Agriculture Committee on April 23rd, 2007

[Allan Ling, President, Atlantic Grains Council]

Good evening, and thanks for the opportunity to present our views on business risk management, something that is very important to us here in Atlantic Canada.

First of all, I should take a few moments to introduce myself. I'm a member director of Island Grain and Protein Council Inc, which is an organization that speaks on behalf of grain and oilseeds producers in P.E.I. We also run the spring and fall cash advance for grain producers. The Island Grain and Protein Council pays a membership to the Atlantic Grains Council.

The Atlantic Grains Council is a Maritimes-based organization made up of similar organizations for the three provinces. We are a member of the Grain Growers of Canada. I am the president of the Atlantic Grains Council, and as a result of that, director to the Grain Growers of Canada.

I'm approaching my 40th year anniversary--not my birthday--in farming. I have a partnership with my brother. We farm about 12 miles thataway. I believe you probably drove by our farm today. We farm approximately 1,200 acres of land. We produce cattle and various crops, which would consist of barley, wheat, soybeans, flax, and we're going to try canola this year, as well as hay.

In 2002 we made a decision to go out of dairy cows. We had a small dairy herd. The main reason was finances. We were struggling along with heavy financing, a heavy debt load, and had to look at refinancing once again. Our accountant said, “Is there anybody chasing you out of the barn?”, and we said no. “Well, then”, he said, “pay some debt off and get rid of your quotas”, which we did.

In the fall of 2006 we dropped our hog operation. We'd been in that since we started. So we now have two empty hog barns.

We are on a fourth-generation farm. Between us, my brother and I have five sons, and it's the end of the line. None of them are going to farm; they're all doing something else.

Between 1965 and 1980, there were a lot of people who got into agriculture. Just for fun yesterday, I was thinking about it and I counted--and I may have forgotten some--26 young people who got into farming in our area at that time. Today there are only four on those 26 farms. Now, a lot of those 26 have retired, gone broke, whatever.

In my opinion, we have a severe crisis in agriculture. I don't really think it's lack of money right now. The big problem facing us as Canadian farmers is who's going to produce the food in this country in 19 years' time? Why am I saying 19? Because last year I said 20.

If we look at Canada, we see we are a trading nation, and I believe we must continue to be a trading nation. We're in a high-cost producing country because of our climate, our geography. Also, over the last number of years we've been faced with very low commodity prices, and we compete with highly subsidized countries such as the European Union and the United States.

Recently I had the opportunity to speak to two farmers who actually might be even a few years older than I am and still farming. Sometimes I would rather not sit down and talk to a farmer, because it tends to get around to this negative talk. Anyway, there was this one particular guy, and we had a fair chat. He's a good farmer; he's a guy I've always looked up to. He said, “I wish I could get out, but I can't”--and that's a common thread among us today.

I guess if we look at the present programs we've had, we'd see they have not worked, especially in a sector like the grains and oilseeds, where we have been in declining margins. We have to look at the whole farm thing too.

I believe there's a feeling out there in the country that there is a lack of understanding between the politicians, the policy-makers, and particularly the bureaucrats. We often feel as farmers that we're being way over-regulated. I know we need to have regulations, but in P.E.I. we've crossed over the line and are probably worse off than other places. We're in a position where, if we're doing something good for the environment or the public, we're not being paid for that. It should come back to general society to pay for the benefits we're providing.

It almost makes you think sometimes that we missed the boat here. Maybe we can't reverse this trend; maybe it's too late.

However, after talking negatively, I'd like to turn that around a little bit. I believe we have a future in this country in agriculture and a lot of benefits, and we must continue to try.

Just listening to the previous presentations and questions, I'd say we have put a fair bit of money into agriculture, but it hasn't done the job that needs to be done. I don't think we as Canadians should be so worried about the dollars we are putting into agriculture—I don't have the figures before me—because an awful lot of money is generated from the export of agricultural commodities that we produce in this country, especially in the livestock and grain sectors.

As farmers in the grains and oilseeds sector, we welcome the recent announcement of $400 million that's supposed to come out; NISA going up from $500,000 to $750,000; and interest-free loans from $50,000 to $100,000. All those programs are a bit of help. We're also very excited about the biofuels industry and alternate energy, but a lot more needs to be done.

The Atlantic Grains Council would like to make a few recommendations.

Payments often come from the federal government based on ENS, eligible net sales. That does not work here because most of us are not straight grain growers; we also feed livestock. It costs the same to grow an acre of wheat, soybeans, or whatever is fed to beef or dairy cows, or pigs, as it does to grow that same crop for sale.

Another one that really needs to be addressed--and there may be a way the feds can do it--is this 60-40 split. So often we're left out of it. The better provinces can afford it. If it does come to us, a lot of the time it gets watered down and does not necessarily go where it was meant to go when the program was announced. I don't understand why it can't be taken off the equalization cheque, or something like that. Maybe there's a way it can be done, and I know we brought it up at the agricultural policy framework meetings. We're losing out on that one. Lots of times farmers in Ontario, Alberta, or wherever get it and we don't.

Crop insurance is a program that we think could stand a bit of overhauling. Sometimes it's based on going back too many years in your history. We're all using better practices on our farms. We're using different varieties to grow better crops. So occasionally we're being penalized on that one.

That bring us to research, which is another subject, but we won't bother mentioning that tonight.

