Agriculture Committee on May 5th, 2009

[The Chair, Conservative, Larry Miller]

Order, please.

Mr. Bellavance.

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

Mr. Chair, do you intend to table the report on the golden nematode this week, as was planned? When will you be tabling it?

[The Chair, Conservative, Larry Miller]

I intend to table it on Thursday. I have House duty that day and will be there anyway.

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

Couldn't it be tabled earlier?

[The Chair, Conservative, Larry Miller]

Yes, I guess I could.

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

Do it as quickly as possible. If you tell me that it will be this week, that answers my question.

[The Chair, Conservative, Larry Miller]

Okay. Definitely, if you want it tabled a day or so sooner, I could do that, but that was my intention.

As you know, we've had a lot of extra meetings. It would just have been simple for me, but it will be tabled Thursday.

Before we move to our witnesses in just a few minutes, as the committee knows, at the last meeting a motion to visit Washington was passed. There's a liaison committee meeting today at 1 p.m. If this proposed budget for the trip is passed, it can be dealt with today. The copies of that are being made.

[Wayne Easter, Liberal, Malpeque, PE]

Just give us the figure. That's all we need to know.

Is it $102,800?

[The Chair, Conservative, Larry Miller]

It's about $27,000, Mr. Easter. We'll confirm the exact amount. That's with every member using their travel points to get to Washington, as per House of Commons rules.

[Wayne Easter, Liberal, Malpeque, PE]

I'll move it anyway.

[The Chair, Conservative, Larry Miller]

The motion is moved by Mr. Easter. Is there any further discussion on that motion?

Mr. Bellavance.

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

I would like to know what the amount is? Is it $27,000?

[The Clerk of the Committee, Ms. Isabelle Duford]

It is approximately $27,000. We are making copies.

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

I don't like your list very much. It's not very specific. I know that this is a detail, but...

[The Chair, Conservative, Larry Miller]

Okay. I guess the only way we can give you that is if we wait until the end of the meeting. Do we want to defer the motion until the end as well?

Very well, then.

With that, we will move into continuing our review of competitiveness in Canadian agriculture.

We have with us today members from the Canadian Federation of Agriculture. We have members here from the Council of Food Processing and Consumer Products. From Wild Rose Agricultural Producers, we have Mr. Townsend. And we have members from La Coop fédérée of Québec. If each organization could keep its presentation to ten minutes or less, we would appreciate it.

We'll start with the CFA and Mr. Pellerin.

[Laurent Pellerin, President, Canadian Federation of Agriculture]

Mr. Chairman, committee members, good morning.

Less than 10 minutes is very little time to tell you about certain aspects of Canada's competitive position in agriculture. So I will try to get right to the point and bring a number of considerations to your attention today.

First of all, the problems faced by Canadian agriculture and its lack of competitiveness stem partly from the fact that for more than 25 years, Canadian government support to farmers has been far less substantial than the support that European and American have received. No doubt farm debt must be much higher in Canada, because the Canadian government's support is not at all comparable to the assistance provided by the American and European governments when times are tough, as they currently are for the cattle industry. These difficulties do not allow farmers in these sectors to have a lot of leeway.

I would like to make a few comments about the cattle industry, both beef and pork. With regard to the BSE crisis, the inspection and processing of carcasses, as well as the removal of residual materials, are much more expensive in Canada than in the United States. These costs represent a very important factor in terms of our competitiveness as compared with American farmers. This reality must be taken into account; it's a question of Canadian regulations.

Country of origin labelling, which has been in place in the United States since March, is also a factor that will affect the competitiveness of Canada's beef and pork industries. We are already feeling the impact of this move and we would like to draw your attention to this issue.

The most recent events related to what is now called influenza A (H1N1) have certainly harmed the pork industry, and we do not know when the damage will end. Every day, the media is talking about this issue, which up until now, has caused certain importing countries to close their borders. Approximately a dozen countries have imposed trade restrictions. Fortunately, the World Health Organization has sent out press releases and notices throughout the world specifying that there is absolutely no link between this strain of influenza and the consumption of pork. Eating pork remains completely safe everywhere in the world. Unfortunately, the crisis has had a negative impact in some countries that purchase pork, even though everyone in Canada is trying as hard as possible to minimize these negative impacts.

