Okay. Thank you.
Mr. Allen for five minutes.
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.
2:30 p.m.
Conservative
2:30 p.m.
NDP
Malcolm Allen NDP Welland, ON
Thank you, Chair.
I like what I heard about the credit unions. As a member of a credit union for the past 40-some-odd years, I appreciate the compliment to the credit union factor.
I will get back to what I heard down at this corner, the talk about young farmers.
Marie-Anne, you talked about the fact that we're not necessarily seeing young farmers, unless of course they happen to be family members who are still hoping to progress in the farm field, and we're going to be relying on immigrant stock to come into the country. By and large, I'm not sure we're seeing as many, in the farm sector, at least, as we probably saw in the 1950s, when they came at that particular moment in time.
I am having a hard time seeing your names down there. Greg was talking about his family.
It seems to me when you talk about price-takers...Brian talked about it in this whole sector, about how we get folks into it. How do we convince the Canadian public? I live in a farm area. I know you like the terminology “value added”. I came out of the auto sector and we've been talking about “value added” for 30-odd years. So the terminology I hear on the farm sector I've heard for a long time in other sectors, in the manufacturing sector.
The problem is, it's always the middle and the end of the value chain that actually makes the money, not the front end. You can see that in the manufacturing sector as well, by the way. The auto sector has five tiers. The top tier happens to be the person who puts the badge on the door going out and sells you the car. The one at the bottom end is the fifth tier, which is you, which is the primary producer, the smallest pieces that are going into it. In your case, you're the biggest piece of the producer, but you're ending up with the least amount of money.
How do we convince folks of your value? To be honest, you are the value in the value-added chain, not the other end, not the corn flakes coming out of the box, which you referenced, Brian. What do we do to engage the public, who talk about there being a way to give them food that's affordable, not cheap, and that indeed keeps you in the business that we need to keep you in? Otherwise we don't eat at the end, cheaply or otherwise.
2:30 p.m.
As an Individual
There has been a lot of debate going on in the last little bit about food labelling. The way I see it, if you'll pardon the language, it's ass backwards. Right now you look at a label that has the percentage of carbohydrates and fat and whatever the nutrient value or mineral value of it is. Why can't we do our labelling? Why does it have to say “Product of Canada?” Why can't it just say “98% Product of Canada”. That way the sugar in it that's imported, since we don't have a domestic sugar industry any more, is being labelled appropriately, so the person can choose whether they want to buy the 12% Canadian product or the 98% Canadian product on the store shelf? The food labelling thing is a pretty simple thing to resolve, and way too much industry and resources are being spent on that.
Part of it, too, as was alluded to earlier, is just getting back to the lack of education, because so many people are so far removed from agriculture.
I would like to see more local content in food, obviously, but I think the federal government has a role to play in promoting local production—Canadian production, too—through its own purchasing behaviour, and so on.
2:35 p.m.
As an Individual
I spoke a while ago to a group of teachers, and they were concerned about the quality of food and everything. They started kind of harassing farmers for using chemicals, or the whole list of environmental things. Finally I told the one lady that in this country you're more likely to die from eating too much than from chemicals and everything like that.
Agriculture and food is not on the front burner because there's tons of it. If we don't produce it, some other country does. This country has never had to starve to death. If you talk to people who were in Europe in World War II, they'll tell you about eating lamb or mutton for weeks on end, or years on end, because there was no food around. They have a lot different perspective than we see now.
Right now, if Canada decided not to produce any food at all, the rest of the world would make it up. It's just how things are. I don't know how you change people's attitudes toward spending more of their income on food. I'm sure if you brought that up to most consumers, they'd just absolutely freak.
2:35 p.m.
Owner, Cedarline Greenhouses
My wife comes home from grocery shopping and complains about how much money she spends on food. I keep reminding her that we have the cheapest food around—but that doesn't usually get me too many brownie points.
When you walk into a grocery store today and ask people what they think of the quality and the safeness of the food in that grocery store, they think it's at the same level and standards of anything we produce in this country.
I'll talk about peppers, because we produce peppers. The food safety protocol that we're producing peppers at right now in our greenhouse operation is second to none. In the last three years, the level has gone up almost like this on the protocol we must follow, because of the marketing company we deal with and the food chains that push it onto them.
