Agriculture Committee on Nov. 28th, 2006

[James Rickard]

Yes. Those apples you're eating came from Georgian Bay. There are three varieties, and I'm sure you haven't had a chance to eat each of the three varieties yet, but you're doing well. There's an Ambrosia, a Honey Crisp, and an Empire. The Empire has been around for 15 or 20 years, Honey Crisp has been around for perhaps three to five years, and the Ambrosia has been around for one to three years.

As producers, apple farmers, we have a harvesting unit, which is called a bin of apples. It is 20 bushels. It's four feet by 3.6 feet by two feet. From some preliminary data that we've been taking up this last fall, Empire returned the farmer $130, Ambrosia $330, and Honey Crisp $575. That's the same volume of apples with effectively the same cost of production. That's what we would like to encourage ourselves to do--the members of the marketing board, the members of the Ontario apple-producing industry: move into the apples that people want to pay money for.

So that's where this would fall into place. There would be encouragement. Of course, we're going to plant the apples that return us the money. We can understand that. So it's kind of “help ourselves to help ourselves”.

[The Chair, Conservative, Gerry Ritz]

Just on that point, you're talking about newer and better varieties available out there, and you have to have time to change your orchards over.

[James Rickard]

And we need a bit of encouragement from the country, which is all of us, to do so. The Honey Crisp are flying off the shelves at the inflated price. Sir, you're eating an Ambrosia, and frankly, that's even better than a Honey Crisp.

[The Chair, Conservative, Gerry Ritz]

It's good too.

[James Rickard]

It's better than a Honey Crisp, personally. However, it's just not as available yet, so they haven't been able to put the price up.

[The Chair, Conservative, Gerry Ritz]

And what kind of timeframe are you looking at from the time you plant until you're into production?

[James Rickard]

It is three to five years.

[The Chair, Conservative, Gerry Ritz]

Okay. Good.

On those points, we'll turn it over to Mr. Steckle.

[Paul Steckle, Liberal, Huron—Bruce, ON]

Thank you very much, gentlemen. That apple came at a very appropriate time. We're all missing our lunch time, and boy, we're very prompt in always getting our dinners and lunches on time.

Having been a farmer all my life, and to some degree having grown up with fruit trees in the days when we grew Tomlin Sweet and we grew Snow Apples and Kings and Stars and Northern Spy and those kind of things.... Those are names you don't hear anymore. In fact, probably none of you around this table has heard them before.

Maybe you haven't even heard of them.

[James Rickard]

Oh yes.

[Paul Steckle, Liberal, Huron—Bruce, ON]

Anyhow, you know what I'm talking about. But I do go back a long way.

I know they were so badly priced at the time I took over the farm in 1965 that I pulled them all out and put in a lawn. Now I have to cut the grass. But it was still better than growing apples.

When I look at your recommendations, I know what you're doing. The replanting and growing varieties that people want to buy really has nothing to do with whether we buy a Canadian apple or an American apple. The price really isn't relevant. It's what people want. What we have to do here in Canada, in my opinion, is make.... And I guess your third recommendation--buy Canadian first--would not only apply to apples, but would apply to a lot of our fresh fruits and vegetables. Whether it's spinach, or whatever we buy, I think we should do more to buy Canadian first. If we took pride in doing that.... Because you couldn't buy a better apple than that from California.

What must we do? Have we not advertised properly: “buy Canadian first”? Do we need a policy of government? I don't think government should be involved in everything we do.

I'm concerned about that, because I know what's happening in the apple industry. And I guess when I look at support programs, we have business risk management, a program that is designed that hasn't yet been adopted by government. But would that program, if it were adopted for fruit growers, apply equally to you as it would to the grain growers and other people? Why not?

[James Rickard]

I've had my comments. I have a big question. How do we address this to the government, if the help should really come from government?

[Paul Steckle, Liberal, Huron—Bruce, ON]

You've asked a lot of questions: all of the above.

[James Rickard]

One of the.... I'm losing it.

[The Chair, Conservative, Gerry Ritz]

In politics we call that a pregnant pause.

[Voices]

Oh, oh!

[Brian Gilroy]

Let me interject for a moment while Jim collects his thoughts.

