Agriculture Committee on March 27th, 2007

[The Chair, Conservative, James Bezan]

I call this meeting to order.

We're going to continue on with our study today on business risk management and how it ties in with the greater issue of the APF hearings and our study that we're doing as a committee.

Today we're going to welcome to the table Mr. William Van Tassel, from the Federation of Quebec Producers of Cash Crops; from the Ontario-Quebec Grain Farmers' Coalition, we have Mr. Peter Tuinema; from the Grain Growers of Canada, we have Mr. Ross Ravelli and Mr. Richard Phillips; from the Canadian Seed Growers Association, we have Mr. Barry Reisner; from the Canadian Soybean Council, we have Mr. Jim Gowland; and from the Ontario Soybean Growers, we have Mr. Arden Schneckenburger. Welcome.

I'm glad to see you're all here, taking time out of your busy schedules. I know you're all itching to get out into the fields. It's so warm out that it's starting to feel like spring and time to start planting, but we're glad to have you all here to make these presentations.

With that, we'll open it up to you first, Mr. Van Tassel, for your presentation.

[William Van Tassel, Vice-President, Ontario-Quebec Grain Farmers’ Coalition]

Good afternoon. I will make half of the presentation in French, and Mr.Tuinema, the President of the Coalition, will make the other half in English.

Thank you for giving me the opportunity to tell the committee about this issue.

The Ontario-Quebec Grain Farmers' Coalition represents more than 41,000 grain and oilseed farmers in Ontario and Quebec. In 2005, 6,000 Ontario grain and oilseed farming families drew a household income of less than $25,000, according to Statistics Canada. Grain and oilseed producers need the predictability of an income-support program that is paid out when prices fall below an agreed-upon floor price per bushel. More than 1,250 Ontario farmers have left their family farms because they were unable to cope with the prospect of declining world prices. We do not have the statistics for the number of Quebec farmers who have put an end to their activities.

Unfair international subsidies mean that Canadian grain and oilseed producers face a consistently declining income. They need an income-support program that is triggered only when prices fall below an agreed-upon floor price per bushel. This would ensure Canadian G & O family farmers can remain viable and competitive until WTO subsidy issues are settled.

CAIS is simplistic. It does not meet the diverse needs of Canadian farmers. Canadian farmers produce more than 200 different commodities across 10 provinces. Saskatchewan farmers can grow up to 15 different field crops. Ontario and Quebec farmers, because their climate is different, can grow only three major field crops: corn, wheat and soybeans. They also grow some barley and some oats. This shows how diverse and large a country Canada is, and why it is necessary to have different types of programs.

CAIS is an income stabilization program that penalizes grain and oilseed producers. It benefits price-cyclical agricultural sectors, but grain producers need an income-support program to provide income predictability in spite of persistent income pressures due to unfair international subsidies. In recent years, or at least, since 1995, grain prices, even though they increased in 2006, have been steadily dropping. There were peaks and valleys, and that is why CAIS did not work.

CAIS is based on production margins, which penalizes grain and oilseed producers, because they face consecutive years of low income and are thus ineligible to trigger payments under the CAIS program.

I will now turn to the President of the Coalition, Mr. Tuinema, who will finish the presentation.

[Peter Tuinema, President, Ontario-Quebec Grain Farmers' Coalition]

Thanks, William.

I'm going to talk a little bit about some of the solutions we're proposing. A national income support program with regional flexibility will provide grains and oilseeds producers with long-term income stability and predictability. Companion programming will provide a long-term bankable solution for farmers, shared costs and risks by government and farmers, and farmers will be paid only when the average world price falls below a target price.

The next slide shows what happens in the CAIS program and why it doesn't work for producers. These numbers are Ontario numbers from 1999 to 2006. It shows that most farms, 97% of the farms, had declining margins in that timeframe. These are grains and oilseeds producers, and CAIS is based on production margins. When margins are declining, eventually producers can't get payout from the CAIS program, so we're proposing a different solution. We're proposing companion programs. These companion programs need to be designed with input from farmers, they need to have regional flexibility to meet unique regional needs of local farmers, and regional focuses will avert WTO challenges.