Another idea I briefly touched on is that maybe producers need to be paid for the environmental good we're doing. Do we need to go to a four-year potato rotation? Do we need to take marginal land out of production, and stuff like that? Maybe carbon credits are another way. If it can't come out of the food chain, there may be other ways to help us.

One of the other things we would like to see is the three-year average eliminated for CAIS and the program redone so it is based on some sort of true cost. I know that we run into problems when we use cost of production, but I believe we have to go that way.

We also recommend that a separate disaster relief program be created. Maybe we should be looking at an RMP program similar to that which the Ontario grains and oilseeds are looking for.

In closing my remarks, I'd like to say that, in short, farm families are facing some challenging times, but we also see that by fixing some of the root causes of the income problem, we do have a bright future in front of our industry. As grains and oilseed producers, we do not believe the government owes farmers a living; we do, however, believe that government owes our industry policies that will allow us to make a decent living. These policies, we hope, are within our grasp. We simply need the political will to get there.

I was telling one farmer today that I was coming here and I asked, what should I say now? He said, tell them not to do any more damn studies; just get the job done and make things right.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you.

Well, we're in the middle of another study, but we will report quickly.

Mr. MacFarlane.

[Ranald MacFarlane, Regional Coordinator, District 1, National Farmers Union]

Yes, good evening, gentlemen, ladies.

My name is Ranald MacFarlane. I'm a dairy farmer from Fernwood. I'm dairy, I'm beef, I've got hogs. I work very hard. I'm the hardest-working guy. I know I'm the last hog farmer in my community. My net income without any off-farm income for 2005 was $13,500. I have a very firm belief that for every farmer who goes bankrupt in P.E.I., we should fire one person in the Carling Building, because this is just quite unacceptable.

A lot of farmers presented here tonight, and what they probably neglected to tell you was that everybody has an off-farm income. They're sending people off the farm to make money to subsidize food production. This is wrong.

On October 5, 2027, I'm going to turn 60. I have very little RRSP, I have no savings, I have a little bit of debt. I've got two friends who just quit. I will call them my friends. They have nothing. They've got about $500,000 debt, and that's all they've got. It's a funny thing: when you turn 40, suddenly everybody's a capitalist, and you have to think of your future and you have to think of your kids. This is just like the Newfoundland cod fishery. Someday people are going to be standing around pointing fingers, saying, it's gone and it's never coming back; the corporation has ruined it. Whose fault is it?

And I will remember who helped and who didn't. Don't worry.

Off-farm income should not have to be a factor for young farmers, but it is. All the agriculture out there is overcapitalized. It's been my experience that credit is too easy to get. The government has preached that bigger is better, bigger is better. Bigger is not better. I farm 100 acres. I inherited that farm. I come from a Scottish Presbyterian background. We believe that if you don't have it, you don't need it, and you ain't going to borrow for it. We've got a fear of God and a complete fear of the banks. I don't want to take on either one.

So all this get big or get out...agriculture has never had an ag policy. The only policy was an export policy, trade policy. You never had an ag policy. Get big or get out. Get even bigger or get out. Get even bigger or get out. Now it's just get out. And a lot of farmers are brainwashed into thinking that if we could just have more free trade...there are hog farmers who will say get rid of supply management because when that's gone, then things will open up. And to those people I say, softwood lumber.

Anyway, I didn't qualify for the farm families options program, and I wrote a letter to the editor. I accidentally declared bankruptcy in doing so, because I said, I'm broke, I'm really broke, and I don't qualify for that farm families options program. Two different companies called, demanding their money right off the bat when that letter to the editor was in the paper. It didn't cost me a cent to declare bankruptcy.

Anyway, having said that, people came to me who did qualify for the farm families options program because, I'll admit, I'm a bit of a media big mouth and people trust me. They came to me and they told me some very sad stories. There are perfectly good young farmers out there who did everything they were told to do, and they got screwed. There's no two ways about it. And the agriculture system, the little bit of semblance of agriculture system we have out there, owes them something better, because they were taught in the agricultural colleges how to do things. The lenders went at them. FCC and everybody--they're the biggest bunch of smiling liars you've ever met. They'll gladly give you the money until you hang yourself. Those people should get an apology, and there should be restructuring in how trade is done in this country.

The NFU's position is to take agriculture out of the WTO. You keep going to the WTO. You keep giving away the little bit we do have. The biggest priority coming up for the last election was getting that border open--we've got to get that border open. Well, the border isn't open. The priority was dismantling the Wheat Board, it turns out. Well, this is just one more example of how the government and the Carling Building and the federal agenda and the trade agenda are all out of whack. It's as if you don't care. I'm sorry I have to say this to you, but remember the cod stocks.

Anyway, we're talking about national food security. We're talking about regional food security. The countryside is broke. I just distributed meat today. I'm selling meat; I sell pork as a sideline. There's huge money in pork. If there's a hog farmer, please don't hit me. There is huge money in pork. The farmers don't get their share because Maple Leaf is out there raping the guys. They always have. The corporations take theirs first, and there's no two ways about it.

Why are the Maritimes not self-sufficient in pork but our price is based on the Chicago Mercantile Exchange, and it's all up to the distributors like Loblaws? They make huge profits. These poor hog guys in the Maritimes and right across the country have subsidized the huge profits at Maple Leaf, subsidized Loblaws, and what have you guys done?

I'm waiting for that part. This is rhetorical.

I liked the report, “Empowering Canadian Farmers in the Marketplace”. It was a perfectly good report. I thought, good, there's no need for any committees; there's the road map, boys. What have you done?

