Good morning, Mr. Chairperson, members of Parliament, and fellow guests.
My name is Doug Robertson. I'm the president of the Grain Growers of Canada.
With me today is our executive director, Richard Phillips.
First, I'd like to thank you for the opportunity to be here today to share our thoughts on the competitiveness of Canada's agriculture sector, especially as it relates to trade.
Grain Growers of Canada represent grain, oilseed, and pulse commodity associations from every province in Canada except Quebec, but even there we are now forming a coalition to work together with the FPCCQ on the funding of public research.
Today in our remarks I'd like to touch first on international trade, then on domestic competitiveness, and then on some key areas where we need to see investment and progress to keep Canadian producers competitive.
Darcy was just talking a little bit about bilaterals, which are a good thing in that we can target key markets for Canadian exports. For example, we have the NAFTA agreement. We have the South Korean agreement, this proposed EU deal that is in the works, but they can also come back and bite us. They can be bad because we're not as large a market for imports so we don't have the same bargaining clout that, say, a country like the U.S. does. In South Korea, for example, the U.S. can negotiate a better bilateral deal because they have a large import market for Korean goods, which is attractive to the Koreans. This then permanently locks in Canadian exporters at a competitive disadvantage on tariffs.
A more competitive deal for Canada would be multilaterals, like the ongoing world trade talks. The multilateral process is crucial because it's the only meaningful way to get at the key issues of domestic and export subsidies. It is critical, as a new U.S. administration comes to grips with its trade policy and India finishes its elections, that Canada take a lead role in pushing for the resumption of talks at the WTO.
Subsidies from other countries can be direct and indirect, for example, with EU oat subsidies. Although the EU doesn't export cheap oats into Canada, they do sell cheap oats into the States, and that depresses our prices in Canada because most of our marketing is done into the States as our main market. We have no ability to sell into the EU because that's restricted.
Every country in the world wants to protect its farmers, so we see multitudes of subsidies and tariffs preventing the movement of agricultural goods into every country in the world. We are not unique in wanting to protect our farmers. A multilateral deal provides the rules for fair trade that everyone has to follow, whether it's a large, powerful country or a small one like Canada. It also provides dispute resolution to solve disagreements that have dragged on for years and years.
Another area that would increase our competitiveness is the harmonization of regulations among our trading partners, specifically the U.S. and the EU. The GROU program is an excellent example of how difficult it can be to bring in a virtually identical although lower-cost product from the U.S. While we don't want to risk food safety or lower our own standards, the regulatory burdens to import even identical products seem to be enormous. The program, as it stands now, is not working. We must remember that the ultimate goal is to allow the same scientific testing that's done in the U.S. and in Canada and the EU to be accepted by each country so that the same agricultural products are available to Canadian producers that our competitors in the U.S. and the EU can already access. The problem is that the way things are right now, if you want to get a product registered in Canada, or even any other province within Canada if it comes into Canada already, it requires added testing costs, and companies are not able to recover those costs because of our smaller market up here. It is called minor use registration for those products.
A useful and often safer and cheaper product cannot be purchased by Canadian farmers. If regulations were harmonized, this artificial disadvantage would be alleviated and every province would benefit.
Domestically some files also need some action. One of them is smart regulations. A major initiative was started under the former government to clean up Canada's regulatory environment, but we have not heard of any emphasis or progress on this file for some time. We would strongly encourage the government to make this a priority. Regulations that add either unnecessary costs or time for approval processes simply discourage innovation, and innovation is key to our competitiveness in Canada.
On the public research front, this is probably the one area where we have seen complete solidarity right across producer groups in Canada and across all the commodity groups in Canada. We are currently in the process of forming a coalition with the FPCCQ, the Ontario grains group, and the Western Grains Research Foundation to formally raise awareness and ensure that resources are committed to public research.
The private sector does make substantial investments in corn, in soybeans, and in canola, but there simply isn't the return in cereals and pulses under our system to spur private research at the levels necessary. Crops like wheat, barley, oats, and peas must have public research as their chief research base. In many cases producers have check-offs on those crops and they're very willing to contribute to research funding, but we need the federal government to step up and be an even bigger partner in this critical area of competitiveness.
Work on agronomics, which is the basic research, has suffered the most neglect at a time when our seeding techniques are fundamentally different now--with low- or no-till seeding--than they were 20 years ago. Things like fertilizer placement, cereal-pulse rotations, and optimization of fertilizer and chemical use for both environmental and economic reasons are critical to the long-term sustainability of agriculture.
As well there is a serious concern that when the current group of plant breeders retire they're not going to be replaced and their programs will die out with them. Before we lose these experts, we must have their replacements working under them, or agriculture R and D in Canada will falter and take years to be rebuilt.
Spending on maintenance of existing facilities has been cut back, and in some cases we have the new facilities but there is no funding to put lab equipment or tools into the buildings to do any work. This has happened in Agri-food Discovery Place in Edmonton--it's a beautiful building but there's not much in it.
Research and development in primary agriculture is the backbone of our ability to compete as a nation with crops that will flourish in our challenging Canadian climate. Simply adopting a formula for funding and research that exists in another country--like Australia, for instance--as a solution for all our problems is ludicrous. We need a made-in-Canada solution that recognizes our realities.
Regarding grain transportation, the perpetual challenge of shipping grain and other commodities in a timely and predictable manner is in the midst of a level-of-service review by Transport Canada. The government must take firm and timely action to implement the findings of this panel, and it has taken years of work by the shippers to get to this point.
Regarding safety nets, we are supporting the efforts of the Canadian Canola Growers, which has already started work on the next generation of safety nets for the grains and the cereals and pulse sectors. Reliable and predictable safety nets are key for Canadian farmers to be able to make investments and production decisions that improve our competitiveness. This initiative involves having a thorough look at the pluses and minuses of a number of past and present programs, then starting with a clean slate to bring together the best ideas of those programs. We in the canola growers would be pleased to share our findings with you in the near future.
In terms of biofuels, the regulations to implement the legislation passed last spring appear to be bogged down in a department either unwilling or unable to move this file forward on a timely basis. Biofuels create a strong base for crop demand, which provides a floor price for farm income. You must ensure these regulations receive priority for this industry to be functional in 2010.
In summary, these are only some of the many issues that our members are asking us to work on here in Ottawa, but if this committee puts its support behind these initiatives, this would be an excellent start to improving the competitive position of our sector both domestically and internationally.
Our final point to take home today is that for all agriculture and for the innovation and research we need, decisions must be based on sound science.
Thank you.