The benefits of a companion program: it eliminates the waste and ad hoc distribution of agricultural funds, and agricultural funds will be targeted to reach farmers who need income support. In Ontario, this means a risk management program for grains and oilseeds. In Quebec, this would mean support for their current ASRA program.

Some of the features of the program are as follows. It's an insurance-based model. Risk management programs would be funded by farmer premiums in both levels of government. Producers usually supply one-third of the total funding; federal and provincial governments would invest the remaining two-thirds based on a 60-40 formula. Funds would only be distributed when needed rather than on an ad hoc basis.

One of the benefits is that it provides a long-term solution: it offers predictability. Canadians depend on us for reliable, safe food. We are a key component of the Canadian economy. It will slow the flight of farm families off the farm and will continue contributing to the economic prosperity of rural communities.

On March 19 there was a budget introduced, and it was a step in the right direction for producers. It was $600 million to a contributory-style savings account. This is a change to the top tier of CAIS. This is still a stabilization program and not necessarily an income support program. The other $400 million would be based on cost of production support. This is more of an income support program that would help producers in the plight they're in, but it needs to be delivered in the proper program to be effective. There are also incentives for renewable fuel and also changes to the capital gains tax in that budget. But these are more long-term solutions along with, say, changes to the WTO. What producers need now, though, is an income support program.

There's certainly national support for the program. There is the Canadian Federation of Agriculture: “The CFA is committed to the principle of federally/provincially funded Companion Programs that offer regional flexibility to fill the gaps not addressed by CAIS and other national business risk management programs.”

It also has support from the Agricultural Producers Association of Saskatchewan: “Companion programs are tools that should be used to level the playing field in Canada with respect to regional issues without creating regional disadvantages”. That's from Ken McBride.

Also, from the UPA in Quebec, there was the statement that: “In order to offset the impact of the Farm Bill, the Federal government absolutely has to make funds available to finance national companion programs that can be used to meet regional needs.” That's from Laurent Pellerin, their president.

The Ontario-Quebec Grain Farmers Coalition looks forward to working with the government to develop innovative support programs that meet the diverse needs of Canadian farmers.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you, gentlemen.

We'll move right along to the Grain Growers of Canada.

Ross, are you going to lead off?

[Ross Ravelli, President, Grain Growers of Canada]

Thank you very much.

Good afternoon, Mr. Chairman, members of the House of Commons Standing Committee on Agriculture and Agri-Food, and fellow guests. Thank you for the opportunity to speak to you on business risk management.

My name, as stated, is Ross Ravelli. I'm the president of the Grain Growers of Canada. I'm a third-generation grains and oilseeds producer in Dawson Creek, British Columbia. Sitting with me today is Richard Phillips, our executive director, based in Ottawa.

The Grain Growers of Canada is an umbrella organization representing many of Canada's grains and oilseeds producers on national policy issues. My farming colleagues from across Canada may differ in terms of the size of their farms, the variety of crops grown, and farming practices in general, but we all face many common challenges. Two of these challenges have been, first, several years of declining income due to international subsidies, which lowers the price for crops, and secondly, rising input costs. Low prices and high costs translate into, at best, very thin margins.

I think everyone at this table would agree that farming is a business and it needs to be treated like a business. As growers, we need to have the variety of risk management tools available to us. We do have some of the necessary tools; however, there are still some elements of risk that are out of our control. We face production risks such as weather, disease, and pests. These types of risk are partially covered off through our current crop insurance programs, which have been good programs, but it seems there is a trend toward higher premiums and lower coverage levels, and that issue has to be looked at.

Farmers have adapted to the weather risks by growing shorter-season crops and crops with drought and disease resistance more suitable to their regions. We quickly innovate with new farming techniques such as minimum and zero tillage.

We also face significant price risks. Commodity prices, especially in the grains and oilseeds sector, are negatively affected by foreign government policies on market access and subsidies. These foreign government actions are a risk that we as farmers cannot manage on our own.

