Agriculture Committee on April 23rd, 2007

[The Chair, Conservative, James Bezan]

I call this meeting to order. We're going to continue on with our APF hearings across Canada. We're glad to be in sunny Charlottetown in P.E.I. Wayne did a great job of giving us a quick tour on the south side of the island here for a couple of hours this afternoon.

Welcome to the table for presentations for this hour and a half. We have Scott Dingwell, who is with the Natural Organic Food Groups Inc. of Prince Edward Island. We have John Colwill and Mike Nabuurs from the Prince Edward Island Federation of Agriculture, welcome. From the Prince Edward Island Potato Board we have Kevin MacIsaac and Ivan Noonan. A few of our witnesses from the Young Farmers' Association are running a little bit behind schedule, Ryan Weeks and Martin Bernard. Ms. Smith is here to help us out if they do not make it in time.

With that, Mr. Dingwell, perhaps you will kick us off with your opening comments. You have 10 minutes or less.

[Scott Dingwell, Co-Owner, Natural Organic Food Group PEI Inc.]

Thank you, Mr. Chairman.

Thank you for the opportunity to present to you this evening. My name is Scott Dingwell. I am a farmer on Prince Edward Island, a co-owner of NOFGPEI, and the current chair of the Canadian Farm Business Management Council. I will be speaking primarily about the Natural Organic Food Group PEI, or NOFG.

NOFGPEI is the former Garden Province Meats, the island's slaughter facility for hogs. The transition from GPM to NOFGPEI was precipitated by Maple Leaf Foods' exit from a majority shareholder position in early 2006. We know this was the beginning of Maple Leaf's major restructuring plans now under way across Canada. This restructuring is not isolated to one company, but is indicative of the major transformations and forces now reshaping agriculture in Canada.

NOFG is actively transitioning from high-volume, low-price commodity markets to differentiated high-value, branded markets. NOFG has created, and is creating, differentiated pork products that can be directly linked to consumers at the retail level.

Much of the reasoning behind this move is expressed in the research contained in the report, A Maritime Pork Value Chain Assessment, which has been provided to all of you. The report was prepared by the P.E.I. ADAPT Council, the Atlantic Swine Research Partnership, and P.E.I. Pork Plus.

The key findings in the report, which prefaced some of this move, are as follows.

Marketing contracts are increasingly replacing open markets, and true price discovery is difficult. Larger operations can more successfully negotiate this environment.

The trend to fewer and larger players is continuing.

Livestock production and processing is increasingly mobile. Multinational firms may dominate world production and source and sell globally.

Small to mid-sized producers will struggle to integrate into supply chain structures. Higher revenues may be possible in value-added niche markets. These small to mid-sized producers may be able to capture market access and cost advantages of larger producers by joining networks or alliances, but both of these avenues require a high degree of cooperation and interdependence.

Consumers are demanding novel food attributes beyond safety, such as animal welfare, organics, environment, and food with no antibiotics or that is GMO free.

Wal-Mart and other large retailers have significant effects on retailing. Large retailers can co-exist with smaller niche segments.

And the future growth potential for value-added branded, packaged products is very important.

Current industry conditions are dire. I believe that Willem de Boer and Robert Harding of the P.E.I. Hog Commodity Marketing Board will be outlining current conditions and recommendations from the P.E.I. hog industry in your next committee session.

NOFG, like any manufacturer, is very sensitive to throughput. More importantly, and specific to NOFG, is the point that a branded and differentiated program with regional attributes requires regional supply.

We believe we are at the vanguard of new agriculture. NOFG is using some of the competitive issues that hindered us in the past as assets in this new economy.

One of our greatest exposures is the fact that the industry may not be able to transition to this new economy because of current conditions.

There does need to be an active debate on food production as a matter of national security. It's very easy not to think about this when store shelves are full, and it's too late when they are empty. Not having that answer today, I will confine my remarks to the current next-generation APF working vision statement:

An industry that is innovative in seizing evolving market demands for food and non-food products and services within an environment that fosters prosperity and opportunity for the entire value chain, creating benefits for all Canadians.

This is a statement that NOFG was pursuing before it was released.

So what is needed? It's not enough to say the words; we must take the steps to make the words happen. Words are only ink on a page or sounds in the air unless they are supported by actions, policies, and investments. The current vision statement for the next generation of APF has a lot of parental supportive words within it, but agriculture in Canada is a mature industry that requires partnership, not parenting.

The three main points I would like to leave with you today are that strategic investments must be made to allow transition to these new market economics, we need streamlining of policy and regulation to maintain and enhance competitiveness, and we must allow for regional differences in programming.

