Agriculture Committee on April 25th, 2007

[The Chair, Conservative, James Bezan]

I call this meeting to order.

I want to welcome our witnesses to the table today, as we continue our study of the agricultural policy framework on our cross-Canada tour. From Agrobiopole, we Hervé Bernier; from the Quebec Federation of Maple Syrup Producers, Pierre Lemieux; from the Fédération de la relève agricole du Québec, Benoit Martin and Jean-Philippe Deschênes-Gilbert; and from the Union des producteurs agricoles de Lotbinière-Mégantic, Maurice Vigneault.

Welcome, all of you, to the table.

For opening comments, you have ten minutes per organization. We'll hold you to that, so that we will have more opportunity for discussion and questions from the members of the committee.

With that, I'll turn it over to you, Mr. Bernier.

[Hervé Bernier, Director, Agrobiopole]

Thank you very much.

This morning, I'm going to talk to you about the role of innovation in the agriculture and agri-food field.

First, I should put the agri-food industry in a regional perspective. In eastern Quebec, the agri-food sector, including agriculture, generates 8% of regional GDP, compared to 7% for all of Quebec. We're talking about 16,000 jobs in the region, 20% of total regional employment. So this is a fundamentally important sector for the region.

In a series of articles published in Le Soleil in December 2005, the following headline appeared concerning the Quebec bio-food industry: “A gold mine for major cities and regions”. The article reported an average growth rate of 3.8%, compared to 2.5% for the Quebec economy as a whole. That remarkable performance of the agri-food sector was essentially due to value-added production. That seems quite promising, but what challenges are we facing? Those challenges can be classified in three categories: the productivity of businesses in the face of globalization, preserving quality of the environment and the aging of the population.

With respect to productivity, we know that, in 2006, Canada slid down the economic competitiveness rankings to sixteenth in the world. In Quebec and even Toronto, people claim that our labour force is responsible for the lack of competitiveness. I think that explanation is simplistic. To be more competitive, businesses located elsewhere in the world invest in research and development and in renewing their technological stock. However, our businesses have been content—and here I'm speaking in general, not specific terms in the agri-food field—just to take advantage of the weak exchange rate on the Canadian dollar in producing at competitive prices and exporting.

As for the environment, farming practices are increasingly being called into question by environmentalists and citizens. There is every reason to believe that, in the coming years, the environment will remain a central concern for citizens. Our businesses must therefore adjust to this situation, which can also be a source of new opportunities.

As for the aging of the population, this phenomenon will clearly have an impact on the agri-food sector, particularly on the labour force, the transfer of farms and the size of businesses. However, it will bring new opportunities for the industry. We note that consumers are increasingly concerned about food safety, the consumption of so-called health food products and health in general, a concern that agri-food can address.

As regards innovation, it must be understood that our society is increasingly urban. More than 80% of the population lives in urban areas. Major economic thinkers tell us that we should invest in biotechnology and aerospace, as well as in the financial, software and pharmaceuticals industries, sectors which are said to generate wealth. But for whom do they generate wealth? For the major centres and the big cities like Montreal and Toronto. What's being done about the regions and agri-food?

Earlier I mentioned to you that it had been statistically proven that the agri-food industry could bring about development. Our experts and thinkers will have to consider the opportunities afforded by the multifunctionality of rural land and the bioeconomy in the context of post-industrial society's changing concerns about quality of the environment and health.

Canada and Quebec have a green advantage that can be a source of opportunities that must be seized in various industries such as specialty products, decentralized processing technologies and agri-materials such as bioplastics and biofuels, in particular.

Adequately supported by experts, rural areas are capable of innovating and producing added value by developing the bioresources in their areas in a sustainable manner. By innovating and reinventing agriculture, it will be possible to secure the future of our rural areas.

In closing, I'd like to emphasize that, in all the analyses that have been conducted, and even in the development of the first Canadian Agricultural Policy Framework, it has been proven that there is a deficiency in the chain of innovation in the area of technology transfer. We must ensure that the research and research findings get to the businesses. Collectively, Quebec and Canadian society has established research centres, centres of expertise, but, in my view, they unfortunately operate more or less in a closed circuit. I think it is high time we changed this situation. How do we go about changing it? We need to mobilize stakeholders and to create synergies with other players, like the training institutions established in the territory?

