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.
10:55 a.m.
Business Development Manager, Eastern Greenway Oils Inc.
I think you've listened well, based on your questioning. You've summed it up.
One thread that I want to highlight in closing is, don't make agricultural policy into a social policy to save rural communities.
11 a.m.
Chief Executive Officer, Agricultural Alliance of New Brunswick
Thanks for the opportunity.
To highlight a few points, profitability is key; give renewal a broader scope to cover more issues; and the programs should be accessible, flexible, and delivered in a timely fashion. They always say repetition is key, so I'm just repeating the highlights.
Thanks.
11 a.m.
First Vice-President, Agricultural Alliance of New Brunswick
I had the privilege of sitting in on several first-round consultations on the APF. A common theme that ran through those consultations, clear across our region in the east, was that the lack of a long-term vision was hindering progress in reaching our goal of returning some kind of sustainable profitability to the primary producer.
Maybe, Mr. Steckle, you alluded to the fact that what we're doing is not working, and perhaps that lack of vision in the past is why we're still sitting around the table and talking about the same things. We need that vision, and somehow, some way, we have to return profitability to the primary producer.
11 a.m.
Conservative
The Chair Conservative James Bezan
Let me just finish off with the proposed vision statement that was presented at the APF consultations, which many of you participated in. The vision for the Canadian industry is proposed as this: “An industry that is innovative in seizing evolving market demands for food and non-food products and services within an environment that fosters prosperity and opportunity for the entire value chain, creating benefits for all Canadians.”
My question is, is that the right vision statement? Secondly, do you believe that the consultation round listened to your needs and was a worthwhile process? Please respond quickly, yes or no, on both cases.
Mr. Speer, I'll start with you. Is it the right statement?
11 a.m.
Dairy Producer, As an Individual
I had a bit of discomfort with the vision, in that I feel the agricultural sector that has been suffering the most is the primary producer. I'm not sure the vision statement puts enough emphasis on the sustainability of the primary producer.
11 a.m.
As an Individual
I'd have to echo Bob. The major part of the margin erosion has been at the primary producer level. Through the BSE and other things that have happened, we've seen processor margins and stuff stay up the same as ever, while the primary producer lost his margin. So we have to emphasize that we need a strong, profitable primary production role in Canada.
11 a.m.
Secretary, Eastern Greenway Oils Inc.
The primary producer's margin has eroded over the past few years.
11 a.m.
Chief Executive Officer, Agricultural Alliance of New Brunswick
As for your question toward the consultation sessions, from what I heard, these sessions were a lot better, had more opportunity for farmers to voice their opinions than previous consultations. I think they're curious to see the outcomes, if they were heard.
11 a.m.
First Vice-President, Agricultural Alliance of New Brunswick
I would like to echo what Bob started out with. In your vision, you include profitability for all partners in the value chain. I think the farmer and producer is definitely very important and sometimes a forgotten partner in that value chain.
You ended up by saying “for the benefit of all Canadians”. Farmers are Canadians too. And so far the rest of Canada and Canadians have benefited at the farmer's expense. I'm not sure whether that's captured in your vision or not, but I think that's a very important point. Farmers are Canadians too.
11 a.m.
Conservative
The Chair Conservative James Bezan
I agree with you 100%. I don't want to say we're going to be sitting around here having visions, but I think we're going to be working on developing a road map on how to move forward.
I want to thank all of you for your presentations this morning, for your interventions. It will help us form our policies and our report that we'll present to the House of Commons this spring.
With that, we're going to suspend to allow the witnesses to leave the table and we'll be back at it at a quarter after with a new set of witnesses.
We're suspended.
11:30 a.m.
Liberal
The Vice-Chair Liberal Paul Steckle
In the absence of the chair, I'm going to reconvene this meeting. He may be a few moments. I believe he's doing an interview.
As we continue the session this morning, we have people with us who represent this province in various venues. We have, from the Dairy Farmers of New Brunswick, Reginald Perry, vice-chairman; and we have Reint-Jan Dykstra, the chairman. From Potatoes New Brunswick, we have Robert Gareau, executive director. From Pork New Brunswick, we have Tony van de Brand, director. From Young Farmers, as individuals, we have Jens van der Heide and Justin Gaudet. From the New Brunswick Egg Producers, we have Mike Durnnian.
