Agriculture Committee on Nov. 17th, 2009

[William Van Tassel]

Probably.

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

One is always a little skeptical about things said in an election campaign. However, you were quite confident that you would see this kind of program implemented, as you had been asking.

[William Van Tassel]

We may be naive, but we were very pleased because the announcement was made and the four parties agreed. So, yes, we thought it would work.

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

Welcome to the wonderful world of politics and unfulfilled election promises.

And that was not all. The budget also announced $500 million for the AgriFlex program. Initially the money was to be spent over four years, and then finally, it was going to be over five years. We also realized—you have to read the fine print—that, in actual fact, only $190 million of the $500 million would be new money. The rest was coming out of standard programs. Finally, we heard the worst news, which was that the program would not include income support.

It is two years now since the new programs were implemented—AgriStability, AgriInvestment, AgriInsurance and so on. CAIS was sharply criticized.

Have you been able to make any comparison today between CAIS and the new programs? Mr. Van Tassel, I even heard you testifying about the problems CAIS has caused grain producers.

Has there been any improvement as a result of these new programs, or are we still at the same point? Have we just exchanged four quarters for a dollar? I am sure you are familiar with that expression.

[William Van Tassel]

In my opinion, it's exactly the same thing. At the present time, we have the AgriInvestment program for periods when production margins decrease by less than 15%, but it's very little. It covers the same programs. I don't see a big difference. In terms of grain production, prices have gone up. So, we did not really have any need for that money, because prices were very attractive.

So, I really haven't seen much change with these programs, especially in Quebec. In terms of stocks at the beginning and at the end, that has already been changed. So, there was no change to be made in that respect. As far as we are concerned, very little has changed.

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

You had false hopes with respect with the AgriFlex program. You even heard an influential Minister, who became the Harper government's Quebec lieutenant, say that income support would be part of a true AgriFlex program. After that, you had to ask for an explanation.

Did you go back and ask what had happened and why they didn't keep their promise—why income support was ultimately excluded from the program? What was their answer?

[William Van Tassel]

We really never got an answer. A program called “Cost of Production Payment” was announced in Saskatchewan several years ago to help out producers, because of increased production costs. That program was replaced with AgriFlex, but the cost production component of the program was removed.

We requested a meeting with the Minister, but we were never invited to meet with him.

[The Vice-Chair, Liberal, Mark Eyking]

Mr. Bellavance, I'm sorry, your time is up. Thank you.

We're now going to go to the NDP. Madam Hughes.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Thank you.

My thanks to the witnesses for coming. I appreciate your patience through this big fiasco today.

From the comments you've made, it's evident that you know—and you would of course know because you are farmers—the direction the government needs to take. I'm assuming this isn't the first time you've come to talk to members of Parliament. I'm sure you've lobbied on this issue before. I'm interested in what you heard from the Conservative side and the Liberal side with regard to what you are asking for. Has it been positive?

[William Van Tassel]

I'm a farmer, so I've learned to be patient. I look out in the springtime and I always hope I'll have something good in the fall. You have to be patient to be a farmer.

What comments have I received? Some said it could be countervailable. They said there were different responses possible from the WTO. We said that regional programs have already been tested and that they weren't countervailable. For the WTO, we were saying that the amber box is not full yet. There is $4.3 billion that can be put in the amber box and there is still room. So there were different comments brought forward.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

So you were getting some resistance.

[William Van Tassel]

Yes.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

You mentioned that the provinces are asking for this as well. Have you received any feedback from your ministers at the provincial level about whether they're head-butting with the government? Have they started to make headway on this?

[Erin Fletcher]

We have a meeting tomorrow morning with Minister Dombrowski, the agricultural minister for Ontario. Her comments have always been that she requires the support of the federal government to bring forth a risk management program for grains and oilseeds.

Tomorrow there are a number of other organizations that are also asking for similar risk management programming for veal, horticulture, pork, and cattle. We're all going to be approaching her together, which is something that's always asked for when one wants unification in agriculture. We've provided this now for a risk management type of ask. We have provincial support for programming, but she needs the federal government to be on side.

[William Van Tassel]

If we look at 2008-09, the grain farmers wouldn't be getting any money out of it. The prices were good for the last year or two. But go back a few more years more and you'll see the prices were bad. We would like to have a program that works in the long term.

Instead of ad hoc funding in which the money is spread out evenly and often goes where it's least needed, this year we would like to send the money where the need is. We want a bigger bang for the buck. That's why we're going for it. I agree that the price of grain was not bad over the last few years, but in the future we don't know where it will be. That's why we're trying to get programs that work in the long term.

