Agriculture Committee on May 4th, 2010

[Bruce Saunders, Chair, Dairy Farmers of Ontario]

Thank you, Mr. Chairman.

Welcome to Grey and Bruce counties. I'd like to express our appreciation to the standing committee for coming to rural Ontario to seek and hear the comments you're hearing. I also want to thank you for allowing Dairy Farmers of Ontario to make a presentation about the assistance program.

This is not just a program that's unique to Ontario. This program is similar to programs in Quebec, New Brunswick, Nova Scotia, and Prince Edward Island. The west may have programs, but I won't speak to those because I don't know what they are.

There is a document that will be circulated to you later on, when it's translated.

The Dairy Farmers of Ontario provide each of 10 new entrants per year the opportunity to apply for the use of up to 12 kilograms of daily quota. The program is offered at no cost to the successful applicants and permits them to increase their cashflow at start-up, so they can have a viable independent business in the longer term.

Applicants must be the age of majority and have a 10-year financial business plan that is certified by an accountant as being able to generate a profit. They must have a financial lender who is willing to provide lending, as required in the business plan. They must produce and market milk on their own farm or a rented farm, and not have previously been licensed to produce or market milk in Canada.

The selection process is as follows. Each new entrant must apply early in the previous year, between August and November. If there are more than 10 eligible applicants, an independent third party selects the 10 successful applicants, using a random selection or lottery process. There were 65 applicants in 2009 for this current year, of which 10 were selected.

New entrants must hold a minimum of 12 kilograms. They must own at least 12 kilograms, up to a maximum of 23 kilograms, before they are given the use of the 12 kilograms from Dairy Farmers.

The new entrants can receive the quota from parents by purchasing quota as part of an ongoing operation or by purchasing quota on the quota exchange. If they are acquiring their initial quota allotment over the exchange, one new entrant per month has priority for their full bid amount to be filled.

The new entrants who are selected have the use of the 12 kilograms of quota for a period of five years, and one kilogram is returned to Dairy Farmers per year, starting in year six, for redistribution to other new entrants later on.

In addition to this new entrant program, Dairy Farmers also gives priority access to new producers who want to produce and market milk without assistance. Dairy Farmers has already given priority access on the quota exchange to 22 new producers since August 1, 2009, and has received intent applications from an additional 82 potential new producers.

Thank you.

[The Chair, Conservative, Larry Miller]

Thanks very much, Bruce.

Last, but certainly not least, we have a walk-on this morning to speak to us about FarmStart. I think I have the right name: Gayl Creutzberg.

[Gayl Creutzberg, Training and Resources Coordinator, As an Individual]

Thank you, Larry, for allowing me to speak at the last minute.

I want to speak because I have some good news, and I'd like to put maybe a last nice spin to this. I also have some answers to some of the questions raised in the first panel.

Ten years ago, almost to this day, I became a new farmer in this area and farmed sheep for six years. But today I'm working for an organization called FarmStart. We're non-profit and we're training farmers across Ontario, in collaboration with OMAFRA, which is the Ontario Ministry of Agriculture, and other organizations. We have grown from two to eight staff in the past year, thanks to Trillium, AMI, Metcalf, OMIF, and others.

We are training a new generation of farmers, as we call them. To define that, perhaps it's safe to say that it's the kind of farming where the farmer is the price setter. We're trying to really promote the idea of a viable business model.

We also have a program called FarmLINK, which addresses something mentioned earlier, partnering new farmers with land and partnering new farmers with mentors or farmers with set knowledge that they can transfer to the next generation. We have just hired somebody to start looking at non-family succession. I hear a lot. I went to the Junior Farmers' Association conference. We hear a lot about farm succession, but we really need to have that knowledge transfer to a non-family member.

I would just note, too, on farm acquisition, that Small Farm magazine for this month arrived yesterday in the mailbox, and there's an article in there about two Neustadt farmers, two young couples who've just bought land in Grey County. They talk about their story and how they managed to pay for their farm and get ready to start farming. It's a very good article.

Currently we have two Exploring Your New Farm Dream courses running in Toronto. We had 38 spots and 65 applicants. I would say, but I'm not exactly sure, 50% of them are new Canadians. So perhaps the farmers of the future are people coming in from another country. Tomorrow, for example, I meet a man from Dubai who is looking to start farming here. He farms vegetables on 400 acres back in Dubai.

Our problem with our new farmers is that they don't qualify for the funding through Growing Your Farm Profits. We are working with OMAFRA to develop a program that will hopefully allow these new farmers to access the cost sharing so that they can go on to do further training.

Other provinces are watching what we're doing. There are already four that want to join our FarmLINK program, so we're going to make that national. I guess we're the guinea pigs. The other provinces are looking and hoping to start something similar in their own provinces.

Thanks again.

[The Chair, Conservative, Larry Miller]

Gayl, thank you very much, and thank you for being brief.

We're going to move to questioning.

