I'd like to thank the committee for the opportunity to speak to you. This is a new experience for me, and I'm a little nervous.
The Nova Scotia Cranberry Growers Association is a different group to the larger commodity groups. Cranberries are a different crop, and I suppose that warrants some of the differences.
The cranberry industry in Nova Scotia has undergone a major renewal within the last 10 years, which flies in the face of more traditional agricultural commodities. The main reason is price. As you are all probably well aware, the cranberry industry went through a real boom time in the nineties. The Nova Scotia industry, like most of the industry across Canada, greatly expanded.
The Nova Scotia Cranberry Growers Association consists of a whopping 15 members. To put things into perspective, we have a total of about 250 acres of cranberries in Nova Scotia, and that's it. The 250 acres of cranberries planted by 15 people represents an investment of approximately $10 million to plant those cranberries in the ground. It's a significant investment.
The industry is a little fragmented. There are some very small growers who planted a couple of acres by using their retirement savings and that type of thing. There are some large growers. There are two large growers who represent two-thirds of the acreage between them. They actually have on-farm value-added activities as well. I'm in the medium group. There are a bunch of us in the middle, with smallish but not small-sized farms.
The production from Nova Scotia out of those 250 acres is about 1.5 million pounds of cranberries per year. This represents a farm gate value of about $800,000. We invested $10 million to get $800,000 at the gate. Out of that, we take all of our expenses and pay off all of the interest on the loans. You can imagine the state the industry is in.
The group of cranberry growers is largely not made up of farmers. I am an engineer. There are guys in the construction industry. There are some other farmers in other commodities who have branched into cranberries as well. It's a different group of people. They're fairly enthusiastic. One of the larger growers in the valley is still working on his profitability as well. He would describe it as an addiction to growing cranberries. It's the type of industry we're in. We're still optimistic, and we are looking for opportunities.
I'd like to switch over to talk about the agriculture policy framework and how it relates to our industry here in Nova Scotia. I am by no means an expert on all the details of the agricultural policy framework, but I work with it on a day-to-day basis, like all the other farmers. We can give you that feedback.
As far as business risk management, it is not used within our industry. There are a couple of issues in the way I understand it. The biggest one is that we are a young industry and we are only coming into production. Ninety percent of the acres in Nova Scotia were planted within the last 10 years. It means most of them are still coming up to crop potential. How do we insure earnings that we never had? It's more about development.
On the environment side, it has been a very significant part of our industry as it's developed. Nova Scotia had the fortune, or the misfortune, depending on how you want to look at it, of having Nova Scotia Environment and Labour take the lead on environmental permits for cranberry farms. Back in the 1990s, I believe it was 1997, they produced a large paper detailing all the requirements we would have to go through. All of the farmers did this. It was a good thing, because it made us think about our farms and how they would operate environmentally before we even made the farms. We are used to working within the environmental regulations. The environmental farm plan is something we're all becoming compliant with. It's not a very difficult procedure when you grow and start the farm under those regulations.
On food safety, on-farm food safety is something that we are all working with. It's mainly been pushed by the buyers of the fruit, not the federal policy so much, although the support for on-farm food safety training has been used.
The big part of the agricultural policy framework that we have all used is the innovation side. Our industry is new. It gave us a chance to innovate. It gave us a chance to employ new ways to plant cranberries, to grow cranberries, to harvest cranberries, and even to do things with cranberries. I know that most of the farmers have used quite a bit of assistance from the Farm Investment Fund here in Nova Scotia, which follows through from that.
Looking forward, what our industry needs is to have more of a focus on how we can get—basically what other people have said here—the return on the investment. We've made the investment. It was done at a time when the industry was in its heady days. We realize that's not realistic. The people who are working in the industry are still optimistic that we can do this.
To that end, one of the large farms in the valley is one of the major fresh fruit packers for cranberries in North America. Fresh fruit represents about 5% of the total cranberry crop, and he sells to 50% of the Wal-Mart stores in the United States, for example, from Nova Scotia here. He's making his latest investments in Wisconsin because it is a more appropriate area for him to distribute from, he feels. But he has given it a good shot here.
The other way the industry is going is the commodity market of frozen cranberries that get used overseas. The other large farm in the valley invested in its own freezing facility, which became registered with CFIA just recently. They ship internationally by the container load.
There are a few small businesses, including mine, that are looking at retail opportunities here in Canada. Our facility is registered for processed cranberry products with CFIA. We see a future in that more than we do in the growing. To be honest, I can buy cranberries cheaper than I can grow them at this point.
So the industry is progressing into a different stage where it is needing the support to go to processing rather than producing.
I'd be happy to take any questions later on the Nova Scotia cranberry industry, and I'd like to thank the committee for the opportunity to speak.