Agriculture Committee on March 12th, 2009

[Michel Dessureault]

From the very outset, the safety net program in Canada has not worked. The problem is the actual structure of the program. Covering producers' margins when they do not actually have a margin means that you are not covering anything at all. The next problem is the subsequent reference to the five years. The program really has to be overhauled from the bottom up. Discussions have been held with producers from every province in Canada. There is a need to recognize production costs in Canada in relation to all the regulations that apply.

We have been wrestling with this in Quebec and Canada for a number of years now. The government always comes back with a margin coverage approach, but the problem is that there are no margins to cover. So, nothing is covered. That means that producers simply go out of business, one after the other, when there are no margins left to be had in the hog or beef industries. That is how things now stand, and the situation is no different in the lamb industry.

[The Chair, Conservative, Larry Miller]

Thank you. Your time has expired.

Mr. Richards.

[Blake Richards, Conservative, Wild Rose, AB]

Thank you to all the witnesses for being here today.

I want to first just quickly address some of the comments made by Mr. Easter.

Our government is very concerned about the situation faced by our farmers, and we are working hard to ensure the future of our farmers. The first issue is opening up marketing access. I look at my colleagues over here, who are looking at studying competitiveness issues, looking to study excessive regulations, and our Liberal friends are trying to see that pushed as far into the future as possible. I say to Mr. Easter and his colleagues, get out of the way of progress and let the government do something. Let's not try to hold things up.

Anyway, I would like to ask some of our witnesses a couple of questions. Mr. Vincent, I ask if you would start. We have a bit of a common background. I come from a hog farming background myself. When I was a young man, we had one of the largest hog farms around, about 1,600 farrow to finish. By the time my dad got out of the business seven or eight years ago, it was one of the smaller operations around, so there were a lot of changes in the industry, of course, over that period of time.

But I would also like to give Mr. Dessureault and Mr. Rouillard a chance to answer the same question, so I'll ask the question to all three of you. I've asked a number of our witnesses on this particular study the same question. I'm very concerned about the future of farming, particularly for young farmers looking to get into farming. So here's a very blunt question, first of all. Do you see a future for young farmers looking to get into your industries, and what needs to happen to ensure that?

[Jean-Guy Vincent]

I do want to say, as I pointed out in my presentation, that advance payments programs were implemented last year, which greatly assisted Quebec producers. About 700 producers benefited from a total of $125 million in loans. We also asked for a reprieve on payments due this spring—in April, to be precise. We were given one, and we are asking for another one, because the current problems are serious.

With respect to young farmers, one of my sons, who is 33 years old, works on the farm with me. He, too, is wondering whether there is any future in this industry. That is primarily a concern in the hog industry right now. Our young people have to be able to rely on programs that will able them to remain in agriculture. For that reason, we are in the process of developing a dialogue between the Fédération des producteurs de porcs and the government, as well as with all the members of Parliament we have been working with, with a view to improving the situation of Quebec producers. Some programs have been identified. For example, we would like to have a look at the caps currently set for the Agri-Stability and Agri-Investment programs. The fact is that we can no longer use a model based on the farms of the past. Those caps have to be reviewed and adapted to the current realities facing farm businesses nowadays.

We were talking about slaughtering earlier. That is important in the beef industry, but it is just as important in the hog industry. Given the current economic crisis, why not innovate by offering producers or even workers an opportunity to invest in slaughtering and processing plants? That avenue has never been seriously examined, even though there has been a lot of discussion of it. Why not have government funding go through the producers and the employees? That is being done in Red Deer, Alberta, and elsewhere. Based on a plan, producers and slaughtering plant staff work together. In Quebec, all these things are on the table. These producers can invest. These kinds of initiatives are underway. The hog industry should also have access to government assistance for slaughtering that would go through the producers and workers, and thereby maintain jobs.

[The Chair, Conservative, Larry Miller]

Your time has expired.

Mr. Bellavance and then Ms. Bonsant.

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

Mr. Rouillard, you wanted to say something. You are over there in the corner, but I would be interested in hearing your comments.

[Paul Rouillard]

Are you talking about young farmers?

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

Yes. The question was asked, and you raised your hand.

[Paul Rouillard]

Well, it would be pretty foolish of me to say that there is no room for young farmers. Indeed, we are in a market where growth is at about 5 per cent. I would also like to give a partial response to Mr. Atamanenko's question.

Of course, 60 per cent of farm businesses had negative profit margins in 2007, but I think we should at least see the positive side of that. The fact is that 40 per cent of farm businesses recorded positive profit margins over the same period, even though costs rose sharply that year. For the Fédération des producteurs d'agneaux et de moutons du Québec, the problem is really quite simple. There is room for new farmers. There is no contradiction between a market that is growing and businesses that recorded a deficit. What we must do is find a way to pass on the know-how of those businesses that are successful to the ones that are not succeeding quite so well, and to the young farmers who are just starting out. That is a fundamental issue that we are carefully considering. If some businesses are able to succeed in the current environment, others should be able to as well.

