Agriculture Committee on March 29th, 2007

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you, Mr. Chairman. And, gentlemen, thanks very much for coming today.

I have a number of issues. A couple of them have been touched on that I want to talk more about.

One thing I always ask a lot of the farm groups about when I go to visit them in my riding is that it has been my feeling as a farmer and as a politician for a long time that the old “conquer and divide” in the agriculture sector and in farm organizations is alive and well.

What I mean by that is, although we have so many voices out there, I wonder whether we are really being heard. I would like to hear your comments. In Ontario, there are three main farm groups. There's a chapter of the Farmers Union, the OFA—the provincial branch of your organization, Bob—and the Christian Farmers Federation.

I really, honestly believe that they are not doing their members the justice they maybe could be doing if they were all of one voice. I would like to hear a few comments—briefly, if you could, because I have a couple of further questions.

[The Chair, Conservative, James Bezan]

Mr. Friesen.

[Bob Friesen]

One of the things we try to do at CFA, of course, is build consensus across Canada. We have as a member a general farm organization out of every province that certainly agrees with the template for business management that we circulated. It also includes numerous national commodity organizations. You're right, OFA is a member as well, and UPA is a member.

We simply try to build consensus with as many organizations as we possibly can. If they are not a member, we even consult with them on occasion.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

My question, really to all of you, is—yes or no, it could be—do you not agree that you could possibly do a much better job if you all got together and became one big voice? That's the question.

[Bob Friesen]

We'd love that.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I'm glad to hear it. What about the other...?

[Stewart Wells]

When we complain, and I think rightfully so, that we think partisan politics gets in the way of good decision-making, we have this come back to us, saying that farmers need to speak with one voice.

But our experience is that when farmers have spoken with one voice.... In 2001 the biggest farm coalition that was ever built in this country was built around the opposition to Roundup Ready wheat and its introduction. We had CFA affiliates, National Farmers Union affiliates, and civil society organizations all working as one, and the impact on the government was essentially zero.

We didn't effect any regulatory change. We didn't get any kind of regulatory regime in place. What we got was a voluntary stepping back from the plate by Monsanto, the industry player.

So our experience says, on the issues where we should work together, we do, and we work together very well. But our experience is that it's not a magic bullet.

[Denis Bilodeau]

I would say that we are experiencing more or less the same situation that you described in Quebec. We work in a collegial manner with all of our groups and we are all part of specialized federations. You must understand that in Quebec, as far as marketing and income security are concerned, we have more or less two systems. We have large crops covered by supply management, which is an income security system, and at the same time we have other crops covered in markets, sometimes export markets, which have their own income security system through the agricultural income stabilization program, which guarantees income based on cost of production and market revenues.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Bilodeau, I do not want to dwell any more on this, but in my opinion, one group could represent the bunch all that much better.

Another thing I want to touch on, and Mr. Steckle started on it, is the problem between the federal government and the provinces, because they both have a role in looking after agriculture.

What Paul suggested was that perhaps there should be a national voice. We know the provinces are totally against that; they want to have some control in agriculture. The only way the federal government could do it is basically to deal with it through transfers, basically saying “look after it” and holding that money back. I'm not suggesting that should happen, but perhaps something like it.

The other way to look after it is basically that the federal government hand over a cheque each year to the provinces based on a formula and let them look after it.

I would like to hear some comments on that. Is that the right way to go? We all want to try to fix the income crisis.

[The Chair, Conservative, James Bezan]

Mr. Miller, you're out of time.

Mr. Wells.

[Stewart Wells]

I have a very short follow-up on your question about the one voice.

As long as industry, or, you could argue, civil society, has two nickels to rub together, there will never be one voice coming out of the farm community. Some company--a seed company, a grain company, a chemical company--will fund a small group of farmers to put forward their point of view. We have current examples right now of where that's happening. A tiny number of farmers are having a tremendous influence on the policies of the federal government, and those farmers are not part of any of the major general national farm organizations.

