moved that Bill C-300, An Act to amend the Canadian Wheat Board Act (direct sale of grain), be read the second time and referred to a committee.
Mr. Speaker, it is a pleasure to start off the week with a great private member's bill.
The genesis of the bill goes back a number of years. When I first started farming in the early 1970s and attended some of the Canadian Wheat Board meetings, and of course there were its allies in the NFU, a lot of the excuses and arguments they are using now were used then, such as the argument that we cannot have this type of thing, that it would weaken the core of the Canadian Wheat Board, and of course that it could not survive if it had any kind of competition, even from the producers that it purports to save.
Let us set the stage. Why this private member's bill and why now?
I guess what it comes down to is the strength and viability of rural Canada, especially in western Canada. We see the statistics. A third of all Canadians live in rural Canada. Twenty-five per cent of our jobs are anchored in rural Canada and that number is sliding. Some 22% of our gross domestic product and some 40% of our exports and trade are generated out of rural Canada, and we are a trading nation. At the same time, 75% of the farmers within the Canadian Wheat Board area must have an off farm job in order to support that nasty habit we call farming.
What the bill seeks to do is add to the options, so to speak, for Canadian primary producers in the Canadian Wheat Board area only, because that is who is feeling the hurt at this point. The bill seeks to add to the options those producers will have to add value to their own product.
At this particular time and place under the Canadian Wheat Board Act, any product in grains, durum or malt barley that is designated for the foodstuffs line has to go through what is called the buyback procedure. That sounds innocuous enough, but what it entails is not just a percentage by the Canadian Wheat Board, in order to administer the fact that it goes in and out of its books, but the freight and elevation charges. In many cases now, these charges are horrendous and add some $30 to $50 per tonne to the basic cost of a product that has not yet left the farmer's yard.
That takes the feedstocks and puts them out of sight as far as getting any kind of positive bottom line is concerned when we are talking about a risky venture, let us say, in the eyes of the financial institutions. Now let us add to that the fact that the board likes to collect the world price at any given time on that buyback as well and again the problem is exacerbated in making those feedstocks for producer processing completely out of line.
We have seen groups come and go. We saw a group of 650 farmers from southern Saskatchewan and Manitoba, and even into North Dakota, who were wanting to build and supply with their own product a durum facility, a pasta plant attached to the Weyburn Inland Terminal. That idea bubbled and percolated along for four or five years, but the group could never get a deal with the Canadian Wheat Board to do away with this buyback provision, which made their feedstocks drive the viability of that system into jeopardy. It never did happen.
We have to address those types of things. We are seeing the advent of the value added side of agriculture, the agrifood side, and it is doing very well. It has seen huge increases. It is controlling the vast majority of the exports and domestic use in this country now. Over the last 15 years there has been a paradigm shift. The primary producer, as a hewer of wood and drawer of water, has been left behind. That is where we are seeing all of the trade injury hurt, with the market costs, the input costs and of course all of these extra charges on their product taking the primary producers away from any segment of viability.
This bill seeks to rectify some of that. Certainly we have to address this in the near future.
We do have some naysayers with regard to this particular perspective. I had lunch a week ago with some of the Canadian Wheat Board officials. I was pleased to buy lunch for Ken Ritter, the chair of the board, Adrien Measner, the CEO and president, and Victor Jarjour, the Ottawa coordinator for the Canadian Wheat Board. We discussed this particular issue along with others that are very pertinent to primary producers at this time.
They are not against the premise of the bill. They are not against the idea. In fact, their own polling numbers, which they just got back, show that some 80% of respondents said that the board needs to move this way. That is 80%, with 67% in that same survey saying the board is not doing its job and 49% saying they just want out from under the board so they can do this. So we know this is percolating out there, and while a lot of folks say that producers must have the final say, I would say this polling number just did that.
We can go back and argue that when we campaigned on a dual market in the last election, a lot of us were elected on January 23. In fact, other than the former minister of the Wheat Board who was elected within that trading area and another member from northern Saskatchewan, there is no one in this House who speaks for farmers. Also, we all know about the problems the former minister of the Wheat Board had in ordering farmers arrested, and in having a complete revamp of the Canadian Wheat Board Act, that saw farmers jailed, shackled and strip-searched, all for running an auger over the international boundary.
