Agriculture Committee on April 19th, 2007

[Charles Hubbard, Liberal, Miramichi, NB]

I'm really pleased that you came, because it's good to hear the other side of the story and to see the people who are buying the product become part of the debate.

I know everyone says we probably have the cheapest food in the world in terms of G-8 countries, but I really question that sometimes. Would you agree that of the nations in the western world, Canada has the cheapest food for families?

[Jennifer Hillard]

As a consumer rep, the first thing I tend to do when I go places is go into grocery stores and check prices. Certainly in the U.S. I think some of the prices are lower. Some figures came out recently that actually said some countries in Europe--and the one that surprised me was the U.K.--actually spend less of their disposable income on food than we do.

Certainly our food is very affordable good-quality food. The stuff that tends to be expensive is the over-processed stuff that people are better not to be eating anyway. If you're looking at fruits and vegetables and meat, they compare very well with the rest of the world, especially in the food safety and quality that's built into them, and the environmental protection that you know is there when they're being grown.

[Charles Hubbard, Liberal, Miramichi, NB]

In your presentation you said the grocery industry in Canada is controlled by about a half dozen big companies.

[Jennifer Hillard]

It is maybe even fewer than that.

[Charles Hubbard, Liberal, Miramichi, NB]

Maybe even five?

[Jennifer Hillard]

Yes.

[Charles Hubbard, Liberal, Miramichi, NB]

How could we ever contend with that to offer a different system? In many rural areas, you know, small country stores have disappeared, because even the wholesalers want more for their product than they can get at the supermarkets. I know country stores that, instead of going to the wholesalers, go to the nearest Loblaws store to buy product to bring to their community to sell. One of the big problems we have in rural Canada is that so much of that infrastructure--the small shops, the amenities that people have had--has disappeared.

We haven't talked much about infrastructure, but a lot of infrastructure centres around groceries and small villages and communities that do have that type of.... How can we ever deal with that?

[Jennifer Hillard]

I'm not sure if we can go backwards. The Competition Bureau, in my mind, has not managed to do what it was put in place to do. Not only do we have a few small companies, but they're vertically integrated; the same people who own the grocery store own the distribution system and the wholesale warehouses and the processors. They control what goes onto the shelves. As I said, it's a systemic problem, and it requires an integrated government approach to try to fix it.

I don't know what the answer is, but it's something that needs fixing.

[Charles Hubbard, Liberal, Miramichi, NB]

To get briefly to land use, when you have land or possession of land or control of land, it takes a lot of maintenance. I know Ducks Unlimited has a big budget; I'm not sure how big your budget is, but what's it going to cost each year to sustain and maintain control of the land you're involved with? Is it going to be sustainable, or do you want the federal government to bring $50 million or $20 million or $10 million or $5 million each year for you in order to do your work? Can you be self-sustaining?

Maybe Ducks Unlimited could answer first.

[Cynthia Edwards]

Yes, it is expensive. We pay taxes and have to maintain that land. We are not looking to the federal government to contribute to the maintenance of our existing properties in any way, shape, or form, but we do use local landowners. They utilize our lands every five years on average, as I mentioned before, and come in and hay or graze that for us. It provides a benefit to the producer and a benefit to us. We do generate some revenue from that hay or grazing in some cases, as well.

It is an expensive endeavour, but we feel there needs to be some land out there that's managed for wildlife as a first priority. There's not very much of it left. It's a small proportion of the landscape, and it provides a host of public benefits. We're willing to maintain those lands and we're committed to doing so.

[The Chair, Conservative, James Bezan]

Go ahead, Mr. Sopuck.

[Bob Sopuck]

The Delta Waterfowl Foundation is very small. Our budget is about $6 million a year, and we do not buy land. We simply do not buy land. It's our strong view that the kind of land on the agricultural landscape should remain in private ownership and that incentive-type programs should be utilized to reward producers for delivering environmental services to Canadians at large.

We think large-scale land purchases by conservation groups can disrupt rural economies. You only have to look at Saskatchewan for the intense opposition that has developed in the farm community to large-scale land purchases. The land is best left under the stewardship, care, and ownership of producers.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Hubbard. Your time is up.

