?

[Prof. Kenneth A. Rosaasen]

That's a bit of a tough question.

You can read in some of the media about Chinese investors who go into Africa or Brazil, buy the land, and set up the entire infrastructure to move the product that's produced right out to the ports and back home to China.

Now, the amount being bought I don't think threatens it like that right now, but let's face it, some people would argue, “Hey, it's my land. I produce my product. There are no rules. I can do what I like.”

I'm not sure there's legislation currently that would say you can't do that in Canada.

[Francine Raynault, NDP, Joliette, QC]

So it risks becoming a long-term problem.

You also spoke about the high price of wheat following the elimination of the Canadian Wheat Board. Do you think this situation guarantees financial security for farmers?

[Prof. Kenneth A. Rosaasen]

No, I don't believe ending the Canadian Wheat Board guarantees the financial security for farmers. I think world markets will still go up and down in prices. Governments may still change policy. Even the ethanol mandate in the U.S. was up for debate. If they quit subsidizing or using ethanol, it would have an impact on world grain markets. So no, I don't think the change has added security to the farm sector.

Some of my colleagues actually looked at the books of the Wheat Board, and instead of using anecdotes about prices, they used analysis. They found that there were significant price premiums achieved by the Wheat Board over decades. This was Daryl Kraft, Hartley Furtan, and Ed Tyrchniewicz, heads of agricultural economics departments. One was the dean of the University of Alberta out in Edmonton. They looked at the books, they saw what they did, and they said what the gains were.

I take analysis over anecdotes.

[Francine Raynault, NDP, Joliette, QC]

Thank you.

Mr. Wells, do you think supply management should be discussed when trade agreements are signed, and why?

[Stewart Wells]

It's something that should be discussed internally. It's a domestic discussion for the people of Canada. In that sense, it's very relevant in terms of the domestic discussion about trade agreements.

If I could, I would just take a second to go back to your previous question about grain pricing. Some people have been saying that prices are higher now than they ever have been since the Wheat Board was killed a year ago, and that's just not correct. If we look back historically into the mid-seventies and in other years and we adjust those prices for inflation, they were much higher than they are now.

[The Chair, Conservative, Merv Tweed]

I'm sorry, Stewart.

Mr. Storseth, on a point of order.

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

Thank you, Mr. Chair.

I would like to clarify that the Canadian Wheat Board was not killed a year ago.

[The Chair, Conservative, Merv Tweed]

Thank you. It's not a point of order, but it's a good point.

Further questions?

Francine.

[Francine Raynault, NDP, Joliette, QC]

I have a question for all three witnesses.

What do you think about the actions this government is taking with respect to agriculture?

[Stewart Wells]

I think I started to address that in my opening remarks, but really what we're seeing right now in the grains industry is a move away from Canada as being a high-quality, reliable supporter of grains, especially wheat, to a low-cost production model. That low-cost production model has not served other Canadian farmers, like hog farmers, well. We're giving away the advantages we have built up over the past century, and we're really moving into a period where.... It's just not productive to be giving away the advantages that you've built up over the years. With these prices that we're getting right now, we're living off the equity of all the work that's been done by previous governments and previous farmers.

[The Chair, Conservative, Merv Tweed]

Mr. Lemieux.

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

Thank you, Mr. Chair.

I just want to follow up. As I was listening to Mr. Richards' questions and the responses being given by our witnesses regarding their organizational affiliations, it just brought to mind a concern I have when we as a committee invite people, or witnesses, in front of committee as individuals. I think Mr. Richards identified some interesting information, in that Mr. Wells is chair of the Friends of the Canadian Wheat Board and former president of the National Farmers Union. He's the immediate past president, although I understand there's not a formal position for that.

Mr. Robson is currently a director for the National Farmers Union. I understand they've presented their own opinions, but really these are top-level executive positions in agricultural organizations, and two out of three of our witnesses today held these, or hold these, top-level executive positions in the National Farmers Union. It's hard to understand how their personal view as farmers could be that much different from the National Farmers Union's views when they have both held such senior-level positions in the National Farmers Union.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

I have a point of order.

[The Chair, Conservative, Merv Tweed]

Mr. Atamanenko, on a point of order.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

We've had people from different organizations here. A lot of farmers belong to associations, whether it's the Wheat Growers or the Farmers Union. They're coming as individuals, just as we've had other farmers who happen to belong to the Western Canadian Wheat Growers Association. We listen to them. They're not mouthpieces for some organization. These people are speaking sincerely from their heart, as others have, and I think it's up to us just to listen to them as individuals. This is not a delegation from some kind of organization. It just happens today that there are two members of the National Farmers Union. Other days we've had members from other organizations, and we've listened to them politely and attentively, as we have today.