Thanks very much, Steve.
We'll now move to Greg Devries.
Evidence of meeting #16 for Agriculture and Agri-Food in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farm.
Evidence of meeting #16 for Agriculture and Agri-Food in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farm.
2:10 p.m.
Conservative
2:10 p.m.
Greg Devries Owner, Cedarline Greenhouses
Hi. I'm Greg Devries. Thanks for the opportunity.
Steve, I think you're normal--
2:10 p.m.
Voices
Oh, oh!
2:10 p.m.
Owner, Cedarline Greenhouses
You just talk a lot.
My background is probably similar. Being the last guy to talk in a panel means you're going to sound repetitive and say a lot of things that have already been mentioned. We have a good group of people here giving good background on different aspects.
I come from a family that originated in Holland. My family came here in 1948. It's similar to a lot of the folks that farm up and down the side roads. Grandpa bought his first farm in 1952. They had ten kids. Three of them were boys. They all farmed and all established their own operations. We had 50-some cousins out of those ten uncles and aunts, and out of those 50-some cousins, there are two of us left farming full time.
It's not unusual. Agriculture is probably the most innovative and most efficient industry there is out there, and it's basically going to take less people to produce more food as time goes on. I think that's just the reality of the situation.
Just because you grow up on a farm doesn't give you the entitlement to say that you are able to farm. Some folks think that if you grow up on a farm, it gives you the right to farm. That's changing. Farming is changing. It's becoming more and more business-oriented. The skill sets are changing.
I received my post-secondary education in the late eighties and early nineties. I went to the Ridgetown college for a couple of years. I was in the degree program at the University of Guelph for a bit. The skill sets they taught us there gave us a good base to work off of, but when I look at what I do today, a lot of education still has to occur there in in order to keep yourself up to pace. The technology changes. When I see what we're doing today with technology and electronics, whether it's guidance systems or the business aspect, there wasn't a whole lot of that in our education programs 20 years ago. Those education programs have to continue to be revamped.
Another thing that's evident out in the countryside is that the average age of a farmer is in the neighbourhood of 58 or 59. There are statistics out there.
There are also statistics out there on the average net worth of a farmer. I know that a number of years ago, the net worth of an operator was under $1 million. I'm sure it's much more today, with the value of land.
If we look at what's going to happen in the next 10 or 15 years, a lot of those folks are going to retire. They're going to cash in the assets they worked for throughout their lives. Through inflation, they're fortunate enough to be worth a lot more than they ever anticipated.
If those folks don't have any kids who are going to stay on the farm, that net worth is going to leave this countryside. Whether through inheritance or willed through other means, it's going to leave the countryside--the little towns of Ilderton, Dresden, and Thamesville--and most likely end up in urban centres, where perhaps their kids ended up in.
One opportunity that the government needs to start looking at is how to use that net worth. If people retire and end up with a chunk of change, they need an opportunity to help reinvest it in our rural communities. I think there's an opportunity there.
There are a lot of young folks here who, if given the opportunity to borrow money in perhaps more ideal circumstances, might be able to carry on their tradition if they have the skill set and passion to carry it out. If you don't have passion in this industry, you're not going to make it.
So I think there should be an opportunity, such as through a financial institution. Obviously, the FCC has government ties where you could park money. Perhaps there's some type of GIC format where the government could offer a guarantee and some type of preferential interest rate. They could give that opportunity to beginning farmers to access the money or for value-added opportunities. I think there are lot of value-added processing opportunities that we haven't even hit on in this country.
It's very difficult to get any type of financing because of the risk involved. This would be an opportunity. If the older generation are looking to retire and sell the farm but would still like to be part of the industry, it would be a great opportunity to take advantage of that.
We have the safest, most wholesome food system of anywhere in the world. We keep on telling ourselves that. Being involved in farm politics--not so much right now--we sit in rooms like this, we look at each other, and we keep on telling each other how we have the most wholesome, safest food system of anywhere in the world.