I have just a quick supplemental, then, from Mr. Anderson on that.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I just want to ask, do your organizations take a position on permanent easements? I've had a concern about this. When these easements are put on, the land is taken out of production forever. Do you have a position on them?

[Ian Wishart]

Yes, we have a position on them. We do not support that approach.

We recognize landowner rights. We believe in landowner empowerment. Ultimately, if you want to have a real impact on the farm landscape in this country, you have to get producers to act on your behalf. We are the original conservationists, as farmers. We simply need the right signals given back to us. We've been many years, in fact, with the wrong signals put out there: maximize output at any cost, whether it's to society or the environment. We can change that approach, and I think our pilot project is a really good example of how easily we can change that approach and what type of buy-in—75% of the producers in a single year. We were told that was unachievable.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Do you support permanent easements, or are you moving away from that?

[Cynthia Edwards]

We do current have a permanent easement program. They are voluntary, so the landowners are advised to speak to their lawyers, accountants, financial planners, etc. They're voluntary easements, but they are perpetual. And we've been very successful over the last several years, especially in a province like Saskatchewan where we've delivered easements with several hundred landowners over the last, probably, five years or so.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I have an issue with that, because I don't know about your organization, but I know of another organization that came in and put a number of those on when people were in really dire financial situations. That's when they showed up with the money for the easements, and the ranchers felt that they had no choice at the time but to go into them. I think we need to talk about that as a committee, whether we think that's a good idea or not for the rural areas.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Anderson.

I want to thank all the witnesses. It brought a different perspective to the table on APF, from land stewardship and consumer ideologies. I think that's great and we need to hear that.

We are going to suspend for only two minutes.

I ask that the current witnesses pull away from the table, and I'll call to the table Peter Watts, Karin Wittenberg, and Rob Brunell.

[The Chair, Conservative, James Bezan]

We're back in session and continuing on with our afternoon.

I'm going to welcome to the table Dr. Karin Wittenberg, who's kind of in charge of the animal sciences at the University of Manitoba.

We also have, from Pulse Canada, Peter Watts and Greg Cherewyk—welcome to both of you; and from the Keystone Agricultural Producers’ young farmers committee, the president, Rob Brunell. Rob was with us in Ottawa when we met with the young farmers about six weeks ago—it's good to see you here, Rob.

With that, I'll turn the microphone over to Dr. Wittenberg, and if you could keep it to ten minutes or less, we'd really appreciate that. People have planes to catch and we have to stay on schedule.

[Karin Wittenberg, Associate, Faculty of Agricultural and Food Sciences, University of Manitoba]

And I appreciate that it has probably been a long day already.

[The Chair, Conservative, James Bezan]

That doesn't mean that you can speak faster.

[Karin Wittenberg]

Does that mean I've just lost 20 minutes?

Let me introduce myself. I am the associate dean of research for the Faculty of Agricultural and Food Sciences at the University of Manitoba. My background is certainly in animal science. I'm also a rural resident and hail from this part of Canada, the Interlake region. So I have a vested interest, most definitely, from a personal as well as a career perspective.

I'm going to start by saying that, fundamentally, when we're talking about agriculture, we're talking about the management of a terrestrial or land-based ecosystem to produce and generate income from commodities or value-added food, biofuel, or other non-food products. When we look at our structure, there are many situations—and you've heard of many already—where we have research or educational or policy and technology transfer institutions that maybe are not as integrated as they might be by definition.

I'm going to focus on three areas in which I think we can make a difference and on which I will maybe solicit some comment and support. The first is a request to consider support—and this isn't always in the form of money, but also in terms of organizational structure and human resources—for long-term and multidisciplinary approaches to deal with the problems we have in the agrifood and agricultural sector.

We're dealing with a managed ecosystem, and we understand both the need to develop technologies and management practices that generate economic sustainability for all levels of the sector and also the need to deal with our environment, both to reduce risk with situations such as climate change as well as to ensure a high-quality sustainable environment. This is for two reasons, really. One is to ensure that our public is behind us, because without public support, anything we request or try to do is likely to fail. Second, there are real opportunities through the agrifood sector—you've already heard of some of them today—to enhance our environment. This is a strength that we have in Canada.

