Agriculture Committee on May 4th, 2010

[The Chair, Conservative, Larry Miller]

Okay.

Just on that, the Canadian Pork Council, and if you want to take it over to the beef industry, those two industries, which are affected by COOL the most, actually have been opposed to that same COOL that they have in the United States, because of the amount of product that we export. I'm not saying it's right or wrong, but that has been the stand at this point.

The last questioner in the first round is Mr. Shipley for five minutes, please.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you, Mr. Chairman, and to the panel, it's great to have a great group of individuals here. On each of the panels we have heard some very, very positive things regarding farming. Obviously, that's why we have some young farmers here.

We also know there is some concern, basically, around two things. One, how do we get the programs right? But second, there is a concern about regulations. I'll tell you, the aggressive farmers we have—and we have a lot of them and we have seen them out there—who are farming, some of whom are actually doing very well and have been able to make it, tell us, “You level the table for us, thank you, and we'll do just fine.”

I had a motion on the floor that helped to do that, relating to the issue of why we are bringing stuff in from another country that we don't have licensed here. Why not give the licence to us? It was a little more complicated than that. It didn't quite get the support of everyone in government, but it got through, and now we're trying to put a process in place for it, because that is a common thread that we continually hear, that if our regulations are at odds with our production, then we have just automatically disadvantaged one of our producers in terms of their cost of production.

We always have a discussion on free trade agreements and supply management. Obviously, our government is a big supporter of supply management, and we've been able to demonstrate that. When we get into free trade agreements, and we've had eight free trade agreements so far, supply management has been a part of them. Agriculture has actually been a very successful part of all of those agreements. One of the things I think we recognize is that Canada and Ontario have had supply management, particularly in the dairy industry, since 1965. That came in as a national program in 1973, and it's no surprise to any country we go to. So when we're talking about free trade agreements, every country actually has issues that are specific to them. One of them in Canada is supply management. Other countries will have their cultural, social, and agricultural issues. So we don't go into these agreements with our hands tied behind our backs, as some would want to suggest. When we go into them, every country knows exactly where Canada stands.

I'm just wondering how we can move ahead in terms of the flexibility you require from the provinces. There have been indications that Quebec has a great program, that Ontario doesn't, and that Alberta does. We transfer billions of dollars to provinces, and they get the flexibility to do what they want with those dollars. Some tend to put it into agriculture more than others, I guess.

Do you have any suggestions on how we can work to change and to get that flexibility across the country?

[Leony Koelen]

If there were a way to streamline the programs a little better, the federal government could have a larger role in filling up those programs, instead of letting every province do whatever it wants. It's almost as if you have two different countries: Ontario and Quebec.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Except the trouble right now is that we have what we call an agriculture policy framework, set up when NISA was disbanded. CAIS came in, and now it's called AgriStability and Moving Forward. You must have the agreement of seven provinces to move ahead, but we do not get those agreements necessarily.

The question came up about farm organizations and education and promotion of farming for young people. So is there something that you think the farm organizations can help us with beyond what they're doing now to help us get the provinces to come together?

[Harry Koelen]

It's a hard question. I don't think we have the answer for that. Maybe it's the politicians' job to figure that out.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Well, except that we're asking farmers, the grassroots, about it. One of the things that seems to get missed is that we have to have the agreement of the provinces. Also in the WTO there are the amber and green boxes for all of those sorts of issues, which we need to get around. I'll leave it at that.

Mr. Chair, for clarification, I believe that Ray Robertson was actually talking about the environmental farm plan. Actually, my understanding is that we committed the same number of dollars to it. As you know, in Ontario, those get transferred down to the province and then are usually administered by soil and crop organizations. So I don't know where it was going, or whatever. That's just a bit of clarification.

[The Chair, Conservative, Larry Miller]

There was no money cut out of it. I guess the bottom line is that there could be more money used—

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Could I have one quick question, or no?

[The Chair, Conservative, Larry Miller]

No. Your time is up.

Just on the issue that Harry and Leony brought up, about the difference from province to province, we have heard this in almost every province. Of course, we can't tell the provinces what they can or can't do, and as a beef farmer who has always been a little miffed, not at Alberta for putting $100 per cow towards their beef industry—in fact, I give the Alberta government credit for supporting agriculture, and in return.... Quebec as well; no province supports agriculture the way they do.

