Agriculture Committee on April 26th, 2010

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

Thank you, Mr. Chair.

Mr. Fossen, in all the testimony we have heard today—all very interesting and important—I was most struck when you said that you were the youngest in your area and that you did not think that you were going to be able to last very long. When a person working on the land with a whole career ahead of him tells us—we who sit in our ivory tower in Ottawa pondering about free trade and all kinds of other matters of great import—that he is thinking of getting out of the business if things do not get better, it is a concern. It gets our attention like a slap in the face. Unfortunately, though it may seem counterintuitive, that is the kind of testimony that gets governments moving.

I would like to go back to SRM. As you know, the Canadian Meat Council has estimated the additional cost of disposing of SRM in Canada to be $31.70 per head. That is the very precise calculation of our direct competitive disadvantage with the Americans.

Earlier, Mr. Valeriote mentioned that there was an announcement on SRM in the last budget. We do not yet have all the details and features of the program.

Do you agree with the Canadian Meat Council and the Fédération des producteurs de bovins du Québec that $31.70 should be provided to producers in order to redress the balance with our American competitors, who have not instituted the same measures? Is it your hope that the announcement in the budget can be of direct use to you in solving the problem of what I call unfair competition?

[Doug Fossen]

Yes, I do hope that we are able to get a “balancing out” amount of money. My only hesitation in saying that--I hear announcements of $5.5 million or billion--is that it actually go to the producer.

I sit through a lot of meetings. I'm the president of our local Stockmen's Association, and I'm a director of our B.C. Cattlemen's Association. That's why I say I am the youngest person involved in our cattle industry, because I am. There's nobody younger than me, that I know of, who is involved in the Cattlemen's.

I see a lot of programs where we're paying good wages to people to come out and assess our crops or see if there's damage or try to bring us money. And I really feel that the people working in the program are getting more than the producer.

So as long as that money can come directly to us, then I am for it. But if it is going to be spent on just administration, then...

I would rather hear that the cattle producers aren't getting anything, because I don't want to hear that we are getting anything...and that we're not.

[The Chair, Conservative, Larry Miller]

Alex, be very brief. We are cutting into our next group, or will be shortly if we don't do it.

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

Very quickly, just to follow up, David, on what you were saying in regard to the export market versus the domestic market, it's my understanding, then, that if we had enough, we could supply our domestic market and we wouldn't need to export.

[David Machial]

Absolutely, yes.

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

I remember last summer when we had that catastrophe in the cherry industry. I was talking to a farmer and he said, “Well, we could supply all the cherries. We could make a good living just by supplying all the cherries in western Canada.” So should we be going there in the tree fruit industry?

[David Machial]

I think in the tree fruit industry we should. It would work and it would solve a lot of our problems.

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

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much, all of you, for taking time out of your busy schedules to be here. You had some good points and I believe you had some very good answers as well. So thank you again for taking the time to be here and we wish you all the best of luck in agriculture. We know there are a lot of obstacles.

I wanted to announce that the British Columbia Fruit Growers' Association has brought in a box of apples at the back. Apparently we're supposed to help ourselves.

Thanks very much to the British Columbia Fruit Growers' Association for that.

We're going to break for about five minutes.

Thank you.

[The Chair, Conservative, Larry Miller]

I'm sorry to rush everybody, but we want to take advantage of as much time as possible.

I want to give a big thanks to our witnesses for coming here today. I know that all of you are very busy, and we appreciate you taking time out of your schedule to be here.

Does anybody want to volunteer to go first? If not, I'll go to my list.

First on the list I have Mr. Kiran.

Welcome. You have five to seven minutes, please.

[Nick Kiran, As an Individual]

Good morning. My name is Nick Kiran.

First of all, it's an honour to be here before your standing committee on agriculture.

I'll just give you a brief history. We came to Canada in 1970 as kids and came straight to Kelowna's agricultural community. We enjoyed being on a farm, and we worked on the farm during all our school years.

By profession I'm a graphic designer. In 1990, due to illness and serious injuries, I came back to Kelowna to heal, and fell in love with agriculture all over again. I have been producing full time for the past 15 years, treating the orchard as my canvas.

Our parents purchased our first orchard in 1990 in Rutland. In 1989 we moved ourselves to east Kelowna. Over the years we purchased over 50 acres of agricultural land. We have replanted every inch to date, and still continue to operate.

[The Chair, Conservative, Larry Miller]

Mr. Kiran, the translators have asked that you slow down a little bit.