Strategic investment, as defined in market development and trade under the next generation of APF, is to make investments in innovative production processes, national systems, and other points of differentiation that are informed by market intelligence. That's excellent. NOFG strongly supports that direction, but we must always find ways and tools to support primary agriculture while it transitions to that new market economy. The markets will fail if they cannot be supplied.

The Agri-Opportunities program announced in January is positive and supportive, but we must challenge ourselves again to remember that one of the keys of that program is to increase market opportunities for Canadian agriculture across the value chain and generate demand for primary agricultural products.

Secondly, there must be major improvements to Canada's regulatory environment. The Canadian Pork Value Chain: Strengthening Our Competitiveness report that was released earlier this month--and I will leave this with the clerk--has many good recommendations within it that should be pursued. In order to pursue market-based economies in Canada, we must streamline and raise the effectiveness of its agencies involved in markets and product creation. Label creation has been difficult for NOFG in this circumstance.

Regionality of programs is the third point. It will be very necessary, when dealing with a country as large as Canada, that programs have enough flexibility to account for varying production practices. Programs that have had success in one region of the country have been viewed as unsuccessful in another region. We must have regional latitude when delivering agriculture policies and programs.

In conclusion, there are three points I respectfully submit to the committee.

First, strategic investment must be made to allow transition to these new market economies. That investment must include the primary levels.

Second, we have to have a streamlining of policy and regulations to maintain and enhance competitiveness. Regulation and laws must have parity within the marketplace. That marketplace is global.

Third, we must allow for regional differences within programming. Canada is a large country with very varying practices.

I respectfully submit that all crisis is an opportunity. We must make intelligent decisions when setting targets and goals for the future.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Dingwell.

Mr. Colwill, you're on.

[John Colwill, President, Prince Edward Island Federation of Agriculture]

Good evening, Mr. Chairman, standing committee members, and ladies and gentlemen. My name is John Colwill, and I'm president of the P.E.I. Federation of Agriculture. With me this evening is our executive director, Mike Nabuurs.

Thank you for the opportunity to present some of our ideas and to discuss topics for consideration on the development of business risk management and other pillars of the next-generation agricultural policy framework.

As you are aware, Canadian agriculture is approaching a crossroads. Canadian farmers are experiencing ever-increasing financial hardship while our counterparts south of the border appear to be experiencing opportunity and growth. This trend must be more closely examined in order to address the long-term sustainability of Canadian agriculture. Some tough questions will have to be asked and answered before we can move forward. The toughest of these is: do we, as Canadians, want to continue to have our food produced in Canada? If the answer is no, then let's begin the process of developing exit strategies for Canadian farmers to exit the industry with some pride and dignity. If, however, the answer to the question is yes, then we must recognize the deficiency and accelerate the process of bringing Canadian farmers on par with our trading partners in the United States and Europe.

The federation of agriculture would certainly prefer to assume that the answer to the question is a resounding yes. There are many opportunities in agriculture, and we must empower Canadian farmers to realize this potential. With the appropriate support and vision from our federal government, the long-term sustainability of Canadian agriculture will certainly be a realistic goal.

We appreciate the funding provided to the agriculture sector by this and previous governments. We must, however, recognize that in many ways these ad hoc contributions are only band-aids to a growing problem. There appears to be a lack of vision or strategy on the part of the Canadian government to move agriculture forward. On many levels, farmers cannot currently make the kinds of proactive changes needed to move the sector forward. Farmers are so focused on keeping their heads above water that they cannot consider the future in ways that would make their farms more sustainable. This is where government must step in with sound policy that will bring us out of the current situation and begin to permit farmers to look forward rather than back over their shoulders for the banker. This strategy must be developed in collaboration with industry.

The Canadian Federation of Agriculture, with its member organizations across the country, has worked hard to come up with a Canadian farm bill that has the potential to address many of these issues. Its three-pillar approach of business risk management, public goods and services, and strategic growth condenses the previous five pillars into three.

Although we may not always agree with the contents of the legislated U.S. Farm Bill, it does appear to provide a level of stability and predictability to the farmer for a five-year period. The federation of agriculture was very pleased to see that government recognized the need to return to a self-directed, contributory-style savings account for the top tier of CAIS, as described in the CFA Canadian farm bill.

The current federal-provincial cost share agreement, a 60-40 split, is part of this issue. It appears that the federal government does not have a problem with paying its 60% share, but the provinces are having increasing difficulty with paying their 40%. What happens in these instances is that farmers are caught in the middle until a suitable arrangement can be made. It is time to revisit the cost share arrangement and come up with a model that places the needs of the agriculture sector first. Is a 65-35 or even a 70-30 split arrangement out of the question?