But we don't go around telling anybody else that--perhaps the other 98% of the population that actually buys our food.
You know, if the government has the regulatory system in place and is proud...and we should be. We like to complain and bitch a lot about all the rules and regulations we have to jump through all the time, but it does give us the backing of that maple leaf. If you want to go around the world and talk to people who see a little maple leaf stamped on that food product that came from here, you'll hear a lot of faith in the quality of that product.
We need to tell our public. We need to talk about what agriculture does as an industry to this country, as well, and we need to make people understand.
Take this scenario where I have 50-plus cousins who chose different career paths other than agriculture. I counted it out one time, and there are another 100-and-some second cousins out there. Those kids aren't that far removed from the farm. All those cousins used to come to Grandma and Grandpa's every summer and hang around the farm. They understand agriculture, to a certain degree, probably at a higher level than most of the people walking up and down the streets. Yet those kids are that much further removed, and I think if the general public had an understanding....
At the end of the day, when governments make decisions, a lot of the decisions are based on what public opinion is allowing them to do. That's just the reality of how our political system works. I think we need to have a higher level of understanding in the public so that when government does make investment in agriculture, it's greeted with open arms and an understanding of what value that means to it all.
I mentioned education. Innovation--that's what it's all about. We need to spend more time on innovation.
More to what Steve mentioned as well, about jurisdiction, I think you should give all of the responsibility for income support-based programming to the provincial governments. I think the federal government should just do the overarching policy around regulation, around innovation, and the higher level.
The speed of how government works is so bloody slow that it's as frustrating as all get-out. I don't know how many umpteen times I've been to sessions like this where....
No offence, folks; glad that you're out here, and glad you came to Ilderton, but everyone goes around, gathers a whole lot of information, and you take it back to Ottawa. The pace of change happens way too slowly. Business happens way quicker than this.
I know that the intent is to help the process move along here, but we need to figure out a system. As Steve mentioned, we've spent many years lobbying both levels of government, and all it involves is finger-pointing back and forth. If some of these areas on agriculture policy were given to specific jurisdictions, then the decision that needed to be made, and the change that had to happen, could happen much quicker. I think that's necessary.
The last thing is baseline programming. Whatever you think the income support levels need to be, let's work on it. Taking farm organizations' time and governments' time to sit in rooms and lobby and lobby on income supports.... I know that the whole last group, and Marie-Anne and the coalition there, it just takes a whack of resources, people's time and energy, to achieve a certain level of something like this....
Yes, I'm almost done, Larry.
It takes everybody's time, it takes everybody's energy away, when we should be sitting around talking about a vision of agriculture, innovation, and the direction that we need to go. Something needs to be done. Is it here? Is it there? I'm not quite sure. Let's make a decision and go with it. After that, let's talk about all the stuff we should be spending time talking about.
Thanks.
2:15 p.m.
Conservative
The Chair Conservative Larry Miller
Thanks, Greg.
We're going to now move into questioning.
We'll turn it over to Mark Eyking for five minutes.
2:15 p.m.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Thank you, Chair.
Thank you, guests, for coming here today.
I was driving around this morning, and you guys have beautiful farmland here. It's very productive, and I envy you. I'm from Cape Breton. My parents were Dutch, and I have a Dutch family background, and sometimes I wish they went further west. But maybe we have a market there, and apparently you're not getting enough money for all the good land and work you're doing.
My question is mostly going to be towards programming. We've heard the last couple of weeks from many farmers, and young farmers, that the programs are not working. There's some talk that NISA was a good program and should have been continued, but right now they're not working.
I was in New Zealand. Ideally, it would be nice if there were no programs and we were all on a level playing field. But as was mentioned before, there's the U.S. food bill and all the other governments are subsidizing their farmers, so we have to help our farmers to some extent. The other thing is that in the United States you don't see different programs in each state. Even in the European Union they seem to have a continental program.