So with that, we'll get our meeting under way.
As I look at the agenda, I believe we have, first of all, Mr. Perry. Is he the one who's presenting? No?
Mr. Dykstra, you're on as the first presenter this morning. You have ten minutes. We'd like to keep it within that timeframe so we can have time for questions.
I will turn the meeting over to the chair.
April 24th, 2007 / 11:30 a.m.
Reint-Jan Dykstra Chairman, Dairy Farmers of New Brunswick
Thank you, Mr. Chairman.
Although I appreciate the invitation--maybe I should embellish a little, but you probably all have the papers in front of you—I've gone to these round tables on a number of occasions and I hope this one will have more fruitful outcomes than other ones we have attended. Especially in light of the number of diseases, crises that we have seen over the last number of years, and also with the WTO talks that are under way at the moment—even though they maybe somewhat stalled—I do hope the Canadian government sees the overall picture. We cannot wait for the world to progress; we have to make progress ourselves.
So although I appreciate the invitation, it is disheartening to appear before a committee, in a long line of committees, that has repeatedly attempted to find solutions to the financial hardships that agriculture continues to face while the remainder of the agrifood business sector seems to be prospering.
I'm here to speak on behalf of 248 dairy farms that produce over 130 million litres, just over $90 million. They take care of the delivery of the product, of which 95% is processed within the province and another 5% is directed towards markets in other provinces.
Dairy producers in New Brunswick embraced the concept of collective marketing of their milk 33 years ago. In the last ten years we have taken enormous strides to modify how we do business to deal with the fallout of the international trade rules that are sometimes imposed on us by governments for what is professed to be the greater good of humanity.
I have a little graph here. Basically, it's talking about the net farm receipts of New Brunswick. In 2005, it was $387 million. In 2004, there was $419 million. In 2003, $404 million; and in 2002, $428 million. As you can see, it is on a declining scale.
The other thing I would like to mention is what government has expended over the last number of years. In 2005, it was $40 million. In 2004, it was $36 million. In 2003, it was $12 million; and in 2002, it was $8 million.
11:35 a.m.
Chairman, Dairy Farmers of New Brunswick
Both levels, yes.
The other thing that is kind of interesting is that one of the largest exports of New Brunswick is potatoes. In 2005 they had farm receipts of $70 million, and in 2004 they had $126 million. In 2003 they had $101 million, and in 2002 they had $87 million. I'll come back to the exports in a minute.
Dairy, on the other hand, is fairly stable, with $83 million in 2005, $80 million in 2004, $76 million in 2003 and $74 million in 2002. There was a steady incline. Exports—and then I want to mention them in regard to potatoes, which are the largest export product in the province—on the other hand, in 2005 were $350 million versus $366 million in 2004. In 2003 they were $459 million, and 2002 they were $389 million. If you look at that, you can see that even when the commodity price goes down, we do not necessarily export more, because when there is a glut on the world market, nobody wants your product.
It needs to be said that only about 5% to 7% of all commodities are being traded in the world. With that in mind, when only 5% to 7% are being traded in the world markets, all prices have to be adjusted according to that.
As I speak, the dairy farming community is stable. It is not healthy, not in despair, but stable. Dairy farmers continue to struggle with the impact of BSE and leaky borders that for years have eroded our market and our income. I do appreciate the steps that the Minister of Agriculture and Agri-Food has taken to plug some of these leaks; however, the race by food manufacturers, the agrifood sector, to devalue Canada's agricultural commodities to the lowest common denominator still exists.
I would like to come back and add something personal to this regarding the BSE crisis that continues on our farms. On my own farm, it had an impact in the first year of about $65,000, a value never recaptured either through government ad hoc moneys or through anything else. The most galling thing is that the government continued to supplement supplementary imports at first and allowed the downstream agribusiness and chain stores to reap huge profits. That is the very same thing as has gone on before and is still allowed to happen.