College-level agriculture and agri-food training institutions account for 80% of students considering a career in agriculture and agri-food. These people are the future, and they are able to introduce innovations and to relay the information to businesses. They are credible agents of change. We have training institutions across the territory, and those institutions, more specifically in Quebec, are not being used to their full potential. We could consider using training institutions as primary partners for technology transfer. These institutions are already working with future farmers; they are training them and they are also training future agricultural consultants, as well as farmers and consultants through continuing training. So this is an environment that is highly conducive to technology transfer, a weak area that has previously been identified and which, to my knowledge, has not been corrected as of this time.

The attempt that was made was to put agents of technology transfer in the research centres and universities. Pardon me, but it didn't work, and it won't work that way. We have to be close to the agents of change and to rely, bet on youth.

Strictly by way of example, I'm going to mention to you that, if you consider the situation in Quebec, three college-level agriculture and agri-food training institutions have 1,200 students and reach more than 5,600 individuals a year through continuing training. These are resources that are out there, that are available and that can be put to work. So instead of working in isolation, why not create synergies with institutions and organizations that already exist? In my opinion, that's what's lacking. If we want our agriculture to be competitive in the years to come, yes, we have to rely on innovation, and the way to introduce innovation is by working in networks.

Agrobiopole is a coalition of centres of expertise, training institutions and economic development agencies that want to work together to create an environment conducive to the emergence and growth of innovative businesses in the regional agri-food sector. To do that, there will also have to be policies that support this type of research.

Thank you very much.

[The Chair, Conservative, James Bezan]

Thank you very much.

Mr. Lemieux, you have 10 minutes.

[Pierre Lemieux]

I can wait till the others have finished. These people were in a hurry.

[The Chair, Conservative, James Bezan]

Mr. Martin.

[Benoit Martin, President, Fédération de la relève agricole du Québec]

Good morning everyone, and thank you for travelling here. My name is Benoit Martin, and I'm a dairy producer established 30 minutes to the east of here, near La Pocatière. Jean-Philippe Deschênes-Gilbert, who is with me, is the Secretary of the Fédération de la relève agricole du Québec.

The Fédération de la relève agricole du Québec is a coalition of young people 16 to 35 years of age that has 1,500 members in Quebec. The main mission of our organization is to improve start-up conditions and to work to provide young people who will be setting up in agriculture with better preparation. We are affiliated with the Canadian Young Farmers Forum, and we had the opportunity to meet with you in Ottawa in February.

I will briefly outline the situation regarding the transfer of farms in Canada. Canada loses 10,000 farms a year, 28 a day. At this rate, there will be less than 100,000 farms left in 15 years. Assets have enormously increased in value in the businesses. In Canada, the average farm is worth $1 million. Business profitability is currently lacking, revenue has been poor for some years now, and indebtedness has obviously very much increased. People have tried to improve their profits by expanding their businesses, but they have also gone into debt in doing so. There are currently twice as many farmers over 55 years of age as are young farmers under 35. Young people move into other industries. A lot of young Quebeckers are going to work on the tar sands in the west. I imagine the situation is the same in other provinces. If nothing is done in the regions, there will be so few businesses left that young people will no longer be able to find a place to set up in farm businesses and will instead have to move into the major centres.

The first issue that we've identified is promoting the transfer of existing farms to a new generation. There are needs related to that, including assistance and support. Young people are entering the business, but others are leaving it. So we have to guarantee some financial security for the people who are going to retire. There must be better business development planning. Human relations are also a very important factor in the context of farm transfers; this is one aspect that must be singled out.

I'll give you a specific example of what's currently going on. One producer in my village has two children who work in Quebec City and who aren't interested in taking over his business. He'd like to transfer it, but he's having trouble doing that, for financial reasons. Since the young person to whom he'd like to transfer the business isn't from the farm itself, he's having trouble transferring it to him because, among other things, he's lacking the assistance and support, resources and financial security to retire. The producer, who wanted to transfer his farm, will probably be forced to sell it. That's one specific example of what's going on in my village.

There is a second issue. We at the Fédération de la relève agricole du Québec think that we have to enable new young people who aren't necessarily from the agricultural sector to enter the business. We have to enable them to enter the agricultural occupation. There are needs in this regard. The biggest need is for capital to be able to buy a farm, because it's currently difficult to gain access to capital. Assistance and support services are also necessary. There has to be access to technical knowledge. We also have to develop a mentoring service, to make use of producers who are retiring in assisting young people who want to start up a business.

