Evidence of meeting #22 for Agriculture and Agri-Food in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was producers.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Greg Meredith  Assistant Deputy Minister, Farm Financial Programs Branch, Department of Agriculture and Agri-Food
Jody Aylard  Director General, Finance and Renewal Programs Directorate, Department of Agriculture and Agri-Food
Richard Doyle  Executive Director, Dairy Farmers of Canada
Brian Gilroy  Chair, Ontario Apple Growers
Jurgen Preugschas  Chair, Canadian Pork Council
Mark Davies  Chair, Turkey Farmers of Canada
Stephen Moffett  Director, Canadian Pork Council
Phil Boyd  Executive Director, Turkey Farmers of Canada

11:40 a.m.

Conservative

The Chair Conservative Larry Miller

That's my understanding.

Mr. Atamanenko.

11:40 a.m.

NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

Could you get a clarification, Pierre, from David perhaps? My colleague Niki was just approached out of the blue to see if she wanted to go to Washington. She didn't understand and she said, “Well, yes, fine...” but she couldn't quite understand—

11:40 a.m.

Conservative

The Chair Conservative Larry Miller

But she wasn't approached by this committee.

11:40 a.m.

NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

Not by the committee, but I don't know what's going on. Maybe you could just clarify that to see what David's got in mind. I don't know as I haven't talked to him. I just thought I'd let you know.

11:40 a.m.

Conservative

The Chair Conservative Larry Miller

Okay. Just further on that, we have a fair slate of meetings that I think are pretty well finalized for the Thursday. We're working on a number for Friday.

The other issue I wanted to bring up was that it has been a practice of the former chairs of the committee to have a gathering of the committee for a casual lunch or early dinner, at some point before the House breaks. I intend to do that. We're trying to pick June 9, but we haven't come up with a time. I hope that works for most members of the committee. So I'm just throwing that out there.

Mr. Easter.

11:40 a.m.

Liberal

Wayne Easter Liberal Malpeque, PE

I have one other question on the Washington meetings. What time is the first meeting on Thursday morning?

11:40 a.m.

A voice

It's 8 a.m.

11:40 a.m.

Liberal

Wayne Easter Liberal Malpeque, PE

There are votes on Wednesday night, I gather. I'm told there are.

11:40 a.m.

Conservative

The Chair Conservative Larry Miller

I haven't heard that yet, Mr. Easter.

11:40 a.m.

Liberal

Wayne Easter Liberal Malpeque, PE

I've got a 100% voting record, although you say different, in my riding. I didn't want to ruin that record.

11:40 a.m.

Conservative

The Chair Conservative Larry Miller

Okay. Without any further ado, thanks to the witnesses for being here today. We had some committee business that delayed our starting time.

Welcome. We have with us today the Dairy Farmers of Canada, the Ontario Apple Growers, the Canadian Pork Council, and the Turkey Farmers of Canada.

We're going to start off with you, Mr. Doyle. Welcome. Could you give us your opening remarks in 10 minutes or less? Thank you.

11:40 a.m.

Richard Doyle Executive Director, Dairy Farmers of Canada

Thank you, Mr. Chairman. Thank you for the invitation to appear.

I will try to be brief. You have a presentation. I will just highlight some of the key slides.

I want to start by saying I've titled this, “To be profitable is to be competitive”. I know that Larry Martin has appeared in front of this committee, and he defined the potential to have profitable gain as being a measurement of competitiveness.

I will bring you to slide 4 on page 2. I think too often we tend to believe that price is the only thing that drives competitiveness. I want to give a comparison of where Canada and other countries position themselves versus what we see in the world market, in particular with regard to trade. The slide shows the comparative cost of production of average farms in 44 countries--dairy farms, of course. You can see where Canada is. As a Nordic country we tend to be, as with other Nordic countries, in a fairly high cost range.

