Good afternoon. Thank you very much for the opportunity to appear before the Commons Standing Committee on Agriculture and Agri-Food.
I think I'm more of a free spirit, but because this is for the public record, I will keep my comments fairly close to my prepared text. It is of no surprise to you. I think you're well versed in the reality that OFA has 38,000 members and 36 different commodity members and is Canada's largest farm organization. Our policy positions are adopted by these members through our network of 101 elected regional directors.
Agriculture is one of the key economic sectors in Ontario. The agrifood industry, including farmers, processors, wholesalers, and retailers, provided 727,000 jobs in Ontario in 2005, which translates to 11% of Ontario's employment, with net farm sales in 2005 of $8.55 billion.
I think we need to be upfront about where we want the next generation of APF policy to take us. I believe this policy should not only expand the economic size of the industry, but also improve profitability at the farm level. An agriculture industry based on an unprofitable primary farm sector is unsustainable. Increasing farm income is a priority for us.
Business risk management tools are only one of the vehicles to increase farm incomes. Other tools include programs to compensate farmers for these new ecological goods, environmental goods, and services that we provide; and initiatives for better positioning of agricultural products to get more consumer dollars for truly Canadian products.
Let me start, however, with business risk management. Last week our board adopted the position that OFA would request that the federal government distribute the $400 million that was announced in the federal budget based on a three-year average of producers' eligible net sales from 2003, 2004, and 2005. While we understand that other distribution methodologies can be developed, the ENS calculation is the quickest. Priority must be given to getting this money that is on the table into producers' hands prior to June 1, which is when many supplier accounts become due.
The Canadian Federation of Agriculture and OFA strongly support federal funding to provinces to support regional companion programs. Federal funding for such programs would equalize the abilities of provinces to tailor-make safety net programming to their own regional economies. While there are many problems across Canada, the best solutions to address those problems will be different in various provinces.
One critical companion program needed in Ontario currently is a federal-provincial program to buy out our tobacco growers, including a commitment to help stabilize local economies affected by the collapse of this sector.
My colleagues today are going to identify other companion programs that are critical to the success of Ontario agriculture.
The other reality is that we must always have an eye on our international competitors. Other jurisdictions like the EU and the U.S. are shifting their spending from production subsidies to conservation and environmental programs. As they do this, they will be negotiating vociferously at the WTO for a cut to production subsidies, but make no mistake about it--their treasuries and their governments are committed to ensuring that farmers have the tools they need to be successful, and we will merely see a transfer of commitment from production subsidies to payments for what we're calling environmental goods or ecological goods and services.
Farmers provide benefits to the greater public such as food safety, environmental stewardship initiatives, and the preservation of the rural landscapes. Many of these benefits are currently positive externalities that we don't receive any compensation for; however, we get the full benefit of the costs associated with providing them. This inequity needs to be addressed by developing programs and market mechanisms to allow farmers to be compensated for public goods and services that they provide to societies, such as clean water, wildlife habitat, carbon sequestration, etc.
Something that was overlooked, but that was committed to in the first APF, was the whole initiative of branding. Farmers can be compensated not only for the quality and quantity of food they produce, but also for how that food was produced. However, branding Canadian products cannot be done without better food labelling requirements. For instance, Canadian consumers deserve to know where the cucumbers in their jar of pickles were grown. I think you've heard from many stakeholders at this point that as soon as 51% of the value of a product has been accrued in Canada, either through reprocessing or repackaging or transportation or retailing, our legislation allows it to be stamped as a product of Canada. That is clearly misleading the consumers.
Canadians also deserve to have the right to have imported products produced under the same safe practices and regulatory standards as domestic products are produced.
OFA members raised these points in the next-generation APF consultations, which have already taken place. There is an expectation that consultation findings will be reported back to participants. OFA has recommended to Minister Strahl that AAFC write a final consultation report for these new framework consultations detailing how the draft framework was changed to incorporate the recommendations from the consultations. For recommendations that are not acted on, the report should outline how they were considered by federal, provincial, and territorial government and explain why they were not implemented.
The other concern we have moving forward is that we may not meet the March 31, 2008, goal for the second generation of APF. There needs to be some thought given to contingency planning to maybe tide us over for an extra year, so that we don't lose continuity in farm programs, especially programs in the environmental arena—programs like the environmental farm plan— which were quick to be accepted in Ontario, yet slow to be implemented in other parts of the country.
Another important element we would like to see continued in the second round of the APF comes from what we learned in the first one—and this is no surprise to anyone—that third party program delivery is the most cost-effective mechanism available to deliver government programming, as it puts the most money into a producer's pocket at the end of the day, so you get the most value for that investment.
I'll cut this off here and, again, thank you very much for the opportunity to raise these issues with the committee. I look forward to your questions later.