There's one specific project in the Lower St. Lawrence region, which is the neighbouring region. It's a sponsorship project, a kind of business incubator. It seems to be working well, but there is one problem: these are young people who are interested in going into this incubator. Ultimately, these are abandoned farms that could be made available to young people, with whom we could match sponsors, mentors who could supervise them. This would work, but the young people who want to start up are really short of cash and don't have access to capital to buy these businesses.

We've identified potential solutions that we would like to submit to you. First, I think we should put young farmers at the centre of the renewal component. We've talked a lot about advisory services, but you also have to make your own farmers central to Canada's agricultural policy. Currently, very few aspects of the Agricultural Policy Framework deal with young farmers. As I said, we have to open up to a new generation of young people who don't come from the agricultural sector.

I think it's young people who could be dynamic and bring another vision. Agriculture and Agri-Food Canada's working paper says so in the following words:

Facilitating the entry of new producers will have major impact on competition and the long-term sustainability of Canadian agriculture.

Ultimately, all these young people who come from elsewhere and who have seen something else could bring new energy to agriculture. In France, the emphasis has really been placed on this. The President of Jeunes agriculteurs de France told us that it is young people who achieve the greatest success in agriculture because they have experience in other areas. They really built on this and it's working.

There are a number of provincial initiatives. In Quebec, there is the Fédération de la relève agricole du Québec, but there are also coalitions in Prince Edward Island, Manitoba and Nova Scotia. A number of other provinces currently have a kind of coalition. In Quebec, that has been around for longer, but we realize that, across Canada, there are really good leaders in all Canadian provinces. So we should rely much more on the coalitions of young people across Canada.

By way of a second solution, earlier I talked about access to capital for beginning farmers. It's all well and good to rely on the skills and knowledge of young producers, but if they don't have access to capital, they won't be able to start up in agriculture. In its working paper, Agriculture and Agri-Food Canada mentions that new businesses are facing special challenges in starting up their operations, particularly as regards financing and capital investment.

In agriculture, to be able to borrow $1 million, which currently corresponds to the average value of a farm, you have to have approximately $400,000 in cash. I don't know a lot of young people who are in that situation. The only people who can have that money are those who have a very rich uncle or a parent who has sold his woodlands, for example. Very rarely can a young person secure such a sum of money. So it is virtually unrealistic to think that a young person can borrow $1 million. But that's what you have to do now in order to start out in agriculture.

In our view, there is a solution to this problem. In Quebec, we call it patient capital. I don't really know what's it called in the other provinces, but patient capital is financing on conditions that are advantageous for the young people, including, for example, interest holidays in the first years and very low repayments. Not a lot of organizations are offering that in Canada right now. We should consider setting up a fund for that purpose.

An assistance and support role should be put in place for young beginning farmers. We were thinking of a federal assistance fund. It should be left to the provinces to manage the fund based on the needs of the young farmers. The assistance I was talking about could take the form of farm banks. We should establish a bank of names of people who want to leave the business and another of names of people who are interested in entering the business, to give them the opportunity to speak to each other. Currently, the only way to find out whether there are farms for sale is to flip through the pages of La Terre de chez nous. However, we also know that some young people are interested in entering the agricultural sector. So there's probably an opportunity to do networking among these people.

In closing, if I became Quebec's Minister of Agriculture tomorrow, I'd like to receive a budget envelope so that I could support the next generation of farmers. With that money, I would do some of the things I talked about earlier: farm banks, an assistance and support service, particularly for human relations, which are very important; a patient capital fund to support young farmers; a mentoring and sponsorship network; support for organizations that bring young farmers together, such as the Fédération de la relève agricole du Québec and Canadian Young Farmers Forum; the creation of technical and economic guides and files that could help direct young people to various types of establishments. With that, I think that, within 15 years, we could really reverse the downward trend in the number of farms. I think that's a realistic objective.

[The Chair, Conservative, James Bezan]

Thank you. Mr. Vigneault.

[Maurice Vigneault, President, Union des producteurs agricoles de Lotbinière-Mégantic]

My name is Maurice Vigneault, and I'm a maple syrup producer and forester and President of the Fédération de l'UPA de Lotbinière-Mégantic. That region is located a little to the west of where we are right now.