[Nick Kiran]

Okay.

[The Chair, Conservative, Larry Miller]

No problem. We've done that before too, so don't worry about it.

[Nick Kiran]

As a family-run orchard business, we have done everything humanly possible to make agriculture viable. My two other brothers have pulled out of agriculture and are following other professions due to the lack of monetary return.

Following other concerns in our industry, it is no longer viable to stay in this industry due to poor grower returns and the high cost of production, especially in the past two or three years. Farm labour has now become a serious issue. In the 1980s there was a student work program by which the government paid the students at 50%. This allowed students to come into the farming industry.

There are many growers who have suggested this might be their last year of farming if this trend continues this year. A few years ago, we had to sell a house that we had owned as an investment in order to pay our bills in the orchard.

In order to keep this industry viable and able to survive, orchardists need a set cost of production in place through a government program that was originally set in place and promised to continue by the government in 1970 in exchange for the ALR land. This cost of production would be based on the packing house from the B.C. fruit packers, consisting of good-quality fruit. This would not be tonnage, but good-quality fruit. That would be made up of Extra Fancy 1, Extra Fancy, and Fancy apples. This would be an incentive to the growers to see light at the end of the tunnel and work hard toward the goal of producing quality fruit.

In the recent emergency meeting through BCFGA, with over 300 people in attendance, it was unanimously decided that if the cost of production was not set in place by the government and taken into consideration, we would take the ALR issue as a tool to fight as our right, to protect our industry from dying.

Farmers grow food and have to wait until the following year to see their payments, while everyone else gets paid--the employees, the pickers, the B.C. Fruit Packers, and our storage and packing house costs, etc. But farmers wait for their payment, and end up fighting for crumbs. We have to remember that farmers are the stump. If you cut that down, everyone else is out of their job.

The AgriStability program does not fully work because, as mentioned before, if you get two or three bad years your cost of margin goes down and there is little money, if anything, to replace it. The SR program has lingered on far too long. Growers can no longer afford to run this high-tax program. Although it was a wonderful program and became a good marketing tool to market our food, we continue to have to spray to keep up this program.

I would like to put forward a suggestion for a food tax, perhaps, on retailers and regulation of the retail industry by the government. Retailers have no interest in buying domestic food because it is imported at cheaper prices from Chile, China, and especially through dumping by the U.S.A. The retailers take advantage of local growers and their fruit.

How can we compete with these countries with their minimal costs of production and lower standards of regulation in growing food? As we all know, Canada has the highest and most rigorous standards of regulations to produce food. The cost of production in this country is so much higher. We pay an average of over $100 a day minimum, while China pays roughly $1 a day to their workers. Where is the protection for local growers to compete and survive with these figures?

There are so many growers who no longer have credit at the Fruit Growers Supply Company for chemicals and fertilizers because of lack of decent returns. This number can be confirmed, as there are over 25 growers I can no longer buy fertilizers and chemicals from. They are all in an odd predicament as to what to do and how to continue to work after they look after their orchards, because they no longer have working capital on hand. This is a concern because if they don't keep up their orchards, it will affect adjacent orchards as well.

To get to this year, in terms of purchasing chemical fertilizers, etc., the government needs to step in urgently to help with ad hoc payment immediately. This payment can go directly to Fruit Growers Supply Company as a credit to the growers, so they may continue to look after their orchards in a proper manner and not dig themselves deeper into a well.

It is my understanding that in Switzerland all the food grown there domestically gets sold first. Only when their food supply is depleted will they import food from other countries. Some people, even some government officials, may ask why agriculture should receive special programs. We have to keep in mind that agriculture is like no other industry, because it consists of growing food and is the hardest commodity to produce because we have to fight with Mother Nature along with other circumstances, whether it be cold, frost, rain, heat, or hail.

Now, this is something for all of you to ponder: you think you've become deranged when you start to wish for hail because only then can you make any money.

Unfortunately, this is the sentiment of a lot of growers. Yes, of course, it is a shame that we are left to resort to this, but who can you blame? For example, my uncle in Rutland said he fared very well last year because he got hail and made money through crop insurance.

In conclusion, the agricultural community is the proudest and most hard-working group of people who continue to grow food for all consumers. However, for the past few years, the situation has become unbearable and very critical, due to very low return that may put many orchardists out of business and change the landscape of agriculture for the worse with abandoned and cut-down orchards. As you all know, these changes could devastate the tourist destinations in the Okanagan Valley. Putting set costs of production in place will keep growers doing what they truly do best--growing food for all of us--and keep our agricultural community alive for future generations.

