Thank you.
It's great to be here and a great experience for me. I live in the middle of tobacco country. I was past president of the local National Farmers Union there and got involved in another committee in order to help some of our members deal with this tobacco issue.
The National Farmers Union position has been clear over the years: we support small family farms. We think that's the best way to grow food, and by extension tobacco is part of that.
In looking at the problem, our position has always been that orderly marketing is the proper way to go because it gives everybody a fair profit out of the pie, but we're beyond that here, we think; it is falling apart in the case of tobacco because of the amount of imports and the illicit trade.
Right now the NFU is focused on trying to encourage governments to look at a buyout for tobacco growers. We think we know what that price should be. It was introduced some time ago: $3.30 a pound. We have accountants' backup for that, and it makes sense to us.
If I can just lead you through a little bit of it here, the marketing board was set up in 1957. It's been a good thing for farmers and it's been a good thing for the tobacco industry, but in 1990 there was a change to legislation and the TAC was introduced. Although I think it had some good ideas and brought some new ideas to the table, it's really been the start of the demise of the orderly marketing system. Because of the weighting of this committee, farmers' influence has been pretty much eliminated. We have farmers outnumbered significantly by government representatives and by tobacco industry representatives, and really the TAC is now running the tobacco industry.
Out of that TAC came the introduction of changes to tobacco in about 2000. Growers were encouraged by both governments and by the tobacco industry to invest heavily in new equipment and in new technology to secure a future in tobacco.
If you look at the years 2001 through 2003, family farms with three or four generations of tobacco growers put their life savings into changing their systems over. The very next year--after they had been told this would secure the future of tobacco and that they'd have great opportunities for exports and so on--the market went into free fall; consequently, those huge debts those farmers have ended up with can't be paid off. There is no other crop that will pay the kind of return that tobacco does.
What we have here is a large number of farm families that are trapped. They have no way to get their assets back or to sell them at a decent price, and they have no production. The production this year is estimated to be 7% growable. That's not a viable crop.
Our conclusion on this is that through the changes in legislation and the increase in illicit tobacco.... This bag of tobacco was bought by a farmer from a guy who sold it off the back of a truck at his farm gate. I mean, this is a tobacco farmer who was propositioned to buy illicit tobacco at his farm gate. People are driving down the road selling tobacco like this, folks, and that's crazy.
You've got a huge problem here. Part of the problem is that the growers, honest people, are being forced to try to pay for their assets and pay down their debts by selling this stuff illegally, and there are lots of ways to do that.
So our suggestion would be that the sooner you come up with a buyout and get some of this production out of the system so that they don't have to deal with selling illegal crops, the better. Legally, with the enforcement people, it will give you a chance to get a better handle on it. There will be fewer growers out there. There will be less acreage to deal with. It will be a manageable situation from a law enforcement point of view.
The NFU's policy on this would be that tobacco is not, in the long term, a viable or desirable option for family farmers in southern Ontario. Public opinion is against it. That doesn't mean tobacco won't be grown in some limited way. It probably will. But most of it is going to be grown in other countries. So with the decline of tobacco and the demand for Canadian tobacco, we suggest that a buyout of the growers would help enforcement and would help these people to get on to something different.
I look forward to your questions.