I didn't speed when coming here tonight, because I knew this would practically be a waste of my time, but I'm being polite and I'm here anyway.

Anyway, as for take agriculture out of the WTO, you keep going to the WTO and giving things away, and agriculture is losing money. We' have an accumulated debt of, what, $58 billion now?

[Wayne Easter, Liberal, Malpeque, PE]

It's $51 billion.

[Ranald MacFarlane]

It's $51 billion. Oh, okay, I admit that extra $7 billion.

So we have an accumulated debt of $51 billion. On my farm, if something is losing money you stop. Anyway, we do have alternatives.

Karen.

[Karen Fyfe, National Women's Vice-President, National Farmers Union]

I guess I'm going to change the tone a little bit and go back to something that Maria Smith said. Maria was the young lady with the P.E.I. Young Farmers' Association. She reminds me of myself 20 years ago, when I married into a fifth-generation family farm. In the 20 years gone by, I've raised five children on that farm, three of whom are in university, and two of whom are graduating within the next weeks with massive debts—$40,000 or $50,000—which they know they alone have to pay back because there's no extra money on their mom and dad's farm to look after any of that educational debt.

Getting back to a question James or one of the other members asked, is there a vision for Canadian agriculture, yes, there is a vision for Canadian agriculture. In fact there are two opposing visions for Canadian agriculture. One is for more corporate trade and is export oriented, which has led us down the wrong path. And the other one is more focused on domestic food security and food sovereignty. It's fine under supply management. Supply management works wonderfully inside a domestic market and doesn't distort export markets. It can balance the two out.

As for something that Ranald said here, the women of the National Farmers Union took it upon themselves to provide an opposing vision for Canadian agriculture. Although I wasn't officially allowed to distribute these two booklets, this is a three-year project undertaken by Canadian farm women, with money from Status of Women Canada and a little bit from Agriculture and Agri-Food Canada. We held workshops across the country and gathered women together to ask, what's wrong with Canadian agriculture now, and how do we fix it? Do we have the solutions? Yes, we have the solutions, and some of those solutions are very straightforward.

I would have liked to distribute a couple of pages, but I think these will be made available.

Mr. Bezan, yes?

[The Chair, Conservative, James Bezan]

It has to be translated.

[Karen Fyfe]

It has to be translated. Okay.

[The Chair, Conservative, James Bezan]

We have the blue book. We don't have—

[Karen Fyfe]

You have these?

[The Chair, Conservative, James Bezan]

Yes.

[Karen Fyfe]

I would urge you, almost implore you, to read this. It's difficult reading, because they do go through the process and they go through the fear that Canadian farm women have, not only for their future but for their children's, and not only for their children but for their community. I think that is the difference between how farm women look at Canadian agriculture and how the policy directors and the bureaucrats look at Canadian agriculture. We look at it inside the context of family and the context of rural community.

Our solution has four pillars. Our four pillars include financial stability; domestic food policy; strengthening social and community infrastructures; and safe, healthy food and environment.

So there is a viable alternative vision of Canadian agriculture out there, and all we need to do is reject the current trend that we're now on, because it has led to disaster. It has led to the industry doing well, but 80% to 90% of the families in that industry going broke and putting “For Sale” signs on their farms or walking away. It doesn't have to be a doom and gloom picture. There are other decisions that can be made.

About two months ago, I think it was February 20, right here in this room, we spoke to the Senate Standing Committee on Agriculture and Forestry. I think I made the case very eloquently, but I took great exception, first of all, to some of their language: on their report's front page, “Understanding Freefall”, and so on, as if the current crisis in agriculture just fell out of the sky, that nothing caused it, it just happened overnight. Well, that's not true. The current crisis in agriculture was caused by deliberate policy and deliberate direction, and therefore the choices that came out of those decisions and that policy.

My farm is on the north side, about a half-hour's drive from here, and on the drive over here tonight I thought, when you're talking about something as basic as food and eating, going to the grocery store and buying your food products for your family, is it a policy that comes first when you're trying to negotiate how food is produced in this country, or is it a particular belief in direction that comes first? I know that's semantics, but I think we as a nation have to get our heads around whether this is a policy that we can live with. Is this a sustainable policy, or are we doing this because we think we have to follow suit in terms of global trade patterns?

So there are two opposing visions here. One is the vision we have right now, and it's not working. The other is a vision that Canadian farm women have put forward, and it will work.

Thank you very much.

[The Chair, Conservative, James Bezan]

Thank you, Ms. Fyfe.

On the publication you presented, because it is a publication, we aren't allowed to translate it. I would suggest that maybe the best way to do this, as it's the property of the NFU, is that you can just mail it directly to the members—

[Karen Fyfe]

Sure. I can do that.

[The Chair, Conservative, James Bezan]

—but the committee can't get involved with that.

We'll move right along to the Dairy Farmers. Mr. Affleck, please.

[Randall Affleck, Vice-Chair, Dairy Farmers of Prince Edward Island]

Thank you, Mr. Chairman and members of the committee.

First, I'd like to welcome you to Prince Edward Island. I really appreciate that the committee travelled, and I appreciate the opportunity to present on the APF 2.

As I understand it, as for the Dairy Farmers of Canada, you've already met with some dairy farmers from B.C. and Manitoba.

The policy issue that I'm going to push a little is the national farmed animal health strategy. It's a little different. My colleagues around the table have probably never heard me rant about this before. It's an issue and a policy that's important to livestock producers. If time permits, I then want to briefly talk about BRM and perhaps trade.