[The Chair, Conservative, James Bezan]

Any other follow-up?

Just briefly, Mr. Friesen.

[Bob Friesen]

We don't support what we would call block funding--namely, just sending money to the provinces. We really don't think we're far away from having a suite of safety net programs that's as good as what we need. That's why we're not saying let's throw something out completely. Instead, let's build around it.

The problem with the provinces is that they've already said it; they don't want to spend one dollar more on agriculture. The federal government has committed to spending more. We need to encourage them to spend a little more as well.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Atamanenko, please.

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

Good afternoon. Thank you for coming.

I'm going to start with the statement that often we can see that those primary producers in Canada are suffering, and many would say it's because of a direct result of U.S. government and European Union policies of subsidies. I think a lot of us often will agree with that.

Many will ask, then, why is the federal government not standing up for farmers vis-à-vis...within the ramifications of WTO, but still not standing up for farmers to be stronger to maybe counteract what they're doing south of us to have something more substantial here?

I want to use an example, and the example I want to use is the fruit growing industry. Maybe I can get some feedback here, starting with Darrin and down the table. I'll try to be brief.

Currently the B.C. fruit growers, I believe with endorsement from the horticulture association, have said that they would like the federal government to undertake a rapid response mechanism to combat the dumping of Washington State apples in British Columbia and the rest of Canada. In other words, if the dumping occurs today, well, then, tomorrow we have trade action taken to stop this--in other words, we increase the tariffs.

They see this as one way of not using federal money but using federal clout and using federal teeth to stop this until this problem is regulated. The history of this in the past has been that when this type of trade action happened, by the time we got things going, months later, the prices would have increased. It would be too late. Plus it would be costly.

This could be considered as a disaster response. It could be considered as a cost of production. What is your feedback? These folks have come out with this, and I'm just wondering what your thinking is on this.

Darrin, maybe we could start with you.

[Darrin Qualman, Director of Research, National Farmers Union]

Thank you, Alex.

I think this really is something that's needed. As we have globalized our markets, what's happened is that farmers have been forced into an increasingly competitive environment. It's simple economics. As that has driven up our competition, and we're suddenly in competition with every product around the world, that increased competition level has driven down our prices. There are extreme cases of that--the dumping, for instance--but there are everyday instances as well, such as when all of our canola is in competition with Brazilian soy, etc.

At the same time, my colleagues have mentioned market concentration. As our competition levels have gone up as a result of globalization, the people we deal with on both sides, our input suppliers and the people who buy from us, have merged and concentrated. Their competition level has gone down, which means their profits have gone up.

So competition levels and profits on the farm and off the farm have gone in opposite directions. It's absolutely essential that we do something on both the critical issue of dumping and the chronic problems that we see there.

[The Chair, Conservative, James Bezan]

Monsieur Bilodeau.

[Denis Bilodeau]

I would say that that explains in part why we defend our supply management programs so passionately. To some extent, these programs fulfil this function. The situation is more difficult for other crops. I think that, in Canada, we're looking for food production independence. This is essential. I think that a people must ensure, as a primary responsibility, that it can feed itself through its own production throughout the country.

I would say that the role that the federal government can play... We are still advocating an income security program approach. We understand that we want to provide producers with security based on a minimum amount of income. But the more we are able to find money within the market, the less likely we will have to intervene. In addition, the money that we do invest will have a positive impact.

Product identification is one thing that people have been crying for year after year, namely, a better identification of Canadian products, to enable consumers to really have good information about where the products have come from. In Canada and in Quebec, our product regulatory frameworks are quite stringent with respect to things as such the environment, which can lead to higher production costs. We are finding it more and more difficult to compete with imports. That must be acknowledged. Canadians are demanding when it comes to the environment—they are putting demands on the state—and it therefore follows that it must be given the tools to meet their requirements. Canadians are demanding and if they prefer to buy Canadian products, we want to create this balance, which will save us from having to intervene so often with respect to dumping-related matters.

