Agriculture Committee on Dec. 10th, 2007

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you.

My third question, and probably my last—I guess I have a little bit of time—is the whole idea of innovation, other uses for what traditionally have been food crops--biofuels, carpets, insulin.

We are seeing that as a result of the tremendous impact of the cultivation of biofuels in the south and in the United States there is a drop in the food stock in the world.

You mention, Mr. Dennis, that because of the biofuel industry we have to improve the efficiency of the foods we grow. There is some research showing that what's happening in the biofuel industry may not be that efficient for climate change, may not be that efficient in putting money into farmers' pockets, and is displacing people from land in the south.

Could we possibly not be going in the right direction, and should we not slow down a bit, especially when we talk about the whole issue of feeding ourselves, feeding the planet, and our own national food security?

[Dr. David Dennis]

Yes. I think if we're going to use plants for making biofuels, they're going to have to be grown on marginal lands. You can't put them on first-grade land because that will have to be used for food crops. We have to be aware there are 842 million people in the world who are basically starving--which is 25 times the population of Canada--and this is a huge problem. We can't ignore that, and I think companies like Performance Plants have to make an effort and say yes, this is good for Canada, but can we help to solve that problem?

We have to not use first-class land for these crops; they're going to have to be grown on marginal land. That's why we're looking at these new types of crops that can grow on these lands. Something like poplar, of course, grows right across Canada and down quite a lot of stretches in the U.S.A., but this land would not normally be used for agriculture.

We have to be very careful about this, and I agree with you totally.

[The Chair, Conservative, James Bezan]

Thank you.

Mr. Boshcoff, you're going to kick off our second round for five minutes.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

Thank you very much, Mr. Chairman.

There's an aggregate measure of support, which I believe you are all familiar with, and it indicates that for Canada we could spend approximately $4.3 billion in support for agriculture, but we only spend $2 billion. I want to plant the seed, so to speak, with respect to what you may think about that in view of today's Washington Post story entitled, “Congress studiously ignores the staggering waste in agricultural subsidies”. The Senate is likely to pass the Farm Bill this Friday at $288 billion. The question that's indicated in the article is that this is notwithstanding the fact that crop prices are surging and farmers are doing very well. They go on to mention all sorts of things. For example, the U.S. sugar industry is getting a 10-year $1 billion program to prop up sugar prices in advance of NAFTA coming into full effect so they can bypass the Mexican market.

When we talk about an issue of this magnitude.... I'd really like to hear what you have to say, from your industry's perspective, on your ability to compete in product development, to get support, and to then export, in general, internationally in the weighted WTO system that allows this to proliferate.

[The Chair, Conservative, James Bezan]

Who wants to go first?

[Dr. Phil Schwab]

From our standpoint, I might just toss out that spending on innovation and science would not be counted against that aggregate support. That would be a green-box kind of payment, so the more Canada can do to stimulate the development of technology that can then be exported worldwide, the more income we will have coming back into our innovative agricultural sector. Companies like Performance Plants and Okanagan Specialty Fruits are developing technologies and varieties that can be marketed and licensed around the world and can bring income back into the Canadian agricultural sector.

That would be my input.

[Jeff Reid]

Further to that, again, echoing the comment about research and development being green, that is a big part of what we see as being required in Canada: more innovation and more research and development.

A lot of what's happening, certainly in the U.S., is that they have this huge corn crop that's in large part going into ethanol, and they're taking acres out of wheat and other crops in general. So I think that's where we have a real opportunity in Canada to serve a lot of those markets that are demanding our wheat and things for exports. We really need to make sure that we can take full advantage of that by having research and development that will keep us at the forefront of development in those cereal crops, particularly in western Canada.

I would echo your concerns that we definitely can't compete with the U.S. on the basis of dollars. We have to be smarter and look for longer-term, systemic solutions.

[Gordon Bacon]

It was probably 25 years ago that U.S. farm support in the wheat sector really drove a lot of farmers in western Canada to look for alternative crops. At that time, pulse crops weren't under the Farm Bill, and this industry developed. This massive subsidization of agriculture has been a long-standing problem in our industry. We have to innovate, because we cannot compete with that level of support. One thing I would also add is that what we can do and need to do is ensure that we have ongoing market access.

We are facing two problems. One is that the U.S. industry is receiving support on a broad range of crops, but also, the U.S. has taken a very aggressive approach in negotiating bilateral trade agreements, and in the absence of a WTO agreement that does bring some discipline into this system, we've been advocating that Canada also pursue bilateral trade agreements. I'll just give Morocco as an example. A U.S. trade agreement is in place that gives them preferential access to a couple of important crops: durum wheat and lentils. We certainly have appreciated the action that has been taken to try to get more bilateral agreements in place so that we can at least maintain market access.

