Agriculture Committee on April 28th, 2010

[Layton Bezan]

It's obvious that trade built this country, and we have to continue to trade, but we have to have a fair basis for trade. We also know that our biggest customer—and we're also their biggest customer—is the U.S., and they're not fair traders. In my business, we make the most money when we can trade with the Americans, but for the good of Canadian agriculture, we need to protect our own food supply.

It's unfortunate. As was said earlier, we have regulations in place, we have traceability in place in Canada that is...I won't say second to none, but we are among the leaders in the world, and we don't demand the same traceability and food safety inspection standards of our largest customers. What is the point of our doing it? We're not protecting our own population, and we're sure as heck not protecting theirs, and we're putting our producers at an economic disadvantage.

Having said that, we have to continue looking at new markets and servicing the ones we have. Local supply to institutions such as those you are talking about would be difficult, if not impossible. We can put all kinds of regulations in place, but is there a way that we can supply a prison, for example, with all locally grown food 365 days of the year? I don't think so, but it's a move in the right direction to try to get at least some of it sourced there.

Right now, one of the big concerns we have in the cattle business is that we're pushing all the trade buttons and trying to do that, but by my math, we're importing the equivalent of 500,000 head of fat cattle a year, mostly into B.C. and Ontario, that aren't subject to the same rigorous standards that we have to undergo.

[Dixie Green]

Mr. Atamanenko, I'd like to comment that perhaps we should frame your question in terms of global warming. Before too long, we're going to have to look at how many miles our food travels. I recently watched the production Food, Inc.. It is amazing how much we're moving our food around the globe. In terms of energy conservation and global warming, we're going to have to look at that.

As for prisons, at least having the prisoners grow much of their own food is a good move. I'm a strong supporter of people getting great benefit by putting their hands in the soil and handling animals, etc. They find lots to learn, and it has to be cheaper for those prisons to grow their own than to bring it up from California.

[The Chair, Conservative, Larry Miller]

Thank you, Ms. Green.

Your time has expired, Alex.

We'll now move to Mr. Hoback for five minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Thank you, everybody, for coming out this afternoon. It's an unusually early spring this year in Saskatchewan, and I think a lot of you would rather be out in the field today than sitting here listening to us at this meeting. But what you are doing here is very important, and I want you to recognize that it is appreciated that you are taking the time to come here.

I get confused. People say, we have to protect the Canadian Wheat Board, but we don't want to trade. Well, if we don't trade, the Canadian Wheat Board doesn't do anything. All it does is trade. If you talk to the Canadian Wheat Board, which I have done, the first thing they say is to get the Colombia free trade agreement done, get the Peru trade agreement done, get a trade agreement with Morocco done so that we can compete against the U.S. in those markets.

So I find this to be speaking out of both sides of your mouth here, when you look at how important trade is. If we didn't have trade now, we wouldn't be here. That's the point that a lot of people have to understand: we would not be in this hall, because there would be nobody farming in this area. If we went to domestic supply, we could get rid of probably about 70% of our farmers.

Brad, you worked with the canola industry. You could maybe give us some background on how important is trade for canola. If it weren't there, where would we be?

[Brad Hanmer]

Thanks, Randy, for the question.

Canola represents, on our own farm, about half our acres and about 85% of our net income. It is direly important. It is one of the crops that is a golden child, and it's a great story. As we know, it was made in Canada, right at the University of Saskatchewan, and it is an industry that has grown from free trade and from private industry, collaboratively with growers.

We see that this same model could be used, Randy, in wheat. Agronomically, wheat is just as suited to this part of the world as canola, and it's rather a travesty that wheat is such a dog. I don't blame the Canadian Wheat Board for low commodity prices, but there are so many things they need to react to very quickly. On our farm, wheat uses less than 10% of our acres, because we can't grow it; it just doesn't make sense, competing with other crops.

[Randy Hoback, Conservative, Prince Albert, SK]

I know you made the comment, Ms. Green, about not growing wheat and barley. Unfortunately, we can't grow lentils and peas. We can't go to other varieties to do a proper crop rotation, so we're forced to grow wheat and barley. Actually, when you talk to producers in southern Saskatchewan who are growing lentils, peas, and other crops, you find the only reason they're growing wheat is that it's a break crop from lentils; that's the only reason they're doing it. They don't even pencil it in as a return. They just know it's not going to be good, so they say forget about it, or whatever, and let's get on to lentils as soon as we can.

Colin, do you agree with my comment? How would you react?

[Colin Schulhauser]

I definitely would agree. If it weren't for peas, lentils, and all the cash crops, I wouldn't be here today. We make cashflow decisions whereby we can deliver in certain months. I can't do that with the Wheat Board grain. I can only deliver sometimes 25%, and then I don't get paid for a year and a half; I get just enough to cover the freight and maybe a little bit more. That does not help my operation. I cannot pay bills and I cannot establish any kind of cashflow or anything with that. That's why we grow all these crops: so that we can sell in certain months to keep our cashflow going. Whatever the Wheat Board gives us just fills in. It's just there, and it really doesn't amount to anything. It's basically just a break-even crop—if you're lucky.

[Randy Hoback, Conservative, Prince Albert, SK]

Let's look at trade agreements. We export pulses; that's how we've grown our industry. We export canola; that's how that industry has grown. If we look at any of the crops that Saskatchewan grows.... We can even go to the livestock sector. You know what happened with BSE: all of a sudden our border shut down.

Isn't it fair to say that trade is probably the number one issue for a young farmer today—making sure you can get timely and fair market access? Is that fair to say?