On the national farmed animal health strategy, there's a group of 13 organizations working nationally with CFIA. They're trying to enhance and develop a Canadian animal health system. The goal is to move away from the current piecemeal approach, based on jurisdictional authorities that currently exist, and move towards an integrated animal health policy, with principles, policies, and objectives.

Globalization has presented many challenges in terms of on-farm animal health disease. There are increased imports and, in particular, more travellers from Asia. Therefore, there's an increase in disease emergence. The goal is to invest based on common principles and objectives, to clarify roles and responsibilities within the different jurisdictions that are involved in this, to develop funding, and to know who's going to deliver the oversight of it.

The reason I and Dairy Farmers of Canada are raising it is that it's a major animal health policy, especially in terms of contagious disease outbreaks that were not really addressed in APF 1. Since we're talking about APF 2, we're hoping that it's developed, whether or not it's a second pillar, a sixth pillar, or whatever they are using as the pillar approach. It's certainly an area where we can prioritize some of our energies as a country.

The key elements in this policy are prevention, preparation, response, and recovery.

On prevention, essentially emergency prevention is as important as emergency response to coordinate the different jurisdictions and the like. Standards applied equally to imports would be key.

Preparation is another key element to upgrade critical infrastructure and to work on standards and agreements internationally on disease.

On response, for example, a mass depopulation and carcass disposal are necessary tools and require preparedness. It should be a key part of a strategy.

Of course, recovery is another key issue. Recovery from market collapse requires a range of financial management tools and a disaster relief program. If I have time on a BRM, I want to address that.

Currently, for example, the Health of Animals Act deals with reportable diseases. I'm not a veterinarian, and I'm not going to even bother to try to lay them out. But the weakness is that it's a reportable disease. If you were to take a proactive approach to animal health and the importance it has in the economy, as I understand it, there are production-limiting diseases that wouldn't be covered under the Health of Animals Act and that type of thing.

On the components of financial risk management, there's a suite of defined programs to provide adequate protection and income loss, to provide research to support diagnostics and surveillance, and to increase knowledge of animal health diseases. Good animal care is key to healthy animals.

On disease management, there's new and existing programming to prevent, prepare, respond, and recover. There's surveillance and an LED network. Essentially, it's to get an assessment of where the infrastructure is, what's needed to move forward, identification and traceability, support programs, and regulated products. For example, there's the availability of drugs and vaccines and how the regulation of those is dealt with. Then finally, there's biosecurity.

I guess what I'm presenting as important to dairy farmers in Canada and also the other industries that are involved in the discussion is that we really should spend some time on some issues other than BRM. There's no question that the BRM is key, but when we're moving forward in agriculture policy....

I also sit on the Cattlemen's Association bodies. I saw what took place on BSE, and you can watch the foot and mouth disease in Britain, and I really am a bit concerned about it. You hope that CFIA is prepared, and I'm sure they are, but we could be more prepared, and as a country we should be focusing our efforts to coordinate the resources.

As for BRM, if I can shift briefly to that, supply management and collective marketing really do need to be recognized in the APF 2 as a critical program in Canada. It was a clear omission in the last one, with the exception of three provinces that had it put in.

As to the CAIS program, supply management in itself is a risk management program. I'm probably one of the few dairy farmers on Prince Edward Island enrolled in CAIS. My brother and I were in the potato industry until a couple of years ago, so we were involved in NISA and then went on to CAIS. My own personal feeling on CAIS is that it's a pretty good program if you don't have declining margins. In a situation of declining margins it's a useless program.

There are a lot of weaknesses in it. We didn't have any predictability in what we would trigger by way of a payment. But as far as the dairy industry is concerned, in the absence of dairy farmers in a business risk management policy like that, how, given a disease outbreak, would they be covered? Maybe CAIS is not the answer for producers, but if they're not involved, then it has a real weakness.

Concerning production insurance, mortality insurance is really not a great policy for dairy producers, because the vast majority of their income is from milk sales. An income loss is more important, so an interruption-of-income type of insurance would be more valuable.

I'll conclude, briefly, on trade. I agree with the comment that we're an exporting nation, but the reality is that a far bigger share of our income in rural Canada comes from a domestic market. “Agriculture and Food Value Chain Facts”, from Agriculture Canada, has data from 2004 showing that over 70% of the revenues come from domestic markets. So we really do need to take a balanced position on trade. Canada needs to be unapologetic in promoting our rights.

I'll conclude with this. It has to do with the collective marketing out in the west. My concern is as a dairy leader in supply management. With only 13.8% of the producers voting to take barley from the Canadian Wheat Board, in my view it's a strategic error as a country to do so. We're not at the eleventh hour on WTO by any stretch of the imagination, in my view, and strategically it's not wise to weaken that institution with such low support for removing it. The numbers I read are something like $59 million a year to barley growers out of the rural economy in the west. What's worse is that what's being proposed is to take that away without compensation to producers.

I'm a bit nervous, to say the least, although I'm encouraged by some of the policies on supply management. Actions speak louder than words, and I think it's a flawed strategy. I'll just throw that out and conclude.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Affleck.

Ms. Sanford is next, please. She is with the P.E.I. Cattlemen's Association.

[Darlene Sanford, President, Prince Edward Island Cattlemen's Association]

Good evening, and welcome to Prince Edward Island.

