Agriculture Committee on April 23rd, 2007

[The Chair, Conservative, James Bezan]

It's not a race, though.

[Mervin Wiseman]

We certainly need to match the opportunity with the right kind of investment, especially at the primary production level. Of course, we have to recognize there is a lot of restraint around moving things forward in any capacity when you're an agricultural producer.

On obtaining a fair market return in the marketplace, there are tremendous challenges around that at the best of times. The renewed focus on farm management systems, such as food safety, quality, and traceability, has created liabilities that are not easy to overcome. Farm management systems requiring environmental and animal welfare safeguards bring additional financial liabilities in the interests of providing these public goods and services. In essence, it certainly brings an impetus to the need for government to invest in order to meet the demands of public goods and services.

Certainly, the changing demographic from rural to urban is very distressing. I think it's something we need to overcome and address in terms of where we're going with agriculture and agrifood economies.

I'd like to very quickly look at some of the issues around APF, what it's done for us in terms of sustainability and profitability, and where we need to go in reviewing it and looking at some of the shortfalls.

First of all, I see a seriously inadequate federal-provincial sharing formula that discriminates against provinces and territories with low populations and further limits the funding requirements necessary to achieve APF objectives.

The Newfoundland and Labrador share of the last APF funding was .005% of the total national allocation, or $1 out of every $183 spent on the APF in this country. One dollar out of every $183 came to Newfoundland and Labrador.

There are other programs that have come down the tube since then. We had a federal budget last year of $1.5 billion. We didn't even get loose change. On the CITI program, the CAIS inventory transition initiative, our total allocation out of a $900 million program was $1,500. Give me a break.

I know the program was not all about bailing out different things to do with investment. I know it was fairly targeted. But at the same time, if we're going to put $900 million towards second chances, then give us a few dollars for some first chances. Let's get it right the first time, and then we don't have to go back to throwing money into that kind of situation.

We are looking at a highly dysfunctional administrative arrangement that unreasonably encumbers and confuses producers with a costly bureaucratic administrative process. We're definitely seeing that, especially in BRM.

The margin-based BRM element fails to provide a suitable framework to address production disasters and has elements that are not simple to understand. The BRM is not simple to understand. It's not sufficiently responsive or predictable, and it fails to address the overarching problem of low and declining margins.

There's a lack of an overall development or a growth pillar. We've had to come in through the back door, stand on our heads, dance on the ceiling, and contort in every way you can think of to consider expansion and growth.

There's an inability to build on regional or provincial differences.

Strategic industry gaps, such as the means to address animal welfare issues, are not there.

There's a disproportionate sharing arrangement to compensate farmers for performing public good functions, the food safety issue, animal welfare issues, and so on.

There's a disengagement of producer organizations from administration and leadership roles. There is no provision or the financial wherewithal to deal with it. The structure is not there to do it. Not only are we becoming disenfranchised, but we're becoming disconnected from the whole framework in moving this industry forward.

There's a lack of harmonization with objectives contained in the full suite of government programs, such as the Farm Improvement and Marketing Cooperatives Loans Act program, the FIMCLA program. It's totally disengaged and not harmonized at all with the goals and objectives.

Of course, we can include the advance payment plan in that. There are some serious flaws in it, even though we're trying to improve them. We've made some improvements.

I'm looking forward to the next generation of APF. It is hoped that our collective experience and the issues that have arisen from the current agreement can be addressed within the following recommendations. These are only a few recommendations, and there are others.

We need a federal-provincial sharing formula that effectively blends population per capita in a way that adequately addresses needs, hurt, and opportunity in the industry.

We need a funding regime that provides adequate levels of funding to achieve program objectives and a suitable compensation arrangement for producers who have to comply with the public good infrastructure.

We need a program designed that embraces federal objectives but provides provincial flexibility through the establishment of companion programs.

We need a BRM program design that separates disaster from income stabilization and an adequate support mechanism that can be triggered on a timely and efficient basis.

We need an enhanced stabilization or a provision for predictability and bankability. That's what we try to rationalize when we talk about the new NISA type of formula. The idea is to have some money ready in order to respond during disasters, and so on.

I take some exception to the CFA's position. I agree with this component of it, but we have the fundamentals wrong in terms of BRM when we look at margin base. The fundamental here is COP and how we protect it. That's where we should be going, and I try to encourage our national organization to go there.