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

Thank you very much.

Mr. Dessureault, do you wish to comment?

[Michel Dessureault]

Yes, thank you.

The future of our producers is one of the reasons we are here today. There will be no future for Canada's producers without adequate slaughtering capacity. That is perfectly clear. And, we have come here today to talk about that issue with you. We need your help to build that future. For a number of years now, we have been trying to get the government to implement a national agricultural policy that would ensure our competitiveness at all levels. In order for that to happen, however, we need you, the elected members of Parliament.

When I talk about this with my son on the farm, the first question he asks is whether he will be able to make a decent living in this business and raise his family properly. Everyone has a responsibility in that; that's why I am here today. This is an important issue. All of us here in Canada have to work together and support one another.

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

It doesn't really seem as though you have been heard. Yet ever since I have been in politics, I have been seeing ministers and governments touring the country endlessly, and holding consultations. It seems to me that your message is quite clear. And yet, we always end up repeating that… I think Mr. Vincent gave a very good example earlier when he talked about income stabilization programs. You did as well. It seems to me that someone, somewhere, does not always understand the message. I realize that it is not possible to just connect a hose and say: Well, here is the money, and constantly be funnelling it to various sectors of the economy. I understand that.

However, after all these consultations, and successive strategic frameworks for the agricultural sector, each of which resembles the last, how is it that we are still at the same point—that we are still talking about the same thing?

[Michel Dessureault]

That is a question of a whole other nature than production—at another level. If we continue to share our views on this, we will ultimately succeed in implementing a national policy that is competitive at all levels, whether we're talking about regulations or reciprocity.

Progress is being made. Some has been made in the slaughter industry, which is very encouraging. We have to continue to work to ensure that, throughout Canada—at least, in the East—the help we are requesting today to maintain the slaughter capacity, is seen to be very important, because it is. The Canadian government has been receiving our message for some time now. We are working on this together, and together we will find the best solution.

We hope that it will be a solution that is fair to business, and that is what we are working on at this time. That is our goal in the short term, but it does not prevent us from sharing our vision for the future.

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

I wanted to…

[The Chair, Conservative, Larry Miller]

Please be very brief.

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

Have you read the first report on the budget, which has just been published? I want to quickly tell you what it says. I don't know whether you are aware of this or not.

In terms of strengthening slaughterhouse capacity, money will be available in a few months—in other words, in about October. I wanted you to know that. I wasn't sure whether you were aware of this. If you have further discussions with the minister's office, they would be an opportunity to discuss that as well.

[Michel Dessureault]

I have made a note of that.

[The Chair, Conservative, Larry Miller]

I see that you're all finished. I thought somebody was going to respond quickly to that.

Mr. Hoback, you're up next, for five minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Thank you again, gentlemen, for coming here today and giving us your presentations. It has been interesting.

I have a few questions for you, Mr. Dupont. You mentioned that you have 1,400 producers. Are they shareholders in that facility? Do they actually have a financial stake in it?

[Martin Dupont]

Yes, the members of the Federation.

[Randy Hoback, Conservative, Prince Albert, SK]

You're saying they do. The federation has a share in it.

[Michel Dessureault]

The 14,300 producers in Quebec are making a contribution of $53.86 per cull cow that is marketed in Quebec, in order to inject $30 million into the slaughter facility. So, there are 14,300 owners.

[Randy Hoback, Conservative, Prince Albert, SK]

Do they get a premium because they're owners? Do they get any other benefits?

[Michel Dessureault]

No. The only benefit for the producer is the assurance of having a good market price, in order to remain competitive.

During the BSE crisis, when we were in a monopoly situation in Quebec, producers received $100 for their cull cows. That was the situation we were in when we began discussions back then.

So, as far as the producer is concerned, receiving a competitive market price is the best possible return on his investment. The fact is that producers have a very limited ability to invest.

[Randy Hoback, Conservative, Prince Albert, SK]

In that scenario, the producers have a stake in it, and by having that stake, they're receiving the benefit of having that stake in it. I think a lot of people talk about who owns the supply along the chain. I think that as government, we don't want to make any restrictions along that supply. What the NFU is suggesting, for example, would be very restrictive in who could or couldn't own the packing chain. We could end up with a scenario in which farmers couldn't participate at that level. If they were't there for you, that plant wouldn't be there.

I think that would be a fair assumption. If the farmers weren't the investors, would you be there?