By the same token, if you go into the grocery store during the off season, even now, you can see Mexican peppers there. I'm not going to say that all Mexican peppers are produced at the same level, but I do know that there are a lot of things they can do in Mexico that they can't do here in Canada. Now who's checking that out?
Someone mentioned MRLs—I think it was Steve—the maximum residue levels and whatnot. When a person goes to the pepper area and picks up a pepper, whether it says Mexican, Canadian, or Israeli, for example, he or she is just going to assume they're all of the same standard. I know the standard I'm producing at, and I can stand by that 100%. The Mexican guy isn't there to tell you what's going on there, and no one is asking what's taking place.
2:35 p.m.
Conservative
2:35 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Thank you, everyone.
I won't give you much preliminary to my question, because we have a short amount of time.
Greg just hit on a motion, actually, that I had before Parliament. Not everyone supported it, but it got passed. It's about those very issues. I'm hoping we can move ahead with it, through the ministers and through the ministry, CFIA, PMRA, and the veterinary drugs directorate.
This is also about the future of beginning farmers. I'm looking down the table, and everyone here actually has family coming in, or you are the family that's in, and there are some who have little ones who are likely to as well at some point in time. I'm wondering about succession planning. What do you do?
Secondly, do you see a future in agriculture? All of you here have parents, or you're the ones.... Is it positive? Is it only going to be positive because you're going to rely on government programs? Is that what makes agriculture the attractive thing that everyone has talked about in terms of this being what you want to be doing, and you all want it?
You talked about his sister being gone. I have three children who chose other careers.
So is there a future in agriculture? Is there a difference in supply management and non-supply management in the availability of credit? Brian, you have both. In a business that is both supply management and not, is there a difference in terms of being able to access that credit from one to the other, and what can we do if it isn't? And I don't know if we can.
Secondly, should government programs keep everybody in? Is there a benchmark? Some would say maybe we should be able to get a certain percentage of our income from programs. For beginning farmers, those who are there, what we have now in terms of some of the things...? There's $750,000 and a capital gains exemption. We've tried to deal with taxes and keeping more money in people's pockets. Do they help? Or what should we be doing?
There are enough questions there. I'll leave it at that for now.
Brian, I'd like you to start, and then some of the others can jump in.
2:40 p.m.
As an Individual
In terms of credit availability with supply management versus non-supply management, I retired from banking a few years ago. At that time it was easier to get loans through supply management because there's perceived stability there. We also have the risk of WTO. There's no question about it. You'd really have to talk to the banks about that, but I think it is easier.
There was a comment made earlier about appreciation on the land values and the ability to get loans. That's frightening, because that's equity-based lending, and the only way equity pays bills is when you sell. I hope the banks aren't getting away from cash-based lending over to equity, because in the long term that is not a good thing.
Bev, I don't know how to answer that. I think to a certain extent, yes, it is. How much? I don't know. You'd have to talk to the bankers. But really, it's an individual case. Supply or non-supply, it's what your financial situation is.
2:40 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Then in terms of the future for farming and how you see it, what's your input--from you guys?
2:40 p.m.
As an Individual
I've put in two different applications for credit on buying two different farms in two different regions with two different business plans. And it was dealing with the same bank, so we don't need to use any names. The first one was actually an operating dairy farm in Saskatchewan. My business plan, based on actual numbers, was showing a $25,000 return in the first year. Yes, it was going to be a fairly tight first 10 years. The lady I was dealing with at that bank denied me because she did not feel comfortable with the risk of loaning to supply management. However, she told me she would be perfectly fine with it if I wanted to move out there and start a beef and cash crop operation. I think it was more based on numbers than it was anything else. But when you actually looked at return on investment, I was seeing a better return on that farm.
You ask if I think there's a future in agriculture, Bev. I took on a $550,000 debt in 2008. If I didn't think there was a future in agriculture I wouldn't have taken on that debt. The return on investment from that property and my rental property, not including off-farm income, was $11,000, but I could get a loan for that. That was open market commodities; that's beef and organic cash crop.
I think when it comes to beginning farmers, sometimes it's actually easier to get in on the open market industry just because you're not looking at the raw numbers.
2:40 p.m.
Conservative
2:40 p.m.
A voice
Your microphone....
2:40 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
... Your opinions are pretty consistent with what we've been hearing across Canada in the last week, starting in British Columbia, mentioning problems with the AgriStability program, the viability test needing to be revamped, lack of access to capital, the cost of land, the lack of harmonization, and regulations between Canada and other countries, as Bev referred to both today and in his motion.