There should be provision and suitable financial means for inclusion of producer organizations in the administration of APF programming at the national and provincial levels. We can also extend that to the process of policy, its derivatives, and how we go about establishing policy that's driven from the top down. There are two key people left out of policy in this country. One is the politician and the other is the producer. It is driven by bureaucrats who have no accountability.

On streamlining the administration process, the strategic growth pillar, we need to make sure we have that. We need a full and comprehensive plan that addresses gaps such as animal welfare. Make sure we harmonize.

I just want to close by telling you about Newfoundland and Labrador and the APF agreement we had. The money that was allocated—$32.5 million and a bit of loose change—has fallen through the cracks. That was committed two or three years ago. We're running on empty on an APF agreement, and we haven't even achieved 40% of the APF objectives. We can't get transition money. There's no talk of transition money. It's a goddamn mess.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you.

Next, from Pork Nova Scotia, is Monsieur Boudreau.

[Dennis Boudreau, Vice-Chair, Pork Nova Scotia]

Good morning. It's my pleasure to have been invited to this round of talks. I'm from Pork Nova Scotia. I'm the vice-chairman. I have my executive manager, Henry Vissers, here with me.

The Nova Scotia pork industry is an integral part of the rural economy of Nova Scotia. In the recent economic report commissioned by Pork Nova Scotia, Kelco Consulting concluded that, based on their review of data for the past five years, a healthy Nova Scotia pork industry spends about $36 million a year on goods and services necessary for farming activities. The resulting activities, through transportation and processing, provided an additional $86 million in direct annual spending. The total direct spending by the sector is $124 million annually. This expenditure supports 1,300 person years of employment, $84 million to the Nova Scotia gross domestic product, and it also provides $8 million in provincial government revenue and $10 million in federal government revenue through taxation.

The pork industry in Nova Scotia is mainly domestic. Nova Scotia produces approximately 50% of the pork consumed in this province. Production has fluctuated to a high of 250,000 hogs to our current production of 170,000. This decline in production is expected to continue and is attributed to a number of factors. The cost of production is higher in Nova Scotia, mainly due to the cost of transporting grain into this province. The export sector has grown in Canada—50% of the national production is exported. This has meant that Nova Scotia producers now share the risk of these national exports. We are open to currency and trade risks without enjoying any of the benefits. Our price is set in Iowa and our costs are established in Nova Scotia.

Some of these items can be addressed nationally as competitiveness issues. For example, we need a competitive regulatory system with respect to licensing of veterinary drugs. Also we'd like to have conditions that will permit farmers to access vaccines at prices competitive with our U.S. counterparts. We also need competitively priced feed grains. We are in a grain-deficient area, and since the loss of freight assistance, the Nova Scotia feeder livestock industry has been at a feed cost disadvantage with other parts of Canada.

Under business risk management, the suite of programs developed in APF I did not meet the needs of the Nova Scotia pork industry. We need an APF agreement that recognizes regional differences. For example, the CAIS program has worked in the past for a single-commodity farm but has caused financial difficulties for farms that have diversified in order to survive. With the extended period of low profitability, the current CAIS program has little value to the hog producers. If the CAIS program is to continue, improvements should be made, including improved timeliness of payments, clarity of process, improved negative margins covered, improved reference margin calculations, and it should include a provincial COP portion in these calculations.

The recently announced NISA-type programming might be of benefit as long as it can help to sustain our industry here in Nova Scotia and be only a part of a revised business risk management program. This program has the potential of putting money where there isn't bad financial hurt. The program needs to be reassessed as to how they put these funds in place. Whereas the hog industry has a huge expense side to the equation, if calculations were based on ENS, hog farmers would be at a disadvantage compared to other sectors such as grains or beef, for example. The program calculations must be fair across all commodities. The Nova Scotia hog industry needs a COP formula to keep farmers alive and therefore rural economies vibrant.

Nova Scotia pork producers need the flexibility of provincial programs in order to address the issues that are unique to our province. The vision of APF II is an industry that is innovative in seizing evolving markets for food and non-food products and services within an environment that fosters prosperity and opportunities for the entire value chain, creating benefits for all Canadians. Producers are not able to buy into this vision on their own. They simply do not have the financial resources. We need a Nova Scotia companion program that supports the innovation required to evolve to this new model.