That particular farmer in that case farms on both sides of that line. It is an arbitrary line on his farm. He augered a barley that the Wheat Board was not handling and would not sell for him because it was a niche market. The officials arrested this fellow. They impounded his trucks. They went further than that under the Customs Act. They impounded the trucks of a lot of farmers who took a bag of something across the line, donated it to a 4-H club or dumped it because it was wood shavings. No one ever checked what it was they were hauling, but the minister, in his exuberance, came down with a heavy hand. He changed some of the rules arbitrarily and retroactively so that he could go ahead and do that, all to save this wonderful government operation, because it is controlled by the Canadian Wheat Board Act.
That goes to the next group of naysayers. The only other real voice out there against this type of provision is the voice of the grassroots farmers, the National Farmers Union, which says it speaks for those grassroots farmers. I am just amazed at how the NFU could be against this. Those farmers are taking the side of the multinationals they hate because of the profit margins for their shareholders and they are saying that farmers would then partner with these terrible bastions of enterprise in this country and start to circumvent the board.
This bill does not really allow that, because the bill says that a majority of any processing facility has to be producer owned and Canadian based. So unless the Cargills of the world are going to sell a flour mill to farmers, which is not necessarily a bad thing, that could not happen.
The NFU members have some specious arguments. They made three or four points in a letter that they circulated, none of which have any validity. I think the flat earth society that is running the NFU had better look in the rear-view mirror because the free marketers are overtaking them. It is just not going to happen in the way they are talking about.
There are other people who speak against this type of thing but at the same time put forward a report. I am talking about the former parliamentary secretary from Malpeque. I know he is the House today. He is very interested in agricultural issues. Again, he is probably going to talk against this bill because of the Canadian Wheat Board and how he wants to see that solidified in the fortress that it is, but in his report he made several recommendations from the airport tour he did in 2005.
Let us talk about those four recommendations. I want to get them on the record so that when he stands and speaks against this, he will have to tell us why he is being a hypocrite. The first recommendation, which is a general one, states: “That all governments place a priority on measures that will enhance farmers' economic returns from the marketplace”. That is what this private member's bill seeks to do.
Another point is on consolidation and market power: “That governments work with farmers to support, develop and maintain collective marketing initiatives, particularly through assisting New Generation Cooperatives and other farmer-owned corporate structures”.
Those are great points. I tend to agree with them.
The third point is on international trade. The member for Malpeque talks about “recognizing the legitimacy of the right of primary producers to market their products how they want”. That goes a long way to supporting this particular private member's bill. I am happy to see this.
The last point is on innovative marketing and product development. He talks about “addressing issues that restrict the production, distribution and retailing of organic agricultural products”. This group of producers is one that has a terrible time out there right now. We have one member of this group on the board of advisers of the Canadian Wheat Board, a fellow named Rod Flaman from southern Saskatchewan, an organic producer who says the board does a tremendous job for him, but he is the only one who says that.
There are some 50 members of a co-op based in Maymont, which is just outside my riding, who have built themselves a little mill. They clean and process to international standards, but they are forced to do this buyback. They have identified the markets. They have developed a niche market and have developed the product to fit it, through innovation and tenacity more than anything, and they are being punished with an extra $50 or $60 per tonne, or whatever it is, added to their commodity for absolutely zero services rendered by the Wheat Board, or by anyone else, for that matter. They have done it themselves. Good for them. That speaks to the future viability of rural Canada. It speaks to innovativeness and the niche markets that are available to us.
There is another group called FarmPure. It talks about making some positive changes like this. It is a group of certified seed growers who have become involved in processing because they felt it was in their best interests. The group is based in Regina, Saskatchewan, which is the heartland and centre of the Wheat Board, but it will not build within the Wheat Board area. It is building facilities outside that area, even if it is a malt plant. It is very big into the beverage industry, with products such as non-alcoholic beers and beverages like that, using Canadian cereal grains and so forth for malt plants.
