Agriculture Committee on Dec. 5th, 2007

[The Chair, Conservative, James Bezan]

I call this meeting to order.

I apologize for the delay. We had votes in the House and it takes a little bit of time to get over here.

We are continuing with our study on the Growing Forward agriculture policy. I want to welcome today the officials from the Department of Agriculture and Agri-Food Canada.

We have Andrew Marsland, who is the assistant deputy minister in the strategic policy branch. No stranger here is Danny Foster, director general, business risk management programs. Krista Mountjoy, who has been here a number of times, is the assistant deputy minister from the market and industry services branch. We also welcome Marc Fortin, assistant deputy minister of the research branch. We welcome all of you here to cover off the questions we have.

Andrew, I understand you're going to start the hearing today with your testimony, which will be ten minutes or less I hope.

[Andrew Marsland, Assistant Deputy Minister, Strategic Policy Branch, Department of Agriculture and Agri-Food]

Certainly.

Mr. Chair, let me begin by thanking the committee for your flexibility in scheduling this meeting. I know that you wanted to meet last week, but we were meeting with our provincial colleagues in Montreal. So we're very grateful for that.

It is my pleasure to be here today to provide you with an update on the development of Growing Forward. As you know, the current Agricultural Policy Framework expires on March 31, 2008. In June, federal-provincial-territorial Ministers of Agriculture reached agreement on principle on Growing Forward, the new policy framework for the sector.

Growing Forward identifies three policy outcomes, which will serve as the foundation for policy and program development under the new framework. These policies outcomes are: a competitive and innovative sector, a sector that contributes to society's priorities, and a sector that is proactive in managing risks. Ministers have committed to developing policies and programs under this framework that enable provincial-territorial flexibility, while ensuring the achievement of national objectives.

Regarding the current status, federal, provincial and territorial governments have made significant progress in the evolution towards the new Growing Forward framework. Recently, ministers reached agreement on a new suite of Business Risk Management programing, or BRM, comprised of: AgriInvest, producer savings accounts that provide coverage for small margin declines; AgriStability, the improved margin-based program that provides producers with assistance for larger income declines; AgriInsurance, existing production insurance and other insurance products; and AgriRecovery, the disaster relief framework.

This new suite builds on a commitment by the federal government to replace the Canadian Agricultural Income Stabilization program with new programs that are more responsive, predictable and bankable for farmers.

Federal, provincial and territorial ministers are committed to ensuring a smooth transition from the current APF to Growing Forward. Ministers have agreed to implement the new BRM suite by April 1, 2008. Ministers have also agreed to seek the authorities needed for a transition period of up to one additional year ending April 1, 2009 for non-BRM programming.

During this time, current APF programs would continue until the new programs are established.

In terms of policy and program development on non-business risk management, the framework builds on and improves on the APF. The framework is outcome-based and more focused on results than the APF. It will support profitability through market returns by taking full advantage of new market opportunities. There's more focus on science and innovation.

Growing Forward will also differ from the APF in terms of program integration. We aim for greater emphasis on client-based services, with more choice for farmers and more streamlined service delivery. In addition, program flexibility will be supported where possible to allow provinces to meet regional needs while achieving common national goals.

Consultations, of course, are fundamental to the development of Growing Forward. Extensive consultations were held from the fall of 2006 to spring 2007 to inform of Growing Forward developments. These included specific sessions on renewal, market development and trade, food safety and quality, environment, innovation and science, and business risk management.

We also had broad-based public engagement with producers and others at a national stakeholders meeting in May. The key message from these consultations was that new directions are needed to improve and sustain prosperity in Canadian agriculture. Canada must build on its strengths, the skills and knowledge of its people, its significant research and development capacity, and a strong protection of modern regulatory systems.

Growing Forward development is also informed by the work of others, and most importantly by the work of this committee. For example, in the response to the committee's June report, the government noted how many of its recommendations were in line with its thinking. For instance, the government recognizes that primary production is critical to the sector and also recognizes the importance of animal health. We also recognize that increasing capacity to support research and innovation within the sector is a key priority. The bio-economy is also an emerging priority, both for the department and for the government.