I personally have four children to support who all adore farm life, just as we did as kids. So please, don't make this my last year in farming, which it will be if there is no improvement in the industry. Please do what is right and help the growers in need.

I thank you for your time.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. DeBoer and Mr. Van Keulen, I understand you're appearing together. Go ahead for five minutes, please.

[Clarence DeBoer, As an Individual]

Thanks to the Standing Committee on Agriculture for inviting us here.

I'm just going to wing it. I have given you some information on the issue I'm talking about, and the issue is family farm transfers. As most of you are probably aware, you can transfer the family farm from parent to son or daughter, but where the problems come in for some of us is when we want to transfer it between siblings, from one brother or sister to the other.

I'm a dairy farmer and also a cranberry grower. Stan has a large dairy farm. We both have brothers who are partners in our farming operations. If there were, heaven forbid, an untimely death of either one of our brothers, our brothers have willed the farms over to our sons--their nephews--for the farms to continue.

That is where we run into problems, because that is when the capital gains are triggered. In this day and age, with everyone saying they want to save the family farm--it's a big issue for everyone to see the family farm continue--this actually works against us.

We're from the lower mainland. I know you have problems here in the Okanagan as well, where land values have shot way up, and I'm sure in other urban shadows throughout Canada, it's the same sort of deal, that land values actually have no relationship anymore to farm gate values. So when you are faced with that sort of situation, when the taxes become triggered in a transfer like that, it's almost impossible for the family farm to continue, unless you have a large farm operation of which you can maybe sell off a parcel. If you're lucky, you have that option, but for most farms, if they're a single unit, the end result will be that the farm will have to be sold in order to cover the taxes.

Some will argue the way around that is to take additional life insurance, which we do. We've also done a lot of estate planning, setting up family trusts in order that any future growth that might happen in the farm would be transferred through the trust. Those things are all very costly and very complicated. Life insurance is a great thing, but as we all get older it becomes more and more expensive. We also operate with debt, and we use the life insurance to cover that, so adding this on top becomes very challenging.

We've had discussions with other people, and we feel that to make some changes in that wouldn't mean a big revenue loss for the federal government. It's not as if every farmer is going to be benefiting from having this change made, but there are situations in which we do have farm families who really want to continue farming, and this is a real burden for them.

So as a revenue loss to the government, it wouldn't be a huge burden, yet it would be of huge benefit to the agricultural community. We're hearing all these young people today who are talking about how they would love to get into farming. We have young people who are in farming and are very talented, who have picked up generations of knowledge, and who, though a situation like this, could fall by the wayside because they can't continue. Then someone from the city comes to buy the farm--this is the ironic part--and with no agricultural background, they end up taking over the family farm. This is how we slowly lose our agricultural expertise.

These are just a few things in a nutshell that I have brought up. Stan has also hired an accountant to put some numbers together for you.

We just e-mailed this last night, so it was too late for this meeting, but the translators will get it translated and get that to you so you can see some comparisons, based on a one hundred-acre farm, and what the impacts would be on taxes.

Stan, would you like to add something to that?

[Stan Van Keulen, As an Individual]

Sure.

Thank you, committee members. It's been a long time since I've been in front of the standing committee.

Clarence has touched quite well on what our dilemma is. The task that you guys have before you today is to somehow make it so that the farming generations continue on. I've been involved in the politics of the dairy industry for probably 25 years now, and that's a goal that we in the industry always want to see happen too.

Here's an opportunity for you, as members, to take it to your government and the powers that be, Treasury Board or whatever, and to say, look, this is not a real cost to the government, to the people, but it's a big benefit to continue on with the family farm.

The example that will be before you--it's too bad we couldn't have it translated in time--is a clear situation. We just mount more debt on farms that are having a tough enough time. I'm fortunate that I am in a supply management commodity. We do get our costs somewhat covered. But the dilemma is that the land values are creeping up, or actually racing up, because of outside pressure. The government...when it comes to a death, or there is a transfer of the farm, it is done at fair market value. There's the problem. It has no reflection on farm gate revenues.

This is something that you, as committee members, can do. You can go back to the government and say, look, this is basically a non-invasive thing.

It's a positive thing for you, it's a positive thing for our industry, and it's a positive thing for the young people to continue on in this industry.

It's not often I come before you begging for... Usually it's begging for money, or begging for programs. But this is saying that if you want to continue the family farm, this is something you can do.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you.