Jim Venn, who works for the group, made a presentation at committee the other day. Jim spent 15 years with Dominion Malting, one of the largest maltsters in this country. He is very well versed in buying, selling, and the operation of the board and how he can deal directly with producers.
In my own farming operation in my past life, there was a maltster about 40 to 45 miles just north of us in Biggar. It was Prairie Malt. Cargill is now the major shareholder. At that time, it was a private sector initiative. The Saskatchewan Wheat Pool was involved in it. Cargill has now bought out Saskatchewan Wheat Pool. It supplies malt to a lot of the smaller breweries, including some in Mexico and even in China. Saskatoon's Great Western Brewing Company and companies like that buy from Biggar maltsters.
I grew a lot of malt barley as a certified seed grower. When I wanted to sell that malt, I found my market in Biggar or in Alix, Alberta, or at Calgary Brewing and Malting or wherever it was, and I trucked it there. There is no railway between Rosetown and Biggar. It had to go through Thunder Bay at that time because of the Crow rate. When I trucked it up there with the B-train or my own trucks, I paid freight and elevation charges to tidewater at either Thunder Bay or Vancouver. Guess what? I had never used either system. I was out $40 to $50 a tonne already, plus I had the cost of trucking it myself to Biggar.
I used to sit and have coffee with the fellow who happened to run that plant at that time. He is a great guy. He is a good operator and is now in Alix, Alberta. He said the reality is that he can buy cheap barley through the board, but he would just as soon pay farmers $10 a bushel for it as opposed the $3 it was going for at that time. He was not allowed to do that.
Now there are some changes. The board has tinkered with it a bit and will allow some incentives. It speaks more to trucking so that we are not double paying, but not so much to the price of the commodity. If a buyer gets offside and tends to distort the buying power of the Wheat Board, it comes down on the buyer very hard.
A good friend of mine, a fellow named Bob Nunweiler, took over a portion of an abandoned armed forces base in Alsask, Saskatchewan. He actually farms at Rosetown and Eston. He grinds every bushel of wheat that he produces. He creates his own flour. He goes through the buyback, this arcane punitive system, because he has to do that. He buys it back from the board and runs it through his mills. He has created Grandma Nunweiler's pancake mix, bread mix and so on. He exports worldwide. He went out there and found the markets.
However, in the meantime he is harassed on an almost monthly basis by the board going through his books and checking his plant to make sure he is not slipping in a bushel from somebody else. That is ridiculous. Alsask needs every job it can get. Bob needs to be able to buy from other producers because his markets are growing. He can no longer supply them on a quantity basis because he cannot get enough grain and he is not allowed to buy it from anybody else. Those types of things have to change.
My time is flying by, but I am just scratching the surface. There is a lot of concern being pumped up by certain groups that my bill, which is very short and succinct, does not have a proper definition of the word “producer”. The word “producer” is very well defined in the Canadian Wheat Board Act and that is what we are seeking to do. If people think it is too broad, I note that it is the same definition used for the voters list, which a lot of us think is too broad. Let us change that. I am willing to make those changes at committee.
As well, what exactly do we mean by processing and percentage of ownership the producers must have? Let us talk about those things in committee and get on with this.
Tremendous numbers of folks are waiting for this type of thing to happen. Rural Canada, as I said, is on the cusp of change. We must have this. Our farm safety nets are nowhere near able to keep up with the hurt at the primary production level. Allowing producers to value add and to seek out all of the niche markets and the innovation they so badly need is all addressed in this particular private member's bill.
I will close with a quote from the Wheat Board itself, in its own production called Grain Matters: “The only way farmers could get more for their wheat and barley in a multiple-seller environment is if end users like millers and maltsters would pay more for grain”. If primary producers own those mills and malt houses, they will certainly pay more for the grain.
It has been raised again by the NFU, the Flat Earth Society, that somehow it could circumvent this by buying extra, producing it and sending it out. That would not be in the best interest of producers. The bill seeks to backstop producers. I look forward to its speedy passage and movement on to committee.