Agriculture Committee on April 25th, 2007

[The Chair, Conservative, James Bezan]

Thank you, Mr. Atamanenko. Your time has expired.

Mr. Hubbard is next.

[Charles Hubbard, Liberal, Miramichi, NB]

Thank you, Mr. Chair.

We've had a lot of terminology. I think a general consensus is that governments could all become involved in terms of disaster research, training, infrastructure, environment, and taxation. I was also interested in the concept of collective bargaining—or collective marketing, as you call it here.

In talking about the report we will write, William, you used the phrase, “make sure our needs are met”. I think if we write that, some level of government is going to ask what it will cost to meet those needs, just of your sector. Theoretically, we put a lot of federal money into agriculture; at least, that's what the ministers always tell us. It's probably never enough in terms of what our constituents say, but in terms of the phrase you used in your presentation, what would it cost some level of government to meet the needs of your sector, those 40,000-some growers in Ontario and Quebec?

[William Van Tassel]

For Ontario and Quebec, we could put out figures, but I'll go for all of Canada, where it would be a national program with provincial flexibility.

There was a study done around 1999 by Agriculture Canada, giving the costs to Canadian grain farmers caused by foreign subsidies, the Farm Bill and also Europe. In those days they were talking about $1.2 billion, if I remember right. That's the last Farm Bill. The Farm Bill from 2002 aggravated the hurt. So probably we're calculating $1.5 billion or $1.6 billion for the hurt caused by foreign subsidies.

[Charles Hubbard, Liberal, Miramichi, NB]

In terms of what the federal government put in over the last few years, certainly it's much more than that, yet your sector—I'm not trying to pick you out in particular, but you did use that phrase. Do you think you got that much, $1.2 billion, out of these programs?

[William Van Tassel]

It's because a lot of money went out but it was not well targeted. That is the problem. When it's not targeted, it goes out all over the country into eligible net sales. The ones that are touched most, their net sales are down lower, so they get less. So really the ones who have the most hurt, when you work by eligible net sales, get the least. So really the hurt hasn't been addressed. That's why we're still here. But I agree there's a big amount that comes out every year.

[Charles Hubbard, Liberal, Miramichi, NB]

You think the programs really are not going to where they should go.

Should size be a factor in terms of how much money an individual farm gets?

Denis.

[Denis Bilodeau]

Yes. This involves large sums of money, and there is a staggering number of needs that must be met.

There has been an influx of money for the Agriculture Policy Framework in Quebec over the past years. If I am not mistaken, it amounts to more than $200 million. Nonetheless, there is something worrisome about this situation. I mentioned it earlier. We soon realized that we were losing farming operations, as they were going bankrupt and in the red.

Indeed, there was an influx of money in certain places. However, some places probably did not need so much. In Quebec, there is a saying that we should not undress Peter in order to dress Paul. We do not want to end up in such a situation. When we have money and if we want to intervene and ensure the maintenance of farms, we must make sure that the economic climate is favourable to them so that they can at least be viable. There are specific cases in which the government must intervene.

The issue of collective marketing is also one of our priority objectives. I am an agricultural producer who primarily expects to sell the products of his farm and get the best possible revenue from the market. I want consumers to pay for the real value of my products. We expect interventions to fill the gap between the cost of production and the market price. The collective marketing approach developed in Quebec helps us to reach these objectives, to the satisfaction of producers.

In some presentations, I saw diagrams showing a very elaborate kind of government intervention. The missing part has to do with the net income from the market. We must not abdicate, we must still do our best to get revenue from the market. Thus, the Canadian government must work on programs to support the economics of farm businesses.

This is being done in the United States. The American government constantly works on this basis. It succeeds in creating a favourable economic climate for agricultural enterprises and this enables them to make a profit. They can develop at various levels in a favourable and positive environment.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Hubbard.

Mr. Miller.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thanks, Mr. Chairman.

Gentlemen, thank you very much for being here today.

Bill, it's the first time I've seen you away from Ottawa. It's good to be here.

I haven't heard much discussed today about farm credit. This relates, Mr. Petit, back to your comments about keeping young people on the farm. We did have a good presentation from some young people this morning. I presume there's Farm Credit Corporation this year in Quebec, the same as it is—What is its role? How could it be improved to maybe help agriculture in general, but specifically the young people? Is there anything we could do there that it might improve?