I'm Darlene Sanford. I'm a feedlot operator. On May 19, 2003, I was a beef producer, and I still am today in spite of BSE and everything else that's gone wrong that has followed suit. My comments this evening will be based on the different pillars of the current business risk management that's being proposed.

We'd like to start with business risk management, specifically with the Canadian agricultural income stabilization program, the CAIS program. The program was implemented just after the BSE crisis and it has proven to be inconsistent in its delivery of money into the hands of producers who have suffered a farm income loss. The program is so complex that producers cannot determine whether their application will result in a payment. Applications are very difficult to complete, and usually a significant amount of time elapses before they are processed, making it an unreliable means of business risk management for our beef producers.

With previous programs, producers could estimate what their payment would be and project their cashflow for the following year. As with any new program, there are growing pains; we realize that, but for the beef industry these growing pains have led to unprecedented uncertainty. Producers who are primarily beef producers have suffered large losses from BSE and have received little or no money from the CAIS program, while others, with multi-commodity farms, have received payments or, in some cases, have had the commodities that have not had a disaster or a downturn in their margins supplementing their beef.

This inconsistency has proven that the program is not designed for a farming disaster and highlights the need to speed up the delivery and implementation of a disaster component. If producers are to depend on safety net programs to help them through a bad year, it is crucial for governments to ensure these programs are effective by testing them to make sure they meet their objectives and the criteria set out.

The CITI program was one of those that did not meet objectives. Where is the other 50%? That's the question my beef producers ask me every time we have any kind of meeting. Just two days ago a beef producer described a situation to me that I will relay to you. His neighbour and he have actually looked at their books, and they both suffered roughly the same loss in the year 2003. When everything was tallied up, they lost approximately the same amount of money, one with beef and one with potatoes, which just happened to be the other commodity. The producer who had the potato crop loss received 100% of the moneys owed from CAIS via a cheque in 2004; the beef producer who suffered the same loss received 50% of the money in 2006. Where is the rest of the money?

This is the question I keep being asked by my producers. Why is it that when the federal government makes a mistake and then realizes...? I give them credit for that; they did realize the inventory system was not working for beef producers, and they did make a commitment to producers that they would fix it and make the program fair and equitable across the country and across commodities. Why haven't they finished the job? Why were these payments pro-rated? None of you would accept half your salary at the end of the year, so why are we asking beef producers to do just that?

Federal ad hoc programming is another issue we'd like to discuss. Our P.E.I. producers are unable to participate in some of the federal programs put in place after BSE. The fed cattle set-aside program and the feeder cattle set-aside program, both offered to all producers after the BSE crisis, were not participated in by maritime beef producers. The main reason was that these programs are both designed for western Canadian cattle production; they were not designed to be implemented in the maritime region. Had we implemented these programs, they would have had a very negative effect on our beef industry--as negative as, if not more negative than, the effect BSE had.

These programs encouraged producers to place cattle on a maintenance diet to slow the flow of cattle to a heavily laden slaughter industry. If maritime producers had done so, it would have affected the supply of cattle to our beef plant, Atlantic Beef Products, while at the same time increasing the number of cattle that had reached an age of 30 months prior to slaughter. This would have cost producers huge amounts of money, as a result of devaluation of carcasses from animals over 30 months of age and animals that were also over the specified weights that this plant is looking for. Cattle over 30 months of age increase the cost of rendering and decrease the value of beef to the slaughter facility, as well as showing losses to producers.

When these programs were designed, the federal government indicated within the guidelines that were sent to producers that it would ensure support for regional differences. Seeing that this program was not going to work for maritime producers, the Maritime Beef Council, which comprises the Prince Edward Island Cattle Producers and Nova Scotia and New Brunswick counterparts, designed and presented a program to all levels of government called the maritime beef herd renewal strategy. I have included a copy of the program with my presentation this evening, so you should all receive a copy of that.

This program was designed to fit under the BSE support programs and provide a means to improve the value of the beef herd while addressing the specific needs of producers from this region. We didn't wait for the federal government to design something that would work in the Maritimes. We saw that what was there wasn't working, so we tweaked it in our own way and presented it back to them, and said we couldn't follow the rules that they'd set out in this prior program, so this was our option. This is what we're suggesting that you could do for our area to help us. The main objective of the program is, as the name states, herd renewal. The objective would be achieved through culling older cows and replacing them with genetically tested quality heifers, resulting in a younger, more productive herd.

The cost of delivering this program would have been less than the cost of participating in either of the other two programs. The government needs to ensure that every possible scenario has been considered before programs are implemented. Without having the necessary time and research to ensure that programs meet their objectives, producers are at risk. Producers who receive BSE program cheques watched helplessly as market prices plummeted, only to have to turn around and claim these payments as income. Others who took advantage of CAIS advance programs are finding out that they have to pay them all back because they haven't triggered anything under the CAIS program.

These are producers who have lost money because of BSE and who were forced to take an advance on the CAIS program and now don't even trigger a payment. Most of this could have been prevented if the necessary time had been taken to ensure that the program worked as it was intended to work. The intentions were good, but unfortunately the follow-through was not there.

Innovation and science. Canada must be in a position to take advantage of opportunities that arise through research and innovation. The maritime beef industy has supported the implementation of Atlantic Beef Products Inc., a producer-owned beef plant serving the beef producers of Atlantic Canada. As producers, we are aware that it is no longer enough to produce commodity beef. Consumers want safe, healthy, and differentiated products. Our producers are willing and able to produce what is necessary to meet these objectives, a fact evidenced by the success of the Atlantic Tender Beef and the Atlantic Choice brands.

