Agriculture Committee on March 31st, 2009

[Jeff Reid]

First, I would just like to clarify that the Canadian Seed Trade Association makes no claims about transgenic being any better than conventional varieties. Our members are actively involved in producing and distributing and selling both transgenic and non-transgenic varieties. Further, I think on the analogy you gave of being able to plant your own seed, that option certainly still exists for farmers in that we do still have conventional varieties available, open pollinated in crop types, with the exception of hybrids in corn, but in corn that's not really related to the transgenic issue. Certainly open-pollinated options are still available, but in the majority of cases where transgenic products are available, those are the ones that generate a higher profit for farmers, so that's what they elect to plant.

[France Bonsant, Bloc, Compton—Stanstead, QC]

In the section on plant research and development, you talk about the private sector, which represents 39%. Is Monsanto that private sector or do you compete with Monsanto?

[Jeff Reid]

The 39% investment by the private sector is all of our member companies combined. So some of that would be multinational corporations that are investing within Canada, as well as smaller independent companies.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Every week in Quebec we have a television program called La Semaine verte. It talks about agriculture, seeds and various problems. On one program, they talked about seeds produced in Canada, supposedly parasite- and disease-resistant, which had been sold in India. Indian farmers planted that seed to grow cotton, but lost their entire harvest because it was infested. It was a dog's breakfast, as it were. I have reservations about anything called modified seed. It's as though I suggested that you, Mr. Reid, change your DNA. I don't know what would grow on your head. Perhaps you might grow a third arm as well.

You say that your seed isn't too transgenic, that it is safe for human consumption, but is it really?

[Jeff Reid]

First, I'd just like to say that we support the system we have in Canada of a science-based regulatory system. That system is one where we don't prejudge the marketability of a product based on other factors, non-science-based factors.

I can't comment specifically on the instance you're referring to. I'm not sure what the issue was there, what claims may or may not have been made. Regardless of that, when we look at the transgenic products that are being sold and used commercially in Canada, we believe there's been a tremendous environmental benefit by reduced use of pesticides that can leach in the ground, reduced requirement to till, so far less soil erosion and so on. I think if you look at the bigger picture in its entirety, the use of transgenic has not only put more dollars in farmers' products, but it's also been a tremendous benefit to the environment here in Canada and in other countries where they've been used appropriately.

[France Bonsant, Bloc, Compton—Stanstead, QC]

I would like to know whether you have any canola processing plants in Quebec. I believe we're barely starting to grow it.

[JoAnne Buth]

There isn't right now, but a plant is being built right now called Twin Rivers Technologies. It will be a plant comparable in size to what is functioning in western Canada, so it will be able to process canola and also soy, and it will also be able to refine products.

I do know they are looking at increasing canola production in Quebec, and they look at sourcing most of their canola from Ontario and Quebec, they hope, and also soybeans. But to start with, they will be using canola from western Canada. So it is a crop that is expanding within Quebec, and we expect that over the next few years we will see quite a bit more production.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Atamanenko, for five minutes.

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

Thank you very much for being here, folks.

Mr. Bast, my first question is to you. We often get into debate about the Wheat Board and the different associations. How many card-carrying members do you have in your association?

[Mike Bast]

Currently we're at less than 1,000.

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

Do you have directors from each province?

[Mike Bast]

We have members from across the Prairies and directors from across the Prairies.

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

Thank you.

Once again, to go back to the Canadian Wheat Board question and competitiveness, in his letter to our chair, the chair of the Wheat Board, Mr. Hill, stated that there were record returns this year totalling over $7 billion, that during the 2007-08 crop year it “used its disciplined approach to sales and pricing to make sales when other sellers, notably in the U.S., were out of grain”, and that this “enabled the CWB to return values to grain producers that were considerably higher than the weighted average prices American producers achieved”.

We often hear that if we had access to the open market and a dual marketing system, farmers could get more, yet we're seeing in fact that under this current system, according to Mr. Hill, the returns to farmers were better than those of their counterparts. Could you comment on that, please?

[Mike Bast]

Thanks.

Mr. Hill is not telling quite the whole story there. The returns of profit to farmers were a record based on the history of Canadian Wheat Board returns. If we were to look at what the open market returns were, though, we could have achieved much higher returns. That year, the Canadian Wheat Board returned less than the average of what the open market price was.

