Agriculture Committee on Dec. 5th, 2007

[Carol Skelton, Conservative, Saskatoon—Rosetown—Biggar, SK]

You mentioned earlier that sugar cane is obviously not viable in Canada. What about sugar beet for biofuel production?

[Dr. Marc Fortin]

One concept that is gaining a fair amount of popularity and is being studied more intensively is the concept of bio-refineries. You wouldn't extract a single product out of a single plant. A typical plant might contain something like 40,000 different compounds that have been synthesized, essentially, through water and solar energy.

Can we extract more value out of a plant than a single compound? We need to undertake more detailed studies as to what products can be extracted, what markets there are to push those markets out of the farm gate, and what processes need to be created to extract that value out of the crops and create new products with them.

What is emerging out of the studies that are being done across the country and across organizations--not only AAFC, but also organizations like Natural Resources Canada, National Research Council and others--and from academic studies in the university sector, is that we will have to adapt a variety of feedstocks to a different set of products and market realities.

It's unlikely that we can develop only a single feedstock, a single plant, to address the variety of market opportunities that are out there, and that's precisely why the agriculture biomass innovation program aims at developing different feedstocks for a different range of products. Each country will have to find its own feedstocks in relation to potential markets and in relation to the potential for growing that feedstock.

No one in Canada has yet put his or her finger on a single feedstock that will answer all solutions, that will provide all solutions to all sectors, to all kinds of products. People are talking about bioplastics, biomaterials, composites, replacement chemicals, displacing fossil fuels, and producing chemicals from biomass. There's a great deal of uncertainty yet in that sector, and we need more work.

[Carol Skelton, Conservative, Saskatoon—Rosetown—Biggar, SK]

Therefore, the research and innovation is very, very important and we have to go forward with it.

It sounds like a lot of the uncertainty that's going on right now is that until we reach agreement with all the provinces, things will be up in the air in some provinces. Is that correct? Am I hearing right?

[Andrew Marsland]

Perhaps just coming back to the sugar beets issue, we are funding, I think, two feasibility studies on the biofuels opportunities for—

[Carol Skelton, Conservative, Saskatoon—Rosetown—Biggar, SK]

I understand that, but I mean—

[Andrew Marsland]

But on the issue of agreement with the provinces, we have an agreement on the business risk management aspects of Growing Forward. Those will come in, at the latest, by April 2008. We have agreements to go through and the process to go through to make that happen; we have an agreement on that.

On the numbers of the risk management aspects, we have an agreement on up to one year of transition--that is the continuation of existing programs to provide for a smooth transition. What we aim for is a multilateral agreement with all of the provinces on a framework for the non-business-risk-management aspects for the next generation of Growing Forward. We aim to have that by March 2008, followed by up to a year of implementation.

[Carol Skelton, Conservative, Saskatoon—Rosetown—Biggar, SK]

What percentage of the funding goes to the non-BRMs? Do you know offhand?

[Andrew Marsland]

It's not easy to give a percentage, but under the APF we devoted about $120 million a year to cost-matched programs and non-business risk management with the provinces. That amount in Growing Forward has yet to be determined, but we would hope to build on that. We will know that by March. The business risk management aspect of it, because it's demand-driven, depends very much on the year, but I would say it's somewhere in the order of 10% in terms of budgeting. What it is in reality depends on the--

[Carol Skelton, Conservative, Saskatoon—Rosetown—Biggar, SK]

As a former 4-H member, I was really interested to hear that you are putting funding into the youth programs for young farm people and rural people. Can you expand on that a little bit? How are you working with these groups to support them and get them involved in the agricultural community?

I know we were always scrambling to get funding for the 4-H program. I always admired the young farmers' organizations because they seemed to have so much more funding than some of the programs I was associated with.

I'd like your comments, please.

[Andrew Marsland]

The funding under the APF went to a range of groups, including 4-H and Canadian Young Farmers, on a range of different programs. It depended from province to province. We had a national partnership with these groups and worked with them to define what the needs were in particular provinces under the renewal heading. They ranged from developing farm business management skills and so on—very much focused on building the skills that young people need as they enter the industry.

I think that's going to be an interesting dialogue as we move forward on the programming ideas—building on what worked under the APF and where the gaps were. But as you say, it's always exciting to work with young producers because they're.... You know, for people who think there isn't enthusiasm out there, there's lots.

[The Chair, Conservative, James Bezan]

Thank you very much.

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Danny, you mentioned the AgriStability advance document that the banks are willing to look at almost as collateral. Can you provide members with a copy of that when you get back to the office? I think that's a very good idea, and a lot of people don't know it's available.

The committee in its recommendations—at least on this side of the House—wasn't overly enthused with the department's or the minister's response to our spring report. We thought it was vague and unclear. In recommendation 16 we recommended that a billion dollars be set aside in a federal contingency fund for disaster relief, such as the situation we have right now with hogs and beef. The response basically said that time and again the federal government has demonstrated that it will respond to emergency situations. Examples given were BSE, golden nematode, and avian influenza. That's true, but we have a disastrous situation here right now where the government isn't responding with special programming, as was mentioned by one of my colleagues earlier.

Andrew, you mentioned that the organization leaders said they don't like ad hoc programming, or they are against it. I can tell you that the producers I talk to want ad hoc funding. They want money in their pockets right now. I have been to several bankruptcy sales in the last six weeks—people I've known all my life, third- and fourth-generation farmers. They don't give a damn whether the ad hoc program is trade viable or not. They need some cash in their pockets to keep them going, and it just isn't happening.

