Thank you, Mr. Chairman, and good morning.
First, I'd like to thank the committee for having us here this morning. My name is Fred Neukamm. I'm the chair of the Ontario Flue-Cured Tobacco Growers' Marketing Board. With me here this morning is Richard Van Maele, our vice-chairman.
What I'd like to do this morning, Mr. Chairman, is get the committee to understand four key things: first, who we are; second, to explain our situation to you, as it is bad and we need help; third, that government policies over a period of years have caused this to happen; and fourth, that we see a solution is available.
I realize you are very busy people, and I will try to be brief.
Our board represents all flue-cured tobacco farmers in the province of Ontario. This is about 1,000 farm families. Since 1957 we have been a provincially mandated marketing board that looks after the production, marketing, and advocacy on behalf of our farmers. We are a duly elected board of 11 farmers. Both Richard and I and the rest of the directors of our board are farmers from across southwestern Ontario, stretching from Brant County across to the Chatham area.
We also oversee a strict regulatory framework for tobacco production that ensures that all tobacco is legally sold in the province through our auction exchange.
That is who we are.
The situation, as Brian has very clearly pointed out, is that we are trapped. Our farmers have invested their life's work in tobacco-specific equipment and assets, their farms, and are carrying significant debt associated with those assets. In many cases, we are second- and third-generation tobacco farmers, and now we have no way out.
We know the Government of Canada, as a signatory to the World Health Organization's Framework Convention on Tobacco Control and through its own aggressive policies, is committed to stopping tobacco use in Canada. One of the consequences of this commitment has been the demise of tobacco farming in Canada. Since 1998 our crop size has reduced from over 150 million pounds down to 55 million pounds in 2006. What that really equates to is the loss of over $200 million of farm gate value each and every year.
We see our request as a logical extension of those government policies. The stated goal of those policies has been to aggressively reduce the use of tobacco products, and those policies have worked. That is why we find ourselves in this terrible situation. We believe it should also be government policy to help farmers make the adjustment out of tobacco production.
We believe now is the time to take the obvious next step and put a plan in place that will eradicate tobacco production in Canada at some point in time. We want to solve this problem once and for all. Last spring we put forward a plan to the government that we believe will accomplish this over a defined period of time. The proposal we put forward is based on a set of principles, those being universal access for all flue-cured tobacco farmers and a fair level of assistance that helps them out of this business, while compensating them for the loss of their livelihood.
We also strongly believe that the communities that have heavily relied on tobacco production for their economy also need a significant amount of help to adjust to a new economic base. Investments need to be made that help both the agricultural and non-agricultural sectors to succeed in this transition.
We have received support from members of Parliament from all sides on our proposals and our ideas, and we have been working closely with government at all levels on this issue. We appreciate the level of serious consideration that our proposal has received. However, time is running out. Last year alone, our production was reduced from 85 million pounds to 55 million pounds. That's a 35% drop in production in one year. We lost over $60 million in our local economy just from one year to the next.
Our farmers have never been in a more precarious financial position. Many cannot hold out much longer, and the anxiety in our community is running at a fever pitch. It is now time to look at the issue of tobacco production in an up-front and mature way and to put a plan in place to deal with it from now until the time that flue-cured tobacco production is no longer used in Canada. We are asking government to fix this issue once and for all.
Thank you, Mr. Chair.