International Trade committee  We can already see what is happening in the dairy industry. We are losing $2 million a month on the milk protein concentrates, and these loses a constantly growing. We are working on a solution to the problem. I think it can be done within the industry as a whole. With respect to eggs, I will only say that the exchange rate will certainly have an effect on producers' income.

International Trade committee  Maybe I'll answer in a short version, and maybe Yves will want to add to this. From a dairy perspective and even on eggs right now, what we're saying is to start talking to us. Let's put a policy in place on special safeguards, because we don't have a clue. They defend it at WTO.

International Trade committee  I think that's a very good question. The more you do trading across nations—I mean, in a balanced way—probably the better off countries are overall. Our point, Mr. Menzies, is that we all relate it back to farm income. Trade is one thing; farm income is another thing. Right now, farm income is balanced through payments—call them export subsidies and so on.

International Trade committee  Each country's demand should be respected. That is why we are not making very much headway with the WTO. Everyone has sensitive commodities, not only Canada. We are not talking about supply management, but about these perishable commodities. Thank you.

International Trade committee  I think that is a fundamental question. During the Second World War, we came to realize the importance of food production during war time. Europe could no longer feed itself: everything had been destroyed. One of the greatest concerns was how to feed the troops, how to provide food when Europe was being bombed, particularly during the last two or three years of the war.

International Trade committee  Yes, there is a fair amount of effort done by some farm groups in Canada. For instance, the UPA in Quebec and the UPA DI, which is the development arm, are working very closely with all the French-speaking countries in Africa and with a very high level of government. They're looking at how to adapt supply management in the food development policy to regain some of the losses and create a domestic economy that makes it worthwhile.

International Trade committee  Yes. I think it's also a choice the Canadian government can make. But for the UPA DI project that is going on in Africa, I think some CIDA dollars are channelled through that. There is some help and some support from CIDA to do it.

International Trade committee  Thank you very much, Mr. Chairman. I have a presentation that will be made partly in English and partly in French. First, I'd like to start by giving a bit of background on the organization. We represent all dairy farmers in Canada from a little over 15,000 farms. We market under a supply management system that has worked fairly well for us in all aspects.

International Trade committee  I think that it is a very political issue. The negotiator's comments, which he made one week after the election, and which dealt with the motion adopted by the House of Commons, and what he said in January, were different because of the political situation. The motion lays out very specific parameters which are to be used to reach an agreement.

International Trade committee  I will give you a very simple answer, Mr. LeBlanc. There has to be stability throughout the entire chain, so that a producer can produce his production and generate enough income, so that the processor has a guaranteed supply of milk, and so that retail stores and consumers pay a reasonable price in comparison with American dairy products, for instance.

International Trade committee  I think Mr. Menzies' question is more one of perception of where we are than how people are actually viewing us. If we go to Geneva, I think the negotiators who are there are still viewed as very credible people and have influenced this negotiation a lot. I don't think that's going to go away overnight.

International Trade committee  I can answer first and can tell you what we are willing to give and what we have already lost in the dairy sector. I've already told you what we have lost. For instance, as I mentioned a little earlier, we are willing to reduce the applicable tariff rate within the quota limit to zero for all countries.

International Trade committee  Yes, it would also apply to sensitive products. I'm talking about the applicable tariff rate within the limit of the quota, but not regarding the off-quota tariff rates. In other countries, the rate is fairly high, but they are not bringing it down and they are not even talking about it right now.

International Trade committee  As far as the dairy issue is concerned, there are quite a lot of internal issues. There are import issues also, but I think you were referring to the internal issues. There has been a lot of dialogue with the Minister of Agriculture, Minister Strahl, and there's been a lot of dialogue between the processing and the producer sides of the industry in the last two months.

International Trade committee  We could provide you with very precise information on that, but when you talk about ice cream it's one issue, and imported milk protein concentrate is more cheese-related, so the two are not together. Imports on ice cream are more the butter oil-sugar blend that they import in bypassing the tariff line and replacing butter or cream, which really affects the revenue of producers.