Really, the only way of equalling that is to have our province do the same, and it doesn't matter what stripe: we've had three parties in government here in the last 20 years in Ontario, and not one of them has supported agriculture to the same degree. We have half the population of Canada. To me, if population is what you need in order to pay for social or agriculture issues or whatever, we have the ability in Ontario, because we have half the population.

[Leony Koelen]

But it makes it worse, doesn't it? For us, it's better to have no support whatsoever than to have one province have a little bit and the other provinces have—

[The Chair, Conservative, Larry Miller]

I don't disagree with you. It makes it very unlevel. But taking control over from the provinces is easier said than done.

[Leony Koelen]

We realize this.

[The Chair, Conservative, Larry Miller]

We're almost out of time, but, Mr. Valeriote, you have three minutes.

[Frank Valeriote, Liberal, Guelph, ON]

Another common issue that arose, again throughout the last week or so, is the issue of dumping. It started with apples out in B.C., when we were out there on Monday. Of course, I learned that what the processors will do is give a fair price if the apples are coming into our country at the beginning of the season; at the end of the season, they'll dump. Then they'll take an average price and conclude that perhaps it wasn't dumping. We found that the process of registering a complaint is cumbersome and costly, and that it's up to the farmer to do it, not the government.

We've heard that this happens in the meat industry as well. I'm wondering what your experiences have been. Is there an issue of dumping for you, here in this area of the province? Have you registered a complaint, or have you not registered a complaint because it would have been costly and cumbersome and a long process that you would otherwise not want to engage in?

Has anyone experienced that at all?

Not at all? Okay.

Another issue is the opportunity to maybe process on the farm and create your own opportunities, as opposed to relying on the processors. I know that in Italy they do that. They encourage them to make as much as they can of...somebody mentioned cheese here—that kind of thing. Do you think that's a viable option or opportunity, and if the government were to step in through some form of incentives, the way they do, for instance, in Italy, do you think you would be prepared to engage in that kind of thing, or do you know others who might?

[Greg Ardiel]

In our area, we try to farm together as a whole, all the different apple growers together, and we have found that by combining our resources and creating an infrastructure for the industry, we're better off than we are competing individually against each other. When we're competing in such a huge market anyway, we're better to band together and try to get ahead that way.

In some of the niche markets it does work, with goats and cheese, but in the large scale of things, the costs are too great to do an up-to-date, current processing facility on your own, when you can go together with others and spread out your costs.

[The Chair, Conservative, Larry Miller]

Thanks, Greg.

Thank you, Frank. We are out of time on this first session.

I'd like to again thank all of you for coming here today. I will just remind you as well that if there's anything, as follow-up information, that any of you think the committee should have, if you'd forward it to the clerk or to any one of us, we can see that it gets there.

Again, I appreciate your coming here. We're going to adjourn for five minutes. I'll ask the witnesses to vacate the table and we'll ask our next round of witnesses to please come up.

We'll try to get going in the next five to seven minutes.

Thank you.

[The Chair, Conservative, Larry Miller]

We'll call to order our second session of the morning.

I welcome our guests and thank you all for coming here today. We look forward to hearing your input.

Without further ado, we move to Mr. Grant Caswell, a young farmer from the Meaford area.

[Grant Caswell, As an Individual]

I welcome the House of Commons committee. Thanks for coming here today, and to Larry Miller for setting this up for us.

My name is Grant Caswell. I'm a third-generation farmer. I work beside my father and uncle on a dairy and beef operation just outside Meaford. Currently I have been working off the farm for the last ten years as a farm equipment technician.

Working off the farm as a farm equipment technician allows me to deal with a lot of different types of farming, farming styles, and people in general. We see how market prices fluctuate; they affect their bottom line and ours. For example, if they have no money, we don't get the work.

My father also told me I should get a job off the farm to get a different perspective on the way things work, and the lifestyle, and that when I wanted to come back to the farm full-time, it would be my own decision and on my own terms. I have been discussing the opportunity to return home to farm full-time. The obstacle I have found is to see how the farm is going to generate enough income to support an extra family on that farm as well.

