Agriculture Committee on April 26th, 2010

[Blake Richards, Conservative, Wild Rose, AB]

Okay. So it sounds like there are several layers there, and it sounds like it's not that different from Mr. Hutcheon's industry.

Mr. Hutcheon, I know that in your industry, your thought is that it seems to be at the grocery store level that the big chunk of the profits goes. It certainly isn't to the farmer. It is to some degree to the packers, but it certainly seems to be at the grocery store level where you seemed to indicate the problem is.

For the fruit farmers or the orchard growers here, you talked about several different levels. Where do you think all of the profits are going? It is my understanding that they aren't going to you, either. So where is the profit going?

[David Machial]

I would say it's to the wholesaler. There aren't a lot of them, so when you have a few wholesalers, you have to take the price they're willing to pay. You go into the stores and the prices of apples are $1.30 or $1.40, and yet my return is 13¢. It's going down. The consumer isn't saving. It has to be the retailer and the wholesaler where money is going.

[Doug Fossen]

Can I make one quick comment?

[Blake Richards, Conservative, Wild Rose, AB]

Please do.

[Doug Fossen]

I agree that retailers are taking more of the profit, but our dollar... We're kind spoiled in Canada with how cheap our food is, even at the grocery store level.

Like, I can feed my whole family for $400 a month, but I might go out and buy a pick-up and spend $800 a month. Or my phone bill might be $150 a month.

I don't know how we get Canadians to value their food more until we starve them.

[Blake Richards, Conservative, Wild Rose, AB]

Yes. I would certainly agree.

In my riding, as I mentioned earlier, I have a large agricultural area. A lot of it is cattle country, but also foraging grains and other stuff. I also represent what I would call the suburbs of the city of Calgary. It's amazing that even in Calgary, even in some of the communities I represent, that are so close to cattle country and farming country, if you talk to the average person on the street and ask them where their food comes from, they say it's the grocery store. They don't get the connection to the farms that just next door to them.

So you're right that we need to educate our consumers about the fact that the people who are growing the food they are able to buy so cheaply in the stores are making nothing. That's so important.

Also, I notice that the orchard growers here are no different from those in the beef industry. The exports are an important part of the market, so some of the things we're doing there are helpful.

But you are here because you're young farmers. To me, it's such an important thing that we're looking at here, the future of farming. We're looking at our long term and how we can help this industry survive in the long term. The way we do that is by making it attractive for farmers such as you to be in the industry or continue in the industry in the short term.

So I'd like to ask all of you a basic background question here, probably one that will be thought-provoking. What is most different about your industry now from when your parents were getting started in it, if your parents were in fact in the industry? What is the biggest difference between then and now, and what's the biggest challenge you have faced as a young farmer trying to get started in the industry? And if the government can do something about that, what might your suggestion be?

[Doug Fossen]

Just quickly, I think the biggest change is that our expenses continually climb and the amount of money we're getting for our product continues to go down. Our parents, grandparents never dealt with that. They were able to increase their production and the price kept climbing a little bit. We're just being pinched, and I'm not quite sure how we can stabilize that.

[David Machial]

I would say it's the demand for higher and higher quality and the costs associated with that. Just the other day, my dad was trying to figure out what nutrients to feed our trees. He was, like, geez, it's so complicated; in the past you had three or four sprays, and you went out and did it, but now you have 20 different sprays that are specific to different times and specific to different pests.

It's just becoming a lot more complicated and costly.

[Madeleine Van Roechoudt]

I would agree with the two previous comments.

I also wanted to comment on your previous question, when you asked where that money is going. The grocers are placing more demands on the packers: they have to be “cold chain” approved. You have to have your apples shipped at whatever the magic number is--5°C, let's say--and then they put them in room temperature storage in the stores.

They're passing down a lot more regulations, but they're not paying anything more. They want the paperwork to prove you've complied, like food safety audits. We have to have third party audits and we have to pay for them, but we're not getting anything more for that. So I'd say that's challenging.

Yes, in terms of the regulation on the farm with chemicals, things are more specific. We used to have broad spectrum pesticides and now they're more targeted. Farmers are required to be experts in their areas--on entomology, on soil science, on amendments, on all that stuff--but you actually can't study that anywhere.

I'm fortunate that my father has been farming, and farmed with his father, and our orchard manager has been farming for 30 years as well. His wife is a crop consultant, so she's really up on all that stuff. I'm fortunate to learn from them, but other people who want to enter have no place to learn that knowledge.

[David Dobernigg]

One thing that's comparable to previous generations is the price we're getting.

[Voices]

Oh, oh!

[David Dobernigg]

It just hasn't kept up with inflation.

As mentioned previously, the expenses have gone up, all the way along to the new style of trees we're planting. They almost look like a vineyard now, where you're planting close together. They're much more expensive. Labour is much more expensive than what our parents were paying. The apparatus, the tractors, the platforms, all the tools involved are just more expensive, and we're receiving prices comparable to several generations ago.

[The Chair, Conservative, Larry Miller]

Thank you.

