Agriculture Committee on May 11th, 2010

[Becky Perry]

With succession planning, we've definitely started to talk to see where things are going. My husband and I sat down; we've made our five-year plans envisioning where we want to go in the future. We've discussed them with his parents. We basically have ourselves all on the same page now. We know that eventually we are going to take over the farm and we're starting to get into the mix of succession planning.

But there are a lot of costs when you look at succession planning, because dairy farming is a million-dollar industry. There's a lot of stuff to turn over. We still have a lot of paperwork to go through, I'll put it that way, but we have sat down and talked.

I know a lot of young farmers who are in the same boat as us. It's one of those things in which you work with your dad or with grandpa or whoever. You're going to eventually take over the farm, but one of the huge obstacles is actually to sit down and talk. One of the biggest things on everyone's mind is that you think you're going to get the farm, and you know you're the one there working, but you're not sure when the transition will be.

One of the huge obstacles is communication. The workshop we went to—three of us have mentioned it already, the BMP sessions—was a huge help, being able to talk to young farmers who were all in the same boat as us and trying to see different ideas. That networking really engages you to believe, okay, he did this, so maybe it's an approach I could take.

Once you sit down and start talking, the transition is made a lot easier. Then you can start looking at the consultancy needs—the accountants, the lawyers, and all the different things you have to go to. Going through the Growing Forward program will, I think, be a huge help on our farm in going through the succession planning.

Farming is definitely a generational thing. I have two little ones at home right now, so I'm hoping the sixth generation is definitely there to keep going after me.

[The Chair, Conservative, Larry Miller]

We'll now move to Mr. Eyking for five minutes.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Mr. Chair.

My family farm is in Cape Breton, Nova Scotia, so I know the Maritimes challenges quite well. I really think that the farmers in the Maritimes have to have Maritimes solutions.

Cedric, you mentioned the possibility of the federations working together as a unified force. We see that Loblaws and Sobeys, and Co-op Atlantic to a certain extent, have their central buying now. All the stuff is bought from the Maritimes, but it's central buying. For farmers in the Maritimes, I think it's very important to work together, whether in dealing with these buyers or dealing with the federal government. When you see the Quebec government coming to Ottawa, it comes as a united voice. I think this is so much better than having various provinces coming.

As to the future of agriculture in the Maritimes, pork and beef are definitely in big trouble. It's hard, looking at the context of our country, to have supply management of pork and beef, because we're such big exporters—but not in the Maritimes, technically. I don't think we produce enough beef or pork to consume in the Maritimes, so it would work well for us, but we can't really go there, because it would have to be a national program.

To go back to the types of farms we're going to have in the Maritimes, it looks as though it will be similar to the situation in Quebec and other areas where you'll have large or efficient farms, and the farms of supply management people will be getting a little bigger and more efficient; then you'll have the smaller farms. We see this in Nova Scotia, where you might be farming part-time and you would go to the farmers market or sell on your farm. It seems that it's going that way. Maybe that's the way it has to be, because it's going to be hard for a medium-sized farm to operate with 20 cows. It's just equipment and things like that.

Should we be looking for policies within our provinces or in the Maritimes to say, okay, not separate them but look at them differently? You have so-called commercial farms that sell to the processors and big retailers, and then you look at the niche farmers and kind of treat them differently, whether it's processing their product or....

We had that problem yesterday in Quebec, where a small producer was making cheese. He found he was looped in with the big guys, and it just didn't make sense.

I guess those are my questions. Are there solutions for the Maritimes? And should we be looking at different models, treating farms a little differently in maybe different categories?

[Cedric MacLeod]

I have a few thoughts on that.

In what we delivered to the BMP sessions—I was the facilitator and had some guide materials to go through—one of the big points we tried to move forward in that session was knowing where you are, which is basically what you're saying. We had examples of 400-cow dairies. Obviously, as you said, you're not going to run 20, but you have to know your role.

My farm is a pretty good case study. I'm going to calve out 15 calves this year. People ask, how do you possibly survive in the beef sector? I don't, because I'm not producing commodity beef. I'm producing grass-finished beef and I deliver it in a 25-pound package. I deliver it to soccer moms and I put it in the freezer. So I know my role, and I am able to extract a good dollar from the marketplace.

That was one thing. When we sat down, we said, you're either big and you're a commodity producer and you're efficient, or you're small and you're value-added and you're going to get more money for your product.

John, who is here, is in that game. He's a good-looking man, and he has a good-looking partner back here. I think she's a little better-looking than he is.

