House of Commons Hansard #4 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was producers.

Topics

AgricultureGovernment Orders

8:30 p.m.

Parry Sound—Muskoka Ontario

Liberal

Andy Mitchell LiberalMinister of Agriculture and Agri-Food

Mr. Chair, I spent a good amount of time in Algoma and northern Ontario and I appreciate the challenges the producers face in that part of Ontario. I am as committed to them as I am to producers everywhere in Canada to working with them to deal with the issues.

I do not know if I fully agree with everything the hon. member said, and that probably comes as no surprise. I know that his determination and commitment is certainly genuine.

I believe there has been a lot of work done to date. Has it solved all of the problems and dealt with all of the issues? No, but there have been close to $2 billion committed specifically to BSE and much of it has been delivered.

We are dealing with issues in this package in terms of trying to build increased slaughter capacity and trying to ensure that we have a wider range of an international market, not simply that of the United States. We are working to restore that market as well. We are trying to bring some rationality to the marketplace so producers can make some business decisions based on some certainty. As I said the beginning of the debate, we trying to ensure, beyond all else, that our producers can operate profitably so they can continue to do historically what they have always done in the country, which is to contribute to a secure, safe food supply for all Canadians. All of us, no matter where we live, owe a great debt to our producers.

As I mentioned to the hon. critic from the Bloc, there are specific issues in respect of cull cows in the dairy industry. I have said that I met with a number of individuals, including the hon. member, to talk about this issue. There are component parts and additional issues that we need to deal with specifically in that respect. I have made a commitment to deal with producers, members in the House, the industry and the provinces to address those issues.

The member and the entire House has my commitment in that respect. We will work on that.

AgricultureGovernment Orders

8:35 p.m.

NDP

Charlie Angus NDP Timmins—James Bay, ON

Mr. Chair, I want to clarify. Because of our commitment, would we get a floor price for cull cows?

AgricultureGovernment Orders

8:35 p.m.

Liberal

Andy Mitchell Liberal Parry Sound—Muskoka, ON

Mr. Chair, realizing a floor price is one of the options that has been put forward, the issue, if I understand it correctly from talking to producers, is to try to see a price recovery for those cull cows. One of the suggestions on how to do it is to directly intervene in the marketplace and establish a floor price. There are advantages to doing that and there are some disadvantages to doing that.

Another way to ensure that is achieved is to ensure that the capacity to process the animals is roughly equal to the amount of animals coming onto the market and to produce that in an environment that is competitive so there is some bidding from which a producer can choose.

There is more than one particular approach, but my commitment is to examine the different approaches, to deal with the industry and the producers and to come to a collective decision as to the best way to proceed.

AgricultureGovernment Orders

8:35 p.m.

Bloc

Louise Thibault Bloc Rimouski—Témiscouata, QC

Thank you Mr. Chair. I congratulate my colleague on his speech. I think is the third time I have heard the minister use the expression “I appreciate the challenges the family is meeting”, and I imagine he is referring to the challenges it faces along with many others,. I would like to know whether my colleague would agree with me that the minister, who was telling us just now that some of us were going to engage in rhetoric, should be reminded that these people are experiencing a drama and might perhaps appreciate his telling us what concrete actions he plans to take to truly help this regional segment of our economy, our farmers, who are immersed in this drama.

AgricultureGovernment Orders

8:35 p.m.

NDP

Charlie Angus NDP Timmins—James Bay, ON

Mr. Chair, this is a terrible drama that farm families are living. In fact this afternoon we received an e-mail from a woman who told us that her father is considering shooting the family cows because he cannot wait any longer. I might sound dramatic, but we have newspaper articles of the rise in suicide rates across western Canada. Our farmers are going down one by one.

I appreciate the minister's sincerity on this issue. My concern is that what we are talking about is a year too late. We are talking about ramping up capacity. The big packers are ramping up to 1,000 a day because they can. Our small regional capacity will not be in place in time and we know that.