As for specific policy and program directions in terms of competitiveness and innovation, under the APF spending on science and innovation was relatively modest. Growing Forward will emphasize innovation as a critical component in the long-term competitiveness and profitability of the sector, with a larger amount of resources being devoted to this sector.

As to regulations, while the APF made some headway in addressing regulatory issues for this sector, we're looking at how best to address regulatory barriers in order to promote innovation to ensure that farmers have access to new and innovative inputs and technologies, without compromising the health of Canadians and environmental safety.

During consultations, participants spoke about the need to provide industry with better access to market intelligence and to seek better market access. We're looking at ways to continue to support the development of new market opportunities while continuing to advocate for Canada's trade interests abroad.

In terms of the heading “a sector that contributes to society's priorities”, during consultations we heard about the need to contribute to priorities for safe food, environmental sustainability, and health and wellness. We're exploring with the provinces ways to assist farmers to continue to meet society's high standards for environmental stewardship while enabling them, importantly, to do so in a way that supports profitability and competitiveness.

Federal and provincial and territorial governments are also looking at ways to help the sector respond to market expectations for safe food, in particular through the development and recognition of on-farm food safety systems.

The APF emphasized after-the-fact business risk management, and perhaps a little less, proactive risk mitigation. In Growing Forward, we're aiming to take a new approach to risk mitigation that is more comprehensive and that will assist the sector in preventing risk events before they occur.

As to next steps, Mr. Chair, we will be consulting stakeholders in the development of non-business risk management policies and programs. In November, federal and provincial/ territorial ministers indicated that further grassroots input will be gathered through provincial and territorial consultations, followed by national consultations early in the new year. This next round of consultations will happen quickly, since we need agreement on business risk management programming by March 2008.

I would like to thank you for allowing me to make these comments. We welcome the committee's questions.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Marsland. We appreciate the opening remarks.

We're going to start off with our seven-minute round.

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair, and thanks to you departmental folks for coming.

Andrew, you went to fairly substantive length talking about the new business risk management program and said that you're looking at April 1, 2008. The reality is that if nothing is done by way of a cash infusion, especially for the hog industry, and to a certain extent for the beef industry, there will be one hell of a lot of folks not here by April 1 in those industries.

I don't know, but I'm sure government members as well have to be getting e-mails, correspondence, telephone calls every day about people going broke in the hog industry. In my riding alone, nine people have gone out; that's 130,000 pigs on an annual basis. These are third-, fourth-, fifth-, and sixth-generation farms, some of them having been recognized as farms of excellence in the past. These are the folks who are going under in this current crisis. My worry is, we're sitting here talking while Rome certainly burns for those two commodities.

Today in the House during question period, the Secretary of State for Agriculture said money would be forthcoming to the beef and hog industries. I have two questions about that. When is this money forthcoming? Under what program is it coming? Don't, for heaven's sake, tell me it's the same $600 million that's been announced three times already.

Secondly, will this program you're talking about today meet what the Prime Minister said on April 6, 2006, when he made the promise of cost of production? Will this program we're talking about today meet the actual cost of production, or will it not? What about the money for beef and hog producers that the parliamentary secretary mentioned? What program is it under, and when will we see it?

[The Chair, Conservative, James Bezan]

Mr. Marsland.

[Andrew Marsland]

Thank you for that question.

Maybe I'll begin, and Danny can supplement my answer.

On November 17, the federal and provincial ministers met in Toronto and struck an action plan to address the very difficult circumstances being faced by the cattle and pork industries. They set out a number of principles that should guide the approach, including a nationally coordinated approach, an approach that is in line with our trade obligations, an approach that supports long-term sustainability, among other things.

Since that time, we have continued discussions with the livestock industry at a federal and provincial level. We met with the industry two weeks ago in Montreal, and again this week in Montreal met with federal and provincial deputy ministers.