We recognize the need for the provinces to continue to invest in agriculture, and we deliver that message on a constant basis. However, in the interest of time, farmers cannot continue to be left in the middle while the provinces bicker with the federal government over program affordability. When the ad hoc announcements are made where contributory dollars are required from the provinces, those provinces that cannot pay do not contribute, as in the CAIS inventory transition initiative. Farmers in P.E.I. are left behind while other provinces that do contribute provide their producers with a huge advantage. We cannot have this type of inequality within Canada's borders on a nationally delivered program.

Public goods and services are also an essential part of the Canadian farm bill. If we are to begin to reach parity with our trading partners, we must begin to seriously consider the benefits of paying farmers for the services they provide to the rest of society.

Food safety and traceability are services that provide a sense of security to the general public. The infrastructure needed to provide this service is paid by the farmers. Government must recognize the need to help farmers implement these initiatives on farms. Depending on the type and size of farm, the cost for food safety auditing and equipment can vary widely. It's anywhere from $1,000 to as much as $15,000 annually. If we use an average of $5,000 and assume there are 250,000 farms across the country, this works out to an annual cost of $1.25 billion that agriculture will pay for food safety and traceability. Farmers cannot retrieve these costs from the marketplace, and help is needed.

I'd like to remind the committee members that the Wayne Easter report, “Empowering Canadian Farmers in the Marketplace”, recommended the following: “That society bear the cost when farmers are required to take actions that benefit the public at large. These activities include producers undertaking environmental farm plans, on-farm food safety programs, alternative use of land for environmental preserves, trails and greenbelts, and carbon sinks to reduce the emission of greenhouse gases.”

Ecological goods and services are another example of the need to pay farmers for the services they provide to society. Farmers are answering the call of environmental responsibility, and they are making investments on the farm to improve and sustain soil, water, and biodiversity.

I'd like to give you a quick example. In 1998 a community pasture of 3,000 acres on Prince Edward Island was faced with the option of the possibility of going out of business or totally fencing their livestock from streams. The directors decided to do an environmental farm plan and proceeded to implement the plan. By 2001 all livestock were fenced out of those streams. The project included over 17 kilometres of new fences along streams, moving corrals, building shade structures, drilling 12 new wells, installing electricity to those wells, and burying over seven kilometres of underground pipe to 30 cement-tank watering stations. The total cost was in excess of $200,000.

The question is this. Who benefited from that project? The answer is obvious. Everybody benefited. The thousands of people who live on that watershed, the livestock, the fish in the stream, the shellfish in the bay, the environment, and the wildlife all benefited. As producers, we also benefited, but at what cost?

Initially our share of the cost was around $70,000, but we also have significant annual maintenance costs to repair fences, blow out water lines, maintain and repair electrical pumps, etc. This is only one of hundreds of examples of similar activities that are implemented by island livestock and crop producers on a yearly basis.

The question is this: how long can farmers continue to pay for these costs for the benefit of all society? These investments should be supported by public funding.

Strategic investment and looking to the future is the final piece of this puzzle. There are many areas that could be discussed here, but I'll just touch briefly on three.

Sufficient processing capacity for beef and hogs is critically important to the future success of these sectors in the Atlantic region. Atlantic beef products incorporate a national organic food group and have significant producer and provincial government investment in them. Both are in need of additional investment to attain new markets and reach efficiency targets.

The current trend of ethanol production and the U. S. subsidization of corn are driving feed prices up and leading to a critical situation in this livestock sector. If livestock markets rebound to match these increasing feed prices, this may become a positive for the entire agriculture sector. But until that happens, the livestock industry is facing a critical waiting period.

With this in mind, if we move to a greater production of crops for alternative energy uses, we must ensure that long-term sustainability is based on sound economics and science. We must remain innovative and ground-breaking. But without adequate research and development, it is difficult to stay on the leading edge. Government must place greater resources into research and development.

As you are aware, nitrate levels in groundwater in P.E.I. have reached levels of concern. As farmers, we also have serious concerns and we have pledged our cooperation to find solutions. Nutrient management planning is one tool that can help. But to implement nutrient management plans, producers have to have confidence in the information they use to match crop inputs with crop requirements. Professional resources will be required to develop individual plans, and more local relevant research and information is needed.

To conclude on a positive note, we are very encouraged by the number of new entrants to agriculture in P.E.I. during the last few years. They add enthusiasm and optimism to the agricultural industry and to our rural communities. The Province of P.E.I. can take some credit for this trend, with an excellent five-year program that links training to an interest subsidy. That program is about to expire, and funding at the same level may be an issue.

I urge the Standing Committee on Agriculture and Agri-food to become familiar with this program and the positive impact it is making on agriculture. Cost-sharing future farmer programs on P.E.I. and possibly in other Canadian jurisdictions would be a worthy investment in Canada's future.

The P.E.I. Federation of Agriculture appreciates the opportunity to speak to this committee. We look forward to the positive outcome of our discussions.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Colwill.

