Agriculture Committee on May 4th, 2010

[Dylan Jackson]

Someone who has not been in a farming family wouldn't be able to do it. They couldn't afford to go out and buy a farm, machinery, cows, and whatever they get into, and then pursue that dream, because in your lifetime, you'd never really get out of the hole. You might every now and then, but it's not an occupation where you can say, “Oh, I am going to go and do this--make some money and have a fun time.” You do not.

[Malcolm Allen, NDP, Welland, ON]

If all things were equal in the sense that.... I mean, there are lots of intergenerational business owners as well, where parents own the business and kids take over the business. It could be in the manufacturing sector or some sort of processing--where the return, granted, is much higher.

This is a very hypothetical question, but if the return on the farm approached some of those norms, do you see opportunities where people your age, young folks--I include Harry and Leony in this question as well--would say that farming sounded like an enterprise they'd want to get into? Young people do get into businesses where the return is reasonable. Do you see that folks are interested in it, if there's a return, or is it just simply the lifestyle and folks are disconnected from farming, period?

[Dylan Jackson]

I think if there was a return, a lot of people would probably say, “Oh, look, this is a good occupation that would be interesting”, and then they could pursue it. I think they probably would.

[Leony Koelen]

Yes, we think so too, but we also think that maybe the young farmer, because it's so hard, has to think a bit differently. You have to be thinking more creatively to get it done.

In our own situation, when we went to the bank, they didn't just give the money. It took a lot of negotiating and a lot of creative thinking. Both of our families didn't want to have anything to do with it, so we had to borrow private money for 19% and do all kinds of creative stuff. But in the end we got it done. We don't mean to say that everybody can do that, but because it's so hard you have to think differently.

[Harry Koelen]

It's not easy. It has been pretty hard over the last number of years, but it's not impossible. It maybe seems impossible, but I would like you to come to the Outstanding Young Farmers sometime, when they have their get-togethers in Ontario, in order to meet some of those young people who actually started from scratch.

This year we had a girl from the city, from Kitchener-Waterloo, with no farming background whatsoever. She bought her own little farm and started raising goats, marketing her own products and making her own cheese at her own little factory on the farm. Basically she processed all her goods. With not all that much invested, she's making a pretty decent living.

Sometimes we have to get very creative. We maybe just can't do everything the way dad and grandpa did. We maybe just have to get really creative. It seems almost impossible, with commodity prices the way they are.... Yes, it's pretty darn hard. We were probably lucky that we had time with us, too. It really is a time thing. If you get in at the right time, it works. If we had gotten in a couple of years earlier, it wouldn't have worked. If we had gotten in a few years later, it would have been a disaster too.

So I wouldn't say it's impossible. I still encourage young farmers. When I hear people discouraging their sons and daughters from going into farming, I still tell them that where there's a will, there's a way. It's not easy, but it's not impossible.

[The Chair, Conservative, Larry Miller]

Thank you.

Wayne, you had a comment?

[Wayne Ferris]

Yes.

In doing income tax for small businesses and for farmers, there's no separation of personal and business with regard to the farmer. I guess that in small businesses, whenever the kids are coming up, they're paid a salary and you don't see that in the farm community. It's brought on because there's not enough money to pay the kids a salary. But I see that as being...and again, it's definitely a 24/7 job. There are no hours stipulated when the kids have to work, and I guess that in the succession planning there has to be more work done with regard to the separation of the personal and the family versus the operation.

I believe you mentioned programs earlier. Keith alluded to the community futures program that was brought out by the federal government where they got some money for education and for cashflows, projections, and so on. I think that was a good program.

[The Chair, Conservative, Larry Miller]

Okay. Thank you.

We'll now move to Mr. Lemieux, for five minutes.

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

Thanks very much, Chair.

Thank you for being here. It has been a good round of discussion.

Let me just start by saying that I don't have the same sort of view that Francis has. What I've heard around the table as we've been travelling is that although there is concern about farming, it's not the end of rural life as we know it. The farmers we've been talking to are resilient, they're hard-working, and they see hope.

There are some commodities, of course, that have gone through a really difficult time. I think beef and pork are two easy ones to identify. There are other commodities that have just been going through the normal up-and-down cycle, such as grain and oilseeds, etc.