Your committee has looked at a variety of noble measures in devising the agricultural policy framework by including sections to deal with business risk management, renewal, food safety, quality and resource protection, market development and trade, environment, innovation and science, as well as animal health. Some of the components in the framework are proactive and will assist the primary agricultural sector to deal with the encroaching demands of food safety, food traceability and society's need to have the primary agricultural sector ensure it remains as environmentally conscious as the rest of society should be.
What also should be recognized is that issues that serve the common good should also be paid for by the common good. That is the taxpayer. If they are concerned about food safety and want a system that is traceable, we will conform, but we should not have to pay for the infrastructure or for the implementation. Also, what we import needs to conform to our standards, and we should not accept the standard of the country of origin, especially if it is lower than our own.
Other components such as the income stabilization programs are also noble causes but are reactive and, in my opinion, should provide assistance only in cases of natural disasters. In reality, these programs mask the true crises taking place in the primary agricultural sector. Some of these crises stem from government's drive to have an internationally competitive food industry on the backs of the primary agricultural producer.
One such case needs to be further examined, and that is the situation of bringing in guest workers for the harvest seasons because we cannot find them here. The main reason we cannot find these workers here is that we do not pay sufficiently. It is not that we do not want to do that, but that we cannot, since we will not be competitive if we pay more.
The primary worker pays the price. We should do this with our civil servants. We have about half a billion Chinese who would love to move from China to a better world. We have civil servants, a tax system in Canada that makes us feel that at times we pay too much tax. Most of those taxes go to programs and, of course, to incomes to allow for civil servants. If we took 5¢ or 25¢ on the $ of what they are making right now, I would say that of the half billion Chinese who would love to come to the west, a substantial number of those people would love to come here and they would have the credentials to do it. So the primary worker in agriculture is allowed to pay the price, but in other sectors they do not.
Over 70% of the bulk of revenue from Canada's agriculture and agrifood production comes from the domestic market. More emphasis should be put on programs to maintain farm incomes and producer bargaining power in the domestic or international marketplace. At present, three main buyers are left for dairy products, grain, and beef in Canada, and we only have two main sellers of groceries left.
All other components of the APF—business risk management, renewal, food safety, quality and resource protection, market development and trade, environment, innovation and science, and animal health strategy—should be modelled on the strategy to give all producers the right tools and regulatory framework to maintain or improve their financial position. Providing producers with these tools will not only provide a healthier primary sector, but should ultimately lead the agrifood sector to shift away from the volatility of the commodity market into high-quality value-added products. Supply management is a business risk management tool and it should never be overlooked. It should be fully included.
The principle of developing an agricultural policy oriented toward feeding your people first has merit as it forces the agricultural sector, from producer to the manufacturer of finished products, to reconsider its priorities and may, in time, shift the agrifood sector into more lucrative niche markets.
The following is a declaration built on this broad principle and is being promoted by the GO5 coalition for fair farming in Quebec, and I feel it merits some evaluation by this committee:
Provide Canadian consumers with high-quality, homegrown products at reasonable prices and receive a fair price from the marketplace without relying on taxpayers' dollars, favour human-scale farms that allow farmers and their families to make a decent living, preserve our heritage specifically by conserving local agricultural production, preserve our environment and our food sovereignty
—and that's the key, food sovereignty—
by favouring local or regional production that avoids costly shipping over thousands of kilometres of food from the other side of the planet.
—most food now is available within 24 hours by plane, and that means it can come from Australia quite easily—
Give local people jobs and favour economic and regional development across Canada.
One thing I would like to mention before I close is renewal. Government needs to do more to entice producers to return to the farm. Education is an excellent start, but more needs to be done.
Farming has become hugely capital-intensive and money is not easy to come by for young people. You, the government, have to come up with programs these people can tap into. The $250,000 addition to the capital gains tax exemption is a help, but more is needed. A 50-cow milking herd plus young stock easily costs $1.5 million to $2 million, depending on where you live. Where does someone off the street find that amount of money?
In closing, the future is in a policy that provides the Canadian agrifood sector access to high-quality, traceable, environmentally sustainable agricultural products. This can only be achieved if our primary producer is valued by consumers, industry, and government.