[The Chair, Conservative, James Bezan]

Mr. Friesen.

[Bob Friesen]

We would certainly support a faster response time when it comes to challenges like that. You're absolutely right. Our industry could be destroyed overnight before we even had an opportunity to put some of the things into place.

But by extension, we've also advocated that we should have somewhat of a bilateral peace clause with the U.S. when it comes to business risk management programs. At the end of the day, it's always the farmers who end up losing the most. Even if you win a challenge, it costs farmers a lot of money. We believe there should be a lot of work done at the official level on some kind of peace clause with the U.S. when it comes to business risk management programs.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Easter for five minutes, please.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

First, on the long term, a couple of you mentioned supply management. There's no question it's one of the foundations of our agricultural policy, but a trend has been set in the recent issue of the Canadian Wheat Board.

What do you think the threshold should be in terms of any ballots or voting in the industry? Is 13.8% high enough to destroy the system? If 13.8% of producers are opposed and it's on a ballot, which would be about 4.5% of the actual ballots mailed out, is it enough for a government to move to undermine that industry? It's what's happening in the Canadian Wheat Board.

I'd like you to think about that one, because the trend has now been established by the Government of Canada. Only 13.8% are opposed to the Canadian Wheat Board in terms of the latest plebiscite, and it's 29,000 votes out of 80,000 ballots.

Over the longer term, we are caught in a quandary. We have been in the whole farm program in Canada, and it creates a situation where there's really cross-subsidization within the industry. When you have a producer of two commodities, he or she ends up cross-subsidizing the farm operation. How do we get around that? I know producers who set up separate corporations to try to get around it.

Secondly, when you look at the inequitable position we're in with the United States, and it is in the UPA's paper, the farm debt/debt asset ratio is really serious. Even if we get it correct this time, and we sure as heck haven't been correct previously, we're starting off with a $51 billion debt load. Our debts are substantially higher than they are in the United States.

Folks, I was around when interest rates were 23.5%. I can tell you that if interest rates ever moved to 10%, we wouldn't know what hit us. How are we going to get around that problem as well, in terms of a farm safety net package? We have to look at it.

[Bob Friesen]

On business risk management, yes, as far as the debt load is concerned, you're quite right.

We had the agricultural attaché from the U.S. embassy speak at our annual meeting. You've already heard someone say that we've come out of the worst four years in farm income in our history. The U.S. farmers are coming out of the best three years of farm income in their history. That's not all about the amount of money their government spends. It's also about whether they spend it strategically. That's why I think all of us talked about our having to be more strategic with the way we spend money. But they also have record low farm debt in the U.S., together with coming out of the best three years of farm income.

As far as cross-subsidization on the farm goes, Mr. Easter, the contributory top tier addresses that somewhat, in that farmers will be able to attract government money based on an ENS contribution. If you just go into the top tier, you won't have that same whole farm effect that you have if you have the CAIS program right to the top.

Companion programs are also meant to, on a regional- or provincial-specific basis, look at some of the ways of how you can deal with that and be a little more targeted and a little more commodity-specific with those programs as well.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Lavoie.

[Gilbert Lavoie]

My answer is essentially the same as the one given by Mr. Friesen, but I would add that we have just gone through a period where we had no agricultural policy in Canada, but rather an agribusiness policy. We thought that if the processes were profitable, they would pass on revenues to the producers and that would in turn secure their net income. As my colleagues to my right and left both said, with the concentration phenomenon that occurred, that did not happen, to the point where we found ourselves in a situation where processors experienced upheavals with their own profitability. So they told the producers that they would no longer take their animals or that they would be shutting down their plants, to the point where we wind up with nothing. In order to reverse this trend, Agriculture Canada will have to adopt an agricultural policy to encourage a business environment providing producers with net income based on the market, or adopt a complementary policy. I think that we need to be focused on agriculture.