With regard to the document that the two gentlemen just referred to, the clerk does have it. It will be translated so that everybody can have a copy, and we'll get that out as soon as possible.

Thank you very much.

We'll now move to Ms. Christine Dendy, from the BC Agriculture Council. Five minutes, please.

[Christine Dendy, Executive Member, BC Agriculture Council]

Thank you very much.

I appreciate being able to have this slot, as I have to get down to Abbotsford for another meeting.

At any rate, we have given you our written submission. We certainly appreciate this opportunity to meet with your committee. I will not go through the submission in detail. You have it before you, and hopefully you will have time to go through it at your leisure. I will just highlight some of the issues.

As you have heard this morning and will probably hear in many of the submissions after ours, apart from the huge economic and societal benefits agriculture provides, we are dealing with a tremendous problem of loss of revenue and loss of sustainability on farms.

If you go along to our submission, you will see that in British Columbia, net farm income in 2004--total cash receipts in farming--was $2.3 billion. This has remained relatively constant, rising slightly to $2.5 billion in 2008. However, if you look at total net income during that same period, it goes from a positive of $135 million and gradually declines to, in 2008, a $252 million loss. That tells part of the story of our major struggles in farm generation transfers and in having new farmers come into farming.

We have today the Young Farmers Association making their presentation. Unfortunately, there aren't many of them. We're glad that they will be here to give you their presentation today; this is a severe problem.

It's very clear to us on the BC Agriculture Council that the lack of profitability in many agricultural sectors is the single largest determinant in the trend identified by the standing committee with respect to an aging farm population. I still think of myself as young, but I realize that I am actually aging too. I'm still dealing with my own farm transition to me, and I'm already trying to struggle with the next one to the next generation. It's certainly a big challenge.

We have business risk management programming, and that has helped greatly, but it does not support farms if you have an ongoing loss situation, and it also is a very slow process. In my own personal situation, we're still waiting for our 2008 AgriStability file to be processed. When there are cash shortfalls and you have problems, even though there are programs there it can take an awfully long time to get any money.

The non-business risk management programs, such as Growing Forward and various other things—environmental farm planning, beneficial management practices, food traceability programs—provide funding, but the demand far exceeds the funding available. Also, we are finding that we are spending more and more time and money on mandatory programs, certification issues, and regulatory issues. They take up an awful lot of time, and they're not necessarily putting better-quality food on the table or resulting in more efficient production. But they are all cost and time requirements that take up time on our farms.

Agriculture research is certainly a challenge. We find here at the research station in Summerland, which has been extremely important for agriculture, particularly for orchards in the Okanagan, that we have a whole generation of researchers who just aren't being replaced. They're retiring. We're losing that bunch of researchers. We have a very slow program of research happening.

We have a five-year program in the new system. It took us two years just to get the new federal program organized. Now that we're finally into the funding system for new Growing Forward research, we only have three years left.

I will leave the rest of the written submission for you to take a look at. We're dealing with all kinds of challenges: climate change, drought management, and all kinds of things.

The price of land is certainly a major issue that is a challenge for young farmers and for family farm rollovers and transitions. That's apart from the capital gains issue. In an area like the Okanagan, where we have very high land-value pressures, we're going to eventually, possibly, have a feudal system--most of the young farmers will only be able to afford to lease farms from others, simply because the cost of land is so high. This is certainly a challenge.

One of the things we did not put in our report, but which I would like to highlight, is that to be successful, farmers now require a very broad and advanced set of skills and knowledge. It is really tragic that adequate training simply is not generally available in British Columbia.

Farming is not what it used to be. In orchards you now need very sound business management skills; accounting and business planning skills; and the ability to develop and implement certification status, global gap environmental farm plans, etc. You need to know how to handle business risk management programs and insurance; sourcing and hiring and training staff. You need to deal with farm safety issues; HRSDC for work visas when you have to apply for them; marketing; international trade issues; and research and development funding programs, which we now have to initiate ourselves and organize the initial funding for.

There's all of that plus the actual farm work, which now requires a very extensive knowledge of integrated pest management practices; new and potential pest threats; agricultural chemicals; chemical registration issues; issues of soils management, plant growth, nutrition, irrigation, and the environment; drought management planning; dealing with bylaws, increasing regulations, and the urban interface issues; and finding and training staff at all skill levels. These are all things that require a much different level of management than when I started farming, when my father started before that, or when my grandmother and grandfather started back in 1903.