Thank you.
11:45 a.m.
Robert Gareau Executive Director, Potatoes New Brunswick
Good morning, bonjour, and thank you for allowing me this opportunity to say a few words. I'll try not to repeat everything you've heard this morning. I'd like to echo a lot of what Mr. Dykstra has already presented, but I'll try to be brief and hit some of the highlights.
I wasn't too sure how to approach business risk management, because I know there's a lot of work going on now to retool the programs under that subject. One concern certainly is with the National Safety Nets Advisory Committee that was set up. We were made aware only recently that the committee had been disbanded, and we're wondering why. It sounded to us as though we had good representation there, with a good group of grower representatives. We're wondering why that committee is no longer in place and who is listening to whom as far as recommendations for the new business risk management part of the APF go.
One of the big problems we in the potato industry saw on the business risk management side was that sometimes the programs were sound and could be very helpful, but the delivery became a problem. The delivery of those programs could be improved. One suggestion we've been making is to have a regional office near the cluster areas. That would go a long way, instead of having our growers dealing directly with someone in Winnipeg. Perhaps we could look at a more regionalized office.
We also think one good way to go is through the self-directed type of programs, as we had with the self-directed risk management programs. I know that the horticultural producers in Ontario have a self-directed production insurance that, from what I hear, seems to work quite well for them. That's an area I think we need to be looking at.
We need to try to find a way to have a less ad hoc type of compensation for all these disasters that are always happening. One example I could use is that of our recent scare with the potato cyst nematode. I'm sure you're aware that the region of Quebec was hit hard by this. The ramification for the rest of the potato-growing areas of Canada is that we're being sort of driven by CFIA to go towards national testing. I think there needs to be consultation. We all passed a resolution that there needs to be a good compensation plan in place before this expensive testing and sampling is put in place, because it's going to drive some growers right out. There should be something that growers can plan for.
On the side of renewal, I agree with what you just heard. We need better programs. There needs to be a way to entice our young people to get into farming. There are many significant barriers to entry, and there has to be a way to address those.
We want programs that can make optimal use of this electronic age we're in today. A lot of the growers now have a challenge using their computers to access the Internet. This is a tremendously powerful tool for the farm, but not all rural areas of this country.... Certainly in New Brunswick they're still struggling with dial-up. Having a high-speed Internet connection could make a big difference in the renewal part.
I'll treat the issues of food safety and environment together. I believe those are a high priority. The potato industry has done a lot of work in that area. You probably know that the potato industry led to the development and implementation of farm food safety programs for all the other horticultural crops. We feel we're the first out of the gate from the crop side of that, or the horticultural crop side.
The problem is that growers are trying to implement these changes on the farm, both on the environmental side and on the food safety side, but they don't see a return at the marketplace, and it's a big challenge. They see other products coming into the marketplace that don't have the same environment, and so it's really not a level playing field. We need to find a way to support those growers. When you're talking about the public good, the common good, somehow this is a good place to put some funds into. Growers are really concerned about their environment. They do a good job. They'll do what they have to do, but they reach a point where they need some assistance.
We believe that science and innovation are the foundation for developing the new technologies and for developing these value-added products that we always hear talk of. We've seen it first-hand with varietal development—cultivar development, for example. But we keep hearing about looming cuts to the breeding programs and how doing cultivar evaluation trials is no longer considered innovative. We see that as very innovative. It may be the best bang for the buck that we can get.
We want strong programs that provide stable long-term funding. No one is going to start a breeding program or do rotational crop studies if they don't have an expectation of some long-term stable funding. We need this to remain competitive with our major competitors, especially in the U.S. In our case, when these science and innovation program dollars trickle down to the province, we've tried to streamline that process. We have a very active grower-industry stakeholder committee, which recommends and prioritizes projects for funding. By the time we get through all the proposals, make our recommendations, and they go through them again with the provincial-federal committees, there can be quite long delays in actually accessing that funding. It's almost a perennial problem. It's planting season and we don't know if certain projects are going ahead. We could be missing some really narrow planting windows to get the trials in place. That is a key. We have to somehow get that streamlined.