I see that there is a lasting and worsening income crisis in Canada, one which Quebec has not escaped. Some of the indicators alarm us. Outside incomes accompany the incomes of agricultural producers, that is the incomes from spouses or part-time work. Currently, 40% of our members are part-time members. It's not that we wouldn't like them to be full time. You have to take that figure for what it is: an indication that increasing numbers of people are having trouble living solely from farming. There's an increasingly strong trend toward part-time farms, which is not wrong in itself, but it's a disturbing indicator.

The crisis is no doubt due to the global context and to the development of markets in general, which the agricultural market can't escape. Approximately 10% of agri-food products in the world are exported, but this phenomenon is resulting in a drop in overall farm incomes around the world. Quebec hasn't escaped this situation. We are in a situation where a small portion of our products has a great influence on the majority, or on a very large part of agri-food products. These are observations.

If we want Canada or Canadian producers to emerge from this situation, we absolutely have to improve the way we support agriculture in Canada. And when I say support, I'm talking about investing money. But it doesn't stop there. We have to be able to provide our producers with better assistance in coping with this new challenge if we want to maintain a dynamic agricultural sector in Canada.

I won't repeat the comments by the Fédération de la relève agricole du Québec. I think its representatives presented them very well, but I'm going to support their concern about the next generation of farmers. We have an aging farming population. It's not because we're aging faster than others; it's that young people are not going into agriculture, and the average age of farmers is quickly rising. That shouldn't make us panic, but it should make us see things as they are. It's less and less interesting for young people to go into agriculture, for all kinds of reasons, the biggest one being economic. It's not because it's hard work, because, when you're passionate, you do the work whether it's hard or not. Young people are as passionate as we are, but they can't aford to act on their passion. I won't repeat all the suggestions that have been made to you; I support them all. I want to assure you that we, as a union organization, are as concerned as the Fédération de la relève agricole about the difficulties involved in starting up in agriculture.

To meet all these challenges, we will need flexible programs that complement those in each of our provincial organizations, in each of the regions of Canada. We don't need situations where the thinkers of one government organization go against the thoughts of other government organizations. We need levels of government that cooperate in order to offer us complementary programs, not one level of government that imposes its vision on the other.

Producers have to be involved in developing those programs, through their organizations, so that those programs are well suited to our new situations, which are constantly changing. Agriculture is evolving very quickly, so we have to adjust quickly. We're the ones realizing that first.

I'm going to speed up because I only have 10 minutes. I'm discussing the themes quickly, and just giving you an outline. Some things you've been told many, many times. We're confirming them for you, repeating them and adding some points.

First, let's talk about traceability. It's very important that we be able to establish good traceability mechanisms, but all of that will ultimately lead nowhere if Canadian consumers can't correctly identify products that come from Canada or Quebec.

Recently, one of my colleagues told me that he had found olives produced in Quebec in the supermarket. By what miracle of nature have we started to produce olives in Quebec? I don't know. But if you can have doubts about the origin of those olives, imagine how it is in the case of strawberries and apples. Consumers are completely tricked. Once traceability is done, you absolutely have to make that identification possible and easy for the average person. The entire traceability system serves no purpose if consumers ultimately can't conclude, for example, that olives don't come from Quebec.

We have a society that is increasingly demanding about its products. We are entirely prepared to offer high-quality products. We're already doing it; we've established all the necessary mechanisms. We are partners in that effort; we've established traceability programs, in particular in the cattle industry. We are putting them in place for lambs and sheep, and we're going to continue along that line. All that is being done to meet society's requirements, and, to date, only producers and the government have invested a little, a lot, in those mechanisms, in starting them up. Now producers, to all intents and purposes, bear those costs alone, whereas the objective is to meet society's requirements. It is unacceptable that we should bear these costs alone, when producers in other regions of the world sell us products that are not consistent with these mechanisms and with which we have to compete.

As regards innovation and research, we need it; it's promising. We need mechanisms to support producers who engage in it. I particularly want to draw your attention to basic research. We need to develop knowledge in fields where no one will do it because there are no market opportunities. Companies will invest in research to develop new phytosanitary, service and mechanical products. But when it comes to understanding environmental phenomena, climate adjustment phenomena that are currently changing, it takes basic research, and no one except the government wants to invest in it. So the government must absolutely continue to play its role in this area because it's based on that that we'll be able to develop applied research and to get people interested in investing in it.

With regard to advisory services, we've developed good mechanisms in Quebec. We have good expertise. Things are progressing quickly. Among other things, we need to support our advisors to enable them to keep up to date on new knowledge. We can't ask producers to support all that. We can ask them to support part of it, but we'll need government investment so our agri-environmental, management and agricultural technical advisors are up to date.