The horticulture training programs at colleges and universities in B.C. are now limited to landscaping and turf management. We just don't have schools and training available, even if we have the young people who are interested in going into farming and taking over our orchards. It is the same in other sectors as well.

Although I'm speaking for the BC Agriculture Council, I'm also speaking from my own familiarity with the orchard and tree fruit horticultural industry, but this applies to other sectors too. It's a very complex industry now, and animal and plant sciences are really important skills that our young farmers need to have.

In my own case, if we want to have any training for the next generation we have to send our young people to university in Washington state or Guelph, or overseas to New Zealand or Australia to get any kind of training necessary.

On top of this we find that the federal research stations have not been replacing retiring researchers and staff, and the province no longer hires extension staff as they used to. So there are fewer related career opportunities in farming to interest and attract young people. Quite frankly, if I'm looking for staff with management possibilities, let alone my own family to take over the farm, my best chance of finding qualified college graduates is to look in New Zealand or Australia.

As another example, this year I had to hire a private consultant to create a course in integrated pest management and soil nutrition to train my own staff.

We appreciate the opportunity to make this presentation. It's certainly fitting that the committee has used the term “future of farming” as part of its title. We will need some help if we have kids coming into it in the future.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We now go to the B.C. Young Farmers Association. We have Mr. Cheema and Mr. Froese.

You have five minutes between you, please.

[Ravi Cheema, Chair, BC Young Farmers Association]

Good morning.

First of all, thank you for having us here and thank you for being here.

The BCYF is a young organization in more than one sense. We're a newly formed group that started in 2008 in response to the lack of a young farmer community. Our slogan is “Keeping farming alive with the next generation”.

We're an association of young, enthusiastic farmers across B.C. We are supported by the BC Agriculture Council, we're members of and sponsored by the Canadian Young Farmers Forum, and we have a diverse board that is made up of 11 young farmer volunteers and former industry officials.

Our goals are to provide business training workshops, communication sessions, human resource development, development planning, leadership training, and industry networking. Past events have been on political debate, money management, and family versus business succession planning. We've hosted eight events in the past two years, participated in CYFF events, and had several meetings with provincial and federal ministers.

We have a membership of over 200 young farmers. Keep in mind that the majority of these young members do not own the farms. They want to get involved with farming, or their parents own the farms.

We have a number of issues facing young farmers in B.C., starting with costs. I'll go through a few of the issues and then talk about them. The issues are land, labour, the price of machinery and construction materials, cost of living, fuel costs, plants, feed, transportation, and carbon tax.

I'm sure you've heard over and over again about land costs. As a young farmer, why would you go into farming if you have to pay $100,000 an acre and basically lose it after a while?

As for me, I used to lease 300 to 400 acres. I'm a cold crop farmer, and I have a greenhouse as well. It's hard to find land now. More and more, people who have money from other trades are buying land, whether it's construction, truck drivers who want to park their trucks, or someone who wants to build a nice house and put a few horses at the front.

[Kerry Froese, BC Young Farmers Association]

Similar to that is the fact that we also have issues with urban encroachment. The same people who want to put a nice fancy house on 20 acres of property and have horses are the ones who are taking away land that we can use as farmland. It would be much nicer to have that usable land, because it comes at a premium these days.

The same people are as well complaining about the smells of farming. They want to have a nice green space, but they don't want the smells or the noise that farming obviously produces.

I think you can go to the next topic on availability of the land.

[Ravi Cheema]

Labour is huge, especially for me. I don't use machinery. I have glass greenhouses for broccoli, blueberries, strawberries, and cauliflower. We used to grow sprouts and more cauliflower. We're at the bottom of the totem pole. People don't say that when they grow up they want to work on a farm picking berries, harvesting cauliflower, or picking peaches.

There's the foreign worker program. For the LMO, it takes a long time to get approval for workers. Through CIC, a lot of cut-off workers want to come back, but they sometimes cannot return.

As for local labour, I would hire local labour in a second, but it's next to impossible. When you do find labour, what I've personally found and what colleagues have told me as well is that workers stay around for a maximum of 20 to 25 days until they find better jobs.

When I bring workers from Mexico or overseas, making around $10 an hour is a lot of money for them. They're more passionate about it.

[Kerry Froese]

That's my situation too. I used to farm 80 acres of raspberries, but we couldn't find the labour, and I didn't want to learn Spanish. We've amalgamated to full poultry. I run a poultry farm now because of that.