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.