In environment, we need a companion government that will help people get motivated and support the entire environmental approach. To date, every time we've assisted producers in pilot projects—we can give you some examples—people have willingly gotten involved and taken major action. Yesterday, I witnessed an effort in a small watershed, a project in which 100% of producers are involved. Probably within two years, they're going to correct 100% of their river bank and take action in the waterways, with the assistance of the federal and provincial governments. When we do it, it works; we have to repeat these experiences. We have to assist producers in this effort.

I'd like to add that environmental improvement is important for agriculture and agri-food, but it's also very important for society in general. This isn't an agricultural mission; it's a social mission. If we don't provide producers with social assistance in this effort, we won't be able to meet the challenge in a way that meets expectations solely with our own resources. Once again, I'm not just talking about money. I am talking about money, but I'm also talking about government assistance in the areas of information, knowledge transfer and understanding of phenomena.

Now let's talk about support programs.

We need support programs that will enable us to be competitive with other countries. Some of them provide major support to agriculture. They enter our markets and don't respect the moral aspect of the commitments they've made to trade liberalization. It hasn't worked, and we have no indication that things will change for the better. We are stymied by the competition, and government support should be commensurate with these problems.

As for the need to simplify the program, I'd say that no agricultural producer is now able to understand the ins and outs of the CAIS program. The accountant may say that everything's going well, that he's done the work instead of the producer and that the producer need only sign the cheque at the same time as the one to pay his fees; nevertheless no producer is able to understand this program. It's too complex. That's why it has to be simplified. It tends to encourage the separation of businesses. Some produce pork and beef, but tend to separate these types of production because the program is more profitable that way. Diversified businesses, that's our agricultural model in Quebec, but we're jeopardizing it with the CAIS program. Changes will have to be made to it in order to stop this phenomenon.

It's also unacceptable for an individual who is both an agricultural producer and an electrician to derive full income security benefits for the agricultural part and for a producer with two types of production to be affected by this situation. There's a kind of contradiction in that. Ultimately, people are being encouraged to do both agriculture and something else. Soon agriculture will become a tax shelter and a way of getting grants. People will be electricians or school teachers while also being farmers. I have nothing against those occupations, but that's not at all what we're looking for. That problem has to be corrected as well.

As for training, I think it's high time we developed new methods for providing people with agricultural training when they are young. Continuing training is fine, and I encourage it, but we have to make our procedure more flexible so that we can train people before they enter the labour market.

There's a great example of success in Quebec. You have to go look at the training school in Mirabel. The secondary and college levels are in the same building. There's no division between the two, which guarantees good continuity. I think that model should be reproduced in other places because the population pool in the rural areas of all the Quebec regions is inadequate to feed the secondary and college-level occupational training schools. We have to find a way to provide more appropriate training that is more within people's reach. Otherwise we'll be seeing an exodus. Go look at Mirabel; it's really interesting. I won't say any more.

I've gone on a bit long, and I apologize for that.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Lemieux.

[Pierre Lemieux, President, Quebec Federation of Maple Syrup Producers]

I'd like to welcome you more particularly because you're from my region. I live in the neighbouring municipality of Cap-Saint-Ignace. The town of Montmagny is my major centre. I'm a maple syrup producer. In our region, maple syrup production occupies a very important place. In my region of Montmagny—L'islet, which represents 50% of Mr. Crête's riding, we produce more maple syrup than Ontario and New Brunswick combined. So you see the importance of maple syrup production for the region.

As a maple syrup producer and representing producers—I'm President of the Quebec Federation of Maple Syrup Producers—I must tell you that I'm very pleased to be able to address the representatives of all the political parties today. This is the first time I've had the opportunity to speak to all these people at the same time. Very often, we meet one on one with the people from the parties and we tell them a bit of our story. But this is the first time I'll be able to tell it to everybody at the same time, and I'm very pleased about that. Thank you for your attention.

The Quebec Federation of Maple Syrup Producers represents 7,300 Quebec maple syrup producers. We produce 90% of Canadian maple syrup. The turnover of Quebec's maple syrup producers is approximately $175 million. You often hear that maple syrup is a recreational type of production. We like to talk about it and eat it, but we're never inclined to think about it as a type of agricultural production involving risk, like all other types of agricultural production. I can tell you that maple syrup producers have now reached an industrial level and that their businesses are comparable with those in other sectors of production. Producers would like Canadian agricultural policies to recognize that there are risks, relating to income, climate conditions, disasters caused by winds or bad weather. We as producers would like those tools to be accessible to us as well.

