Agriculture Committee on Dec. 7th, 2006

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

The other thing that's coming through this, and I've been trying to read through all this material from the Western Canadian Wheat Growers Association to the Fulton report and other information, and it seems to be clear. You mentioned in your talk that it's not really a matter of another CWB and market choice; it's basically that either we have a single desk or we have the open market.

I noticed some of the conclusions and I made some notes on the Fulton report. It will be extremely difficult, if not impossible, for the Wheat Board to survive without single desk. The grain handling and transportation will be similar to the U.S.; however, we won't have the Farm Bill to protect farmers, so our farmers would be vulnerable in the open market.

It's unlikely to be successful, the new Wheat Board, because of the potential risk of investment, the whole idea of farm ownership and control, of trying to set up a cooperative in this volatile market when prices vary. So that's not realistic. It seems to be--and everybody seems to agree--that the Wheat Board will cease to exist.

The argument is this: we should have choice; we looked at the spot prices, and I didn't get these spot prices because the Wheat Board stepped in.

I'd like some feedback on this. The main argument, I think, for not having a Wheat Board is this: I want to get those good prices and I want to take them across the border or wherever today. It's being interfered with. I'm not getting that price. There's a pool price.

I'd like you to talk a little bit about this.

[Ken Ritter]

I'll begin by expressing my view this way. I think the debate has become very divisive and totally unnecessary.

First of all, yes, there are people who have the view of the Western Canada Wheat Growers, of course, and that's their right to have that view. Nevertheless, at the end of the day you have to come to a conclusion on how you're going to move forward. Our view is very simple. Farmers in western Canada should have exactly the same opportunity to decide on what kind of marketing organization they have as farmers in Quebec and Ontario.

In Ontario, their farmers have said they don't want a wheat board or they don't want the kind of wheat board that they had; they want more of an open system. So that's been introduced there. Farmers in Quebec, counter to that, have said they want a single desk system, and now that's been implemented.

This is a farmers' issue in western Canada. Farmers are businessmen. They know what they want. They know what their vote means. They're able to express their business interests. All we're asking is, just let them do it.

Adrian, do you have anything to add?

[Adrian Measner]

I might just touch on a couple of the other questions—very quickly, because I know we're moving on here.

Concerning the conclusion of the CWB—whether it'll exist in this open market environment—again respectful of the order here, I agree in my personal opinion with Dr. Fulton and the conclusion he reached.

What we've said is that business will migrate to those companies that own primary elevators and terminal elevators, have an international network around the world, and are vertically and horizontally integrated up and down the value chain. That's where the business will migrate to.

So the Canadian Wheat Board will either become a small grain company or a brokerage firm, and that is not the Canadian Wheat Board that exists today. That is a totally different organization, and it's not a very large organization.

On the other issue, the spot prices, we continually hear this, and certainly it's something I've heard in many farm meetings. When the spot price goes above the pool price, there are lots of comments made. That's when people point to it and say, look; I could get a higher price there. Well, the pool price is by its very nature an average through the year, so there'll be some times when it's above and some times when it's below that.

But there are farmers who have said they want to take advantage of those spot prices, and we have responded to that request. We have put a daily price contract in place that's based on U.S. cross-border prices. Those prices fluctuate up and down, and farmers choose when they want a price on that basis. We think it's a very positive step forward, so that those farmers who want that spot cash price can take advantage of it and price their grain on that basis. Other farmers who want to stay in the pool account can do so.

[The Chair, Conservative, Gerry Ritz]

Thank you Mr. Atamanenko.

Oh, go ahead, Ken.

[Ken Ritter]

Let me just add one more point.

For my argument about debate being divisive and unnecessary, I'll give you two examples. At our last board meeting we passed two resolutions. One was that we have a small processors' exemption of 500 tonnes. That will mean you can sell outside the board to a small processor up to 500 tonnes, or they can buy to that limit. The second thing we passed was the new generation co-op policy, which touched on many of the issues that were in your bill. It relates to the fact that new generation co-op members can deliver to their own processing plant and receive the North American price for the grain they sell.

By this, Mr. Chair, I'm saying a lot of the issues that have been frictions in the past are being dealt with by this organization. That's why this divisive debate is often simply unnecessary.

[The Chair, Conservative, Gerry Ritz]

I didn't realize that. That's great. You're saying the new-gen co-ops get the North American price. Is that done in an initial payment, or are they still in the pool and getting their final payment at the end of the year?

[Adrian Measner]

What we would do is create a separate pool for them, and whatever they pay on that domestic human consumption price would be pooled together and delivered back to them. They would still get it later in the year, although we could look at some kind of fixed price contract. We haven't explored that with them, but if a new generation co-op were interested in that, we could certainly look at it.

[The Chair, Conservative, Gerry Ritz]

Thank you.

