Evidence of meeting #57 for Agriculture and Agri-Food in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farm.
12:05 p.m.
Conservative
The Chair Conservative James Bezan
Thank you.
I understand, Mr. Gaudet and Mr. van der Heide, that you're appearing as individuals. You have 10 minutes. Who's doing the speaking?
April 24th, 2007 / 12:05 p.m.
Justin Gaudet As an Individual
We're here to represent the young farmers who don't really have a group yet. Hopefully it will come in the near future, but for now, we don't have one.
We want to present a different point of view on this topic, as people who haven't been in the industry for as many years as most people sitting at the table here. We grew up in a completely different social reality compared to everybody else who has been in the industry for many years. I'm going to try to present more of that point of view.
First of all, if the agriculture industry is going to survive in Canada, we need young people to take over from the aging farmer population. One of the key factors is whether farming is going to be a viable lifestyle, a rewarding career choice. If you look at other industries, a lot of times you can have a much better lifestyle if you go into an industry other than agriculture. That being said, there are a lot of young people who want to go into farming. They love it and that's what they want to do.
The main thing that's going to draw them there is opportunity. Is there opportunity for a good lifestyle? Is there opportunity for growth and advancement within the industry? A big part of that is going to be the strength of the industry. If there's a strong industry, people are going to be drawn to it because they want to be in it anyway.
When it comes to taking over farms, one of the biggest problems is that the older farmers are selling and dismantling farms to fund their retirement. As has been said, it's very difficult for a young farmer to come up with the money that's needed to take over a farm. There needs to be a program so that farmers don't have to sell their farms to fund their retirement. I'm not sure how it could be done, but maybe having some sort of pension plan that would take into account funding for the retiring farmer but keeping the farm in operation with a new owner would be a way, instead of selling off the farm and the young guy being on his own to find resources.
Another aspect is education. Providing knowledge to the young farmer, or to farmers in general, is key. There's a big importance in knowing what you need to know to operate your farm. A big part of that is the universities and colleges. They need to be funded and supported quite strongly. We need to make sure that any research and any development goes through the universities. If you depend on private industry for the research and the information you use for management, a lot of that information could be biased. It's profit-driven by the companies, so how much can you trust it? There's an important need for unbiased research. The best way to do that is through government and the education system.
Another aspect is educating the public about agriculture. I think that's one area that's really lacking right now. I went to high school with 2,000 students, and I was the only farmer. Probably when most of the people here grew up, they were part of their farming community. Everybody was a farmer and everybody knew what farming was about. Even if your neighbour wasn't a farmer, he knew what was involved. But now the social reality of it is quite different, and most people don't know and don't understand. I think a lot of the problems that agriculture is facing, as far as public relations and public views are concerned, come from that lack of knowledge of the public about agriculture. I think that's a key area that's been neglected in the past that really needs serious looking into.
Also, about the department and the people who farmers deal with in the government, there needs to be a lot of education for them so that they know exactly how the agriculture system works. Sometimes you deal with government officials who don't come from farms and don't even know about farming. They know the politics and they know issues, but they don't understand how farming works. So that's a key point as well.
12:10 p.m.
Liberal
12:10 p.m.
As an Individual
Another aspect is the side of regulations and food safety. Canada right now provides a lot of high-quality foods and needs to continue to do so. Canadians have been able to trust that they have a safe, high-quality supply of food, and I think that's something that we can't neglect. That's something for which we have to keep high standards, and we have to work towards getting them as high as possible.
That being said, with such a high quality of food that we provide, we can't let lower-quality foods come in from other regions of the world. If Canadians expect a certain quality of food and Canadian producers produce that certain quality of food, it's not right that we buy a lower quality of food just because it's cheaper. We have to make sure that any food coming in meets those quality standards. Those quality standards don't apply only to the final product; they should apply to how the product is produced. Are they doing it ethically? Are they doing it in an environmentally sound manner? Are they doing it in the socially responsible manner?
These are things that really need to be looked at if we're going to import food and we're going to say that food is of as high a quality as Canadian food is. Is it only the final quality that's as good, or is it how it's produced? I think that's a key issue that needs to be looked at. A lot of times the lower price comes from neglecting some of the other areas in production, like environmental standards and social standards in other countries. So that's really important to look at.
As far as government programs and funding go, they should be better advertised. Farmers should know a lot more about them. They should be easier to access. There should be a lot less red tape. Make them easier to access. Make them more visible so that farmers know how they work, where they are, and what programs they have access to. A lot of times farmers don't even know that there are great programs out there. Not enough is known about them, so farmers don't even access them.
There is also the area of research and development. Young farmers see that as very important, because it's one thing to just give money to farmers or tell farmers to become more efficient or to become better producers, but we need information. We live in an information age, and that's probably the biggest thing. You can't manage unless you have the information to manage, right? If you're running a farm, you need to know as much as possible. You need to have all the information that you can.