I'm not going to go through the length of the document, but I would like to say that you've heard about Lake Winnipeg and the many issues we in the province of Manitoba have at the watershed level relating, in part, to agricultural practices. You are also aware that central Canada or prairie Canada is going to be very vulnerable to changes that we might see in the future with respect to climate change. This is an area of opportunity from the perspective of new growth in the agriculture sector—maybe not so much on the food side, but certainly on the energy and the bio-product sides. We will very quickly see operations that are producing commodities for multiple purposes—and the standards for those commodities, depending on their purpose, may be quite different.

So we have complex issues to deal with, both from a social perspective and environmental perspective, as well as from a policy perspective when it comes to things like trade.

At the University of Manitoba, we've chosen to focus on a few areas. One of them is through the development of the National Centre for Livestock and the Environment. This centre brings together disciplines from many faculties, such as science, engineering, medicine, and agriculture and food sciences, for the purpose of identifying solutions and best management practices relating particularly to intensive animal agriculture.

This initiative has garnered a tremendous amount of support, about $13.5 million from two levels of government, as well as from industry. In the main, this initiative, which really began in 2004 and whose research programs started in 2006, has garnered good support and a great deal of interest. But it's very clear to me that we still see most of that interest at two levels. One is the short term, because we're looking for value in the short term, as most of our funding agencies are very focused on seeing value in a short-term timeframe.

Secondly, we see things from a very disciplinary area. For example, those who would normally support initiatives in soil or land management might be very reluctant to move into water management or into animal production systems. As a result, we see barriers that slow down the work that could be done by scientists and other collaborators in the area of agriculture and the environment.

To sum that one up, I would simply like to say that as a recommendation, I think Agriculture and Agri-Food Canada needs to take a leadership role--I know it has to some extent, but even more so--in engaging a range of federal departments, for example Environment, Health Canada, Fisheries and Oceans, and even, within its own mandate, CFIA and PFRA, to invest more strongly in long-term, multi-disciplinary research. These efforts will result in common goals being achieved more quickly between those organizations or those departments. It will also encourage the training of post-graduate people in the multi-disciplinary areas, and this is critical if we're going to be able to deal with the complex issues that agriculture is facing down the road--to have that kind of expertise available.

The second thing I'm going to address has to do with declining enrolment in agriculture faculties. This is impacting our industry again. Just in our university, we had more than three positions identified for every graduate from the diploma, the degree, and masters and PhD programs. We have an industry that is coming to us and saying that they can no longer steal from anyone else because there is nobody to steal from, or that there's enough to steal from, but everybody's stakes are higher and there are no people available.

The second thing that happens with declining enrolments at Canadian faculties of agriculture is that their stake and their ability to garner support within their own university administrations starts to decline. Renewal of academic staff who are doing research, new investment into programs so that what we teach students is current, some of those things start to fall behind, and we have a wheel of decline. For a nation that has as much of its income and as many of its acres and people associated with agriculture as we do, I think that bodes poorly.

At the University of Manitoba we have taken some steps to try to reverse this, going to, in particular in our case, China and India to attract students with the hope that some of them will stay in Canada. We have co-op job training programs in conjunction with industry. We have just recently, through Immigration Canada, brought someone in so that we can go through accreditation programs for immigrants who already have training from other countries and may simply need upgrading. We have probably the best--of any faculty in our university--scholarships and bursaries for students who come into our faculty.

And finally, we've taken the steps in the last few years to build an education centre at one of our research stations in conjunction with the National Centre for Livestock and the Environment to increase education opportunities for a public that is very interested in food from a health and social perspective, with the hope that there is a greater understanding of what the agrifood and agriculture industry is about, but also as an opportunity to demonstrate the excellent career opportunities that our youth have if they choose this field.

In conclusion on that, I would recommend that there is a role the federal government and Agriculture and Agri-Food Canada can play in helping us increase interest by our youth in this area--a role in terms of ensuring that we have recruitment and education programming for our public and for our youth so that we encourage and provide a vehicle by which they can learn of the opportunities. That might be through, again, investment in such initiatives as our Glenlea Farm Education Centre, but there may also be other ones available.

