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.