If we weren't challenged on the $1.6 billion, or thereabouts, that the previous government put into BSE under 10 or 12 different programs, why would we be challenged on ad hoc moneys going for hogs and beef right now when they direly need it?

I have a second question, and somebody can think about it while Andrew is answering the first. I was confused—those guys will say that isn't unusual—by your answer on AgriInvest in relation to supply management. How will AgriInvest work for producers of supply management? Be fairly specific if you can.

[Andrew Marsland]

I think I indicated that producers haven't asked for ad hoc payments, but they've certainly asked for assistance. I don't want to give the impression that they haven't asked for assistance.

Again, in addressing the liquidity issues, I think it goes without saying that the problem is a very difficult one, and we need to address it with the industry in a way that builds on existing programs but respects the trade obligations. That's critically important and has been recognized by the industry.

In terms of different programs and circumstances, in the BSE situation we were facing a different issue that was essentially driven by border closure and initially almost a market collapse. All I can say is that when we give advice on the developmental programs we take into account the trade context, because if we don't we can compound the issue over time.

In those circumstances, with the various responses the government developed as the situation developed, we were comfortable that they were reasonably safe from a trade perspective. We'll continue to do that.

[Wayne Easter, Liberal, Malpeque, PE]

Supply management.

[Danny Foster]

We haven't announced the details on the AgriInvest program. We hope they will be announced within a couple of weeks, once we have the agreement signed.

Under the old NISA program, if you recall, supply management producers were often disqualified from participating, in terms of their non-supply-managed operations, because they had supply-managed commodities. We have put forward a recommendation for that to be addressed under the new AgriInvest program. So with the approval of the agreement, producers who have a large grain operation and a large poultry operation, for instance, will get the coverage on their grain operation. They won't be disadvantaged because of how the two link in the AgriInvest program.

We expect that to come through with the agreement of provinces.

[Wayne Easter, Liberal, Malpeque, PE]

Can you tell me—

[The Chair, Conservative, James Bezan]

Your time has actually expired, Wayne. Sorry.

Just on the grain farm poultry operation, as an example, would their farm-fed grain that they put through their poultry operation be qualified?

[Danny Foster]

No, it wouldn't be.

[The Chair, Conservative, James Bezan]

Mr. Gaudet.

[Roger Gaudet, Bloc, Montcalm, QC]

Thank you, Mr. Chairman.

A small issue has been bothering me. I travelled through western Canada last spring as a member of the agriculture committee. I would like to know how programs are developed and who develops them. It might seem like a silly question, but I'd still like to know.

[Danny Foster]

With respect to the new suite of programs, basically we went through an extensive consultative process with producers and national industry organizations in developing the programs. On the AgriStability program, a margin-based program, we started that exercise I believe in May 2006. An industry-government task team looked at a lot of options in terms of alternative programming. At the end of the day the recommendation was to stick with the margin-based program. We needed to make some significant improvements, which we have made, including the inventories, the targeted advance mechanism, expanding coverage for negative margins.

As well, as part of the Growing Forward consultation exercise, it was becoming clear that in addition to a margin-based program, industry was saying that we'd need a producer savings account type of program. That decision was made earlier this year, to put the AgriInvest program in place for the top tier of the previous margin-based program.

I guess the short answer is that we've consulted every step of the way with industry on the development of both the AgriStability and the AgriInvest programs.

[Roger Gaudet, Bloc, Montcalm, QC]

Some of the people we met in western Canada told us—and my colleagues who were with me will correct me if I'm wrong—that the major problem with the Department of Agriculture was that its officials did not grow up on farms and that they really couldn't tell the difference between a carrot and a turnip.

So about this and decided I thought that it might make sense. Indeed, 35 or 40 years ago, departmental officials were all sons or grandsons of farmers. So they were connected in one way or another to farming. But today, how many departmental officials know anything about farming? I wouldn't be surprised if it wasn't more than 5% of all departmental employees. Further, these people probably don't work in Ottawa, but rather in rural areas.

[Danny Foster]

I can just give you the example of what we did with AgriStability. The core group that designed that had two government officials on it and six people from industry—recognized industry people. That was the group that formulated the recommendations to go forward with an agri-stability program.

Notwithstanding what the background of the agriculture officials are, we consulted heavily with the industry. I think that is probably as much as we can say in terms of how we ended up with the program.

[Roger Gaudet, Bloc, Montcalm, QC]

When you consult with the industry, do you speak with CEOs of companies or to the producers themselves? That's my question. Consulting with CEOs is like talking to officials. Do they know anything about farming? They take their marching orders from the board of directors, and that's the end of it. At least, that's what I think. I get the impression that the people who develop the programs really don't know what farming is really like.

[Danny Foster]

Yes. Again back to the example, we had a horticulture producer from B.C. We had a hog farmer from New Brunswick. We had a very young large grain farmer from Saskatchewan. We had a cattle producer from Ontario. We had, I believe, a grains and oilseeds producer from Quebec. So we had a number of people from across the country who were farmers.

I can't recall directly whether or not some of them represented organizations, and they might have, but they were people on the ground who were part of the task team that actually developed the recommendations. It wasn't bureaucrats developing the recommendations and then taking them to industry organizations and asking them what they thought. This was actually the working group that formulated the program, in this example.