Agriculture Committee on Oct. 31st, 2006

[The Chair, Conservative, Gerry Ritz]

Mr. Carlson, do you have a final point on this?

[Herb Carlson]

Yes. I guess we need to have some economists debate each other. It would be interesting to hear what Kraft and the others had to say about their analysis as well. But that's beside the point.

The question you raised about price and Wheat Board versus.... It's a very difficult question to answer. The thing about the open market price is that it changes every day. I've been selling open market grain since 1975—that was the first time I grew canola. Now I grow a whole bunch of different things. You have to have a crop rotation; you don't just grow wheat.

Of course, that gives you the opportunity to experience the open market at work. And do you know what? In 1988 I topped the market for two loads of canola, but I haven't done it every time on every load since. Once in a while you manage to make all your decisions and it all comes together just right, but mostly it doesn't. You can take a price from the market and say, “Look at what we could have gotten on the open market.” Yes, but did you get that on the open market? That is the big question.

I'm sure Mr. Pike is a very experienced marketer, and he probably does a better job than I do. But there are a lot of farmers out there, and we have to run farms. The bottom line is that you don't have time. Even with computers and cellphones and all that stuff, you still get busy and you don't always....

Some of you are farmers. How dedicated are you to watching the market every day?

Certainly there will be times when the open market will give you a better deal, but you have to make the sale.

[The Chair, Conservative, Gerry Ritz]

Thank you, Mr. Carlson.

Mr. Atamanenko, you have five minutes, please.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

I'll try to be quick.

Thanks, gentlemen, for being here.

Mr. Smolick, I have a question in regard to your association, the Grain Growers of Canada. You have a number of organizations. Do you know roughly how many producer members there are and whether there are any corporate members?

[Jim Smolick]

I wouldn't have an actual count of producer members. We have eight associations across the country. I wouldn't give you an actual number, because it's a subjective number. There are a lot of people who belong to them.

And you were asking about corporate associations? At present, we have no corporate associations.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

I understand that some have recently dropped out of your organization, such as the Ontario wheat producers. Is that because of your position on the Wheat Board?

[Jim Smolick]

No, it was not because of our position on the Wheat Board.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

I'd like to move on.

Mr. Carlson, you're a farmer. We have had passionate pleas from farmers specifically to have marketing choice, saying we have to do this because it's a free country; we have to allow this.

Why are you, as a farmer, in support of a single desk? And do you feel that the majority of people support your position? What's the passionate plea to retain a single desk?

[Herb Carlson]

In the business world there are always rules you have to play by. Sometimes you enter into agreements and other structures that limit your freedom to do things because you feel there is a benefit on the other side. That's how I feel about the Wheat Board. It restricts our ability to market grain wherever we want, but I believe there is a net benefit to marketing through the Wheat Board, that they actually have some market power and they exercise it.

I also believe that farmers are capable of deciding for themselves whether or not this is an important value. There have been changes made, and I'm sure there will continue to be changes. But for the time being, I'm comfortable with the single desk. I think it gives me value.

There are a lot of crops out there, and I have a limited amount of time for marketing. That's a poor excuse to someone with more time. But if I can put my energy into the things I have to make all the decisions on, it gives me some feeling of comfort. I could hire a broker or a market consultant to help me with this, but I already have help from the Wheat Board.

[The Chair, Conservative, Gerry Ritz]

On a point of clarification, Mr. Atamanenko, all four gentlemen are hands-on farmers.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Pike, the U.S. International Trade Commission in its 2001 investigation into CWB pricing has taken note of the Canadian value-added industry successes. It states that the CWB has been extremely successful in promoting investment in Canadian milling capacity. This is a quote: “Clearly, the Board views the rapid growth in processing as an important policy triumph.” Mr. Easter touched on this with respect to wheat.

There seem to be successes in the barley and malt industry, where we seem to be doing better. Canada malts four times more barley per capita than the U.S., with tremendous growth in western Canada.

I'd like your comments on this. We hear the message that the board is impeding value-added, and yet I'm seeing information to the contrary. What is your take on this?

[Gary Pike]

The malt barley case is easily explained: we grow some of the best malting barley in the world, and the plants have come to the product. That's fairly evident from where they're located. We have lost a few plants to the U.S. in recent times—the last few malt plants have been built in Montana. We watched that happen in the past two years, and we have lost some capacity in that regard.