When facing these foreign subsidies, where possible, we have switched to crops where the market is more rational and functional, in the hopes of increasing market revenue. For example, we have seen significant increases in both canola and special crop acreage over the last few years.

Farmers are the first line of defence in addressing all these problems, and we must do our best to adapt to whatever the weather and distorted markets throw our way.

Given the importance and significance of agriculture to this country, farmers have not faced these challenges alone. Over time the agricultural value chain--governments, farmers, and private industry--have worked together to try to mitigate some of these risks, and with varying degrees of success.

The reality for many of us is that the private sector has led the way on research, innovation, and development of new varieties of crops, value-adding, crop protection products, and marketing tools. Herbicide-resistant crops, forward pricing contracts on both crops and cropping inputs, development of reduced tillage equipment are but a few of the positive contributions the private sector has provided to us. This creativity and innovation are key to our future success.

Governments have played an important role and have had many successes as well. The production insurance, which I mentioned earlier, and the cash advance program, which I'm sure you're all aware of, are two good examples.

The recently announced renewable fuels strategy, along with other key components just announced in the 2007 budget, will not make us world leaders on this front, but they will ensure we have a Canadian renewable fuels industry.

However, we have had a number of government programs with mixed results. I'm sure you're all aware of CAIS, NISA, GRIP, and the Western Grain Stabilization Act, to name a few.

It is critical that farmers, through their farm organizations, are involved as early as possible in designing new programs. Despite the recent APF-2 consultations, the Grain Growers of Canada still feel there is an urgent need for a more focused look at the needs of the grains and oilseeds sector.

The Grain Growers of Canada have forwarded this idea to Minister Strahl, and as yet we have had no firm commitment to engage in this process. I hope this committee will see the need and validity of this approach and give us your support in this initiative.

At this time, the Grain Growers of Canada would like to thank the government for the recent announcement of nearly $1 billion to assist Canadian farmers. The $600 million in federal funding to start new producers' savings accounts is good news. We know from past experience that NISA was a popular program and well understood; however, we must work on providing farmers with the needed program flexibility to access and use this fund as they see best in their operations, and then live with their decisions.

The $400 million payment to help with rising production costs announced last week, and the future commitment of $100 million over each of the next five years are certainly welcome.

I would now like to share some of the business risk management design features and principles that the Grain Growers of Canada would like to see incorporated in any new program.

A program must be production neutral and not mask market signals. Producers should be able to make their own decisions about what is best for their farms based on agronomics, market signals, and risk management tools available to them, whether those tools are available from government or private industry.

A program must be predictable and bankable. Without a doubt, the biggest criticism of CAIS has been the inability of producers to know with any certainty whether or not the program is going to trigger, and if it does, when they will get the money.

We recognize that provincial governments will always need regional programs. However, we feel it's very important that federal dollars are used in a way that ensures equitable treatment of farmers across commodities and across the country. It is important that federal programs are designed to be national in scope and in a manner that minimizes the risk of countervail. Our growers rely heavily on export markets, and they will bear the cost of any retaliatory trade measures by foreign countries.

We support the margin-based principle. However, program design must be more flexible to take into account the issue of commodities with long-term declining margins due to negative effects on prices because of the actions of foreign governments.

Any business risk management program should have positive linkages that encourage participation in other programs, as opposed to negative linkages that reduce the flexibility of farmers to properly manage their individual risks.

Beyond its role in providing sound business risk management programs, there are a number of other key responsibilities for the federal government.

Rather than simply letting farmers rely on government support through its programming, the government must also actively work to reduce our need for that programming. As farmers, we want to earn our living as much as possible from the marketplace, not from the government. The government does not owe us a living, but it does owe us a policy environment that gives us the opportunity to succeed.

Therefore, we call on the government to first actively negotiate at the WTO, and through bilaterals where necessary, to ensure that Canadian grains and oilseed producers and processors have access to markets that are not inhibited by subsidies, tariffs, or non-tariff barriers.