[The Chair, Conservative, James Bezan]

Be very quick, Mr. Dennis. The time has expired.

[Dr. David Dennis]

One of the things that is really important to a company like ours is that we're commercially viable, so we look at the commercial viability of any product.

The only government support we've received is the R and D tax credit. This is incredibly important, and I hope people continue this because it's a way of stimulating research that will be viable. That's the only funding we receive from any government in Canada.

[The Chair, Conservative, James Bezan]

Thank you.

[Ken Boshcoff, Liberal, Thunder Bay—Rainy River, ON]

May I ask the clerk to distribute this article at our next meeting? Would that be acceptable?

[The Chair, Conservative, James Bezan]

If it's translated, it can be circulated.

Ms. Skelton is next for five minutes, please.

Oh, it's Mr. Lauzon.

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

I'm sorry about that. We changed our minds and didn't tell the chair.

[The Chair, Conservative, James Bezan]

I always believe in ladies first, you know.

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

It doesn't work that way in committees.

Thank you very much for being here, gentlemen.

I've been meeting with a lot of different agricultural groups--private individuals, farmers, different associations' representatives, etc. They all keep saying that the future is in research and innovation. You folks have been here about an hour and I've heard “research and innovation” repeatedly.

I guess what they've told me and what you're telling me is that the future of agriculture is critically dependent on research and innovation. I've also heard from you this afternoon that the non-BRM part of Growing Forward is very encouraging to you from a research and innovation perspective.

Can you elaborate as to why you're so positive about that?

[The Chair, Conservative, James Bezan]

Mr. Schwab.

[Dr. Phil Schwab]

From the early drafts of the innovation and science chapter, there was a focus on taking new technologies from Ag Canada laboratories and our universities to early stage emerging companies and down to the farmer level. That was a key focus in that early chapter.

Another key focus was providing resources to help farmers and ranchers adopt that technology to help them learn and experience the benefits those technologies can bring to their farms and ranches across the country. Those were critical early pieces that have remained throughout.

The focus on a modern regulatory environment is also at the core for many of us here and the folks we represent. Seeing that commitment to a strong, science-based, modern regulatory environment within the innovation and science chapter is very important.

Not to be lost in this is the support for innovative organizations like Pulse Canada, Soy 20/20, the Ontario Agri-Food Technologies, and similar organizations that are searching out new technologies from our universities and helping to connect them with the small companies, the multinationals that are going to develop them.

That's a key component in taking that investment at Ag Canada to our universities, scientists, technicians, and researchers who are working so hard to bring new innovations to our marketplace.

[The Chair, Conservative, James Bezan]

Mr. Bacon.

[Gordon Bacon]

In our production industry we need to have an R and D strategy to create new products. But one thing this committee might want to consider is looking at the level of public research investment in agriculture and benchmarking Canada versus some of our competitors like the U.S. The numbers are quite startling when you see that the level of public investment in agricultural research in Canada has fallen quite substantially.

Growing Forward is more of a policy framework. That's an important thing to have in place, but some sound arguments can be made that all Canadians would benefit by substantially increasing public research investment to go along with the investment that farmers are now making, where growers in the pulse industry are contributing up to 1% of farm gate receipts to research.

We probably need a good policy framework, but I would encourage you to look at some arguments as to why agricultural research is a good public investment.

[The Chair, Conservative, James Bezan]

Mr. Dennis wants in on this too, Mr. Lauzon.

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

Okay. I should have said that before we go on to Mr. Dennis, the other word I heard repeatedly was “partnership”. I think what you're saying is that it's a partnership among the agricultural producers, the government, and the innovative people in science.

Mr. Dennis.

[Dr. David Dennis]

Yes. Our drought technology came out of the University of Toronto. We've established a chair of plant biotechnology there. We have a very close link between our research laboratory in Kingston and the University of Toronto.

We're also establishing a very close link with Queen's University. We started out with Queen's, but we're now going back and developing a very close relationship.

We'll take genes from any university. At the moment, we're also looking at genes from the University of North Carolina. With some of the money the Americans are putting in, maybe we can get some benefit from it here in Canada.

[The Chair, Conservative, James Bezan]

Mr. Reid.

[Jeff Reid]

On behalf of the seed industry, I'd definitely like to echo your comments that we're very encouraged about the focus on innovation and research. Regulatory reform is obviously an important part of that.

We would also note that the Canadian private sector invests heavily where there is an opportunity to recoup that investment. One of our concerns, though, is that we don't see many references to intellectual property protection in the Growing Forward document. It's something that we really feel is going to be key in going forward, particularly, as Mr. Bellavance pointed out, when private sector investment is lacking in certain areas. We really need to see some improvements in intellectual property protection.