As was mentioned earlier, a lot of private industry does research and development. It's profit-driven for them, but we think that the government should step in and do a lot more regional research in crop development and stuff like that so that farmers have unbiased information to work with.
As well as being financially supportive to farmers, we think the government should also be the farmers' biggest supporter in other ways. If farmers are given the tools they need, they can manage to survive financially. They need the government to step in and support them in international relations—in dealing with other countries—or in policy dealings. We need strong government in that regard, to provide a strong industry. Then farmers can manage to make money if their industries are strong. We think the policy framework should be seen as somewhat of a failure if farmers have to rely on safety nets. Safety nets are important, but they should be seen as a last resort for the farmers.
I think I should wrap it up. Thank you for your time.
12:15 p.m.
Mark Durnnian New Brunswick Egg Producers
I would like to thank you for the invitation for coming before the committee.
Also, I'd have to say that the New Brunswick Egg Producers, the board itself, was not notified that this meeting was even taking place. Somebody had given you my name; that's how I wound up here. I'm not on the New Brunswick Egg board or CEMA or any of those organizations; I'm just an egg producer myself, so I'm not into a whole lot of this information. I had contacted them and tried to get them to send somebody, but everybody was tied up because we got the message just last week. So I'm going to read a little bit about what they gave me, and then talk a little bit.
When I think about risk management, I think of two major kinds. There's the loss of income due to price changes, and a loss of income due to production challenges such as animal disease, weather, and crop problems. Farmers face many exceptional challenges that are beyond their control. A farm business is a unique business, and the government's program should help farmers when they're hurt by factors beyond their control. Among the more obvious examples in our industry is avian influenza, which I'll talk a little bit more about.
Our industry had significant discussions with officials in the Canadian Food Inspection Agency and with the Honourable Chuck Strahl regarding the inadequacy of compensation available under the Health of Animals Act. When flocks are ordered destroyed, the compensation is inadequate, because government interprets market value to mean replacement value. So what this actually means, to give you an example, is if you have a chicken in production, they'll say, well, it will cost $7 to replace it. So if I have 35,000 chickens on my farm, and there's an avian flu within five kilometres—my birds don't even have to be diagnosed with it—if it's within five kilometres, all my birds would be killed. I have 17,500 at one age; 17,500 at another age; and another 17,500 replacement flock. So all those birds would be destroyed, and they'd tell me they're worth $7 apiece. And that's just for the 35,000; the other ones are worth only about $1.50 because they're young. So if I were to get paid out compensation, you'd be looking at about roughly $300,000 under the present program that they're trying to implement.
Now, if my barns are empty for six months before they decide they're going to allow birds back, I'd have to come up with birds that age to come in, which is hard to do. Then I'd have to wait another six months to get another age flock in there. I mean, the actual value of those birds within that year's period.... I'd lose a complete half-year production, and then half my production for another fall and half year.
Roughly, in a year I produce 11 million eggs. Now, if you break that down into dozens, you have 920,000 dozen. At a $1 a dozen, we'll say, that's $920,000 in the run of a year that I'm going to be out, and you're going to compensate me $300,000 to come in and destroy my birds, even if they're not even diagnosed with this disease. That's a hard hit to take. We need some type of program that's going to address that, if they're going to do that.
As it stands now, the Canadian Food Inspection Agency is planning to conduct surveillance for avian influenza in commercial flocks. This is a disease that was found in New Brunswick probably 30 or 40 years ago. It's in wild birds. It's just the common flu. If you go over to Asia, where it's developed into a high-path flu that can actually affect humans, then that's different. Here it's still totally low path. I mean, if they go into a barn of mine, and then they destroy.... There has to be some form of compensation for that.
Moving on, we'll go to the other half of risk management, which is price decline. Fortunately, under supply management, which egg production is under, we don't have to worry about that. For more than 30 years the Canadian egg farmers have been operating in the supply-managed system where farmers produce eggs to meet the demand of Canadian consumers. Supply management promotes a steady production of high-quality egg products, which is widely recognized as a sustainable system. It's one that allows farmers to earn a reasonable living under most circumstances.
Talking about high-quality food, I was down in Florida a couple of months ago, and they had a dozen eggs there for $2.80, and two and a half dozen eggs for $1.50. The difference was that the eggs for $2.80 had no medications, hormones, or chemicals put into the chickens. The other ones—well, who knows what was in them. Fortunately in Canada we don't have to worry about that. Everything is strictly regulated. You have different programs, like Start Clean—Stay Clean, and HACCP, that ensure we have proper safety with our food.
When the Start Clean—Stay Clean program came out about 10 years ago, we spent thousands of dollars on our farm to meet the criteria—to do the bio-security, have the step pans, change clothes every time you walk into a barn, wash your hands, and all that stuff—just so we would be qualified for the compensation. We continue to do that.