I'm going to tell you about more specific issues. We can earn income in two ways in the farming sectors. We can earn it in the market, with provincial regulations that may be accessible as a result of existing federal regulations. In the maple syrup sector, we earn our income in the market under the Quebec Act respecting the marketing of agricultural, food and fish products. That act stems from acts and regulations at the federal level allowing offices to regulate at the provincial level. As it concerns us, it's very important that it be preserved. It should even be reinforced.

In a globalization context, producers are left to their own devices, and there has been a concentration of capital. Yes, there is a concentration of producers, but the capital concentration is much greater than the producer concentration. Even if we think we are better armed and better equipped to sell our product, I can tell you that, when we're left to our own devices, without regulations enabling us to structure and giving us collective tools, we're in even greater difficulty than before globalization. I ask you not to weaken the regulations, but rather to reinforce them in order to give producers the means to organize and regroup so that they can seek the best possible prices in the market.

I'm not necessarily asking you for money. I'm asking you for tools, resources to enable us to make money. I find it inconceivable that maple syrup producers should be forced to resort to programs like stabilization insurance and so on. Our product is unique. If we want to be able to put it on the market, we have to have tools in order to organize.

I would also like to talk to you about the product's safety and wholesomeness. In the maple syrup sector in Quebec, we as producers have established our own tools to control our product. All our maple syrup is classified and inspected before being sold to processors. We observe that some processors import maple syrup from the United States, from Maine and Vermont among others. No quality control is conducted on these products. We find it deplorable that that maple syrup can enter Canada without undergoing the quality controls that we have set for ourselves. When the time comes to export it, we'd like federal regulations to see to product traceability and impose certain requirements for that purpose on all people who export.

The regulations currently leave that open. People can request inspection certificates from the Canadian Food Inspection Agency, but they do it on a voluntary basis. If they don't request it, they can export the product like that, without having subjected it to CFIA's quality controls. In the licences, businesses are asked to be responsible. Given that one or two visits are conducted a year—sometimes none—we feel there is too much flexibility in the exporting of maple syrup. We'd like there to be stricter control of businesses that export maple syrup. All the acts and regulations that we have passed must be implemented, and all producers must support them. There shouldn't be just one small group supporting the system to the detriment of all others.

Now I'd like to talk about renewal. In the context of the Agricultural Policy Framework, we've been a bit spoiled. We have benefited from certain Agriculture Canada research programs. We'd like that to continue in the future.

With respect to research, we ask that new money be allocated to it. A little more should even be allocated. On the other hand, we wouldn't want that money to be taken from the income security mechanisms. It has to be a new monetary contribution. In our opinion, the future depends on research and innovation. We don't want that to be done to the detriment of other sectors such as income security.

The same is true for market development. The Federation of Maple Syrup Producers is very satisfied with the latest Agricultural Policy Framework. Agriculture Canada recognized that we were the organization administering the SPCA program. We can go after the money available at Agriculture Canada in order to conduct generic promotion of maple products outside Canada. That's been very beneficial for us in recent years. We'd like that to continue.

I'm going to talk a little more specifically about the income security programs. Agricultural producers are of the view that there must be a lot of flexibility in income security program administration. In the maple syrup industry, we've introduced an inventory management mechanism. In Quebec, we manage a maple syrup bank in order to offset weather conditions. That bank contained as much as 60 million pounds two years ago. Today it contains 37 million. Next spring, at the start of the harvest, it will probably contain 20 to 22 million.

In the future, however, we would like to have an additional partner to support that reserve. The only ones currently supporting this strategic reserve are the producers and Financière agricole, in other words the Government of Quebec. When you manage a strategic maple syrup reserve, that's the equivalent of income security mechanisms for the producers of Ontario, New Brunswick and Nova Scotia. They can produce maple syrup. They live in regions where they often produce before we do. I'm thinking of Nova Scotia and Ontario in particular. So they can sell all their production before we do. New Brunswick's production is similar to that of Quebec in terms of the sap flow. However, it's not necessarily a province with a high export volume. Since the producers haven't organized a marketing board, they sell their maple syrup to processors, who buy it before buying syrup from Quebec. Quebec's maple syrup bank is the organization that manages the income security mechanism for all Canadian producers. Consequently, the CAIS program will virtually stop intervening in the maple syrup sector.