[Voices]

Oh, oh!

[Cedric MacLeod]

But the two of them go to the farm market, and they're selling a story: they're selling themselves and they're selling top-quality products.

If you're going to have programs helping people, maybe it's in developing a market strategy, a story, something you can take to market yourself, because the dairy boards are going to take care of marketing milk, but guys like John and I need support in selling ourselves and selling our farm story.

[The Chair, Conservative, Larry Miller]

There are just a few seconds left.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

I never get enough time, Chair. It seems as though—

[The Chair, Conservative, Larry Miller]

Well, I don't have a crank on the clock.

Karl can make a quick comment, sure.

[Karl Von Waldow]

It's as he's saying. I'm not even going to talk about the dairy industry right now, because a lot of people have been talking about it. We have a beef herd as well, of 80 cows, and in the last couple of years they tend to get the leftover feed that we're not using, because it is hard to run a beef herd. As I said before, my dad has always wanted to do that, but with the cost of production going into it and the cost you get out of it, it's almost impossible to do. We lost money last year on it.

We have sat down so many times to figure it through. Take as an example a 500-pound animal. We might get $500 for it now, but in the market it would sell for almost $3,000 worth of beef. There's another five-sixths of the profit being shared just at the processing stage. If you were to take half of that back into the producer's hands, there would be no problem at all in trying to make a go of a beef industry, or the hog industry, or anything like that.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We'll now move to Mr. Shipley for five minutes.

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

Thank you.

I want to tell you how impressed I've been by the whole panel.

I'll ask some quick questions, because the chairman is fairly quick with the gavel and the time.

You talked about access to credit. That's something that has floated up at just about all of the meetings. I can't ask everybody to respond, because we'll run out of time, but I'd like to know how difficult the access to credit has been. Obviously we have some people who were successful, able to grow, and able to set goals and objectives. Somehow through hard work, education, and being bright, they've been able to get there.

Next, one thing that continually comes up and has been brought up again today is about the import of products from other countries that do or do not meet the standards we have in Canada. They may meet the standards, but our producers here do not have the same access to management tools that our competitors do. It's a consistent one. I have a motion to deal with that, which has support from Parliament. We're hoping to get some changes and regulations to do that.

Becky, you talked about the other key one that you all obviously have to deal with. With the amount of investment that you have, the story we hear is that farmers don't do succession planning very well. You still have dad at 65 years old, my age--well, I'm not quite 65, but I farmed, and I was in supply management and also in the open market--making all the decisions. There has to be that transition. How does it work?

We obviously have young families here who are becoming part of a very intense agriculture. I think succession planning is key. Becky talked about it. It's often for the long term, and we tend to think about it as, “Holy mackerel, I'm at this age and we haven't done anything. How are we going to get our siblings or whoever involved with it?”

I'm interested in the partnerships. I forget whether it was Karl or Richard who talked about it. We tend to forget about partnerships.

We have some young farmers in our family. We actually visited them, but not as part of this tour. They've partnered with some other farmers to sit down and share their financial information. Farmers are not very good at sharing financial stuff, because we don't want to tell the next person about how good it is or how bad it is. We especially don't want to tell them how good things are if we have something that's good.

On succession planning, do you have any comments about how we can help beginning farmers? This is about how we can get beginning farmers into that. It's about access to credit, the imports, and making sure we can be competitive. Succession planning is critical.

I want to caution you about the Ontario policy on energy. It is a disadvantage to farmers. It does not give farmers access to the grids. It doesn't pay them a fee for biogas digesters that comes close to making a profit. We pay 80¢ for solar, but I couldn't tell you how that works.

It's becoming a cash cow in Ontario for investors. Some of the farmers are getting into it, but it does not offer an advantage to farmers. I'd be cautious about the program before getting on the bandwagon about it.

Those are my three comments.

Richard.

[Richard VanOord]

Perhaps I could go first. I'm sure Karl has a lot of good points as well.

I'm going to start backwards on your list. I'm going to start with succession planning, and I'm going to work the way up a little bit there.

Succession planning is essential, because we're dealing with multi-million dollar farms. I've seen it where a farmer has died at 70 or 75 years of age. Their kid is 55 years of age, and still, at 55, they weren't allowed to make any decisions. So the dad passes away within a year or two of the grandfather, and now the son, who wasn't even allowed to sell a Bobcat, now has a multi-million dollar operation. That farm's done. There was improper training. So communication is essential there.

