Good morning.
I'd like to take this opportunity to thank the committee for the opportunity for the fruit growers, the apple growers of Nova Scotia, to present their views here today, especially as it relates to the next generation of the agricultural policy framework. We appreciate this process here.
The Fruit Growers Association is a not-for-profit organization that has represented the tree fruit industry for the last 144 years, assisting its members with ongoing development of economic viability in a sustainable tree fruit industry in Nova Scotia. Our association has 112 members. There are packers and processors as well within our association.
We have about 5,000 acres of orchard in Nova Scotia, with an annual production of 2.2 million bushels, which is approximately 8.5% of Canadian apple production. Our average farm gate value is around $10 million, and our economic impact is approximately $52 million within Nova Scotia.
In 2001, our industry took steps to develop a long-term industry vitalization program. I have it here in a little bit of a chart. This just shows where we are.
We developed that industry vitalization program and we put in six interactive elements that we are currently work on. These interactive elements are integrated fruit production, cultivar evaluation and development, orchard renewal, bioproduct development, and commercialization. Some of these activities that we are working on are ongoing and some have been completed. They're all very important, and we have science and innovation and renewal as an umbrella over all these things to make them work properly and effectively.
Nonetheless, during the same period of time, the ongoing success of the industry has been threatened by issues that are not within its control. Some of those issues are related to the current agricultural policy framework. I'll just give you a few examples of some of the issues.
One is cutbacks in the agriculture and the agrifood system. These cutbacks have caused the downloading of government costs onto producers, producer organizations, and others, with no compensation to counterbalance the added costs. This is a very serious issue and it really needs to be addressed immediately.
There is also continued rationalization of the regional primary production research infrastructure. This AAFC rationalization of science infrastructure related to primary production will soon create a drop in the industry's ability to maintain overall productivity, which will negatively affect the sustainability of the agriculture and agrifood industry.
Another issue is increased regulatory burdens and associated costs. As a result of society's demand for improved food safety, traceability, and environment stewardship, regulatory burdens are being placed on producers at a significant rate and at a high cost to the producer. The implementation and long-term maintenance costs of these new requirements that are being incurred by the industry must be recovered. This situation really needs to be remedied. We're not getting it out of the marketplace. At the present time, as Frazer mentioned, what has to be done is that we have to get our 12% return. We're not getting it. If we can't get it from the marketplace, we have to find other ways to get it.
Another issue is ineffective and inefficient government programs. This industry has had to work with ineffective and poorly managed federal government risk management programs, such as CAIS, which is not sensitive to the needs of diverse mixed farming and horticultural operations. This also must be corrected.
These issues, at a minimum, must be addressed effectively through the next generation of the APF.
The government has said that the next APF aspires to lay a foundation for profitability for the food chain, producer to consumer, but without a healthy and profitable production base, the APF will not perform. Farmers still drive the production, which is the food value chain's basic ingredient.
We feel strongly that the APF must address strategic investment in the industry. The APF needs to support industry strategies for development and renewal. We know that the replanting of orchards with high-value cultivars is one of the answers to economic sustainability in our apple business. AAFC supporting the proposed national tree, fruit, and vineland replant program would be a strategic investment. Currently there are provincial replant programs that have been implemented in three of the five apple-growing provinces, but these efforts need federal partnering if the provinces are to meet their full potential.
Canadian trade policy and practices need to be changed. The Nova Scotia Fruit Growers' Association agrees with the B.C. Fruit Growers' position on trade. I believe on April 16 the tree fruit industry in B.C. had an opportunity to address this committee. I'd like to emphasize one of the things they mentioned:
Fair trade is an issue for fresh produce. Fresh produce occasionally gets into an oversupply situation. The consequent price collapse is often centred on the North American market due to retail consolidation and U.S. expansionist subsidies that stimulate overproduction. Market failures have a negative impact on industry, which causes the level of investment and the confidence in business planning to suffer. Consumers suffer when investments in quality, food safety, and local availability decline. Taxpayers suffer when financial programs and transition payments are generated to help producers in difficult financial situations. Retailers are huge beneficiaries as they get an unexpected windfall by purchasing produce at half the price expected, and then do not pass the savings onto consumers.
Apart from imploring the government to provide special assistance during a price collapse, grower associations can also pursue trade actions against dumped product. For fresh produce, we would like to see an alternative to the current anti-dumping process in trade actions. The drawbacks of the current system are:
(1) The process is not timely. It takes a lot of time to gather extensive data, to prove dumping, and finally to prove injury.
(2) The process is expensive to administer. At a minimum $275,000, for example, to launch an anti-dumping suit, the same amount of in-kind time and effort must be spent by a commodity group that is also impacted by the financial disaster.
(3) The process is highly uncertain, and the results often seem to be random or at the whim of the administrator. In this case the Canadian Import Trade Tribunal has the final decision-making authority.
This is the current process industry must deal with under the Special Import Measures Act. We feel that a new method of dealing with market failures and price collapses precipitated by product dumping needs to be investigated.
The current APF neglects to address domestic marketing of Canadian product. Under the next APF we would like to see Brand Canada promoting Canadian product to Canadian consumers. Consumers need to be prompted to buy Canadian first. A strong emphasis being placed on the issue of domestic product in our home market will support APF safety and environmental programs and encourage the development of food security for Canadians.
It is imperative that the AFC re-establish and continue to invest in science and innovation at the regional primary production level. New knowledge is created through science, and the new knowledge prompts innovation and commercialization. Primary products are the fundamental ingredient for an all bioproduct development. Without availability to sound science at the regional primary production level, the production base will be compromised in a very short time.
The Nova Scotia Fruit Growers' Association supports the CFA's proposed Canadian farm bill and its three pillars: public goods and services, business risk management, and strategic growth.
The Nova Scotia Fruit Growers' Association also supports the Nova Scotia Federation of Agriculture's position regarding the next generation of APF.
Our comments above are further to the standing committee submissions by these two groups.
We thank you for the opportunity for expressing our opinion.