Other new ideas arise daily, and it is only through sound science and research related to the unique beef production practices of eastern Canada that these ideas become a reality. We need government to recognize this and to continue to support research and innovation for this region in this region. We have a testing station in Nappan and just ended up spending a year fighting like mad to keep it there. We want to see that continue. We need research done in this region for this region. We don't do things the way western Canada does. In my feedlot, all of my cattle are under cover 12 months of the year. They don't go outside. This isn't Alberta; I can't do that. When we have a storm like the one we had on Easter Sunday, it's not fit to have cattle outside. We don't do things the same way, and that's never been recognized by the federal government. It's put into every policy and program that we see, but when push comes to shove, we don't see the results. They're just not there.

Market development and trade. The development of new products is only the beginning. Finding a market for that product is the other half of the equation. Market development and research are major factors in a product's success. We must have access to marketing research and testing in order to determine whether a product is worth investing in. When designing a product for export, it is important to understand who your competitors are. Exploring export markets provides information on the competition, whether they are subsidized or whether they have to deal with the same regulations that we do in Canada.

One example is the handling of specified risk material. I would like to point out an error in the printed version. It reads September 12, 2007. It should read July 12, 2007. As of July 12, 2007, all specified risk materials must be removed from animals over the age of 30 months. Specified risk materials are not to be used in the production of animal feed or fertilizer, and a permit must be obtained to move this product. Producers in the United States will not be subject to these same regulations, placing our producers at yet another disadvantage.

Our government must be careful when implementing regulations of such vast proportions that they don't have a lasting effect on the industry or a detrimental effect. Already, we are seeing the implications of this feed ban and the cost to the industry.

My first question would be why it took close to two years for the federal government to formulate allocations to provinces to deal with specified risk materials when $80 million was set aside to deal with this program. Why is it two years before we find out exactly how much money is coming to P.E.I. and how much is going elsewhere? How can we put things in place to make sure we meet these deadlines and that we are seen as a good corporate citizen, or a good country following the rules under OIE, when our government is doing this to our producers?

We now have approximately a month to decide what we're going to do with the money and get things in place. Our beef plant in Borden tells us that by May 1 they have to make the decision as to what they're going to do. May 1 is only a couple of days away.

Renewal. Providing producers with the opportunity to learn new skills and use their knowledge to increase profitability will benefit all sectors. Developing programs that support innovations as well as ensuring that policies don't inhibit production will contribute to agribusiness success.

Safety and quality in Canada's food chain. Increasing numbers of producers have implemented on-farm food safety practices. These practices must be recognized and promoted to enhance consumer confidence in domestic and foreign markets, and producers must receive credit for the work they have done.

Environment. Producers must be paid for their contributions in taking land out of production for riparian zones, fencing cattle from streams, and implementing farm plans. These actions take money out of the hands of producers for the benefit of all society, therefore there should be some financial compensation for this work.

In closing, Canada needs an agricultural policy. We need a direction. As farmers, we want to be treated fairly and equitably and we want to see that across commodities and across the country in all programming. We should not need another Great Depression, where Canadians and politicians alike go hungry, for government to find the required respect for the food they eat three times a day and the people who produce it.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you.

Who is presenting for Prince Edward Island Pork?

[Willem de Boer, President, Prince Edward Island Pork]

Welcome, committee, and good evening.

My name is Willem de Boer, and I'm a hog farmer from the east side of the island, Brudenell, P.E.I. I'm also chair of the P.E.I. Hog Commodity Marketing Board, which represents the interests of P.E.I. hog farmers. I'm joined today by Robert Harding, the board's executive director.

We have been actively involved in safety net issues on behalf of our producers for many years, and it is a pleasure to be here today to speak to you about our perspective on the agricultural policy framework.

Tonight we will focus our presentation on business risk management issues and competitiveness. To make it easier to listen to, Bob has less accent than I have, so he will do most of the talking.

[The Chair, Conservative, James Bezan]

Mr. Harding.

[Robert Harding, Executive Director, Prince Edward Island Pork]

Mr. Chairman, I would like to continue in English.

P.E.I. produces about 200,000 market hogs per year, which are processed here and sold mostly off-island. Our sector may be a very small part of the Canadian industry, but it's a very significant part of agriculture in P.E.I. Agriculture and agrifood is by far our biggest industry.

Our sector contributes to sustainability in P.E.I. Our farmers use the feedgrains we produce in rotation with potatoes and other crops, and the manure provides an effective natural fertilizer to support these rotations.

Our producers continue to meet the increasing expectations of domestic and export customers, but the challenges that are faced by our producers today are staggering. Our farmers have always stepped up in taking important steps to mitigate the many risks associated with farming, but today government has a crucial role to play to help our farmers come through this period and build into the future.

As an export-dependent sector, we have been through many trade challenges. We recognize the trade sensitivity of any government programming. Therefore, we encourage programs that conform to international trade obligations and minimize the threat of trade actions.

It is clear to us that the current suite of APF programs has not been terribly beneficial to Prince Edward Island. In some cases it even appeared that the APF favoured western provinces. We support innovative approaches that allow for regional programming to address regional opportunities. For example, if there is a deemed maritime benefit to a proposed approach, then strategic investment in that regional initiative should be permitted. This is not allowed under the current APF. Therefore, government hasn't helped our industry take advantage of opportunities that were seen as benefiting our region. We hope this is addressed in the next generation.