Production insurance for livestock has been promised in APF agreements, but the government has not delivered. Production insurance for livestock must continue to be developed and suitable options provided for the industry. In the absence of production insurance, there should be a means of compensating producers for disease or other loss of production assets beyond their control.

The pork industry has used their CAIS reference margins to help on losses due to circovirus disease, thus reducing those margins if needed later to address farm losses. With production insurance in place, the disease loss would have been compensated and the original CAIS margin left intact. This has driven Nova Scotia hog farms very near to bankruptcy. The production insurance program should be developed and delivered across Canada with a consistent base to work from. This would help create fairness and accessibility across Canada.

Pork Nova Scotia supports the creation of a framework for disaster relief. Governments will not be able to provide a suite of business risk management programs that can address all eventualities. Therefore, having a framework to guide special situations will be valuable and provide producers with confidence that assistance will be available in these extreme circumstances.

On the cash advance program, Pork Nova Scotia appreciates the work done by Agriculture and Agri-Food Canada for the cash advance program. However, we still find that access to the cash advance for hog producers is not as favourable as that offered to crop producers. The extension to livestock for programs that are currently available to crops must be workable for livestock producers. Due to the short production cycle of hog farms, hog producers have access to the cash advances only for six months. In fact, we have only 50% of the benefits offered to crop producers. In addition, livestock producers that grow grain to feed their livestock will now be at a disadvantage as farm-fed grains will no longer be eligible for a cash advance. How a producer uses grain should not be a criterion for eligibility.

While the environmental policy and regulations fall primarily under provincial jurisdiction, government and industry must work together in developing a strategic approach and define those for enhancing the environmental performance and sustainability of the agriculture sector. Producers require support and incentive to economically achieve enhanced environmental performance. Our feed costs are already higher than those in other jurisdictions. The addition of corn for ethanol programs simply makes the impact worse. Government programs to enhance biofuel or bioenergy production must not be to the detriment of the raw material in livestock feeds. Energy efficiency must be granted increasing attention in all sectors, and outreach and incentive programs should be structured to achieve an effective reduction in societal energy use.

The renewal pillar must focus on sectors, such as the Nova Scotia pork industry, that are in transition. This pillar can help us work on underlying factors surrounding profitability.

Our producers need the means to move the industry forward. Efforts such as moving to higher-value markets and moving of the value trains do not come without cost. Consider a producer who wishes to raise hogs for natural markets. This would require him to remove antibiotics and meat and bone meal from feeds. Some farms may have disease challenges within their herd and they may have to depopulate the herd and purchase breeding stock. A similar situation will arise if a producer wishes to take advantage of the heritage breed market.

All of these changes require a period of time when there is no cashflow on the farm, plus farmers must learn new production methods. We do not have the equity left in our farms to make these changes without support. This role could be filled by renewal.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Boudreau. Your time has expired.

Mr. Whidden.

[Havey Whidden, Vice-Chair, Dairy Farmers of Nova Scotia]

Thank you, sir.

Good morning, everyone. My name is Havey Whidden. I'm here this morning with the general manager of Dairy Farmers of Nova Scotia, Brian Cameron. I appreciate the opportunity to be here with you today.

I'm a dairy farmer. My farm is located about 20 miles south of here. With the help of my wife, my daughter, and my future son-in-law, we milk 90 Holstein dairy cows. Dairy farming has been my career for the past 29 years.

Today I'm here representing Dairy Farmers of Nova Scotia. I am the vice-chairman. We have a staff of six employees at Dairy Farmers of Nova Scotia, and all expenses at Dairy Farmers of Nova Scotia are funded by our membership. We have 276 dairy producers in Nova Scotia, and they produce 170 million litres of milk annually. Dairy Farmers of Nova Scotia is a member of Dairy Farmers of Canada.

I am pleased to be here today. It's not often I get to speak to such a distinguished group of influential politicians. I want to use my time today to speak to you about supply management; no surprise there, I expect.

Supply management has been good for Canada, not only for producers but for all of Canada. Our processors have a consistent supply of high-quality milk at a predictable, stable price. Our consumers have a consistent supply of a wide selection of high-quality, healthy, safe, and reasonably priced dairy products. And to top it all off, all returns to the farmer for milk come from the marketplace, with no government support.

But we do need government support. We need government support to maintain supply management. We need government support to maintain the three pillars of supply management. All three pillars are crucial.