Just for your information, this is a $4 million initiative. At this point we have about $2.5 million, actually more than that, pulled together. Again, industry has been our main supporter--they see the value--but also recently the province.

My last one is around the development of the Canadian agrifood research centre, focused on the grains. We know well that the federal government has major institutions of the grain sector here in Winnipeg. We have a number of companies that have headquarters here in the grain handling, seed, and commodity areas. We have major biofuel investment in the province.

With the declining infrastructure and the inability to expand in some of these federal facilities, I think there's an opportunity, through Smartpark at the University of Manitoba, to bring these interests together and to build a world class centre that is focused on the grain industry and the future opportunities of the industry.

That would be my recommendation for the third area.

[The Chair, Conservative, James Bezan]

Thank you, Dr. Wittenberg.

Mr. Watts, you're on next.

[Peter Watts, Director, Market Innovation, Pulse Canada]

Thank you very much. It's a pleasure to be here this afternoon.

My name is Peter Watts, and I'm here with my colleague Greg Cherewyk. We work for Pulse Canada in Winnipeg.

I have circulated a presentation to everyone in both French and English.

I will be making my presentation in English, but if there are any questions at the end in French, I will answer them in French.

I'd just like to direct your attention to the upper left-hand side of the presentation. Pulses--you probably all know, but just to make sure--are beans, peas, lentils, and chickpeas. Pulse Canada does not cover soybeans, for the most part, or any other pulses at this time.

I'll go through the presentation rather quickly, because I have only ten minutes, so please bear with me.

The first slide shows you the growth in production and exports of pulses in the last 15 or 17 years, and since we're here to talk about innovation, I'd just like to emphasize that innovation has been a critical component in terms of developing new, higher-yielding varieties of pulses that are disease-resistant and that have led to the remarkable expansion of the industry that you can see there, more than quadrupling in production over the last 15 years to over four million tonnes, nearly 4.8 million tonnes in 2005-06.

Canada is now the world's largest producer and exporter of peas and lentils, and an important player in the dry bean and chickpea markets. Innovation has been an important part of that. I'll draw your attention to the example of red lentils. We've shifted or expanded our focus in terms of R and D in recent years to focus more on consumer requirements, end-user requirements. In the red lentil example, Canada developed new varieties that were better for milling and splitting of red lentils. Today we are the largest player in the global red lentil market, and it's no coincidence that in Saskatchewan we have the largest red lentil splitters in the world.

Agriculture Canada has been an important partner with the pulse industry over the years, investing in research and assisting in market development, and again in the case of the red lentil sector, helping to fund a benchmarking study that looked at end-user requirements from export markets that led to the development of these new and improved varieties.

On the second slide, the point I'd like to draw your attention to here is that the agricultural policy framework that came into place in 2003 has, from the pulse industry's perspective, been a success. The pulse industry has been a beneficiary of the APF through a number of programs, but through one in particular, which I'm going to draw your attention to today, and that is a pulse innovation project, which I'm a part of.

The APF focused on five core agricultural areas, and these have been very important areas to focus on, but I think as we look to the next generation of agricultural policy, as was alluded to in the last presentation, we need to expand our focus and take into consideration other areas that have a huge impact on agriculture, including food and drug regulations, transportation issues, intellectual property, and, of course, environment. We have environment in the current APF, but I'm thinking more of policies that will be implemented by Environment Canada in the future.

On the next page, the top slide, the message we'd like to leave you with today is that there are three things that Pulse Canada, the pulse industry, feels we need to focus on as an agriculture sector, and those are research--reinvesting in research--the regulatory environment, and rail movement.

We've talked a lot about research, and I'm sure you've talked a lot about research in these discussions. In your own discussion papers, it was indicated that spending on research on agriculture in Canada is about 50% of that in the U.S. compared with the GDP for agriculture. I have a quote here from a report by the Canadian Agri-Food Policy Institute from last year, which says:

Government expenditures on research and development have not kept pace with need, or with past expenditures levels. This trend must reverse to provide the needed substantial investment on behalf of the agri-food sector.