The final area I want to talk about is market and trade. I'd like to put quite an emphasis on that part. That was the missing pillar in the first round of the APF. I hear that it might be included in this next generation. We fully support that. We must have strong programs for market and trade promotion. We want to establish and promote our products worldwide. We want to establish more free trade zones. We need more trade partnerships with many of these promising countries all over the world that have a demand for our products. We're continually faced with high tariffs in certain areas that are trying to buy our products. They are handcuffed by these tariffs. If we could establish more free trade zones, I'm sure we could sell a lot more product worldwide.
In New Brunswick, we seem to have fallen behind. We're losing out. Other areas are more competitive. They're ahead of us. They're doing more aggressive marketing. We need to be more aggressive. We have to make new trade deals. We have to do more promotion of our products. This would hold not just for potatoes; I'm talking about all agricultural products. We have to promote the fact that we are doing all this work on food safety and protecting our environment.
In the first round of the APF we kept talking about brand in Canada. I don't think we have done that or achieved that. We have to brand ourselves. There has to be some funds available for international marketing. That's our bread and butter. In our province, 80% to 90% of our potatoes go outside. If we don't have any programs we can access to do this promotion and marketing.... We're way behind our competitors and we've already seen the erosion of some of our traditional markets. We have to maintain our existing markets, the ones we've had success in before, and we have to establish some new ones.
Mr. Chairman, that is basically my presentation for today.
11:55 a.m.
Tony van de Brand Director, Porc NB Pork
Good morning. My name is Tony van de Brand. I'm a pork producer and a director on the N.B. Pork board. My farm is 25 kilometres west of Moncton in a place called Salisbury. I'm joined here by Stephen Moffett. He farms in Penobsquis, which is halfway between Saint John and Moncton. He is also on the board.
The N.B. hog industry is small but unique and has evolved from being just a producer of commodity pork. The industry's isolation from mainstream pork production, away from many important diseases, but still close to markets makes this province a producer of high-quality, high-health weaner pigs, breeding stock, and niche market hogs for markets in other provinces and the U.S. Our industry, although small, is an asset to agriculture in our province as well as other areas.
All of our producers are enrolled in the Canadian quality assurance program. The demand is high on our producers to meet the expectations of our customers. Risk management is a part of the everyday decisions made by our producers. Currency fluctuations, interest rate changes, input costs and availability, management challenges, and increasingly sophisticated customer demands are all risks. The vast majority of these risks are borne directly by producers. The question facing us today is where government can play a role in helping to mitigate these risks.
A lot of my presentation is the same as the Canadian Pork Council's, and we support their position.
One of the principles of the APF is to ensure that funds are used in an equitable manner, treating producers across commodities and regions equitably. We support this, and the government should focus on this. The current programing format does not meet this principle, where production and advance payment programs first intended for crop producers are expanded to livestock production.
We support the principle that government funding should focus on mitigating negative impacts of uncontrollable, unforeseen events, and we support that programming must conform to international trade obligations and minimize the threat of trade actions. The hog sector is no stranger to trade challenges, having experienced countervail and anti-dumping actions. Such actions are expensive to producers and create uncertainty.
The design principle that looks for producer involvement in sharing program costs is in many cases unnecessary. As noted, the majority of risks facing hog producers are borne directly by producers. Producers already assume considerable risk in production, so sharing in program costs is simply an added expense.
Moving forward on the subject of business risk management, we support the continuation of a margin-based income stabilization program. The current Canadian agricultural income stabilization program, or CAIS, has met the needs of many hog producers across the country, although improvements should continue to be made.
These improvements should include deeper negative margin coverage to 70%, basing the historical reference margin on the better of the past-three-year average or the Olympic average, eliminating the risk of government pro-rating of payments, improved timelines, and reduced administrative burden. Program payments should be considered as income in the year of the hurt, rather than when received. Predictability and bankability of the program continue to be problems. We hope the targeted advance already approved will be available soon.
We support the creation of a framework for disaster relief. It is recognized that governments will not be able to buy business risk management programs that can address all eventualities; therefore, having a framework to guide special situations will be valuable and will provide producers with confidence that assistance will be available in extreme situations. Efforts must be made to see this framework finalized.
