Agriculture Committee on April 16th, 2007

[Ross Ravelli]

By nature, farmers are often mystic people. Absolutely. We assume a lot of risk, but we go out there every spring with optimism.

As far as how we compete with the United States and Europe, we know that's a problem. But if we look to the next few years with the biofuels industry coming onside, we've already seen what that has done as far as driving the prices. The prices are up 30% over last year. So that gives us some optimism.

As I mentioned, innovation, even during trying times, has been a real benefit for Canadian agriculture in the last few years. This move to new crop varieties has accelerated in Canada and North America, which has allowed us to be on the leading edge of technology. We lead it; we don't just assume it is happening. Our farmers have become very innovative in finding ways to cut costs. We are very streamlined producers right now.

I don't know how much more we have to give or how much more we can collapse that cost. I don't know that. But I am optimistic about the changes I foresee in the next little while. I'm not laying my hat for the future on the WTO. We'll have to live with international subsidies for a long, long time. But I know that is the direction we have to move in to get that kind of solution.

I don't know if I answered your question.

[Roger Gaudet, Bloc, Montcalm, QC]

That's a valid response. But only on the condition that there were no problems of any sort such as floods, droughts, or anything of a similar nature. Everything would need to be shipped at lightning speed. I'm not so sure that things will be that easy.

As far as other production sectors are concerned, I know that people are encountering problems, and I am not sure they are really managing to obtain federal government subsidies. And I'd like to know the other witnesses' opinions on this, that is Ms. Allison, Mr. Sardhina, and Mr. Lucas.

[Linda Allison]

I'm somewhat confused. What do you mean, that we don't have access to the funding?

[Roger Gaudet, Bloc, Montcalm, QC]

The witnesses who appeared before you said they didn't get their fair share of the subsidies they were entitled to. These subsidies supposedly targeted farmers in general, but only some of them ended up benefiting from them. Some production sectors or small producers aren't getting any subsidies, unless the government sets up their own targeted subsidies.

I'm not sure things are going so well for apple growers. When they are having a tough time, are they entitled to benefit from programs such as the CAIS in order to offset their loss of income?

My question is simple: what sort of assistance are you expecting from the federal government?

[Linda Allison]

Speaking specifically to the CAIS, yes, we all have access to it, but the question is whether we qualify to receive funding. We don't all qualify based on the tax implications, the status of our farms. That probably has to be looked at. If there were a disaster portion, more people would probably qualify. Other government funding, such as the funding available through the environmental farm plans and the best management practices, is available to everybody. I think more and more agriculture producers are choosing to access that funding.

There was probably a bit of hesitation and fear of the unknown. You know, “Oh, my God, what do they really expect from me if I access this funding? What will I have to live up to?” That's going by the wayside. More and more people are accessing that type of funding to provide better production practices on their farms, to upgrade their facilities, to protect riparian areas and that sort of thing. I think more people are using that funding. But specifically on CAIS, no, they are not getting that.

[The Chair, Conservative, James Bezan]

Does anybody else want to comment?

Mr. Sardinha.

[Joe Sardinha]

Yes, Mr. Chairman.

I think the word “affordability” came into play in a lot of these programs in the past, and it continues to be an issue for the provincial government in consultations with the federal government. The word “affordability” comes up time and time again, and that's a problem. If we use the word “affordability” as the be-all to design programs, yes, there are going to be constraints on whether producers can access programs, because the dollar value will have a finite limit.

The other thing I wanted to comment on was in terms of the distribution of the money. The grains and oilseeds sector has had a huge issue with declining margins, and it's something that hasn't been addressed by CAIS. Perhaps a NISA component would be a better way of addressing declining margins because of the allowance of inputs in the calculation.

In terms of the dollar distribution, horticulture has been seriously shortchanged in the recent federal announcements. Maybe not in the most recent announcement, but going back last year, $900 million flowed to the grains and oilseeds and cattle sectors through inventory evaluation, and in applying that methodology nothing went to horticulture.

If you talk about equal access of producers to government programs, that's one area where it's been sadly lacking, horticulture, which is 80% of the agriculture GDP in this country and produces crops that are readily edible by Canadian citizens. We have been left hanging, and some of the sectors—and I'm saying particularly our sector—went through a major financial disaster in 2004, thanks very much to our U.S. friends. So we are a small voice, and we haven't been heard. I say this with respect for the cattle sector and grains and oilseeds sector, because they've had their issues.

One other thing is that I also support the proposal for a separate disaster component. When you talk about affordability, what has depleted the CAIS program funds provincially and federally has been instances such as avian influenza and BSE. If we had a separate catastrophic loss or disaster pillar, those issues would be taken care of outside of the regular safety net program.

