Agriculture Committee on April 26th, 2010

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Okay.

Moving on with regard to pest management, one program that has been very successful in the Okanagan...

For my colleagues, there will be an executive summary sent around. Unfortunately we didn't have it officially translated into French, so you'll receive it when we get back into Ottawa.

At any rate, this has to do with the sterile insect release program, and it's a little bug called the codling moth. It was something that was causing all kinds of problem in the southern parts. It came across from the U.S. and into the Okanagan, so the sterile insect release program is a partnership between regional taxpayers and the farming community.

I'd just like to know from the farmers if you think this is a program that should be sustained. Maybe the governments could play a role to help lower your costs and to make that part of your business in a healthy and more natural future, so we can eliminate some of the pesticides.

[David Machial]

That's a great suggestion. SIR has worked. In my area, anyway, I no longer have to spray for codling moth. The problem with SIR is that as the acreage goes down, those people still in apples have to pay more. So definitely, if the federal government could come in and help out, that would be great.

I was also talking to someone working for SIR. Basically what they do is they take this moth and they sterilize it using radiation, I think, or some kind of machine, but that machine is getting old and needs to be replaced. They're scrambling, wondering where they're going to get the money for this new machine. So even aid for something like that, just to keep the cost of the SIR down, would definitely be welcome.

[Madeleine Van Roechoudt]

I think there is also room to expand the program to other pests, such as a new one called the spotted wing drosophila. It is a vinegar fly that lays its eggs in ripe fruit, which is different from other flies that lay their eggs in rotting fruit. That affects soft fruits, so blueberries, cherries, strawberries, and I think maybe even apricots, and grapes.

There's room to expand this sterile insect release program to other pests. The apple clearwing moth is another one decimating orchards in the south end of the valley.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Is labour a big issue for you folks?

[Ian Hutcheon]

No. There's lots of it.

[Voices]

Oh, oh!

[Ian Hutcheon]

You just can't afford to hire anybody to help you.

[David Machial]

Labour is an issue because our work is seasonal and no one wants to pursue a career in a seasonal type of job.

For me, I'm involved in the SAWP program. I bring in Mexican workers. That's been a godsend. In the past, people would say, “Oh, yes, I'll work for you, I'll work for you,” and then they wouldn't show up the next day, which meant I had to scramble to get the 50 bins of apples off that day. It's just a real headache.

It's kind of funny; when you listen to the radio, you hear about how there are a lot of unemployed Canadians, and yet I have trouble finding Canadian workers for my farm. So maybe another possibility is that someone could be on EI or partial EI and work for a farmer at the same time, to kind of have that incentive to go and do some seasonal work. It's just a suggestion.

[The Chair, Conservative, Larry Miller]

Thank you.

I believe that is already there, that people are allowed to make up to so much money while drawing unemployment. They have to declare it, of course, but it is there. I don't know all the details.

[David Machial]

Do you know what the amount is?

[The Chair, Conservative, Larry Miller]

No, I don't. I could try to find out. It would probably be easier for you to find it out yourself. But if you don't, get hold of your local MP, whoever that may be, and I'm sure he could get that.

Before we go on, Doug, I was chuckling to myself about your comments about crows and rails. You will find out that in the bureaucracy, and that's what you're dealing with, there's absolutely no common sense there. Whatever it says in their little black book, that's what they go by. We all know as farmers sometimes it's easier to ask for forgiveness than it is permission.

Mr. Valeriote, you have seven minutes.

[Frank Valeriote, Liberal, Guelph, ON]

I would like to thank everyone for taking time out of their busy schedules to be with us today.

I assure you that many of the comments that have been made are completely consistent with what we've heard over the past year and a half of our agriculture committee meeting with people coming to Ottawa, particularly with respect to the AgriStability program and the failure of what I think they called the “olympic” model and the averaging. As well, there's the absence of harmonization of regulations between us and other countries who don't seem to meet those regulations, or have to comply with regulations that are as onerous, I suppose.

I want to get a better idea of the land value. If I can summarize it, the cost of land has gone up, which makes it difficult for new farmers to buy that land. Others buy that land for recreational or residential purposes and make it impossible for you to rent the land. As I understand it, the third factor is that your parents, or retiring farmers, are more inclined to sell their land because it's really the only return they get on their farming to use to prepare for retirement. So they are more inclined to sell it than pass it down, maybe, to others.

To either David, does that summarize it in a nutshell?

[David Dobernigg]

I'm not entirely sure whether they are “more” inclined. I think if they have a willing offspring who is happy to take over the farm and take on that risk, they are usually more than happy to pass it on to them.

[Frank Valeriote, Liberal, Guelph, ON]

So if they pass it on, the cost of the land isn't as much of a factor then, if it's going through from one generation to the other? Or are you telling me that you need better succession planning rules as well? I'm trying to head into that direction--the tax laws and things that help you move a farm from one generation to another.

[David Dobernigg]

Yes, and we're working through that right now.

I think the tax laws, especially for passing on farm land, are actually quite fair. We're working through that right now, and there doesn't seem to be too big an issue with it.

The problem is that really seems to be the only way to get into farming right now, to have that land passed down and passed on. You might have 50% or 25% being able to pass it on to the next generation, and then the other farmers will sell it off, so you have a smaller base for each generation in agriculture. The price of land, if you're getting it passed down, isn't that big a deal, but if you're new and trying to get into it, that's very difficult.