Second, move ahead with the smart regulations initiative to not only reduce the burden of regulation in our industry but also speed up the timelines in which Canadian farmers can access new and innovative products.

Third, provide the necessary incentives for research and investment in agriculture. This is critical to ensure our growers continue to be competitive in an international market for the long term.

Fourth, our government must show leadership in dealing with our transportation problems in western Canada.

Finally, decisions affecting the new varieties we grow and crop production products we need to produce them must continue to be based on sound science. Wherever possible, we need to work at harmonizing our rules with our major customers and competitors. Any other process will lead to both lengthy delays and lack of access to new technologies, which cost the farmers money. Again, this leads to more cost to the government in business risk management.

In summary, we have presented you with our thoughts on both business risk management tools that we feel are needed for the grains and oilseeds sector, but also some concrete steps this government could take to minimize the need for farmers to rely on those tools and ultimately reduce the costs to Canadian taxpayers. Yes, we need appropriate risk management tools, but we need to reduce and manage that risk as well. The fact is that the best risk management programs are the ones farmers can manage effectively on their individual farms.

Thank you. I look forward to both your questions and your comments.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Ravelli.

Mr. Reisner, please.

[Barry Reisner, Past-President, Canadian Seed Growers Association]

Thank you very much, Mr. Chairman.

First of all, I'd like to say it's my pleasure to be here to address the committee today.

I'd like to introduce myself. I'm a fourth-generation farmer from Limerick, Saskatchewan. The year 2007 will be the 100th crop on our farm by our family, so we have deep roots there. We currently are farming 5,000 acres, which used to be considered a large farm. At the present time it's probably somewhere near an average-sized farm in our area of southern Saskatchewan. We grow and process and retail pedigreed seed to retail and wholesale customers.

I guess I should preface my remarks by saying that I'll be speaking from a western perspective. I have been the president of the Canadian Seed Growers Association the past couple of years, so I've seen agriculture across the country, but I can't speak for it today. I also can't speak for the animal industry. I really can only speak for the grains and oilseeds industry, as I know it best.

About the CSGA, we have 4,000 members in nine provinces across this country. We have about 1.2 million acres under pedigreed production. We have been promoting quality seed and genetic improvement for 102 years across Canada. It was needed 102 years ago, and in our mind it's needed even more now.

I want to address this a bit differently than the previous speakers did. I recognize that this is the agriculture committee, but I think we need to recognize that others in government and citizens of this country may ask why the government is responsible for business risk management. I feel government is responsible for business risk management. The government is responsible for agriculture policy in this country, and I think that's a big reason why we need business risk management, because of the long-term failure of our agriculture policies, the failure of our policies to look far enough ahead and to create a positive plan for agriculture in Canada.

Crop production does vary widely. Particularly in the west, we have extreme weather, and that causes risk. We need to have some ways of managing those risks, particularly now that costs are so high. We're in a cash economy in agriculture, and costs are high, so we need to be able to manage that risk from the weather. We also have market-based fluctuations, price risk. Those are to a large extent almost totally out of growers' control, and we need to manage those risks.

Also in the long term, particularly in the last 10 or 15 years or so, individual farmers really cannot compete with foreign subsidies and tariffs. That is something that's totally outside of our control. As producers, we look to our government for support and direction in addressing that and for direction and help in the WTO process, as well as in bilateral agreements. Those are things beyond individual producers' ability to influence, so again that's the government's responsibility. If those things don't produce desired results, then it falls on government to accept the responsibility to assist in business risk management tools.

Again, as I said, in my view I think we've had a very piecemeal and outdated national agriculture policy--indeed, if we can even call it an agriculture policy. It seems that our policy is the same as it has been for the last 100 years: that we're good at doing what we do, so we'll do it, and the world will beat a path to our door. Unfortunately that doesn't work very well anymore, and it's going to work less well in the future. So we need some significant work done in that area.

