Thank you, Mr. Chairman. It's great to be here.
Greetings to all the committee members as well. It's my first time before the committee. Actually, it's my first time before a committee in this capacity, as a witness. I'm sure you'll be gentle.
At any rate, I appreciate the work that you folks do on behalf of agriculture. In my experience, the work of the agriculture committee is like the work I see in the department; it's done by people who obviously have a passion for the issue. I know that the farmers in our agricultural organizations appreciate your work and the passion you bring to it.
I just want to talk for a few minutes about what we've done in the last few months and then talk a little more about the future. After that I'll take your questions.
As you know, the government committed $1.5 billion to the agriculture sector in our May 2 budget. That's triple our original election promise. It's in response, really, to what we heard from farmers and farm organizations about the need that's out there. We have addressed some short-term needs and have at the same time tried to lay the foundation for longer-term stability. We've been very busy over the last couple of weeks with some announcements on how to benefit our producers now and into the future.
We were very happy to have made three announcements on May 18--the farmers' hat trick, if you will--that put about $1 billion into farmers' hands this fiscal year. The biggest announcement was the change to the CAIS inventory valuation system. We all know that CAIS hasn't been as responsive to farmers' needs as it should have been, and through this change we'll be putting an extra $900 million into producers' pockets. Administrators will be recalculating producers' CAIS applications for the 2003, 2004, and 2005 program years. If producers are entitled to more money by using this new method, they'll be getting a payment.
I should just add that if the old method of calculation is better for the farmers, we'll just keep that one. We'll give them the best of the two methods. Also, there's no additional paperwork, since this will be done automatically. We're trying to keep the paperwork to a minimum all around.
Also connected to CAIS, we're working with the provinces and territories toward expanding the eligibility criteria for negative margin coverage to help viable farms with deep losses. That will provide another $50 million from the federal portion into that program.
We're also committed to replacing CAIS with a program that separates disaster relief from income stabilization. Those negotiations are ongoing with the provinces right now. In the meantime, we are making changes to the program that make it more responsive to producers' needs, as a down payment on our future objective of separating those two programs. In addition, we've gotten rid of the deposit requirement and have replaced it with a fee for this year. We've also deferred collection of overpayments, the clawback provisions. We've deferred that for now and cancelled interest charges on those overpayments until January 1, 2007. We think all of these are commonsensical initiatives that will help meet farmers' needs.
Two other related announcements on May 18 will help farmers now and in the future. First, the tabling of amendments to the Agricultural Marketing Programs Act, the AMPA legislation, will improve existing cash advance programs by making them, again, more responsive to farmers' needs. The second part is the introduction of the enhanced spring credit advance program, or ESCAP, which will also provide assistance to producers as early as this year. We'll be doubling the interest-free maximum for spring credit advances to $100,000, and extending the repayment period until September 30, 2007, in order to help farmers market their products to their best advantage. We are anticipating that will make an additional $500 million available to producers this spring.
The AMPA legislation, which will make those changes from ESCAP permanent, is also expected to provide an additional $600 million a year in cash advances. That's because the coverage will be expanded, of course, to include more agricultural products, notably livestock; to increase the overall limits on advances to $400,000; and to increase the cash amounts to producers, interest-free, from $50,000 to $100,000.
In addition to these, I was in Manitoba last week to announce our new cover crop protection program. That's to help the farmers whose land was damaged by flooding over the last couple of years to plant a cover crop and get back into production. We've committed $50 million for this year to fund the initial year of this national program. Most of that money this year will go to Saskatchewan and Manitoba just because of the flooding there and the excess moisture. This will provide producers on moisture-affected land with one-time payments of about $15 an acre.
In future years I would like to move to provide producers who have crop insurance with a per acre payment that's calculated to cover the average incremental cost of planting cover crops on land that's coming back into commercial crop production. This year it covers all land that has been flooded or has excess moisture, whether they're in crop insurance or not.
Earlier announcements. Of course we did accelerate the payout of the grains and oilseed payment program. About $590 million of the $755 million has been paid out. We've also announced that the Farm Improvement and Marketing Cooperatives Loans Act, the FIMCLA act, will continue. It was scheduled to be wrapped up, but it will continue, and consultations are taking place with industry on how to make the program more effective, especially for young farmers. All of these changes are to hopefully give tools to farmers to run their businesses more effectively, more profitably, and in a more predictable financial environment.