Production discipline is one of the pillars of supply management. We do this through a quota system. Producers are allotted production quotas based on Canadian consumer requirements. In other words, we produce enough milk to supply the demand for dairy products in Canada, with a very small amount for export to help balance the system.

The second pillar is fair returns to producers. Milk pricing at the farm gate is transparent. A great deal of effort is put into milk pricing to make sure it is fair and reasonable.

The third pillar is import controls. We need government to maintain import controls at our borders. Without import controls, the other two pillars cannot function. Without the ability to control the amount of imported product coming into Canada, Canadian dairy producers would not be able to predict the amount of milk we need to produce. If we don't know the amount of milk to produce, we cannot maintain a stable price.

Canadian dairy producers have lived with varying degrees of uncertainty of our supply management system for the past 15 years. In order to have a healthy industry, we need to have confidence in our future. Canadian dairy farmers have huge amounts of capital invested in their farms. We need to know that government will continue to support Nova Scotia for the benefit of all producers. Nova Scotia dairy farms are a very important part of rural Nova Scotia.

Our Canadian government must support and maintain one of the best marketing systems in the world: supply management. Supply management also must be recognized as a business risk management pillar of the agriculture policy framework. I want to repeat that because I feel it's very important: supply management also must be recognized as a business risk management pillar of the agriculture policy framework.

Without supply management, the Canadian dairy industry would have great difficulty surviving. It requires huge investment today to operate, maintain, and invest in modern dairy farms. All this requires financial stability and long-term confidence in our industry.

The whole-farm approach to the Canadian agricultural income stabilization program is a disincentive for dairy farmers to be involved in the program. With supply management providing a fair return for the milk sold, this would cancel out the losses in another enterprise that is doing poorly. Milk sales give a fair return for the dairy enterprise and not for other areas of the farm. Dairy producers will only buy into production insurance if milk income and business interruption are covered by the production insurance program.

In conclusion, dairy producers in Nova Scotia see the revisions of the agriculture policy framework as being important to moving agriculture forward. Supply management and its three pillars must be included as a program under the business risk management pillar.

I believe we as a country must soon make some important decisions about our agriculture industry. We need to make some decisions about where our food will come from to feed Canadians in the future. We must decide whether we believe it's important to have the ability as a country to produce the food required to feed our people.

The average age of a Canadian dairy farmer is 47. A lot of us will be retiring in the next 10 to 15 years. Without a stable future that can provide for the financial requirements, many good potential dairy farmers are making other career choices.

Thank you for your attention.

[The Chair, Conservative, James Bezan]

Thank you very much.

Mr. Gordon, you're on.

On behalf of the committee, I would like to extend our condolences on the loss of your colleague in Virginia, Jocelyne Couture-Nowak. It was a shocking event in Virginia last week. We paid our respects this morning with a moment of silence when we started the meeting.

You have 10 minutes, sir.

[Robert Gordon, Nova Scotia Agricultural College]

Thank you. That was certainly appreciated. It was a significant loss not just to Virginia Tech, but certainly to all of her colleagues here at NSAC.

My name is Robert Gordon. I'm a Canada research chair at the Nova Scotia Agricultural College and also a dean of research.

As the focus has been today on BRM issues, I'd like to spend a bit of time talking about two other chapters that I think are highly linked, and integrated, potentially, with the BRM chapter. Those are “Environment” and “Science and Innovation”.

First I'd like to talk a bit about NSAC and some of the roles we have played in supporting the agricultural policy framework and hope to play in the next generation of the APF. NSAC recently, in 2005, celebrated its 100th anniversary. One thing the institution has done over the last 100 years is evolve as the industry has evolved. Right now, NSAC has a student enrollment of around 800 students. We have technical programs, and certainly strong undergraduate programs at the BSc level. We have an emerging graduate program at the master's level in association with Dalhousie University, and we also have a proposed PhD program, which is now being reviewed by the Dalhousie senate for implementation in 2008.

NSAC has evolved substantially as one of the major research institutions in Atlantic Canada. In 2006, NSAC ranked first of all 16 Atlantic Canada universities in research intensity. We're forecasting in excess of $5 million in research holdings being acquired by NSAC in 2007. This shows how we have evolved from primarily a teaching institution to a full university, with strong research academic programs to suit that status.