It's a very competitive international marketplace. A lot of our competition in the international marketplace has been far more proactive than we have. The U.S.A. has a policy, and has had a policy for a large number of years, of having low-priced grains and oilseeds in their country. That's done--not by accident, it's planned, in my view--to encourage value-added production and processing. They are sticking to that plan. They're going about it a different way now with the biofuels industry, but that has been their plan.

The EU has a policy to ensure that they never again have food shortages in those countries. For anybody with a historical view, you can really understand why that would be so important to them. Their view is also to maintain traditional family farms, because society views that as important.

Another competitive international marketplace that we face is emerging competition from new exporting countries. A lot of those countries have lower costs of production than we do, and they have efficiencies in transportation that we don't have. I think we have to be realistic and recognize what our strengths are and what our weaknesses are.

Getting to business, I'll discuss risk management. What components do we have right now? Right now we have crop insurance as a business risk management tool. We have CAIS and we have ad hoc government programs. That's what we have, and we can talk about those and other things.

In terms of the problems we have with the current system, crop insurance often does not cover the costs of production, so that is a problem. It's a pretty good system. I think most farmers appreciate it and use it, but at times of low commodity prices, it does not cover your costs of production. It doesn't make sense to insure your house for less than what it costs you to build it, but that's what farmers are forced to do with crop insurance if market prices are low.

As for the CAIS program, the process is complicated. It's expensive, it's unpredictable, and it's unbankable. I don't mean to dump on it totally; it has some benefits, but those are the problems, and I think you've heard them significantly before. It's also slow to respond to low net farm income. This is especially true for farmers with fiscal year-ends from January to July. If you have a year-end from January to July, you basically are waiting another year before you can file your CAIS form, so you're waiting another year. I know of farmers who have been forced off the farm; a year later, they get their CAIS coverage cheque, and it's a significant cheque. That's an unfortunate situation, and it shouldn't really happen that way.

Another problem with CAIS is that it really is designed to stabilize farmers' incomes. Stabilizing incomes is a good idea in normal times with normal fluctuations in price and production; stabilization does not work well in a long-term trend to lower net farm incomes, and that trend is contributed to by subsidization by our competitors as well as by our higher costs of production. It was really exacerbated with removal of the Crow freight rates. That has taken a lot of net income every year from farmers in western Canada.

Seed growers have unique needs. I should comment on that. We have some unique needs distinct from those of commercial farmers.

We have significantly higher costs of production. Our input costs, particularly on acquisition of stock seed and breeder seed and various things that we use in our production methods, are significantly higher than farmers' costs are. That's another big risk for us. We also have significantly more marketing risks than farmers do. We have quality risks. We're concerned about germination and disease levels, things that commercial grain farmers aren't nearly as concerned about. We also have varietal risk in the marketplace: if we produce a pedigreed seed crop and there's no market for it because the market doesn't want the variety we have, that's a bigger risk for us. As well, there is crop kind risk: if the market changes to another crop kind and what we have is not in demand, well, that's just our problem at the time.

In terms of future direction, I think crop insurance is a good program. Farmers depend on it; it's good for what it's designed to do. In normal times, with reasonable costs for commodities, crop insurance can be effective in covering production risks. There are some adjustments made annually to crop insurance, and I think that program is valuable. It needs to be continually adjusted.

We need to simplify and improve the responsiveness of CAIS. It's good in the fact that it does recognize an individual farm's variability and profitability, so it does reward individual farms and gives them higher coverage if they can show that historically they have earned that coverage. I think that's the good part about CAIS.

I think the implementation of producer savings accounts or a new version of NISA will be very popular with farmers. It addresses the need to have it within their control. They know what they have to help them out when they come into financial problems.

In the longer term we really need to look at our agriculture policy, to get away from dealing with the symptoms to dealing with the problem. We need to be honest, as a country, and look at our strengths and weaknesses and build on our strengths. Let's put our producers in a position where they can be profitable on their own.

Our farmers don't want to be dependent on government. They've been in that situation for a significant number of years, and they don't want to be there. They want to get off the dole. They want to profitable and enterprising and to run profitable businesses. But they need some direction, as I said before. They need some help from government in setting policy to allow them to do that.

