Agriculture Committee on March 27th, 2007

[William Van Tassel]

I'm going to talk about grains because I'm a grain producer and I work for a grain producers' coalition. I think that grain producers throughout Canada have been affected by foreign subsidies and the American Farm Bill. I think we have to look at that first, then consider flexibility, and finally, find solutions for everyone. We do not all produce the same crops but we are dealing with a common problem. We have to deal with that problem.

[Arden Schneckenburger]

There are a number of things. Right now agriculture is basically a 60-40 split between the feds and the provinces. Both are responsible for it. So as long as the federal money is evenly distributed to everyone, flexibility within provinces should be had.

An example of that would be crop insurance. I believe all provinces have crop insurance. It's different in each province, and yet it's still a common program, national in scope.

[The Chair, Conservative, James Bezan]

We'll go to Mr. Reisner first, and then we'll go over to you, Ross.

[Barry Reisner]

Thank you.

I don't think we need more programs, I think we just need more money. More programs just make more complications and more papers to fill out. Farmers don't want that. We have the production insurance, crop insurance, and the purpose is to cover environmental risks for production. CAIS is mostly to cover price. If we have a producer account, it will give some flexibility.

To my mind, those are enough--if they're properly funded. It all comes down to money, just money. If there's not enough money, put more money into those programs or change them so that they're more effective. I think that's really all that the producers need.

[The Chair, Conservative, James Bezan]

Mr. Ravelli.

[Ross Ravelli]

Thank you.

I think you've heard that production insurance is something that's pretty common, and I would say a reference margin-based program we could probably agree to. It may have limitations, but we could agree to that as a start.

I think the other common thing we heard today is trade injury, trade injury compensation. We all think that is what's holding the market down. Really, that causes a lot of these programs not to be as effective, not to give our cost of production.... I don't like that word, “cost” of production; I don't want to have a cost of production.

In terms of getting the programs to be more relevant to our farming operations, if there were some way of finding out what the figure was, of having that instilled into all crops so that it wasn't distorting the market, that would be a huge step. Let the market decide. With that compensation in there, if we can't grow wheat or canola in Canada any more, so be it. Let the market tell us. We have to get the market signals. I don't think we're getting them clearly now.

[The Chair, Conservative, James Bezan]

Thank you very much, Mr. Gourde.

Mr. Atamanenko, you get to finish off the last round. You have seven minutes.

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

Thank you very much. I'll try to be brief, if I can.

Thanks for being here.

Mr. Ravelli, I have a question for you. You talked about certain solutions: new markets with WTO, more involvement of the private sector, smart regulations, research investments, looking at transportation, and new varieties. We talked a bit about a vision—Paul was mentioning that—the vision of food security for our country.

Do you share the vision that we should be supporting the small or medium-sized family farm and the rural way of life for food security? The reason I'm asking is because many of the things you mentioned can maybe be geared more to large operations and industry. Do we support this and let the small enterprise fall by the wayside, or can you see the small farm being supported?

That's my first question.

[Ross Ravelli]

That's a very good question and a very large question that we're trying to deal with. How do we determine what the industry is, and from our side in the grains and oilseed industry, where we are? We're an export country. We export 80% of our stuff. Who's producing that grain?

We're trying to tailor programs to that sector--the bigger sector, the more productive sector. But still, Canada is a large area. We have to have the social aspect of the rural economy, absolutely. There has to be a marriage of those. Somehow we have to find that balance.

I think agricultural policy in Canada has been balanced too far towards the small-way-of-life type of farmer, which is good, but our industry has moved. We're exporting. We give a lot of money to Canada's gross domestic product from selling, so we have to have programs move and have more swing that way, I think.

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

Maybe I'll move on, and we'll come back to this. I'd like to see what Quebec and Ontario have to say about this.

You talk about an income support program. It seems very simple and logical. From the way you've described it very briefly, it seems that it could be implemented more easily than what we've had in the past, that it could answer the idea of food security for our nation. It's sounds almost as if it's sort of a minimum-income type of program to guarantee the survival of farms.

If that in fact is the case, have you costed it out? Would the current figure of $1 billion, plus $500,000 over the next five years, be a start?