[The Chair, Conservative, James Bezan]

Mr. Petit.

Or Mr. Bilodeau, whoever wants to answer.

[Richard Petit]

In Quebec, we have Farm Credit Canada, as well as La Financière agricole du Québec. They had implemented several programs to help transferring farms to the new generation.

We must strive for a more integrated strategy. Funding can be of some help. However, the transfer should not only be based on debts assumed by the young generation. Of course, they must contract debts to set up their farms, but at the same time, we need a more integrated strategy. Such a strategy would offer tax breaks to those who transfer their farms. Thus, they would not have to be dismantled.

We must have a strategy for this. We must facilitate the transfer of farms from generation to generation, and this does not necessarily have to be a transfer from parents to children—

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Okay. Yes. We've heard them, and I agree with that. I think there are things that we could do—

[The Chair, Conservative, James Bezan]

William wants to have a word.

[William Van Tassel]

It's a lot less mileage, to start with, to come to the meeting here, so thank you for having it in Quebec.

One thing I would like to talk about is this. When you talk about farm transfers and Farm Credit Canada, really the biggest problem for farm transfers is that we don't have a climate for profitability on the farms. If we had a place where the farms were very profitable, it would certainly be much easier having a transfer. I think that's the biggest problem we have to work on.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Yes. That's a good point.

Bill, the next one was for you anyway. You talked about flexibility from region to region, and this isn't the first place we've heard this. We've heard about flexibility right from the east coast this way, and I don't have a problem with that. In fact, I'm starting to be convinced that we need to be a little more flexible, because we're a big country and things are different.

At the same time, a government won't want to and certainly can't treat one area better than another or treat one worse than another, and that's where the problem evolves. I guess it's going to take somebody smarter than me to design a program that will work that out. You'd have to agree with me that there are certainly some complications there.

About suggestions on how we can make that regionalized and at the same time keep it fair, treating everybody the same and that kind of thing, is there anything you can add to that?

[William Van Tassel]

About flexibility, probably you'll hear it again tomorrow in Ontario, but what we're asking for is a national program, and certainly there would have to be federal guidelines. We're not asking more for one region than for another; we're just asking where the herd is, so it's addressed.

I'm not an expert. I wouldn't be able to put up a program either. But there could be national guidelines in order to see how it would be worked out for each region and province.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Okay.

One thing we've heard about here is the environment. And farmers in Ontario, I know, and I think here in Quebec and probably in most provinces, are being made to do things to protect the environment and protect the water. That's good, and I agree with that. But it's for the public good; it isn't just for the people who live on that chunk of land. So would everyone pretty well agree that society as a whole should be sharing in that cost because we all benefit from it?

[William Van Tassel]

Yes.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

For once, we get everybody agreeing on something.

[Voices]

Oh, oh!

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

That's good.

[The Chair, Conservative, James Bezan]

Thank you.

Monsieur Crête.

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

You showed us a table comparing agricultural debt in the United States and in Canada. This table almost seems like an alarm. Am I excessively alarmed?

In my riding, for the last six months or even the last year, farmers have been coming to me to speak of real concrete problems.

According to what you are saying, is it urgent to take immediate practical measures? If interest rates were to rise by 2 or 3% tomorrow, would it be disastrous? I would like to hear what you have to say about this.

[Denis Bilodeau]

This is certainly urgent, not only for the export markets where we face competition, but also with regard to domestic production. The level of debt contracted over the past years will still be with us for several more years. You can see this for yourself because you come from a rural riding. There is no improvement in the environment. The situation of agriculture in Canada and Quebec is the same. Currently, we are hearing from producers and fellow citizens in other provinces that their situation is equally catastrophic. Clearly, we must remedy the situation.

On the other hand, we see that interventions in other countries are sometimes better targeted, more profitable and allow producers to stay in business. Twenty years ago, farm debt was at the same level in the United States and in Canada. Things have changed since then.

[Richard Petit]

Currently, the cost of interest for farms, in terms of the percentage of expenses, is about the same as when the interest rates were around 8 to 12%. Normally, they should only be half that much, but because of the increase in debt, the amount of money paid for interest has remained the same. If the rates go up 50%, there is 50% more to pay. Thus, the burden of interest will increase in a situation that is already difficult.