As I said, we must focus on our strengths. One of those strengths is innovation. Farmers in this country are very eager to adopt innovation. They've proven that in the past. We need to allow them more opportunities.

One of the problems is that there are impediments to innovation in this country. Through my work with the CSGA, I've become aware of many of those impediments. One thing government can do through the regulatory system is to try to ensure that those impediments are not unreasonable. They were put in place for reasons, but let's ensure that they're not overly delaying innovation.

Thank you very much.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Gowland, are you two doing the presentation together?

[Jim Gowland, Chair, Canadian Soybean Council]

Yes, we are. Mr. Schneckenburger and I will be splitting the presentation.

[The Chair, Conservative, James Bezan]

Okay, good.

[Jim Gowland]

I am the chairman of the Canadian Soybean Council. It is a fairly new organization in the last year and a half. It's a formal relationship between the Manitoba Pulse Growers Association, the Ontario Soybean Growers and the Fédération des producteurs de cultures commerciales du Québec.

Our organization represents approximately three million acres of production in Canada and approximately $1 billion in farm gate value. We represent about 25,000 growers.

The Canadian Soybean Council is an organization to better represent soybean producers at the national level. We have partnerships with the Guelph Food Technology Centre, the Canadian International Grains Institute, Soy 20/20, Soyfoods Canada, and the Canadian Soybean Exporters Association, just to name a few.

Since our beginning, the Soybean Council's key area of focus has included market development. Our initial focus has been on new export market development, but we've also moved forward with our traditional role on the domestic side of things as well: research and innovation, through Ag Canada-type projects and partnerships; involvement in stakeholder communications, with the National Oilseeds Roundtable; and also in the area of advocacy, with all of the APF-2 consultations.

I'll turn it over to Mr. Schneckenburger.

[Arden Schneckenburger, Second Vice-Chair, Ontario Soybean Growers]

Why do we believe safety nets are needed? Safety nets provide producers with stability from the highly variable commodity markets that we've been witnessing over a number of past years, especially with a commodity like soybeans, for which the market has been declining steadily. Since last year, prices have improved slightly.

Globally, farmers have access to different sets of tools to manage risk associated with production. We're not asking for anything new; every country has them. Canadian producers need a set of tools similar to those held by American producers in order to help them compete. That's especially true in our soybean industry, where we have NAFTA and WTO rules. We have an open border with the U.S., and our prices were based on a declining U.S. price in the past. That price wasn't what the producers in the U.S. got; it was their export price. The American producers were subsidized on top of that, and we as an industry have had to compete against that, farmer to farmer.

Some provinces have very good regional programs that have worked for their producers. In Quebec they have ASRA. In Alberta they have the spring price endorsement program.

On past and current safety nets for Ontario, prior to 2003 each province negotiated different programs with the federal government to meet the needs of its farmers. In Ontario we had the market revenue insurance program, net income stabilization assistance, and crop insurance. It's interesting to see that there's a proposal to bring back NISA, but that's only part of the solution for the overall farm part.

After 2003, federal policy changed to two national safety programs: CAIS and production insurance. As stated earlier, CAIS does not work for a program such as our soybeans, corn, and wheat in Ontario. Specifically for soybeans here, the production insurance part of our crop insurance program works reasonably well.

In terms of current issues in safety nets, CAIS is not working for Canadian growers. This is mainly due to timeliness of payments based on income tax. This can be up to a year after the hurt is registered, and we're then still waiting for payments.

CAIS is not commodity specific. We need flexibility in our programs so that we can mitigate risk.

CAIS has the offsetting of losses in other segments of a farm's operations. If farmers in Ontario, Quebec, or Manitoba have attempted to diversify, they are punished because of whole-farm income.

There are long-term declining reference margins. Another problem with it is the difficulty in predicting a payment. As a matter of fact, there's no way anybody can predict a payment in this program.