Actually, I've been impressed with some of the increased productivity measures that have been taken by farmers. If farmers were really thinking that this was the end of agriculture, they would not be investing in growth or in higher productivity, implementing new technologies and innovation to improve the way in which they farm.

In fact, Harry, you're saying that you somewhat support people saying to their youth, “Get involved in farming”, not discouraging youth but encouraging them.

That said, I think there do have to be measures taken by the government, and taken by Canadians and by farm groups, to encourage youth.

It kind of comes back to what Wayne, I think, was saying, that financial stability and profitability are two key components--

[Wayne Ferris]

I would add that the profit doesn't have to be as great as the other sector: there's a desire to farm.

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

Right. Yes, absolutely.

[Wayne Ferris]

I think the young generation are prepared to take less as long as they have the comfort of knowing that they can have a lifestyle that they want.

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

Right, and I agree with you.

I think it was Keith or Wayne who made the point that government programming can't solve all of this. I agree with that, but we do have an important role to play.

How many of you are involved in farm associations, and do you see any initiatives at that level to encourage young farmers?

There's one that comes to mind. I don't know all the details, but the Dairy Farmers of Ontario, I believe, have a program where they basically lease a significant amount of quota to a new young farmer. Youth apply under this quota program. They're allocated quota. They have something like 10 or 15 years to actually buy the quota, but it's given to them so that they can get started in dairy farming.

At the farm group association level, do you know of other initiatives like that, that have been taken or could be taken, to pull youth into farming earlier?

[Wayne Ferris]

My son applied through the Ontario Milk Marketing Board and our application was successful. He got 12 kilograms of quota. He doesn't have to pay anything for that quota, and after five years he has to give one kilogram back and he's expected to buy it at that time. It's actually a 17-year program, so there is some stability in that program. I think there were 10 of those allotted across Ontario.

The other organization that I'm a member of is CAFA, Canadian Association of Farm Advisors, and certainly there are lots of succession planning courses being run and there are chapters right across Canada. Certainly there is a lot of education going on out there to encourage young farmers.

[The Chair, Conservative, Larry Miller]

Just for your information, Pierre, in the next session, at 10:30, there is supposed to be somebody here from the Dairy Farmers group and you could talk about that.

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

Oh, yes; actually, you've hit it on the head. What I'm wondering is whether there are other farm group associations or farmers associations that have taken a similar type of initiative.

Does anyone here know if similar types of initiatives have been taken in other sectors to encourage youth to get involved? And is this something that could be promoted?

It was just an open question, because I knew about the Dairy Farmers, but I didn't know if other farm sectors had been doing that.

[The Chair, Conservative, Larry Miller]

Ray, are you familiar with that?

[Ray Robertson]

I can't say particularly for any commodity group, really; I know that in some sectors, such as the dairy goat sector, it's been crazy. I alluded earlier to someone starting into the dairy goat business. That's one in which we see tremendous growth in the area. It seems to be working very well, I think. It doesn't take as much money to get into it and there's no quota involved. It is a growing market, and Ontario is probably the prime province for that to happen, with the ethnic population we have in the GTA, Brampton, and Mississauga. Most of us would be in the vast minority there. Those people are all accustomed to drinking and eating goat products back in their home countries, so I think there's a tremendous market. I don't think it's even being tapped to its potential, by any means. So that is one area where we see growth.

From my personal perspective, we manage the Grey Bruce Farmers' Week, for example, every January. We have now gone to a full day for the goat program and we have over 100 producers, or people who want to be producers, who participate in that. There's tremendous growth there. Only three years ago we talked about having a full-day program, and they said it would never fly, but we went ahead with it anyway and it's been tremendously successful. So we see growth in that area.

I think the sheep industry—I'm sure you'll have people here sometime from the sheep industry—has done reasonably well. There's probably room for growth in that industry. One of the things I constantly hear is that there's not a constant supply of the product. I know there's one person who I will be talking to later on—in fact, in about three-quarters of an hour—who would love to be here to talk about that subject. I've see him quoted in the press recently that there's a real need for that sort of thing.

