Thank you, Mr. Chairman and members of the standing committee, for visiting Manitoba to discuss the agricultural policy framework and future farm programs.
My name is Martin Unrau, and I'm the president of the Manitoba Cattle Producers Association, which represents approximately 10,000 producers in various aspects of the beef industry, including cow-calf, backgrounding, and finishing.
The cattle industry is worth in excess of $500 million annually to the Manitoba economy. My family and I live in the MacGregor area and are committed to seeing our industry move forward. We're involved in all three levels of this industry, cow-calf, backgrounding, and finishing.
I appreciate the opportunity to provide some comments for the committee. Manitoba cattle producers are a self-reliant group. Our industry does not usually ask for government programs and as producers we take many steps to manage risk on our farms and ranches, such as implementing herd health programs, ensuring adequate feed supplies, and using other management practices to move our industry ahead and keep it viable. We believe that markets and not government programs should provide the signals that guide our industry. As cattle producers, we recognize there will be cyclical ups and downs in our industry, and we try to plan for them accordingly. However, in spite of our best practices, some factors are simply beyond our ability to manage, such as the BSE crisis in the last four years--and the crisis is not over at this point.
Other natural disasters, such as flooding and drought, are also a problem for us. Faced with challenges such as these, cattle producers may sometimes need to access risk management programs. The debate over Canadian farm policies has been going on for many years, and many programs have come and gone--NISA, AIDA, CFIP, and CAIS, just to name a few. We believe the politicians and policy-makers developing these programs have had good intentions. However, sometimes the gap between good intentions and successful program delivery has been great, and producers have not received the types of assistance that were needed.
In developing future business risk management programs, the cattle producers would ask the government to adhere to some key principles. Crafting farm programs to meet the needs of different commodity groups, such as cattle, pork, grain, and horticulture sectors, can be extremely challenging. What may seem to be a logical program component for the grain sector could have adverse effects on the cattle sector. It is important that a competitive balance be maintained, be it within a particular industry or between the different sectors. It is imperative that future programs be trade-neutral. As an industry that has been at the centre of an ongoing trade dispute for nearly four years, we are well versed in the devastating impact of trade disruptions. Moreover, cattle producers remember all too well the United States cattle group R-CALF launching a countervail anti-dumping complaint against our industry in 1998.
Programs that are being designed to mitigate risk must not inadvertently place certain sectors at risk by courting trade challenges. The Manitoba Cattle Producers Association asks that future business risk management programs be more predictable, more transparent, and less bureaucratic. Farming is challenging enough without producers having to try to digest convoluted risk management programs that may or may not provide assistance to them when they need it the very most. All too often, producers have been confused about what it will take to trigger a program payment. Hiring accountants or consultants to help wade through this process is costly and time-consuming for producers.
Of equal importance is the need to deliver assistance in a timely fashion. For example, payments related to natural disasters must flow quickly, not months after the crisis has ended. Uncertainty about when program payments will be made causes stress to affected farmers and ranchers and it certainly does not help those producers as they try to manage their operations.
The Manitoba Cattle Producers Association supports the view of the Canadian Cattlemen's Association that Canada needs a national disaster program to address a broad range of issues that could potentially affect our industry. Ideally, such a program would be able to address diverse challenges such as trade disruptions, as well as natural disasters such as flooding and drought.
Had such a program been in place in May 2003, the cattle industry would have been in a better position to tackle the BSE crisis. Our industry and allied industries had, and continue to suffer, hundreds of millions of dollars in losses because of this crisis. The crisis is not over; in Manitoba we see some producers struggling to repay loans such as the BSE recovery loan, and it will take many years for producers to recapture lost equity.
While no one can predict when a disaster will occur, it is critical that these programs be in place to deal with potential threats to key industries such as agriculture. Such programs would help encourage industry stability and would offer a vastly increased level of preparedness in the event of a disaster. The creation of a national disaster program must be a priority.
As you've travelled across the country, you will undoubtedly have heard a lot of comments about the CAIS program and how it could be improved. I would like to cite the concerns raised by some Manitoba producers about the CAIS program as examples of areas in which it does not meet the needs of producers.
These producers, and undoubtedly many others across Canada, have concerns with the CAIS inventory transition initiative and the fact that it does not include breeding animals. The government's rationale is that breeding animals are not intended for market, and as such there is no market loss on these.
However, for cattle producers this is hard to swallow. When a grain producer faces a cash crunch on his farm, he can just sell more grain. When cattle producers face a cash crunch, it's common practice for them to sell breeding stock. We believe breeding stock is a marketable commodity, just like grain, yet, for whatever reason, policy-makers have treated breeding stock differently from grain. We would strongly encourage the government to revisit this policy decision. Fairness in the development of farm programs is key.
We would also like to comment on the federal government's decision to include livestock in its expanded cash advance program. This is welcome news for Manitoba. The Manitoba Cattle Producers Association is working to set up an entity to deliver this program to Manitoba producers, as we believe this will be beneficial for the provincial cattle industry.
However, the concern we have with the advance payment program is that CAIS must be used as security by producers applying for the advance. Unlike grain producers, cattle producers do not yet have production insurance that could be used instead of CAIS for their required security. As a result, this could limit the amount of money cattle producers will be able to borrow under this new program. It is our hope that means can be developed to overcome this challenge.
I'd like to make a couple more comments before wrapping up.
Cattle producers in Manitoba are watching the development of the ethanol industry with great interest. Ethanol plants will compete with cattle producers for feedstock such as corn. A considerable level of federal and provincial government support, including mandated ethanol usage, is flowing towards this sector. It would be unfortunate if the long-term competitiveness of the cattle industry were undermined as a result of these policies. We urge the federal government to carefully monitor the impact of its policy with respect to ethanol and biofuel developments.
The standing committee has undertaken considerable work on the supplemental import permits issue, and the Manitoba Cattle Producers Association appreciates this. Any steps that can be taken to reduce trade irritants with key trade partners such as the United States are extremely important for our industry, and this is a step in the right direction. We hope the motion suggesting guidelines to limit the use of supplemental import permits will be received and supported by the House of Commons in the near future.
We would also like to comment on the urgent need to restore international beef product markets that were lost as a result of the BSE crisis. An example is Korea. We would strongly encourage the federal government to work diligently at trade barriers that keep our beef products out of some of these key markets.
Again, on behalf of the Manitoba cattle producers, I would like to thank the committee members for visiting Manitoba to discuss the future generation of farm programs.
I would be pleased to answer any questions you may have.
Thanks again.