Agriculture Committee on April 24th, 2007

[The Chair, Conservative, James Bezan]

Mr. Bettle.

[Don Bettle]

I think we can do the same thing with markets and food security on a global scale by identifying Canadian product as Canadian product and the highest-quality food in the world. I've worked with people in the United States before. When we were in dairy, we exported dairy products there, before the WTO said we couldn't do that anymore. The reason we could do that is that we had a high-quality product. We sold it at above the Canadian price into the U.S. because we had a high-quality product, we had a consistent supply. In any market, any place in the world, pretty well, if you can give them a high-quality product and a consistent supply, you can get a little more margin out of that.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

You're touching on another issue here, and it comes to what I call truth in labelling and country of origin. As a producer myself, I have no problem doing that labelling there. No matter what country we send it to, I don't think it's going to jeopardize us. Obviously you agree.

Does everyone else in the different industries feel the same way? We do have some of our commodities that don't believe in that, because they're afraid it's going to hurt what they're exporting into other countries.

[The Chair, Conservative, James Bezan]

Mr. Miller, your time has expired, so we'd like just quick responses from those who want to participate.

Mr. Carmichael.

[Ray Carmichael]

I have just one point.

I believe a lot of producers, particularly some of the individuals I've dealt with in the east here, are forgetting that the consumer does not want to go to the store and pick up a 10-pound bag of dirty potatoes, take them home, throw them under the sink, and wash them. My daughter does not want that. A lot of producers, I feel, need to recognize that society is changing its demands. That's why it's hard to get local products into the stores. A lot of times it's the value-added processing that they're buying. They're buying a service, not the potato or the beef, and that's being lost by a lot of individuals.

[Vince Kilfoil]

I have a quick comment.

I think some of the sentiment you've heard about in the last couple of days here in the east is that producers would much rather be able to extract their sustainable profit from the marketplace rather than relying on risk management programs to add to their bottom line. It would be a lot better feeling to know that you could extract that from the consumer and have the consumer go away feeling that he paid a fair price for a very healthy and environmentally friendly product. I think that's where a lot of that sentiment comes from.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thanks, Mr. Chair. I want to take a little different tack.

I hear what Vince said. In fact, I wrote a report on trying to achieve income out of the marketplace. But the reality is that with the WTO in the tank—it may be revived, I don't know. I've sat in on some meetings with the United States farmers. They'll come to the table and they'll say, we don't give a damn about the rest of the world, but we want you to support us; we want our farm to be maintained at our farm gate. They don't give a damn whether the money comes out of the mailbox or where it comes from. I don't know whether it's something we drink in our water, but my God, as Canadians we're pure; we're absolutely pure, and it shows in government policy.

But on Ray's point on U.S. blenders credit for biodiesel, is that on top of the 20¢ incentive that matches our own that they're putting in? It's a tie-up?

[Ray Carmichael]

They have a pool of money and pay every new producer so much. Last year it was 20¢ for capital investment. In addition to that, there's a blenders credit.

[Wayne Easter, Liberal, Malpeque, PE]

That's good to know.

Robert's point was that he'd like to see us spending a whole lot less on BRM. That has to make us think, Robert. When you said that, I went back to look at the programs. In reality, in the last 16 years we've had 14 different programs, all business risk management. I was there with Andy Mitchell. We basically canned spending on the environment because we had to spend it on business risk management. They ranged through everything from CAIS to TISP to FIP to cattle set-aside—you name it—14 programs in 16 years, all related to business risk management, putting billions of dollars out there.

And yet in the meantime, in the last 25 years our debt load has gone up 300% on Canadian farms, and American debt load in the same time went up 20%. Our income from the market over the last 21 years was $51 billion of net income, but our payments from the federal and provincial governments were $58.4 billion. Out of the market we lost $7 billion. We have to somehow get to a point where the primary producer level is sustainable.

Having said that, when you consider biodiesel, it's amazing that in this country we don't have a national energy strategy that ties it all together; we don't—and I'm not saying their government or ours, because we're both the same in this regard—have a national food security policy in this country.

You made six points, Vince, along the lines of food safety, environment, strategic growth—I didn't quite catch them all, but they'll be on the record. Those are areas that we can spend money on—in infrastructure, etc.—that isn't considered a subsidy, that's considered green under WTO. We're not looking at that. We're going to have to turn this policy on its head somehow.

