Evidence of meeting #45 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farmers.
A recording is available from Parliament.
4:45 p.m.
Conservative
The Chair Conservative James Bezan
Thank you, Mr. Atamanenko.
Mr. Easter, you can kick off the second round for five minutes, please.
4:45 p.m.
Liberal
Wayne Easter Liberal Malpeque, PE
Thank you, folks, for your presentations.
I'd love to get into the railway business, but I don't think we have time.
Am I basically hearing that everybody's in agreement on a national program, a national program that would allow companion programs under certain criteria at the provincial level, as long as there weren't WTO problems, for lack of a better word? I think that's basically what I'm hearing.
Secondly, in terms of our national programs, somebody said it all comes down to money. I believe it was you, Barry. But in terms of our national programs, do we have to support levels on a commodity basis that's equivalent to the United States in order for our industry to move ahead?
There is a problem in terms of our entire farm program. There's no question about it. You are punished for diversification. To give you an example, one guy could be in hogs and potatoes, and he could have neighbours on either side of him singly in those commodities. They'd get payments and he wouldn't, because he's subsidizing himself. It doesn't really seem fair.
I guess the question is this. Do the support levels have to be relatively equivalent to the United States on a commodity basis?
Thirdly, when you're answering, to tie into that, should crop insurance be made mandatory? If you're going to participate in these safety net programs, should it be made mandatory or not?
4:45 p.m.
President, Grain Growers of Canada
I think the only question I can answer is your last one. I don't think it should, Wayne. That's the negative time I was talking about before—negative linkages.
I would say that if crop insurance were a really good program, then you might allow that to happen. But everybody is an individual on their farm. They know their cost structure and they know their risk as well. There are lots of people who have farms of certain sizes whose risk for production losses for crop insurance are minimal. It's a disaster program they're looking for. Maybe they can self-insure.
I like flexibility; I don't like making it mandatory.
One of the problems with crop insurance, and I'll throw this out for you, is that it hasn't kept track.... Well, first of all, there are two components to crop insurance: price and yield. We know the price side is influenced by international trade. The price we have on the crop insurance is depressed—around 25%, the last time we heard. That price should be higher. On the production side, it has never kept up with the production of the last five years. There's been an explosion of seed technology, of new products, and our yields have gone up exponentially. Mine personally went from 24 bushels of canola average under crop insurance to 34, and this is still with a ten-year average. If we went to five years, I'm pretty sure my crop insurance would be on 45 bushels.
How do we get the crop insurance to really reflect where we are today, whatever that number of years is? How do we do it? If we could, then I'd look at a crop insurance program more in the vein of your question as being maybe possible, but not as it sits now.
4:45 p.m.
Liberal
Wayne Easter Liberal Malpeque, PE
I'd like some answers from others as well.
The other way to go, because of the complexity of the industry, is to ask whether you target a different kind of program for guys like you, Ross, who want to pay attention to the market signals—a different kind of national program for that component of the industry from the one for a lifestyle farm, for lack of a better description.
4:50 p.m.
President, Grain Growers of Canada
It's a trade-off, Wayne. It's a tough one to me. That's something that you, as the government, have to do all the time. What to do is a real quandary. Do you save people on the farm—that's a number of people—or do you try to put more towards an industry, which is what we are? We're an export grain industry.
How do you do that? How do you have that marriage so that we don't depopulate all of rural Canada but still allow commercial growers to be efficient and avail themselves of programs that you have? Why should either section be disproportionately advantaged because of their situation? That's the quandary.
4:50 p.m.
Conservative
4:50 p.m.
President, Ontario-Quebec Grain Farmers' Coalition
You talked about the U.S. level of support. We'd like to have that. Generally that would help. We want to be careful nationally about whether we go down the road of that type of program. It could expose us to trade challenges or countervail challenges, so we have to be careful on that.
Crop insurance, or compliance, or having both.... That's what we proposed in Ontario, because what happens when we go to government is that they ask whether all the risks are covered, and whether producers are covering all the risks. What they don't want to get into is a place where people are choosing, then all of a sudden get to a point where there's a disaster and producers aren't covered and then they have to go back and get ad hoc relief. That's why in Ontario we were looking at having cross-compliance between our proposed program and crop insurance.
As for the lifestyle as distinct from business-type farming, the ASRA program has lower levels. There are such components in some of our programs, where there are criteria of size before you actually get into the programs.
4:50 p.m.
Conservative
4:50 p.m.
Conservative
Barry Devolin Conservative Haliburton—Kawartha Lakes—Brock, ON
Thank you, Chair.
One of the treats of going seventh in the question round is I that wrote my question down while you were speaking. It is: how do we balance the desire for flexibility for the provinces with the desire for equal treatment across the country? But I think we've beaten that one pretty hard already.
Basically, “Barry, more money” was a comment you made. You sound more like Barry's wife than Barry.
4:50 p.m.
Voices
Oh, oh!
4:50 p.m.
Conservative
Barry Devolin Conservative Haliburton—Kawartha Lakes—Brock, ON
How much more money? To me, this is the $64 billion question. Is it $1 billion, $2 billion, $3 billion, $4 billion...? You say we don't need new programs, but more money. Give me an order of magnitude.