In the grain and oilseed sector, market prices are currently slightly better than what we have seen over the past 25 years. Unfortunately, the price of inputs has also risen quite substantially. Now let us turn our attention to the price of fuel and fertilizers; there is a link between fuel and fertilizers. The prices of the two have also risen significantly, which makes it difficult to compete in the Canadian grain and oilseed industry. As for the price of fertilizers, the price of potash, in particular, is kept artificially high. Potash production declined because inventory levels were rather high. Furthermore, the suppliers, the retailers who sell fertilizers to farmers, purchased stock at very high prices in 2008. Even though the prices of goods and commodities dropped in 2009, they are still selling fertilizer at very high prices compared to what the daily price should be, because they paid so much for their stocks in 2008.

I'd like to say a few words about the GO5 coalition and the Canadian Wheat Board. If any sectors are managing better in this time of tremendous price volatility, it's certainly the sectors that have supply management. Actually, they are managing to do much better than other sectors within the industry in Canada.

I would also like to point out that thanks to the work of the Canadian Wheat Board, particularly during the last period when grain prices were better, grain producers in western Canada have enjoyed much better financial yields thanks to this organization which helps them market their commodity jointly.

I would like to draw your attention to one particular aspect of competitiveness. I am speaking of the availability of credit. First of all, I would like to salute the Canadian government for the announcements it ran last week regarding additional access to credit for young farmers and cooperatives. In my opinion, this is a very useful measure that we have stressed and that we will also celebrate. The extension of credit lines until the fall of 2010 through the livestock advance cash payment mechanism is also very good news. I think that many farmers would not have been able to meet their commitments this September. We salute this measure, and we think it is a very good initiative.

There are still a number of ongoing problems. Generally speaking, we cannot say that the agricultural sector has a problem with access to credit. However, if we consider each good, we have to concede that certain types of farming operations have a harder time gaining access to credit. Livestock operations, particularly those that produce beef and pork, are certainly having a hard time of it.

Everywhere I go in Canada, I hear one comment in particular: the additional premiums that are billed on short-term credit margins—we are talking about an interest rate that was increased by 2% over last year or a few years ago—can be explained only by the fact that suppliers of credit say that this sector represents greater risk. On the other hand, this sector is at no greater risk than it was two years ago. And yet, we are seeing these 2% increases on short-term credit. It is not that the credit is not available; but rather, it is more expensive than it should be. If we consider the base rate, which is now at .25%, we should be able to borrow money at very good interest rates.

With respect to competitiveness, I would like to make one last remark about the AgriFlex program. You may recall that the Canadian Federation of Agriculture had made a proposal that was very similar to the arrangement the government has put in place, except that we were suggesting that AgriFlex be available for all non-business risk management programs as well as for business risk management. Ultimately a different choice was made. We are putting forward the same arguments as before, that is we are saying that because of the diversity of agriculture in the various regions of Canada, it would be a good idea to make this program more flexible and extend it to all programs within the Growing Forward Strategic Framework.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much, Mr. Pellerin. You'll get lots of time to add to your comments through questions.

We'll now move to Mr. Jacques Légaré from the Council for Food Processing and Consumer Products, for 10 minutes.

[Jacques Légaré, President and Chief Executive Officer, Council for Food Processing and Consumer Products]

Thank you for inviting us Mr. Chairman.

This opportunity that we have to exchange with you is very important to us. The Council for Food Processing and Consumer Products represents businesses who are major players in the food processing industry and it actually represents $14 billion of an industry that generates $20 billion in Quebec.

Let's turn to page 4 of the slide deck that was distributed. I wanted to show you here how important food processing is. It is the second most important industry in Canada, accounting for over $2 billion in contributions to the government. This industry generates 276,000 jobs, $22 billion of added-value in GDP, exports representing more than $20 billion, imports representing $16 billion and $76 billion in domestic consumption.

However, despite the importance of this industry, in the policy document, Growing Forward, the words "food processing" only appear once, in only one paragraph. We feel somewhat like orphans and we're looking for adoptive parents in the Canadian government.

We're facing several issues. In Quebec, 70% of agricultural production is processed. Agricultural production and food processing are an absolutely essential marriage of convenience for the overall development of the industry.

I gave you a table that shows that grocery bills are just about the lowest in Canada, aside from the United States. Overall, Canadians spend 10.3% of their income on food. In France, that percentage is 14.8%, in England 11.2% and in Greece, 31%. When we look at those countries, we realize that the system can perhaps be improved. Even if the cost of groceries in Canada increased by 2%, 3% or 4%, money could be injected into the system and that would allow the industry to evolve more.

