Agriculture Committee on April 26th, 2010

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you.

A special thanks to Joe; you worked really hard to organize a lot of the witnesses. I know our clerk was really thankful for your efforts, so I'd just like to thank you on her behalf.

I guess I'm like a broken record, but I'm going to say this again. I'm just going to take off on what you said there, Joe. You talked about the United States Farm Bill and their institutional procurement programs and all of those things they do, whether it's coupons for seniors to buy food at local markets or school programs. Yet I recall that a couple of years ago, some of us on the committee had a recommendation, which all on the committee agreed to, that the federal government encourage local procurement when buying for federal government institutions. We all agreed to that and thought it was a great idea. Yet the response we're getting is that we have to be careful because of trade obligations.

I don't think it's fair to criticize one government on this. I think we've all kind of slipped into this over the years--until we all of a sudden wake up and say, “Wait a minute.”

You know, if you come from another planet and you see what's going on, and see all of this productive land and of these qualified people with the excellent fruit and vegetables and produce, and yet people aren't making money, we're doing something wrong.

We can fix the tax system, we can fix the subsidies here and we can give money there, but the bottom line is that we have to somehow collectively start standing up for something national, whether it's a food policy or it's some program that recognizes our producers and gives them a chance to make money.

You mentioned expanding the list of sensitive products. I'd like you to maybe comment on that.

I'd also like to get Mr. Butler to comment on one thing that I've been told, that before NAFTA we had something like 1,000 onion producers in B.C. and now you can count them on the fingers of your right hand.

I'll stop there, and hopefully we can get a couple of comments.

Joe, maybe you wouldn't mind starting.

[Joe Sardinha]

Sure. Thanks, Alex.

Certainly, I called them “sensitive products” for a reason. The apple industry has looked long and hard at what supply management has. When you have an element of certainty around your cost structure and then around your revenue, that looks very attractive.

We had a chance--this goes back to the mid-eighties--when the Canadian apple industry did vote to set up a supply management or a marketing scheme. Ontario, oddly enough, turned it down. They've regretted it ever since.

So we've already had some initial national discussions on it. And the idea would be to treat apples with the same broad brush stroke as any other supply management commodity. Granted, it would work a little differently, though, because we cannot supply the needs of the Canadian apple industry. As a whole, Canadian apple growers produce probably 50% of Canada's needs, so we're going to be a net importer regardless.

It would allow us, though, to have that first point of entry control of regulation on imports so we could have a reference price for imported product without calling it a tariff. And we could have some sort of regulation of that product such that we in turn can effectively sell our product in an orderly fashion and at the same time, I hope, have a little bit more market power. We've lost considerable market power. We have no market power any longer with the consolidated retailers. So it would be an effort to rectify some of that.

I don't know if any of you have heard this before, but I heard a marketing expert this March at the Canadian Horticultural Council in Quebec City. I asked the question of one speaker beforehand, and this expert confirmed my suspicions. I asked the specific question: during this time of recession, what has happened with wholesale and retail margins in the fresh vegetable and fruit sectors?

The retail margins have increased--at a time when producers are getting less.

That is despicable. That should not happen.

Hence our industry's frustration, and hence the industry saying that perhaps we have to go down this road and consider some kind of special protection for the industry, because we really don't see things improving in terms of our empowerment with the retail sector and in terms of the free and open access that U.S. and other competitors have into our market because of NAFTA and other trade agreements.

So that's where we're coming from. I'm not saying that's the be-all and end-all or the solution. We are looking at things like perhaps trying to pursue an anti-dump and get five years worth of protection. I can tell you that system is also very expensive and very archaic. Industry has to put up a lot of up-front money without any assurance we'll win our case.

Just ask the potato people. They went through a case very recently to renew their five-year protection, and it cost them in excess of $300,000. That was going to be their legal bill to take it to the CITT.

This is some of the reason behind our push for the concept of creating more sensitive product categories.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Lemieux, five minutes.

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

Thanks very much, Chair.

Thank you, everyone, for being here. I met some of you before in my last pass through Kelowna, so it's very good to see you again.

I'll start with a few comments on supply management. I'm a big fan of supply management. There is lots of dairy farming and chicken farming in my riding, and certainly it offers a certain stability to those commodities.

But I do want to echo what Christine said in that it's not a panacea for all agricultural problems, and it really does come down to the commodity.

With milk, for instance, it's simply milk; but with apples, as you pointed out, there are many different types of apples, many different grades, etc.

As well, there is the whole quota system, the adjustment. There is a huge adjustment factor to go from the market system that exists now to buying quota, managing quota, and then of course you're into a very provincially regulated system.

So it's not a be-all and end-all, but it certainly has its advantages. I just wanted to highlight that.

Robert, you were talking a lot about standards, and I'd like to understand a little bit more in concrete terms what you mean by standards. I think of two different types of standards when you look at the final product. There is a food safety standard. If food is coming into the country, is it safe for consumption? I think we have processes in place, of course, to root out product that is not safe for the consumer, and that system is working.

Then is the quality side of standards, when they're not growing to the same standards.

Are you referring to a lower-quality product? Can you give me some concrete examples of what you're referring to when you're concerned about the standard of products coming into the country and how that matches up against Canadian produce?

[Robert Butler]

I think it's a combination of a couple of things. One is the food safety standard. We don't know that they're the same food safety standards that we have to impose here in Canada. We believe there are some standards from the U.S. or some standards from the European countries, but we don't know about some of the other standards from other countries we import food from, and yet they come in at a far lower rate than what we could even do.

