Agriculture Committee on Dec. 3rd, 2007

[Jacques Laforge]

AgriFlex?

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

AgriFlex, is that the name of it? Any comments on that proposal and how it might affect any of your sectors?

[Jacques Laforge]

At this point, none of us have seen it.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Okay.

When we had CFA in--

[The Chair, Conservative, James Bezan]

Did you want to say something?

[Jacques Laforge]

When these programs, like flexibility, are developed SM5 is not necessarily.... Because we're under supply management, we're not consulted on all the fine details. It's a lot more the non-supply-management commodities that are looking for safety nets. And whenever they are finalized, that's when we're exposed to it a little bit. That's how we operate. That's a fact of life.

There might be a lot of details here that other commodities have worked on that haven't touched us. That's why we would not have all those details. It's not that we don't follow it or whatever, it's just that is how they develop.

A lot of changes have taken place in the last six months that we have to catch up on, on a daily basis. AgriInvest is one example. I operate out of commodities. The last mail-out I received to fill out my CAIS program for the other entities and so on stated AgriInvest, but it said they would tell us later on how it works. Farmers don't have the details. It's more talk at the government and the farm organization level.

[The Chair, Conservative, James Bezan]

I think Mr. Halkai wanted to jump in too.

[Errol Halkai]

I just wanted to clarify for the committee as well that traditionally supply management has considered supply management to be its business management tool. That's why Jacques is saying we don't know the details of it, because a lot of the program development has been geared to other commodities outside of supply management.

Our supply management is a market-risk-based program, but we still need protection from disease or disaster, and this is where supply management needs coverage for its requirements too. I just want to make the distinction that supply management still considers supply management to be its primary business risk management tool, but we do need some programs to assist us in disease and disaster coverage.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I have just a couple of questions on supply management. First of all, I would like to know the total value of all quota held in Canada, in all of them. The estimated outstanding debt in Canadian agriculture is approximately $50 billion, and I wonder how much of that share belongs to supply-managed producers. You can think about that one, if anybody knows.

The NFU and CFA were here the other day. The NFU, the National Farmers Union, released a report just in the last week or so criticizing not so much the Ontario provincial government as specifically the Ministry of Agriculture. I would like to hear some comments on that.

[The Chair, Conservative, James Bezan]

Mr. Miller's time has expired, so I ask that you keep your replies brief.

[Jacques Laforge]

I'm not aware of the Ontario criticism.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Name somebody, then, Mr. Laforge.

[The Chair, Conservative, James Bezan]

Your time has expired, sir.

Is there anybody from Ontario? I don't think so. There was his question on debt and quota value.

[Jacques Laforge]

I don't think there's ever been a calculation made on what the total quota is worth. For example, in dairy, if you calculate the total value of the quota, it doesn't exist. If you calculate what a minuscule amount of quota is trading for on a monthly basis or on a yearly basis, we probably could get you that number fairly easily, because there is quota exchanged and so on.

That quota is a very volatile thing. If we say the total is worth so much, and 15% decide to go out of production tomorrow for some reason, the quota would be worth zero. We could talk about this subject for two days or two weeks, about what's happening. I'm not trying to ignore it. I'm just saying that's a fact of life.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Maybe we could get that information.

[The Chair, Conservative, James Bezan]

Maybe if you want to submit that, Mr. Laforge, from SM5, addressing those specific questions that Mr. Miller raised, it would be good.

I have a few questions I wanted to raise myself before we go to the second round.

I was a big proponent of making sure we had the pillar identified before the national farm animal health strategy. I know that all the SM5 groups participate in the Canadian Animal Health Coalition. Are things still moving along fairly well through that organization, in their representation to the minister? Have we made any headway? If we can't get it through as a pillar or as a main principle within the Growing Forward component, are there other ways we can look at it, possibly under avian flu? It does seem to target certain producers or rather regional areas, unlike BSE, which hit the entire country, leading to trade disputes that happened with so many of our trading partners.

Is it possible to fit this in under the agriculture insurance section of Growing Forward? That might possibly be a way to deal with this issue and protect farmers, who need that so desperately.

[Jacques Laforge]

Yes, I think that would be quite possible. As for the animal health work that has been done, we're quite pleased with where dairy is heading. There were a lot of comments made about this in the questions around the table. One thing I want to raise, though, is that from one commodity to the next...if it's avian flu, you have to isolate it, and you have to deal with it.

I'll tell you that in livestock, in bovine, if you ever have an outbreak of foot and mouth disease, there's nobody who can compensate. Two hypothetical systems have been run to show what it would do in North America. Cattle move around. I keep dairy cows on my farm for more than three months. They're there for eight or nine years quite often.

That shows why we need those kinds of things. We need them fast, and we need to be able to deal with those issues accurately, because they could wipe out half of the dairy production in Canada, especially just when you look at how cattle move around at auctions and so on.