Mr. Valeriote for five minutes, please.

[Frank Valeriote, Liberal, Guelph, ON]

Thank you very much, each of you, for coming today. I know you've taken time out of busy schedules, particularly on the farm, where you'd probably prefer to be right now.

As you know, we've been travelling across the country. The message, for at least me and other members of the panel, I know, is beginning to coalesce strongly.

We've had some people, more than one, say that we are in a constant decline in the farming industry, that the average age of farmers is now the late 50s, unlike other industries. In the last 10 years, 65% of farmers under the age of 35 have left the industry. We've heard some say that if something meaningful isn't done, rural Canada might soon be a ghost town.

That concerns me. It may not be your experience, but this is what we've heard. It doesn't suggest that people don't want to be farming. The lifestyle is something that's embraced. It's making a livelihood that's the problem. There are certain sectors that are surviving more than others, but I'm deeply concerned.

What I've also heard is that it's going to take more than just tweaking the business risk management program, or a program over here or a program over there. We need a meaningful farm and food policy where the federal and provincial governments come together and even the playing field for everybody across the country. I don't see any other option, other than tweaking here or there. To do anything less, as far as I'm concerned, is minimizing the problem and living in a certain degree of denial.

That said, Steve, you mentioned the SRMs. We visited a plant out in Alberta and they showed us the SRM material. It was about 108 pounds. What troubled me was this. The United States and Canada remove the SRM material. The United States can use most of that SRM material for farm feed or fertilizer, whereas we don't. What's left in the United States is two fistfuls. What's left here is still that 108 pounds.

Then I asked this question: Have we opened up any more markets to farmers in Canada because of our stand on SRM and how we're responding to it? They said no, not one new market.

I wonder how you would deal with the problem and if you would make a change.

Anyone can answer that question, but I think, Steve, you were the one who raised it—either you or Doug.

[Steve Eby]

You mean the SRM farm problem?

Well, we've had the BSE issue since 2003. Technology and science, you would think by now, would have developed some kind of a magic tool to make use of SRMs. That hasn't happened. So it's going to be a complicated issue. Is it as big an issue from a food safety standpoint as we think? When we look at other countries, such as the United States, who deal with a small amount of SRM, they can ship into our country while having a whole different set of regulatory issues than Canada has.

Can we make use of that SRM going back into fertilizer in some of those old markets? Yes, I think we can. That's the issue of the whole regulatory system, on which I know industry and all of us were on the same page in 2003 in trying to work our way through. We have probably learned a lot since then, so maybe it's time to revisit a whole bunch of those issues and make some policies that are harmonized with other trading partners.

[Frank Valeriote, Liberal, Guelph, ON]

Right.

Doug, you talked about the bureaucrats shutting down abattoirs. That concerns me. We're at a time where we have to give farmers all the tools they need, even if it's diversifying by processing on the farm, or, as somebody said on the last panel, coming together with other farmers and creating some kind of processing facilities, whether for cheese, meat, or whatever.

I need to know more about bureaucrats shutting down abattoirs left and right. Can you give me some examples? Can you tell me what's going on?

[Douglas Hayes]

When you speak to some of the people at the small and medium-sized abattoirs and ask why they are being shut down, they will tell you the following. For example, I spoke to one fellow who has a considerable abattoir down south of Owen Sound, and he basically said that every week there were inspectors coming in and finding something wrong every week. It's just continuous. If one inspector doesn't find something wrong, the next one will. He said he's just constantly putting money in trying to play catch-up. When he tells me about some of the things that must be done because there's been a complaint about something, it's totally ridiculous. It's little things that border on harassment. A lot of these places have just closed up.

I spoke to a young farmer this week, telling him that I was coming here today, and asked him what he thought, and he said he had thought he would start farming, thinking he'd start trying to sell some meat directly to the consumers, but it's just impossible to do it. He really can't find a place that will kill his beef at a reasonable rate, for him to make a go of it. If you go to an abattoir, the rate they charge seems astronomical.

But at the same time, when the farmers explain it to you, a lot of it is just this constant harassment from these inspectors. I know these are not all federal plants; some of them are provincial plants, with provincial inspectors, which you people aren't responsible for. At the same time, something needs to be addressed, I think, all the way across.

[The Chair, Conservative, Larry Miller]

Okay.

[Frank Valeriote, Liberal, Guelph, ON]

Sean wanted to say something.

[The Chair, Conservative, Larry Miller]

Be very brief, Sean.

[Sean McGivern]

I just wanted to comment on that.

We slaughter cattle 52 weeks of the year for our farm store, and the big challenge is proper processing and working with plants that can do that. It costs us over $500 an animal. When you look at the animals running through Cargill and those places for pennies per pound, and we're paying dollars per pound, you see that we're at a huge disadvantage.

[The Chair, Conservative, Larry Miller]

Ms. Bonsant for five minutes.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Thank you.

My question is for you, Ms. Creutzberg.