You mentioned one-third and two-thirds--one-third producer, two-thirds then divided up between the federal and provincial governments. Is there a minimum level? Could you explain that? Maybe somebody else could comment on that too.

[Peter Tuinema]

The amount would vary from year to year, depending on what the prices are. There would be spikes in payments, and in some years there would be practically no payment.

Also, I said earlier, or someone else brought it up, we really have three programs running: CAIS, production insurance, and ad hoc dollars. And there are considerable ad hoc dollars, probably almost $1 billion a year for the last four years. That's considerable.

What we're wanting to have, instead of ad-hoc programs, are predictable programs. If CAIS isn't going to address the need, then design programs that are going to address the need and pay producers. Then you shouldn't get into these ad hoc payment situations. So it really shouldn't cost any more than it does right now.

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

Would it be based, for example, on the revenue from last year's crops and based on income tax?

[Peter Tuinema]

Do you mean income support programs?

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

Yes.

[Peter Tuinema]

In the case of ASRA, in Quebec, or the proposed program, it's a target price. If the price of that year falls below the target price, the producer is paid the difference between the two.

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

It's coughed up.

[Peter Tuinema]

The producer year after year pays a premium for that, and that's where the one-third cost from the producer would come in. That's generally the way the program in Quebec is set up.

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

Does anybody else have any comments on that?

[Jim Gowland]

The programs we've had up until 2003 in Ontario, as an example, and there are other provinces too, work fairly well. If the NISA program had been allowed to carry on, I think with the income problem we saw here in the last two or three years, it probably would have been a model. NISA would have shown how it exactly works. Bringing that back in as a top layer of CAIS kind of identifies that maybe that still is a good opportunity.

I think we have to build on some of those things we've had before and try to grow them and come out with that bankability, the predictability of a program.

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

This will probably be my.... Oh, sorry, go ahead.

[Arden Schneckenburger]

We need to have programs that don't give us a minimum living income. We need a program that will let us be competitive with our American counterparts, who as we know can get sizable ones in some cases. We need to have an income for farmers in order to take part in the other pillars of the APF, be it innovation, science, technology, or all these other things. As to a minimum, no, we need to have something where the industry can move forward.

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

Can I move on to transportation?

You mentioned problems, and I think everybody around this table agrees that we have problems, especially in western Canada. Do you see the solution to be us getting tough with CN and CP? That's one thing.

Do you see more of a need for the preservation of secondary and tertiary lines to allow small facilities and small communities to move grain? Should there be more emphasis on rail, with an improvement to the major lines? What feedback are you getting from people?

[Ross Ravelli]

Certainly the issue we touch on and which touches all this is competition, and we need accountability.

Right now the railways have no accountability except to themselves. Proposals have been put forward that there has to be some kind of ombudsman or some kind of facilitation between the shippers and the people at CN and CP. There is nothing, and nobody can take them to task. If we could enter into some process that would allow it to happen, with an arbitrator of some form, it would be a big step forward.

[Richard Phillips, Executive Director, Grain Growers of Canada]

It would apply if they're small shippers on the smaller lines or larger shippers on the large lines. I think the problem is universal across all shippers. The railways can't be held accountable.

[Barry Reisner]

It's maybe an area where government can have a role.

Shipping in western Canada has been a significant problem forever. We've seen that it's been worse than usual this winter. Part of it's weather-related, but we also had disruptions because of labour this winter.

We're trying to diversify into smaller processing facilities to increase profitability and get away from commodity crops. The smaller shippers are having an even worse problem than the major shippers. It's not always about cost. It's about reputation, reliability, and how we are seen in the world, as far as being reliable suppliers of products.

We can look at the U.S. system, which is a commercial system, and it's probably worse than ours in some ways. We have a lower price system, and it's a regulated system, but it doesn't work very well either. We have to overcome that, or we're going to have serious problems as far into the future as we can look.

We can't do it as farmers. It's something that has to somehow be done through regulation, coercion, or persuasion. We need some kind of way to work with the railways in particular to get the system working better, because they do most of the transportation of grains.