France, England and Germany passed legislation that imposes greater restrictions on retail businesses, something that we don't see here. From our point of view, the competitiveness of processors has to be seen through an analysis of the regulations applied in Canada, which are very good, and which we can work with, but which are not applied to or shared with foreign products that enter Canadian territory and that compete with us.

In terms of the use of claims, in the United States 16 claims are allowed. Products that make certain claims on their labels have no problem coming into Canada. However, in Canada we're only allowed five claims. This is a problem that puts Canadian processors and producers at a disadvantage.

The new "Product of Canada" labelling rules considerably restrict the advantage that we used to have in terms of promoting the high-quality of Canadian products because they set a 2% limit on ingredients that are used in products that are processed and manufactured here in Canada. As soon as a little bit of sugar is added to blueberries that were grown here in order to turn them into jam, they can no longer be called "Product of Canada" even if the labour and the product were 95% Canadian. We can put a "Product of Quebec" label on it but not "Product of Canada". Our Canadian products will be more identifiable abroad than they will be on our own grocery shelves, and this a major problem.

If a little of bit of salt is added during the processing of vegetables, they can no longer be called "Product of Canada". This is an aberration that runs counter to the intention that led to the law being passed. Yet these rules are now being applied. We have made representations, but our position wasn't acknowledged. It is very urgent that this situation be corrected and that Canadian content be reduced to a level that would allow us to add something that cannot be grown here to our products and labour. For example, sugar cane cannot be grown here, we have to import it. If we add that to a product, it's game over. The same applies to salt and to certain spices that cannot be grown here. Unfortunately we cannot use them if we want to be able to use the "Product of Canada" label. This is truly of great, great concern.

Page 7 shows how complex processing is and shows the types of pressure on that industry. I won't cover everything because it's not possible to do this in 10 minutes. However I would like to point out that if the Canadian government wanted to include processing in its policies and wanted to be involved at that level, then we could resolve some of these problems and foster a much greater and broader development. We could become winners and we could seize the opportunities before us.

On page 8, we show that the processing industry is somewhat caught between the agricultural producers who have obvious needs, and the distributors, who often engage in abusive practices when it comes to processing. We work within very restrictive margins, and this is preventing us from developing at a rate that is necessary if we want our activities to be more profitable for agricultural producers and the industry as a whole.

In Canada, the distribution network is 90% controlled by three distributors. This is the greatest concentration of distribution in the world. In the United States, the 10 biggest distributors control approximately 30% of the distribution industry, I believe. Therefore when it comes to working with American distributors, we have much more flexibility. In Canada, because of the practices of the three distributors, our access to the market is very limited. If a manufacturer wants to launch a product, a flavour or a format, $550,000 in slotting fees have to paid out in order to have the product displayed throughout Canada. Yet that does not guarantee in any way product sales. It is absolutely unthinkable for small businesses who want to develop, meet the needs of consumers and promote local products.

The right-hand side of page 9 shows developing business opportunities. We are going to have to be involved with Asian markets and they will be dominating the global market. In 2020 they will represent 41% of the global market and global needs. That is very significant. The markets in India, China, Japan, the United States and Russia will be the top five global markets. We have to think about what we are going to offer our consumers and which markets we are going to focus on. However, in order to be competitive we are going to have to use competitively priced inputs.

"Product of Canada" labelling used to give us an advantage in terms of the quality of products. We could display that. That possibility was eliminated and we now have to look at supply on foreign markets. This is going to be rather difficult. On page 17 we make the case for an inclusive policy, such as the one Holland adopted. It would include all the stakeholders who need to work together. Often, the various levels of government do not consult each other when legislative measures are being applied to food products. A consultative group has to be established and an inclusive food policy that includes processing has to be developed.

At the end of the document you will find many suggestions and many sources of information that we can discuss further during questions. Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We'll now move to Mr. Townsend from Wild Rose Agricultural Producers.

You have ten minutes, please.

[Lee Townsend, Director, Wild Rose Agricultural Producers]

Thank you, Mr. Chair. I'd like to thank the committee for allowing me the opportunity to speak on behalf of the Canadian honey industry, and I'll do my best to answer any questions you may have.

