Agriculture Committee on Oct. 7th, 2014

[Randy Hoback, Conservative, Prince Albert, SK]

It makes a big difference.

The last couple of weeks I was in Chile and I was talking to our trade officer in Chile. One thing I noticed is the increase of wheat sales into Chile. I know you travel a lot promoting farmers' goods around the world. What do you see in the market for wheat and the board grains in other areas? Are you seeing the increases like we forecasted?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

We saw farmers take up the challenge. This year was a little bit different from last year. The final results aren't completely in yet, but of course the yields are down and the acreage is down simply because of some flooded acres in Saskatchewan and Manitoba that were all in production last year. It will change from year to year because of the rotations that farmers use. You don't grow wheat on the same ground every year. You rotate in other crops, so we'll see those acreages change as the years come and go.

The underlying factor is that there's a growing demand for good top-quality milling products. There's a growing demand for barleys that simulate rice in other areas, in the Japan and Chinese markets. We're seeing those develop as we watch. Canola is a fairy-tale story in western Canada. A lot of that was developed because of the intransigence of the Wheat Board. A lot of canola acres went in. The problem was you start putting canola in and you end up with blackleg and problems down the road. You have to have those rotational crops with a return on them so that farmers will grow them.

Now that we're seeing wheat and barley and durum that you can market when you see fit, we're seeing them back in the rotation in a much more fulsome way, which is great. Now we need new varieties to take advantage of that nitrogen that sat so you don't drive the protein level up on malt barley and so on. There's a lot of work being done on fusarium, different things like that, that the industry is driving.

All of our research now is being driven by industry. They decide on the result they want and then the money is put together along with the province, academia, our own researchers at Agriculture Canada and so on. There's a myth out there that somehow we're spending less on research, we're not. We're actually doing it in a different way.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Hoback.

We'll go to Madame Raynault, for five minutes, please.

[Francine Raynault, NDP, Joliette, QC]

Thank you, Mr. Chair.

Minister, thank you for joining us today.

I would like to discuss the seed-saving privilege. Will farmers be allowed to resell their products—seeds—to organic farms, for instance? Will there be any issues with that?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Absolutely.

[Francine Raynault, NDP, Joliette, QC]

Okay, thank you.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

We just invested and made an announcement in Nova Scotia at Dalhousie, at their agricultural college, which is the hub I guess you would say of organics research in Canada. It was almost $9 million specifically to develop new varieties and new ways of fertilizing and so on in the organic sector to help that sector grow.

[Francine Raynault, NDP, Joliette, QC]

As you probably know, I was a farmer a few years ago. According to my understanding of Bill C-18, farmers will be able to save their own seeds, but they will have to pay for storage. Can you elaborate on that?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

No, there are no storage costs. Storage would be your own cost. What it speaks to is the farmer's right, in your case the ability to keep seed over to be used again the following year, or three years down the road. It really doesn't specify. You would sign a contractual agreement with the seed owner to either pay the intellectual property rights up front, as most farmers will probably do, but there's also the ability not to sign that contract, but to sign one that says you will pay the intellectual property on the seed that you sell. There will be a different value for that, but it's something you would work out with the seed grower.

[Francine Raynault, NDP, Joliette, QC]

Do you know what the cost of intellectual property is? Has an amount already been set?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

It is right now. I would say the IP costs paid up front would be very similar to what producers are agreeing to pay now on new varieties of canola, soybean, and corn. There aren't any new IP varieties of wheat just yet; they're coming. But we'll have to see how that all plays out.

At the end of the day, the IP costs on grain sold and as you produce it so that you can maintain some for your own seed are numbers that will have to be worked out.

[Francine Raynault, NDP, Joliette, QC]

Subclause 114(2) of Bill C-18 increases the maximum penalties provided for in the Agriculture and Agri-Food Administrative Monetary Penalties Act. Why increase that maximum amount? Moreover, why increase the maximum amount in this piece of legislation instead of doing it in the regulations, which are easier to amend?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

These are an umbrella of different charges that could be laid. Certainly you could add to them with regulation if you so desired, but this underscores the importance of proper animal husbandry in Canada moving forward.

[Francine Raynault, NDP, Joliette, QC]

How dit the UPOV 1991 ratification go in other countries? What happened in the case of producers and researchers? Some people are saying that the convention's ratification did not go well in a number of countries because farmers were strongly opposed to it and the convention had a bad reputation.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I would disagree with that statement. I don't know of any instance, based on science or based on practical fact, where it hasn't worked well. What it does is it stimulates investment in the seed side from the major players growing seed as well as from some private sector folks within that country.

Canada is one of very few that has not put UPOV 91 into play. There are a couple of others that have ratified it but haven't actually made it workable. Norway is one. That being said, we're the only major grain-producing and horticulture-producing country that has not ratified UPOV 91.

[Francine Raynault, NDP, Joliette, QC]

One of the industry concerns has to do with farmer's privilege. Of course, some farmers are afraid that Bill C-18 will impose limitations on their activities.

You have visited places all over Canada. Can you comment on the concerns expressed by farmers?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

We are really hearing that from only one farm group. All the rest understand what IP costs are and why they have them. There's only one farm group that is concerned about this and is making up myth information.

At the end of the day, UPOV 91 is light years ahead of the regime we are under now, UPOV 78, in that it allows a farmer to save seed. There's no provision under the regime we have now for that to happen. UPOV 91 makes that system available to farmers. This concept that you would pay a fee every time you touched the grain is absolutely ridiculous in the extreme. There's no such thing contemplated at all.