We're quite pleased with the way it's moving. It should be concluded, and we should have a very clear program on what to expect in the case of a crisis.

[The Chair, Conservative, James Bezan]

The one thing I've always admired about farmers and supply management has been their desire to adapt technology quickly, to use it to the best of their benefits and improve their profitability. Many grain farmers have gone down that path, as well.

One of the components of Growing Forward is research and development. We haven't heard a lot about that through our hearings this fall. I was wondering if you had any comments about what needs to be done in research and development, what role government plays, and where we want to be heading in the future.

David.

[David Fuller]

First and foremost, one of the things that we must have under research and development is we must have the scientists. Government needs to have a program in place that will allow scientists to go through college here and be able to work in up-to-date facilities in this country. We need to have up-to-date facilities with skilled scientists who can continue to push our research and development.

It's important for the government to continue to maintain the ability for people to work here--that's important--instead of having our people exported outside of the country and that work being done there. It gives our farmers here an advantage. If the technology is here, we can adapt it quicker. Canada is different from other countries. The climate is different, the regions are different, and we need to do things here that adapt to this country. We need to keep our people here. That's most important.

[Jacques Laforge]

In the case of dairy, we've also been working and investing directly in research for the last 10 or 15 years. We've created some networks in mastitis, CLA, and so on, and also the nutritional aspect of it. We did it in partnership with Agriculture Canada and the private industry out there. It has worked out pretty well. We've received some payback out of it, so that's pretty good.

[The Chair, Conservative, James Bezan]

Good.

Let's seek Carol and Lynne here to talk about cooperatives. I've always felt that cooperatives in rural Canada have a major role to play, especially in agriculture. Often we talk about it from the marketing side, the retail side, but there are a few smaller cooperatives that are out there to buy agricultural inputs. I believe that farmers want to really capitalize on the opportunity to buy in volume and get better deals. If you look at the disparity happening right now in fertilizer in Canada, especially in western Canada, versus the U.S. on Canadian-made fertilizer—they can buy it down there quite a bit cheaper—I think there's a real role for them to play.

When farmers want to look at offsetting some of the concentration that's happening in the industry to empower themselves—we always talk about integration—instead of being top-down, this is a chance to be from the bottom up, if you want to integrate from the producer level.

Does the Co-operatives Association have an active recruitment program on the ground for producers? If they contact you for information on how to form a co-op, what types of co-ops do they want to form? New Generation Co-ops is something that is available in some provinces. I was just wondering if you provide those types of consultations to producers.

[Carol Hunter]

Yes, we do, and we do it through a large Canadian network of provincial co-op associations. We have about 19 partners that talk to producers, such as the Ontario Co-operative Association. They're on the ground, right at the community level. We provide those advisory services through the current program known as the cooperative development initiative and the Ag-CDI, the agricultural co-op development initiative.

The challenge is that the ability to provide those services is very limited. Because it's only $1 million a year for co-op advisory services to 19 organizations across the country, you have a situation now that a province the size of Alberta gets $60,000 a year to help all cooperatives get formed on the ground. That's why we really are reinforcing the need for an expanded and renewed co-op development initiative, so that people on the ground can get access to those services.

[The Chair, Conservative, James Bezan]

Good.

Wayne, André, Larry, do you guys have any follow-up questions?

[Wayne Easter, Liberal, Malpeque, PE]

On the co-op one first, I think this is something that's really, really worrisome. What Alberta is doing is a good thing--there's no question about that--in terms of putting money into co-ops. They're also putting money into beef and hogs. But it's increasingly creating distortions across the country. Other provinces either may not have the financial clout that Alberta has or the deep pockets. And when the federal government isn't stepping up to the plate, we really have a problem, in terms of the different position of producers and people who want to form co-ops in their province, or do anything else for that matter. There's a tremendous discrepancy as a result.

My question to you, to the co-ops, is this. I think you'd said in your remarks that you required $30 million over five years in the agriculture sector. What are the consequences if you don't get that money?

[Carol Hunter]

They're very profound, because the $30 million is still a very limited amount of money for advisory services. The consequences would be that producers, as well as other people wanting to start cooperatives, would not have access to the specialized advisory services they need. The membership structure is different and the capital structure is different, so they need access to those specialized services in the communities.

Quite simply, there would not be a stimulation of the cooperative model in communities with people promoting that model. We would see more of other kinds of business models in the ascendancy. The cooperative model would not be reinforced because of the inability to communicate what it is and provide those specialized services on the ground.

We've seen in Quebec, for example, how strong their cooperative economy is because of an enabling environment with government that recognizes, and has historically recognized, the value of cooperatives. On a pan-Canadian level, we really need to stimulate a mixed economy, with cooperatives as one pillar of a mixed economy.