I'm curious about two things.
I too am convinced of what everybody thinks, that the consolidation of these large processors and grocers is keeping you from getting what you truly deserve, and that is more than just the recovery of the cost of your inputs and something reasonable for your labour.
The Competition Act doesn't allow the Government of Canada to break large companies up, as can be done in the United States. It only allows the government to stop a lack of competition when people have collaborated with one another to set a price.
I'm wondering how you feel about the government revamping the Competition Act so that it can step in. Do you think it is time to step in and keep the processors from becoming, if they haven't already become, so large that they're controlling the price of things?
Can somebody answer that first? Then I'll ask my second question.
Steve.
2:45 p.m.
As an Individual
Totally. We're far behind the times in competition legislation, I think. I'd be fully in favour of that, but not just at the processor level. It goes right down to short-line manufacturers of equipment and that sort of thing.
We're very fortunate here in that we can price parts for our equipment. The border is only 40 minutes away, and it's nothing to get a replacement part for a piece of our farm equipment 20% to 25% cheaper there than here, especially with our dollar at par right now. Part of the reason those parts are cheaper is competition.
2:45 p.m.
As an Individual
I agree with the premise. My only concern is how this would affect instances in, say for example, the supply management sector. There, the farmers have gone together to pool their milk; you effectively have one seller. That has to be taken into account as well.
2:45 p.m.
Liberal
Frank Valeriote Liberal Guelph, ON
Well, it might be, unless they're considered an exemption. That's a good point.
I have another question. We talked about innovation. Most of you have gone to the University of Guelph or know somebody who has. I'm proud to come from that city.
As a lawyer, I used to have to upgrade all the time. Every year, I had to learn new techniques, new laws, new ways of practice, new technologies that I had to use in my practice in order to survive. Those who didn't died. I've heard from some of you about the need for innovation and the embracing of that innovation. I'm wondering how many of you take an active role each year in upgrading your skills, looking at diversifying, looking at new technologies.
What's it like out there? What are you doing? Are you doing that, or are you just relying on the same old same old? Perhaps we can go down the line.
Jamie?
2:45 p.m.
As an Individual
I think what Greg said is true. If you went to university in the 1980s, what you learned then probably is of very little value to you now. I think for most of the guys here, if you're not innovative and going ahead, you're going behind. Agriculture doesn't sit still.
I look at the things my kids can do that I still can't figure out. I'm not a real computer genius by any means, but with what they've learned, they're so much farther ahead, and their thinking is far more progressive probably than mine is at this point. I think you get to a point that you're just not as sharp as you used to be. Sometimes having some young guys around keeps you sharp.
I think the majority of these guys at the table here are the innovative ones.
2:45 p.m.
As an Individual
You only have to go to the farm show here in London to see the interest farmers have. If they're passionate about it, they want to try out the new equipment and anything that makes them more innovative.
In Middlesex we have a county association for pork producers, and pretty well all the members are now under 35. To sit around and listen to their discussions is really quite intriguing; they're into it. And they have to be; the older guys in the hog industry are saying right now that if you survive, that's pretty innovative.
I think you wouldn't be here if you weren't interested in getting better all the time.
2:45 p.m.
As an Individual
On the livestock side, a lot of our innovation doesn't come from a formal education at Ridgetown or Guelph or Trenton or wherever. A lot of it comes on the livestock side from veterinarians, who will say “This is what we see” and “This is how you get better production”—those sorts of things. It's not a formal designation.
On the cash crop side, there are farm shows. And a lot is from your neighbours; a lot of it is word of mouth from other people. It really is. I'm not sure that answers your question, but that's the landscape of it, in my opinion.
2:50 p.m.
Conservative
2:50 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Thanks, Mr. Chair.
I'm from not too far from here. I was born and raised in Clinton, in Huron County.
The price of land, as has been touched on a couple of times here, has appreciated significantly in the last ten years and really in the ten years before that. Now there's a pretty serious barrier to entry for a young farmer. My question concerns, I guess, a two-pronged issue: getting in and then being able to actually afford to stay in it.
Seeing that the topic today is young farmers and the future of farming, what advice can you give the committee today on ways to make it easier for young farmers to get in? Obviously it's a pretty unique case, if a young farmer has $200,000 or $300,00 to put down on a farm.
Second, what are some more interesting ways to be able to take profit from the market?