Agriculture Committee on April 21st, 2009

[Mike Dungate]

In terms of horsepower, we're at a troubling time right now, losing our chief agricultural negotiator, which is great for him—he is off and has received a promotion, and that's fantastic. That being said, from what I understand, we've had some difficulty filling the job of chief agricultural negotiator for the WTO. I wouldn't wish that travel schedule on anyone. When your job is in Ottawa but your commute to work is to Geneva for two-thirds of the year, that is not an attractive position. But we need somebody with skill there. We're going to lose a lot of experience, and we need someone now.

While there may be a lull right now in the negotiations that are going on, now is the time. This person has to build up contacts, has to get up to speed on these issues, and all of that. That, Mr. Eyking, would be the key part in terms of horsepower. As a result of our not having a negotiator in place, more will fall to ministers in terms of playing that role. They'll have to do it.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

As you know, ministers change.

[Mike Dungate]

Ministers do change.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

So it's key that the negotiator be on the ground now, that he have done his homework, and that he understand the industries. Isn't that right?

[Mike Dungate]

Yes. I'd say that's the biggest challenge concerning the WTO, and I think the other one is the uncertainty about where it's going right now. We talked about an intendence going in a different direction at the WTO and about whether it is going to go strictly to agriculture. There have been a lot of calls for a separate world agriculture organization to govern trade. I think that proposal is more reasonable than the view of those who say, just don't trade in agriculture.

As we know, there are special issues—that's why we're looking at a market access secretariat—in agriculture. It's not in other products. We have unique issues in agriculture that do not complicate the regular trade in products: we have fresh products, we have issues, and food is a requirement for all of us. You can do without a TV set, and that TV set can sit in storage and not lose value. When we put something in storage, its value drops immediately.

That's what we're dealing with in agriculture, and that's why we have to be aware of what's going on there.

[Gord Hardy]

I think I'd just like to point out that a large percentage of agricultural farmers within Canada want to trade. There's a large percentage that need this trade. I do congratulate government on the work they've been doing on world trade, but to us, just getting more market access means quite a bit to the whole of agriculture, not just beef but to every sector, the grains and oils, as you point out, as well.

I don't want to see this lose the focus on our primary producers. We need to look at our primary producers and keep them in business, because we're losing them fast. Canada needs to stand behind their producers.

[The Chair, Conservative, Larry Miller]

There are just a few seconds, Mark, if you want to make a comment.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

This goes back to Mike, on what's happened about the U.S. When they're at the negotiating table, especially with products like chicken, what's their position? You alluded to Brazil and pushing back. They're in the position of keeping tariffs in place, so would there be no dumping in their country?

[Mike Dungate]

I think what you're seeing from the U.S. is a real concern. I'll call it addressing the elephant in the middle of the table, which is Brazil, which wants to hide behind being a developing country, not provide any access, take every single provision to get away from it; and the U.S. is saying, “We're not giving up our export subsidies, our domestic support, and not getting anything from you. You're not hiding behind it, and until you start coming to the table on a realistic basis...”. Brazil considering itself developing in terms of agriculture is ridiculous, from that perspective. How do you do it so that it's real, so that the benefits don't come to one?

In the chicken industry, Brazil and the U.S. account for 76% of global chicken exports. Brazil alone will benefit from any opening in chicken on this ground--no other country. There's not a benefit for everyone else. It's a benefit for them, for they who have that cost structure to be able to leverage it. We have to look not just at the opportunities that are out there but at what's realistic.

[The Chair, Conservative, Larry Miller]

Thank you.

Time is important. Mr. Holder, five minutes.

[Ed Holder, Conservative, London West, ON]

Thank you very much, Mr. Chair.

I'd like to thank our guests for being here today.

I must tell you that my city of London, Ontario, which I like to say is the 10th largest city in Canada, is not particularly agriculturally based, but certainly surrounding us is Middlesex County and other counties, and you would know that. I'd like to take exception, though, to a comment that my colleague said: I don't care what the weather is. If it's drizzly, wet, and nasty, I'd rather be inside than out, and for those others who have a different passion, God bless you.

But my interest in agriculture isn't just because I had breakfast and lunch today; it's more around the standpoint of trade. I've heard a lot of comments about trade today. I sit on the international trade committee and I'm particularly interested in some of the comments.

In fact, Mr. Dungate, you just made a very compelling comment about Brazil, which I'll come back to in a moment.

I've had the privilege to head a delegation to Peru. We talked about the beef industry there in terms of opening up markets and we're trying to secure the free trade deal with Peru. The reason we need to do that, as you know and my colleagues opposite know, is that the Americans have put a free trade deal in Peru. Our delay in implementing that puts Canada's beef industry and Canada's agriculture industry at a total disadvantage because the Americans are there. I say that not as a political comment but as a comment on behalf of the interests of all Canadians in agriculture.

First, if I might, Mr. Dungate, in your presentation you made a comment about bans in terms of the chicken industry. You weren't as concerned about Mexico, but you talked about the Philippines and Taiwan. I just came back from Taiwan, and one of the things that we did, I will tell you, is talk about the beef industry in Taiwan to the president of Taiwan. We did not talk, I will tell you, about chickens. I tell you that sincerely, but I would ask you to help me understand the circumstances in the Philippines and Taiwan. How large is that market? How long has the ban been there? Or what's the potential size of it? I'd like just briefly a bit of history on that, if you don't mind, sir.