We've also watched Dakota growers on the pasta side try to access Canadian durum for their own use through the Wheat Board channels. We were unable to get that product moved into the appropriate channels. Whether you put it down to a political standoff or people differences, we're missing out on some niche markets like that in the value-added sector.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Dr. Loyns, I have something to ask you. Then, if we have time, perhaps I could get a comment from the other gentlemen.

You have a crystal ball and you gaze into the future. It's no secret that when we open up the marketplace and the small entrepreneur tries to compete with the large corporations, somebody is going to get hammered. Do you see a negative effect on the average family farm in Canada? Do you see the effect on the communities, the railway rates, the Port of Churchill? Have you thought about this? Do you think it's exaggerated? Do you think we'll pull through and that farmers will continue to produce? The global stage is directing our policy. What effect do you foresee on rural Canada?

Maybe if we have some time, I'll ask each person to respond.

[The Chair, Conservative, Gerry Ritz]

You're out of time.

Gentlemen, final points.

[Dr. Al Loyns]

Yes, I've thought about it. There are some traps, but there is much more opportunity for development, however you define family farms. I expect I'd define them a little bit different from you, as an economist. With the right kind of deregulation, we have many opportunities out there . As a farmer and an economist, I have long been promoting voluntary use of this organization or a new generation co-op. I think the results would be positive in most of the areas you named.

However we go about it, we need to pick up on Mr. Easter's report from last year and get some genuine competition into the system. I'd like to have that go on the record.

[The Chair, Conservative, Gerry Ritz]

Thank you, Mr. Atamanenko. We're out of time.

There has been a lot of discussion by some of the witnesses that somehow the ten elected directors are the panacea. They can look after farmers' interests, and so on.

Are they not still constrained by the Canadian Wheat Board Act? I find that very limiting. Just a final comment, gentlemen.

[Jim Smolick]

Yes, definitely they are. I think Dr. Loyns described it. They are bound to the Canadian Wheat Board. They are not bound to the farmer.

[The Chair, Conservative, Gerry Ritz]

Thank you.

Mr. Thibault had a point of order that he had notified me of before Mr. Breitkreuz.

Mr. Thibault.

[Robert Thibault, Liberal, West Nova, NS]

Thank you, Mr. Chair. I recognize we are out of time, but I am not asking for an answer from the panel at this point.

I want to thank them all for excellent presentations. However, I wonder if they could, if possible, answer one question in writing to the committee.

In their presentation, they pointed out the question of spot prices and futures prices, and we've even been talking about this “once in a decade” opportunity that is being missed.

I wonder about the impact on those prices of all this additional supply pressure. As Mr. Carlson mentioned, very few people hit the top. If we didn't have the system in place now, would those prices be down, and would that perceived advantage be reduced?

[The Chair, Conservative, Gerry Ritz]

Do you gentlemen understand Mr. Thibault's question? If you could give us a written response....

Mr. Breitkreuz, a point of order.

[Garry Breitkreuz, Conservative, Yorkton—Melville, SK]

I can't believe that mine are along the same lines. I have three questions I would like to lay on the table and then I would like a written response.

My first question is this. I have a choice as a farmer as to whether I deal with co-ops in my area or deal with private business. It hasn't destroyed the co-op. Why is this different?

The second question is this. Canadian Wheat Board supporters have told me if we allow more freedom to export, the border will close. It hasn't closed to canola and oats. Can you comment why this would be a different situation?

The third question is this. Visual kernel distinguishability has been supported very strongly by the Wheat Board. It has cost farmers a lot. Can you give us an accurate estimate of how much this has cost? The Wheat Board has strongly supported this method of grading. It is very archaic, and we are at a disadvantage in Saskatchewan because of frost damage and that kind of thing. So I would like comments on that and how that has affected a farmer's bottom line.

Thank you very much, Mr. Chair.

[The Chair, Conservative, Gerry Ritz]

Thank you, Mr. Breitkreuz.

Did everybody get those points down?

Mr. Carlson wants some clarification on Mr. Thibault's point. He wants you to reiterate.

[Herb Carlson]

I'm assuming the clerk will supply those questions.

[The Chair, Conservative, Gerry Ritz]

Yes. We'll go back to the record and get the actual wording of each one of those questions, send you a copy of them, and you can respond to us.

Let me thank you again, gentlemen, for your presentations today. They're very helpful. Our clerk will probably not include the slurs on economists, Dr. Loyns, since he is one, but your point is well taken.

Thank you so much, gentlemen. This meeting stands adjourned.