We know that a loan loss guarantee, as the other hon. member said, will not put cement in the ground. When our members came and spoke in the summer, that is why they said that we needed the plan in place before the beginning of the fall auction season. That has not happened, and we do not know when that plan will be in place.

Therefore, rational business decisions are being made by farmers and, unfortunately, the rational business decision for many farmers is to give up because they cannot go on any longer.

AgricultureGovernment Orders

8:40 p.m.

NDP

Tony Martin NDP Sault Ste. Marie, ON

Mr. Chair, I want to thank the member for Timmins--James Bay, our critic for agriculture, for giving me some time tonight. I also want to thank the constituents of Sault Ste. Marie and area for their confidence in me so that I could be here tonight standing in my place to speak up on behalf of the farmers of Algoma and all farmers across Canada and tell the government it has to stop playing games with the lives and livelihoods of some of our best people. Either there is money or there is not. This is a cynical, dangerous game the government is playing.

As I understand the program, the money being made available is a charge against the CAIS program. For those who do not know about the CAIS program, it does not work. I am also led to believe that the remaining money in is included in this package as well. The minister needs to be clear about what money is really available, how much, how much is new money and how someone can apply. None of this has been done. Farmers are making life-altering decisions without proper and adequate information. Let me explain.

If the CAIS program is used to flow the money, nobody knows if they will qualify because of the formula which looks at a farmer's last five years of financial information, and drops the highest and lowest. The industry has been so volatile it is just plain difficult for anybody to know.

Many farmers in Algoma who were expecting to qualify for CAIS this year have not. As a matter of fact the family that is here tonight has told me that they know of 20 to 25 farmers in the Algoma area who have received letters of denial for CAIS for this year. Cheques that are desperately needed for the cash flow for the families to get through the winter and keep the banks at bay will not be there. My hunch is they are not qualifying because they received BSE money last year and it is affecting their formula.

That is precisely what they are afraid of with this new program. It is going to drive farmers further into debt and disqualify them from applying in subsequent years. The minister needs to come clean on this. This is no way to treat the people who produce our food.

Let us look at TISP as an example of the kind of game that is being played here. When TISP was first announced, it was to be $150 per animal. Then it was decided it would be $80 per animal. When the money finally flowed, it was $56 per animal. How can anyone plan anything with that kind of fluctuation and reduction? It left approximately $30 million in that envelope which the farmers who applied and qualified could have used. That money should have been transferred without complication once it was determined there was money left. Now we are told it has been folded into this new money.

We are also told there is really no new money in the package to increase capacity to slaughter and to process. It is loans and loan guarantees. As my colleague from Timmins--James Bay said, this will not create one new plant. It will enrich the already existing operators and continue to bankrupt small farmers.

I say to the government, get real. Get out there and talk to some farmers. Talk to the gentleman here in the gallery tonight who drove nine hours to be here for this debate because it is so important to him and his neighbours. He left his farm and work and drove here to say by his presence that he and his neighbours are in trouble and they need the government's help.

The minister needs to make new, real money available and get it to the farmers now with no strings attached. The minister needs to put new, real money into support for new processing capacity across the country so at the very least we can bring some competition and some real market discipline to the industry. Otherwise we should get ready for bankruptcies, fewer farmers, and even greater reliance on the U.S. based food processing and distribution systems.

AgricultureGovernment Orders

8:45 p.m.

Parry Sound—Muskoka Ontario

Liberal

Andy Mitchell LiberalMinister of Agriculture and Agri-Food

Mr. Chair, I congratulate the hon. member for his first intervention in the House. I know that he was in another house in a previous life. Let me try to clarify some things because I believe there is some confusion in his understanding of the factual information.

First of all, let me say clearly that I have met with producers across Canada. Very recently I met with producers in northern Ontario to discuss the specific issues that face agriculture in northern Ontario. I was very appreciative that my colleague from Nipissing arranged that and I thank him.

