Agriculture Committee on Nov. 17th, 2009

[The Vice-Chair, Liberal, Mark Eyking]

Excuse me. We usually have a break in between, but I was hoping we'd go right to the witnesses.

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

Could you tell me whether Mr. Bellavance intends to table his motion now or tomorrow?

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

No, that's fine.

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

I heard you say you wanted to table your motion now.

We already said we support it, André. You can put it forward. You can trust us. Watch.

[The Vice-Chair, Liberal, Mark Eyking]

Let's try to leave this meeting on a good note.

Mr. Lemieux, we're not going to have any more cross-pollination here, okay?

[Some hon. members]

[Inaudible--Editor]

[The Vice-Chair, Liberal, Mark Eyking]

Excuse me, we have witnesses here.

We're going to hear a presentation from the Ontario-Quebec Grain Farmers' Coalition.

Mr. Van Tassel, you have the floor.

[William Van Tassel, President, Ontario-Quebec Grain Farmers' Coalition]

We'll start with Mrs. Fletcher. Ladies first.

[The Vice-Chair, Liberal, Mark Eyking]

Oh, I'm sorry.

Madam Fletcher, you have the floor.

[Erin Fletcher, Manager Public Affairs and Communications, Grain Farmers of Ontario, Ontario-Quebec Grain Farmers' Coalition]

Mr. Chairman, members of Parliament, thank you for the opportunity to speak with you today. My name is Erin Fletcher. I am a member of the Ontario-Quebec Grain Farmers' Coalition, representing 41,000 farmers from Windsor to Rimouski. I am the manager of government relations and public affairs for the Grain Farmers of Ontario.

I am joined by William Van Tassel, who is the president of the Ontario-Quebec Grain Farmers' Coalition.

I feel very fortunate to be in this industry. The recent trends are positive for agriculture. The local-food movement has encouraged consumers to buy locally, and in these difficult economic times, the demand for our food is not going anywhere—as our population grows, the demand for our food increases.

We have been encouraged at times by the commitment the government has made to agriculture in Canada. We appreciate the efforts of the ministry in expanding marketing opportunities internationally for our products. We are also encouraged by the replacement of CAIS with the Growing Forward agenda. This is a step in the right direction.

While the trends in agriculture are positive, the challenges are numerous. As we have witnessed in the past couple of years, commodity prices have fluctuated wildly, as has the Canadian dollar. In many cases, the cost of production has exceeded the price of commodities. As grain farmers in Ontario and Quebec, we are subject to international market trends and competitors that directly subsidize farmers. And this has been the case for many decades. Another challenge in farming is the overlap of provincial and federal responsibility; one jurisdiction points to the other when confronted with difficult policy decisions.

We do wish to remind you that we have significant experience managing through economic turmoil and volatility. Also, you cannot look at agriculture one year at a time, as not too long ago we were barely able to stay in business—grain prices were significantly lower, and inputs like fertilizer and oil were high and contributed to declining and negative margins.

So we are here to offer our experience to the government on agricultural programming. At the last federal-provincial-territorial agriculture meeting in July, the provincial ministers asked the federal government to undertake a review of risk management programs and to involve industry in the study.

The Ontario-Quebec Grain Farmers' Coalition will be focusing on the federal agricultural program called AgriFlex. AgriFlex, or the agricultural flexibility program, was announced in budget 2009. We were disappointed in this announcement, however, as the business risk management component was excluded.

[William Van Tassel]

Thank you, Erin.

AgriFlex was intended to complement the Growing Forward agenda and to include the Business Risk Management component. This announcement was a step in the right direction, but more needs to be done.

I am here today to ask that the risk management component be included in the AgriFlex program. The reasons for doing this are compelling. AgriFlex, with the BRM component, was the result of a comprehensive consultation process with agriculture stakeholders across Canada, and was finalized in the summer of 2008. AgriFlex counterbalances the ineffectiveness of AgriStability and AgriInvestment in sectors that have low prices on a sustained basis, such that margins are weakened. Table 1, which way we will come to at the end, provides all that information. However, I am not sure you all have a copy of it, because it was not translated.

AgriFlex with the BRM component would be a cost-sharing and risk-sharing partnership, allowing farmers to weather the many ups and downs of agricultural markets, including cost of production and currency fluctuations. AgriFlex with the BRM component was intended to complement the “Growing Forward” policy framework currently being implemented by Agriculture Canada.

“Growing Forward” has its limitations, as national programs can be too rigid to accommodate regional or commodity-specific situations. As Canada is a vast country, agricultural programming needs vary from region to region. AgriFlex with the BRM component is a proactive program to support provincial programs that effectively address safety net issues. They are the opposite of the emergency, ad hoc type of assistance we have seen in recent years. Often ad hoc programs include allowable net sales, called ANS, which means that the ones who were better off receive more than those who are really in need.

Implementing AgriFlex with BRM is a prudent measure, as it would stretch existing government dollars much further, by getting the money to those who really need it. Programming funds that are committed to meet short-term needs not addressed in the current “Growing Forward” framework would be used by AgriFlex to more effectively reach producers who need them most.

Significantly, AgriFlex with the BRM component does not require new federal money, but will mean current funding is spent more effectively. Here, we are referring more to the figures for the period from 2005 to 2007, as there may have been slight changes in recent years; but we are referring to ad hoc programs that came out previously.

And we are not alone in how we feel.

At the last three federal-provincial-territorial meetings, provincial Ministers asked the federal Minister to review business risk management or BRM programs. The provinces are willing to talk to the federal government. Ontario, Quebec, Saskatchewan and Alberta have all expressed a willingness to partner with the federal government to develop agricultural programming.

