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.