[Mike Dungate]

It's the same way with the cattle industry. Not all parts of the bird are preferred by Canadians. Primarily dark meat goes to the Philippines and Taiwan. In fact, we've created quite a market in the Philippines, because in western Canada we feed wheat and barley as opposed to corn and soybeans. It provides a whiter meat, and in fact they like that in the market there. And so we've done that.

It becomes a real transportation effect. We have a couple of key processors who are aggressive; they're based in B.C., and one has operations in Alberta and the other in Saskatchewan. Transportation becomes a key element in terms of being competitive in that market. If you are in central Canada, you've got to be trying to export towards Africa. You just can't make up going across this country with frozen product.

That market is key from that perspective of just getting total value on a bird. We export about 6% or 7% of our production. That's about what we need, to sell those parts at probably the best value we can get. It's pretty stable at that point. The U.S. exports about 17% of its chicken, and it's stable. It has been at that level for 15 years. It needs to balance its market. We don't need to go more in terms of export; we just need that balance.

We had an AI outbreak in the Fraser Valley. Philippines is the key market for both those processors. Taiwan is second. There are a number of other countries, but those two are key, and we need them open as soon as possible.

[Ed Holder, Conservative, London West, ON]

That is appreciated. We were there as guests of Taiwan. Just to be clear, it wasn't part of the international trade committee. Certainly when we travel we like to promote Canada, regardless of where we go.

I'd like to change the question around to COOL. I think it certainly impacts both the chicken and the beef industry. It's an area that will be one of the subjects of discussion when my committee goes down to Washington next week.

I got a sense...and I'm following up on Mr. Richards' comments, Mr. Hardy, where you said that based on timing or circumstance it didn't seem to have as much impact in Ontario. But I'm concerned in the longer term about COOL. As I look at the background to what is going on with it, I am terribly concerned about the protectionist mindset that, frankly, I think COOL hides behind, if I can put it in those terms. And that is my sense of that.

I'm not asking you to speak for the cattlemen across Canada, but could you imagine a point sooner versus later when that's going to have an impact in Ontario? I would appreciate Mr. Dungate's response on that as well.

[Gord Hardy]

I believe it will, because with the way country of origin labelling is set up now and the wording of it, it has processors down in the United States and retail having to put a cost on. That cost is not borne by them; it comes right back to the primary producer. That's where that's coming off. So yes, we will be working into a discount that will be put in place through the country of origin labelling.

[The Chair, Conservative, Larry Miller]

Thank you.

I'm sorry, I didn't mean to cut you off, Mr. Hardy.

[Ed Holder, Conservative, London West, ON]

Is it still possible for Mr. Dungate to respond?

[The Chair, Conservative, Larry Miller]

Yes, if he can do so briefly.

[Mike Dungate]

I think in any market access gains, if you lose a market that you had, it's the worst thing. Missing an opportunity by not getting into a market is one thing. Losing one you had comes back. As for COOL, if pork and beef can't go where they naturally have gone, into the U.S., and come back into Canada, that means there's more meat in Canada. That means there's more pressure on all meats in Canada. That's what COOL legislation is doing overall.

[The Chair, Conservative, Larry Miller]

Thank you very much.

That concludes our questioning. I'd like to thank all of you, as witnesses, for coming here today and participating in our study of this. We do have some committee business to attend to.

Yes, Mr. Bellavance.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Chair, I do not know if we will have time to get through all the motions, but since we started at 11:10 a.m., I would ask for consent to end the meeting at 1:10 p.m.

[The Chair, Conservative, Larry Miller]

Mr. Bellavance, everybody, we discussed this earlier, and unless it's been predetermined.... Everybody has meetings. I know I have to go at one o'clock. I think we made it very clear that we have so much time to meet. The meeting is scheduled from 11 until 1 o'clock, and that's when I intend to deal with it. I think....

Just one second, Mr. Easter.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

I do want to mention that we regularly extend meetings. I would not want people to get the impression that our meetings always run from 11 a.m. to 1 p.m. That is false. We very often accept, in good faith, to go overtime in order to satisfy requests from various members, but if that is the case, the next time we will indeed hold our meetings between 11 a.m. and 1 p.m., and the same rule will apply to everyone, all the time.

Is that the understanding?

[The Chair, Conservative, Larry Miller]

Yes, it is. That's generally the benefit. That has been the understanding. It has happened a couple of times. The last time I had to leave, and that was fine. We had an understanding at the start that if we needed extra time it should be dealt with in advance with a motion, so people could make time arrangements; or at the start of the committee, if the committee so desired, we could save half an hour for committee business. We need to have that direction at the start of the meeting.

But we're wasting time here, and we could get on to these motions.

Mr. Bellavance.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

We are not wasting time; we are only trying to come to a friendly agreement, but if that is not possible... That is something we did with the former chair. And besides, since this committee has begun its meetings, that has happened regularly. You said so yourself. We started at 11:10 a.m. and will conclude at 1:10 p.m.

Now, if we do not have time to discuss my motion today, I would ask that it be the first item on the agenda on Thursday.

[The Chair, Conservative, Larry Miller]

Mr. Easter, you have a point of order.