What I've put here is two world prices, the world price of November 2007 and the world price of February 2009. The thing to remember here is that I've converted butter and skim milk powder prices, so these prices reflect commodity prices of processed products on the world market and therefore would also include the processing costs, where the bar codes do not. You can see that while you have many of the exporting countries in between those, most of the countries that export are not competitive in the sense of a straight price standpoint. In my definition, they're exporting, but they're not making a profit at it--or their income is generated outside of the marketplace, which is the other issue.

Moving now to page 6, slide 11, I want to point out that while in the late 1990s and early 2000, we in Canada, farmers in particular, felt that the world market was very volatile, with high peaks and valleys, we had seen nothing until 2007-08, when the price was almost tripled and then brought back to its lowest level within less than 12 months. That created different situations in different countries.

Most of the dairy industry around the world is in crisis--in Europe, in the United States, just about everywhere except in Canada. That's a point I would like to make later on.

Let's look at the U.S. price, on slide 12, page 6. I put in the U.S. price from 2000 to the current price. You can see that very few businesses can survive with the fluctuations that we've seen in farmers' prices in the United States, or in Europe, for that matter. You cannot have in one year $21 of return per hundredweight and within two years drop down to $9 per hundredweight. Europe is going through the same thing. A lot of the farmers in the last 12 months have seen their returns drop by up to 50%, and there were rallies and protests earlier this week in Germany, in Brussels, and so on. So the volatility of prices in the world makes it extremely difficult to refer to competitiveness.

I'll bring you to slide 16 on page 8. I want to point out that while we're talking about trade and price volatility of world markets and so on, many people believe that the WTO is the solution to all of these crises. The reality, Mr. Chairman, is that the WTO is not really going to give the long-term solution.

This slide shows the European agricultural support. I would suggest to you that the current WTO agreement that's on the table, the current draft, will permit this to continue. All they did, really, is increase their financial contribution to the agricultural sector. They just changed the colour. They changed the name of it. They called it rural development. They called it decoupled. They called it whatever you want.

The reality is that yes, they will not have “export subsidies”, which are the red bars—these will disappear—but their farmers will still continue to rely on the financial contribution of the government to produce.

The leader of the COPA for farms was doing a protest yesterday and was quoted—and I don't think I included this in my presentation—as saying that European farmers anywhere in Europe are not profitable any more. They're in crisis and they want even more money from the government. Europe reintroduced export subsidies of $1.5 billion to the dairy industry in January. The U.S. last week announced the reintroduction of export subsidies and the reactivation of their dairy export program, which had been terminated as a government intervention. This is the situation we're in.

I want to turn to page 10, slide 19, if I may, on the benefits of supply management. In this cost comparison that was done by the International Farm Comparison Network, it is interesting to look at the farmers' share of the consumer dollar. What our farmers receive in Canada has been above 60% of the consumer dollar, and we've been extremely stable compared with any other country. That stability is part of the reason that an industry can be profitable long term—and not just for the farmers, but the processors, distributors, and retailers. What's interesting in this analysis is that while everybody has tried to gain or aim at 60%, any time it gets close in a less regulated industry, you see a downturn, and when it gets too low, you see an upturn. No other country has been able to achieve either the stability or the percentage of share of the consumer dollar that the dairy industry has.

I'm on page 11, slide 22. While consumption was going down because of the high price in 2007, and while production was down because of the low price of late 2008 and 2009, and while, as I said, the rest of the world in the dairy industry is in crisis, we have been able to have an increase in price at the producer level this year. Because of that stability I was referring to, we've also been able to increase the retail market of our products. We've achieved a 1.5% increase in milk in the last 12 months, which is difficult in this country with an aging population, a 5% increase in cream sales, and a 2.6% increase in cheese sales across the country. We're very pleased with this.

Every time we talk about price increase at the farm level, people say the consumers are not getting a good deal. I'll bring you to page 12, slide 23 and would note that the fact of that stability has permitted just as good a deal for the consumers as it has for the other sectors of the industry.

