Agriculture Committee on Nov. 28th, 2013

[Clyde Graham]

Thank you, madam.

Agro-100 is one of 46 different companies that operate in Canada at various levels in communities and on a national and international basis.

We don't know because it's going to be up to individual companies to try to take advantage of the opportunity of exploring the market in Europe. The thing you have to understand about a free trade agreement is that you don't know what's in a room until you open the door. With this opportunity, our companies will look at it. They will look at their product lines. They'll look at the markets. There'll be discussions.

The other thing we should be aware of is that the fertilizer industry in Canada also imports fertilizer, particularly in eastern Canada and Quebec. This will be opportunities for European companies to bring products into Canada that could benefit Canadian farmers.

Trade agreements, when they work well, are two-way agreements. Some of our members, such as Yara, which is based in Europe, are major players in the Canadian fertilizer market. They import a lot of product into Quebec and other parts of eastern Canada. We see that this is a two-way benefit for our members to be able to export and also for farmers to have access to different products from Europe.

[The Chair, Conservative, Bev Shipley]

Thank you, Madame Raynault.

We'll now move to Mr. Preston for five minutes, please.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Thank you very much, Chairman.

Thank you to the witnesses for coming today.

I have a quick question on the value-added piece you talked about with the meal. We've removed the oil, and there's meal left over. If we can use it as feed, it's another value proposition. What is currently fed canola meal?

[Jim Everson]

Dairy cows.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Dairy cows.

[Jim Everson]

Our major market is dairy cows. Our little catch line is that canola in a dairy meal ration will improve the milk production of a cow by one litre per day. We have a lot of scientific evidence to demonstrate that's the case. We have a very strong market in the United States for meal going to dairy farms.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Is there any market in Europe for the meal?

[Jim Everson]

Yes.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Is it for the same industry?

[Jim Everson]

In any market to which we ship seed that is then crushed for oil, the meal is also used in the animal feed industry.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Is there no problem, from a GMO point of view, with the crushed meal and the meal being used for animals?

[Jim Everson]

Generally there is not. The European Union has labelling requirements for genetically modified products, but there are very significant amounts of GM meal going into Europe. It's a big market there.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

That's super.

I wanted to mention something else. In your speech today we heard about the health benefits of canola. Since I've joined the agriculture committee, I've found so many new ways to be healthy.

[An hon. member]

Don't eat the cookies.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Apparently don't eat the cookies.

[Voices]

Oh, oh!

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

You talked about the value proposition that canola offers in Canada right now with some 249,000 jobs. I thank you for the statement that you used today. We haven't yet started to convert what CETA is doing to Canada from a jobs point of view. There are a lot of benefits from an agricultural product point of view and an agricultural producer point of view. You actually have a value-added piece here in saying that there are 249,000 jobs in your industry. You expect that you can increase canola exports by up to $90 million. Turn that into jobs for me.

[Jim Everson]

I don't know that I can do the actual math and turn it into jobs, but anytime you have an agreement that creates a more predictable trade environment for your product, you create more confidence in the industry, and you have more investment coming from all sectors of the industry such as the seed developers and the producers who are out there buying tractors and products all the time to improve their agronomics. There is also the process issue of putting a huge amount of infrastructure into western Canada to create value-added products. These agreements create predictability and confidence that lead to investment and lead to jobs.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Yours is an agricultural product that needs more than just the seed market directly. Something else has to be done, whether it's crushing in order to get oil or the meal itself. There's the transportation piece too. You've stretched the market this year from a transportation point of view because of the size of the crop. For CETA, of course, most of your product will have to go through eastern Canada in order to get to Europe, but you already do ship a fair bit there.

How is the east coast from a transportation point of view? Is what you have this year meeting your stretch?

[Rick White]

From a canola perspective, there's not a lot going out from the east coast.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Okay. Will there be another way to go?

[Rick White]

I believe there's an opportunity to utilize the east better than we have, not only through the St. Lawrence Seaway but also possibly through Churchill as well. Those are a couple of possible opportunities to alleviate some of the west coast congestion that we have.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

We talked about how many acres of canola you currently grow and how the increase truly has been not in acreage but in yield. The other gentlemen are partially responsible for that too. That's truly how we're going to be able to meet the new outputs we'll need in order to satisfy the European market and the four or five other markets you mentioned: Korea, India, Japan, and China.

We've already seen such a significant growth. Could you expect that same type of yield growth over the same period of time?

[Rick White]

Well, it'll taper off, but if you look at the corn experience and the soybean experience, you can see where corn yields have gone over the last 20 years. They just seem to keep doubling.

Given the technology that's going into canola, you're going to see something maybe not on the same scale but similar as well. We have traits coming down the pipeline. Nitrogen-use efficiency is one of them. Drought tolerance, water efficiency, all these kinds of new traits in the research pipeline will provide a more robust seed that can produce more under even more severe and adverse conditions to keep our production numbers up. Again, we'll be producing more with less.

[The Chair, Conservative, Bev Shipley]

Thank you. Time is up, Mr. Preston.

I want to thank the witnesses for taking time to be with us today on this important subject. We will break for two or three minutes. We have a teleconference coming up, and it'll take a couple of minutes to set up.

Thank you very much.