In respect to the program that was announced on September 10, there are 488 million new dollars. It has absolutely nothing to do with CAIS. It is 488 million new dollars. Of that money there are dollars that are going into increasing slaughter capacity. There is money that is going into set aside programs to try to bring the marketplace into balance very quickly, that is both on the fed and on the feeder side. And then finally there is new investment in trying to develop markets beyond simply the United States and to allow our producers to diversify when they are selling abroad. That is 488 million new dollars.

Beyond that, the member mentioned TISP. The TISP is not being rolled into this money. That was a separate announcement that had been made previously. All of that money will be flowed. There is a reference to TISP in the press release that was announced, but simply to say that the last of the TISP money was to be advanced by the end of this month or the first week of November, a commitment to fulfill the total payout in that.

In respect of what was said in the CAIS program is beyond everything else that was in the program. Recognizing that there were challenges in terms of producers waiting until the year after they experienced the loss, which is the way CAIS works, one reconciles the books for one year and then the payment comes the next year, realizing the necessity and the urgency of putting cash into these producers' hands, a special component of CAIS was designed to make straightforward cash advances to them very quickly. That is not the $488 million we talked about. That is new investment to do those things that I talked about. On top of that, we dealt with ensuring the last of the TISP money was brought forward and that we made sure that we could advance more quickly at a time when producers needed the CAIS advances rather than in the following year.

AgricultureGovernment Orders

8:45 p.m.

NDP

Tony Martin NDP Sault Ste. Marie, ON

Mr. Chair, if the minister thinks I am confused, he ought to meet with the farmers in my riding. There were about 120 at a meeting a few weeks ago and there was lots of confusion about the way that money flows, or does not flow, from the federal ministry and from the provincial ministry. I am glad to hear the minister say tonight that there is in fact new money. I want him to know that we will hold him to that because we will be watching.

We have a significant number of farmers in our area who did not qualify for CAIS this year who thought they would. They played by the rules. They thought they understood how the formula worked. They applied thinking that they would get that money. They were counting on that money to get them through this winter and to hold the banks at bay, but it did not come. There is no cheque in the mail. There is no money. These folks have been through a couple of really tough years.

The minister has to get out and talk to some more farmers. I suggest that he is probably talking to some of the leadership and some of the organizations that represent farmers. They may not be giving him the full story. He needs to get down into the grassroots and talk to farmers, like the one that is here tonight. I suggest he take a few minutes tonight to talk with my constituent who drove nine hours to be here to listen to this debate and to perhaps contribute in some way if he could to clarify the situation by letting us know what is happening to him and his neighbours.

AgricultureGovernment Orders

8:45 p.m.

Conservative

Jeremy Harrison Conservative Churchill River, SK

Mr. Chair, this is my first intervention in this place. I would like to thank the people of Desnethé—Missinippi—Churchill River for sending me here. I hope I am able to live up to the trust they have shown in me.

My question is very short and straightforward. I would like to ask the hon. member how he can square his words of support for our agricultural producers with the lack of support shown for our agricultural producers by the NDP government in Saskatchewan which has repeatedly shown that it just does not care about rural Saskatchewan?

AgricultureGovernment Orders

8:50 p.m.

NDP

Tony Martin NDP Sault Ste. Marie, ON

Mr. Chair, I do not know if he is confused, but this is the federal Parliament here. We are talking about the response to this very tragic and not to be trifled with issue for farmers in my riding, and I am assuming his riding as well.

We are talking to the federal Minister of Agriculture and trying to explain to him why this program is not working and why it is that our farmers are still in stress out there.

AgricultureGovernment Orders

8:50 p.m.

Liberal

David Kilgour Liberal Edmonton—Beaumont, AB

Mr. Chair, first of all, congratulations on your appointment.