We have, in Fredericton, the capital of our province, 14 dairy farmers who get together and we share our books 100%. We actually have a guy in a department who takes all the numbers for everything. We break everything down; we each are given a letter and our farm stands for that letter. Therefore, I do not need to know who my partner is, which one of the 14 is “A,“ which one of the 14 is “B”. I know which letter I am.

We've gotten to the point that we have shared which letters we are; so we're to the point now where we have shared all the information. I sat down with one of those guys and we compared our insurance bill the other day, and there's $2,500 difference for the same coverage. I got my insurance adjusted by $2,500, and the insurance agent said, “Don't tell anybody else.” That's $2,500 in the bottom line; that's $2,500 in my pocket because the insurance stayed the same.

Succession and planning is important. Farmers getting together is important. We started with three dairy farmers. We started growing corn silage because the cost of grain has skyrocketed in the last five years. It's gone up $100 a tonne. The average farm in New Brunswick is about $30,000, which is what a lot of people take home. For a lot of farmers, what they used to take home, they're now paying for grain. We got together with three dairy farmers and one of us plants, one of us sprays, and one of us harvests. Therefore, only one person has to buy a planter, one person is responsible for spraying.

Not only is the capital nice that you don't have to purchase everything, it's nice that you don't have to be in the field during those times of the year when you know someone else can take care of it, and you can concentrate on something else. You get that stress lifted off you, too, and working together you get that stress lifted off.

Imports and standards--that is going to be a battle. That's a good one to fight, but it's going to be a battle. If you have the UPA, you have 50,000 votes right there behind you, out of Quebec. I haven't heard a farmer yet say that they don't agree that the standards should be changed.

As far as credit is concerned, I'm very thankful the Farm Credit Corporation is around. I wish they would do day-to-day banking. I guess they're having a fight with the banks to do day-to-day banking, because I would do my day-to-do banking with them as well. They have been fantastic. They know that they're not going to hang you out to dry. They're there to support you as well, as a farmer. That is going to be a constant thing, credit and how you get it.

[The Chair, Conservative, Larry Miller]

We are out of time. It seems we never have enough time for these hearings. I thought some of your comments were very interesting today.

Jonathan, you mentioned about staying positive. In any business, that is the right attitude that you have to have. We all realize that there are obstacles and what have you, but that was a comment that really stuck with me.

Actually, down this table today, somebody else mentioned the quality of the presentations; I would echo that. All of you seem, while pointing out some of the obstacles, very positive. I think that speaks well for the future of agriculture in New Brunswick, and hopefully that spreads out across Canada.

Becky, I guess we're coming to visit your farm later today. That's good. I have to say that my kids are also the sixth generation on our farm. Unfortunately, none of my three sons are going to continue on farming, but they will have the land, I guess.

Without any further ado, thank you again for taking time out of your busy days to be here. We appreciate that.

We'll take a short break.

[The Chair, Conservative, Larry Miller]

I'm going to call to order the second half of today's session. Thank you to all of our witnesses for being here today. As a farmer, I know what it's like to take time off on a nice day. So we appreciate you doing that.

This is part of our cross-country tour, you could call it, or study into the future of agriculture. It's great to have all of you here.

Since you're all here as individuals, I believe, if you could keep your opening remarks to about seven minutes, that would be great. I'll be a little flexible, but at the five-minute mark I'll give you the two minutes' notice.

If you have any written opening remarks, could you give them to the clerk, who is Isabelle? Then, after your remarks are translated, she will distribute them to everybody.

With no further ado, we'll start with Nathan Phinney.

Nathan.

[Nathan Phinney, As an Individual]

Good morning. I'd like to thank you guys for giving us a chance to talk.

I guess I'm here to represent the beef industry--unfortunately. My cousin and I and my 73-year-old grandfather, we own a 2,000-head beef feedlot about an hour from here. It's a dying industry if we continue to let things go the way they're going.

One of the biggest problems we have is our labelling. We're bringing in millions and millions of pounds of offshore stuff. It gets processed in Canada, reboxed, and then it gets a “Product of Canada” label put on it. How misinformative is that to the consumer when they see “Product of Canada” and it didn't even originate in Canada, yet it got processed here?

On the other thing we have allowed--I guess it's our own fault--when we look at exports, 70% of the cattle in Canada are U.S.-owned. We have allowed cartels to come here, such as Cargill, IBP, and Tyson. They not only have the largest killing plants, but they've contracted and own the cattle. It's smart on their part. With high fuel costs, it's a lot cheaper to kill it here, box it here, and send it down in larger quantities.

