Agriculture Committee on April 23rd, 2007

[The Chair, Conservative, James Bezan]

You have time to ask a brief question.

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

My question is for Mr. Wiseman.

You are a young producer, and the issue of young farmers is a subject that concerns us a great deal. Regardless of whether you come from Newfoundland or anywhere else in Canada, you all have things in common. These include lower farm income which is, I believe, a problem for those with mid-sized farms. Since agricultural support is usually proportional to production volume, it is the large productions which, generally speaking, benefit from the support. At any rate, large farms get more support from the government through its programs.

Do you have any fears for the survival of the family farm and for the likelihood that young farmers may not be able to carry on? If no one is taking over in the agricultural sector, I think that we will be headed towards the very large operations that we see in the United States, and which are managed by large corporations. Finally, do you have any recommendations to make to the government as to how it could encourage young farmers?

[The Chair, Conservative, James Bezan]

If you could keep your comments very brief—

[Chan Wiseman]

As you know, there are fewer farms today than there were 25 years ago, and most farms are big corporations. In terms of specific solutions, we really have to present the opportunities that are there, especially in our province. There are huge opportunities in the agricultural industry, but new and young farmers in a lot of cases just don't have the financial wherewithal to be able to get into farming from an entrepreneurial perspective, so we need to ensure that the right programs are there. We look to FIMCLA, for instance. This is a program that new and young farmers can avail themselves of.

So we need to ensure we have the right support programs, the right funding, the financial programs, so that new and young farmers can get into this particular industry.

[The Chair, Conservative, James Bezan]

Thank you very much.

Mr. Devolin.

[Barry Devolin, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Good morning, and welcome to everyone here today.

In terms of different kinds of farming, in my mind I slot things into two or three categories. Certainly there's the supply managed sector, produced commodities, and then there are other, what I will call mainstream commodity producers, whether it's beef or grain. Then there's lots of other stuff. I don't know whether we'd call it odds and ends or just lots of other stuff. My riding is in central Ontario, and I have a very diverse farm community—everything from maple syrup to honey to fur producers to organic dairy to goat milk and goat cheese. I see many of the opportunities, particularly for younger farmers, are in these what I could almost call niche products or more specialized products.

The question I have—and, Mr. Hunter, you raised it, and Mr. Wiseman touched on it as well—is really a two-part question. Number one, in terms of these miscellaneous categories of smaller products, is that where you see some opportunities? In terms of business risk management, we have the CAIS program and there are a lot of complaints with the CAIS program that we're all familiar with, but for some of these producers, using cranberries as an example, vertical integration and trying to capture more of the value chains seem to be the way to go. Does a program like CAIS work for small producers, particularly small producers who are trying to move up the value chain and not just sell the raw commodity, but actually try to convert it into some sort of a product? That's maybe a yes or a no, but if you have some ideas or some suggestions of what could or should be done to a program like CAIS to help those producers who want to become producers of products rather than commodities, we would appreciate that.

[The Chair, Conservative, James Bezan]

Mr. Hunter.

[Frazer Hunter]

CAIS doesn't work for those situations because it's only on primary production and not on the value added.

I'll go back to the point you made about transition. We're trying to transition our primary producers to get a return so they can invest in the future. CAIS looks after the past; it doesn't look after the future. Here in Nova Scotia, our federation is taking the initiative this year to be the catalyst to buy the only multi-species, federally inspected plant in the Atlantic provinces, because we see we've got to move up that value chain. We've got to start producing products. The money in hogs isn't in producing loin chops; it's made in producing smoked products and adding value to the end product, i.e., sausages, etc. So in this province we've taken the initiative because we can't lose that conduit to the marketplace. If we lost that kill floor, that abattoir, we'd have no conduit to get our product into the marketplace. CAIS doesn't look at it.

What we are asking for in Nova Scotia is the flexibility to use up front that CAIS funding that would come here normally. If we look at supply managed products, if they go under pressure from imports, they're going to need to be maintained. Where is the money going to come from to maintain their income? It's not going to come out of CAIS, but it could be used in the CAIS funding. If we look at fur, we're not even going to be able to sustain CAIS in this province if the fur price drops. As Chan mentioned, we produce a million pelts in this province. If the price drops about $20 a pelt on mink this year, that's $20 million. It doesn't affect the CAIS payment this year, but on the Olympic average, if we have another bad year, we won't be able to sustain the supply of sufficient funds to get to that point in this province.