What programs have worked for us? Basically, the commodity-specific types of programs have. Prior to 2003, Ontario had market revenue program production insurance. It worked well because it was regionally specific. It accounted for differences in crops and markets. The market for our soybean crops tended to work north and south. We're not east-west, and we're different from canola. We're linked here with the U.S. production.

Soybeans in Canada are export neutral. We don't import and we don't export. Our price is basically the U.S. export price, as I stated earlier, and the U.S. farmers get subsidies. We have to be treated equally in order for our industry to compete in the long term. We need the commodity-specific programs so that they provide our producers with flexibility.

Safety nets are a bridge for producers as the market develops further. A prime example that we're seeing right now is the ethanol industry in the United States and the positive impact it's having on the market. There are many opportunities in market development that can help our industry in the future.

I'll turn it over to Jim.

[Jim Gowland]

We see a major linkage between business risk management programs and market development. Certainly market development and safety nets work together to foster a strong and profitable Canadian soybean industry. Those initiatives help build a long-term profitable industry. There's a lot of new product development, new food, and industrial uses, and domestic and export market development. The safety nets are the backstop there that provide that market stability until potential market development can be realized.

Our member organizations--Ontario Soybean Growers, the Quebec growers, and Manitoba Pulse--have been very active in market development initiatives such as developing relationships with potential buyers in Asia, for soy foods, biodiesel, bioplastics, and industrial linkage. Those safety nets provides very stable supplies for our processors, and with dramatic changes in prices we also see those large shifts in supplies.

It's critical to point out that soybeans are a key feedstock in the bioeconomy. Certainly there are a lot of us who have a vested interest in that, through government and grower organizations. Renewable fuels and other opportunities are only a part of the longer-term solution. We see that there is no silver bullet to fix the whole problem. There are many different opportunities that we'd have to pursue to move that on. So we see that a linkage to domestic production is very critical. Any agrifood products branded as Canadian should be produced from Canadian-grown feedstocks. We see regional solutions that are required for all pillars of the APF, especially BRM. Eastern Canada grows soybeans for agronomic reasons, and needs a program that is regional in nature, just as the western provinces need regional flexibility for some of the crops that they grow.

We also see the connection between trade and safety nets as well. As we pursue trade efforts, we need those safety nets as a bridge. Trade is critical for a long-term soybean industry in Canada. The Canadian Soybean Council supports freer, fairer, and open international trade. We're not in favour of unilaterally reducing Canadian business risk management programs prior to other nations' doing so. We certainly see that utilizing business risk management is very critical to complement all of the other APF pillars that the government has put forward. We see many opportunities within those pillars to move our industry forward. The soybean industry has been very innovative over the years, and we continue to look at innovation as our means of moving forward, while having that backstop of business risk management programs in place.

Again, we reinforce the need to have business risk management programs that are commodity specific, have regional flexibility, and are bankable and predictable.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you, gentlemen.

I want to remind the committee that we do have votes tonight at 5:30. I believe the bells will start ringing at 5:15.

We will start off the first round. You have seven minutes, Mr. Steckle.

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

Thank you, gentlemen. We have met around this table many times, some of you more often than others. But some of us at the table have been here for a long time, addressing this same question. Is it a lack of commitment? Is it lack of will to understand the problem? What is our problem? I guess that's a question I put to myself as well as to you, but obviously we have some serious problems, moving forward.

A number of months ago, probably 20 or 22 months ago, the Ontario grain and oilseeds people, along with Quebec farmers, put together a proposal on business risk management, a model. I don't know how widely that was circulated throughout Canada, but it was a model based on units and where farmers had the engagement of a tripartite arrangement. For some reason, that made a lot of sense to me, because I don't think we can have any kind of program where there isn't a three-way partnership. I don't think farmers can expect government to be there on every front and be there to bail them out of a problem.

But the greater problem, as I've come to understand as I'm reaching the twilight days of my career in this venue, is that we have to make that commitment that food is a security matter to a country. I think someone—maybe it was you, Barry—referred to Britain and the history in Europe. If we look at what Europe's commitment to food is, it is to them a security matter. It's a sovereignty matter to them.