4:50 p.m.
Past-President, Canadian Seed Growers Association
As far as an order of magnitude is concerned, Barry, I can't tell you how much more money is required. What I can say is that we have the programs there that will deliver to farmers if there are other factors like trade injury. As Ross said, if trade injury throws your production insurance values off, then maybe there should be a trade injury adjustment to them, or maybe there should be a trade injury adjustment to the CAIS program. It's probably better on CAIS because it wouldn't distort production practices and it would be more practical to do it that way.
Trade injury, for example, could be targeted through an existing program, but as an adjustment to an existing program. If you look at Alberta, they have done that through CAIS. They have targeted additional resources through their CAIS program, in recognition of higher input costs and a couple of other things that they've done. They see that as a possibility.
You don't have to go through all the time and trouble of developing a new program that is never going to be perfect, as we said before. CAIS was supposed to be perfect, but they made it too complicated. It's really not any more perfect than any other programs we've had, but it costs you probably a thousand dollars more as a farmer to get an accountant to fill it out.
4:55 p.m.
Conservative
Barry Devolin Conservative Haliburton—Kawartha Lakes—Brock, ON
The reason I'm asking is that the agriculture minister made his announcement of a billion dollars back on March 9—the two components were the $600 million and the $400 million. A couple of days after that, I had a meeting with my local farm council, whose members I talk to on a regular basis. What I heard was that a billion dollars sounds like a lot, but when you slice it up into this many slices, it doesn't really leave very much. I came back at them with the same question.
If the federal government was putting $1 billion or $1.5 billion on the table and the provinces were coming up with 40%, that would be $2.5 billion. I don't know whether we're adjusting that number, or whether people are suggesting that it has to be doubled or tripled.
I don't know if anyone else wants to comment, but I'd like to get your views on whether you think the federal expenditure for agriculture is in the right realm or whether it needs to be dramatically increased.
4:55 p.m.
Chair, Canadian Soybean Council
I think we have to look at it and see what's relevant to the investment that we're making, from producers right through to government, and industry as well. As growers, we're spending huge dollars to be innovative, to compete. Industry puts huge dollars in there. Our governments have been putting in huge dollars these last number of years in order to be innovative.
Without that recognition and making it relative to that investment, those are dollars that some other feedstock is going to take over if we don't have a bit of a backstop there to protect that feedstock from going in there when prices do slide. We have to assess and look at all the dollars we're investing and at the spin-off of industry. We have to evaluate those types of things. There's no doubt about it. It needs to be relative and have that backstop there, with enough dollars to protect the investment that all of us are putting into the innovation of our industry.
4:55 p.m.
Vice-President, Ontario-Quebec Grain Farmers’ Coalition
I would like to answer that by saying that when the money is not targeted, you can put in $1 billion, $2 billion, or $3 billion, but the effect won't be there. In a huge country like Canada, the effect won't be there. But if you target where the damage is, you probably have enough already or it probably won't take very much more. If you target the hurt, then we'll be able to put a figure to it, and the figure is probably what's being spent already.
That's why we're pushing forward our program. It's more targeted to where the hurt is, and it will cost less. It also makes the farmer responsible.
4:55 p.m.
Conservative
4:55 p.m.
Past-President, Canadian Seed Growers Association
I'd like to go at this a little differently. I'm hoping I'm right in saying that good times are coming to farms across the country. I think I'm right. I'm not sure how long they're going last, but I hope they last a while.
If that indeed happens, I would encourage you to not stop investing in agriculture. If that happens, that's not the time to stop investing; it's the time to stop putting band-aids on and to start investing for the future. Don't say the problem is gone, it's over, and we're not going to have the income problems again. They will come back again, I'm sorry to say. I'm sure they will; I hope it's in a long time before they do, but let's try to put ourselves in a better position.
Let's not forget what has happened in the last five or ten years. Let's work in a proactive way to put ourselves in a better position. It's better for budgeting that way, from the federal perspective. Let's put the pieces in place so that we don't run into this problem again.
4:55 p.m.
Bloc
Roger Gaudet Bloc Montcalm, QC
Thank you, Mr. Chairman.
The current government tells us that since it has been in power, it has provided $4.5 billion to the agricultural sector. On the other hand, you all seem unhappy. Can you tell us where the money went?
I have seen no changes in agriculture since I was elected in Ottawa, in December 2003; there are still problems. We're talking about the American Farm Bill. Why is it that we are not in a position to confront the United States, which is subsidizing its agricultural sector, just like the European Union? In Canada we are not able to subsidize. Why?
I would like someone to give me some answers concerning this problem. You have to define this. If you're saying that the United States and the European Union subsidize agriculture, why is it that Canada cannot subsidize it?
I would like to hear your comments because I am concerned about this.
4:55 p.m.
Vice-President, Ontario-Quebec Grain Farmers’ Coalition
The reason lies in the concept underlying Canada's programs. We use a whole program and a margin of reference. Therefore, when the price that the producer gets goes down, the margin of reference goes down and the program is no longer effective. That is CAIS. Because grain prices were kept down since the last and the previous Farm Bill, the margin of reference went down and the program was no longer effective.
The concept underlying our programs is very different from that of the United States.
5 p.m.
Bloc