[Frank Valeriote, Liberal, Guelph, ON]

Okay.

Doug.

[Doug Fossen]

As an example of that, our farm bought land in 2005. We bought 1,250 acres, and we paid $950,000 for it--which is a little less per acre than the fruit growers, but...

Our plan, in order to buy that land, was to sell more land and do what they call bridge financing. We financed the whole purchase price, plus Farm Credit wanted to take over our farm mortgage, so we took out a loan for about $1.3 million. We then sold off a 15-acre piece for $125,000 and a 25-acre piece for about $127,000. That was ALR land that we actually worked and took about two to three years to subdivide. It was rough land that we didn't use for our cattle operation. It was divided by roads, and we were able to subdivide those and sell them.

The type of the place that we bought was 1,250 acres, and we sold a 60-acre home site off there for about $330,000. Then we sold a 200-acre block at the back for about $425,000.

In essence, we almost paid for that, our remaining 850 acres, with land that we sold. The hard part is that because there is so little income in agriculture, we might have to go one more lot, and if we have to go that lot, it will take away the value of that.

There's money to be made in buying, selling, and chopping pieces of property, but it doesn't change the fact that there's no money in the agriculture itself.

[Frank Valeriote, Liberal, Guelph, ON]

Right.

Could I ask you a question on regulations then? I spoke to somebody from XL Foods yesterday. I ran into them in the airport. We were talking about SRMs and the treatment of SRMs in Canada versus in the United States, an issue we're all familiar with. He was of the opinion that it was a good thing that we imposed those kinds of regulations, because it will fortify the integrity of our beef and our cattle industry.

My concern, however, is that it's put us at a competitive disadvantage. I look at the regulations on the one hand, and I think this is great, and we're proving ourselves as having a better farming industry in Canada with higher standards. Yet we're killing ourselves.

Could either of you comment on the balance that needs to be achieved? On the one hand we keep saying, oh, we have to have these high food standards and high health standards. And we do. On the other hand, one of you talked about everything being dumped into Canada at the very end of the year and about us not being able to compete. Can you comment on that?

[Doug Fossen]

We recently took a tour of a slaughter plant down in the U.S., in Washington. The SRM that they remove from the animal totals five pounds. So they have to deal with five pounds of specified risk material, which is like a spinal cord and a bit of the brain, the cerebellum, I think.

In Canada, we're dealing with 100 pounds of what we call SRM. That's the difference.

When you ask American slaughter plants what they do with their SRM, they basically say, “What?”

We are being penalized.

[Frank Valeriote, Liberal, Guelph, ON]

Let me be specific. The government is providing $25 million to deal with it, and it's appreciated. I'm applauding that. I spoke to XL Foods, and they're appreciative of it too. We're not sure that this is the only answer.

In my mind, I'm wondering if we should lighten our standards a little on this SRM thing. Should we allow a little more of it to be used for animal feed? Or do we keep those high standards and just keep plowing money into the industry to somehow deal with its disposal? There has to be a balance here.

What are your thoughts?

[Doug Fossen]

I think our standards are sort of killing us. It's hard; we can't compete in our world market when...

In the BSE situation, in our whole cattle industry we've had 14 cases of BSE. In Britain, when they had their BSE outbreak, I think there was somewhere around 250,000 cases of BSE. None of our animals that had BSE were ever processed and made into food.

[Frank Valeriote, Liberal, Guelph, ON]

Can you be more specific about that balance and how we might achieve it?

[Doug Fossen]

I think just calling it specified risk material, they could definitely narrow the window on...and how much volume that is. That little processing plant on Vancouver Island that I was talking about: it costs him $30,000 a year to deal with specified risk material.

I think if we could cut down the amount of rules, as long as we know that's not going to cause the disease in something else, we should be able to make it into compost or do something to get rid of it without the cost.

[The Chair, Conservative, Larry Miller]

On that point, Doug, the Americans have to do the same amount of SRM removal that we do, but the one example that's really blatant, where they have a benefit over us, is that we are allowed to make our SRMs into fertilizer but only to be spread on lawns or golf courses. We can't spread it on agricultural land.

There is a move on right now to try to get it approved so that we can.

I think that's a big difference. What that basically does is that it allows the packer or whoever to recoup some more out of a carcass, which in turn should benefit the producer. That's only one example.

We'll move to Mr. Lemieux for seven minutes.

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

Thanks very much, Chair.

Thank you for being here, and thank you for your presentations. They were excellent. It's clear to me that you put a lot of time into basically condensing your points into manageable bits and pieces. I appreciate the time you put into presenting us with your thoughts.

To follow up on the BSE issue, it's true that we have a fairly high standard, but I do want to say that we use that high standard. Back in 2003, Canada really suffered in the eyes of the world with respect to BSE. There was a real onus on us to open foreign markets, and one of the ways we do it is with the sound science argument. So the procedures and protocols we have in place for SRM are used to great effect by, for example, Minister Ritz when he goes international, to basically gently force open or more forcefully force open export markets. He's had tremendous success that I think in the long term will benefit our cattle industry.

It's one of the things he leans on when he goes to Korea. He says, “Listen, you have no argument to keep your borders closed to our beef, and they've been closed since 2003.” When they say, “Well, we're worried”, he says, “Worried about what? We do this. We have this. We do this. We have all of these procedures in place.”

The idea is to use those procedures to basically force other countries to open their borders. As I say, it has been successful.