[Erin Fletcher]

Yes, AgriFlexibility will probably put money into hogs and cattle this year.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

I believe the Cattlemen's Association was before the committee last week, or a couple of weeks ago, and they also indicated that they need a national business risk assessment program that works for livestock producers. This is basically the same thing. I'm wondering if you could comment.

They also said they are asking for this: “...offer the better of the Olympic and previous three-year average on reference margin calculation; eliminate the viability test;...increase coverage to 70% of negative margins;...remove the caps from AgriInvest and AgriStability”. They had also mentioned two points specific to Ontario, which were to enhance reference margins by allowing inclusion of BSE payments and allow producers the better of AgriStability tier one or AgriInvest.

If these changes to the existing program were made, how would that impact on you? Do you have anything to add to that? What are your comments with respect to these?

[William Van Tassel]

They have the problem of declining margins, so they're trying to work within the program to try to make it better. BSE is...[Inaudible--Editor]...so we can't really work on it here. They're trying to get out of the problem of declining margins by working on that, but we're working it a different way, say by going to regional programming more.

[The Vice-Chair, Bloc, André Bellavance]

[Inaudible--Editor], Mr. Shipley.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

I thought I'd make a couple of comments, and then I'll turn it over to Mr. Shipley for a question.

When I'm speaking with farmers, oftentimes I hear that they want a level playing field but they also want flexibility. I think of it in terms of the national programs providing the level playing field, and the regional programs, the provincial programs, providing the flexibility. We try to make the national programs as flexible as possible, but it's impossible to cater to every single province and their regional priorities. I find it appropriate that Ontario is supporting the RMP for crops, but for Alberta or Saskatchewan, for example, it might be a different commodities that are supported.

We did extensive consultations before launching AgriFlex, and one message was that it should be a program that looks forward and enhances competitiveness. BRM programs don't enhance competitiveness; they help farmers in difficult times. We need programs that look forward as well, and that's what AgriFlex is focused on. We've undertaken a number of initiatives that some people might not be aware of. Through AgriFlex, for example, we're spending $32 million on the federal Canada brand advocacy initiative to raise the issue of what Canadian products are. This helps us in international markets to publicize and support and move forward with the Canada brand.

Another one is $50 million for agri-processing. Agri-processing is an important part of the value chain. We're able to support that through AgriFlex so they are able to move product from the farm gate to the consumer's plate. That helps the farmer. If they're able to do that more efficiently and effectively, that helps the farmer. AgriFlex allows us to move ahead on initiatives that will increase the competitiveness of the agricultural sector.

I'll turn it over to Mr. Shipley before I use up all my time.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I want to go to Erin, if I could.

On the risk management program, you mentioned that the utilization rate is high. Would you explain what the utilization rate is? Is that the number of people in it, or the payouts to the farmers?

The other one is ASRA. It was mentioned by my colleague across the way that waiting for ASRA is the 40%, and waiting for the federal, 60%. How long has ASRA been in place on its own? I understand that the RMP has been on its own.... How many crops is RMP actually funding? That will help you with the response in terms of how much money has come out of it.

AgriInvest is a bit of a template from the old NISA, which I think was a great program, fortunately, under the first agriculture policy framework set up under the previous government. Now it is set in place, with the agreement of the provinces. When we say we can't move or we have lack of flexibility, we can only make that flexibility happen with the agreement of the formula by the provinces. We can't unilaterally move ahead on those programs.

I'm wondering if there is clear understanding on that. That might be something you'll have discussions on tomorrow.

I want to get those answers before my time evaporates.

[Erin Fletcher]

When I made that comment about RMP utilization rates, I meant that it was to have been a three-year pilot program, and over those three years we had only two where producers were asked to pay into the program, which would be a good indicator of how many producers are going to be using the program and the year-over-year retention rates. We had an 86% retention rate in 2009 over 2008, in a year in which prices actually improved to the point where there's not going to be a payout in any crop other than corn in the RMP this year. So there was 86% utilization.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Were there any last year?

[Erin Fletcher]

Do you mean payouts? I'll have to get back to you on that. There were some payments through RMP last year.

[William Van Tassel]

You asked about ASRA. It was designed in 1975 and brought in towards the end of the 1970s in Quebec. Most of the time, there was federal money going in, because the federal programs were sent through ASRA. So it was there.

Mr. Lemieux, you talked about a level playing field. We're also talking about a level playing field, but we're looking at our neighbours down south, because this was brought forward on corn. Corn is very much touched by the American Farm Bill. That's why we said there has to be a level playing field and there needs to be certainty out there.