I will conclude with my two last slides in French, Mr. Chairman.

I would like to wrap this up. We now move to slide 27, page 14.

This shows the link between supply management and the stability it brings, as well as the long-term profitability, not just for producers, but for all sectors of the industry. Stable and fair prices for farmers, just like stable and reasonable prices for consumers, are essential for continued market growth, providing a stable supply for processors and low costs for the government. In fact, the market can be expected to produce a profit.

The stability brings with a number of benefits, whether in the environment, in the safety and quality of the products, and in all the mechanisms that can be put into place, because our producers have the means to follow new procedures.

In conclusion, Mr. Chair, competitiveness is measured by profitability. Every sector of the industry must be profitable—not just one sector, every sector—if an industry is to be considered competitive.

Thank you very much.

11:50 a.m.

Conservative

The Chair Conservative Larry Miller

Thank you, Mr. Doyle.

We now have the chair of the Ontario Apple Growers, from the best apple-growing area in the country, Mr. Brian Gilroy.

Welcome, Brian.

11:50 a.m.

Brian Gilroy Chair, Ontario Apple Growers

Thank you very much.

Thank you for the opportunity to offer input on some of the competitiveness issues affecting the horticultural sector of agriculture in Canada. As Larry mentioned, my name is Brian Gilroy. I am an apple grower just south of Meaford, Ontario, in the chair's home riding of Bruce--Grey--Owen Sound. As a point of interest, Grey County has more acres of apple trees than any county in Canada.

I'm presenting on behalf of the Ontario Apple Growers, which represents the 300 commercial growers in the province. Often I will highlight issues and potential solutions that are common to most horticultural farmers. We work together through the Ontario Fruit and Vegetable Growers' Association and the Canadian Horticultural Council to strengthen the entire social value chain through the goal of primary producer profitability.

Ontario and Canadian apple growers have experienced a number of dramatic changes over the past fifteen years, primarily as a result of the worldwide overproduction of apples, the globalization of trade, dramatic cost-of-production increases, and retailer and processor consolidation. Consequently, apple acreage in Ontario has declined from 32,000 acres in 1992 to approximately 18,000 acres today. With the current orchards and vineyards transition program, the industry is seeing further acreage declines. This is a federally funded program that was intended to last three years. What has happened is that the three-year program fund has basically been assigned in a little over a year, with applications approved for over 4,000 acres of apples, of which 2,500 acres have been removed and verified and for a little over 1,100 acres of which farmers have been paid out.

This program has been funded, as I mentioned, by the federal government, and with the rate of uptake from the tree, fruit, and grape industries, it is seen as a very timely success. Thank you to those from this committee and from government who helped make this happen. Unfortunately, our provincial government has not participated with funds to assist with the $12,000-plus-per-acre replant cost. One of my primary asks today is for the orchards and vineyards program to be enhanced with sufficient funds to finish the job in Ontario and other provinces where the need exceeds the funds available.

If our efforts to receive provincial replant support could be strongly encouraged federally, it would be greatly appreciated. Ontario is the largest apple-producing province, yet it is the only one without a replant component. When asked whether the apple or horticultural industry in Canada is competitive, I respond that I strongly feel that those who remain involved in the growing of local fruits and vegetables are the best of the best. Canada is a high cost-of-production location, and with the three major grocery retail chains providing relatively low-cost food to the consumers, growers are severely challenged.

Among the issues that are affecting our cost of production is the pesticide issue. In Canada, it remains a serious challenge for our growers. The cost for crop protection materials is on average 56% higher in Canada than in the United States. The gap in availability of new technology is growing, with U.S. growers now having 100 more active ingredients, with more than 3,000 more crop uses, than we have in Canada. A while ago, there was talk about harmonization. It has been a number of years since we started to work towards harmonization with the U.S., and we're no closer today, if not further away.

I'm going to my next point.