As an example from just my farm, I had 20,000 bushels of durum. The best I could get on the PRO in January of 2008 was $12 through the Wheat Board. The open market that day was sitting at $21.80 or something like that. When I phoned the board, there was nothing more I could do.

Taking a loss of roughly $10 per bushel to my farm is $200,000, and I'm considered a small farmer. That's a huge hit for me because I was compelled to go through the monopoly system.

Mr. Hill is correct in that there were record profits to farmers based on CWB returns, but not based on what the real market was in the world and on what we could have achieved.

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

My other question is in regard to farmer control and farmers making decisions. What is your comment on the CWB director elections, which returned more directors who want to continue with the single desk?

[Mike Bast]

Right now, we have 10 directors out of 15 elected by farmers, but there are problems with the election in regard to who is eligible to vote, how many people are actually voting, and what acres they carry. Is somebody with 5 acres voting, compared to somebody with 1,000 or 500? What risk in the market does a guy have who has 5 acres in production compared to a guy who is making his entire living off 5,000 or 1,000 acres?

Even though we are electing 10 directors, the process to get those 10 directors elected is heavily skewed in regard to whether it's a true reflection of who's really representing the Canadian Wheat Board.

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

Thank you.

My next question is to anybody here in regard to the whole idea of genetically modified organisms and genetically modified wheat. Genetically modified alfalfa apparently has recently been approved by Health Canada and Environment Canada for cultivation in Canada, yet there's some concern that genetically modified alfalfa could devastate the organic farming industry, which uses alfalfa for their soil.

Then there's the whole idea that if we had GM wheat in Canada, for example, this could in fact contaminate non-GM wheat, which would then decrease. We talk about market access, but this would shut down some markets, specifically in Europe and also around the world, markets that value the high quality of our non-genetically modified wheat at this point.

As for my question, although we've been doing some research on studies of GM foods, it's about the idea of contamination. Can that have a negative result on our farming industry here and also on our ability to compete? I'll open that up to anybody.

[The Chair, Conservative, Larry Miller]

You have 20 seconds.

[Voices]

Oh, oh!

[JoAnne Buth]

From the canola point of view, one of the things we do in canola is we have an industry agreement for this: the industry agrees to get approvals in our export markets. We are a bit different because we have a small number of markets: the U.S., Mexico, China, Japan, and now the EU, which we've been fighting for a long time, and some smaller markets.

But because we work so closely together with industry, we have not had those issues in terms of GM canola affecting our export markets. Canola growers have chosen GM canola and now grow 85% of the acreage in GM canola.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Hoback, for five minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Again, thank you, everybody, for coming today. Your presentations were all very professional and very enlightening. It's nice to see two out of the three industries are doing very well. I guess that's where I'm going to drive into.

Mr. Reid, you talked about where the private industry was actually funding, canola versus wheat versus pulses and other crops. Which crop did you say was getting the most funding right now? And can you quickly explain why?

[Jeff Reid]

In Canada, canola is by far number one, and largely because there's the ability for companies to sell seed, which in turn is due in part to the enhanced intellectual property protection, because there are patented traits involved and so on. So companies can actually get a return on their investment, whereas in those other crops, such as wheat, where we see a very low level of investment, it's very difficult to see any sort of return on investment.

[Randy Hoback, Conservative, Prince Albert, SK]

Ms. Buth, in the canola industry you do some interesting things as far as segregating product, ID, IP products. Could you expand on some of the programs that are out there in the canola industry and just how they're working?

[JoAnne Buth]

We don't actually IP non-GM. It's a very small part of non-GM. I would say it's virtually at zero now, partly because there is no premium in the marketplace, and it is difficult to produce organic, which is where most of the interest is.

In terms of IP-ing, we have several different streams that the canola industry segregates in order to meet specific market needs. One of those is the old high erucic acid rapeseed, which goes for industrial purposes. The biggest by far right now, which is making up about 18% of our acres, is high oleic canola, or specialty canola, which is very specific for the food processing industry for them to move away from a hydrogenated product so that they can have a transfat-free product. For McDonald's french fries, etc., where they were using a hydrogenated product and ended up with transfats, they now can use high oleic canola and it will be transfat free.

So part of the innovation is looking at where the markets are and how the crop can be modified to meet a higher premium market, because there is a higher premium for high oleic canola.