Agriculture Committee on April 23rd, 2007

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you. I have so many questions and not enough time.

Karen, maybe I could start with your comments on the WTO, and I know others have mentioned it also, that maybe agriculture should not be in the WTO. What about NAFTA? Do we look at NAFTA? We know that, for example, in my province of British Columbia, NAFTA has hurt vegetable producers—they've gone out of business—and apple growers are fighting dumping. At the same time, we know much of our agriculture industry is export oriented. Do we go for bilaterals? Is that the key?

Mr. Harding mentioned minimizing the threat of trade action. How do we fit that in? We know our hog industry wants to get access to Europe. Instead of having a 0.5% quota, we should be getting 5%, as was kind of agreed on. So how do we put all this together if we in fact take agriculture out of the WTO?

Then we have the whole issue of food security and what people have been mentioning, what's the vision? Is the main vision to feed our country and to be secure? How do we put all that together?

Maybe you could start, Karen, and then we could get some other comments.

[Karen Fyfe]

Thanks for the question, Alex.

It's a huge kettle of fish, it really is, and it's a complex business, but at the same time, I think our federal government, along with our farm leaders, have to take the blinkers of naiveté off. When we have a negotiator sitting around an international table at an international forum, we have to come out as strongly as possible to defend our producers, to defend our farm families across the country who are trying to supply food to local markets and balance that with the export markets.

To me, it's more of a balance. Right now, we're so skewed to the position of trade policy, not agricultural policy. We have to get back to a more balanced position where we have a domestic agricultural policy where feeding our own people by our own producers is equally important and as relevant as exporting any of the product.

Just because we can do something doesn't make it right—and Mr. Harding, no offence intended here, but I'm going to pick on the hog industry just a little bit as a rhetorical question. Just because corn and grain can be grown in Brazil at an extremely low cost of production, and then the Brazilians can transport that corn or grain to China and allow the Chinese to finish their hogs, and just because those hogs can then be transported back into Canada at a much cheaper price to the consumer, does that make sense? Just because it can be done, does it make sense to do it, given the fact also of the transportation costs in there and that cumulative effect to global warming?

Just because something can be done, is it right, or are there other issues that we should look at, such as sustaining our own rural communities, such as trying to reduce transportation? The 1,500-mile Caesar salad that we're all so well-acquainted with...just because we can do it, does it make it right?

As our president, Stewart Wells, says, there's a reason that the WTO was called the World Trade Organization and not the World Income Protection Organization.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Are there any other comments?

[The Chair, Conservative, James Bezan]

Mr. de Boer, and then Mr. Ling.

[Willem de Boer]

I have a comment on the amount of pigs coming into Canada. Between 60% and 70% of Canadian pork is being exported. Lately more and more pigs, not live pigs but meat, have been coming into the country. The biggest concern we have as hog producers is that those pigs are being raised in China, being raised in especially Brazil and Mexico. The meat comes over the border, and as long as it looks red, it's okay, so let it come in.

We know certain things, we hear certain things, and we read certain things about how those pigs are raised, what they get, what antibiotics, and all those things. It's much different from what we have. I think Canada should have a much stronger food inspection agency at the border. For instance, if you bring your meat in, show us where it comes from, what it had, and whether the same standards as ours were applied. I think that would be already a big step forward. Most of it's from Brazil and other places. You can't enter them; I think it's almost impossible for our country to enter them.

Those things should be really strongly looked at. For those people, a container going over the Atlantic Ocean is $3,000, and they can put 30 tonnes in there--more, if they want. What's that per kilogram or pound? Not much. So for those people, if they can sell it for a few cents less, at $3,000, it's still cheaper than buying it over here.

So I think the Canadian Food Inspection Agency should look at that more seriously.

[The Chair, Conservative, James Bezan]

Very quickly, Mr. Ling; Mr. Atamanenko's time is up.

[Allan Ling]

In response to your question, I do believe Canada is a trading nation and we will continue to be. We can't put a fence around Canada. We have to be a player.

I've never been in WTO negotiations or anything like that, but from the reports I hear, Canada plays a very strong role in our negotiations. We don't get everything we want, obviously, but in supply management we have done well to hold what we have. Hopefully we can continue to do it. When you get 146 or 147 countries against one, it has to be a tough role, but for the livestock and the grains and oilseeds, we have to be there.

So on that, I do support where we're at.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Ling.

Mr. Easter, it's your turn.

[Wayne Easter, Liberal, Malpeque, PE]

Thanks.

Thanks, folks, for your presentations.

Willem, on the debt numbers you outlined, George Brinkman, an economist out of Guelph, came out with figures a week before last. The figures indicated that between 1981 and now, really, Canadian farm debt has increased 300%, and U.S. farm debt has increased 20%. Then when you look at the subsidies that actually go to the farmers, the Canadian government has subsidized over that period of time 116% of farm income in Canada. In other words, our share out of the marketplace was negative. In the United States, their government, although they subsidized higher, had a share of farm income of only 37%.