So we're saying look after profitability rather than margins. Even with the $20 drop in the pelt price, they're still making a good margin. Unless we have profitability to the primary producers, they cannot move up the value chain, and CAIS does not look after that.

[Barry Devolin, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Wiseman, did you have any comments on that?

[Chan Wiseman]

No.

[Barry Devolin, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

This is to Mr. Fuller, on chickens. I have some chicken producers in my area as well, in Ontario.

It's my understanding that you're saying there is consensus between producers, processors, and further processors to change the 13% rule. I guess the comparison that we're using is maybe with dairy, where there clearly wasn't an agreement.

Is there an actual proposal on the table that those groups agree on? What I've heard is that flipping it and making it a 20% rule is the proposal. Is that true, or what is the proposal?

[David Fuller]

First of all, there is a letter signed by the national organizations. Our signature is on it; CPEPC—the Canadian Poultry and Egg Processors Council—the Further Poultry Processors Association of Canada, and CARI are on it. There are a number; it's not just those.

There has been an agreement to ask the government to have this rule changed. The proposal would not be to go to 20%. The proposal would be probably to go to somewhere around 40% or 50%, because, as you can imagine, we've had a case already this year in which we had a box come in that was 10 kilos. There were eight kilos, I think it was, of chicken and two kilos of rice. It met the rule. It came into the country tariff-free. You open the box up, take the bag of rice out, throw it aside, and you take the chicken and sell it.

This is why we as an industry clearly understand what's at risk. It's not just farmers not producing chicken, not buying grain, not doing this or that. It's primary processors not putting a product across the line; it's further processors not making the product in its final form.

We are at the very early stages of this, but people are starting to see how they can use this. There is an opportunity to shut the door before this gets out of hand, as it has in the dairy industry. At this point, the government has refused to do it.

[The Chair, Conservative, James Bezan]

You're out of time, Mr. Devolin. Thank you very much.

Mr. Atamanenko.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you, gentlemen.

Mr. Bishop, what percentage of apples sold in Nova Scotia markets are locally produced? Do you know, roughly?

[Andrew Bishop]

It's approximately 35% to 40%.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Where would the rest of them come from?

[Andrew Bishop]

The rest of them come from other countries. They're primarily Washington, U.S., apples.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Have you experienced dumping of Washington state apples here?

[Andrew Bishop]

Right now, as we speak, there's been a short crop year in North America, but we were monitoring very closely two years ago. There was some very drastic dumping. But to put the documentation in figures and prove a case is very difficult. We looked at it very closely and have declined to move forward at this moment.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

The reason I'm asking is that we've heard from the B.C. Fruit Growers, and you're familiar with their presentation. Their proposal, because of the dumping that has been occurring in our province, in British Columbia, is to have a minimum price. Initially, their proposal was a rapid response tariff mechanism, developed within the last few months, to forego all the problems you mentioned trying to get that process initiated. It would be just to slap on a tariff. If the apples are dumped today, slap it on tomorrow, and then we deal with it. Now their position is more one of a minimum price. What are your comments on that?

[Andrew Bishop]

The B.C. Fruit Growers definitely have a larger problem with this than the Nova Scotia Fruit Growers, because we're much further distanced. We have collaborated with them and we support their initiatives, because what we've done in the past hasn't been all that successful. We have to look at a new way.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

David, I'd like to pursue this.

You were talking about a bag of rice and chicken. Is it literally possible that you'd have a box—? Are we not dealing with processed foods wherein part of it is rice?

[David Fuller]

We have dealt with this case this spring. We had to go to the government, to Border Services, and ask how they are reading this, because they're reading it wrong. Even our industry was very upset that it came in tariff-free.They have, since that—But that's the aspect of this 13% content rule, the games that can be played with it, that you can move product into this country—If you put “14% rice”, it has to be in a separate bag.

If you throw it away and sell the chicken on the domestic market, the damage that's going to do to the Canadian domestic industry from one end of the chain to the other is astronomical. We want to solve this problem, and there is a way to do it. The Americans will support us on it. It will benefit them, but it will close the door for everyone else. We have not been able to convince the government at this time. We're still working on it.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

In other words, you would like the government to invoke article 28, as they've committed to doing with the dairy farmers.

[David Fuller]

Absolutely, it's Canada's right. We earned that right in the last round of the WTO, and we want Canada to use our right and launch article 28.