Eighty per cent of the imports of apples into Canada come from Washington State, which produces almost as many apples as the rest of North America put together. They're a huge apple-producing machine. When they blow the price out or sell to the three major grocery retailers in eastern Canada and give them huge incentives to advertise Washington State fruit, it's something that makes it very difficult for us to compete against.

When it comes to the service industry—the suppliers of restaurants, small bodegas, and smaller grocery stores—almost all of those apples come from Washington State. Why? Because for whatever reason, they're able to move huge volumes at discounted prices. Their growers are in a similar situation to ours. Washington State doesn't do that to the northeastern states, which also produce apples. They have a hands-off policy there, but export is very important in Washington State.

Two years ago, there was serious dumping of the 2004 crop with depressed prices into Canada, and that hurt us dramatically.

When it comes to government, I don't think it would hurt at all to have a strong recommendation made that whoever in government is involved in the procurement of food, for the military, prisons, hospitals, and so on, try to purchase Canadian product when they can. I think that would go a long way, because those service industries don't carry both U.S. and Canadian; they carry the U.S. 90% of the time.

The service industry has gotten much bigger over the last ten years. People are too busy to go to the grocery store and buy their food. They depend on the service industry more.

[Paul Steckle, Liberal, Huron—Bruce, ON]

We know when people shop for apples today, they buy three or four at a time. We used to sell them by the bushel. Now, you're putting them in...I know what the containers look like.

I'm totally convinced that it's not a price issue. I said that not only about apples, but other products as well, because we have organic products selling for enormous prices, and not always to the rich people, but to other people too.

So people have made market-buying choices. If government can help you do that, we ought to do it. Certainly starting with the institutions over which we have some buying power and control, we ought to be doing that. I think all of us here want to help you guys, but how do we do it? That's the big question.

On the question of business risk management, could that program work for you guys?

[Brian Gilroy]

Do you mean the one that's being put forward by the grains and oilseeds producers?

[Paul Steckle, Liberal, Huron—Bruce, ON]

Yes. I know it speaks specifically to grains and oilseeds, but could it not apply? I think their vision is that it could be broadened and not only apply there, but it could apply even in the livestock sector.

[Brian Gilroy]

The marketing channels for grains and oilseeds are fairly straightforward. There is some variation that takes place, but when it comes to horticultural crops, the marketing channels are incredibly diverse. For whatever reason, programs that are designed for or by grains and oilseeds producers don't seem to work for horticulture.

In Ontario, an adjustment was done for the CAIS program, where they looked at accrual versus cash accounting and they did a blend of the two, which was recommended by IBM.

Of the money that came to Ontario, horticulture has about one-third of the cash crop receipts for all of the province's agriculture. We received 8% of that top-up. That was a significant difference between what we represented and what we received, and this is the level of hurt that generally is taking place in the horticultural sector.

[The Chair, Conservative, Gerry Ritz]

Mr. Easter, you have a minute.

[Wayne Easter, Liberal, Malpeque, PE]

I have a quick question.

I agree 100% with your “buy Canadian first” approach. But if the government were to order it, would there be any trade implications? Have you done some research into this? What are the trade implications of this kind of policy?

[Brian Gilroy]

From what I understand, it could be an irritant, but it doesn't fly in the face of the free trade agreement. The U.S. does it significantly with their school lunch programs. They have a number of programs. For example, an apple processor from Quebec wanted to provide the Texas prison system with apple sauce. They had to import American apples, process them into apple sauce, and send it back to get that contract. The apple-growing community agreed we didn't want to shut them out of a marketplace, but it's being done. It currently is being done, and there's nothing wrong with waving the flag. There will be a reaction to it, but I think it's something we can survive.

[The Chair, Conservative, Gerry Ritz]

Thank you, Mr. Easter.

On that same point, we did see Canadians rally around the BSE situation and buy more beef than they ever had before. Waving the Canadian flag when it comes to food...they know the quality and the safety and security are there, and a lot of food today is not price point.

If we're going to implement a program such as that, my concern is in our labelling. In this country we've allowed the labelling to be, for lack of a better term, “perverted” to the point that I can buy Argentinian beef, and as soon as I slice it here, it's Canadian. It's a secondary processing. We're going to have to look at the labelling act in order to go forward with those types of recommendations.

Mr. Bellavance for seven minutes, please.