A good production insurance plan is something that a lot of horticultural crops do not have. In apples, we have the most complex, expensive production insurance plan in Canada. There was a study done on the Ontario plan last year, and that was the result. Recommendations were very limited, but participation rates for the apple plan in Ontario in some areas that experience a lot of weather is as high as 80%. In other areas, such as the Bay, it's somewhere around 20%.

Generally speaking, horticulture is very supportive of a self-directed risk management type of program for hard-to-serve commodities, those for which crop insurance plans are very complex, very costly, or for which there is no plan at all. We also need some type of market revenue—did you hear that? I said “market revenue”—or cost-of-production insurance to protect us from the dumping of commodities into our marketplace. Washington State has dumped and will dump apples into our marketplace at well below their cost of production, which creates significant hardships for the Ontario industry. They did it really badly in 2004 and have done it on certain varieties again this past marketing year.

The anti-combines act or Competition Act does nothing to protect primary producers from the processors who basically buy up the competition. In Ontario, numerous plants have been closed; and producers feel bullied by the processors to accept minimum prices for their fruit, and they are threatened with further plant closures.

We often hear about the horticultural value chain and how important it is that the value chain work together. If the processors that are buying up all of those juice plants were good value-chain partners, it would be one thing, but up until now, they haven't shown their good side.

U.S. producers continue to benefit from a “buy U.S.” policy for all taxpayer-funded programs and agencies—the military, hospitals, schools, the prison system, etc. This policy has resulted in great benefits to U.S. producers, through the purchase of surplus agricultural products, as well as ongoing agricultural products. But when there's a surplus, it stabilizes and allows the markets to expand.

A similar policy in Canada would provide similar benefits, without any additional cost to government. A trial project for the school system in northern Ontario has been implemented and continues through the Ontario Ministry of Health, who is promoting it. We need funding partners to help the fruit and vegetable growers assist with healthy eating issues in northern Canada. We're ready, we're willing, and we need some funding to help get it there. This is a good first step, but it needs to be expanded upon as quickly as possible. Canada produces excellent agricultural products, which would provide health and economic benefits. Our government must adopt a policy of showcasing these products and extolling their benefits. We are proud of our products, and there would be minimal or no cost to government to help push this one forward.

The U.S. Farm Bill supports a market access program, which provides U.S. producers with funding for export market development. A major target market is Canada. Many Canadian horticultural crop producers rely on the Canadian market, and therefore must compete with commodities that receive MAP funding. It is one thing to compete with other producers; it is impossible to compete with the U.S. Treasury.

A new agricultural policy framework should include MAP-like programs, not only to target export market development, but also domestic market retention. Last week, we learned that specialty crops—horticultural crops—have received an extra $45 million to be spent before September of this year to help producers adapt to the rapidly changing demands in the marketplace. Recently, we have heard that U.S. retailers are demanding “Product of U.S.A.” only, and have notified Canadian growers that they will not be able to purchase and market our fruit this coming crop season.

These are a few of the items that affect our ability to be competitive.

Thanks for your attention.

Noon

Conservative

The Chair Conservative Larry Miller

Thanks, Mr. Gilroy.

We now move to the Canadian Pork Council.

You have to excuse me, Jurgen, if I get your name wrong, but we have Mr. Preugschas here, and Mr. Stephen Moffett. Welcome, and thanks for coming.

You can present for 10 minutes or less, please.

Noon

Jurgen Preugschas Chair, Canadian Pork Council

Thank you very much, Mr. Chairman. I do appreciate the opportunity.

My name, actually, is quite simple. You put a “P” in front of “righteous” and you have it. I'm not saying I'm righteous.

We would like to thank the committee for asking us to attend again and make a presentation to you to update you on the competitive issues facing pork producers.

