Thank you very much. It's always nice to have the first say, but one's always apprehensive about what others might have to say behind you. Good morning.
Thank you, on behalf of the Agricultural Alliance of New Brunswick, for taking the time to come to our beautiful province and all the provinces across Canada to hear the concerns of our industry. I would also like to thank you for inviting our association to participate today.
By way of introduction, the Agricultural Alliance of New Brunswick is a relatively new organization. We have yet to celebrate our first anniversary. However, we are the product of the amalgamation of two former federations of agriculture, each of which previously represented one of the two official languages of New Brunswick—French and English. We now share the knowledge, history, resources, and leadership of two well established organizations with very dedicated memberships. However, we now speak with one voice and share common goals in providing New Brunswick's producers with proper representation.
Personally, I own and operate Erin View Farms Ltd. I'm primarily a potato producer from Johnville, New Brunswick, in the upper Saint John River Valley. I was the former president of the Agriculture Producers Association of New Brunswick until the amalgamation of the two associations last July. I chaired the coordination committee that helped being the two federations together. By way of qualification, I am not a stranger to the issues of producers in the province but certainly don't consider myself an expert on solutions that will bring agriculture from the crisis we are in right now in Canada.
Of course our hope and dream as producers and as an association that represents producers is that we would be part of a very successful, dynamic, and vibrant industry where all stakeholders, especially producers, would have the opportunity to succeed, be profitable, and continue to be world leaders in delivering to Canadians and the world a safe and environmentally friendly source of food. At the same time, we want to continue to be major contributors to the Canadian economy and the rural communities we live in.
To do that, however, we need to provide primary producers with the policy environment and tools to enable them to achieve sustainable net incomes. It is our hope that a second generation agricultural policy framework will build on and improve some of the initiatives undertaken under APF 1 and make some major advances towards some long-term solutions for producers, providing them with some of the tools and policy environment that is so desperately needed in our industry right now.
A major component of any strategy has to include a risk management pillar. As producers, we can do the very best job at home on the farm but be significantly and negatively impacted by factors beyond our control. We are in a very risky business. We need all the very best tools available to enable us to manage that risk. Because of the diversity of our sector, both here at home in New Brunswick and throughout the rest of Canada, risk management must include a suite of tools from which producers can choose to tailor a proper program that best manages the risk of their own operation. The CAIS program has worked very well for a lot of producers, but it doesn't cover everyone all the time and does little to address declining margins.
Many operations have diversified in order to spread out the risk, and CAIS fails in many cases to provide the coverage needed on these operations. We would propose that declining margins, a problem within CAIS, could be somewhat addressed by allowing payments received under CAIS, meant to restore production margins to a 92% level, as eligible income. Including these payments as eligible income in those years when shortfalls occur would help to mitigate some of the issues around declining margins.
We support a top-tier NISA-like approach within CAIS, as proposed by the Canadian Federation of Agriculture under its Canadian farm bill. This would add some predictability and some bankability to the program as well as provide producers with some ownership of that program.
We also feel that affordable production insurance should be made available to all commodities as a supplemental tool to CAIS in managing producers' risk.
We also feel that major disasters that occur, like BSE and the avian flu, for example, are almost impossible to manage and compensate for under current risk management programs. So we would support the establishment of a catastrophe fund to deal with specific critical situations that occur.
It also should be recognized that supply management and its pillars should be maintained, supported, and recognized as an integral part of a business risk management program. As with all pillars of the APF, we would support regional flexibility. Canadian agriculture is a very diverse sector, and Canada is a very big country. Regions need flexibility to tailor programs and provide companion programs that allow for the very best and most efficient delivery of support in their region.
Another concept discussed around our board table is a business risk management self-assessment program, similar to the environmental farm plan, where on your farm you would be able to self-assess the risks that are present on your farm and what you could do to mitigate some of those risks, and make some of the funding that is available under current business risk management programming available to help mitigate the risks on your farm.
At this point, we feel it is very important to recognize that we cannot associate business risk management or any of its programming with providing sustainable profitability for the sector, as primary producers. If we are depending on business risk management programming to return profitability to the sector, then as primary producers we are definitely headed down a dead-end street. We as producers are certainly not very proud of the fact that $8 or $9 of every $10 spent under APF 1 was used for business risk management. If we could turn the tables so that $6 or $7 or $8 of those dollars were spent on strategic growth, innovation, science, market-driven research, food safety, and environmental stewardship, and rely on extracting a consistent profit margin from the marketplace, where it should come from, we could well be on the road to recovery and succeed in reaching our goals.
We feel that in order for this to happen, we must have the right policy environment, regulations conducive to growth within the sector, and a realignment of trade-distorting barriers. Proper industry consultation would, and should, be used to help Agriculture and Agri-Food Canada develop a long-term vision for this sector. After all, we are the ones with everything invested, and in some cases I mean everything invested. We are the ones with the most at stake and the most to lose. By definition, we are a major stakeholder, and we are the part of the value chain with the least amount of say, the least amount of control, and suffering the most right now. Renewal for our industry is at a critical stage.
A new direction for agriculture that will allow us to grow and prosper must be able to return to the primary producer some level of sustainable profitability. Agriculture is the number one sector in several provinces, and very important to many others. It certainly is an important sector to the economy of New Brunswick. Agriculture is a major contributor to both the gross domestic product and the trade surplus of the nation. The sector is way too important to Canada and Canadians to ignore. This country was built around agriculture production. Agriculture is the lifeblood that flows through rural Canada.
Any new agricultural policy framework must only be part of, and complementary to, a longer-term strategic plan and a very clear vision, with goals and roles well defined, and some level of accountability. Without that, agriculture may not recover from the crisis that we're in right now.
I'd like to thank the committee for inviting our association here this morning and for indulging me in my own twist on what should happen.