Mr. MacIsaac, you're on. I understand you may not be able to stick around very long.

[Kevin MacIsaac, Chairman, Prince Edward Island Potato Board]

Good evening, Mr. Chairman, committee members, and ladies and gentlemen. We do have another meeting after this one, but we'll do our best to go through this presentation to you.

We appreciate your invitation this evening. My name is Kevin MacIsaac, and I'm the chairman of the P.E.I. Potato Board. Ivan Noonan is with me this evening; he's our general manager.

In the short time we have, we'd like to share with you that P.E.I. certainly is the largest potato producing region in Canada. We produce over 25% of the potatoes in the country and approximately 35% of the total seed production. About half of all the seed potato growers in Canada farm in P.E.I. Our potato acreage peaked at 113,000 acres in 1999 and has decreased by 14%; it is down now to 97,000 acres for 2006.

Our seed potatoes and fresh potatoes for processing are shipped to over 30 countries around the world, and that includes markets as diverse at Thailand, Turkey, and Uruguay. Close to 60% of our crop now is produced specifically for processing into french fries, potato chips, dehy, and other value-added products. The value of seed, table, and processed potato exports from P.E.I. over the past five years was over $1.2 billion, and this doesn't include the value of shipments to Canadian markets.

We realize there have been many consultation sessions over the past few years on the APF, and we participated in them, including the session in P.E.I. on February 19. To be blunt, we do not feel that the first APF has done much to assist with the stated goal of helping “the sector chart a course to continued prosperity and profitability”. We should qualify that statement: perhaps the sector is more prosperous and profitable, but we as farmers definitely are not.

In terms of business risk management, we went backwards when we lost NISA and ended up with CAIS. I know some politicians and government employees felt that NISA was simply a retirement program, but here in P.E.I. it was working as intended, and in good or relatively reasonable years, we built up our NISA accounts. When we hit bad years, either as individual farmers or as an industry, we withdrew funds from our accounts to stabilize our farms, and that's the way the program was intended to work. CAIS does not do the same, and many of you know the problems with that program.

In terms of the other APF elements, in terms of food quality and safety we worked through the Canadian Horticultural Council to develop an on-farm food safety program for potatoes. It was a very long process. It received technical approval from CFIA; however, not a cent of the millions of dollars of national funding that has been repeatedly announced by the government has been made available to potato farmers to implement this program. We are implementing it now because our buyers are demanding it; they will not pay extra for it, but they are demanding it, and we will have to do it. We've been told that eventually, after another long approval process, our growers will be eligible to receive $750 per farm to assist with implementing these costs. Really, that amount is an insult.

The food produced by Canadian farmers is safe and was safe before APF made it a priority. Nonetheless, in this country imported produce that does not have to meet on-farm food safety program requirements is sold to Canadians, and we see this as very unfair.

In terms of science and innovation, we're not really sure where these funds or resources from the APF are directed, but we see cutbacks in terms of the research that we need to help us remain competitive as producers. Most of the researchers who work on potato issues on P.E.I. have retired or are retiring soon. They have not been replaced, and we've lost touch with our research people: for the most part, the work they're doing is not relevant to our needs. It's a very sad situation indeed.

In terms of the environment, one would think that the efforts in this area of the APF framework would be designed to assist farmers in addressing environmental issues. This definitely has not been our experience in the province; instead, dollars from the agriculture budget have been provided to Environment Canada to do research that actually has blackened our image in this province in agriculture, and in the potato industry in particular. When Environment Canada provides the environmental extremists, as I call them, with copies of its potato research first and does not discuss the results with our industry, we think there's a major problem. The public, however, trusts Environment Canada to provide good science-based information to Canadians. We did, as well, before our eyes were opened by some of this kind of work.

In terms of renewal, again we haven't seen a lot of evidence here in the province. I'm sorry to sound pessimistic, but it appears that while we try to convey our concerns through the regular consultation process, they're not necessarily reflected in the decisions that are made in Ottawa in the very end. We're being honest with you, and we hope you will hear our concerns and know that they are real.

Rather than talk in the language of the APF 2 elements being used in Ottawa, we'd like to now tell you about some of the things we feel must be addressed if we are to have a chance at a prosperous and profitable farm sector.

We need a business risk management program that really does stabilize the industry at a level where there is a hope of recovery from whatever shock that causes farm income to fall.

We also need a compensation program for the potato industry that will help us deal with a disease or pest detection of quarantine significance. As you know, we've been through the potato wart crisis, which devastated our producers, and a much smaller number of potato producers in Quebec are now going through the potato cyst nematode crisis.

The response from the bureaucrats is that we have safety net programs that will address the losses, but they're simply not effective, and we need to address the long-term losses of property and income that can occur under these circumstances.