[The Chair, Conservative, James Bezan]

Merci, Monsieur Gaudet.

Mr. Miller.

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

Thanks, Mr. Chairman, and thanks to everyone for showing up.

I'm basically going to put my questioning along the same lines as our witnesses this morning, because I'd like to hear your comments.

Ross, it's good to see you again. I have a question for you. We talk about having something to specifically address disasters and that kind of thing. We've heard comments by Mr. Sardinha about BSE and the avian bird flu, and to me they are specific disasters. We have from time to time adverse weather conditions that affect all sectors of agriculture, whether it be a mini drought or whatever you want to call it, or excessive moisture, and that kind of thing. Do you think that crop insurance should be mandatory throughout agriculture? I know there are some debates on that, but should it be part of the overall thing? I'd like to hear your comments on what you think of the announcement here to move back to the 15% top-up to the CAIS program.

To Ms. Allison, there's one question that keeps coming up, and earlier I asked your counterpart about it as well. The CAIS hasn't be responsive enough in all sectors of agriculture, and specifically you hear some good stories and horror stories in the beef industry. Do you think that this 15% top-up is going in the right direction?

I have a more general question. The family farm keeps coming up. Should programs and government funding be directed more to the size of farms, or basically to make us competitive on the worldwide market?

Mr. Sardinha, you talked about a number of things in the fruit industry. I know about these things, because I have quite a few Georgian Bay fruit growers in my own riding, and I know that they haven't been able to access CAIS money; it just hasn't worked. Are you suggesting in any way that the fruit industry or the horticulture industry should be in supply management? And one specific question I have--and I don't know the answer to this--is what percentage of the fruit is grown? I take it that we're a net importer of fruit, and I'd like to know the numbers there as far as that is concerned.

I'll leave it at that for right now, and if I have any time left maybe I'll add some more.

[Ross Ravelli]

Great, Larry.

One question that I have noted down is you want to know about crop insurance as a mandatory feature. Is the NISA top-up the recent option you're talking about?

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

Those two, yes.

[Ross Ravelli]

Those two, okay.

On crop insurance as a mandatory feature, we talked in my presentation about having flexibility on every farm. When I sit down in the spring, I have my crop insurance options before me. They have three prices and three price levels, and every one has a different level of premium. I have to sit down and look at my farm and weigh these three options, which are really nine options. It makes it confusing to find out which works best for my farm. Right next door, Linda can be somewhere else in Saskatchewan looking at the same types of figures and saying, “Well, that doesn't quite work. My risk isn't as high.” Maybe on her farm she is spread out further over the country and she doesn't have the risk for hail or the drought risk that normally you have.

So to make it mandatory, would you set the level or would you just say that you have to have it at some minimum? If you say some minimum, in my scenario that I gave you, when the top is already 60% of what I grow, why would you want to make a minimum less than that?

I don't know how you can make a program mandatory that I don't think is as valuable as many people think it is. I think it takes options away from farmers. I'd hate to do that. And I'd hate to have that mandatory part of this business risk management basket say that you have to have this to get that. That takes away flexibility. I think you heard this morning from everyone that flexibility is what farmers have to have to make the best decisions.

In terms of the NISA top-up, I'd almost throw that question back. It's $300 million per year that's revenue-neutral to the government. It went from the NISA top-up to a smaller group. You've got $300 million, and now it's three times the people who have access to it. What was that top 15% supposed to do? Does it now meet the needs of the people who triggered it because you've just spread it over more people? I question that. I'm not sure. As a farmer who didn't trigger it, yes, all of a sudden I'll have access to more money. Does that make it a valuable program? I'm not sure. Was there a need for me to have it? That's the only question I would have. It does spread it out. I question it.

Also, the other question I have for you is that it is now an amber program. It was in the green program and now you've moved it into the amber program. Whether the international trade will do something with it, I don't know. I have a question on it.

[The Chair, Conservative, James Bezan]

Ms. Allison.

[Linda Allison]

Thank you.

Your question to me was regarding CAIS and the top-up.

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

That was one.

[Linda Allison]

Okay. I question the greenness of that program as well--how valuable that would make it.

I also question how valuable it will be to the cattle producers as a whole. As an example, I am one of the cattle producers. I'm a 200-cow calf producer. I also run a few yearlings. In the whole lifetime of CAIS so far, I have been given $9,000, of which I now have a letter on file to pay back $4,500.

I know there are a lot of people in the same predicament as I am, and a lot of them have actually thrown up their hands and said “My goodness, why do I even get my accountant to do this? Why do I go through the extra paperwork and even bother with it?”