The competitiveness of the hog sector has been severely impacted by various shocks that have hit the sector over the past three years. While we remain optimistic about the long-term potential for the Canadian hog sector, it is increasingly difficult to be prepared for and manage the impacts that continue to face our industry. High feed costs, the strong Canadian dollar, low hog prices, the economic crisis, reducing access to credit, and country-of-origin labelling have all conspired to dramatically harm pork producers. And now we have been slammed with negative consumer perceptions around the H1N1 influenza A virus.

While Canadian hog producers are accustomed to managing the normal fluctuation of hog prices, the last three years have offered absolutely no relief. Hog producers no longer have the funds or equity to finance these losses, and we should all be concerned with the survival of our pork industry in Canada.

The fact is that many producers have left hog farming, and this exodus shows no signs of slowing down. The number of farms reporting hogs across the country continues to decline. Since 2006 there are nearly 30% fewer farms reporting hogs to Stats Canada. One of the most pressing obstacles to the future of this sector is the increased debt load producers are now burdened with.

Continued losses over the past few years have eroded any funds or equity within the industry. The increased producers' debt load is to a point at which the industry is going to have difficulty moving forward and competing with other markets. The hog sector recovery from the various shocks will depend on how well the industry and government react to this extraordinary situation. Producers are doing everything they can. Governments now need to act.

The introduction of mandatory country-of-origin labelling in the U.S. has wreaked havoc on a sector already suffering from financial losses. Since 2009, exports of live hogs are down 40% compared with the same period last year. This breaks down as follows: 30% fewer Canadian weaner and feeder hogs going into the U.S. and 65% fewer Canadian market hogs being exported to the U.S. On an annual basis this represents a loss of about $250 million worth of exports. The loss of this market is creating significant structural change in the Canadian hog sector.

COOL is eroding market signals. The market indicated that there was an economic advantage to breeding hogs in Canada and raising, slaughtering, and processing them in the United States. This created the most efficient and profitable production system in North America, and it was competitive with producers around the world. With country-of-origin labelling artificially causing discounted pricing for hogs with Canadian contacts, this system is no longer viable.

Let me be clear on this point. We support the federal government's efforts to address COOL and initiate the WTO challenge. However, COOL is severely damaging the Canadian industry right now, and the pork industry is bearing the brunt of COOL, so many producers will not be able to adjust their business structures.

The outbreak of the H1N1 influenza A virus, unfortunately named “swine flu” in the early days and still accepted broadly, has had a dramatic impact on the market for pork. Hog prices tumbled with the news and many export markets closed their borders. Luckily, Canada's main export markets have remained open.

Let me expand on that just a little bit. Hog/pork sales in Mexico dropped by 80%, virtually wiping out the sale of pork in Mexico, and of course we export a lot of product into Mexico, as does the U.S. Then all of a sudden we're getting a piling up of pork in North America.

However, the uncertainty the virus has created is causing more market disruption. In addition, the discovery of the virus in pigs on a farm in Alberta has made Canada even more vulnerable to trade restrictions and consumer confidence issues. The futures market dropped as much as 17% upon the announcement of H1N1 influenza A. Futures prices for the spring and summer months are still struggling to recover. Historically, these months bring the highest prices for our producers. The likelihood of profitability for hog producers in 2009 has evaporated due to the H1N1 virus.

Canadian hog producers have been responsibly adjusting to market signals as best they can, and that was illustrated by the drop in our hog producer numbers. Our breeding herd numbers have been reducing since the second quarter of 2005 and have had the desired effect of reducing hog production numbers. Producers have also been adapting in many other ways, using every avenue at their disposal to try to remain competitive. They've tightened expenses as tight as they can go.

As we make it through this very difficult time, we know we need to be working in the most efficient system possible, and this will involve the regulatory environment in which we operate. We can no longer afford to be catching up to our competitors. We need to be ahead with the most effective, streamlined, and cost-effective regulatory environment possible. This means having access to the best veterinary products available on a timely basis and ensuring that grains are developed and grown for livestock feeding purposes, ensuring that government policies do not disadvantage livestock production to benefit the production of fuel. Governments have to be committed to providing the most competitive environment possible for production to succeed. As well, our supply chain must work together to create the most efficient production chain in the world, and this work has begun with the pork value chain round table.