We need a true commitment to dealing with trade barriers, including phytosanitary barriers to trade and negotiating market access. Over the past few years, the United States has negotiated several bilateral trade agreements with countries that are or used to be major export markets for our potatoes. Tariffs are rapidly disappearing for U.S. agriculture products into these countries, while the tariffs that apply to Canadian products remain high. When you add in aggressive market development, support, and financing terms that U.S. growers and exporters receive from their government, we lose ground very quickly.

We realize that Canada chose to focus its efforts on the WTO, but while we're doing that, the U.S. and other countries have developed bilaterals that can achieve similar results in key markets.

We need federal support to truly fight foreign governments that refuse to live by existing international trade and phytosanitary rules. For example, Venezuela used to be a very important market for P.E.I. seed and table stock potatoes. We shipped over 1 million hundredweight to that country annually. However, when the current president came to power, Venezuela refused to issue import permits for Canadian table stock potatoes anymore. Our trade officials tell us that this is illegal, but it has now been several years that we have been unable to ship our table stock potatoes there. It's not a good situation.

Another case in point is Russia. There was an extensive drought in Europe this year, and potato production was badly impacted throughout the continent. We had an abundant crop in Canada, and the European situation looked like it would lead to strong exports. To date, our export shipments are somewhat higher, but nowhere where they should be. Why? Because we have an inability to access these markets.

We've been trying to ship to Russia since early fall, and despite the assistance of Wayne Easter in raising the issue federally, we're still shut out of there. We've been told there are no phytosanitary or plant health reasons for this. Indeed, we've shipped potatoes there in the past, but no one in Agriculture Canada or the CFIA seems to be able to identify the root cause for refusal to grant import permits for Canadian potatoes.

In terms of innovation, we'd like to see the APF support an innovative approach to improving farm viability, which we have been involved with here in P.E.I. Like many sectors of agriculture, the North American potato industry is very integrated and when we have surplus production in either Canada or the United States, it results in poor returns for potato producers on either side of the border. Certainly this was evident in the 2003 and 2004 season.

United Potato Growers of America initiated potato acreage buy-down programs in its member states in the spring of 2005 to prevent surplus production. P.E.I. has worked with them and also initiated potato acreage buy-downs for the 2005 crop in our province. Through our grower-funded program, we bought down close to 9,600 acres of potatoes. We've also strongly encouraged other potato-producing provinces to plant only what is required to meet known market demand.

While this was happening, we also fostered closer ties with the United Potato Growers of America. United Potato Growers of Canada was formed in February 2006. To date, our membership represents over 96% of Canadian potato production. The members so far include almost all provinces, with the exception of Nova Scotia, which is very supportive but it is a very small province. Other than that, we have good support from the other provinces.

We've signed a North American potato cooperation memorandum of understanding, and so in addition to reducing the supply of potatoes, we're sharing some real-time information in terms of our markets and pricing in order to maximize our returns. I would have to say the level of cooperation between potato growers across the border is truly unprecedented. Your trade officials can attest to the improved relationships in discussions at the Canada-U.S. potato meetings and negotiations that have resulted from these cooperative efforts.

At home here in P.E.I., we also instituted a second grower-funded program to buy down acres for 2006. We bought down close to 8,500 acres. Yes, we're getting there. United Potato Growers of America has also reduced considerable acreage in their country as well.

A word on the environment. In our initial program to buy out acres, we were looking to reduce our acreage by 10,000 acres, and we felt this would be a reason to do it in terms of the environment in that less slope land, less marginal land, would be used; less fertilizer and crop protection would be used as well. Also, the economics, of course, would mean more returns for producers. However, in a nutshell, when potato producers tried to implement this program, we went to the provincial government and the federal government for funding assistance and we were unable to get assistance in developing this program. This was certainly a big disappointment because it was a benefit not only to our province, but the other provinces as well.

I could raise many other items, but in this short period of time, I'd just like to add two final comments. You have an important role in this committee, and we really have to try to improve the policy framework for agriculture in this country if we have any chance of a viable Canadian farm sector in the future. I would ask that you be flexible. Sometimes programs that work well in the west do not work well in the east.

Thank you very much for the opportunity.

[The Chair, Conservative, James Bezan]

Thank you, Mr. MacIsaac.

Mr. Weeks, Mr. Bernard, welcome to the committee. Who's going to lead off your presentation?

[Ryan Weeks, Vice-President, Prince Edward Island Young Farmers' Association]

Thank you for having us here today. I'd like to apologize for our tardiness.

It has been our pleasure, as a young farmer group, especially at the Canadian Young Farmers Forum, to have the opportunity to be before the Standing Committee on Agriculture and Agri-Food in the past, especially during this past trip to Ottawa, at our annual meeting. You have probably touched on some of our topics already, but I'll continue with them.