I feel I should provide some background as to my involvement in agriculture. I am from Stony Plain, which is just west of Edmonton. I operate a 2,000-hive commercial apiary alongside my parents, and we are solely structured for honey production. I have been working on the farm for the past 19 years, of which the past 13 have been full-time involvement. We have just begun our spring management of the bees, and we are looking at around 30% to 40% winter-kill this year. This is higher than our normal 10% to 15% winter-kill average.

I have sat on the Alberta Beekeepers Commission board for the last five years, and I am currently in my first term as vice-president. I am currently in my first year on the board of directors for the Wild Rose Agricultural Producers, and I have been a member of the Canadian Young Farmers Forum for the past three years.

Canada has a progressive beekeeping industry. In Canada there are about 8,000 beekeepers who keep around 600,000 bee colonies. Approximately 1,800 commercial beekeepers keep 80% of these colonies. Statistics Canada reports that the total Canadian honey production is on average 80 million pounds per year. The value of honey and honey products, including pollination fees, is over $100 million per year. Alberta accounts for more than 40% of the bee colonies in the nation's honey production. Honeybees are known for the valuable services they provide to Canadian agriculture. They pollinate apple, hybrid canola, berries, and hundreds of other crops. The value of honeybee contributions to crop pollination exceeds $1.5 billion per year.

Canadian honey is known for its high quality around the world. Canada exports 40% to 70% of its honey to the United States, Japan, and Germany.

The apiculture sector, like many other agricultural sectors, has changed dramatically over the past 20 years. The most obvious challenges have been long-term declines in honey prices, declining bee health, high standards for production to meet consumer's expectations, and intense competition from low-cost producing countries.

The recent reported honeybee kill is 30% per year over the past three years. Can you imagine the impact that 30% of our bees dying annually has had on honey production, crop pollination, and the sustainability of the industry as a whole?

When it comes to the impact of competition our industry faces, there are many key points that need to be mentioned. There has been a drastic increase in the cost of production of honey in Canada. Producers are being forced to improve their honey production and processing methods and systems, yet they are seeing little to no price increase for their safe Canadian honey, compared to imported honey, which does not have to meet the same standards. The return on investment for beekeepers is decreasing. Very few young farmers are attracted to invest and become beekeepers. The sustainability of the beekeeping industry has come into question over the past few years.

There has been a great deal of discussion within the Canadian honey industry about what can be done to solve these issues. Risk management in agriculture can protect farmers' incomes from uncontrolled risks in farming, such as climate, pests, and market decline. Training can be provided to address food safety and best management practices to keep up with the pace of change and assist farmers to enhance their profitability. Food safety would be improved by moving towards mandatory registration for all producers of honey in Canada with CFIA. With this, we are ensuring that the Canadian supply of honey is safe and has full traceability if there is an issue. Currently, it is a voluntary program, but our industry has been discussing the advantages of making it compulsory. As has been explained to us, if we have mandatory standards in Canada, then those same standards can be applied to all imported honey.

There needs to be enforcement of fair trade with honey coming into Canada. Honey being imported into Canada should be produced under similar restrictions as are applied to Canadian beekeepers, and quality should be tested to ensure safety and that no adulteration has taken place. Examples of this are honey labelled as “syrup blend”, “sweetener”, or “sweetening agent”. There needs to be better control of this.

There are many advantages and disadvantages in current Canadian honey products compared to foreign competitors. Some of the disadvantages are that the cost of production of honey is higher in Canada than other regions that are exporting to Canada, and conditions required for on-farm food safety production processes are applied to Canadian farmers but not to farmers from other export countries. For example, imported honey does not have to meet the same standards when it is shipped into Canada.

Among the advantages is that the Canadian honey industry is working hard on its food safety program, which will make it a leader in the food safety standards of honey. Also, CFIA's honey program has been a tremendous help to our industry, assisting us with our quality and food safety, as well as assisting us in our export market access. Although applying these standards will increase the cost of production, pricing does not compensate for efforts put on production of quality products. Another advantage is that Canada is known worldwide for having honey that is safe and of high quality.

There are specific regulations that are both beneficial and detrimental to the competitiveness of Canadian honey products. Examples of some beneficial regulations are that foreign worker programs have literally saved our industry, as extremely few Canadian workers want to work with bees; new labelling regulations are very beneficial, but they need to be implemented and strongly enforced; on-farm food safety regulations and CFIA's involvement with our industry is of great benefit to us; and the review of agriculture pesticides regulations and harmonization within North America.

