Agriculture Committee on April 25th, 2007

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

Can we make a comparison, for instance, and say that 5% of farms are at a red light and 20% of them are in jeopardy? Would you say that this is a case of the Pareto law, namely the 80/20 rule?

[Denis Bilodeau]

Our data comes from Statistics Canada. We see that the net farm income in Ontario will be negative. In Quebec, it will be slightly positive due to provincial intervention, substantial as it is. This was a matter of speculation. Probably, we were not lucky in recent years. Undoubtedly, certain events had an impact on the situation. The BSE crisis had an impact. The effect of the American Farm Bill on the price of cereals had an impact, and the scars are still there. Perhaps, Canada did not react in the right way to all these events, because our farms have had to bear the impact and went down every year.

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

You spoke of flexibility regarding BSE. More flexibility in the past could have lessened the impact. I am the new financial critic for the Bloc Québécois. We have before us your table that you prepared for the March 19 budget. Regarding next year's budget, what would you like to see in it? Is money the issue, or does the issue have to do with the way in which money is allocated? If you were asked to comment on the next budget and if you found that it was good for agriculture, what would be its best point?

[Denis Bilodeau]

The sky is the limit.

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

No, let us stay within the bounds of financial reality—

[Denis Bilodeau]

That is what I mean.

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

—actually, the government is in charge of the budget.

[Denis Bilodeau]

We often hear about flexibility. In Quebec, income security programs are based on production costs. As I just said, we must make sure that we provide tools with which we can get the maximum income from the market. That will also take some work.

Earlier, we spoke of identifying products on a real basis. We must give consumers an adequate choice of products. This must not be hidden from sight. Whenever 51% of the added value comes from Canada, the product becomes a Canadian product or a Quebec product, even if there is absolutely no Canadian or Quebec content in the jar. We don't eat the jar, but the contents should be a Canadian or a Quebec product. We must work on certain things to improve our collective situation. The money will come as a result. We must be flexible in meeting the needs. We must implement programs and allocate budgets so that we can reach our objectives.

[The Chair, Conservative, James Bezan]

Mr. Van Tassel.

[William Van Tassel]

In answer to your question, I would like the next budget to allocate funds for a program that would supplement CAIS program by taking into account other kinds of problems, for instance, the impact of the Farm Bill. I think that is what we would need.

[The Chair, Conservative, James Bezan]

Thank you.

I have a few quick questions.

One thing that hasn't come up here today, which has come up in every other province we've been in, is mostly why you haven't talked about the restructuring in the hog industry in Canada. It's been of concern in just about every other province, with the closure of Maple Leaf, or the restructuring within Olymel. I just want to find out what's going to happen here in Quebec.

The other issue we haven't talked about in any great detail was biofuels and how that is being received here in Quebec. Is it positive? Is it negative? We've heard that in some places people are concerned about impact on feed prices, and in other places they think it's great.

I want to get quick comments on those two issues.

Mr. Roy.

[Pierre Roy]

In Quebec, in the pork production sector, production networks are currently being created. Some would like to establish a uniform standard for pork in every region. However, since 2005, various needs have come up, for instance, there is a demand for natural pork, or biologically-raised pork.

The federation has noted that pork marketing must answer to various needs. In my opinion, Quebec will set an example by creating new markets to meet the consumers' needs as much as possible.

[The Chair, Conservative, James Bezan]

Mr. Van Tassel.

[William Van Tassel]

I would like to comment on biofuels. People might be afraid that the price of grain will go up. I hope it does go up, to tell you the truth. It's not the price of grain. The price of corn is based on the Chicago Board of Trade, so if we have biofuels or not, the price of grain is still going to go up. How it helps the grain farmers here in Canada is that it puts up the local price a certain amount. It puts up the value here in eastern Canada. It puts the value of replacement up somewhat, let's say, compared to American corn. It's a plaster, but it won't address all the needs. It helps the grain farmer, but we can't say it will fit everything.