This is an opportunity for the federal government to come to the table in a true partnership and show leadership. AgriFlex is a good public policy. The agricultural industry worked together to develop this proposal, which is intended to complement the federal government's current suite of agricultural programming.

Annex 1 provides figures for 1985 and 1986 as regards corn production. We went back in time to do a simulation, in order to see how the AgriStability and AgriInvestment programs are working. In 1984, prices were quite good and there were no payouts. Reference margins were fairly high. In 1985 and 1986, prices dropped, and the two programs worked because the reference margins were still quite high. Of course, we are talking about an “Olympic” average. Over the years, the margin disappears and the program no longer responds. Even in 1990, the average price of corn was $122.30. Rather than a total contribution of $309, it was $60.38. That means that this program may work well in the very short term, but in the long term, it is not effective.

For cattle and pork producers, after a year or two of bad prices, the program no longer responds. AgriFlex could be used to support productions that are at risk, where there is a real need.

In conclusion, once again, we ask that a business risk management component be included in the federal government's AgriFlex program, so that provinces have the flexibility they need to effectively administer agricultural programming.

Thank you for your attention.

[The Vice-Chair, Liberal, Mark Eyking]

Thank you for that presentation. You kept it right under time, which gives us time for one round.

What we're going to do is have five minutes for each party. We're going to start off with the Liberals and Wayne Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thanks, William and Erin. I'm glad we finally got you on committee after the games the government played earlier.

You said in your brief that AgriFlex is good policy. I guess the problem is the definition of AgriFlex.

I debated the minister in the last election. I was of the assumption that the minister was looking at AgriFlex as I was, because the two major parties committed to AgriFlex, and I believe that some of the other ones did as well. I believed the minister was committed to AgriFlex being allowed for RMP in Ontario and for ASRA in Quebec. As I understand it, Minister Ritz is not allowing it for those two programs. Is that correct?

[William Van Tassel]

Well, for me right now, AgriFlex is a program without flexibility. We were pushing for that. We thought before the election that the four parties, I believe, had agreed and had pushed for AgriFlex. But it didn't come out as we thought.

If you go back to 2005 to 2007, there was $1.5 billion, normally, of federal money going to ad hoc programs. It was very inefficient. That's why we pushed for AgriFlex. It could go to fund programs where the need really was. Also, since it's for regional programs, normally it's less countervailable. If you look at the ASRA program, the Americans already tried to countervail it on the hog side, and they never did, because it's a provincial program. That's the reason we were pushing to make it more regional.

I was under the assumption also that it would have been for risk management, for the RMP.

[Wayne Easter, Liberal, Malpeque, PE]

There's another case, as I mentioned earlier, of the minister not living up to the commitments he stated during the election. I think you were here earlier when I talked about the Agriculture and Agri-Food Canada performance report. The sad reality is that in this report there is room in terms of business risk management programs and the few changes in liability tests to help the hog and beef industry. There's room within those moneys. This government's spending is way down from previous government spending under safety net programs. And AgriFlex could certainly help the crop industry in Ontario and Quebec and elsewhere across the country.

The Ontario government has come out, as has the Quebec government, and supported them with their 40% of what was hoped would be AgriFlex money. The 60% that was expected from the Government of Canada didn't come through. I understand you're in the third year of that in Ontario.

Give me the timeframe within which you're operating and what the implications are for this futuristic, far-reaching program should the federal government not commit itself to living up to what was its word during the election campaign.

[The Vice-Chair, Liberal, Mark Eyking]

I have to keep the times close today because of our time constraints. Mr. Easter, that will be your last question.

You have one minute to answer his question. That's not to say that you couldn't add on to someone else's question, but that's it for that one.

[Erin Fletcher]

To answer your question specifically about Ontario, the risk management program was a pilot program. It was completed in 2009. We are understanding that we need a commitment by January for the continuation of the program in order for it to be carried out in its fullest capacity in 2010.

To date, it has been a provincial program with no federal contribution, but it has had quite a significant utilization rate in Ontario.

[The Vice-Chair, Liberal, Mark Eyking]

You have half a minute, Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you very much.

I think what your answer spells out is the limiting factor here in terms of moving ahead with programs that farmers support and the inflexibility of the government in terms of working with the farm community. What we're finding is that if you dare challenge them, the door will be closed and no further discussions will come to mind.

[The Vice-Chair, Liberal, Mark Eyking]

Thank you, Mr. Easter.

We're going to move on to the Bloc.

Mr. Bellavance, you have five minutes.

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

Thank you, Mr. Chairman.

Thank you for your testimony.

I want to reassure you. You are not the only ones who believed that the Conservative government was really going to introduce an AgriFlex program.

During the election campaign, and even after that, just before the budget, that is what the Conservatives announced. I remember seeing, among the list of election promises, a truly flexible program that was in the works and that the provinces could use to meet their specific requirements. I have no recollection whatsoever of having heard either the Minister of any other Conservative candidate say that income support would be specifically excluded from such a program.

I'd like to take you back to that period. When you say that the four parties agreed to set up an AgriFlex program, that is because you heard it somewhere. I imagine you were given assurances, it was your perception or, at the very least, you heard someone on the Conservative side say, during the election campaign, that this new program would really be the one you were seeking and, in particular, that it would not exclude income support.

[William Van Tassel]

That was my perception and I was fairly certain that it was going to happen. It was announced in La Terre de Chez Nous, a farming magazine in Quebec. When Mr. Paradis came to meet with the UPA before the election, he said that there should be enough flexibility to include risk management.

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

You are referring to Christian Paradis, the current Minister of Public Works.

[William Van Tassel]

Yes.

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

At the time, I guess he must have been Secretary of State for Agriculture.