Some of the detrimental regulations--or lack thereof--are fair trade regulations and subsidy programs in the United States and other countries.

I can also list some solutions that could improve farmers' and industries' competitiveness, including but not limited to improving market access, changing regulations, branding products, etc.

First, improve pest control tools to reduce winter kill, and reduce cost of production to maintain industry sustainability and competitiveness.

Ensure that PMRA regulations will provide needed registration of miticides in reasonable time to improve beekeeping practices and honey bee health.

There should be mandatory CFIA registration for all Canadian honey producers.

Implementation of new labelling regulations is needed to keep the grade designation. Only 100% Canadian honey can be graded as Canada Grade 1, 2, and 3. Import or blending product is labelled as simply Grade 1, 2, or 3.

Improve the surveillance program to ensure that products meet the label specifications and preserve the Canadian quality of Canadian honey. There is a difference in quality between Canadian and imported honey. Imported honey being marketed as, or with, Canadian honey, without proper labelling, is a falsehood for Canadian consumers.

Negotiate international trade and imports of products based on a balanced perspective considering on-farm food safety, production conditions, and labour cost.

Enforce existing trade rules more firmly on importers and exporters.

Finally, support research capacity to improve production and help reduce the cost of production--for example, hive health.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We now move to the Cooperative Federation of Quebec, to Mr. Richard and Mr. Hébert.

Have I got that right? I have to apologize for my French; it's not very good.

Ten minutes, gentlemen, please.

[Denis Richard, President, Coopérative fédérée de Québec]

Thank you Mr. Chair. Thank you for inviting us to appear before Canada's Standing Committee on Agriculture and Agri-Food. I will presenting along with my colleague, Mario, who will use his time to talk to you about a business called momagri.

I would like to state from the outset, Mr. Chair, that we do not claim to have one comprehensive solution to such a complex issue. We do hope, however, that in the short time that has been given to us, we will be able to shed an interesting and useful light on this issue and give you some food for thought about some aspects of this matter.

First, allow me to briefly describe the Coopérative fédérée de Québec. We are a federation of 105 Canadian agricultural and agrifood cooperatives representing approximately 85,000 members. The Coopérative fédérée de Québec and its affiliated cooperatives represent $6 billion in sales and approximately 16,000 Canadian jobs in four Canadian provinces. Our member cooperatives are mainly located in Quebec, New Brunswick and Ontario. We are also active in Alberta through our Olymel affiliate and we have sales offices in various countries, for example, Japan and Australia.

The Coopérative fédérée de Québec and its affiliated cooperatives are primarily involved in the supply of farm inputs and in the distribution of hardware and petroleum products. The Coopérative fédérée de Québec and some of its member cooperatives are also involved in the food processing sector. Furthermore, several of our member cooperatives are involved in food distribution. The Coopérative fédérée de Québec is therefore at the very heart of an organizational structure that includes agricultural producers, consumers, food distributors and processors. I believe that gives us a unique perspective on our agriculture and agri-food sectors.

The question certainly deserves to be asked. The marked decrease in agricultural producers' net incomes and the increase in their level of debt begs certain questions. These deteriorating circumstances have been accompanied by a marked increase in governments' financial commitments over the same period of time. This situation can partly be explained by a series of epizootic diseases, for example the beef and pork crises, an increase in price volatility and more recently, the rapid appreciation of the Canadian dollar. The backdrop to this, however, is that the situation of agriculture producers began deteriorating when the WTO was created, when the Uruguay Round-Trade Agreements were implemented, and as trade became generally more deregulated and liberalized. In fact, the issue of the competitiveness of Canadian agriculture necessarily begs another issue, which we feel is this: Competitive with respect to whom?

Our American neighbours have a much more competitive agricultural sector. However, they also have to deal with Brazil's agricultural sector which, in some areas, is even more competitive. We have to be aware that we practice a northern agriculture which has certain benefits, for example precipitation levels and a high per capita land ratio. However, we neither have the amount of sun that our southern neighbours have nor can we harvest our crops more than once a year.

We feel that the issue of competitiveness of the agricultural sector must also be tied to the issue of State support measures, at both the quantitative and qualitative levels. In that regard the food processing sector is a poor relation when it comes to State support, contrary to the situation in Europe or the United States.

