I want to thank the Standing Committee on Agriculture and Agri-Food for inviting me. I am very pleased to be here today. My name is Rémy Laterreur. I have been a pork producer for 31 years in the municipality of Saint-Narcisse-de-Beaurivage, on the south shore, south of Quebec City. My speech today has to do with the fact that in order to ensure the future of farming, existing businesses must be in good financial health.
In my experience, the profit margins in farming are much slimmer, and most producers can feel a considerable amount of financial stress in trying to adapt to regulations or standards. These producers listen to the market signals, which are often accompanied by political signals encouraging them to make major investments to fully development their business's potential.
Agriculture in Canada is, and will always be, a very important economic lever, but because of our northern location, it requires, and will always require, a minimal amount of support from governments.
In my 25 years as a producer, the price cycle has been relatively regular. There were low, medium and high prices, which balanced out when averaged over five years. There were significant health problems related to our production, but they were spaced out over time, which allowed the farm to adjust and recover financial stability.
From 2005 until now, hog farms have seen a lot of action. The circovirus epidemic, which lasted two years, caused losses of 10% to 30% in most herds. The use of corn ethanol increased feeding costs by about 50%. The strength of the dollar has caused a significant decrease in the competitiveness of pork exports, which led to a general decrease in revenue for pork producers. Pork producers saw their usual references drop as a result of the massive investment of money in grain markets. The combination of losses from 2005 to 2008 forced a large number of farms to participate in the federal government's advance payments program, repayable one year later.
The futures markets seemed to get off to a good start in 2009, but then collapsed after the H1N1 virus, initially referred to as the “swine flu”. This is in addition to the world economic crisis, which is not yet over.
We are still waiting for a decision from the government regarding postponing, once again, APP repayments planned for September 2010. Support from the AgriStability program, which is based on a cycle of profits and losses over an average of the last five years. If a farm is operating at a loss for an extended period, the program no longer applies.
The provincial government tightened up support in 2009, which also had very significant negative effects on the profitability of farms. The combined decrease in the amount of money available lowered the value of farms, which reduced the equity accumulated over 20 or 25 years of work to zero, or even below zero in the case of a large number of farms.
Canada will always have to offer minimal support for agriculture through flexible programs that can quickly respond to the reality facing our producers. If the agriculture programs and budgets do not allow existing producers to overcome all the obstacles they encounter, I think that it would make absolutely no sense to waste human capital on agriculture.
To ensure the future of farming, we must first ensure that there are serious agricultural policies. We need long-term agricultural policies that show stability, which will ensure that programs for the next generation will work.
Canada's agricultural heritage is an extremely important resource. Canadian producers are very proud of the high-quality products we consume and export throughout the world. We must ensure the viability and stability of the sector, so that the next generation will also be able to tackle any challenges it is faced with.
There is a group of agro-economist consultants here, who have added up all of the negative effects in recent years. They can give a very detailed picture of the precarious situation our producers are in.
The point of my speech was not to make the next generation of producers afraid. Quite the opposite. I want to show that we need to make some changes if we want this next generation to succeed.
Thank you.