The first principle in our discussions of the next generation of APF is to ensure that funds are used in a manner that treats producers across commodities and regions equitably. We obviously agree with the principle of equitableness, but this principle is not being met. There are existing business risk management programs that were not developed for livestock producers and that are of limited value to us now.

The principle that producers must share in the cost of programming is somewhat misguided and it is entirely unnecessary. Our farmers take on severe risks every day. The requirement to pay toward any program cost is simply an extra expense for our farmers. And worse, it suggests that those involved in developing the programs don't recognize the extreme costs our farmers are assuming.

We have participated in business risk management consultations for the next generation of APF. There are certain points from the discussion paper we'd like to support and there are some points we feel aren't adequately captured.

Crop insurance was changed to production insurance with the promise that livestock would be covered. This appears to have been a change in name only. We have participated in discussions to make the program beneficial to livestock producers, and we appreciate the work that was undertaken by Agriculture and Agri-Food Canada to look at this. But the required changes still have not been made.

We are now discussing the next generation of an APF. Production insurance is still of limited value to a hog farmer in Canada. We believe, at the very least, that producers should be compensated for losses beyond their control until a real production insurance program for livestock is in place.

We support the principle that government funding should focus on mitigating negative impacts of uncontrollable and unforeseen events. We also believe that catastrophic events must be covered from a separate fund. Business risk management programs were never developed to cover catastrophes like BSE. An established framework of such a program would provide producers with the confidence that assistance would be there in extreme situations.

While it was developed to stabilize farm incomes, the Canadian agricultural income stabilization program, CAIS, has not been found to do so for P.E.I. hog farmers. Some have received payouts from the program, but improvements are required. These improvements include deeper negative margin coverage, basing the historic reference margin on perhaps the better of the past three-year average or the Olympic average, improved timeliness, and reduced administrative burden. CAIS program payments should also be considered as income in the year of the hurt rather than in the year of the payment.

The unpredictability of the CAIS program is an immense problem. This unpredictability makes it unbankable, which severely limits the ability of our farmers to manage their own business risks. The potential of governments to pro-rate producer payments in effect makes the program even more unbankable. From our perspective, that must be eliminated.

The Canadian farm families options program we talked about earlier was set up to provide short-term income assistance to low-income farm families. While the program was established under the renewal pillar, it's now being seen as a safety net program, as many producers' farm incomes are so low that they now qualify. While many producers are in this desperate situation and need to access these funds immediately, the application forms for year two that were promised in the spring of 2007 will not even be available until August of this year--maybe. This is not acceptable.

The enhanced cash advance program was announced as another crop program revised to benefit livestock producers. While we welcome the approach, our producers need the assistance now, not later. Details of program delivery are still not finalized, and the program is still of greater benefit to our crop producers than our livestock producers. A crop producer can access an advance and hold it for 12 to 18 months, but a hog producer can only hold it for six months. That means he only gets 50% of the benefit of that program compared to a crop producer.

Another thing is that farmers who grow grain for their livestock are at a further disadvantage, as we heard earlier, because farm-fed grains simply are not eligible for this. The way grain is used should not be a condition of program eligibility.

On competitiveness, we have some issues we want to address. We heard in the earlier sessions as well that our producers can compete with anybody in the world, given a level playing field. In order for our farmers to continue to grow food for Canadians, governments must also become more competitive. This is a critical issue, but does not seem to be addressed in these next-generation documents.

Canada is known as an exporter of food to the world, and the industry has proven to be very competitive in export markets with relatively little financial support from government compared to other countries. The strong Canadian dollar has had a serious impact on our ability to maintain these sales to foreign markets. We support expanding government funding in support of our exports, as governments in other exporting countries are doing.

While WTO negotiations drag on, we support government negotiating bilateral trade agreements. More resources may be needed to keep pace with our major competitors, who are today signing bilateral agreements with some of our major markets.

The Canadian Food Inspection Agency needs to rebuild its export expertise. That was talked about earlier as well with potatoes. We cannot maintain exports without adequate professional resources to service these market access issues on a timely basis. We had some good people there, but they've moved on and haven't been replaced. That's critical for our sector.

The competitiveness of our processing sector is severely at risk as well. We expect that very shortly there will be only one export-ready pork processor east of Quebec. We heard from them earlier this evening. That has huge implications for the long-term competitiveness of our sector, and we feel these issues need to be part of the overall discussion.

Our hog farmers cannot access competitively priced labour through the temporary foreign worker program that is available to crop producers. This matter must also be addressed to allow our livestock producers to access the program.

Because of our non-competitive federal regulatory system, our producers don't have access to less expensive animal health products or competitively priced feed grains. These are available to U.S. producers and further provide an unlevel playing field for the same reasons. Canadian certification and inspection fees must be brought in line with U.S. costs.

Canada's herd health status is second to none, and P.E.I. has done much to keep pig diseases absent from here. This is critical to our competiveness from both a producer point of view and an export perspective. Because of this we feel that animal health should almost have its own pillar in these discussions. National identification, traceability issues, and emergency preparedness could perhaps all be rolled into this pillar, and need to be supported by governments.

Another important example of this unlevel playing field is that less expensive products may not be approved for use in Canada, yet food from countries where these products are used is imported for sale to us as consumers. If the products are safe for Canadians to consume, they should be safe for our farmers to grow for our consumers as well.