That's the reality of the world we're in, and of where we're at.

Nobody has really mentioned this to any great extent, but should we be looking at basically restructuring the...? I think Randall mentioned that we're looking at BRM in absence of most other things. But should we be looking at a federal government program for support in other areas, like the HACCP program? Farmers are picking up that cost, but it's the consumer that benefits. Inspections fees, farm health and safety, public health and safety--should we be looking at all those areas, which are green under the WTO so are allowable? It gets money into the farm community and it's not a subsidy. I don't know why we don't look at that, and some environmental programming as well.

Perhaps you would think about that, and if anybody has a response, I'd like to hear it.

There are a couple of specifics that we need on the record.

You mentioned, Randall, a national farmed animal health strategy. Is there general agreement by industry on that? Who has it been presented to? It's something we may need to include in our report.

On another point, a lot of people seem to indicate that we need a different disaster component under federal programming. What should it cover? Should it cover trade disputes or not, and what should the share be? If there's a flood in a city, the federal government pays 90%. If there's a flood on farmland, the federal government pays 60%, if they pay at all. Should there be 90% funding by the feds in terms of disaster, whether it be disease, such as BSE, trade action, or whatever?

[The Chair, Conservative, James Bezan]

Mr. Affleck.

[Randall Affleck]

In regard to the national farmed animal strategy, my understanding is that there's been discussion at the policy level within about 13 organizations nationally with CFIA. The trouble is on launching it to the next step to get some meaningful coordination. It's why it was promoted that we should push this issue.

[Wayne Easter, Liberal, Malpeque, PE]

Could I ask this then, Mr. Chair? Whoever the chair is of this grouping of 13 groups, could a letter be written to the chair of the committee, if there's agreement, asking that it be specifically stated in our report as a component of APF 2?

[Randall Affleck]

Okay.

If I could add, on your question on different disaster insurance, from our industry perspective, because supply management is what it is, a strong case can't necessarily be made for market insurance. But I'm concerned that producers don't have adequate coverage for disasters.

As a farmer, whether it's 60-40, 90-10, or 100%, I really don't care. It's public money that should go to the producers, but it's important. In particular, smaller provinces that rely heavily on agriculture are at a real disadvantage on the 60-40 split. For example, at a minimum, federal dollars shouldn't be tied up waiting for provincial dollars, in my view. If you can't get the perfect scenario, the federal dollars should minimally flow.

[The Chair, Conservative, James Bezan]

Mr. Harding.

[Robert Harding]

Thank you, Mr. Chairman.

On Wayne's comment about some of the CFIA costs, inspection fees and so on being assumed, it would be green if we called it green under the agreements. It's only a heads-up. If it's seen to be that, I think there would be support for it from industry, for sure.

On some of the concerns that Allan brought up about people wanting to hold on to their own power, I know the CFIA came up with the business alignment plan a long time ago that was basically cost recovery. I know our sector said it was fine, and we wouldn't use it anymore. It didn't matter that whatever was cut out, they said they'd charge it on this now, and it didn't matter. There are a lot of people within that structure who are trained to do that. They won't want to give it up.

Karen, I didn't take any offence at what you said. The free enterprises in our sector that we see are very careful. As Willlem said, we produce 50% more than we eat. It has to go somewhere, and it has to be very targeted.

I think our big concern is from a competitive point of view, if a product is not allowed to be used by our farmers on farms, even though it's cheap...it's because Health Canada hasn't approved it--which we all support. But for eight years, the Americans were allowed to use it, and we could buy it in our grocery stores all across Canada. So if it is not good for Canadians to eat--or is it? There was a disconnect there. I think there was anywhere from $2 to $5 per pig for the benefit of producers in the States, and we didn't have that. It's now approved in Canada...but it was a disconnect anyway.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Easter.

Mr. Devolin.

[Barry Devolin, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Thanks, Mr. Chair.

We've certainly heard a lot of good ideas today, both this evening and this morning in Truro, and a lot of common themes, I think, that we're going to take away.

I want to talk a bit specifically about the CAIS program. It's been said that while success has many fathers, failure is an orphan. Well, CAIS seems to be an orphan for me, because I have yet to meet anybody who will claim responsibility for coming up with it in the first place, or any organization that says it supported it at the time.

I think, Mr. Harding, you pointed out, I guess, the fundamental flaw--or one fundamental flaw, anyway--which is that it's not predictable and therefore not bankable. That's because when you fill out your forms, you don't have all the information you need to plug into the formula to spit out a number at the other end, the way we do with our income taxes--you might make a mistake, but basically it spits out a number that tells you either what you owe or what you're going to get back. With CAIS, you have to wait.

I had one farmer say that he'd found the best accountant he possibly could, a guy who helped set CAIS up, and he was told he was going to get somewhere between $8,000 and $43,000. You could ask a kid on the street and they probably could have guessed a similar confidence interval.

I'll start with Mr. Harding, and maybe others will want to jump in. Is it possible to take the CAIS program and change it so that it actually is bankable, so that it is predictable? There's a semantic argument: would it still be CAIS or would it be something else?

