Agriculture Committee on Dec. 10th, 2007

[The Chair, Conservative, James Bezan]

You have 20 seconds left.

[Guy Lauzon, Conservative, Stormont—Dundas—South Glengarry, ON]

Brian, do you have a question?

[The Chair, Conservative, James Bezan]

We can come back.

Monsieur Roy.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

My question is for you, Mr. Dennis.

I was surprised by what you told me. Among other things, you said that the best farmland should not be used in ethanol production. I would like to know how you would manage to ensure that the best farmland is not used for ethanol production, because the decision to grow certain crops is made by the farmer who owns the land.

Basically, farmers are looking for profitability. When farmers have very good farmland—like farmland in Quebec—and they know that they can make more money growing corn for ethanol production, that is what they will do. You can't stop them. There is no law, currently, to stop that from happening.

Basically, as long as there is demand, people will tend to use the best land to grow corn to make ethanol. At this point in time, nobody can stop that. You cannot stop farmers from making that decision.

[Dr. David Dennis]

I think that's right. Some of the most intelligent people I've ever met are farmers. If they're not very intelligent and don't have good business savvy, then they don't stay in business. You're absolutely correct.

The question is this. The growing of food crops is probably always going to be more valuable than the growing of ethanol crops. It will depend on the market.

Of course, one of the things that's driving ethanol production at the moment is the subsidies for ethanol. Certainly, there are tremendous subsidies on producing ethanol in the U.S.A. If you remove those subsidies, most farmers will go back to growing grain for food.

Yes, there is a problem. I think food crops will always be more economically viable than crops that are grown for ethanol. They will have to be pushed to the sidelines of agriculture. I agree with you that it's a problem.

I think the competition between food and ethanol, certainly in the U.S.A., is a problem that people are now talking about. It has to be resolved in some way.

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

Thank you for providing a partial answer to my question.

I would now like to address Mr. Reid.

Since the beginning, you have talked a lot about intellectual property rights as they relate to patented seeds. I have no problem with a company that develops new seeds benefiting from intellectual property rights. I feel the same way about pharmaceuticals. We could have a similar discussion about companies that develop drugs and then, a few years later, someone else copies the drug and makes it generic and so on.

I would like to talk abut what intellectual property rights have done for companies in the United States like Monsanto, for example. I am sure you know all about this. These companies have taken over certain regions. Take corn, for example. These companies have used their patented seeds to take over certain regions by suing farmers who were not using the seeds sold by the companies, based on the claim that these seeds could contaminate the neighbour's seeds and so on.

Here is what happened. Contrary to what you have stated, the cost of seeds rose significantly for farmers. Many of them could no longer buy seeds from the companies that patented them and that won the right from the Supreme Court to protect their seeds, even on land that does not belong to them, that is, farmers' land.

The opposite occurred. The cost of seed did not drop, but rose significantly, forcing some farmers into bankruptcy because they could no longer buy seed. The rising cost of seed does not necessarily mean that farmers can sell their crops for higher prices. Farmers pay more for their seed, but in the end, they cannot get more money for their crops. If memory serves me, that is what happened in Minnesota. A lot of farmers went bankrupt because Monsanto won its case in the Supreme Court and was able to force farmers in several regions to buy its seed or stop producing.

This kind of monopoly lasts a year or two or three until a new kind of seed becomes available. That is U.S. intellectual property rights in a nutshell.

[The Chair, Conservative, James Bezan]

Mr. Reid.

[Jeff Reid]

Thanks for your question.

First of all, I believe that farmers will only adopt, and should only adopt, new technology if it either decreases their cost of production or increases their profitability. I think everyone in the seed industry in Canada would agree with that. Really, I think the only reason some of those technologies have become so popular with producers is because they have a significant impact on reducing their costs of production. Thus we're seeing a lot more technology being delivered through seed, because it is more economical for the farmer to use and has quite a number of environmental benefits and other spinoffs that are quite beneficial to society as a whole.

I think we have to remember throughout the whole discussion that the status quo is certainly always an option for farmers, in terms of not adopting new technology, but I think what we've seen time and time again is that these new technologies, again, are very beneficial to the farmers' bottom line and that's why they become adopted so quickly.

Again, the CSTA has gone on record saying that we support farmers' ability to save seed in terms of farm-saved seed under the Plant Breeders' Rights Act. It's only when you get into a patented technology where producers have the choice whether to buy that or not. It's certainly under their own free will, and we don't believe they're going to invest unless it's in their best interest.

[The Chair, Conservative, James Bezan]

Time has expired.

Ms. Skelton, you're on.

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

It's really interesting, sitting here today, hearing about the different parts of Canada and the crops we grow and what we're doing.

I can go back to the pulse growers and talk about no till, reduced herbicide, reduced pesticides, and I look at Mr. Easter and this wonderful picture about Africa. And look at the red soil. I saw erosion last year in Prince Edward Island and I said to my agriculture husband, how can this be happening? We have to change our growing practices.

