I apologize.
The grain sector in the United States is huge, producing 450 million tonnes or nearly 20% of the world's grain. Our experience over the past 33 years, which has been shaped by a series of farm bills that continually influence our day-to-day operations, clearly shows that it is difficult, if not impossible, to remain competitive if you are not given the same opportunities. This applies to market development, support for research and expertise, and income protection.
In a world economy faced with shortages of hydrocarbons for energy purposes, but also for industrial production, grains represent a very attractive alternative as a source of carbohydrates and lipids that can be used or processed into various industrial products, including fuel.
For that reason, a lower price can now be set for this natural, renewable raw material. Grain producers in Canada and Quebec can certainly not remain competitive without this kind of protection. Providing this protection and support for the industry will have even better results if producers have access to a share of the income generated by this industry. Having a share of the value added will also stabilize incomes.
The federation views the discussion about giving priority to the use of agricultural commodities for food purposes to be a false debate. The economy being what it is, the main problem surrounding the use of commodities for industrial purposes is simply that carbohydrates and lipids derived from grain are not priced at their proper value.
There will simply be competition between the production of essential goods and the production of less essential goods. In the latter case, the excessively low price for this source of carbohydrates and lipids make them attractive for industrial production and energy use. This is true not just for grain, but also for the resources used in growing grain, such as minerals, energy, farm land, water, financial resources and, of course, the human resources involved in research, know-how and entrepreneurship.
We think that humanity will have to choose and set priorities at some point. This problem is becoming increasingly evident because of economic growth in developing countries. As you know, world grain stocks have evaporated over the past 10 years, dropping form 600 million tonnes to 300 million tonnes, and this happened well before the lastest developments in the biofuel industry in the United States.
The federation is of the view that farm families in Canada and Quebec should not have to pay the price for the refusal by multinationals and urban dwellers to place an adequate value on plant protein and calories for food, even though the available quantity of these nutrients today is limited.
Although cellulose may seem a more acceptable alternative to many people, the same issue arises since the competition between these resources is no longer about how the grain is used but rather how the increasingly limited agricultural land is used. Farmland will always be more productive, given that the most productive land has been cleared to grow food.
This bioeconomy based on farm commodity and farmland is a necessary and inevitable step. We believe that ignoring it will greatly weaken the competitiveness of the grain industry and Canadian agriculture. It is vital that this issue be considered along with the environmental and energy issues. The federation has often been questioned at this committee about why Canada should support its agricultural industry, when doing so seems to help other countries, according to some people.
Our answer has not changed. Support for agriculture through direct subsidies or structural policies like the one on biofuels is tied to a very simple reality. Grains, carbohydrates, lipids, proteins and plant calories that are produced and consumed here or exported have a beneficial impact on the agricultural community and Canadian society in general, but also on all societies in the world.
Whether we are talking about the 70 million tonnes of grain produced by Canada, the five million tonnes in Quebec or the hundreds of millions of tonnes produced in various rural regions of Quebec, this grain production makes a difference around the world. We may be naive about how the world works and the relations between its various peoples, but from our understanding, given that resources are increasingly limited, government support for the grain sector is probably the best opportunity for a humanitarian investment that Canada has had in recent years. That is basically how people see it who have lived off the land for generations.
It is also worth noting that the agricultural policy being proposed for the grain sector, which is based almost entirely on trying to develop industrial demand and sharing in value-added opportunities, will never be successful without adequate protection at the bottom of the chain. That is why the Quebec-Ontario Grain Coalition, of which we are a member, has been calling on the government for nearly 18 months to bring in flexible mechanisms and support to meet the particular needs of the various agrifood or agro-industrial chains of production in Canada.
This new mechanism is based on a so-called AgriFlex approach, which is designed to fit in perfectly with the various federal income support programs proposed by the Conservative government as part of its Growing Foward policy. AgriFlex is aimed at encouraging the provinces and producers to create companion programs to deal with regional disparities in protective measures to deal with the cyclical declines in farm income experienced in the grain sector.
Family farms would necessarily become more viable from a succession standpoint, since they would be able to count on long-term financial planning. Basically, AgriFlex would be funded from a federal envelope provided to provincial governments so that they could fund regional programs such as agricultural income support programs, including the Quebec Income Stabilization Program and Ontario's SRM, which are both aimed at the grain sector. AgriFlex would offer the flexibility required so that the federal funds could be used to partner with these regional income support programs or other regional programs focused on market development or research.
After five years of disastrously low prices, grain prices have risen again recently but remain extremely volatile and vulnerable to a sharp decline at any time. Farm families would like to see less volatility and more predictability. Because the market cannot achieve that goal on its own, we feel that this type of partnership with the government is needed in order to increase predictability and protect the viability of family farms.
In conclusion, the Fédération des producteurs de cultures commerciales du Québec is convinced that the grain industry in Canada has no choice but to tap into the same opportunities as the huge grain industry to the south of us; that the use of grain for energy and industrial purposes and therefore the biofuel policy are part of a necessary and evolving process; and that to achieve this objective we need important regulatory amendments such as those found in Bill C-33.
Finally, the success of this biofuel policy and the development of industrial products in Canada absolutely requires adequate support for the grain sector, which is at the base of the value chain.
Thank you.