The goals of research at NSAC are to support the agriculture industry in Atlantic Canada in providing innovative and adaptive solutions to current challenges; to support the development of new products and opportunities, as has already been discussed today; but also to develop highly qualified personnel not just to work on the farm, but to support the agriculture sector in science and technology development into the future.

One of the key areas NSAC is also committed to is enhancing industry partnerships in support of technology transfer and developmental opportunities, as well as our links with program delivery of things such as the environmental farm plan, which I'll talk about in a few seconds, as well as the nutrient management planning training that we offer through NSAC to support the environmental technologies in the region, but also to be innovative and forward-thinking and to be working with industry in identifying new initiatives in the life sciences and bio-opportunities, and as well as other new technology developments that will support value-added opportunities for the agriculture sector.

We have an innovative industry-research chairs program, whereby government and industry partner 50-50 on the development of five-year research chairs through NSAC. There have been huge success stories developed through this program over the last decade. I certainly feel that the expansion of the fur industry in Nova Scotia is, part and parcel, due to the development of a fur chair in the late 1990s at NSAC. That really helped to support the expansion of that sector in this province. But the development and enhancement of the blueberry industry, as well as issues surrounding bioproduct development, waste management, and numerous other things, have been established through this industry-research chairs partnership program, again very closely linked to the science innovation capacity that we have as an agriculture sector in Atlantic Canada.

To start off with the “Environment” chapter, one area we've really emphasized through our involvement at NSAC is the development and enhancement of the Nova Scotia environmental farm plan program. For those of you who aren't aware, the EFP in Nova Scotia is a partnership between the Nova Scotia Department of Agriculture, Agriculture and Agri-Food Canada, and the Nova Scotia Federation of Agriculture. We've received funding over the last seven years through various sources, including AAFC and the Nova Scotia Department of Agriculture, as well as the CARD program, which is the program that supported the development of the EFP early on.

The EFP started in 1999. It has continued to be a voluntary program that helps farmers identify and assess environmental risk on their farms. It continues to be a free opportunity for all farms that want to go through that process. The reasons for participating are compliance with environmental laws, assistance in assessing environmental risk, and maintaining good farmer relationships with the community, as well as access to potential funding through programs such as the national farm stewardship program. Right now, currently enrolled through the program we have over 950 farms participating in various stages of the program. That includes more than 760 farms that have actually completed and implemented action plans regarding their EFP.

Combined with that, we also have actively pursued nutrient management planning for Nova Scotia farmers, and to date over 600 farms have enrolled in that innovative program as well. So those are two really good success stories that have been developed through the environment chapter of the APF to support the sustainability of farms in this province.

We're starting right now to really get a better sense of some of the accomplishments that we've seen from these innovative programs. I'll highlight that over the last five years we've seen that 79% more farms have developed nutrient management plans than existed prior to 2001. We've actually had an 18% increase in farmers having adequate manure storage capacity, as well as 13% more farms having proper and certified pesticide storage facilities. So there have been significant advancements in the sustainability of these farm systems because of programs like the EFP.

Under the “Science and Innovation” chapter, there really haven't been the financial resources that we would like to have seen to really help that chapter move forward. Again, one of the key things that I think we need to be focusing on is better integrating that chapter with the other chapters in the next generation.

One program certainly that I'm proud of, which we've established with provincial funding that has been built into the overall implementation framework for Nova Scotia, is a graduate training initiative. We recognize that one of the key challenges of the future is the transition issue with respect to farmers. Certainly one other area, too, that is important is to maintain highly qualified personnel and good young scientists to stay in the sector and work in the industry in this next generation.

So what we've established through NSAC is a graduate research training initiative under the “Science and Innovation” chapter, which has really been the establishment of this fellowship program, where we're providing financial opportunities to high-calibre graduate students at NSAC who are conducting research of benefit to the Nova Scotia agricultural sector. It's really intended, as I said, to ensure a reliable supply of highly qualified personnel to meet these future demands, but also to have a focus on future opportunities for the industry.

In summing up in terms of reflections and suggestions, the “Environment” chapter here in Nova Scotia has been a real success. The historical focus on water, air, soil, and biodiversity has certainly really helped with respect to enhancing the future sustainability of the sector. I see in the next generation a future need to look at watershed issues collectively rather than at individual farm levels, the need to integrate farm energy or alternative energy technologies into environmental farm planning opportunities, as well as other emerging issues like farm safety.