Yes, farming is a lifestyle, but it is still a business. Unlike any other business that only requires a 40-hour work week, we work long, hard hours every day for livestock and crops that we cannot set a market price on. No other business sector can take such a continuous loss and still keep going. The average farmer today is 60 years of age. If no one in the younger generations can take their place, everyone will have to pay more for the food we eat, and it will mean a loss of jobs in the other branches that deal with agriculture in general.

Every dollar a farmer spends goes through nine hands before the end result. Currently there are no federal-provincial aid programs that any one farmer could count on or could take to the bank. We almost need a five-year outlook plan, and always plans to be looking forward and not dealing with the past.

Money spent on meat packing plants instead of farmers makes no sense, because they are the middle man and they pay nothing for the livestock, but then sell to consumers for top dollar. Farmers are working harder to improve their income by shopping other markets and selling their products, but as the input costs keep rising, they just take away from the farmer's bottom line. As everyone may know, we can't put a fuel surcharge for trucking and freight on all the products that leave our door. If only farmers could get paid what it cost to produce their products, it would be a thriving business.

In conclusion, we are the backbone of society, doing our best. We just want to be recognized for the great job we are doing. I would like to thank you for the opportunity to speak with you. I hope you can get some information from this.

[The Chair, Conservative, Larry Miller]

Thank you very much, Grant.

We now move to Steve Eby, from the Kincardine area.

[Steve Eby, As an Individual]

Thanks, Mr. Chairman.

I'd like to welcome everybody to this part of Grey County at the edge of Bruce County.

I'm a full-time farmer. We farm in the south end of Bruce County. We own and operate a beef grazing and finishing feedlot. We sell approximately 1,400 head of fed cattle annually. I'm a graduate of the University of Guelph, and I try to manage our business by using cost-effective programs based on strong science and strong record-keeping and management decisions.

I firmly believe there's a future in farming. The road is not a smooth one; however, with properly addressed regulations, policy, and the development of new markets, both local and globally, farming will evolve into a very dynamic industry.

Young farmers need a plan. I believe that plan includes profitability, bankable consistent programming, trade—all markets are important—a level playing field, an insurance program for cattle producers, financial programs, regulations that are harmonized with our trading partners, and a food policy.

Expanding on those a bit, profitability is mentioned. All mentioned areas are important to assist in increasing profit potential. Young farmers will invest in agriculture if the industry can supply a fair return on their investment and labour.

Programs must be bankable, reactive to market conditions and developments. The industry has made many suggestions to current APF; however, the government now wants to consult the industry. Action is needed, not more consultations.

I recommend funding the environmental farm plan at 100%. It's an excellent landowner stewardship program that supplies benefits to all of society. Countries like Switzerland pay for environmental programs, not production-based programs.

With respect to trade—local, provincial, federal, and global—all markets are important to maximize the value of agricultural products. All producers, whether supply managed or not, benefit from open markets. The dairy industry, for example, sells breeding stock genetics, which are called cows on the open market. In Bruce County we have businesses that export food grade soybeans to over 20 countries around the world. These premium crops increase the revenue to assist young producers in their income.

We need a level playing field, a national-based program. In the beef industry we currently have a mishmash. Alberta and Saskatchewan either have, or they are working toward, a price insurance program. Agriculture Canada should lead the price and base its insurance policy development analysis on the adaptation of this process. We have to hold imported products at the same standard as the domestic production.

On insurance programs for cattle producers, there have been promises to have something similar to crop insurance developed for the livestock industry since the APF started in 2003. To date, nothing substantial has happened in that area. There needs to be an effective, affordable form of price and basis insurance for cattle producers across Canada.

With respect to financial programs, there are breeder and feeder cooperatives based in Ontario. I know there are other programs across the country, in other provinces. These are excellent programs to provide options apart from the regular type of financial institutions. In 2009, over 100,000 head of cattle were purchased through those cooperatives here in Ontario. Locally--basically Grey and Bruce counties--upwards of a quarter of the members are made up of producers under the age of 35. The cash advance program is currently under a stay of default. Nothing really has changed in the last year. I'm involved in that program, and I feel it needs to be extended for another year.