Given that the purpose of the agricultural and agri-food sector is to feed the world, therefore we must also ask ourselves if we have the necessary means to develop agriculture. A recent study by Ms. Isabelle Charron, Assistant Director for Economic Studies, AGÉCO Group, and by Ms. Joëlle Noreau, senior economist with the Fédération des caisses Desjardins du Québec, found that in the past 30 years, the relative increase in the price of food products was less than that of the price of consumer goods.

A according to a recent study by the Canadian Economic Observer, the number of products of Canadian origin that make up the grocery basket of families in this country varies from 58% to 80%. Therefore, one can readily see that the food sector is very efficient—more efficient than most other sectors in Canada.

Moreover, a recent OECD study confirms researchers' findings indicating that the average Canadian family spends less on food in relation to total household spending than a few years ago. This share of total spending is pegged at 9% in Canada, 7% in the United States, 14% in France, 35% in China and 50% in developing countries. From a consumer's standpoint, and despite the recent price hikes associated with market hyper- volatility, our farming and agri-food sectors are clearly efficient.

But the past is not always a good indicator of what lies ahead, so one has to wonder whether Canadian agriculture will not only be subject in future to violent meteorological phenomena associated with climate change, but also to major inflationary and deflationary cycles such as those we experienced in 2008.

This brings me to momagri, a movement dedicated to setting up a World Organization for Agriculture. I would like to call on Mr. Mario Hébert, a senior economist, who will tell you about momagri, and I will come back with a few closing remarks.

[Mario Hébert, First Economist, Coopérative fédérée de Québec]

Established in December 2005, momagri's mission is to provide objective analyses and concrete solutions to current and future global agricultural problems by promoting an international governance model of agriculture, which brings together both free trade and market regulation. Momagri was founded by a number of large French agricultural and financial cooperatives, and is now represented by its numerous partners from the political, agricultural, health care, and NGO communities. Among its accomplishments, momagri developed and fine- tuned an economic model with a unique focus on the agricultural sector. It is the only model to take into account the unique characteristic of the agricultural sector, and it stands apart from the current models used in international negotiations. Surpassing all expectations, this model helped us to anticipate last fall's sharp drop in the price of agricultural food commodities, and in doing so attracted the attention of several organizations, including the International Monetary Fund.

According to momagri, agricultural food commodities cannot be compared to simple manufactured products. Based on initial models released in late March, unregulated liberalization of the agricultural sector would have a spectacular effect on the volatility of agricultural prices. Momagri projects that in 15 years, the poorest countries will experience a 60% drop in agriculture revenues. The wealthiest nations will be faced with a 30% drop. Even the farmers from China and India, two importing nations, will see their revenues decline by 30%. Food crises will occur with increasing regularity.

Momagri experts go so far as to compare upcoming crises to the 2008 crisis, during which 17 countries, including Argentina and India, had to impose restrictions on agricultural exports in order to feed their respective populations. The only winners, according to this new model, will be the farmers from emerging exporting nations such as Brazil. They will enjoy a 10% increase in their revenue.

Need I remind you that farmers, regardless of who they are or where they come from, cannot survive in a highly chaotic marketplace. That is why momagri favours a governance model the primary focus of which is to ensure a secure food supply for the planet. This is why momagri intends to make food security a G20 issue on par with financial market regulation and economic recovery.

[Denis Richard]

In closing, Mr. Chair, our farming and agri-food sectors, which have shown signs of flagging since the Uruguay Round, are seeing their ability to respond further diminish.

The Coop fédérée, just like momagri, believes that trading of agricultural products should be liberalized, but that this should be done in the context of a specific negotiation process that takes into account such issues as the safety, security and sovereignty of populations throughout the world. In fact, we believe that increased liberalization without a specific strategic focus on agriculture and food may very well lead to heightened protectionism, as food crises erupt due to the hyper-volatility of markets, as we experienced in 2008. What occurred in 2008 seems to be a harbinger of bigger things to come. Many economists throughout the world share this opinion.

Mr. Chair, that is the Coopérative fédérée de Québec's position, in a nutshell, in response to the question you asked about the competitiveness of Canada's agricultural sector. Thank you for your attention.

[The Chair, Conservative, Larry Miller]

Thank you, gentlemen.

We'll now move to questioning.

Mr. Valeriote, you'll have seven minutes.