Thanks very much, Larry.
First of all, I want to thank you very much for coming to the riding here and doing this session. I appreciate you taking me in at kind of the last moment here.
I represent the Canadian Forage and Grassland Association today. I wear a number of hats in the industry related to the agricultural centre in Markdale.
I'll refer to the Canadian Forage and Grassland Association as the CFGA. It includes forage producers from right across Canada. A significant number of those producers are right here in the Grey-Bruce area.
I realize that I have a pretty short timeframe; I think you said four minutes, Larry. You said if I could do it, you could work me in, so I appreciate that, Larry. I'll stick right to my notes here and try to come in within four minutes. I realize there's a lot of time required.
A delegation of CFGA just returned from a forage fact-finding mission to the Middle East, including Dubai, Abu Dhabi, and Riyadh in Saudi Arabia.
Most of the Middle East area that we were in is in the middle of a desert and facing a severe reduction in water table. As a result, their government is phasing in an irrigation ban on farmland. Abu Dhabi has a strong commitment to food security, so it agreed to subsidize forage imports to support livestock production, which includes dairy, goats, sheep, camels, and horses. We were actually on a number of those farms.
Their annual forage requirements in the current year are estimated at close to 800,000 tonnes, and that number is growing rapidly. Last year, Abu Dhabi Food Control Authority paid out $250 million in subsidy alone for the forage imports. They're actually subsidizing producers to bring in forage to the country, since they're not allowed to irrigate. That irrigation ban is being enforced; and over the next two or three years, it will be totally banned.
Industry experts speculate the next tender will reach 11.1 million tonnes in 2011. Fortunately, Canada is seen as a preferred supplier in most goods, based on a strong global reputation for quality and service. If Canada were to receive even 5% of that 11 million tonnes, it would equate to significant export trade revenue for Canadian producers.
I'll use an example. If Canada alone had 550,000 tonnes--I'm just using a figure of $400 a tonne--$180 million U.S. would be a reasonable figure that we might expect from that.
In fact, the UAE government continues to encourage Canadian suppliers to collaborate with other countries to develop a four- to six-year supply. They're not looking for short-term suppliers; they want people who can come in and serve the country for a longer term. They're not interested in just a year at a time, that sort of thing. They're interested in developing relationships, and that's part of our reason for being there, to brand Canada and start to develop that relationship.
Based on western Canada exporters, Canadian producers are currently facing a 36% cost disadvantage due to higher freight costs plus a shortage of container availability.
In keeping with the main theme of this meeting and looking at how young farmers can be attracted to the agriculture industry, the forage sector is a prime example of one that is possible for them to participate in if it is viable. If you compare it with the dairy industry where quotas are extremely high, it's very difficult for young persons who are starting, unless they're starting with a family operation. Many other operations require an awful lot of overhead. The forage industry is certainly one that is reachable for many young farmers, but it must be profitable.
As Dylan said, why would anybody do it if they can't make a profit? No other industry would do it. Nobody else would.
I realize my time today. We want to table our concern and keep the door open for more discussion in the near future.
Wanting to finish on a very positive note, our fact-finding mission to the Middle East was most successful. We certainly came home having been very warmly received in the Middle East. The door is wide open for business when we are able to compete on a level playing field.
I thank you most sincerely for coming to the Grey-Bruce area and providing the opportunity for local producers to express their point of view. On behalf of CFGA, I look forward to meeting with you at a time that is mutually acceptable and discuss the situation in more detail.