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.