Thank you.
And thanks for the opportunity to visit with you again. I always find these opportunities very beneficial.
APAS, the Agricultural Producers Association of Saskatchewan, serves as a voice for agriculture in Saskatchewan. APAS envisions a future in which agriculture is profitable, rural communities are viable, and the role of agriculture in society is recognized and appreciated.
Canada needs a new attitude towards agriculture. We have developed a very bad attitude towards an industry that provides so much value to this country and this economy. This new attitude is the essential ingredient in the entire agricultural policy framework. Every pillar must have success as an objective for this industry, for this country. Science and innovation are the keys to success.
We have several impediments to overcome in order for Canada to be able to use the key. Our regulatory systems must be enabling and must ensure that we are able to use products developed through our investment.
Kernel visual distinguishability, KVD, is an example of an impediment to extracting value from our investment. An important market for Canada is and has been that for high-quality milling wheat.
The quality characteristics for which Canadian wheat is famous and which have allowed us to develop high-value markets are available in only certain wheats. Canada has chosen to ensure our reputation in those markets. The method has not been to register varieties that are visually indistinguishable.
There are many other markets and many other opportunities available for wheats with different characteristics. However, if the wheats that are developed for those other markets are not visually different from the high-quality varieties, these newly developed varieties cannot be registered in Canada.
As a result of this, we have wasted much of our investment because we will not put the discipline mechanisms into the system to allow for these different products to coexist within the Canadian system.
Even worse than Canadian agriculture's not benefiting from this development, our competitors frequently commercialize the new variety in another country, because we have no mechanism that gives us--the developer or the investor--a purpose for keeping it here to add value to our economy.
For some time, we have subjected our industry to the competitive pressures of the global market for its income. While many competitor countries have continued to supplement the incomes of their producers and shelter them from global pressures, we have handicapped our industry with many made-in-Canada costs: costs to our society through taxes, costs of inputs, global prices of inputs, costs of labour in Canada that agriculture producers must pay even though the money they get from a global market...these are all costs that are made in Canada and can be fixed in Canada.
The global market is not just in other countries. The global market for agricultural products includes the streets of every town and city in Canada. Agricultural production competes in the global marketplace everywhere.
Agricultural products move into Canada with little or no restriction. A huge amount of product coming into Canada is subsidized product, which reduces commodity values and creates a competitive disadvantage to producers in Canada. This situation has been unfair to the entire industry, and it has been unfair to the Canadian economy.
Our major competitors in other developed countries have implemented policies that treat their producers very differently from the way Canada treats its producers. They have provided money through subsidies to ensure their industry remains financially healthy. They have reduced competition from cheap foreign suppliers through various means, including trade actions, tariffs, and phytosanitary measures.
Canada has refused to implement policies to mitigate the damage from subsidies in other countries. Canada has allowed supplementary import permits from the agreed-to access limits. This allows low-cost imports from countries to continue to come into Canada. These imported products do not have Canadian costs of production, as mentioned above, nor do they go through all the processes Canadian production does to ensure safety and quality--another made-in-Canada cost to producers.
Canadian policy has a significant and prolonged negative impact on the competitiveness of this industry and the economy. We have required the industry to operate with insufficient revenue. We have continued to extract Canadian costs from it. We have forced the industry to compete in a competition without competitive tools.
As a result, we have allowed the industry to accumulate debt with a reduced ability to repay. Asset values have declined to the point where we have the worst debt-to-asset ratio ever. The U.S. has the best debt-to-asset ratio in their history, and they have had several years of record-high incomes as compared to Canada's having record lows.
Given that we compete in the global marketplace for our revenue, given that the U.S. revenues from the market come from government, and taking into consideration the ability that U.S. producers now have to purchase inputs, we must recognize that we have a significant policy deficit in Canada. We have tried in vain to operate an industry without sufficient money. We cannot expect an industry to operate in Canada, pay Canadian societal costs and Canadian labour costs, and work within Canadian regulation, while being required to use revenue from an international marketplace. It is not what our competitors in developed countries do. It is not what our government requires certain other industries within Canada to do. It is not sustainable and it is not logical. It is not what the industry needs, and it is certainly not what the Canadian economy needs.
As the value of the industry diminished, the political will to invest in research and development for the industry diminished as well. There was no strategy to look at what we had and to explore what it could be. There was no strategy to develop. Without sufficient money, the opportunity for improvement was limited, and profitability has been reduced because of policy failure. This has been further aggravated by our reaction to the perceived value decline. We cut back on publicly funded research when it should have been increased dramatically. This is no strategy to win.
If this were the normal business development of a corporation, the CEO of the corporation would ask the department management for very detailed information about how the policies were creating value for the corporation and how they were meeting shareholder needs. This is why we need a new attitude for Canadian agricultural policy and for the industry. This is an industry that has much ability to produce and much ability to provide solutions. There are several obvious areas for exploration, including nutrition, fuel, health, and the environment, where agriculture can provide solutions.
Opportunities for agriculture to provide a financial return must be continually explored and developed. This research and development needs the appropriate policy paradigm to perform in. It must foster an attitude of competing to win. In Canadian agriculture, we have spent many of our resources, both human and financial, to fix symptoms. The symptoms are mostly a result of the shortage of profitability. Fixing the symptom has relieved the symptom for a time in some cases, but it has left the overall problem unresolved. It is not productive to fix symptoms; we must fix problems.
As an example of the renewal program, what will attract and retain both people and investment? Both people and investment will follow money. This works in the U.S., and it is a principle that is always true. The program that attracts people to an industry without a strategy to retain them in that industry will be a chronic repaired symptom, without any lasting results other than to create the perception of a chronic problem and consume resources that would have produced a much more positive and beneficial result if they had been strategically employed to fix problems rather than symptoms. However, we're not talking about a subsidy that just makes agriculture profitable forever. This is no more realistic than believing the industry will be sustained without sufficient revenues.
We are talking about a strategy to build value in this industry and in this economy for the long term. We are talking about agriculture providing value and solutions for Canada and the planet. Agriculture and a new strategy can provide environmental and ecological solutions for Canada. There is much capacity to improve rural Canada through strategic investment and processing to meet domestic demand, while at the same time meeting concurrent objectives of growing the value of the economy, meeting international commitments relative to carbon, and creating an environment that Canadians want.
Science and innovation, combined with an attitude to win, are the keys to developing new strategies. Value from this industry, maintained and enjoyed within our economy, will build on the positives. Agriculture can provide solutions from a strategy. Agriculture is not a problem; our lack of strategy is the problem.
Attitude and strategy, combined with science and innovation, are the ingredients for success in this industry. APAS has been working through the CFA, along with farmers across Canada, to develop a Canadian farm bill. It is working toward success in our industry and for our country. It all starts with an attitude to win.
Thank you.