I really strongly believe that the Nova Scotia federal partnership that has been established through the AgPF has been an excellent example of provincial-federal-industry partnerships and a good example of the environmental farm plan that has existed here in Nova Scotia. Really, don't mess with something that's been working. What we really need is a seamless transition into the next generation of APF for the environment.

In terms of science and innovation, as I mentioned before, it's generally been an afterthought. I think we really have to focus on trying to find ways of better integrating innovation, new product opportunities, and aspects associated with technology and opportunities for technological advancement in this next generation of the APF. So improving the value chain will continue be an area of focus.

But the key thing, certainly, that we've identified here in Atlantic Canada is that the regionalism of agriculture requires a regional approach to science and innovation. One thing that we've really seen in this last generation of APF has been this need to fit into a national model. Certainly we have to recognize the differences within the industry as you move across this country. You need to be thinking about some of those things as you're developing programs to support the future enhancement of the industry under science and technology, as well as the need to continue to support the development of HQP, not just at the farm level but in support of farm-level initiatives in the science-based sectors.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Gordon.

We'll kick off with Mr. Hubbard, please.

[Charles Hubbard, Liberal, Miramichi, NB]

Thank you, Mr. Chair.

Thank you to the witnesses. It's always a problem; we have a short time. I guess this morning we have two provinces here, too, which complicates things a little bit. From Newfoundland, the presentation seems to be, how do you start if you have no base to look for programs? It's almost unbelievable that such a little bit of money is being put into that Newfoundland agricultural sector when so much of your food has to come from the mainland, with the cost of transportation and all.

With the dairy farmers now you have two major co-ops here in Nova Scotia that most of you are involved with, Scotsburn and Farmers. Does that give you an added advantage in terms of getting a better amount of the money that is available back to the farm community? Do you see dividends over and above your actual milk sales? How do they work, the two co-ops?

[Havey Whidden]

We do not see any advantage in terms of the price we receive for our raw product leaving the farm, regardless of whether we ship to a co-op or to a private dairy, except that in the cooperatives, of course, there are shareholders. I am a shareholder of Farmers Co-Operative Dairy.

If the dairy does well, there are some dividends paid. Unfortunately, our dairy didn't do that well last year, so there were very small dividends paid. That would be the only area where there would be an increased revenue, but on the other hand, we do contribute on a regular basis to our share capital within the company.

[Charles Hubbard, Liberal, Miramichi, NB]

I want to just ask a question on this. In terms of farmers, you deal with several major food companies and you buy shelf space. What do they ask as a percentage of the sales for that shelf space?

[Havey Whidden]

I can't speak on behalf of the processor because I'm not involved with the company at that level. I am a shareholder, but I am strictly involved with the producing side of the industry. DFNS, Dairy Farmers of Nova Scotia, has no involvement whatsoever with negotiations between a customer of a processing plant, and so on.

[Charles Hubbard, Liberal, Miramichi, NB]

Are you avoiding that question? You must sit as a board. You have a board of directors, and certainly your sales group would say to you, “Loblaws this year wants 20% of the value of that product in order for me to have 20 feet of shelf space at a store in a certain place.” You must be aware of that as a dairy producer.

[Havey Whidden]

They don't say that to our board. Our board is not involved with that sort of thing. I am somewhat aware of those things. I don't feel comfortable speaking about—

[Charles Hubbard, Liberal, Miramichi, NB]

I know that, and most people aren't comfortable putting it on the table, but it is a major problem in terms of agricultural groups wanting to get shelf space in the four or five major food distributors in Canada. It's regretful that they demand so much for you to be able to sell your product.

Before, I asked about the pork producers. You say that we only produce about 50% of the product used in Nova Scotia. When we talk about research and your costs—and I would think the college is probably trying to help you there—what factors would you have to improve in order for you to get a better share of that product and be able to make money in your industry? What would you see as the need for success in terms of you being a successful farmer, the people of Nova Scotia being able to eat pork produced in this province, and everyone being a little bit happy with what's going on?

[Dennis Boudreau]

I would say our biggest roadblock in the Nova Scotia pork industry would be our high grain costs. The only real disadvantage for us, from central Canada or out west, is that we don't have the grain right here, so it's transportation.

I think the reality is that they've tried to have a grain industry here before, but if we have nothing to work with, a rotation, let's say a huge potato industry like P.E.I. and New Brunswick—We haven't too many other avenues where we could use a rotation, so grain production in Nova Scotia has never been profitable.