What is equally important is that we set out some changes for the future, or at least some options for the future for farmers and for producers. I wonder if the way to do that is by helping farmers diversify their marketing opportunities and options. One of those options is contained in the government's commitment to ensure that all motor vehicle fuel in Canada contains an average of 5% renewable fuel content, either ethanol or biodiesel, by 2010. We believe this is an important initiative that will provide short-term and long-term benefits not only to our agriculture producers but also to players throughout the value chain, as well as to our environment and to Canadians in general. There's potentially a huge new market for grains and oilseeds with this initiative.
I'm working with my colleagues from Environment and Natural Resources, and with industry and with provinces to make sure the commitment is implemented in a way that allows producers the opportunity to get involved in the value chain and to derive the maximum possible benefits from this 5% target that we will create.
Consulting with the provinces and industry now on how best to support our producer involvement in this new opportunity is ongoing. It started last week. We had a biofuels conference in Regina with the provinces, a bilateral agreement with the provinces. We want to move ahead quickly, but we want to do it right, and I want to do it in a way so that producers can make the business decisions to get involved where it makes sense for them.
In the longer term, biofuel is really only one aspect of the range of industrial chemical and other products that can be derived from the agricultural biomass generally. We want to support science and research and development to get there, and there are provisions in this budget for that as well.
I just want to update you a little on the WTO negotiations. As I'm sure you know, the WTO members did not reach an agreement on detailed rules and commitments in the agriculture negotiations by April 30 as originally planned. That being said, the WTO members are determined to resolve outstanding issues. We're currently involved in some pretty intensive negotiating in Geneva aimed at reaching agreement on detailed commitments at the earliest possibility. Canada is continuing to push for a more level international playing field for our producers and processors, which we believe can be accomplished by eliminating export subsidies, substantially reducing trade distorting subsidies, and by significantly improving market access.
We want an ambitious outcome for Canada. At the same time—like all WTO members, we have both offensive and defensive interests. For example, it is clear that key issues important to our supply management system continue to be under very significant pressure at the negotiations.
In response, we have gone to the wall to aggressively defend our interests. Canada's active participation at the WTO is crucially and critically important for the prosperity of this sector. For this reason, I can tell you that we will remain at the table to fight hard for all of Canada's interests. We must be a deal maker, I believe, not simply a deal taker at the WTO. We want a deal that benefits both our supply-managed and our export-oriented interests.
There are a few words I'd like to mention, too, about the CFIA.
As Canada's regulatory agency for safeguarding Canada's food, plants, and animals, CFIA has a very important role to play in contributing to the quality of life for Canadians. In this world of globalization, where borders become very sensitive to problems of disease and animal health and so on, I believe it is imperative that we remain on top of the pressing issues that CFIA deals with so we can better respond to emergencies as they arise and, better yet, prevent them from taking place to begin with. If we are to continue to be recognized as having one of the most comprehensive food safety and animal and plant health systems in the world, CFIA, as I've said many times, will often be as responsible for keeping borders and opportunities for our producers open as anything else we may do. If we handle our regulatory system well, that will continue to make market access possible for our producers around the world.
There are provisions in the budget for pandemic preparedness and for AI, or avian influenza, preparedness, and I'm happy to talk about that as well.
Finally, I just want to be clear that we are working toward long-term sustainability and profitability for our agricultural sector. That also includes the rural communities that are dependent on a healthy farm sector for their own economic strength. In the May budget, we provided a number of measures for non-agricultural-related sectors that are important to rural Canada, including, for example, some tax changes for fishermen, on either coast, when transferring property to their children. Money for the forestry sector, infrastructure development, and access for farmers and others to the Pacific gateway funding are other examples.
We believe it's important not only to support our agricultural sectors, but also to look after rural communities. We believe that where families grow and raise their children in those rural settings is the cornerstone, the backbone, of our country. We want to support that and make sure they have as many facilities as possible and as much access to opportunity as the rest of the country has.
I think that's probably enough for me, Mr. Chairman. I'm happy to take questions and try to answer them.
I'd just like to thank the president of the CFIA, François Guimont, and associate deputy minister, Christiane Ouimet, for being here this morning. If the going gets really tough, I'm just going to punt the ball to one of them.
Thank you.