[Brad Hanmer]

I would agree, Randy. On that issue, I have a dire concern with the innovation of attracting investment into the wheat and barley industry right now. My comment on corn is sincere. There are posted comments from the major corn breeders in the world that the corn yield will double. If we can't grow corn here, wheat will be even that much less profitable for us, and I can't imagine its being less, because profit is non-existent now. We need to spark innovation in wheat breeding, research, barley, or we're going to wipe it out completely and move to corn.

[Randy Hoback, Conservative, Prince Albert, SK]

Is there anybody else?

[Layton Bezan]

Randy, obviously trade is extremely important in the cattle industry and in the hog industry as well, but I think we have to look at some internal things. We've talked about the CFIA before. CFIA is holding us back on markets that we could get to.

One of our big problems in the cattle industry is that we are so dependent on one market. We have an initiative undergoing right now in the industry in western Canada to get hormone-free product into Europe.

You guys are undoubtedly familiar with the Hilton quota. Right now, with our new North American agreement with Europe, we're allowed 20,000 metric tonnes of hormone-free products from throughout North America to go into the EU, and then we still have our 15,000-tonne Hilton quota. Well, at the rate CFIA is moving on approving plants and programs to get beef that's all ready to be killed in June into Europe, the 20,000-tonne quota will be filled. We'll be once again non-competitive with the U.S. in accessing a market in which we know they like our product, we know they have the money to pay, and they can take a lot of it.

This is a market we need to be paying particular interest to. It's good to have agreements with Jordan and a Colombian free trade agreement and stuff like that, but they're not really going to solve the problem in the beef industry. We need a European agreement, and we have one; we just need the internal mechanisms that are in place freed up so that we can get it there.

[The Chair, Conservative, Larry Miller]

Randy.

[Randy Hoback, Conservative, Prince Albert, SK]

Would you agree that the agreement is something Canada should be putting forward as a priority?

[Layton Bezan]

Absolutely.

[The Chair, Conservative, Larry Miller]

Thank you.

Mr. Valeriote, you have five minutes.

[Frank Valeriote, Liberal, Guelph, ON]

Thank you for attending today and taking time from your busy farm schedules and commitments to be here.

I'm perplexed. We keep hearing about this suite of solutions. We've heard it over the last year, and we continue to hear it. It's tweak AgriStability. It's harmonize regulations between countries so we're not disadvantaged by long waiting times for approval of inputs we can use in Canada so we can be competing effectively with the states with access to those inputs and freer trade or better markets. All of those things are understood.

My fear is--and it's based on a couple of comments that were made over the last couple of days and earlier, and I think maybe Dixie may have said the same thing--that the small farm is going to disappear. The only way to make these farms work is to grow.

Somebody said the other day at one of the hearings that if we lose the family farm, “rural Canada”--and I'm quoting--“will become a ghost town”. We'll have a huge migration of people from rural areas into urban areas, and I don't think that's where we want to go. In response to that, somebody else said we have to make some enormous changes.

I'm more and more convinced that tweaking these things might help some of you, but it's not going to help the whole agricultural industry. I think we need to think beyond the box--way outside the box.

I'm wondering if maybe Brad and Ajay could help me on the issue of support for farm transition from one generation to the next. You may not be able to effectively do that with somebody in your own family; they may not be interested. Or there may be one who is interested and you do it at the expense of fairly dividing your estate with the other children.

I'm wondering, should succession planning and the incentives given to it through tax laws and other laws help in transitioning your farm to the next generation, even if they're not related to you, and should we not introduce those kinds of incentives as well?

[Ajay Thakker]

Thank you for the question.

APAS has looked at it, not only from an intergenerational transfer point of view but a new entrant transfer point of view and has tried to tie the two together. As has been mentioned, it may not be viable to pass it on to a member of your family.

I think it's important that farmland passes on and production continues. And hopefully it will continue in the same manner that it has been managed, in the sense of responsible attitudes towards the environment, sustainable farming, and not someone coming in to buy the farm for very short-term profits.

[Frank Valeriote, Liberal, Guelph, ON]

Have you presented actual models to the government, or otherwise, through your studies and research that could be implemented to assist in that regard?

[Ajay Thakker]

Our study was a little more.... We said these programs do.

I've personally worked on a number of programs, and I have been studying a number of programs that have been put forward by the Canadian Association of Farm Advisers and some of their members. I think there are some very viable options, through creative tax structures, the use of financial instruments, that can create situations where you can pass on the family farm without leaving other members of the family high and dry.

The other thing is that for a long time, in Saskatchewan, at least, the value of the land didn't have a lot to do with it, so passing on the family land wasn't a viable way of doing things. Today land is at a premium, and there are methods and instruments in place that can make it viable for someone to take over control of the land.

[Brad Hanmer]

Thank you very much for the question.

The one thing that I think is dangerous, as legislators, is to get confused on what the definition of a family farm is. Family farms can also be large. The average farm size in my neck of the woods is probably around 3,000 to 4,000 acres. There isn't a farm in our area that is more family than mine, and we're a 24,000-acre farm. It doesn't mean we're not a family farm. We're an evil corporate farm, by some terminology.

When you are looking at saving the family farm, I think you save enterprises, and have as many of them as you can, but do not use size. Defining five goats and three chickens as a family farm, and if you have 4,500 acres you're a corporate farm, I think is a fatal flaw in people's thought processes.

Family farms will survive by being profitable, and if that means being large, that's the way the market is going to push it.

[The Chair, Conservative, Larry Miller]

Okay. Thank you--

[Frank Valeriote, Liberal, Guelph, ON]

Can I ask one small one?

[The Chair, Conservative, Larry Miller]

In five words or less?

[Frank Valeriote, Liberal, Guelph, ON]

My question is about research and new biotechnologies. I know at the University of Guelph they're using non-food agricultural products to make plastics and things like that--

[The Chair, Conservative, Larry Miller]

Have you ever seen a lawyer ask a question...?