This is not a partisan matter; this is a matter of a government making a commitment to food security for its people. Once they make that commitment, they will find the wherewithal and the will to do it, and I think we're lacking that.

I fail to see how the APF consultations are going to achieve any great end, because we're going out with bureaucratic people, people from departments. They're going to listen to certain select people, and I think we're falling far short of the mark. We went across this country many times and we're about to begin to do that again. We may see you again sometime. But I just fail to see how we're going to, at the end of the day....

Can we not, once and for all, come together and find a solution? CAIS--is it going to be there? Do we want to have it? We have the sort of reverting back to the old NISA program, but when farmers don't have money, how are they going to match those dollars?

We've come out of four years of bad pricing, and there's no money. How much of the $1.5 billion that was promised in the 2006-07 year has been delivered? How much money is still there in contingency, sitting there from the years 2003, 2004, and 2005? We don't know that. I think farmers have a right to know what's there for them and what's still coming to them. But we don't know that, so we're always in limbo. We don't know whether we're working with last year's money, or this year's money, or next year's money.

So I'm lost and probably more bewildered in terms of our direction, but I'd like to have you tell me this. Do we have in the industry the will to go forward collectively? Could this be possible? Can we find the grains and oilseeds, the crop people, as well as the livestock people sitting down and drumming out a problem that you could deliver back to government, if government were to make the commitment that we're willing to sit down and finally put together something and put it to rest?

We tried that about seven or eight years ago, and we ended up with CAIS. We tried to be all things to all people, and it didn't work. Now we're trying to reinvent it. Somehow we've made some improvements, but I think it's a little late.

[The Chair, Conservative, James Bezan]

I'd ask that when you respond, you respond briefly, because there are only three minutes left in this round.

Who wants to go first? Peter.

[Peter Tuinema]

You ask what the problem is. I think we need to get away from “one size fits all”.

You talked about the dollars going out. Some of the previous speakers talked about, really, our having had three programs. We've had CAIS, production insurance, and ad hoc programs. I think enough dollars have been spent. I think they need to be better targeted.

I think you're on the right track. You need to be talking to producers, not trying to design a “one size fits all” but talking to producers and seeing.... There may be four or five different sizes. But it needs to have flexibility.

[The Chair, Conservative, James Bezan]

Mr. Gowland.

[Jim Gowland]

I think we would acknowledge the same line of thinking as Peter is putting forth here. There are a lot of dollars expended by the government to move a program forward. Certainly with the CAIS program there have been a lot of dollars, but it just hasn't been targeted to those who need it and are hurting. Certainly the way we look at it from the soybean industry, if there was that regional flexibility to address that, that's what we need.

[The Chair, Conservative, James Bezan]

Mr. Schneckenburger.

[Arden Schneckenburger]

Also, we have to address the target where the hurt really is, as Jim was saying. If it's in declining prices because of subsidies from foreign trading partners, especially in our soybeans case with the U.S., those kinds of things have to be directly taken in. CAIS doesn't fit all, and that's why a regional program, commodity specific, is important to address some of those issues of commodities such as soybeans, corn, and wheat.

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

Mr. Van Tassel wanted to get in.

[The Chair, Conservative, James Bezan]

I'm sorry. Yes.

[William Van Tassel]

I have just one quick answer.

Minister Strahl said it pretty well when he came to the annual meeting of UPA in December.

In Canada, the programs are whole-farm based, and in the United States they are commodity specific, especially for grains and oilseeds, which is the base of agriculture. When their prices are lowest, this indirectly subsidizes the rest of agriculture. So that is probably the whole problem for grains and oilseeds, at least.

Also, when there is an ad hoc payment it goes in ENS, eligible net sales, which goes to where the prices are higher. Where you have eligibility net sales, the higher it is, the more you get. When the prices of grain are low, then it doesn't really target very well.

As the others were saying, it's the target. If it were better targeted, it would be a better answer.

[The Chair, Conservative, James Bezan]

You have less than 30 seconds.