There's also the quality of the product. We don't know whether that quality is the same. Today you can go into the markets and buy food, and you look at the label and the label still doesn't tell you today where that product is produced. It says “Packaged for”, but it doesn't say where it comes from. We have no idea.

I did find one product at one point in time from Green Giant, the Jolly Green Giant, that said “Made in China”, and since that time they've taken that off and they say it's “Packaged for”.

So they are finding ways to get around the regulations and the rules.

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

Right.

[Robert Butler]

However, the standards are not consistent, that's the problem—

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

Yes. And what I'm trying to do is better understand what's meant by “standards”. When I think of food safety standards, I can assure you that food safety standards are the same in Canada as they are for imported products, because the food is safe or it is not safe, and product that is unsafe would not willingly be allowed into the country for use by Canadian consumers. So from a safety perspective, the playing field is level.

From a quality perspective, I agree with you. But I also think the consumer can make some of those choices. If he doesn't like mushy apples, because the quality is not the same, then he won't buy mushy apples, he'll buy those nice crisp apples that are produced here in British Columbia.

Like, would not the consumer be able to distinguish--

[Robert Butler]

If you can get the consumer to ask the question.

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

Yes.

[Robert Butler]

Oftentimes—on potatoes, for example--you go to the supermarket today and with bulk potatoes it will say “Canada or U.S”. Now, you have to ask which ones are Canadian, of course. But that's not going to happen. It just doesn't happen.

The question was asked on onions. Onions are generally bulked on the shelf like that as well, although we don't have much more than three onion producers in B.C. anymore.

So the issue is that you can't get the supermarkets to do what should be done in the way you would want it done.

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

Right. So that's more of a labelling issue than a quality issue, then. You're not saying imported onions are lower quality, you're just saying we can't tell them apart, which would be a labelling issue.

[Robert Butler]

If you want the consumer to buy the Canadian product, you have to find a way to label the product.

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

I agree with you on that, very much so.

It kind of leads to my next question, which is on the education of the Canadian consumer. It's all in line, of course, with the future of farming. The whole idea is how do we make our farms more profitable? And then, of course, more profitable and more secure farms attract younger people to get involved.

Christine might be able to answer this from the point of view of both the British Columbia Agriculture Council but also the member groups. I notice there's quite a impressive array of member organizations. I'm wondering if you could share what kind of funding and what kind of initiatives are taken in terms of advertising so that the consumer is better informed, better aware, encouraged to make the Canadian choice, encouraged to buy the Okanagan apple, not the Washington state apple.

What kind of things are you undertaking at the consumer level? Do you undertake anything, as a council, or do your member organizations undertake anything in this regard?

[Christine Dendy]

For a while we had a “B.C. Grown” program, which was provincially sponsored. The funding for that was withdrawn. We still have that program labelling available, but the funding initiative from the province is not there at the moment and we don't know when we're going to get it back.

So commodities and producers and marketers are pretty much on their own in terms of their own marketing and advertising and what direction they want to go in. But we are certainly working fairly hard to try to get this B.C. Grown promotional program back in place.

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

I have just one more quick question here.

[The Chair, Conservative, Larry Miller]

As long as it's very quick.

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

Is there any kind of a strategy to put in place? I'm thinking of dairy farmers. Dairy farmers have a certain amount of money they spend—I can't remember what the number is, it's in the tens of millions of dollars—on advertising. I'm wondering, just taking the B.C. perspective, whether there is a strategy whereby all these groups that belong to the agriculture council would pay something to go into advertising and then launch an advertising strategy to inform British Columbians, “Buy local. Here's how you check it. Here's the advantage to you.”

Is there any sort of a strategy on that?

[Christine Dendy]

No, we don't have any strategy of actually levying all the producer groups for money to do a joint advertising program, but we are certainly working on the B.C. Grown and that label. We've done some market surveys and consumer testing, and certainly understand that there is some very goodwill at the moment for the consumer to be purchasing locally and to be purchasing B.C., but they don't know what they're buying. It's a problem when the labelling isn't there.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We only have a couple of minutes left and I'm going to take the liberty, as chair, to ask the last question. I will direct it to our young farmers, to Ravi and to Kerry.

If there were one specific regulatory change that government could make, not only to your industry but to agriculture in general, what would that be?

[Kerry Froese]

Having heard what Robert and Joe said, we're seeing that we need to educate our consumers with these labels. If they don't know what they're getting, they're not going to choose the local product.

When the mark-up is after the farmer, and at the retail level, it's at a point where the consumer can't even make the decision to help the Canadian farmers. They're not able to make the right choice because they're not empowered.

That's something that I would like to see changed.

[Ravi Cheema]

If somehow government could make a law where retailers could not mix product together...

For example, our bell peppers are mixed with ones from Mexico, the U.S., and sometimes New Zealand. Every weekend I take my Mexican guys shopping, and I can tell they're looking at the cost--$3.99--and looking at me like I'm making a lot of money, when really I'm only seeing 30¢ or 40¢ out of that.

I'm not too sure, but I believe the radio industry has to play a certain amount of Canadian music. Maybe the retailers should have to buy a certain amount of Canadian product and have to make the distinction between product from the U.S., Mexico and China, not mix it all together at the same price.

[The Chair, Conservative, Larry Miller]

To comment on that “Product of Canada” labelling, it should be a benefit to the retailer. To me, it makes no economic sense for them to mix them. I don't know why they're doing it.

Those are good comments.

[Kerry Froese]

We get pushback from our processors because they can obtain that product cheaper from other countries. They don't want to put that labelling on there.

[The Chair, Conservative, Larry Miller]

They want to put it together and average it out, I suppose.