Mr. Chair, as many people have said here tonight, there has never been a more urgent time for all levels of government to start addressing the problems that we have heard about tonight and finding intelligent solutions to the continuing BSE crisis which is hurting tens of thousands of families across this country.

A good many producers are becoming more frustrated at not being consulted on how the crisis should be dealt with. The federal and provincial governments have worked with industry organizations, such as the Alberta Beef Producers and the Canadian Cattlemen's Association, but some producers say that those organizations do not represent them at this particular time on this particularly vital issue.

They complain that the various government initiatives to lessen the impact of BSE have disproportionately aided large meat packing concerns and ensured a consistent oversupply of cattle at low prices at the expense of producers and taxpayers. Cargill and Lakeside, for example, have been doubly compensated since they received $42 million after June 2003 while simultaneously benefiting from the oversupply of cattle caused by producers lacking access to the U.S. slaughter facilities.

Those who operate independently in the feedlot centre say the current situation is increasingly untenable, as colleagues know. Even with the funds that they have received from the CAIS program and other government initiatives, they are facing increasingly hostile lenders. One feedlot owner from Alberta expressed the following yesterday:

The real story of what farmers are feeling out here on the ground is not getting through to the people at the top, whether it's politicians or industry spokesmen. The banks are starting to put the death grip on some of us out here, especially the independent operators who feed exclusively their own cattle and do not custom feed for packers or Americans like ourselves. We need government to tell the banks to back off.

Without more assistance soon, some operators, as everyone in this House knows, will be forced to sell their operations to buyers from the U.S., who will benefit by picking off their farms at low prices and filling them with artificially cheap Canadian feeder animals.

Feedlot operators have also indicated to me that a 10% cap must be imposed on packer ownership of cattle. Without this the large packers are free to purchase feeders at currently depressed prices from thousands of cow calf operators, and then to contract them out to a select number of custom feedlots to be finished. At the same time that packer owned cattle are finishing, privately owned ones are doing so as well.

The large meat packers have no obligation to buy from private feedlot operators and can thus offer lower and lower prices to those who are anxious to get rid of their inventory, since the finished cattle in their possession are costing them money for maintenance and losing value as they become older and heavier.

The situation in regard to cull cows has been especially bad since they cannot be marketed domestically due to a lack of processing capacity. Nor can they be exported as live animals because they are more than 30 months of age. This has put many feedlot owners in a very severe predicament. They cannot sell these animals due to the lack of domestic slaughter capacity and yet they cannot afford to keep them as they are incurring maintenance costs on them, and banker's interest, with each passing day.

Although the new aid program announced in Calgary pledges money to support initiatives to increase domestic slaughter capacity, it has proven problematic for those attempting to secure financing to build plants to slaughter animals over 30 months of age. The current proposal is simply unworkable they say, because no financial institution will agree to accept a 60% liability for losses on loans which they deem to be high risk. This problem must be solved soon because if it is not, very little if any new slaughter capacity will come on line to absorb the glut, or the wall of beef as it has been put, and a lot of money will simply go to waste.

One key lesson we can all take from this crisis is that Canada needs to diversify our exports, as other members have mentioned. Canadians consume about 28% of our production. The rest must be exported. In the past the customer of choice of course has been overwhelmingly the United States. With the U.S. refusing to accept live animal exports, it becomes exceedingly urgent that Canada find other markets for beef. Australia, by the way, exports its beef to more than 100 countries.

Before foreign customers are willing to accept our beef, their consumers need to know--we know it but they need to be assured--that it is safe. Providing meat packers with the regulatory and financial support to allow them to implement private BSE testing systems as part of their operations would provide this assistance.

There have been arguments, as we all know, about how private testing is unnecessary and expensive, but the reality is that foreign consumers require assurances concerning the safety of our beef, which they are currently not getting. Japan and South Korea have already indicated that they will accept Canadian beef exports provided all animals are screened for BSE. I believe the added cost of setting up regulatory and support for private testing is a small price to pay in comparison to the almost complete lack of access that Canadian beef is faced with at present.