My question—it's probably to Marie-Anne and Joe, and maybe to Greg—is on the programming. If there was a new federal-provincial agreement, and many you were steering that agreement, all cards on the table, I'm talking about if there were $2 billion, $3 billion spent last year....
You alluded to it, Greg, to maybe going more towards the provincial route. I'm not sure how that would work in the scheme of things. But we found that the beef producers in Alberta are getting a better shake than the beef producers in another province. Quebec is doing something.
I think we have to steer, as a country, somehow to some more uniformity and better programs. Let's put the cards on the table: if we started from scratch and ask for some ideas, what should we be doing to make it better for farmers?
AgriFlexibility is another thing that was brought up over the last two weeks. It's not working, especially for diversified farms. It's just not working the way it should. It only works for farmers with one crop or one piece of livestock.
At any rate, on that point, we only have five minutes each. If you don't have enough time, you could always bring it up on another question. But that's where I'm steering: what should we be doing in this country to make it better for the people in the farming area, new farmers?
2:20 p.m.
As an Individual
Basically, with the programs we have now, if you don't have an established reference margin, they can make one up for you.
I'm not sure the beginning farmers...because Ontario did that payout last year that turned out to be a disaster in itself. The beginning farmers said that if you can't do subsidies any better than that, then just don't have them.
I think you can get things accomplished that are for the good of the industry through such things as when you funded environmental projects, or the things that farmers want to do. Young farmers especially are willing to embrace new things, but they can't afford them because they've got other regular....
We're pretty sure the federal government is not that excited about doing anything with cost of production, which treats all commodities equally. And if you're not willing to go that way--not that you shouldn't--then you need to use a carrot to revitalize agriculture.
2:20 p.m.
As an Individual
I again have to say that we need to make sure, when it does come to beginning farmers, that they have to be able to come up with a little bit of input into what their reference margins are. Somebody in my area, say, is dealing with different realities from somebody in eastern Ontario or Alberta. And this is where I think I can understand where Steve's coming from; when it comes to support and programming, we need to look at it more from a provincial standpoint. It's just the big overarching things that we need to look at on a national level.
I agree fully with Marie-Anne that one of the things we need to look at, when it comes to the environmental issue and that sort of thing, is that the farmer seems to be the one putting in the money, but it's the public who are gaining from it. That's wrong. So when we come up with environmental programs, etc., we have to make sure that the people who are doing the work are getting rewarded instead of the people who are benefiting from it.
2:20 p.m.
Conservative
2:25 p.m.
Bloc
France Bonsant Bloc Compton—Stanstead, QC
Thank you very much.
I hope you have access to the simultaneous translation.
I do not agree with Steve Twynstra about a national model. In Quebec, we have developed some specific markets. Let me give you an example: organic farming, where the federal government wants to lower our standards to keep the rest of Canada happy. I am not here to defend the feds and ask Quebec to lower its expectations. We in Quebec have worked too hard to grow quality products. I do not believe that a national standard will help you.
I also have to tell you that one thing must be done above all. At the WTO, our position must always be that the right to food is non-negotiable. We must start by learning how to feed ourselves locally.
Two weeks ago, we met with bank representatives. I want to know what you think about what they told us. They told us that lending money to farmers was no problem for them. Personally, I did not believe them. They all told us that money is available, the Banque Nationale, the Bank of Montreal, the Toronto Dominion, whoever. At your lovely banks, do you see money available, yes or no?
2:25 p.m.
As an Individual
I think the money is there. The interesting thing that I find is that if you want a farm mortgage, whether it's with FCC, credit unions, or the banks, you get anything from 1.5 to 2.5 points higher interest than on a home mortgage. When you talk to your branch manager and ask him why that is—this is short-term money—it's because there's more risk in agriculture and less risk in residential mortgages. Then when you ask them the next question, which is how many farms they have foreclosed on in the last six years, and they say none, or very few, compared to the number of homes, there's a discrepancy there.