But our focus now is really the short term. The hog sector recovery from various shocks will depend on how well the industry and the government react to this extraordinary situation.

Thank you.

12:10 p.m.

Conservative

The Chair Conservative Larry Miller

Thank you, Mr. Preugschas.

We now have, from the Turkey Farmers of Canada, Mr. Mark Davies and Mr. Phil Boyd, for 10 minutes or less, please.

12:10 p.m.

Mark Davies Chair, Turkey Farmers of Canada

Thank you, Mr. Chairman.

I appreciate the opportunity today to give you our view on the competitiveness of Canadian agriculture, specifically as it pertains to our industry. I know our presentation has been forwarded to you, so I will just make a very quick presentation and highlight some of the key points.

First a little background. The Turkey Farmers of Canada is a national organization representing Canada's commercial turkey producers. The mandate of the TFC, as we call it, is to promote the consumption of turkey in Canada, as well as to be the voice for Canadian turkey farmers, both domestically and internationally, on matters relating to the future sustainability of our farmers and the sector generally.

We are found in eight of Canada's provinces and have an annual production of 217 million kilograms, or about 23 million birds. We had a 2008 farm gate value of $389 million. Exports of Canadian turkey meat are valued at approximately $23 million, and imports are estimated to total $32 million. Our market, while supply management and domestic in focus, is not closed to trade.

When it comes to sustained competitiveness, to ensure this for the Canadian turkey industry, our focus needs to be on the following five success factors: first, long-term economic stability; second, trade and harmonization, as others have discussed; third, regulatory clarity; fourth, research, infrastructure, and investment; and fifth, domestic balance. I'll just take a moment to touch on each of those briefly.

Supply management offers long-term economic stability. By comparison to unfettered free trade or full protectionism, we believe this is a third and viable option. It creates an environment for sustainable development. Domestic growth has been achieved through an orderly marketing system that matches supply to changing demand in a constructive and thoughtful manner. As an outcome, our sector does not rely on government transfers and it provides a fair return that is earned from the marketplace.

The poultry meat sector, like other sectors in Canadian agriculture, is not immune to international risk brought about by economic collapse, but unlike other sectors, that risk is reduced by virtue of the marketing system these farmers have chosen. It is a policy choice that needs to be sustained to provide certainty for reinvestment and to contribute to ongoing competitiveness.

The industry and government response to foreign animal disease outbreaks is critical in terms of reducing the period of business interruption. Discussions concerning compensation for animals ordered destroyed have been ongoing since 2004. Resolving this matter is a critical component to a prompt recovery for the farmers impacted, whether one or more--the scale is irrelevant; it's the issue itself.

We are pleased with the opportunities recently provided by the government and CFIA to fully engage in this discussion; however, there's much work to be done on this. I hope there will be some resolution and we'll see an end to it shortly.

When we discuss trade and harmonization, the TFC appreciates the support afforded to supply management by federal political parties, as well as the support provided by the federal government over the last eight years, since the beginning of the Doha development round. Some accomplishments have emerged, but not with regard to the import pillar of supply management. The current proposed modalities would bring serious negative economic implications for our farmers. We believe the negotiations are emerging to an outcome that will not produce equitable results for farmers of many commodities in many countries, not just Canada.

Within the trade rules and implementing Canada's WTO Uruguay Round commitments in 1994 and to abide by our NAFTA commitments, certain highly processed products, for example a TV dinner, needed to remain exempt from import control. To accomplish this under the new WTO tariff rules, the federal government defined these products as “specially defined mixtures”, also known as the 13% rule. However, the 13% rule the government administers today is not the rule in our WTO commitments and what was agreed to by industry in 1994. The rule has resulted in expanding the range of products not on the import control list, and it is also undermining the effectiveness of the Canadian turkey import quota. This rule, bluntly, needs to be changed.

