Thank you, Mr. Chair. I appreciate the opportunity to have the floor and I thank you for that chance.
I want to talk a little bit about this. I think once again Mr. Easter has gone over the line that he likes to cross to try to get a reaction.
I made it clear on Thursday that I thought that if Mr. Atamanenko was going to bring the motion forward and it was going to be appropriate, he should bring it forward in his name, call for the investigation, and take the third party out of that. He has done that. We're not going to support the motion, but I actually think the motion is written in a form that the committee can consider and vote on. Of course we've got a situation now in which someone has taken it to the nth degree and to a point where it's basically ridiculous. Probably the result will be that the Auditor General may say it is just not worth trying to cast this net, because it's gotten so broad and so wide that there's no point in even getting involved in this.
What's also important is that I brought up the consideration earlier of talking about what the provinces are doing and what their involvement is and what the Canadian Wheat Board's involvement is, because I think that if we're going to do an investigation, as Larry said, we need to take a look at what each of the players has done in this barley plebiscite. Actually, the committee has the authority to do some of that stuff themselves. If we were to choose to go looking for those kinds of answers, we can do that. Wayne actually challenged me and the minister to do it, and I think the truth is that we can do it. I don't know how much of that information can be considered confidential, but the reality is that it's important that the committee begin to do that as well.
The Canadian Wheat Board certainly has a vested interest in this. A number of the directors in particular have been very clear that they have an interest in what's going on here. I had a chance to attend a Liberal function in Saskatoon a couple of months ago and saw a number of the directors standing on the stage with Mr. Easter and the Liberal leader. I had to wonder what the political connection was, because they'd made a decision that they were going to take part in a particular political situation. At that level we need to talk about whether we should be investigating that Wheat Board's conduct and possible spending in the period of the plebiscite.
There's good reason for doing this, because we have a long history of the Wheat Board's being involved politically. I don't know if you're familiar with that, but it goes back to the fact that there were times when they were actually buying tickets to Liberal fundraisers in Winnipeg. They did that; they bought them, and I think they later were reimbursed, because they decided it was politically wrong for them to be doing that.
Certainly after the 2004 election, when Mr. Alcock was made minister, it was only a short time later that the Canadian Wheat Board made the decision that they were going to hire his campaign manager to do their government relations for them. They did that, and clearly they had an interest in being involved politically.
They made a number of other decisions that were political as well. They hired David Hurley to do polling for them. He's done polling for them over a number of years. He was the Liberal federal campaign manager working with Paul Martin, and he's working with the Canadian Wheat Board. There's a long history, and there's a reason we would certainly want to take a look at the Canadian Wheat Board's role in the plebiscite over the last few months.
I think it's also important that we take a look at what the two provincial governments on the Prairies are doing, if we can possibly find out what they've been up to. They were using Saskatchewan egg and food facilities for meetings and for sending information, so clearly the forces that did not want change in the Canadian Wheat Board had access and opportunity to use Government of Saskatchewan resources as well. When we challenged them on that, they said they hadn't done it and then later admitted that actually they had, but said they had only supplied the room. Somehow the fax machine, I think, or one of the computers was involved as well.
Clearly the Saskatchewan government has been interested in this issue, and it would be very interesting for us to find out what role they've played over the last year as well.
Even more than that, the Manitoba government and in particular the agriculture minister have been very clear on their position on this file and the fact that they would like to make sure no changes take place to the Canadian Wheat Board and the marketing system, in spite of what western Canadian farmers want.
Once again I would remind people, as I did the other day, that 68% of the farmers in western Canada had chosen in the plebiscite to support choice, and that those results were entirely consistent with the annual report we had from last year--which I have a copy of here--in terms of the choice farmers wanted for barley and for wheat.
I think we can certainly make an argument that we need to take a look at what the governments have done, and I would also argue that it would be interesting to know what they're going to do. Farmers have made a decision that they want change on August 1. We're going to bring that change about, I hope. It's clear now.
Mr. Easter, we heard today in question period that the Canadian Wheat Board forces are lining up with the big multinational companies and they're going to try to stop farmers from getting an improved return from the marketplace in the new crop year, it appears.
That is a real concern for me, because the board and these companies have been signing these contracts for years. It's been impossible for farmers to find out what the contracts are or their conditions, even what the prices on the contracts are. Now we're finally in a situation where farmers will be able to see clearly what the marketplace has to offer, and it looks as if a group of people is going to be lining up to try to keep farmers from being able to see that. So I hope that doesn't happen.