On regulations, government needs to harmonize regulations with major trading partners. SRM regulation differences between Canada and the United States are well known. And then what do we do? We turn around and import U.S. meat. That comes back to that harmonization.

The high Canadian dollar and all regulatory imbalances irritate that and are very costly to producers.

As a matter of food policy, does Canada want Canadian-produced food products? If so, producers need a fair return from the marketplace. A profitable agricultural industry will attract young farmers. Retailers need to recognize provincial inspection in provinces as equal to federal inspection. This will add more Canadian local products to our store shelves.

Thank you.

[The Chair, Conservative, Larry Miller]

Thanks very much, Steve.

We'll now move to Doug Hayes, from...is it Twin County Feeder Finance Co-operative?

[Douglas Hayes, As an Individual]

Yes.

I have a beef farm in this area. I farm about 600 head.

I have been involved with the Ontario feeder finance program for about 16 years. As Steve just mentioned, it is a good program. It's been a great thing for producers.

I don't know whether you're all familiar with it. It is designed for and geared toward young farmers. We don't lend just to young farmers, but it is there because they are able to come to us with little equity. They have to have a knowledge of how to feed cattle, but they don't have to have a credit history. They can come in to us and get a sizeable amount of money and start farming and work from there.

Because of this, I've seen a lot of young people come in to ask for money from our program. You have mixed feelings about it. They come in and they have hope in their eyes. They have a willingness to start off farming. But because of the beef industry, the way it is, these young people come in, and you see that sometimes they make a good living on it. And it's not their fault—some of them are very good feeders—but sometimes they come back at the end of the year to pay off their loans and there really is no profit margin for them at all. You ask yourself, how did that person do that? They spent all that money on their expenses during the year and at the end of the year they walk out of the office with very little money to take home to their family. It can be very discouraging that way.

Because of this, and the contact with these young farmers, I just have to realize that if you are a young person and are thinking about farming, or you're a young person who is farming, the thing you're up against is.... Personally, my feelings on it are that you have older farmers receiving large subsidy cheques in some cases. When a lot of these older farmers started, way back in the fifties and the early sixties, there were no programs. There was a junior farmer mortgage program that young farmers could take advantage of, and there were farm improvement loans, but that wasn't a great deal—for the most part, all you had to compete against was the marketplace. You have corporations that receive large government assistance that are getting into farming.

To be honest with you, there are people who work for five months of the year, go on unemployment insurance benefits, and make far more than a young farmer would make, and that's very discouraging.

Mention was made earlier, in the first segment, about diversifying. I'm talking about the beef industry. It is virtually impossible for anyone to diversify in the beef industry, because the bureaucrats are shutting down small abattoirs right and left, and that just makes it impossible for any size of operation to get better access to the consumer dollar. Instead of directly marketing your beef to the consumers, the bureaucrats are virtually shutting that down and trying to prevent any farmer from accessing the consumer dollar directly.

Again, you're a young person and you think you're doing the right thing; you go out to farm and you see your friends and classmates from school going out and getting good jobs, and you ask yourself.... Personally, when I sit back and watch these people coming into our organization for money, I ask myself, does that person really know what he's doing, given the state the agriculture and beef industries are in today?

There actually is an army of young people out there who would love to farm. They're out working at other jobs. They're not happy with it. They've been brought up on a farm in a lot of cases; they know how to farm, and yet those young people just can't see their way to farm. Once they leave the farm for one generation, you're going to lose those people. You're going to have to do what was suggested today: you're going to have to go to the cities; you're going to have to go to the non-farm people and try to bring people back.

You're at a crossroads now; it's time something was done to keep those people on the farm, because once you lose that generation to the city and to good-paying jobs, it's very hard to get them to come back.

Some of the things I would like to see done for young farmers is creating a level playing field as far as the subsidy programs are concerned. It was mentioned this morning that some of these programs can't be accessed by young farmers. That's wrong. The tax dollars that are put into these programs should be directed toward young people. We need a cap on these subsidies. It's totally ridiculous that some of these subsidy cheques are going out, anywhere from $500,000 to $1.5 million to some of these people. Those tax dollars are hard to come by. It's time the government said enough is enough and put a cap on these.