The ministers outlined an approach that first of all looked at accelerating access to moneys under existing programs. There are significant moneys available under those programs, but we recognize it as important that they get out to producers very quickly. We're also looking at where the gaps are in those programs and how we can address those gaps identified.

We are engaged on the issue with the industry. I can't comment on what the response will be, but we are moving forward with existing programs and we are looking at where the gaps are.

The issue, as the industry has characterized it to us, is an issue of liquidity—immediate liquidity. The industry hasn't asked us for ad hoc programs. They want us to address the liquidity issue through existing programs or other alternatives that they have put forward.

They'd also like to look at a long-term approach, by addressing regulatory issues. We have been examining those with a federal-industry task force. It's a complicated issue. It's been noted by many people that it's a very difficult situation facing the livestock industry, a confluence of events close by—obviously, the effect of the dollar, but also effects of the pressures caused by feed prices and other issues, and by the cyclical nature of the industry and the point we find ourselves at in that cycle.

Danny, do you want to add to that?

[Wayne Easter, Liberal, Malpeque, PE]

I'll just interrupt for a second, Danny. When you're answering, what this committee really needs is an analysis. I always appreciate your numbers. You're always very forthright with them, and they're always good.

I'm wondering, in a comparison of the old APF CAIS program, etc., and the newly named new one, whether you have done any analysis that you can put before us that compares five years under the old program with the same five years under the new program, broken down into three categories: farmers who are hobby farmers, farmers who may be less than $750,000 or thereabouts, and large-type farmers.

I ask because I'm told by some that going to the accrual method is going to mean less money for the middle bracket of farmers, and the only way we can find out is by doing a five-year comparison, current and back.

[Danny Foster, Director General, Business Risk Management Program Development, Farm Financial Programs Branch, Department of Agriculture and Agri-Food]

To be specific to the question, we haven't done that comparison back five years and basically profiling farmers by size, but we have looked at what the new business risk management suite will do for farmers in terms of specific responses. For example, with respect to the situation in the hog industry, the AgriStability program will provide significant support to that industry, and I think you would hear the same response from the industry itself.

In fact, we've started issuing targeted advance payments under the AgriStability program to producers where Canada delivers, and the provinces requested that. I can tell you that the amount of assistance being offered under that approach is significant to the hog industry.

As well, when provincial ministers sign on to the new AgriInvest program, which we're expecting within the next two weeks, we will then be able to launch the Kickstart program, which is the $600 million, and that money will be available early in the new year for producers—not just livestock producers, but that's who we're talking about here today—and then the AgriInvest program will kick in once they complete their tax information for the 2007 year.

But the AgriStability program is up and running. Interim payments are available to producers under that program, and targeted advances, which are a new tool available to producers, are in place in a number of provinces. They've been delivered in Alberta. The letters are now in the hands of Manitoba producers, and in New Brunswick and Nova Scotia as well. The provinces of Saskatchewan and B.C. are considering a similar vehicle. ASRA has delivered most of the assistance in Quebec, and Ontario at this point is promoting the interim payment mechanism versus the targeted advance mechanism. This is actual support going to producers.

There is another program that helps producers with cash flow and assistance. That's the federal advance payments program, which, as you know, we've recently expanded to include livestock, including hogs and cattle. That program is available to producers in a number of provinces. In a number of provinces—I think three or four specifically for hogs—we're still negotiating delivery arrangements with provincial organizations.

Those programs are up and running, and as I said, once we've got the agreements signed with AgriInvest, we can start to flow funds through the $600 million Kickstart as well.

[The Chair, Conservative, James Bezan]

Thank you, Mr. Foster.

Welcome, Mr. Gaudet. You have seven minutes.

[Roger Gaudet, Bloc, Montcalm, QC]

Thank you, Mr. Chairman.

I was advised to ask you the following questions. I know the agricultural sector fairly well and I will continue with the same issue raised by my colleague Wayne.

Some witnesses told the standing committee that bureaucrats are keeping them in the dark about the details of the new BRM programs. Could you provide to the standing committee before the end of December all the available details on how these programs will operate?