So I'd ask you this. If you were the minister, what would you do to cut back on what are perceived as subsidies and spend the money in a different way, but at the same time increase support to the farm community so that it makes a difference in terms of family incomes and lives? That's where we're going to have to get to.

[The Chair, Conservative, James Bezan]

Mr. Kilfoil.

[Vince Kilfoil]

What you're asking for is more consultation?

[Wayne Easter, Liberal, Malpeque, PE]

No, absolutely not. What would you do if you were the minister, and given where we are in the world environment right now?

To be honest with you, in Europe the farm community doesn't care where their money comes from, and they don't in the United States. But in Canada we think, my God, we have to be pure.

I haven't said this before, but I'm shaking my head. I'm asking what's wrong with us in Canada, the way we operate. We gave away the dual wheat marketing system. We gave away the dairy subsidy without negotiating. We're doing other things now, and we have done so as a government. We give them away in international trade and get nothing in return, and our farmers are the ones who suffer.

What's wrong with us? It's not a government thing.

[The Chair, Conservative, James Bezan]

Mr. Carmichael.

[Ray Carmichael]

I've often said that one of the simplest things would be to just watch U.S. policy, because they seem to have it figured out.

With this blenders credit thing, if you check it out and watch what's going to happen, there are not going to be loan deficiency payments on corn, because they put their money at the blenders. The petroleum blenders are getting the buck. That's creating the demand.

They're going to come to the WTO and NAFTA hands-free—no subsidies. In agriculture, we have reduced our loan deficiency payments to our farmers. It's a perfect scenario. Why we don't follow the same model beats me.

[The Chair, Conservative, James Bezan]

Vince, did you have anything you wanted to add to that?

[Vince Kilfoil]

If I were the minister, I would take a serious look at some of the other ways besides direct subsidies by which we could help to level the playing field; that is, regulatory reform and a policy environment where the farmers actually stand a chance.

Our competitors to the south have all kinds of chemical products, for example, that they're allowed to use. I've heard company reps tell me that because Canada has a limited marketplace for some of these products and because of the policy and regulations they have to go through to get their product into the marketplace, it's not worth it for them. It's a situation a lot different from that of our competitors to the south and some of the other competitors.

That's just one example of a lot of ways that we could help to level the playing field without actually putting money in the producer's pocket.

[The Chair, Conservative, James Bezan]

Mr. Speer, go ahead, but please give a very short response. Mr. Easter's time has expired.

[Robert Speer]

My response is that the minister needs to have a plan that says this is where we want to get to and this is how we're going to get there. You have to develop that plan to get there. Don't just go here and there or wherever the money happens to need to go today.

[The Chair, Conservative, James Bezan]

I have a few questions myself.

There is one thing we haven't heard in the Maritimes that we did hear out west. Vince, you touched on it. In having your business risk management self-assessment program and going through the same process in environmental farm planning, would you take into consideration the commercial tools that are available? Are farmers using forward price contracts or hedging or options? I haven't heard that question in the Maritimes yet. Are commercial risk management tools widely available and used?

[Vince Kilfoil]

I'm not sure they're as readily available or as readily used as they are in the west, but if those are tools we can add to our toolbox, we certainly need to take a look at them.

[The Chair, Conservative, James Bezan]

Mr. Carmichael, when you're out securing feedstock from your producers, how is it secured? Is it because they're shareholders and they're going to have to deliver? Are you going to be giving forward price contracts to entice them to deliver?

[Ray Carmichael]

Basically, it will be fixed contract pricing based on—if you can ever track them down—commodity markets from out west. We're in a unique situation; we don't have ready access to commodity trading, so everything we do on the oilseeds side certainly starts out, actually, with Chicago soybeans, then come canola markets, and we work it way back.

Yes, it will be contract, but remember that we're so far away from any ability to deliver it that forward contracting on canola is not very profitable. We'd have $60-a-tonne freight to get a tonne of canola to the nearest crusher in Canada, in North America.

[The Chair, Conservative, James Bezan]

Where is that?

[Ray Carmichael]

It's Hamilton and Windsor. There's no other opportunity, other than our modest little facility in New Brunswick, to access a place that can actually crush oilseeds.