I'd like to see a cap of $50,000 on these programs to give the young people a chance. Use these tax dollars in a more constructive way to try to keep young people in farming. Big corporations don't need this money. If they can't make a dollar on it, let them step aside and let a bunch of young people come in and do the job. The government can do certain things. The APP has been a good thing, with $100,000 interest free. Certain things could maybe be enhanced in that program.

Farm Credit needs to get back to its mandate to lend money to young people. From what I've learned these last few years, Farm Credit seems to be getting more interested in lending to the large corporations, such as the Cargills and whatnot, which makes it more difficult for young people to borrow money. It shouldn't be that way. Farm Credit was there for a purpose, and I don't think they're living up to their mandate.

There needs to be some relaxing of the rules for the local abattoirs, so that if someone did want to start up direct marketing of their beef and whatnot, there's an abattoir there that can handle it so they're not consistently being put out of business. Again, we need some direct government programs geared to young farmers. Everyone needs to start small. You can't start out with 10,000 acres. You have to have something there to get these people interested. These young families deserve a decent living. They deserve to have a somewhat equal living to what their friends have in other jobs.

In the feeder finance program there are two carriers of the APP program in Ontario. Feeder finance was able to lend money, $100,000 interest free, and all those people in feeder finance had to repay that money when that money came due. People even went to ACC in Guelph and borrowed their money, the $100,000 interest free, and they haven't repaid that money. That's not right.

Those people in our organizations have stepped up and borrowed that money. They dug down, they got some money, and they repaid that money. The people who borrowed the money from ACC didn't have to repay it. There are even rumblings about forgiving those loans, and that's not right. If you borrowed that money, you need to repay it in some form. If you don't have the money now, it needs to be turned into a mortgage or something, but that money has to be repaid to make it fair all across Ontario and all across Canada.

That's everything I have to say. I thank you people for coming all this way to listen to our concerns. I'm very happy to be able to come here and speak to you in this manner.

[The Chair, Conservative, Larry Miller]

Thanks very much, Doug.

We'll now go to Sean McGivern. Sean is a producer from the Bessborough area and runs an organic processing facility.

[Sean McGivern, Grassroots Organics and Saugeen Speciality Grains]

Thank you, Madam and Gentlemen.

Are you a passive or an active food consumer? Are you engaged personally in the production and the processing of the food you consume, or are you totally reliant on the industrial food system to provide and deliver to you what it has chosen on your behalf? Are you in control of what you consume? What role do you play in our food system?

Since the 1950s, our food system in North America has not been driven by nature or by the natural forces of the free market. It has been driven by government policies, which have been created to support the industrial food complex that we know as our food system. Government agricultural policies have come to shape the food you eat more than you can ever imagine. Government policies in North America have led to the rush to produce some of the lowest-quality food in the history of mankind due to the subsidies paid to farmers to produce the crops that need to be integrated into our food system.

To be able to use all of the supply of these commodities on a yearly basis and to not have an overwhelming stockpile, innovation was required to form such products as corn into every aspect of the North American diet. It has been said that humans are now walking, talking, molecular structures bound together by corn in every one of its thousands of forms.

There are many signals showing up in our food system that have presented themselves in such forms as obesity, various health issues, shortened lifespan, impoverished rural communities, and the largest disconnection of eaters from food producers in the history of mankind. These health issues are clear representations of the quality of food that humans are consuming. As the human diet has evolved over the last 2,000 years, it is now at an all-time low when it comes to the health aspects of the food we consume. We have traded taste for quantity, texture for shelf life, and regional specialties for Frankenfoods.

There are new plant technologies moving into our food system that are unprecedented. Never in the history of mankind have we seen the irreversible effects that we are now witnessing in our food supply. Never before have we experienced the moral degradation of the Creator's creation like we are now experiencing. Genetic engineering is going to alter, and is already altering, our seed stock. Once it is tampered with, it can never be reverted to its original form, which once worked well and was sustainable and renewable, all of which it is no longer; it is altered, and we are left with the lasting effects it will have on our nation.