Right now, all the eggs produced in southern New Brunswick go to Amherst, Nova Scotia, to one central grain station. The main reason behind that is regulations and cost. We shut down our grain station last year because of two things. One was the regulations coming in and the high cost of machinery and meeting the HACCP conditions. As for the other one, as was already pointed out, there are two major sellers of groceries in Canada right now. They just up and said, we want to buy from one person; we don't want to buy from a bunch of people. Either get together or we'll buy our eggs someplace else. There'll be three sellers of groceries soon, because Wal-Mart is creeping up into Canada. It became number one in the United States over a 10-year period, so there's a good chance it could do quite a bit of damage here if we don't have the proper regulations put in place by government for things like this.
The next agriculture and agrifood policy should include all components of Canadian agriculture, with the primary objective of achieving growth and profitability for every sector. As a result, it needs to go beyond identifying solutions to problems. It must also recognize and strengthen very successful components of Canadian agriculture, such as supply management. It's a system that's proven to work, but you can't have it in all sectors. In the potato sector, for example, most of the potatoes are exported, so it's difficult. But there are some sectors where you could bring in regulations that would help.
Stores call food “local” now if it gets there in 24 hours. If you put food on an airplane it can be there in 24 hours, and it's called local. Maybe regulations should be brought in so the stores have to buy so much local food to actually be called local. Maybe food should have to be labelled to show where it came from—this came from Africa, or wherever.
You look at food safety too. People who grow some vegetables can't get certain pesticides and insecticides, even safe ones that are used in other countries—and we buy food that has been sprayed with these. Some countries like Argentina are still using chemicals that we banned ten years ago. They're spraying them on the food, shipping it up here, and we're buying it and eating it. That's not good food safety or good sense.
It should be noted that in the implementation agreements for the current agricultural policy framework, some provinces include very strong language in support of supply management—going as far as recognizing it as a cornerstone of Canadian agriculture policy. Supply management systems are federal-provincial agreements authorized by legislation. As such, the pillars that allow for the effective functioning of supply management need to be supported. That is why we are also asking that these three pillars—producer pricing, import controls, and production discipline—be explicitly named in the next policy framework.
Turning to general disaster risk or risk management, if a farmer gets hit with drought or heavy rains, or loses a crop due to disease or bugs, in order to get compensation, he has to go through two levels of government, and there's private insurance and this and that. But you still have to pay the bills as time goes on. Banks aren't the types to wait around for that. That's how they make their money. If you don't make your payments, they say, okay, you paid all this money, and now we want the farm.
I feel that if farmers can show that they're in financial distress due to conditions beyond their control, due to government program changes or government rules that changed, for example, or due to weather, disease, or whatever, as long as they can show what they were making, there should be financial aid for them immediately, under some type of program. If you can show the paperwork for it, then they should say they'll make your payments and keep you afloat.
In my own case, taking income out for six months is half a million dollars. And I still have to pay my bills. I still have all my costs. The only cost I don't have is feeding my birds, basically. I still have everything else there.
Even to feed my birds, I don't buy my feed from a feed mill; I have my own feed mill, so I still have costs there. I could have anywhere from $10,000 to $50,000 worth of grain sitting there. If it's going to be shut down for six months, what am I supposed to do with it? Even to resell it would be costly, to take it out. I'm talking about things like that.
12:30 p.m.
Conservative
The Chair Conservative James Bezan
Thank you very much.
Mr. Hubbard.
We're going to stick with the five-minute rounds, and we'll extend to make sure everybody gets a round of questioning.
12:30 p.m.
Liberal
Charles Hubbard Liberal Miramichi, NB
We've certainly heard a lot of good points. The biggest problem is to bring them out in five minutes, but hopefully, around the table, we can address most of them.
Going first of all to the young farmers, most of the statistics we get indicate that farm debt is one of the biggest problems that Canadian agriculture has.
Justin, when you are the holder of a farm, you go to Farm Credit, and the debt probably becomes almost half of what the income of that farm would be. Do you have any figures on that? Have you looked at projected—? If you buy a $3 million dairy farm with 50 milking cows, and you put $3 million in, what do you get out at the end of it, after you spend about half of your sales covering the cost of just carrying the debt, without paying it down?
12:30 p.m.
As an Individual
I don't actually have any numbers. It was pretty short notice. I just found out about this a couple of days ago.
12:30 p.m.
Liberal
Charles Hubbard Liberal Miramichi, NB
Jens, do you have any figures on what investment would be needed and how much of the income would go toward just servicing that debt?
12:30 p.m.
Jens van der Heide As an Individual
It would be a substantial amount; I know that. Just to start off straight from the ground, it's impossible. But do I have exact numbers? No, I don't.
12:30 p.m.
