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.