If managing a good maple syrup bank with stable prices produces good results for all Canadian producers, why wouldn't the federal government invest with us to support this reserve so that Quebec producers always have an interest in managing the inventory in the most economic way possible so that there is stability in the maple syrup sector?

What we'll need to supplement our income mechanism is a process to manage weather conditions. Ultimately, it would suffice to develop a form of harvest insurance that would be accessible in order to offset weather conditions, versus small or large harvests, in terms of production.

The other element we need in the maple syrup sector is a disaster program. When wind storms occur and trees are uprooted, sometimes all our equipment is in place. If we no longer have any woodland in order to produce, that's a net loss. Producers no longer have any income for a number of years because it takes at least 40 years for our trees to be able to produce. So we have to wait 40 years before we have another tree that can produce the same yield. So maple syrup producers absolutely need a disaster program. Moreover, as a result of the high winds that occurred this summer, some Quebec producers lost a large part of their maple stands and are still waiting for programs. They haven't received any assistance.

Early in the winter, in the first days of December, there was an ice storm between Ontario and Quebec. Producers suffered quite significant damage to their sugarbush, even more significant, I would say than in the big ice storm in 1998. They're still waiting for programs; they haven't received any assistance. We think these are unacceptable situations. In the maple syrup industry, we can no longer live this way, in view of the investments we have made.

For example, for a sugarbush of 10,000 taps, it takes an investment of about $500,000 to $600,000 to purchase the woodlot and equipment, in order to be in production. We've reached levels comparable to those of all other types of production.

I've done a brief overview of everything I had to ask you as the federation's representative. As I said earlier, I hope that talking to the members of the three parties at the same time, to all our representatives in Canada, we'll expedite the maple syrup industry file, mainly as regards border controls and the need for income security programs such as those that have been put in place, in order to meet the needs of Canada's maple syrup producers.

Thank you.

[The Chair, Conservative, James Bezan]

Thank you very much.

Mr. Steckle, you're on first, five minutes, please.

[Paul Steckle, Liberal, Huron—Bruce, ON]

Thank you, gentlemen, for appearing this morning, and we look forward to our time today in the province.

To our friend in the maple syrup business, I am also a farmer, and I come from an area where we produce maple syrup, but in smaller quantities.

The recurring issue that has come up from time to time as we have travelled across the country is this whole issue of over-regulation in Canada and under-regulation of product coming into Canada.

I want you to know we've taken note of what you said this morning in terms of product coming into Canada, and how it comes under less scrutiny than our own product we produce here. That's something we need to look at very seriously for the benefit of young farmers. What we need to see is some sort of an emerging theme in how we look forward in terms of our programming to ensure there is a generation of farmers to replace us.

Those of us who live in other provinces—and I live in the province of Ontario—look at Quebec as probably having a premier program in the ASRA program. I'm going to put this to you, Mr. Martin, in terms of the ASRA program and you as a young farmer. If those continuing programs similar to that program were to be there, would that give you enough incentive to want to go on?

I want to go on to ask you to respond to the issue, because you talked about mentoring. I've seen a program proposal that would see young farmers being able to access ownership of an operation, or perhaps a father would deem his million-dollar operation to be something he wants to pass on to his son, but there's a taxable issue. The son would take it over, the father would hold the mortgage for 20 years, he would pay off the mortgage over 20 years at $50,000 a year—and we're using numbers here as an example.

If we could have tax laws accommodate that, would that type of program be something that would be interesting to young farmers because the father could continue in a mentoring role? It could be anyone else for that mattter, but in this case it could be a father or a friend. I'm wondering if that type of program would be something, and if it were a tax measure, then perhaps this committee needs to look at how we address this issue with the government in terms of changing tax laws to accommodate that. How do you feel about that?

[Benoit Martin]

You talked about FISI, which, unless I'm mistaken, is only in Quebec. It gives Quebec agricultural producers some security and a certain amount of credibility with their creditors. When you go to the bank and you have a production protected by FISI, you run much less of a risk, in the case of bad weather, for example, than other producers in Canada. That's a definite advantage for us.

You also talked about mentoring. Transfers from father to son are often pleasant. In my case, for example, the transfer is being done gradually. So I'm acquiring a lot of knowledge from my father about the herd and fields, and it's very interesting. However, in the case of a transfer from one person who isn't related to the owner of the business, that can be done more suddenly. A beginning farmer often has less access to mentoring services from the seller.