Mr. Easter, you have two minutes, and I'll hold you to it.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

The minister has spent a fair bit of time criticizing the board, saying that you really should be out there selling grain and that you don't have a contingency plan in place. In my own personal view, I don't believe the minister even understands that you're not a government agency. I really don't believe that. Has he spent any time looking at the board?

And can you elaborate a little further on what you talked about with Mr. Goodale in terms of contingency plans and planning for the future in all eventualities—whether the barley vote loses, whether it wins—and what kind of options you have? The argument is always made that there's no other option but to sell through the board. But through the board you have all kinds of options in marketing choices, far more than you'd get from the private sector, as I understand it.

Thank you, Mr. Chair.

[The Chair, Conservative, Gerry Ritz]

You have one minute, gentlemen.

[Adrian Measner]

I'll start with the second part, contingency planning. What we have looked at over many years and many sessions is losing the single desk on wheat, or losing the single desk on barley, or losing the domestic market—just a whole bunch of iterations here to say that these are the possible outcomes in a future we don't control all the elements in.

Any good board goes through that type of contingency planning. It doesn't mean we expect it to happen. It means we're prepared in case it does happen. It's very important to understand what the implications are as you're setting policy and as you're operating as an organization. That is happening on a continuous basis.

The barley is difficult, because we don't have enough definition. Of course it depends how producers vote, so we'll have to see that first. But we want to get that definition so that we can do more analysis around it.

But there are a lot of unknowns, as I said to Mr. Goodale. Part of the question is, will government guarantees still be there for part of that barley market? Or are we going to be part of that barley market? Will we be able to use the contingency fund as a backstop because we're undertaking a risk on that side?

We need to have some of that clarity around. When will the bill be introduced? What is the bill going to say? And what are the time periods around it? It's that clarity, I think, that would be very useful to our organization as we continue to plan for the contingency of a potential loss of barley.

[The Chair, Conservative, Gerry Ritz]

Thank you, gentlemen. That brings to a conclusion this hour. Ken, did you have anything else to say, or are you good?

[Ken Ritter]

That will be fine. Thank you, members of the committee, for allowing us to appear before you.

[The Chair, Conservative, Gerry Ritz]

Good. Thank you, gentlemen.

We will suspend for a couple of minutes while we get ready for the next session, the third hour today. It's a bit of a marathon session. We will have to be on time with that one because of question period obligations and so on.

If we could, let's make the swap as quickly as we can.

This meeting is suspended.

[The Chair, Conservative, Gerry Ritz]

If I could call this meeting back to order and have everybody take a seat, we'll start into our third hour here this morning.

I have a couple of housekeeping issues before we get right into the discussion, if everybody would take their seats.

Before we move into the next discussion, if you guys could just bear with us, we have a bit of a housekeeping issue. You have before you an amendment to Mr. Bezan's motion that was accepted at 1,500 tonnes. Do you remember that we had talked about the numbers not being quite right? Well, he has the numbers here right. I just wanted to run that by the committee. This motion is ready to table in the House as soon as we make that amendment.

Is everybody okay with that? Can I have a show of hands?

[James Bezan, Conservative, Selkirk—Interlake, MB]

Could I give background information on that, Mr. Chair?

[The Chair, Conservative, Gerry Ritz]

I don't need background. Everybody's okay with it.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Just so they understand, the 76,000 tonnes is what the TRQs are right now. We're saying that for the supplementals they be limited to 1,500 tonnes.

[The Chair, Conservative, Gerry Ritz]

Mr. Roy, you had a point.

[James Bezan, Conservative, Selkirk—Interlake, MB]

That is above and beyond the 76,000.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Yes, that is fine. However, here it simply says: “tonnes” and not “tonnes métriques“. There is a difference.

[James Bezan, Conservative, Selkirk—Interlake, MB]

It's spelled “tonnes”.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

It is not the same meaning in French.

[The Chair, Conservative, Gerry Ritz]

When it's spelled with the two n's and the es on the end, that designates metric tons, Mr. Roy. The translation doesn't do that, I understand.

We will make that correction as it goes in, and then I'll be able to table this report.

Also in front of you is a motion from Mr. Bezan that was tabled with the 48 hours' notice. It's a very short motion. I'll read it, unless you want to do it, James. It's your motion.

[James Bezan, Conservative, Selkirk—Interlake, MB]

I do want to make a friendly amendment, if that's possible. I forgot to put it in the original motion. It is that the Agriculture Committee recommend the Government of Canada bring forward immediate legislative changes to the Canada Transportation Act that fulfill the agreements reached between Transport Canada and shippers on May 5, 2006, including the initiation of a review of the level of service being provided by railways.

And this is where I want to add in the amendment, if that's possible, that the motion be reported to the House.