It's important to farmers, who are eagerly anticipating the change in price at the new crop year. They're looking forward. It could be up to $2 a bushel difference just on barley. I'm reading some of the material that's being put out by the maltsters; they claim there's a loss of $50 million to them in the system if we go ahead with this, and I don't know if it's to them and to the board. That indicates to me that somebody has been signing contracts at far below the present market value of the grain. It'll be very intriguing to find out what that amount is after the new year when farmers are able to sign their new contracts and have a price that is market-related. For years, we haven't had that.
Particularly this last year, as we've gone through this whole debate about the Canadian Wheat Board, we've been in a situation where the PROs, the Canadian Wheat Board pool return outlooks, as I understand it, have been below the spot price; they had been below it for 11 months, and I think they've continued to be below that mark. So if you say that the Wheat Board gets average prices, how can they be below the average market price for at least 11 months in a row? That's one of the reasons farmers want the choice they're demanding for the new crop year.
There's certainly some vested interest in this thing. If we're going to begin to look at them, I think we need to take as wide a look as we possibly can, ask some questions of the two provincial governments that have the resources, certainly, to use against farmers. I hope they will not be combining with the big companies and the Canadian Wheat Board to squash western Canadian farmers. I would hope that if they do that, members on the opposite side would reconsider their position on this and say they need to stand up for farmers and not just go with what they've always gone with, which is that the system needs to be maintained as it is. Clearly there are opportunities for farmers to benefit in the next year, and we need to be able to provide them with that.
This committee also has a bit of a history on this issue as well. I don't think I need to remind some of the members of the committee that the committee itself took a strong position in...what year was that? Was it 2002 when we made the report? In 2001-02, we came with the report from the Standing Committee on Agriculture, and it was a good report, a strong report. It was one that, as far as I remember, was unanimous.
Recommendation 14 was in that, which read--and I'm going to read it in here because it was supported by all the parties here today--and that is, “Whereas additional on-farm activities...”.
I may be wrong, because I think our NDP agriculture critic at the time wrote a minority report to that, but the rest of the parties here supported it. This is how the recommendation reads:
Whereas additional on-farm activities and local value-added processing are an excellent way to give farmers more influence in pricing, the Committee recommends that the board of directors of the Canadian Wheat Board authorize, on a trial basis, a free market for the sale of wheat and barley, and that it report to this Committee on the subject.
So in 2002, this committee made a recommendation that we set up, on a trial basis, a dual market at least, or it says a “free market”, for the sale of wheat and barley. That was agreed to by the Bloc, the Liberals, and us at the time.
So we thought that was important. There were four parties then, because at the time we sat, I think Mr. Borotsik was on the committee as a PC, and those of us who were Alliance agreed with it, the Liberals agreed with it, as did the Bloc. There was a consensus at that time that we needed to do something different.
I find this intriguing. Mr. Easter constantly refers to his report, but this deals with this issue prior to his ever writing that report: that whereas we need additional on-farm activities and opportunities, we need local value-added processing, which is an excellent way to give farmers more influence on prices. So even at that time we realized that farmers needed other opportunities and that we were not giving them a chance to take advantage of those.
I want to talk a bit about some of those opportunities. Come August 1, there are going to be opportunities for western Canadian farmers.
One of those opportunities was the Prairie Pasta project, which was put together in my part of the world, southwest Saskatchewan, where folks wanted to be able to bring their own grain to their own processing plant. They were going to be able to deliver their own grain without having to go through the Canadian Wheat Board, and they would realize, as our motion said, the additional local “value-added processing” opportunities from that.
The project went ahead. It went in fits and starts, and then the Wheat Board said no, we're not going to let you do that. Those growers actually thought they had an agreement from the board that they would be allowed to deliver their own grain to their own processing plant. It was moving along well. It looked as though the plant would be profitable, and it was the Canadian Wheat Board that said they were not interested in doing that.
At that point the farmers said, if we can't have that opportunity of delivering our own grain, then there's no point in going ahead with this project. If we do go ahead, we would lose control of it. We don't have control over deliveries. We have no way of knowing if we're going to have the proper supply for the project. And so the Prairie Pasta plant in Swift Current, Saskatchewan, was not able to go ahead.
There was another group that said, well, how about trying to deal with the Americans? There's a pasta plant in North Dakota, and how about making a deal with them? We'll basically have an identity-preserved type of situation. There will be a certain amount of grain committed to that plant, and you give us the opportunity to deal with them. The project was moving ahead. I can tell you a bit about it so you understand more clearly.
The Prairie Pasta Producers were formed in 1999. They wanted to form a large-scale pasta plant, as I mentioned before. There was lots of farmer interest in this project, and there still is.