I'd like to introduce Maria Smith and Martin Bernard, and I am Ryan Weeks. We are the people who put this project together.

The P.E.I. Young Farmers' Association issues and opportunities are the vision for the future of Canadian agriculture, low record farm revenues, moving beyond efficiency and innovation, declining numbers of farms, barriers for new entrant farmers, and requirements for future and current programs. This is our outline.

What is the vision for Canadian agriculture from 2015 to 2020, and what is the importance of a unified vision? We feel it is important to have a unified vision because it reduces political distortion from election to election. It also provides direction toward specific goals rather than trying to move money in ways to make things look good. We'd also like to focus on whether we're going to export or import and how much of each we intend to lean toward. Also, who should be involved in this vision?

We feel it's important for young farmers to have a spot on committees, on planning organizations, and any of the programming committees that are set up. We'd like to see a little more involvement in that area. We commend you for what you've done so far. We think this is a step in the right direction.

We also think it's important to have experienced farmers on those committees. This provides experience and knowledge that maybe we haven't experienced yet or that could save us some mistakes in the future.

With respect to record low farm revenues, commodities will result in potentially reduced gross income, currently and in the future. Farms in low-income situations cannot afford to exit failing industries with such high debt levels. Low-income effects go further than the farm gate. Legislation against loss-leader products at a retail level should be in place. This would maybe help return a fair share of the dollar spent on food in this country to the producer. Also, value chains would allow an increase in revenue to all stakeholders.

We think it is important to move beyond efficiency and innovation. Today's farmers are innovative and efficient in their farming practices, and they continue to evolve in being so. Actually, you can give credit for this to the low farm incomes, because it has forced farmers to be as efficient as they can be to survive.

With respect to the next step, well, if it continues this way, we'll either have to become differentiated in our products or move to large-scale commodity-based conglomerations, which might head toward multinationals owning them and farmers working them. I don't think that is in the best of Canadian agriculture.

I think declining numbers of farms linked to record low incomes and lack of vision is where we see that tied in. That vision of 2015 to 2020 is not there. Australia has it, but why don't we? The States has a five-year Farm Bill that's up for grabs in Canada. Actually, the CFA is working on one as well. I think this is an important tool.

The average age of farmers is actually down to about 58, I think, which is not that young. The number of farms since the 1960s has decreased by half, from 500,000 to 250,000 farms, and they are increasingly subsidized by off-farm income. No one wants to work off the farm. Anybody who works off the farm doesn't want to work off the farm; it's just a reality we face today.

Barriers for new entrant farmers include high input costs, high collateral requirements to access financing, and limited programs relevant to a wide range of young farmers. Similar programs, like the P.E.I. future farmer program have interest rebates and training. This is a step in the right direction.

CASS is not quite meeting the requirements for advancement in agricultural training. I have a lot of friends who are single today and married tomorrow, and they seem to miss out on the opportunity, yet they haven't moved up into the kind of income bracket where they are totally secure. They're still in the same position as I am in, maybe with the same expenses or more.

Requirements for future and current programing include the inclusion of young farmers on planning committees; including the future in the planning of the future; having federally funded, provincially administered programs monitored for consistency; and having efficient administration of programs. We've seen this, maybe, with CAIS. I hate talking about CAIS too much, because everybody's heard a lot about it over the past few years. There are some changes being done, so that's going in the right direction.

We'll just round off here with requirements for future and current programming. Programs to protect farmers in case of uncontrollable factors that may occur, such as natural, economic, and international disasters, should be in place. There are some. Disaster assistance needs to be adjusted from the typical 60-40 federal-provincial split to a 90-10 split. Whenever you have a disaster, you're in trouble. Whenever you're just doing day-to-day changes or preventive maintenance, you're not in trouble. They do it with households and townships. I think maybe we should look at that for agriculture.

In conclusion, I'll give an overview of what was discussed here today.

The biggest thing, I think, for Canadian agriculture that will solve all these problems is a vision.

I was at the APF meetings in Quebec City, the renewal meetings. I talked to a gentleman there, and he was talking politics a little bit and kind of wondering what was going on. He said he was not sure where we're going to go, or something like that. Anyway, he made the comment: do we know where we're going to go as an industry, and could you honestly tell me what tomorrow holds, or what five or ten years from now holds? That's where we need to focus. Band-aids work today, but preventive maintenance works for years to come. With that in place, I think a lot of these troubles could probably be worked towards and overcome. It would increase farm revenues.

We need to decide on steps beyond efficiency and innovation, slow the rate of declining farms with increased farm income stabilization--once again, a vision of an industry that's strong, not funded. No farmer wants to have to go to the mailbox to get a gratuity; they want to get paid for what they do.