Through private testing, we have the opportunity to turn tragedy into triumph. Once Canadian meat packers begin testing privately for BSE, they will be able to boast that Canadian beef is not only the best in the world but it is also the safest. That in effect would be a huge competitive advantage for Canadian beef and it would help the industry to thrive.

Finally, reopening the U.S. border is not the panacea to the troubles of the beef industry that some seem to think, although we all want it open. Without a strategy for diversifying the customers of Canadian beef, history could end up repeating itself. We could once again be faced with a situation where one BSE-positive cow, as the Leader of the Opposition pointed out, would threaten to destroy our entire industry again.

Producers have recognized that getting the U.S. to allow Canadian beef will not ensure the long term stability of the beef industry. Let us support their efforts in finding a lasting solution rather than trying to impose one on them.

Allow me to end with this plea for help from a Ponoka region producer. She said:

This is an emergency call...Farmers are getting more disillusioned every day...we have a wealth of knowledge and know-how that needs to be passed down to the next generation that is going to feed the world, and yet there is no one to stand up and do the job...When we all go broke from trying, or die from broken hearts and broken spirits, all Canada will be losers.

AgricultureGovernment Orders

8:55 p.m.

Conservative

Kevin Sorenson Conservative Crowfoot, AB

Mr. Chair, I want to thank you for allowing us to have this debate this evening. It is the main issue in my riding, as I am sure you understand. Mine is a rural riding that is feeling the effects of the biggest crisis agriculture has faced for decades.

Tonight I want to thank the government, that is, the Alberta government, for stepping up to the plate first, for having a minister who understands the industry and understands the crisis in responding to the degree that she has, and it is not just the minister but in fact the entire government.

The Canadian Cattlemen's Association said in its report, “It is important to recognize that the elements of this plan”--its plan--“are interrelated and cannot be considered independent of each other”.

The program that this government has come up with is absolutely contingent on a number of things happening if it is going to be viewed as a success. First, if the border is to open, many producers, many individuals in the industry, view that as being a possible saviour, as allowing the industry to carry on. The second part, though, is that slaughter capacity must be increased. The extra supply of beef that needs to be processed if it is going to leave this country is an imperative.

This program has a number of different facets to it, but if slaughter capacity is not increased everything else falls apart.

Today I had a call from a constituent who is prepared to move ahead with a slaughter facility in Alberta, a facility that could cost $55 million. It has already secured between $20 million and $25 million. Now when the banks are approached, the banks say that because the federal government has stepped up with such small amounts, a $66 million loan loss reserve fund, much less than many lending institutions ever imagined, they are starting to back away. They say the risk is still too high.

So all the set-aside programs and all the other programs are being jeopardized if we cannot see more capacity resolved. There is nothing in this plan about tax incentives for those who would invest risk capital into start-up projects, either to increase existing plants or to begin new plants. There is nothing in the plan about long term tax incentives for those new plants to start.

Again, a loan loss reserve fund that gives a small degree of security or satisfaction to the lending institutions is perhaps part of it, but why did the government miss an opportunity to tell individuals that if they are putting up money it will make sure that there will be tax incentives that will help them in the long term. Why did the government miss on that?

AgricultureGovernment Orders

9 p.m.

Liberal

David Kilgour Liberal Edmonton—Beaumont, AB

Mr. Chair, I would point out to the member from Crowfoot the quote at the end of my talk was one from one of his constituents. He probably knows her.

AgricultureGovernment Orders

9 p.m.

Conservative

Kevin Sorenson Conservative Crowfoot, AB

Not in Ponoka.

AgricultureGovernment Orders

9 p.m.

Liberal

David Kilgour Liberal Edmonton—Beaumont, AB

In any event, I agree with the member's premise that we must have more capacity and this loan loss formula is not working. I had a call yesterday from somebody in southern Alberta who said basically what the member just said: the banks will not touch it. They have basically said they will not deal with it. They say to pull it back and replace with something that will work and then they will do it.

