Good morning, everyone. Mr. Miller, committee members, I thank you for the invitation.
I will be able to share my views on two main points in the seven minutes. This is related to what the other witnesses have already said.
The key word is “stability” when it comes to the agriculture industry. Although we have already heard about this, I would like to talk about the cost of investments in agriculture and the impact of health problems on the profitability of businesses in the animal production sector. My notes highlight these two issues.
I would like to talk about the cost of investment and the value of assets, either for a transfer or purchase by someone who wants to get started in agriculture, whether or not they have an agricultural background. These assets are very expensive, and output is very low. This has come up many times, but agricultural revenue is very variable. That makes it difficult to acquire these assets. I would even say that, like many agricultural sectors, there is a crisis. It is destroying existing producers who want to continue to keep these assets in place. This is the case with hog production. Because of the crisis, it will be difficult for producers to update their buildings and to be competitive with other countries. We must find a way to enable people to get set up in agriculture with these assets or must find a way to help people who already have these assets to continue to produce.
My recommendations are more of avenues to explore. There are two points related to investments. It would be possible to have assets that belong to a fund or to communities that would take some items off the balance sheet. For example, if a young person does not have to purchase land for agriculture, if he does not have to include it on his balance sheet for a loan, that could help him when it comes to investments.
Furthermore, when a businesses asks for major investments, for example for hog production or dairy production, we must ensure that the businesses' revenues are stable, so that they can amortize this equipment or these assets. Often, people make major investments and the market conditions are very variable. That causes financial instability within the business, which often discourages people from moving forward or makes it difficult to encourage younger generations to take over the farm. This often comes up with hog production. Those are the two points I wanted to cover regarding the cost of investments.
I would also like to talk about the impact of health issues on animal productions. This could be compared to mad cow disease and porcine circovirus. I think we need to find a system that will help people during a health crisis, or if a major disease is found in a country. Mr. Laterreur spoke about the impact porcine circovirus had on hog farms. Producers are already asked to deal with widely fluctuating market conditions, in particular with respect to the prices and cost of input. If we could find a way to reduce the impact of a disease on the herds, we could at least help in that respect. It would also help the country better face the situation.
I recommended that a health fund be created, a health insurance, like what exists for humans, in order to face this situation. If there had been health insurance for mad cow disease or porcine circovirus, the government would perhaps not have had to invest as much money all at once to support businesses. I do not think that all farms will have to face the same disease every year at the same time.
This would be one method. The fund could be used to develop technology, for research.
For example, in the hog sector, research could eradicate diseases or identify certain regions in a country. That would help us continue to export our products or to contain a health situation. In recent years, if hog producers have been lucky enough to avoid the effects of circovirus, that could have helped suppress the fluctuations in the market.
To conclude, I would like to talk about programs. There are risk management programs. They would have to be adapted, and new crisis management programs would have to be created. When a sector is in crisis for several years, the existing risk management programs are no longer effective. We must be able to separate risk management from crisis management and quickly identify the sectors that require different support for several years.
Thank you very much.