In Saskatchewan 20 years ago we had tremendous erosion problems, and since the introduction of the pulse industry in western Canada we've stopped that. I think it's been so beneficial to all of Canada.

I'm so impressed and so happy that you came here today and spoke to us, because this is what agriculture needs. Farmers need to change their agriculture practices, they need to be innovative, they have to participate, and they have to work with it. So thank you very much, gentlemen, for all your work and for coming here today and telling the committee about this.

Gordon, could I get you to talk about some of the things we have in the non-BRM program under Growing Forward? What suggestions do you have for the non-BRM programs?

[Gordon Bacon]

I think the programs that are in place have worked very well. I don't think we have to start from scratch. We have some programs that work very well.

What I tried to illustrate in my presentation was that Agriculture Canada has some good programs where they've facilitated industry to take a leadership role in some high-risk areas that also have some high reward. One of them is the science and innovation program, which allowed us to start working with the health community and food industry. It makes sense. We should have been doing it 25 years ago, but we didn't. Now that we've started, this is the kind of approach we need to focus on.

The two big drivers from the consumption side are, and will continue to be, environment and health and wellness. Agriculture has to engage itself in both of those areas. I was speaking only partly in jest when I said this committee really needs to be part of health and part of environment. This is the area in which agriculture can play a role for all Canadians.

So I'm hoping that in Growing Forward we see some strong programs in the environment area. As you mentioned, we have a very good story to tell. We have a story to tell that I don't think could be matched by the Europeans or by the Americans. We have an advantage that we need to focus on.

In the past, our environmental programs have focused on risk mitigation. I think we need to turn 180 degrees and say, “Let's start marketing the advantage we have.” I think we'll find willing buyers in the human food market, in the animal feed market, and in bio-products.

Of course, I work for the pulse industry, but I think crops that fix nitrogen, that take an essential nutrient out of the air, are going to play a big part--not only in Canada but around the world--in terms of sustainable agricultural production that will feed a doubling of the population by 2050.

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

My concern, too, was that we have to protect our soil in this country. Every agriculturalist protects the environment the best they can, but we have to remember that the soil will grow only so much.

Please, Mr. Dennis.

[Dr. David Dennis]

I think the impact of something like no-till farming has been huge. Certainly it has been down in the States, where around 18 million acres are now grown by no-till farming. People don't realize just how much carbon dioxide is released into the atmosphere by farming in this country. Something like all the carbon dioxide released from farming until 1985 was more than all the carbon dioxide released by burning fossil fuels—a huge amount. What we can do now is start reversing this by no-till farming, which is really effective.

It also goes to the question you were talking about, and that is erosion. The cost of erosion is huge in terms of losing topsoil. Until recently in Iowa, 50% of the topsoil had been lost through erosion since the time of agriculture.

You can't carry on doing this. You have to start building up new soil. The way to do that is to plough in the remains of one crop and then seed directly into it.

The advantage is simply huge. And not only is there a huge environmental advantage with the carbons in the soil, but there's advantage for a lot of the small animals that live in these areas as well.

[Dr. Phil Schwab]

To just briefly address your question about non-BRM programs, it's not a program so much as ensuring that this committee looks at the regulatory capacity we have to adopt these new technologies we're talking about. We're talking about new types of crops, perennial crops, grasses--things that we haven't seen before in our regulatory system. We need to make sure they have the human and intellectual capacity to regulate those products safely, including the new advances in animal health and biotechnology that Mr. Easter was talking about.

So as much as this committee can do to support the dedication of those resources in our regulatory agencies will go a long way toward ensuring smooth and safe adoption of these technologies.

[The Chair, Conservative, James Bezan]

Thank you.

Your time has expired.

Mr. Steckle.

[Paul Steckle, Liberal, Huron—Bruce, ON]

I want to thank you for coming. I missed part of your presentation due to a late flight.

I want to centre on two questions I have for you today.

We're talking a lot about the future. We know that research and innovation is not something that bears results within 24 hours, or within 24 years sometimes, but it is there for us in the future. I think we need to encourage that, and I totally support that. But we have to think about the here and now.

We have sectors in our agricultural community that are in serious trouble, and if we don't protect them now, then we won't have them for that future that we're all talking about. I heard Mr. Reid say, and I agree to a point, that we can't follow the Americans down that subsidy road. I agree that none of us should be in that business of subsidization in agriculture, but we're in that way of thinking. We're going to continue that. Europe is going to continue it whether we think so or not. They're going to continue, and so will the Americans.

I did some math, and I calculate that the $4.3 billion we're talking about here as the level we could support at is doable. We just recently announced the reduction of GST by 1%, which is $5.5 billion. It's far more than the total aggregate amount of money that we could spend in agriculture. We just gave that away to Canadians who could perhaps afford to pay that 1%.