So I think, as I mentioned before, the APF has been a success. Investing in science and innovation was a very positive development, and in fact I'd just like to draw your attention quickly to the next slide on the pulse innovation project that we're working on within Pulse Canada, a $3.2 million initiative funded by the science and innovation broker program to develop new value-added opportunities for pulse crops in the North American food sector. We're currently developing an industry strategy and action plan vis-à-vis the North American food sector.

We also have six human clinical trials that are being funded under this study, which are looking at the relationship between pulse consumption and the prevention of chronic disease linked to obesity, such as diabetes and cardiovascular disease. Why are we focusing so much on health? The times are changing, and as you know, we expend a lot of resources in Canada on health care.

Of course, our traditional approach has been treatment, and the focus is shifting toward prevention. As I indicate in this slide, agriculture is positioning itself to be a provider of solutions through the prevention of major health issues.

Passing on to the next slide, at the bottom of page 3, the point here is that the pulse sector is attempting to position itself to be a deliverer of health solutions to consumers, in a food-based approach to health and wellness. This is the reason why we feel that agriculture needs to focus on opportunities in health and wellness, and the pulse industry is doing that.

I'd like to skip over the next page and move on to page 5 to talk about the regulatory environment for a moment. I have four areas, which I've listed here. There is no question that some of these areas are having a significant impact on the agriculture sector. We need to take them into consideration, as we develop the next generation of agricultural policy, given the growing interdependence of agriculture, health, transportation, etc.

In terms of the Food and Drugs Act, I'm not here to criticize Health Canada, but we have a problem with regulatory approval times for new food products in Canada, and it is impeding innovation. We need to look at this.

I have a quote here from a study that was done by Ron Doering two years ago. He interviewed a number of executives at food companies across Canada, who were “nearly unanimous in their recounting of extraordinary delays that are, in the words of one industry leader, 'completely unreasonable, universally recognized as the slowest of all countries' ”. He goes on to say that for one company, “It was faster to obtain a full drug approval than to get regulatory food approval to add calcium to orange juice.”

Again, I'm not here to bash Health Canada, but to say that from an agriculture policy perspective, we need to take into consideration the forces in other areas that are at work when we're developing policy.

The transportation area is a key one. I'd like to finish off the presentation this afternoon by talking about rail movement. Rail is a very important component of the pulse industry. Although we are highly dependent upon bulk movement of crops for export in Canada, increasingly we need to make sure we have a system that caters to smaller crops, such as peas, beans, lentils, chickpeas, flax, mustard, and sunflower. Also, wheat and barley are increasingly moving in container out of the country or within the North American marketplace.

While Canada is the largest supplier to the world market of a lot of these crops, we are not the preferred supplier today, given the problems with transportation. In fact, we are branding ourselves on the international marketplace as an unreliable and inconsistent supplier of these products. That's becoming our brand, and it's overshadowing our investment in R and D.

The rail business model must converge with the new agribusiness models that are focusing on niche markets, added value, differentiated products, and on attempting to capture premiums for functionality, food safety, and quality assurance.

We need to brand ourselves as world leaders in the consistent and reliable supply of agrifood products. We can do this by increased cooperation between the railways and agriculture. By better forecasting the movement of crops, agriculture can contribute to system-wide efficiencies. But in return we ask the railways to develop systems to ensure that sufficient railcars are allocated to meet the needs of the industry, and that transit times become more in line with other crops.

For example, right now canola has a transit time of about nine days. It's eleven days for board crops, whereas for pulse and special crops, it's about 16 days. In terms of the variability of the schedule, there is about eight days on either side, so if you are shipping pulse crops to a port position, it might get there in eight days or in 24 days.

You can imagine the impact this has on demurrage costs, in terms of the shippers and container companies you're working with.

Finally, we need to make sure that containers work with the steamship lines, in order to ensure that there is an adequate supply of containers to ship products, both in the port position and the country. As more and more products are being put into containers in the country, this allows us to capture premiums associated with food safety, quality, and identity preservation.

We need amendments to the Canadian Transportation Act that will assist shippers in obtaining competitive options and help resolve disputes when normal commercial negotiations break down.

Finally, we need a level of service review, to ensure the provisions in the Canada Transportation Act are doing what they were intended to do.

Thank you.