So I would agree that the money is available; it's at what cost that there's an issue.
I think there are two systems at work here, and that's because there's much more competition for retail mortgages than agricultural mortgages, which comes down to what I said earlier about the whole factor of concentration within different industries and sectors in agriculture. There's just not nearly the competition there needs to be—except at the grassroots farm level.
2:25 p.m.
Owner, Cedarline Greenhouses
I have two comments.
First, about your “eat local” comment, we're still an export-based industry. Our family produces 16 acres of greenhouse peppers. If it were all about eat local, that 16-acre greenhouse wouldn't be there: we have a market south of us that we're trying to supply. So I want to make sure that we also keep abreast of the scope of our industry as well.
I fired our bank this year on our line of credit and went to a credit union. Our bank came back to us and wanted more security for less line of credit at a higher interest rate.
I find that--locally, at least, in our area, and I would expect this through different parts of the province as well--the challenge of getting a line of credit is becoming more difficult. On long-term financing, it's easy; if you bought a farm five years ago for $5,000 an acre and it's worth $10,000 an acre now, you have another $5,000 of equity. So why wouldn't they lend it to you?
It's a scary thing; my dad has said he's never bought a cheap farm yet. And he bought some land back in the fifties that I think was pretty cheap, but.....
I'm not sure where the cost of land is going to crest, and I don't think anybody else here knows that either. It is a bit of an unnerving way to finance your business. Earlier on, someone mentioned the inflation of land prices and what it's done to our borrowing capacity.
2:25 p.m.
As an Individual
I think another problem that the banks have is having knowledgeable bankers. That's not to criticize them or anything, but often, with us, we'll start the year with one account manager, and by the end of the year we've switched to someone else.
What these guys are saying is true: we seem to pay a premium for mortgage money and we are asked for more security all the time.
It was the same for us this year, Greg. They wanted another half a percent or something, and we just said, “No. We're not that bad a risk. Do you want us or not?”
We had an exit plan in place before we did that, of course.
2:25 p.m.
Voices
Oh, oh!
2:25 p.m.
As an Individual
It wasn't as hard as we thought it would be, but they were willing to put the squeeze on it. Their complaints were that they had lost money and everything else in the stock market and they needed to make it back. My opinion was, well, you didn't lose money on me, so go after where you did lose it. But we seem to always pay a premium, I agree.
2:30 p.m.
Owner, Cedarline Greenhouses
I have one small comment. Jamie made a comment about finding good people in the banking industry. I was told that the bank we fired, which will remain nameless, had 52 different agriculture account managers in the last two years, and 29 of them had quit or left. This is all anecdotal, but you find a lot of good people in that institution, with great backgrounds, who were frustrated with the decision that was made at headquarters as to how they were to go out to their good customers.
2:30 p.m.
Conservative
The Chair Conservative Larry Miller
Could you just speculate a little bit on why you think they want...?
2:30 p.m.
Owner, Cedarline Greenhouses
I think Jamie hit it. I think the banking industry went through some tough times, and, frankly, the last couple of years have been relatively good in most sectors in agriculture, and they thought that was an area that they were going to recoup some money from.
It's frustrating in a lot of ways, because when you need a bank, they're not there, and when you don't need them, there are people knocking at your doors.
2:30 p.m.
Conservative
The Chair Conservative Larry Miller
Okay, we're out of time, but, Hugh, I'm going to let you comment on that one. It's important, I think.
2:30 p.m.
As an Individual
About three or four years ago we got cut off at the bank too. The biggest problem is that for anything over $100,000, they have to go to Toronto. We went to a credit union. The bank lost a lot of good customers, and they all went to credit unions because they were dealing with the same person every year. The bankers have a little window, and if you don't fit, you're not allowed in. The local manager has no authority. He's a patsy, and I feel really sorry for him, because all the decisions come from head office in Toronto. That's why we went to a credit union.