[The Chair, Conservative, Bev Shipley]

Thank you, Minister, and thank you Madame Raynault.

Now I'll go to Mr. Zimmer, for five minutes, please.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Thank you, Minister, for coming today. I also want to thank you.... I don't know if we've seen you in committee since you came up to Dawson Creek and talked to the farmers in the B.C. Peace and the Alberta Peace regions. They sure appreciated your being there and your frank words about the situations, and that you're concerned about them. I think that's what they noticed in the meeting.

As you know, our government brought in marketing freedom for western Canadian farmers. It was a few years back. It has been a proud moment ever since. That was something we can backstop against.

Where are we now and in the future in terms of economic development for farmers? What are we doing now? That's still ongoing. We had record crops last year, and they were struggling to make them to market, but that's a good problem, I would suggest.

What are we doing in terms of tangible economic benefits for western Canadian farmers specifically?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I think the biggest thing is that farmers are, in some cases, incorporated, but they all pay tax. Overall, we've lowered the tax rates on businesses. We have the red tape review. Of course, farmers are always complaining about red tape, and I was the same. You get done summer fallowing at 10 o'clock at night. You come in, and the last thing you want to do is start filling out paperwork. We've addressed a lot of that through the regulatory side of Agriculture Canada and CFIA. We continue to do that with some major changes in this bill.

Farmers have gone electronic. We're doing a lot of that work too on the mapping, so that when they decide what trace elements they want to put in they actually have access to a satellite to store that and then download it into their sprayers and applicators. There's a tremendous amount of that work being done.

As a government, we continue to build logistics, increasing highways, port facilities, and all those types of things to make sure that farmers have the ability to get those crops out when they're harvested. It never really stops. This concept that old MacDonald's farm is where we should be is ridiculous in the sublime. Farmers are big business now.

I go on a farm now...my nephew is doing all the farming and of course with my job I can't even discuss farming with him, but I drive by and I know what he's growing. I look at the equipment he's running. Boy, I'll tell you; it's like the flight deck on the starship Enterprise when you climb in some of these combines and sprayers. I wouldn't know where to start. I'd have fun learning how. I'd want to get out in the middle of a 200-acre field, if I didn't hurt anything. It's amazing the technology that is being used now on the farm.

This whole concept of mapping, we're growing.... When I was actively farming a number of years ago, a good crop of canola was 30 to 35 bushels. Now the norm is 50 to 55 and it's the same ground, but it's all the micronutrients. My nephew talks about a pinch of copper and a dash of sulphur and a little bit of this and that. He's not putting on the tonnage to begin with that we used to do to kick-start that crop. Now it's all about the top dressing with these micronutrients.

It's a tremendous opportunity to showcase what we're doing for the environment. What farmers are doing is unbelievable here in Canada. We're producing almost double what we did 20 years ago, and there's a hungry world out there.

I was just in meetings in China and India. They have large populations. I've been in four cities in China so far that have the population of Canada in one city. They're hungry for Canadian product. They recognize how safe it is, the quality and consistency of supply. There are tremendous trade corridors to be built there, and into India. Then there are other primary buyers, such as Japan and Korea. and so on. We now have a free trade agreement with Korea. We're still working with Japan on a bilateral, as well as through the TPP structure. We continue to develop those trade corridors which of course will affect a farmer's bottom line in a very positive way as well.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Right. Thank you for that, Minister.

I see the new young farmers. They're ready and willing to get their products to market and to sell in this open market.

Kind of stepping on what my colleague, Mr. Hoback, said, could you give us an update on the status of the grain shipment concerns? We spoke and you said good things are happening there. The grain is getting to market; the ships are leaving port. Could you quickly give us an update? I think we have a fair amount of time.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Well, it's not a perfect world, but at the end of the day we're a lot better off than we were before. There's still lots of work to be done. Transport Canada is the mainstay in that. We continue to be updated as to the performance of the railways. Those are documents we look at all the time.

I know Western Grain Elevator Association has, for the most part, been happy with what has been moving. Is there more to be done? Absolutely, there always will be. It's a moving target. Every year is going to be different. I think what it showed us last year was that's the new norm we're going to shoot for and there has to be a logistics system there to handle that volume of product on a year-to-year basis.

The carry-out dropped almost 10 million tonnes from what it was projected to be. That's good. That means cash in farmers' pockets, and of course, the shippers.... Right now, the last I saw from Mark Hemmes at Quorum, elevators are sitting at about 65% capacity, terminals at about 20% to 30%. There's still room to move that grain out to the coast. There are 20 boats sitting there. The demand is still there. This year's crop is starting to move; last year's crop is still there. Last year's crop was not touched by frost. The protein levels and gluten levels are good. Anybody carrying grain in their bin is seeing this value this year that they didn't get last year.

There's always work to be done. Are the railways tough? Absolutely, and they continue to be. Will we eventually wear them down and show them that good business means they're part of a value chain? Absolutely. We're not going to stop until that happens.

[The Chair, Conservative, Bev Shipley]

Thank you, Minister.

I have about two minutes, so that everyone has an opportunity to ask you a question.

Go ahead, Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Minister, you talked about a lot of the farmers and the innovation and stuff going on. An interesting thing and it looks like it's going to happen in my riding is the CCUVS, the unmanned vehicles—

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Drones, yes.