On the development of programs for new entrant farmers, the P.E.I. future farmer program is a pilot program that's well accepted. I sit at AGMs for Future Farmers across Canada, and they love it. Everybody sits there in awe of P.E.I., because the assistance--the training assistance, the financial assistance--and just the focus is there.

Once again, just to touch on the disaster assistance, it should be 90-10 federal-provincial.

Thank you for your time. We appreciate it.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Weeks.

Maria was looking a little concerned that she was going to be making the presentation, but you arrived just in time. With that, we'll open it up to questions. We're going to stick with five-minute questioning periods.

Mr. Easter, you're on first.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

First of all, I'd like to welcome the committee to P.E.I.

I think from the witnesses you've heard, you should know that agriculture is the number one industry here, and what happens in agriculture, positive or negative, flows in the same way throughout Prince Edward Island society. There is no question about that.

Because we had about an hour to spare, we did take a drive out, so we've seen a potato wart field and the restrictions that are on that particular field.

Anyway, I have a few questions, and I thank you all for coming and laying out your presentations.

Across the board, there seems to be a view wherever we go that companion programs are necessary, that there needs to be regional flexibility. I'd ask you to quickly comment on that, because it hasn't been the direction of governments to go with companion programs. We've been moving away from that. Does that need to be rethought, and do we need to reinstate flexibility for companion programs?

Secondly, I think Scott, or it might have been John, mentioned the figure of $1.5 billion—you can correct me on that figure if I'm wrong—just on food safety and traceability alone. The U.S. is a lot more strategic in that area than we are. They develop programming that's green, whether it's environmental, food safety, or whatever. What we do is seen as a subsidy.

Maybe the potato board guys could tell us what it costs for CFIA inspections in this province. If that was paid for, it would make a huge difference. It's a food safety issue. It shouldn't be a farm cost. If the federal government would take responsibility for some of that programming in that area of cost, it would help the bottom line and wouldn't be seen as a farm subsidy.

The third point I'd like you to respond to is on the whole trade issue that a few folks have brought up, and we've heard it elsewhere. I don't know why, but in Canada...and I've worked on this Russia potato thing; there is no reason that is not settled. Do we need to be looking at something like a quick response team that has certain individuals from agriculture, from trade, and from wherever else committed to doing nothing but dealing with our trade problems so that they're on it, right off the bat, and if they had to go to Russia to deal with it—the CFIA, and so on and so forth—it would be done with quickly? Trade is our bottom line in terms of selling these products. When we produce them and can't sell them, it's no good to anyone.

Those are my three questions.

[The Chair, Conservative, James Bezan]

I'd ask everybody to keep their comments very brief.

Mr. Noonan.

[Ivan Noonan, General Manager, Prince Edward Island Potato Board]

I'd like to respond to the cost of inspection. We were always told that as soon as the door was cracked open, inspection fees would continue to rise, and we showed how indeed they would, that as inspection fees rise on seed certification and other things, fewer people would participate. It's a proven fact.

Continually, CFIA and Agriculture Canada have worked against us as growers on that. It costs $120 to $150 for a load of potatoes to go across the border. That's a big fee. They've left us at a point where now we're trying to give up something of what we need here in Canada to protect our Canadian growers, in order to get rid of that fee, through negotiating, through ministerial exemptions or marketing orders. It's constant. At Industry Canada and Trade Canada, we've had three, four, or maybe even five people just constantly going there and negotiating something, providing our input, and you'd swear you were at a different place.

I think, Wayne, you used the term “corporate memory” as being almost gone there a few years ago. Well, it's really gone now. We have nobody there to really represent agriculture. We have people coming, people going, people acting all the time. We need some stability in that system. We need some of the on-farm food safety thing. We need funding. That's all green, or orange, or yellow, or whatever you want to call it, where the federal government could help these growers and indeed have no repercussions.

The U.S. are very adept at doing this. They put millions of dollars into their marketing programs for french fries and fresh potatoes. They'll send potatoes from Colorado with free freight into Uruguay.

In our markets, we were major players in 30 countries around the world, and now we're all but starving to death because we have nobody working for us and no consistency, no one fighting for us for the phytosanitary programs, and I could go on and on.

I'm sorry to be so long, but we have a major problem in the federal system with our agricultural programs. Before, when they were preaching $20 billion by the year 2000, at least we had some support. That seems to have disappeared in the last few years.

[The Chair, Conservative, James Bezan]

Does anybody else want to answer some of Wayne's other questions?

[Wayne Easter, Liberal, Malpeque, PE]

On this one, Mr. Chair, though, for a minute, should the public be paying the lion's share of those costs rather than farmers or not? Even in Scott's area, where they're picking up a lot of the costs in terms of new plants, if it's possible for the government to pay it and be green, why shouldn't we do it through the Government of Canada?