Are you familiar with any work that's been done? Is there a similar kind of whole farm program, a fix, that would address that problem, which is the predictability and the bankability of it?

[The Chair, Conservative, James Bezan]

Go ahead, Mr. Harding.

[Robert Harding]

Thank you.

I think this committee heard from the Canadian Pork Council a month or so ago. The safety net committee of that organization certainly worked with CFA and others to go through some of the years before CAIS was ever developed, when we had NISA and we were getting out of tripartite. There was a tremendous number of really good ideas, some of them that would actually work for farmers. But they cost a lot of money. I think that was the actual, real reason. I know some of it's hidden behind trade issues and so on, and frankly, I think some of it is hidden behind trade issues that maybe aren't really there. If the will is there, then there's a way to do it.

We do have a team of well-intentioned bureaucrats who will cling, to their deaths, to this program because they believe absolutely in it, that it's the right program, and so on. Actually, I met with one a couple of weeks ago. He said, “But in principle, it's the right program.” I said, “No, it's not. Our farmers are going broke. You can philosophically talk about that all you want, but it's not working.” “Well, it works in some places,” he said. Well, maybe. But that's where they're coming from, so I think that's a big challenge, too.

I know, as Allan said, that you guys are the policy-makers, but you have to rely on these people who are there. They're not all mean-spirited, but sometimes the ones we meet are.

[The Chair, Conservative, James Bezan]

Mr. Ling wanted to get in on this, and Mr. MacCallum as well.

[Allan Ling]

I don't think it makes a difference what you call a program. There's nothing wrong with the word “CAIS”, and yes, I do believe it can be made to work for us. But the changes have to be made. And we have taken, across the country, some positive steps, like adding the NISA-like approach to the top tier. I believe that's a step in the right direction.

I don't think we have to throw the whole thing out. But when you're based on a declining margin and historical prices, that's where the problem with it comes in. You can't live in the past, and that's what we're trying to do.

The other thing, of course--and we keep talking about it--is the predictability and the bankability. We all know about that.

To answer Wayne's question, yes, of course, if we can take advantage of some of the programs that are green, then we certainly should be doing that. And I think I alluded to that in my opening remarks.

[The Chair, Conservative, James Bezan]

We'll have Mr. McCallum and then Mr. de Boer, very quickly, because Mr. Devolin's time is almost up.

[Doug MacCallum]

One thing about the CAIS program is that the advance is based on a fixed amount, and then the program itself is based on a margin amount, and the margin formula takes away from the fixed amount. That's what happened to the cow-calf people. We got a fixed amount of $100 a head for our cows that had calved. But when the margin formula was used in the program, we lost that, and our money from the government then became a loan. The only way we could access the money was to join the CAIS program.

I've never belonged to any government program in my life, and I don't belong to the CAIS program today, even though they told me in the premier's office that I should join it. But I said that once I am stabbed in the back by a program, I will never join it again. I quit it really quickly.

[The Chair, Conservative, James Bezan]

Mr. de Boer.

[Willem de Boer]

About CAIS, I have to say the same as Allan, and I want to take my only example again. I've been there 12 years now. The first two were very good years, and then 1998-99 was a really bad year. I got $80,000 out of the program at that time. Afterwards, I got a couple of thousand dollars out of it. Last year, with personal expenses, I lost close to $100,000 again. The bookkeeper told me there was no money, no CAIS.

It doesn't help, and it can help somehow.... So if you could go back to the CPC and talk to them, there are certain ideas. The protein council has certain ideas. I don't have all the knowledge they have. But it does not help; at least, it did not help me, and that's what I want to emphasize.

I think the green idea is a great idea, but it should be more...[Inaudible--Editor]. Going into Smithfield Foods and the other people.... Smithfield is the biggest one in the whole world. They want to have loose housing. I don't have a problem with loose housing for sows; we can do it, but again it costs money. The consumer wants it, and we have to cough up all those costs. The space per pig--I don't know how many square feet it is; let's say it's two square feet. They want to have it at two and a half; they want to upgrade it because there are too many pigs in a pen. That's okay with me too, but it's on the backs of farmers. They're going to have to cough it up.

We cannot say to the processor that we want to have 10¢, 5¢, or 1¢ more, or whatever it costs, because it's costing us money. We can't do it. The consumer wants it, so we have to cough it up. If that falls under the green idea, please advise us and send me the form. I will fill it in.

The same is true with the options program. My wife works with me on the farm. We have a part-time hired hand once in a while. We want to go into that options program. The two of us are in the negative, and $25,000 is waiting for us--no forms. You can get it in the fall of this year.

She asked me to hire a bookkeeper to come up with a plan. If it stays like this, then they're going to want liquidation. There's no money at all, so I don't know how.... If the prices go up, I have to spend another $2,000 or $3,000 on an accountant. Whatever I can get out of the options program, if I'm eligible for it...but I cannot get into it.