I guess the other thing I'll just throw in as well, in terms of some of the government programs you have, is Growing Forward. It's one program the ministry is really deeply involved with. I have to be a little critical of the way that program has been rolled out. It's always been seven or eight months behind; there's always delay, delay, delay. The form's supposed to be out at a certain time, and they don't come for many months after. Farmers are expected to plan ahead, and have to plan ahead, but it's hard to do. This year the funding has been cut so much that one-third of the producers in Grey County alone who applied for the cost-shared funding got a letter yesterday saying the funding has run out, and that they didn't get it. These are people who are putting in either 70% or sometimes 50% of their own money into it, but that cost-share incentive is not there to help with environmental improvements on the farm.

So I have to be a little critical of the government for that, in cutting back to the level they have. That was a win-win program for absolutely everybody. The farmer won from it, the consumer won from it, and government got lots of positive publicity from it.

I think it's an area where the government was totally wrong this time in making that cut. Usually there was enough funding to go around in the program, but this year it was really cut back, and, as I say, one-third of the applicants from Grey County alone, even though they were in with their applications within about two weeks' time after the program opened, the money was gone—and it was on a first come basis.

That's pretty difficult to swallow for many people. I know there are people in this room who were caught in that squeeze too.

[The Chair, Conservative, Larry Miller]

Thank you.

We'll now move to Mr. Valeriote.

[Frank Valeriote, Liberal, Guelph, ON]

Thank you again.

What I've heard as well in the last week or so, and what I'm hearing now, is that there's an absolute willingness to stay on the farm, an embracing of the farm life, a love of the farm life, but for many, an inability to make a living.

One of the figures and statements that really hit home with me last week was that 65% of farmers under 35 have left the industry in the last 10 years. That's because they can't make a living in it.

I'm sorry to keep raising the dark side of this, but if we minimize, or live in denial, I think we will find, as one farmer said last week, a complete decline in the industry. I'm concerned about that. I don't want to fluff this off as something where we can adjust a few programs and everything will be fine, because that's not it, folks. In fact, one of them said that we wouldn't be having this tour across the country on the future of farming in Canada if we weren't in crisis.

Wayne, I really liked your ideas about allowing farm land to come out of farm corporations, as if they had not incorporated, really, in order to distribute that land, or whatever, in retirement or on death. Someone last week spoke of a program where we match up retiring farmers with non-family who wished to become involved in farming.

I took it a step further and suggested that those favourable tax laws that exist for succession planning within families should perhaps extend to non-family members as well, if we're going to save our farms. Could you comment on that?

[Wayne Ferris]

Yes, and I guess that's just further to my comment with regard to being able to transfer to siblings and nieces and nephews, as long as those siblings and nieces and nephews continue in farming. I think it shouldn't be used as a tax shelter or anything of that nature, but I think to encourage farming we do have to think outside the box, as somebody said earlier, and get a bit innovative.

The other thing I think a lot of work has to be done on is the marketing, and maybe under the Income Tax Act, investment tax credits for processing, for packing, those types of things, where you get added value coming back to the farmer.

[Frank Valeriote, Liberal, Guelph, ON]

Right.

Greg, I think you mentioned the Farm Credit Corporation and their declining opportunities because of lack of assets to pledge, lack of experience. We heard from the banks that came before us at committee in Ottawa a couple of weeks ago, and they of course regaled us with the fact that they're so farmer friendly and all of the rest of it. Of course, we accepted that at face value.

What has been your experience with the banks and their willingness to lend to you as far as needing access to capital? I'd ask you to be candid.

[Greg Ardiel]

Right now it's been reasonably positive. My father had to provide guarantees on things, but I deal with TD Bank and they've been very good.

When we went to talk to Farm Credit, they just said we were better off to check with our local bank, because they can't offer young farmers anything this way without the assets behind it, even if our father provided a guarantee. They weren't interested in doing it.

[Frank Valeriote, Liberal, Guelph, ON]

Does anyone else have an experience they could relate, negative or positive?

[Dylan Jackson]

When you go to the bank they're happy to give you money, just like any other bank. You can get money.

I'm not bashing the programs the government is offering, but a lot of them...we could just go to the bank to get the money. I think it's something bigger than investing in another program.