[The Chair, Conservative, James Bezan]

Monsieur Petit.

[Richard Petit]

With regard to biofuel, we take the following position. It would be very good to have a policy in this regard, but it must not replace agricultural policy. This distinction must be drawn. If biofuel production is aimed at decreasing greenhouse gas emissions in order to reach the Kyoto objectives, we agree that this sector should be developed. Nonetheless, this must not replace an agricultural policy.

If this results in less intervention from agricultural policy, so much the better. As Mr. Van Tassel mentioned, the increase might not materialize in the grain sector, or there could be an impact on the livestock sector. We need an agricultural policy to support the agricultural sector. Agriculture policy cannot be transformed into energy policy. We need a real and viable agricultural policy. This is our position.

[The Chair, Conservative, James Bezan]

Mr. Easter. And you promise to very—

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Chair, William made the point that maybe there is or maybe there isn't enough money, but it may be targeted wrong. After that, I added up the numbers on all the programs since 2003. The federal share of programming since 2003 to the end of 2006 in Quebec was $847 million. I might be out $3 million or $4 million. That's a whack of money, and we're still going under. That's under 14 different programs that the money was spread across. It is a lot of money, and still we're not meeting our income target, so it tells you the extent of the problem.

There is money coming out of the federal government, and there is the Quebec share on top of that, which is fairly extensive, but it is still not meeting the needs of income levels at the farm gate. Those are astronomical numbers. The farmers are still taking a hit even with those numbers. It's hard to believe.

[The Chair, Conservative, James Bezan]

There's a question there. You have a good point.

Do you want to say something, Mr. Van Tassel?

[William Van Tassel]

It was almost more a comment than a question. I agree that big amounts came out. As I was saying, it's been really targeted differently. If you look at the graph on page 10 that was handed out on the farm debt, and if you look at the part since 1994-95 when the Uruguay Round finished and the policies changed, then you will see that the farm debt in Canada went up a lot.

What we're saying is that we have to target it a certain way for it to be more effective. I agree that big amounts went out, and personally, if I could get my entire amount out from the market, I certainly would, but we don't get it right now. We have to think in the long term. We want to have farms for our children and our grandchildren, and we need agriculture in the long term.

So yes, it's a big amount, but I think we need it.

[Wayne Easter, Liberal, Malpeque, PE]

We need more.

[The Chair, Conservative, James Bezan]

I want to thank all of you—

It has to be short, because we're out of time. Monsieur Bilodeau.

[Denis Bilodeau]

We did not come here to say that the federal government is not investing in agriculture. We know that it is making interventions. We recognize and we appreciate that fact. As a matter of fact, we came to tell you that we need more flexibility. We are working in a North American environment. With regard to beef, for example, American producers benefited from a series of favourable prices over recent years. The prices reached record levels. Those people are in a very enviable economic position. Their companies have developed cash flows. On the other hand, in Canada, we were the victims in this situation.

You say that interventions are being made, and that large sums of money are involved. But the large sums of money have to fill a large gap. If we had been able to throw off the shackles of the embargo, we could have solved the problem. A cyclic rise in prices was expected in the beef industry, we missed it completely. We are still hoping that the embargo will be lifted. If it is lifted, we will end up in a cycle of low prices.

What we want is to create a positive environment that will foster agriculture. This does take some money, but we surely do not have to fill a bottomless pit. We are quite aware of the fact.

[The Chair, Conservative, James Bezan]

I agree. I'm a cow-calf producer, so I would love to see the market get better on the cattle side. It's been tough for the last few years, that's for sure.

I want to thank all of you for your presentations. They're going to help us with our report. It's been great being here in Quebec. This is an area of Quebec I haven't been to before, and I enjoyed the drive out. We're going to do a little bit of a tour this afternoon yet. We're looking forward to that.

With that, we adjourn until tomorrow morning in Ontario.