These programs will come into effect in January 2008, or perhaps in April, but nobody knows what is happening. It doesn't make any sense. As was said earlier, this is not a situation of an employer versus an employee, but rather of a government versus producers who are in a crisis. Why has nothing been announced? I don't know who will want to take the question, but there it is.

You met on November 17 to move things forward. The industry did not ask for anything. If you wait for everyone to speak up before doing anything, every producer will declare bankruptcy, and that will be the end of it. Is that what the government wants? I do not know. It's all very well and good to toss out numbers, like 600 million dollars, but things have to happen now.

Last year, I asked officials from the Department of Agriculture to explain the vision of the government. But until now, I have not received an answer. I believe there must be a long-term vision for the agriculture sector, as for any other sector. Primary resource sectors are essential. If agriculture is suffering, the entire country will suffer; there is no doubt about it.

I would like to receive an answer on that matter.

[Danny Foster]

With respect to outstanding program details, they mainly revolve around the AgriInvest program. We're waiting for the agreements to be signed with provincial ministers, which as I mentioned we expect within the next two weeks, because we all know we need them in order to get the $600 million flowing. Once we have those agreements with the provinces signed—and they are all in the process of going through their treasury boards or cabinets or what have you to be signed—we will be launching the details.

To date, we've launched the details of the AgriStability program, and producers in fact have been signing up for that program for the 2007 year. Once we have the agreement signed for AgriInvest, those details will be forthcoming, and I expect that to happen before the end of December.

[Roger Gaudet, Bloc, Montcalm, QC]

My second question deals with supply management.

As recommended by the standing committee in its June 2007 report, supply management is now recognized in Growing Forward as a business risk management program.

But why is it that the top 15% coverage has been excluded? Can you provide details on this issue?

[The Chair, Conservative, James Bezan]

Mr. Marsland.

[Andrew Marsland]

As I recall, the committee recommended that Canada's supply management system be recognized as a business risk management, and that is part and parcel of the Growing Forward framework. It's explicitly recognized in there as a business risk management system.

[Roger Gaudet, Bloc, Montcalm, QC]

Are you helping farmers or the government? My question is very simple. You are excluding 15% of the coverage to farmers because they are knee-deep in problems—I could use another word. What is the government's game? I want an answer. It really doesn't make any sense. You want to help farmers, but you will deduct 15% of their coverage in case of bad luck. I have a serious problem with that.

[Danny Foster]

I'm not quite sure about the 15% you may be referring to, but in terms of supply management, supply-managed producers can participate in the AgriStability program that's been announced to date, in terms similar to their eligibility for the CAIS program in 2006 and earlier. As I said, the details of participation for AgriInvest will be announced once we have the agreements in place with the provinces.

[Roger Gaudet, Bloc, Montcalm, QC]

So you are not revealing very much this afternoon. We are asking questions but we are not really getting any answers, based on what I'm hearing.

I'll continue with another subject.

Could you confirm that feed grains used on cattle and dairy farms will not be eligible for a claim under the AgriStability program? In other words, the present situation will not change, except that you have changed the name of the program. But within the program, nothing has changed.

[The Chair, Conservative, James Bezan]

Mr. Marsland.

[Andrew Marsland]

I'm not aware of any restrictions on the exploitive grains used for dairy feed.

[Roger Gaudet, Bloc, Montcalm, QC]

So the situation has not been addressed at all. Things were going badly, you didn't change anything, so things will continue to go badly.

This question, which was probably put forward by House services, is a good one. You said that there will be no changes. This means that the situation will not be improved, even if things are going badly.

[The Chair, Conservative, James Bezan]

I think what Monsieur Gaudet is saying is that the eligibility of farm-fed grains under the AgriStability program will be treated the same way as it was under CAIS.

[Danny Foster]

That's correct.

[The Chair, Conservative, James Bezan]

Monsieur Gaudet.

[Roger Gaudet, Bloc, Montcalm, QC]

Is that all?

[The Chair, Conservative, James Bezan]

No, you have about 20 seconds left.