But we have a sector, a community of people who are going bankrupt. If they fail to get the money from the treasury, where else are farmers going to get that money? It's not going to come from the marketplace. If they can't go to the treasury and we can't, as farmers, as agriculturalists in this country, go to government and expect some help at least in the near term, then where can we go?

Mr. Reid, back in 1965 when I put my first crop of corn in--I farmed before that, but that was my first crop of corn--I paid $14 a bushel for seed. Today we have varieties that are costing farmers upwards of $200 a unit, which is 80,000 seeds, which is less than 56 pounds. When you look at that, it's 14 times the price of that seed. I got $1.75 for corn then. Today it's $3.75. We maybe took 100 bushels then. Today we're getting 200, and that's at the top end. Some crops don't produce 200 bushels.

Where are we coming out at with this? Where are farmers benefiting from all this research that's being done? Where are the dollars filtering back? There's money in the industry, but it's not filtering back to the farm gate. Those are my two concerns. If we can't deal with the farmers here and now, we won't have them for the future. I hope you can give me some understanding of where we're going, because I'm afraid we're in some serious trouble.

[The Chair, Conservative, James Bezan]

Mr. Reid.

[Jeff Reid]

In terms of your first question on where the money is going to come from and so on, I think what we have before us right now is maybe an opportunity in that we have seen significant appreciation in commodity prices, largely because of this fuel--ethanol--situation pulling acres out of agricultural food production as a whole. Thus we've seen a tremendous increase in the value of our food products in recent months.

I think we have a window of opportunity here to make some transitions in terms of how we approach this market and get some innovation going. I think we really have an opportunity to make some very rapid progress here in terms of, for example, registering new types of varieties for western Canada that will yield significantly more and allow farmers to take advantage of those high prices.

So, again, I think we have a real opportunity to make some changes in the short term like never before, which will have fairly short-term payoffs, really, relative to prices and advancements we've seen over the last 20 years.

In terms of production costs and the cost of seed and so on, again, I think farmers are very rational and they look at their overall production costs when they make purchases. I would say that now we are seeing delivered in that bag of seed not just seed as it was a number of years ago but with that the technology--for instance, if it's a Roundup Ready crop, that's allowing them to maybe not have to till the land. So they can avoid the costs of tillage and equipment and soil erosion and so on.

If it's a Bt crop that can avoid corn borer, they're avoiding having to spray insecticides in the environment and so on, not to mention the huge yield advantages I referred to earlier.

I think it's a case of seed becoming just that much more important because it's now the vehicle to deliver that technology that previously required far greater expenditures in other ways by the producer.

[The Chair, Conservative, James Bezan]

Your time has expired, unfortunately, Mr. Steckle.

Mr. Storseth is next.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much, Mr. Chair.

I do want to ask you some very specific questions, but I have to make one comment. The fact of the matter is this government has put more money into agriculture than any government in the history of this country, and the tax relief being offered through Bill C-28 is going to affect farmers and benefit farmers as well. It benefits all Canadians.

Mr. Reid, in your submission you talked about KVD. This was something about which you seemed very adamant and very strong. Could you expand a little bit about the importance to you of changes to this system, and how that would benefit our producers as well?

[Jeff Reid]

Sure.

To my knowledge, Canada has been the only jurisdiction in the world that has used KVD, or kernel visual distinguishability; for a variety to be registered and fit into a certain class, it has to look a certain way. As time has gone on, that's had the effect of essentially narrowing the gene pool from which we could cross, and thus has had a very negative impact on our ability to register higher-yielding varieties over time. Even varieties that have been an improvement in terms of quality, disease tolerance, and so on haven't been able to reach the marketplace because of that constraint of kernel visual distinguishability.

I think this has really come to a head in the last couple of years because of the new opportunities with ethanol and the need for more feed, and so on, in western Canada, in recognizing that the west needs to have the same opportunities we've been enjoying for close to the last 20 years in the east, where we have been able to make some really substantial increases in yield. It's certainly a very critical issue I think for the seed industry and for all of the downstream sector as well, particularly the feed industry and the ethanol industry, to meet that need for more production overall.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

How long has this issue been on the table for you? How long have you been advocating for this?

[Jeff Reid]

It's certainly been a burden for western Canada for many decades, I think. As I say, we had the fortune of eliminating that in eastern Canada in 1989, and within a very short period of time we saw substantial increases in yield. As we indicated in our submission, in the last 15 years we've seen a 62% increase in wheat yields in Ontario, largely because we didn't have that burden of having to meet kernel visual distinguishability.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

It seems like a no-brainer to me, from what you're saying.

What's holding it back? Have there been any organizations or groups?

[The Chair, Conservative, James Bezan]

I think Mr. Schwab wanted to get in on this as well.