If you talk to prairie farmers about the possibility of marketing their durum at a processing plant, they will get excited about that. That's one of the reasons we had such strong support for Mr. Ritz's bill last fall. I think it was Bill C-300, the private member's bill that would have allowed farmers to deliver grain to the processing plant that the producers themselves owned. It was a great initiative--a great bill. Unfortunately it was one that the opposition voted down, for political reasons. Once again, farmers in western Canada were denied the same opportunities extended to farmers in Ontario, and farmers in Quebec, the Maritimes, and British Columbia. We can begin to see why farmers in western Canada are a bit frustrated by this.
Anyhow, when the Prairie Pasta plant project was announced there was a lot of interest in it. Farmers saw it as an opportunity for them. They began to raise money for that plant, and they were able to do that. But as I said, the Wheat Board was not going to allow them to do farmer direct delivery to their own plant.
In 2001, they came back as a new generation co-op. I think people had told them, we like co-ops, and let's see if we can't set it up as a new generation co-op. They were trying to set up a direct working relationship between themselves and the Dakota Growers Pasta company in Carrington, North Dakota. It seemed to be a logical fit for everyone, and negotiations began. Actually, the Canadian producers were going to buy shares in the Dakota company as well.
There were a couple of direct trial shipments. I assume that people on the board went along with this and let people deliver these trial shipments of bin-run durum to members in Dakota. They were using the Canadian Wheat Board buyback. The durum was good, as western Canadian durum always is, and the plant wanted to buy more. They felt it was important that they have the opportunity to access western Canadian wheats. Trucking costs were expensive there, so they set up a rail project to move the grains.
These farmers are innovative. They are moving ahead. They're trying to find a project that will work. They're making the adjustments that need to be made in order to make this work. The rail project and the whole concept was actually agreed to by the Canadian Wheat Board. The frustrating part was that once it was set up and appeared to be feasible and appeared to be going ahead, the Canadian Wheat Board then started to change the price. If you understand the buyback, you know a little bit of the frustration that farmers have, because when, for example, as a producer, I have my grain in the bin and I want to market it to somebody else, I have to go to the Canadian Wheat Board and say that I'd like to buy my grain back from them. It is sitting in my bin. It never leaves my bin, but I have to deal with them. I have to say that I am going to sell it to them at the price they say, and I'm going to buy it back from them at the price that they tell me I have to pay. That price varies. It just moves back and forth depending on their decision.
At that point, for the Prairie Pasta plant, the Canadian Wheat Board started moving the buyback up, and all of a sudden it began to be non-feasible for the producers.
I should note that this Dakota Growers Pasta plant is the third largest miller of durum in the United States, so these guys weren't just dealing with somebody who was working off their farm. Prior to this whole operation, they had never before purchased Canadian durum. They thought it was good. They wanted to set it up.
This was frustrating for the farmers. They never got access to the United States through this even though they thought they had this project going ahead. They've gone ahead in the future. They've changed the structure of their company to try to make it more palatable, to make it work. They've gone to the Canadian Wheat Board in the past. They've asked them to give indication that they would allow deliveries under the arrangements that they've made, and the Wheat Board basically finally told them, “Sorry, we're not going to allow that”, and so that deal was cancelled.
That deal was worth up to three million bushels of durum annually out of western Canada. It is a deal that was cancelled because there was a political decision made that western Canadian farmers could not have that choice.
Mr. Chair, that obviously ties into the opportunity that people want to have with barley come August 1.
In 2005 and 2006, the Dakota Growers actually came back with another suggested strategy. They said, “Why don't we set up a strict IP program so that you provide us with one type of grain? We'll hire you to grow it, and you deliver it right to us.” It would really be a closed loop system. The seed would come from the Dakota Growers, and it would go back or be grown under contract, and returned to the mill. Once again, negotiations just dragged on and on, and the opportunity was lost, so there is a real frustration. That's the area of durum. There is the real frustration among producers that they never had the opportunities they thought they should have had and would have had if our recommendation had been followed.
The Standing Committee on Agriculture and Agri-Food at that time had a lot of wisdom in making that recommendation. Hopefully we'll have enough to actually reject this motion that's been put before us today.
It's important that we do something with barley, Mr. Chair. I have had a number of letters from people over the last few months about the differences they have found between the barley pricing in the United States and that in Canada. They point that out to me as a reason we need to do something in western Canada in order for us to be able to access the same opportunities as U.S. producers have had.
Brian Otto is a farmer from Warner, Alberta, which is right by the Montana border. He grows barley as well. He's actually a sharp producer. He keeps track of what the prices are doing on both sides of the border, and that's brought some real concerns to him.
I just want to talk a little bit about what's happened over the last year and the necessity of our moving.
I see Charlie is holding up his beer-tasting card, and I hope he's not getting too dry just yet.