With the launching the first agriculture policy framework, promises were made that production insurance would be extended to other commodities, including livestock. Despite work that's been done by both industry and government, we are no closer to the implementation of a suitable production insurance for livestock than we were at that time. The result is a huge gap between crop producers who have access to production insurance and livestock producers who do not.
This gap has been made painfully clear in the hog sector in the past several years, as circo virus has devastated many hog operations across the country. Without an adequate means to address the disease and no access to production insurance, many farms have gone out of business, unable to survive.
Disease or other production problems out of producers' control, in otherwise viable swine operations, could force producers out of business. We do not want to see this happen here in New Brunswick or anywhere else in Canada. With production insurance this problem could be avoided.
We certainly appreciate the work that has been undertaken by Agriculture and Agri-Food Canada to look at production insurance, but it's difficult to see when a viable scheme will be available.
A lack of production insurance hits producers in two ways. First, production losses are not fully covered. Second, the CAIS reference margin is not supported with production loss coverage. We want assurances that government will stay committed to funding production insurance, even if the end result could involve a private insurance tool.
With regard to enhanced cash advance programs, amendments to the agricultural marketing programs act that expanded coverage of cash advance to livestock, increased the overall limit, and increased the interest-free portion of the advance have been welcomed by our sector.
We appreciate the work of Agriculture and Agri-Food Canada to make the cash advance program more workable. However, we still find that access to cash advances for hog producers is not as favourable as that offered to crop producers. To explain, a crop producer can access the advance and hold it for 12 to 18 months. However, due to the short production cycle on hog farms, hog producers have access to the advance for only six months. In fact, we only have 50% of the benefit offered to crop producers.
In addition, livestock producers that grow grain to feed their livestock will now be at a disadvantage, as farm-fed grain will no longer be eligible for cash advances. How a producer uses grain should not be a criterion for eligibility.
The federal government recently announced the creation of a deposit-based producer account with upfront federal funding. This is an interesting development and warrants further investigation. Further information is needed on how long-term funding will be secured for the account without eroding current programs.
It is important that this savings account be available to all types and sizes of operations. Caps under the old NISA stabilization program were limiting, and did not reflect the growing size of hog operations. There are now new and varied ownership structures in place, which should also be considered.
The old NISA program was a favourite of some New Brunswick producers, especially when provinces were allocated some funds for companion programs, which, in New Brunswick's case, the red meat sector used to enhance NISA.
For producers across Canada, some program funding targeting some regions or commodities could help create a more equitable situation for farmers. One example here would be where feed costs are higher. We may have lower margins, so a program that is margin-based may lead to receiving lower support. An enhancement may be needed to make such a program more equitable.
We know very little about the aspect of the programming that is targeted to address high production costs in the recent announcements.
It is also noteworthy that where producers are involved in more than one commodity, the decline of one commodity could be offset by another commodity and make that producer less eligible for CAIS payments, while another producer with only one commodity could trigger a payment. This is a concern for some producers. However, while there have been many complaints about the current CAIS program, the whole farm program, available to all commodities, is a useful approach and should be maintained.
It should not go unmentioned that there are other business risk management elements where government could play a role, one being environmental. Producers should have support from government on mitigating environmental risks. We are improving and will be expected to improve on already good stewardship of the environment around our farms. Much of this is for the public good. Thus the costs of making changes should be absorbed by the public and not the farmer.
Another is food safety. As noted, all our producers are in the quality assurance program. Food safety is a public issue. The public should be financially involved and not place a burden on the producer.
Other elements of business risk management where government can play an important role include ensuring that agriculture works within a competitive regulatory environment, developing and promoting strong animal health protection programs, and promoting open and free trade.
In conclusion, we bear lots of risks in the swine industry. For industry to move ahead and be modern, efficient, and competitive, it must use its dollars to meet this criteria. Risks are occasional events that are impossible to budget for, and contributing to risk management is how government can help.
Again, business risk management should be provided equitably. These programs should be respectful of international trade rules and commitments to avoid trade action.
Thank you very much, Mr. Chairman.