I met with an African parliamentarian who said that in his country, Cameroon, the Chinese are buying up agricultural land with irrigation, and the food produced there is exported directly to China.

Are you not afraid, given the immigration happening here and the difficulty farmers are having surviving on their land, that these people won't make the same choice in Canada, be it in Quebec or Ontario or wherever, and that the products grown there will go back to their country of origin? That kind of alarms me. In your part of the country, have you noticed increasing numbers of Chinese buying farmland?

[Gayl Creutzberg]

I'm not finding that its mainly Chinese. We seem to be getting a lot from Egypt and, as I said, from Dubai. I'm meeting someone from Dubai tomorrow. The stats now are that in Toronto, over 60% of the people there were not born in Canada. So it's my sense that these people are growing food for their communities within metro areas like Toronto. I really get a sense that those who come to this country come here because they have this vision of what Canada has to offer, and it's not about business back home.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Right. What the person told me scared me a little. We have to protect our land.

Mr. Hayes, if I understood correctly, you have 600 head of cattle.

[Douglas Hayes]

Yes.

[France Bonsant, Bloc, Compton—Stanstead, QC]

That seems like a lot to me. In my riding, a person with 100 has a large farm. They are family farms. They are not industrial farms.

Do you think it would be better for the young people who are coming up to start with small family farms rather than big ones? When I walked around here, I saw that you have superb land. Young people don't have the resources to buy land at $8,000 an acre—I think that's what they said.

Would this not be an avenue, for young farmers, to choose a piece of land that is 1,000 or 1,500 acres that had been divided into smaller lots? That way, with smaller family farms, they would have the chance to start up and survive.

[Douglas Hayes]

I wouldn't expect a young farmer to start with 600 head of cattle. Something like 100 or 150 head would be reasonable. But in this area, my operation is, I would say, compared with a lot of cases, maybe average. There are many operations much bigger than what I have. In this area, for anyone who has 50 to 100 head of cattle, it is definitely a sideline from their main occupation, which would be off the farm. It is a good way to start, but in order to make any kind of living, you have to have these kinds of numbers to make it worthwhile; otherwise you need to have off-farm income.

[The Chair, Conservative, Larry Miller]

Mr. Eby would like to comment too, Mrs. Bonsant.

[Steve Eby]

I'm also a beef producer. To go back into my own history, I started off with one animal; it was a 4-H calf. One became two; two became three. The beef industry financed my post-secondary school education. We just kept building on that. We are a family farm. I work with a part-time helper, my father, and we have just grown the business over the years. But we need that scale to survive, under the current system.

You start off small and you build towards that. It is the framework to make the small producer grow into a bigger one that is very important.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Before you answer, Mr. McGivern, I have another question for you.

In my riding, we have seen land divided up into several lots. They are all organic farms. The future is organic. The future is green energy. I encourage you to continue.

I don't want to insult you, the people of Ontario, and I am not familiar with your programs. But in Quebec, we have developed products from organic and other land. As you say, human DNA is changing, and I find that a little disturbing. That is why I encourage young people like you to do more organic farming, so the system can build on it.

I know you have something to say on that subject. I will let you speak. I encourage you to do organic farming. I buy locally, too.

[Sean McGivern]

Yes, I think the organic approach to agriculture that we've taken is.... Organic sometimes gets a bad name, but I always say there are two types of organic farmers: organic by neglect and organic by management. We spend a lot of time on the management side of our operation. Our operation really, truly can be a family farm operation. We don't have herbicides and pesticides and harmful products that can harm young children on a farm property, and I think it allows us a very good quality of living.

We have heard a lot about sustainability, but I think we need to look at sustainability in terms of a symbiotic process and how it can work together for the whole farm. A farm isn't very sustainable if we are importing tons and tons of nutrients to feed that farm operation. I think we have proven in this area that.... Our farm totals about 1,000 acres, and I have very small input bills. I buy a little bit of forage seed for plough-down, but we “seed save”.

We produce all our own products on farm. I think there is a lot to be said for that—and that we're running at a profit, also.

[The Chair, Conservative, Larry Miller]

Mr. Allen, you have five minutes.

[Malcolm Allen, NDP, Welland, ON]

Thank you Mr. Chair.

This is to Gayl, who talked about the programs of OMAFRA. In a previous career I was an electrician at one time. I actually served what I call indentured servitude, but the province calls it apprenticeship. They actually make you sign an indenture certificate—they still have those things from the Middle Ages.

But in farming, we don't have that process. We have apprenticeships in a sense, in family farms, because children learn from their parents. There is a cost to the farm in doing that. But ultimately there isn't any payback, in the sense that when a corporation takes on an apprenticeship, there are tax advantages to doing it, but there are none on the farm. I don't know whether anyone has looked, since we are looking at new farmers, at how we do this and at how we could take this as a hybrid approach, from the tax perspective, to see whether indeed we could use a model that comes out of the industrial sector.