[Ivan Noonan]

Definitely, it should be. Unfortunately, on this much-used term “value-added”, the growers have become very resourceful. And this whole supply chain, and the whole thing, is just that; it's a supply chain, and after everybody else gets their commissions and their brokerage and everything else, the farmer gets what's left. It's a very sorry state. And if we want to continue to receive our food from other countries, that's exactly what's going to happen.

Somebody, other than Mr. Easter and a couple of others in Canada, has to take it by the horns and carry this thing forward. We genuinely need help. We saw it in potato cyst nematode. We cut the path, unfortunately, with potato wart. We worked with our people in the U.S. and that made potato cyst nematode for Quebec and in Idaho work together. That may not always be the same, but we need more than just lip service from the federal government. We need support and we need them to listen. We need you guys to carry this message back: that they have to pay attention to what the growers in this country need. It's absolutely imperative that it happen, because there's going to be nobody left to feed us.

[The Chair, Conservative, James Bezan]

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

Mr. Bellavance, please, for five minutes.

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

Thank you, Mr. Chairman.

Thank you for your comments. They are most interesting. I can see a sort of trend in the east. In fact, we have not been to Quebec or Ontario yet, but I can already tell you that people share your concern for more flexibility in federal programs. We shall see what other presenters will have to say about it. However in the east, we have noted the same will as expressed by Messrs. Dingwell, MacIsaac and Weeks. People want more flexible programs, federal programs more focussed on regional priorities, particularly in the area of risk management.

In the west however, the point of view is different. You spoke about a vision for the future. My question is mainly directed to the people I mentioned before: Messrs. Dingwell, MacIsaac and Weeks. According to what the three of you said, it is important for the federal government to offer flexible programs. As for the vision referred to by Mr. Weeks, do you think this would be the answer, or at least one solution — since it is always difficult to have such a degree of certainty when planning for the long term — that would guarantee the viability of agriculture?

[The Chair, Conservative, James Bezan]

Mr. Dingwell, do you want to go first?

[Scott Dingwell]

Thank you.

I would second Ryan's comments that without the vision or a target to aim for we cannot make decisions today. We cannot possibly make decisions without knowing what the end goal is to be. There are really serious questions about ag policy in Canada. Are we an exporting nation? Are we a supply-protected nation? Are we focused on a cheap food policy? Are we protecting future food supply? Those are the first questions that must be answered by this government and by this committee. When we have the answers, we then can quite easily design programs and goals that will lead us to that end vision.

On regional differences, absolutely, our country is great and it is wide and it is large. What works for 10,000-acre grain farms in Saskatchewan does not work for 50-sow farrow-to-finish farms in P.E.I. There are different needs. I recognize that standards and principles must be met and matched across a national program, but we absolutely have to have the flexibility to create programs that will meet those regional and production variances that do exist in a country this large. It's easy to design a program for Ontario or Quebec or Saskatchewan or even a program for P.E.I., but in a national program we have to recognize the scope of the country. Vision is critical, and regionality is simply a function of the size and the variance of our country.

[The Chair, Conservative, James Bezan]

Mr. MacIsaac, do you want to respond?

[Kevin MacIsaac]

One of the big issues in the regions in our industry is transportation. When we lost the Crow rate assistance it made us uncompetitive. The Toronto market has been a big one for our industry over the years, but we're basically looking at 40¢ a tin to get that product to market, and that's not competitive compared to somebody growing the product in Ontario right next door.

So in regional programs we have to take some of that disparity into consideration. We're a long distance from a marketplace, and I think we need to keep that kind of concept in the back of our minds as we're doing these programs.

[The Chair, Conservative, James Bezan]

Mr. Weeks.

[Ryan Weeks]

Maybe I'll add to what I discussed earlier about the vision for Canadians.

I have to apologize, André. I missed the first part of your comment.

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

In fact, this has just been answered. I mentioned you since you said it was important for federal programs to offer some flexibility in the area of risk management and to adapt these programs to regional characteristics. This idea seemed interesting to me as coming from a person representing young farmers. This is something worth remembering when planning a coast-to-coast program that in the end may prove not to be adapted to regional and provincial specificities. Since you mentioned that we must have a vision — and I think it is interesting to remind it — in order to prepare a future for agriculture in Canada, I am wondering if this is not one of the important solutions we have to consider if we want to build a viable agricultural sector in the future.

[Ryan Weeks]

As for solutions to the regional differences noted today, I'm maybe young to present some that are suitable, but the other young farmers in my group and I are definitely open to working towards this.

Having a vision of where we're going is definitely important. If I don't know what to plan for tomorrow, how can I do the best I can for Canada and agriculture in Canada, and not have to rely on the government to protect me? If I have a vision of where Canada wants to go with all agriculture, maybe I can find where I fit in, be secure, and not have to worry about the next guy coming to push me out.