With government subsidies paid to crop and livestock farmers, either in the U.S. or Canada, it is a signal to primary producers that they do not need to build resilience into their farming operation, that they should continue to maintain their production levels and methods, and that there is no reason to seek new or better markets. Subsidies have a history of allowing agricultural production to continue that would not under regular circumstances continue to happen if there were not a cash subsidy payment to encourage it to continue. So we now see how government policies, unsustainable production methods, and subsidies have led to the state of the food system that we are supplied with.

Large multinational food processors are delighted to have this type of food system that we have in North America because it allows them a continuous supply of cheap raw materials. It allows them to have captive supply because of the volume they purchase and because governments continue to subsidize producers at the farm level, with no incentive for farmers to continue to produce such stable crops as corn, wheat, soybeans, and cotton, thus keeping the market price for farmers below the cost of production and unable to create a profit from the marketplace alone.

For agriculture to be a viable enterprise in Canada, we need an end to all subsidies related to agricultural production. We cannot afford to pay or protect farmers from the free market with payments based on bushels per acre or pounds per animal. We must pay farmers for such things as environmental stewardship, infrastructure improvements, value-adding incentives, rural disadvantage payments, rural employment creation, and sustainable farming tax credits, all of which will foster a strong rural community while not promoting the overproduction of commodities that are sold into the marketplace at below cost of production levels just to make room for the next year's crop. We must also fight to protect our domestic markets and to ensure we do not allow the dumping of cheap foods that do not comply with our health and safety standards. We also need sensible policies and regulations that do not force our farmers and food processors out of business while allowing substandard foods to enter this country.

Once you understand the true cost of food, you begin to see the need for a food revolution and why it is required to ensure that we have an agricultural economy in the future of this country.

We are facing a plateau in agriculture that we've never seen before. This year alone, China announced a $55 billion rural infrastructure grant to create infrastructure money to be used at the farm level. I recently had a discussion with a high-level person at Staples Business Depot, and they said they had trouble getting a lot of products in, because when the Chinese new year comes around, usually about 20% of the workforce doesn't return to the cities; this year they had over 40% to 50% of the rural workforce not returning because of the infrastructure dollars that China had put in place.

We see agricultural products flowing in from those countries all the time. I work in the export and import types of markets, and we have a business approaching about $2 million a year in sales. The big challenge I see is the lack of infrastructure and processing that we have here. We do not need another government program to give people money to make a business plan or produce some flyers or cards or promote local food; we need money and resources on the ground, ready, willing, and able to help farmers with infrastructure and the dollars they need to do something.

I'm like most of the other people here who have tried to deal with Farm Credit, which always suggests that you deal somewhere else. I think that's horrible.

The other horrible thing—and it's not just the Conservative Party here today, although you've been in power for two terms now, but there have been a lot of other governments before you who have really let agriculture down. We don't need a five-year plan in agriculture, which somebody alluded to. We need a 50-year plan, and we need five-year plateaus where we can update that plan and move ahead. But we don't have that plan now, and I think that's a serious, serious issue here. I don't know how we build any longevity or reality into a market with such short-term thinking. We need long-term thinking, with consistent changes and updates to it. But we need to put that policy and framework in place so that we have something to build upon and not create it as we go.

I think we're at a place right now where we're losing tons of farmers. The big issue we have here, especially in Ontario, is with land values and stuff. It's astronomical. We have farmers competing against farmers who are buying these farms, developing them, putting two or three lots on them, and then expecting the farming community to pay the same value for those properties.

We have some of the highest wages in North America here in Canada. We have some of the highest health and safety standards. We have some of the highest costs of production; whether people realize it or not, we simply do. I don't want to trade any of those things; I'm glad we have them, but we have to be aware that we have them and we have issues that make us uncompetitive in the marketplace.

There's absolutely no reason, in my opinion, with the regulations that we have coming down on us, that we can or will be competitive in the marketplace. It's great for people to think that we are competitive and it's great for people to take pride in the job they do on their products, but we have to be realistic here. If we are as competitive as we keep hearing farmers saying, then we wouldn't have the economic situation that we're in right now.

I just want to leave you with those thoughts, and I look forward to your questions.

[The Chair, Conservative, Larry Miller]

Thank you, Sean.

Now to Bruce Saunders, to speak to us about the young farmers program the dairy industry has.