Can we make it profitable? I don't know. I think they've tried it and tried it. When you look at what grain prices are around the country, this year is probably the first year in the last five or ten that it's profitable. So do we have the assets? Do we have the money to put us at risk like that? If we go into the grain industry to help us that way, I think we'd be at greater risk than we are today. So we have to move to a path with less risk.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Bellavance, please.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Thank you, Mr. Chairman.

Mr. Wiseman and Mr. Boudreau, I learned something very interesting and important from your testimony. While travelling throughout the agricultural regions of Quebec in particular, but also during the meetings of the Agricultural committee in Ottawa, people from every province have often talked about the lack of flexibility in the programs for the provinces. It is rare, at least in Quebec, that people say that the CAIS, which replaced other programs and yet failed to meet the needs of farmers that were being met by such programs, is a good solution and that, because of the fact that it was implemented Canada-wide, it is the best solution.

This program cannot be adapted to all types of productions or to all regions. Grain producers know that this is an effective program when there is a prolonged drop in price. It is not predictable, nor is it competitive, with respect to the policies and subsidies provided in other countries. Obviously I am thinking of the U.S. Farm Bill here, as well as huge subsidies given in certain European Union countries. In committee or during our visits to find solutions regarding risk management, we often hear it said that it would be wise to fund companion programs that are already existing in the provinces.

In your opinion, is this an important change that the government should make?

[Mervin Wiseman]

Yes, maybe. There is one thing about the CAIS program—the BRM program that we have—and that is that even though it may not hit the target, it's got good intentions. There's no doubt about that. Sometimes we say there's not enough money there, but by and large, there not being enough money there is not really the big complaint. It's how the money gets spread around. We seem to take care of people who are doing very well, thank you. If they have a slight drop in margin, we make sure they're well taken care of. But the people who really need the money just seem to slip through the cracks. We talked about declining margins. What about people who have no margins at all? If you look at the province that I come from—and I've heard it from Quebec as well—there are many, and predominantly the number of producers out there without any kind of a margin to be able to either go up or down is really the fundamental problem.

Even in cases where it may work--and we can talk about the fur industry, which I'm involved in; I have the largest fox farm in North America. The CAIS program can work relatively well for one or two years, but then if the prices are going down, you're on that slippery slope of declining margins. What I'm hearing mostly—and sometimes it's articulated very clearly and other times it's a little bit vague—is that it's really the cost of production that we're getting at. That's what I see: it's the cost of production. Then I see the language of COP starting to come about. When we look at supply management, by the way, I believe it's at least one of the key principles. There are three main pillars, but it's this idea of working with COP and building safeguards around that COP that gives stability to the farming industry, especially in the dairy industry. I think if we would concentrate a little more on that—Again, with COP and the language that I'm hearing, I don't know if we're going to get anywhere because they're talking about tying the payments of COP into eligible net sales. If you have high eligible net sales, then maybe you don't need your COP protected as much as somebody who doesn't have those ENS. I know it's not simple to get at, but I don't believe it's overly complicated. I think we have to get the fundamentals straight. We just haven't been able to do that.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

What do you think, Mr. Boudreau?

[Dennis Boudreau]

We need to look after farms in Canada on a regional basis. In five years' time, we will see how the programs are working. Quebec has programs. We are even a little bit jealous of Quebec because we would like to have something similar. Our provinces and the Government of Canada are not flexible enough to implement these programs. We need to have agriculture in all communities and in all provinces of the country. We must not, as was the case with the last programs, focus on the cost of transporting grain and subsidies to get the grain here. That really put us at a disadvantage compared to our fellow farmers in Ontario or in the West.

If we continue in this direction, Ontario and particularly the West will continue to benefit more from the situation than we are, and will be able to export a lot more. There will be too much food, too much meat on the market. Is this beneficial for a country? It is a good thing to have an adequate supply of food, but in my opinion, it is more important to ensure that we have food in all provinces. This is part of the economy and it is very important. We must not forget this fact. The government is too concerned about the need to sell and produce a lot, even if it means finding food elsewhere. In my opinion, it is more important to have agriculture here.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

You mentioned something that we heard earlier from other witnesses, namely, the importance of emphasizing food sovereignty. I do not know if you were here when this issue was raised.

[The Chair, Conservative, James Bezan]

André, your time is up.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

You can say yes, if you want.