I'll do the best I can. A lot of what he's saying is exactly where we're at too.
I'm going to start with risk management programs.
Thank you for allowing me the opportunity to appear before you today. We operate in several fields, as farmers, as abattoir processors, caterers, and we also do agri-tourism.
Ontario has put a risk management program into operation for Ontario grain farmers. This was designed by farmers for farmers, to be affordable, bankable, and at a cost of production level, with a premium to be paid that is basically green to the U.S. for trade.
There has also been work on this for the red meat sector. The pork industry needs help immediately. The loss per animal has ranged from $30 to $80 for the last three years. The government has responded with loans, then a stay of default on these loans. Instead of a stay of default on these loans, which simply extends the repayment from APP loans to September 2010, these existing loans should have been forgiven. We could then start with new loans, from now until September 2010, to see where the industry is.
The loan was already a band-aid for a bad situation that needed to be properly addressed, because the lending institutions could not continue to offer support with the constant loss of revenue. So adding another year just makes it four years. I don't think it's going to be any easier to get out of it at that time. This has to be addressed before the House rises, or a significant portion of the estimated 70,000 jobs that the industry contributes to the Canadian economy will not be there when the House returns.
To add to this, the COOL program in the States, the country-of-origin program, and the badly named flu outbreaks that we had--that was not correct in the first place, calling it swine flu--have also dumped our prices by about another 20%.
The federal government has chosen not to work with the Ontario risk management plan, nor to support the hog industry in its per head ask, yet it has decided to support the ethanol industry with a safety net guarantee on a per litre basis. The Chatham ethanol plant was given a safety net guarantee by Prime Minister Stephen Harper, as announced by Dave Van Kesteren, our federal member of Parliament, in April for $72.7 million to guarantee the plant's profitability for the next 10 years. It was set at 10¢ per litre of production, and it comes to them in the form of a grant. How is this different from a per head basis payment for the hog industry?
We as farmers, as the primary producers, are still stuck with programs that don't work for most producers. No offence to the ethanol industry, but we as primary producers have never seen a workable program or relationship with a government that lasted 10 years, with a guarantee of profit from the government. Farmers could set goals and actual directions for such a program. We get three-year programs that take two years to get up and running; or very rarely, we get a five-year program that also takes two years to get rolling. Other hurdles include the qualifications to enrol, paying your fees, and finding out you can't qualify. The funds run out before the fifth year is complete anyway.
With that being said, grain and oilseed prices are down 30% from last year, and all of our input costs are up. I know that was discussed here this morning. Nitrogen production was stopped in Alberta in January, potash in February in Saskatchewan, and it forced our prices to stay at 35% to 45% higher than last year. The commodity prices are now drifting lower. The weak Canadian dollar is positive to Canadian agriculture and it's negative if it's strong. It would make sense to offer AgriFlex funding as a companion program to our risk management plan in Ontario and allow more flexibility to the province to deliver it to us.
By your own studies, it has been proven that every dollar put into primary agriculture at the producer level returns $7 within the fiscal year. There's more than $700 million unspent surplus in the agriculture budget. An immediate $800 million injected into the hog industry would give a return of approximately $6 billion. If you had a better stimulus plan than this, considering the economic downturn and agriculture being the second-largest gross return and employer in Canada, then we need to hear about it. If not, agriculture--in particular, the hog industry at this point--deserves another immediate hard look.
On the labelling, new labelling regulations are worse than we had before. Ninety-eight per cent is a level that's almost impossible to reach if any processing is to take place. For example, using cane sugar, sea salt, or oriental spices changes the ground rules. It now becomes made in Canada, which only requires 2% Canadian content, with no indication of where these food products were grown. Now you have made-in-Canada, and you don't know where it came from, how it's produced, what chemicals, pesticide, or herbicide regulations were in effect, or what the federal inspection standards were in the country of origin. Fewer than 2% of these products will actually be inspected upon entering our country. This, in turn, makes it almost impossible to compete on a level playing field. Our regulations have many banned herbicides and pesticides that cannot be used here. This is an extreme health risk. If not, all the research done here by our government is a huge waste of our tax dollars and these data are completely inaccurate.
If this is correct, the products with these banned substances should not be allowed to be imported into this country, especially with a made-in-Canada label, which tells you nothing about the packaged contents or where it was produced, leaving the consumer totally uninformed, with potentially false or distorted information.
The 85% Canadian content that was put forward by the KFA , OFA , and CFA was fair and accepted by CFIA after many discussions and negotiations. All parties felt it was a great accomplishment, was doable, and would enhance agriculture in Canada. It would give consumers the ability to read clear, easy-to-understand labels, and it would not be misleading. It would allow the consumer to choose a local or Canadian product.
How could 98% Canadian content come about when our negotiators were told that the Canadian content, as presented, would be 85%? We were told it was a done deal. This needs to be acted on immediately for the sake of saving money, jobs, and the further processing of real Canadian agricultural products in this country. This will keep agriculture more profitable, with a tax that stays here and does not end up in a foreign country's pocket.
This has nothing to do with trade barriers or sanctions. We need to be fair to our grassroots producers. How can our consumers believe that they have clean, safe food products under the made-in-Canada label when they have no clue where these products actually came from? This is totally unfair to our consumers. We've all seen and heard plenty of food scares and recalls of tainted products, whether accidental or intentional for profit. The consumers must be able to choose where their products were grown and further processed for consumption.
We cannot compete with other countries' low or non-existent wages and poor labour regulations while our minimum wage continues to increase. There is an unfair imbalance in inspection, food safety, labour laws, production, labelling, and red tape. Our Canadian producers deserve to be able to compete fairly and stay in business. We can compete with the world's best and safest foods if they all have to comply with our regulations.
We're overburdened with regulations and paperwork that create jobs having little to do with food safety. The statement has been made that all processing plants should have one set of regulations. This is an irresponsible statement when you consider the paperwork of a business with two or three employees making and processing 10-kg batches of product at a time compared with metric tonne batches with 500 or more people on the floor. It takes the same amount of time for the employee to do the paperwork, but the economic ratio won't allow payment of a full-time employee for a small business. I'm not saying that we don't need any paperwork; I'm saying that it's unrealistic to expect the same paperwork and compliance from large and small operations.
How many recorded health problems have occurred in small plants? A small operation would not survive a food-related illness such as listeria—we'd be done. As the new regulations have been put forward and enforced, we have gone from 420 active abattoirs to 175 in the past five years. This is mainly in Ontario. A number of the existing 175 are frustrated enough that they want to quit. We can never comply with the regulations, because they are continually changing and our cashflow doesn't allow us to keep up. This, in turn, has turned lending institutions against us, and we cannot sell our operations because it's not affordable to take them over.
We are in a paper war with other potential trade partners who continually raise the paper bar to restrict trade. We go to all the expense of complying with new regulations that are supposed to open the door to exports—only to find out that there is yet another new set of regulations. Those same countries for which you have created a new bureaucracy new paperwork, in the hope of securing export rights, have just changed the rules. Are you in the door yet? The answer is no. How far ahead are you going to look to push this paper war forward while our boy scout mentality continues to put us competitively behind?
Thank you.
