Thank you, Mr. Chairman.
I was given a lot of freedom when I was asked to come here as an individual and not have to represent any particular organization. I will just take a moment to say who I am as an individual.
I graduated from UNB with a master's in forestry. I worked 10 years with the provincial government in forestry. Then 20 years ago my wife and I bought a small dairy farm. The farm is now four times the size it was then, and we have four times as much debt as we paid in total for the farm at that point.
The question was, what would I like to see at the end of this next APF agreement? I guess basically what I'd like to see is the government spending a whole lot less on business risk management but spending the same amount of total money. I'd like to see our dollars coming from the marketplace and us in a position where we don't need business risk management to the same extent.
I suppose the question is, how do we get there? I have a few thoughts. My suggestions would be through knowledge and through creating the right atmosphere in the industry.
In terms of research, which is where you get some of your knowledge, I saw a picture about a year ago, and there were 31 combines coming down across a huge field. In the dust of those combines there was a whole raft of seeders coming along, seeding the next crop. If we're going to be in the bulk commodity, that's what we have to compete with. We can't compete with their climate and their soil and their wage structure and so on. So what we have to do is be out in front of those 31 combines. We need new ideas, better products, better production techniques, so that we can be planting this year what they're going to plant next year. We need the research, and that's where government can have a significant role.
So how do we decide what research to do? We need to be constantly looking at where agriculture is going to be. It's too late to be looking at corn-based ethanol plants. What's going to be the next big thing? That's where we should be doing our research. A suggestion or a thought would be something to do with crop residues being processed close to the source, so that byproducts can go back on the soil and we don't end up depleting the soil.
We need to have the best minds from producers, processors, consumers, the government, and researchers looking for new opportunities. What about having a website where people, if they have an idea for a research project, can submit the idea? The more ideas you have, the better opportunity you have of getting the new product, the next new big item.
I'll move on to education. We need the right kind of education, both in the schools and available to existing farmers. The research I was talking about earlier is no good if it doesn't get to the people who are managing the farms. At the present time farming is a business, and if you're going to succeed it's the good business people who are succeeding in farming. Yet when I hear discussions about agricultural schools and training courses, it's about how do I grow a new crop, or how do I have a new production technique or livestock management? It's rarely about business management. It's management on the farms that makes a big difference between whether they are profitable or not.
Just as an aside, I'm a member of a dairy club in this area. There are 12 farms in the club. We're all paid the same for a kilogram of solids produced, yet there's a range of $5 per kilogram in net income on those farms. We share our financial numbers. Just to put it in perspective, $5 on my farm is $150,000 a year. That's the difference in net income on those 12 farms. It's not related to size and so on; it's the management on those farms. To put it in perspective, my farm has half a million dollars in gross income and a difference of $150,000 in net income.
I mentioned atmosphere. By atmosphere I mean how we as an industry view ourselves. Together, we—farmers, industry partners, and government—need to create an atmosphere where we see the glass half full and rising, not half empty. There's truth in the idea that if we think we can do it, it's probably true, and if we think we can't do it, it's probably true.
Look at what's happening to corn prices with the ethanol production. I could look at this and say, my feed prices are going up, so I'm not going to be profitable. Or I can look at it and say, great, somebody else is going to pay part of the corn producers' cost of production, so I don't have to pay it all; now, how do I take their byproduct and put it into my farm? Is there research done so that I know how to do that?
I have two other comments. Regulation is an area where government can be involved. You need to encourage and not discourage enthusiasm in the industry. Keep the regulations quick. Opportunities are time-sensitive. Make it simple, fast, and effective to deal with regulations or to change them.
As to renewal, farming is a great lifestyle. It's easy to get excited about farming. If existing farmers start each day with enthusiasm for what they do, then the next generation will want to get into farming and keep the renewal process going.
In closing, I see government's role in a new APF as helping to generate the knowledge, helping farmers identify and overcome their knowledge gaps, and creating an atmosphere where there's enthusiasm for farming, where farming is profitable, and where there is much less risk for business risk management.
Thank you, Mr. Chairman.