When we discuss harmonization, a number of issues require ongoing attention to ensure competitiveness is not inadvertently compromised by government. These areas relate primarily to technical regulations or standards between competing jurisdictions. In our sector, our farmers and processors compete with farmers and processors from the United States and Chile primarily, and to some extent Brazil.

Some examples of what TFC has done: we've developed and are implementing a national HACCP principle based on the on-farm food safety program that is auditable and verifiable. We have a relatively new flock care program that is auditable and verifiable also, and it is being implemented on Canadian turkey farms from coast to coast. A new organic standard is being implemented by regulation in Canada by the end of June 2009. And the avian biosecurity committee is completing its work on a national biosecurity standard.

Each of these initiatives is worthwhile and laudable and meets the demands and expectations of food safety for Canadian consumers. By these very actions, though, we are undermining the competitiveness of our own farmers if these standards are not going to be met by farmers and processors in competing jurisdictions. If not held to the same standards, an imported product will have an advantage and thereby undermine the competitiveness of our sector. In another example, Canadian farmers can be at a disadvantage when competing with imported product if their access to inputs, such as pharmaceutical or crop protection products, is more constrained.

A recent benchmarking study on the competitiveness of the Canadian animal health industry found issue with approvals in Canada compared to other jurisdictions. I know that one of the previous speakers has already commented on that, so I won't go any further. It does, however, raise the matter of equivalency in terms of imports of meat from animals treated with medications that are not approved for use in Canada.

Product of Canada labelling requirements need to be re-examined also, to avoid consumer confusion and to provide a more competitive market for our farmers. Our processors are discontinuing product of Canada labelling as a result of the difficulty with the current regulations. For example, we can import a hatching egg, hatch it, raise it in Canada, and it is eligible for product of Canada labelling. If the same hatching egg were hatched in the U.S., imported as a day-old poult, then raised in Canada, it could not be labelled as a product of Canada. This is an unfortunate side effect, since a meaningful product of Canada label is an important marketing edge for Canadian farming. I know that within our industry, there's a substantial number of day-old poults that are brought into the country, so it is a huge part of our industry.

Within research infrastructure and investment, the members of TFC believe that a critical factor in future competitiveness is investment and research. Since the federal government reduced research dollars in poultry several years ago, the national poultry farmers and processor organizations founded the Canadian Poultry Research Council. In the last few years, CPRC has funded 22 projects, leveraging industry contributions of over $1 million by a factor of over 4:1 to the tune of $5 million.

In aggregate, this is very close to federal expenditures prior to the cutbacks of the 1990s. Rather than requesting additional funding for research, there are three elements that we would ask the government to address. Number one, ensure that existing funding remains for federal contributions to research; number two, sustain the ongoing realignment within the research branch; and number three, evaluate the current expenditures with industry to ensure sustainable and long-term funding for research. The problem is that a lot of the programs at this point are not funded to their conclusion. That's the obvious issue with that.

I have a couple of other facts. The value of our domestic market has grown significantly, by $126 million in five years, for a variety of reasons, such as consumer attitude towards turkey meat. The main challenge faced in the last several months has been managing high input prices and low meat prices in North America. As well, feed prices have increased 57% in Ontario from 2006 to 2008. I know that's something you've probably heard as a common theme from many witnesses.

In conclusion, the current volatility in the poultry industry follows three years of disrupted markets that began with the bird flu outbreaks of 2006 and their impact on world production, consumption, and trade. The governments of two main poultry-exporting countries have had to buoy up their industries to ensure their survival. The USDA announced in March 2009 that it intended to purchase up to $60 million worth of turkey breast meat products to help out the turkey industry, which has been suffering significant financial losses. As recently as mid-May, the Brazilian government announced that it is considering extending a line of credit of up to $1.38 billion U.S. to rescue the country's struggling poultry industry. The Canadian government has not had to bridge any financial losses for the Canadian poultry industry. We've managed our production quotas to address the market dynamic. We also contend that supply management is the key to keeping our industry sustainable and structurally sound in the long term.