I do not know how many new plants the member thinks we can have in Alberta. I gather the proposal is for about 25. We cannot have 25 new plants. We must have proposals that will work whether the border is open or not. I gather from talking to people, as the member does, that there are three or four proposals that would be viable whether the border is open or not. I think he is probably referring to a proposal from a former member of Parliament, if I am not mistaken, who has done a lot of extremely good work on the matter.

AgricultureGovernment Orders

9 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

Mr. Chair, the member opposite sat on the same committee as I did in the heat of all of this BSE controversy. He is starting to talk as though testing is the answer, to say that there are countries just waiting to buy if we test these animals. I have had meetings with a lot of the ambassadors and the purchasers and so on from those countries. Unfortunately, none of them, not one of them, even Japan, is ready to sign on a purchase order if we test an animal.

My concern is that we can do it--and maybe that is part of the solution--but there is a cost of $30 a test for every animal or $200 a test if we take the expanded one. Increased freezer space is needed, as is an increase in CFIA inspection vets, who are poised to go on strike in a little while. We are already short-staffed with CFIA. They are overburdened now. Plus, we need lab space to do all the testing. How does the minister square all that when saying that testing is the answer when we physically do not have the infrastructure or the people to do it?

AgricultureGovernment Orders

9 p.m.

Liberal

David Kilgour Liberal Edmonton—Beaumont, AB

Mr. Chair, I understand that this month there is a test that hopefully is going to be approved by the EU, which will cost something like $10 or $20 an animal.

AgricultureGovernment Orders

9 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

They don't sell those--

AgricultureGovernment Orders

9 p.m.

Liberal

David Kilgour Liberal Edmonton—Beaumont, AB

No, the test will be developed and we could use it in Edmonton, Calgary, Crowfoot or anywhere else.

The point is that if we go to Japan, as I think the member would realize, they say, “If you will test your animals, we will let your beef in”. They may not sign a purchase order but they have indicated--

AgricultureGovernment Orders

9 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

No, they won't.

AgricultureGovernment Orders

9 p.m.

Liberal

David Kilgour Liberal Edmonton—Beaumont, AB

How can they deny our animals into Japan when they have the same rule for their own animals? They all have to be tested.

AgricultureGovernment Orders

9 p.m.

Conservative

Gerry Ritz Conservative Battlefords—Lloydminster, SK

Or they're backing out.

AgricultureGovernment Orders

9 p.m.

Liberal

David Kilgour Liberal Edmonton—Beaumont, AB

They have their rule at the moment. I am sure my colleagues have had people come to them and say, “If you'll test every animal, we'll let your animals into Japan for now”. How can they deny it?

I accept the member's point that they have not signed any purchase orders. That is a fair comment.

AgricultureGovernment Orders

9:05 p.m.

Conservative

Rob Merrifield Conservative Yellowhead, AB

Mr. Chair, I listened to my colleague's comments very intently. I am really a little bit confused because he talked about opening the border not necessarily being a solution. He talked about testing the animals as being a solution. He talked about the monopoly that has been identified within the province of Alberta and across the country with the packing plants' ownership of animals.

All of those points are interesting, but the member's government has come out with a program that is at least eight months late, probably a year late. It was done in consultation with the industry and hopefully with all the member's colleagues.

I am sitting here a little dumbfounded trying to discern exactly where the member is coming from with regard to the proposal that is on the table from the government as a solution for the BSE problem. Perhaps it is a flashback in the member's past. Maybe he is on the wrong side of the floor. I would like you to explain to us in the House exactly what you think of the proposal that is before the industry at this time.

AgricultureGovernment Orders

9:05 p.m.

The Chair

I am intervening to say that although we are in committee of the whole, maybe we should use third person and riding name references. It would perhaps be easier.