[Willem de Boer]

In conclusion, our producers are doing what they can with the resources available to them. We have assumed increased costs associated with CQA, our industry's on-farm HACCP-based food safety program. We have a national identification and traceability system that will be implemented shortly. Our farmers have environmental farm plans for their operations. We produce the healthiest pigs in Canada and perhaps the world. We are partnering with our P.E.I. processor to grow pigs for specialty markets. And we are going broke.

Our farmers have been enrolled in the CAIS program and similar programs that were supposed to provide safety nets. After four years of depressed prices, it is apparent that the current mix of what we now call business risk management programs does not provide adequate coverage. In spite of all of these programs that were supposed to work, our farmers are going broke.

We can't blame our farmers, as we continue to grow the best food in the world. But the extra costs are crippling, and farmers are facing the grave reality that unless something changes very soon, we cannot continue to farm in Canada. We want to farm, but we need government to listen to what we are saying. Our government has to be truly competitive with the policies of other countries. We don't want much--just a level playing field--and we need you to find that for us.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you, gentlemen.

Mr. MacCallum is next for five minutes, please.

[Doug MacCallum, As an Individual]

Thank you, Mr. Chairman, committee members, ladies and gentlemen. I'm not much of a speaker.

I'm a hobby beef farmer in Brackley Beach. I call it a hobby farm because when I wake up in the morning I feel like I should be strapping a steel helmet onto my head, a couple of shell belts across my chest, and taking a sawed-off rifle to feed my cattle because of all the legislation that the government is doing. They don't really have to legislate the farmer. All we need is a level playing field. If we make a bit of money, we'll be the best stewards of the land you have ever seen.

Anyway, I'm married to a wonderful woman. I have two wonderful kids, and they are in university and college. They don't have any student loans or whatever because I saved their family allowance and invested it for them.

I have a letter here, and I'm going to shorten it up a bit: “All I'm asking for is a level playing field. If the American farmers get $71 an acre to grow their crops, then the Canadian farmer has to get $71 an acre to grow his. Don't try to tell me there is no money for such an idea, because agriculture creates hundreds of billions of dollars--$686 billion in the last 20 years.”

I feel I also have to have the right to farm policy, not more legislation. I want to give you a couple of different scenarios.

Say a farmer from Saskatchewan, let's call him Percy, is an organic farmer, and he and his wife spent most of their lives growing organic canola. One day Monsanto sprays Percy's crops with Roundup and some of it does not die, so Monsanto seizes his crop, takes him to court. They sue Percy for all he's worth. The Canadian judges award Monsanto everything, and on top of that, Roundup probably would not do much for Percy's organic certification.

Example number two: An American farmer plants his rice in the spring, and all of a sudden they find a kernel of genetically modified rice in some of the seed. The American government would order the remaining seed destroyed and the planted seed down, but the farmer would be compensated for his loss. Monsanto would not be allowed to sue this farmer as they did to Percy in Canada.

I will get back to my original point. The government gave me a tool: they legislated that I had to belong to a farm organization to give me a voice. It's the only piece of legislation I can thank them for, and I'll use that voice. I am going to write Scott MacArthur a cheque for $300, half of which is for my dues, and the other half will go towards a fund that will take the provincial and federal governments to court.

I think the NFU and the farm federation should come together to also support this idea--and anyone else who thinks that Canadian food should be produced in Canada, not brought from other countries. The way it is going now, eventually Canada will have to give the U.S.A. our water, our electricity, and our oil to pay for food for our tables. Not only that, our sons and daughters will have to go to Afghanistan and Iraq, or wherever, to fight Bush's wars.

I know that times are rough for our farmers, so if a farmer calls me and supports my idea, but they are short of cash, I will donate another $150 on their behalf, and I will never disclose their name.

In closing, I'm aware that it is a busy time of year for farmers, but this is something I can't do on my own. We farmers need to be united in this cause. If you don't want my help, just let me know. It seems that the food for our pets is more important than our own food. If this idea doesn't work, I'll only be out $150 to $300, and I will sell my farm and move on. I am not going to go into more debt or continue to bang my head against the wall any longer.

I didn't make any presentation, but it just seems like there has to be a question asked, and that question is this: does Canada want Canadian farmers to produce the food, yes or no? It's a very simple question, and I've asked a lot of people. Most of the people give me answer very quickly, but I found two people, one in Charlottetown and one in Ottawa, who can't give me the answer.

This farm crisis has been going on for so long that it's just normal--yes, there's a crisis in agriculture--but it doesn't really need to. That $400 million is a drop in the bucket. The beef industry alone has been out between $15 billion and $20 billion in the last four years, and that's only one part. The potato industry is losing money hand over fist. The pork industry is losing money hand over fist.

I'm not much of a speaker, as I said, but anyway, on February 7 the government announced it will seek to invoke article 28 of the General Agreement on Tariffs and Trade, GATT, which allows them to establish tariff-rated quotas to limit milk protein imports. This is a positive step that should have been taken a lot sooner.

I was talking to the manager of the new beef plant today. They have to pay a hell of a tariff just to put our beef in the Island stores, and that's wrong. They're bringing in beef from Venezuela and everywhere else, and that's wrong. The government has to stand up. These corporations don't pay any tax. The taxpayers are getting sick and tired of propping up these corporations. They're led to believe they're propping the farmers up, but they're not propping the farmers up.

Food has to be paid for one way or the other.