There's something I'd like to follow up on, if I could. I have a fairly large apple producing area in my riding along Georgian Bay, and a very small wine producing area; they're just starting into that. One thing we have there is getting labour. I think you have the same problems here in B.C. as we do down there. There's a certain amount of unemployment in our area, but for whatever reason Canadians just don't seem to want to go to that labour. So a lot of migrant workers come into my riding, and obviously they are out here. What is the one specific thing or more that government could do to make that program work better for you?

Also, the other part I heard, I believe more on the fruit growing side of it, is the cost of production. The cost of production, to me, is another word for supply management. There's an old saying that there's no such thing as being almost pregnant, you either are or you aren't. To go with supply management, you either have to do it or not.

I know from my non-supply sectors, especially beef, it splits it down to the commodities that largely export versus the ones that don't. That seems to be what it comes down to. I heard Ian's comments about having to shoot a number of his cattle. That's what would happen in the beef and pork industry. To go down that road, it doesn't seem to be as simple as just saying we need the cost of production. It's either totally supply management or not.

It's a very complex issue. The only way that any government is ever going to look at any of that is that it has to be from the industry. We're not hearing that from industry as a whole; we're hearing it from some individuals. That's more a comment than a question, but if anybody could touch on the labour one, it would be interesting.

[David Machial]

Well, I was actually going to touch on your comment.

[The Chair, Conservative, Larry Miller]

You can go there too, that's fine.

[David Machial]

I know we export because we have to, but if we had supply management... In British Columbia, I think the statistic is something like this: we can supply 50% of the food needs in B.C., so if we had a supply management system, I wouldn't need to export. I wouldn't care; I would be able to provide my local market. Importers would probably still have to bring their food in, just because we can't meet the demand.

With regard to labour and making it easier, with SAWP our Mexican workers are specifically tied to our farm, but because the work is kind of seasonal, in the month of August they don't do a lot of work. I have farmers coming around and asking if they can borrow my workers. I say, “No, you can't; it violates the contract.”

If you could maybe provide a quota, a certain number of hours where SAWP workers who come in could actually go and work for other farmers, I think that could alleviate some of the pressures on smaller farms that are having trouble finding workers.

[The Chair, Conservative, Larry Miller]

So you'd like there to be a little more flexibility there.

[David Machial]

Yes, a little more flexibility. You don't want them coming in and then taking off and working for whoever, but I don't think it would hurt if my workers went and worked for someone else for three or four days while they needed that little bit of extra labour.

[The Chair, Conservative, Larry Miller]

We have just a few minutes left here, but Mark, you had a question.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Yes, I have a question, but first I'd like to make a little statement--a quick one.

I know we're going to be visiting a lot of locations and seeing a lot of young farmers. I would just hope that we keep the political rhetoric away from these sessions and remind the parliamentary secretary to go a little easy on cheerleading the minister, because it leaves us no choice but rebuttal. I would like to keep that away from these meetings, keep to the questions for the young people, the young farmers, and keep the cheerleading out of it. That's just a comment.

David, you mentioned your parents talking about NISA. I think NISA was one of the better programs, because if, for example, you had $300,000 worth of sales--I could be a little off with the numbers here--and put in 3%, it would be $9,000 put in, and I think the province would put in 3%, and the feds. So you had little pools. If you had $300,000 in sales, there would be $30,000 going into this pot, and as your sales went down or you had a rough year, you could pull from it. Also, really, if the farm built up a pot, you could pass it over when you sold the farm.

I think it was one of the best programs we ever had, especially for the horticulture industry. I think it was available to all non-supply management, so you had it in beef and pork.

What would you think, for a lot of these programs, if the government said, “We're not going to give the agriculture industry any more money; if they've been given $1 billion, that's it, they're not getting any more”?

With some of these industries, should we really look at them again and say, “Hold it; we did better things before. Maybe we should look at changing them around to maybe reintroduce a program like NISA”?

[David Machial]

Definitely. As I said, my parents and uncles talked favourably of NISA. If you were to get rid of AgriStability entirely and put in place a NISA-type program—AgriInvest really is a NISA-type program—they would appreciate that a lot more than what we currently have.

So yes, definitely.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

It was a federal-provincial thing, too, so the province was putting in their share. I think it was a great program, and it was simple.

It took the anxiety out, because you knew you had a little fund in there. You could take some chances on your farm and say, “Well, I have that little fund.” If you wanted to grow high-bush blueberries, you could take that chance if it were going to dip a bit, because you had that fund backing you up over a couple of years. So I think it's something we should look at again.

I don't see any more comments.

[The Chair, Conservative, Larry Miller]

Pierre, did you have a question?

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

I'm fine, Chair, but perhaps I'll address what Mr. Eyking said.

The only reason I brought up success in opening foreign markets is that we were talking about SRM. The discussion was about the penalty that our farmers pay for SRMs. And we recognize that--I recognize that--but I think it's also fair to say that it's used to leverage other countries to open their borders, and there has been success in that regard.

There are positives and negatives to the SRM policy that's in place right now. That's all I was trying to communicate.

[The Chair, Conservative, Larry Miller]

Okay, point taken.

Mr. Bellavance, the last question goes to you.