You raised the taxation option as a way of spreading out the transfer. In Quebec, we think that tax measures are an option that should be given priority because, currently in Canada and Quebec, if a producer wants to retire, regardless of whether the business is dismantled, sold to a neighbour or to a young person entering the business, the tax rate remains the same. The person transferring his business to a young person will transfer it at half or one-third of the price obtained by the person who sells it, but it is taxed in the same manner. So we think that something should be done in this regard to lighten the tax burden for those making the effort to transfer their business. We think it is inconceivable for a person dismantling or transferring his business to be on the same footing from a tax standpoint. Something should be done on this matter, which would permit the entry of young people who have not necessarily come from the agricultural world and who are, for example, the nephew of a producer. It could also be a producer's son, but who has not had the chance to take over the business because there were other children in the business. That often happens. That young person might take over another business. By favouring these young people through the tax system, we could really help them take over existing businesses that operate well. It's easier to take over an existing business than to restart a business that has stopped for four or five years. Taking over a business where the herd is already performing well and the equipment operates well is something that's relatively easily done. So we think that taxation would be one option to favour.

[The Chair, Conservative, James Bezan]

Thank you, Paul. Your time has expired.

Mr. Crête, you have five minutes, please.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chairman. Thanks to the committee for choosing to come to Montmagny, and thanks to the people of this great region for responding so well.

I think you're providing interesting pictures of the situation. We are in a region where agriculture has always been very important. We've acquired tools in the past, and we still have them today.

Imagine a youth who leaves the ITA in La Pocatière, which is the local agricultural school, and who works in agriculture for 20 years until the age of roughly 40. You talked about a number of measures earlier. I'd like each of you to give me a measure that you think provides for a significant change that should be made, such as promoting processing. We have excellent producers. Perhaps we should become producers and increasingly go into the market at the same time. I'd like each of you to tell me the main measure you would like the federal government to put on the table, within the vision of the work you're doing right now, so that we have conditions that contribute to ensuring that agriculture in the region is still healthy in 20 years.

[Pierre Lemieux]

First, I think we absolutely have to maintain the opportunity for producers to organize and market their products jointly. I think that's been a badge of success in the past and will remain so in the future, if we want to do business as producers. We can't ask producers to be simultaneously workers, agricultural operators, business people and people who are concerned with selling and processing their products from start to finish. I think there are value chains for production and processing, and everyone has a right to work at that level. As regards production, the need for tools to organize common marketing in a globalization context is even more important.

The second essential element is the control of products that enter Canada. They have to be of equal quality. We require of ourselves that we meet specific production conditions. If we don't have the same requirements for other countries and we allow their agricultural products to enter Canada, how will we be competitive?

I think those are the two essential elements that we'll need.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Does anyone want to add anything?

[Maurice Vigneault]

I don't like giving a single answer, but if you're requiring me to do it—

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Control your answer.

[Maurice Vigneault]

I would tell you that, if I absolutely have to give a single answer, I would choose the most urgent measure. Quebec has an excellent income stabilization program, FISI, which we talked about earlier. It must be clearly understood that this is an income stabilization program. So its mission, its role is to intervene in the case of upward and downward market changes in the cost of production.

We're currently competing with income support programs elsewhere in the world. So to supplement an income stabilization program, we would first have to have a program in addition to that one, which does not interfere with it, which is an income support program, because that's what we're competing with. Either we set ourselves rules for controlling imported products that are shamelessly subsidized elsewhere, or else we decide to introduce income support measures like there are elsewhere. It's one or the other, but that's the most urgent issue.

However, with this program alone, agriculture won't make it. We need a lot of other measures that, once again, are not necessarily amounts of money, but rather ways of doing things and the opportunity for producers to acquire the means to make maximum income in the market, as Mr. Lemieux mentioned. This program alone—

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Wrap it up.

[Maurice Vigneault]

This program alone will not be enough.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

You have one minute left, I believe.

[Le président, Conservative, James Bezan]

Mr. Bernier.

[Hervé Bernier]

I would have tended to answer that, in the globalization context, the products that enter Canada, as was mentioned, are not subject to the same rules as those of the domestic market. In my view, that's not a trend that will be reversed, but rather than will accelerate. So we'll have to rely more on the processing of our products and on specialty products in order to be in specific value chains that guarantee us access to markets where there is added value.