As an Individual
I don't have exact numbers, but it's enough so that Farm Credit won't lend you money. They'll look at your situation, and they'll send you out the door. They'll say that there's no way you could even pay it.
As with my situation in dairy, you need to have something given to you by, most of the time, your parents, or perhaps you can find an older farmer who's generous enough to work something out with you so that you can gradually pay him. But as long as the farmer who's selling wants full value for his farm, a young farmer cannot buy it, in the case of dairy specifically.
12:30 p.m.
Liberal
Charles Hubbard Liberal Miramichi, NB
Mr. Dykstra, we've had, at least in our own province and across the country, in the last 40 years a lot of farmers coming from Europe, first and second generation. You talked about Chinese. Are you going to bring them in as farmers, or what are they going to do? Is that the next future for Canadian agriculture to look for—or Mexicans?
12:30 p.m.
Chairman, Dairy Farmers of New Brunswick
When I was referring to that, Mr. Hubbard, it was more in the sense that right now we are bringing in Mexicans, Paraguayans, Uruguayans, wherever we can find them, to help with the harvest of certain fruit crops. We are bringing them in to put them in the kill plants down in Manitoba and wherever we can find them, because they are willing to work harder for less. That is why I was referring to the Chinese.
12:30 p.m.
Liberal
Charles Hubbard Liberal Miramichi, NB
I simply want to bring this point out. Since World War II, a good percentage of the farmers in this country have come from Britain, from Germany, from the Netherlands. And Justin in particular talks about.... The Gaudet name has been in Canada for probably 400 years. Where are we going to get the people who are going to take over these farms when Justin's and Jens' people can't afford to invest in them to get started? Are there countries out there that have money?
12:30 p.m.
Chairman, Dairy Farmers of New Brunswick
Well, it is not necessarily the money, because when I came, back in the 1980s, at the beginning of the eighties, New Brunswick had a program for young people to get started. They had, for example, an interest buy-down or interest forgiveness for x number of years. Those kinds of programs need to be reimplemented to help the next generation on the farm.
The other area where help is needed, as well, is this. Most producers nowadays don't have any money put aside, because what they have done is reinvest in their farms so they are large enough to continue into the near future. So in order for them to get their pensions or their retirement money, they have to take out a large sum of money. If you can move some of that money out, more tax free, it might be easier.
This morning you were talking to another group of people. Mr. Steckle was mentioning $50,000 on a yearly basis. That would be a start.
12:30 p.m.
Liberal
Charles Hubbard Liberal Miramichi, NB
I'll add, just generally, in the last minute or so that I have, that we have a lot of programs in this country. You can list 14 or 15 of them or whatever. It could be 25 in some provinces. Which ones are most significant? Which should be continued? You talked about the young farmer internship program we had in New Brunswick. It's gone. What do you see? And when a program is announced, how long is it before you are able to access it? We announce a lot of things. But by the time the bureaucrats get all the red tape organized, can you use it effectively?
Does anyone want to answer?
12:35 p.m.
Chairman, Dairy Farmers of New Brunswick
Sometimes you have to know about it. Sometimes these announcements are so wishy-washy that you don't even know about it. You finally hear about the program when it is done. I'm sorry, but some of these programs are not announced with a lot of fanfare because they don't want us to use them.
12:35 p.m.
Stephen Moffett Director, Porc NB Pork
Further to that, Mr. Hubbard, you're asking which programs are the most important. Obviously we think the safety net and business risk management is very important. If we can keep our farms profitable in the long run, obviously the banks will support us.
In this same vein, and as I've said for a long time—Years ago we had the young farmer intern program, which was excellent, here in New Brunswick. But we had other programs to support farmers who were getting started. And in response to your question earlier, a young farmer or a farmer going to borrow would do well to be able to borrow 50% or 65% of the cost of the total investment. So if an operation is $500,000 or $1 million or higher than that, which is very common nowadays, it takes a tremendous amount of a person's own money to get started.
We used to have grant programs, and if we don't do that anymore, at the very least we need to have low-interest loan programs similar to what ACOA does for manufacturing and processing. Agriculture used to do those kinds of things for us, but they quit doing that long ago. ACOA doesn't do it now. So there's a tremendous gap there in our industry in helping producers not only get started but even grow and become more efficient.
12:35 p.m.
Conservative
The Chair Conservative James Bezan
Mr. Perry, answer very quickly, because Mr. Hubbard's time has expired.
12:35 p.m.
Reginald Perry Vice-Chairman, Dairy Farmers of New Brunswick
I'd just like to emphasize, again, that I think the next APF has to really target and look after the next generation of farmers. It has to help the next generation of producers take over the land.
Maybe we need a national young farmers program with an interest buy-down or with incentives to get in, because if we don't have that encouragement and the programs in place, and we miss this next generation--we've already missed one--there will be no farming in Canada. And then you'll have no food sovereignty.