The import controls pillar of supply management must be supported and maintained to ensure supply and demand are matched and continue to provide Canadians with safe, affordable food at stable prices.

Thank you very much.

12:20 p.m.

Conservative

The Chair Conservative Larry Miller

Thank you.

Mr. Eyking, the first round is seven minutes. Go ahead, please.

12:20 p.m.

Liberal

Mark Eyking Liberal Sydney—Victoria, NS

Thank you, Mr. Chair.

I thank the representatives from the different commodities for coming here today.

As you can see, we're kind of short on time. We might only get one round, so I've got a question for almost each commodity. If you can make your answers short, I'd appreciate it so I can get my questions in.

My first question is to the Canadian Pork Council. How much money per hog is going to be needed from the federal government to help you get through this first year?

My second question to you is this. We see the benefits of supply management, and I know we're big exporters in the pork industry. Is there a way supply management can work some way within the pork industry?

12:20 p.m.

Chair, Canadian Pork Council

Jurgen Preugschas

I'll answer part of that, and maybe I'll defer a little bit to my fellow producer from New Brunswick.

On the question about how much, we really went through that in detail, and we have made an ask to the federal minister for an ad hoc payment of $30 per hog for the marketings of 2008. We feel this is a number that will significantly assist our producers in staying in business. We feel about 50% of our industry is seriously at risk at this point in time. We have something like 70,000 to 80,000 jobs dependent upon our industry in Canada. The export industry is 42,000 jobs, so those 42,000 jobs are at risk.

Your next question is on supply management. Have we considered it? Certainly, people have brought that up, but to make supply management work, we would have to reduce our production by two-thirds. So two out of three producers would have to be out of work, plus out of our 80,000 people who are employed in the hog industry, two-thirds or more of them would have to be put out of work.

Are you prepared, as a leader in Canada, to put an additional 50,000 or 60,000 people out of work in our economic times? We're not.

12:20 p.m.

Liberal

Mark Eyking Liberal Sydney—Victoria, NS

Just to follow up on that quickly, I'm sure you had the ask on this quite a while ago, for the $30 per hog. Do you have an answer yet?

12:20 p.m.

Chair, Canadian Pork Council

Jurgen Preugschas

It was two weeks ago tomorrow that I actually met with the minister and made the ask to him. I know last week the House was not sitting, but many of our producers have talked to members of Parliament across Canada and we are expecting some movement on it very soon.

12:25 p.m.

Liberal

Mark Eyking Liberal Sydney—Victoria, NS

My second question is to the apple growers. I've got two questions. First, I wonder what kind of apple juice I'm drinking and where it is from.

My second question is this. I guess in Europe they're promoting local fruits and vegetables through this environmentally green footprint, and they pretty well have them labelled in the grocery stores—how far it came, the impact it has on the environment, and things like that. It's really having a big impact and is helpful for the local growers. Should we have something like that in Canada that can ratchet in on how local a product is with some sort of labelling or some sort of recognition?

12:25 p.m.

Chair, Ontario Apple Growers

Brian Gilroy

Absolutely. I'll expand briefly.

I'd have to look at the juice a little closer to give you an educated guess as to where it's from.

The buy local...I'm going to call it a tsunami. It's still building; it's still way out in the ocean, and it hasn't crested yet. Local farmers' markets and pick-your-own operations are benefiting dramatically from this buy local movement. Canadian horticultural producers are seen as producers of safe, healthy, good-for-the-economy food because it's grown locally. The Ontario government made an announcement early in April that it was going to spend $24 million to try to get Ontario-grown into Ontario institutions. That's sort of what we've been asking for, for quite some time, both federally and provincially, so we would encourage you to get on the bandwagon and catch that wave before it crests.