I could never give you a concrete answer on CAIS right now. It's very controversial in the cattle industry. They'd like to think it was going to do something for them, but that remains to be seen.

What was your next question?

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

The family farm is always something that comes up. Should government funding be directed to or lean towards smaller family farms, regardless of size, and not concentrate specifically on making all agriculture competitive in the world market?

Are you clear on what I'm asking?

[Linda Allison]

I'm very clear on that, and it's rather a trick question.

I asked the question at our regional meeting the other day: How many ranchers in the room are under 40? There were only about 50 people in the room. There were two active producers under 40. How many ranchers in the room are 75 and over? There were a few more who were in that category. So the rest of us were in the 40 to 75 age group.

You talk about the family farm. It's a difficult thing to know what to do, because not that many of us have children who are even willing to step up to the plate any more and take over that family farm. It's hard to give you a definite answer on that.

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

Okay, thank you.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Miller.

Mr. Atamanenko, for five minutes, please.

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

Thank you very much for being here.

I have a question for Linda. First of all, it's a pleasure seeing you and meeting you finally.

In terms of the national park as a threat, what do you mean, specifically?

[Linda Allison]

What do I mean by the national park as a threat? Well, for one thing, the proposal is a very splintered proposal. It also includes a lot of urban area.

The big concern that the southern interior cattlemen have is that British Columbia is unique, in that the ranching industry depends on crown grazing. Our cattle, while they stay home during the late fall, winter, and early spring, go to crown grazing owned by the provincial government for the summer months, for which we pay a grazing fee. As well, we have to make all the improvements and live up to the forest practices we sign on to.

If that part goes ahead, our concern is that livestock grazing will be extinguished within the park boundary. What happens then to those ranchers? Without your crown grazing, your ranch goes sideways. You're very dependent on that. What happens to those ranchers who no longer have crown grazing? How on earth will they ever be compensated? What precedent will that set?

In addition to that, let's say you have this park. It's going to impact my friends the fruit growers, or the grape growers, or any other agriculture persons, because now you're going to be saving these animals within the park. How are they going to fence out any of the wildlife that's there?

In addition to that, loss of any ranches within the southern interior impacts all the machinery dealerships, the feedlots, and any agri-related industries whatsoever.

That's where our concerns lie.

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

Thank you.

Joe and Glen, I'd like to pursue what you meant in what you talked about. You talked about a minimum import price. Is that different from what you mentioned earlier this year about a rapid response tariff? I'm looking at this as proactive, whereas you see the rapid response tariff mechanism.... The way I understand it is that if today apples are dumped from Washington State, right away we would like to see a tariff imposed on these apples, rather than go through that whole process you talked about, which takes months and is costly and doesn't give any effect. Is this different?

This rapid response proposal of yours has been approved by the Canadian horticultural association, I believe. Where is it right now? Is there national agreement from the other apple producers? I'd just like some clarification; I'm not sure where we are with these two.

[Joe Sardinha]

Thank you for asking those questions.

First of all, we talked about it initially in the context of having a rapid response tariff mechanism. Perhaps it's better if we do have a minimum price, in the sense that it's less on the retaliatory side and more on the side of maintaining market stability. For those purposes, because there are so many other situations in which reference prices are used to comply with certain obligations in international trade, we go back in history and use a reference period to print and put out agricultural payments--general payments to the farming community--because you can't use last year's figures to comply with trade rules. In that sense, using a historical average would make more sense to arrive at this thing.

I didn't get a chance to answer the previous question about whether this is trying to manage supply. It is absolutely not. We fully realize we're importing 50% of the apple needs for this country, so we're never going to be able to establish supply management in that sense. We just want to bring some stability; we want some proactive mechanism. That could be as simple as having a reference price at the border. Canada Border Services Agency monitors the price of imports coming in all the time. If there are any anomalies, they can take some quick corrective measures to say the product will not be allowed to come in because it is below this reference price.

Where is this right now? Our resolution was passed at the AGMs of both the Canadian Federation of Agriculture and the Canadian Horticultural Council. We've said that we've already contacted the CFA recently; their policy analysts will be looking at this, and we hope to develop something further with them.

Ultimately maybe this is not an issue for Agriculture and Agri-Food Canada, but more of an issue for the trade minister. I think that's eventually where it's going to end up--in the trade minister's department.

I imagine the words “emergency tariff” have more clout, but we're looking for something that's going to work.

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

So specifically, you're moving more into the area of the minimum price than towards the idea you expressed in your communiqué, which talked about a rapid response. Just so I'm clear in my mind, is that correct?