What I would like to suggest, or what I have thought about, is something to make it fair for us who own cattle. Today my Ontario price is $1.49 for dressed beef. If I need $2 a pound to meet my costs of production, I would like to see the government step in and top me up to my $2 a pound. If the killing plants are offering $1.80, you would throw in 20¢ to top me up. Unless we do this, we are just failing.

We do have some assistance programs; however, they just seem to stop the bleeding for a short period of time. Yes, we do need immediate assistance to get the bank pressure off, but it's not the long-term solution that we need. Until we take a serious look at importing the large quantities we do, we are never going to get any better.

With regard to the consumers of our products, I feel that with each generation we're getting further and further from the farm generation. At one time everybody had an uncle, a cousin, or somebody who had a farm. Now I'll bet that most people you talk to wouldn't even know what a farm really looked like.

I also want to touch on local markets. The local markets are a great idea, as Cedric has said, for smaller venues, but we're in the commodity market. We're going large-scale. How much room is there for these little markets? Until we get this labelling thing under control to prove that a product was grown, raised, and produced in Canada, and put it in the large-scale chains like Loblaws and other large grocery stores, we're never going to make it.

I guess that is my major point for today. We have to eliminate this labelling problem. For something to be labelled as a Canadian product, it has to be a Canadian product. It can't be imported from somewheres, repackaged, recut or whatever, and have a “Product of Canada” label put on it.

That's pretty well all I wanted to say.

[The Chair, Conservative, Larry Miller]

I understand that you and Corey are in the operation together?

[Nathan Phinney]

We're cousins.

[The Chair, Conservative, Larry Miller]

All right.

Would you like to add any comments, Corey?

[Corey MacQuarrie, As an Individual]

Well, Nathan covered most of the points.

I'd just like to add that it's one thing if the imports were produced at anywhere close to the standards that we're forced to produce, but I mean, there's just no way we can compete when we have the CFIA, we have traceability, and we have so many things to account to. They are great things to have in place, don't get me wrong, but when other countries aren't forced, then it's not possible for us to compete. It's just not possible.

I have a few other little points as far as the beef industry goes. There are far too many beef farmers--I know in Atlantic Canada, and I'm sure it's Canada-broad--who don't know their cost of production. They'll say, okay, we need money and we need help; they don't know what exactly they need.

I think the government needs to enable producers to have feasibility studies done, to work with consultants, and to work with people to understand their business. This is farming 2010, not farming 1970. There's a big difference.

Along with that--I know it was mentioned on the other panel--is access to capital. I know for us in the beef industry, we don't have the quota system, we don't have that milk cheque to take to our lenders and say here's what we have. We're kind of in a different game. I think that's about all on that.

One more thing; along with the beef industry and I know most cropping commodities, in the Maritimes we have a lot of wildlife problems. We lose about 10% of our corn every year to bears. When you look at the way marshlands are treated, we're rewarded for creating habitat for birds and that sort of thing. Right now we're creating food and habitat for bears, for deer, and for everything else, but it's coming at a cost to us and it's coming out of our pockets. I think we seriously need to look at some way to change that and some way to get back some of the money that we're losing year after year. I know that other provinces have come up with programs, but we lack them here in New Brunswick.

[The Chair, Conservative, Larry Miller]

Thanks, Corey.

You mentioned traceability and those types of things. Those were things put in place by government but at the request of the industry--for example, Canadian cattlemen--and it was done to try to gain imports around the world. I just want to clarify that.

Nathan, you talked about “Product of Canada” labelling and what have you. I sat on my local cattlemen's organization in Bruce County for quite a number of years in the eighties and we were fighting for that. But nobody can put a “Product of Canada” label on beef that comes from another country. It simply can't be done. If you know of somebody that's doing it illegally, then you report them, because they cannot do it. The only beef today, or any product, that can have “Product of Canada” labelling on it has to be 98% of the main ingredient, which of course in this case is beef. The processing part of it can have “Processed in Canada” on it, but it cannot have “Product of Canada”. The consumer is still being educated on that.

I just thought I should point that out.

[Nathan Phinney]

I guess one of the things I meant is that if you get your weekly Superstore flyer and look on the front page and there's a steak for sale, it states on it that it meets the USDA standard cut or AA or AAA Canadian cut.

So if meets the two cuts, where did it originate from? Or is that just the standard?

[The Chair, Conservative, Larry Miller]

If it doesn't say “Product of Canada”, then you can assume that it comes from someplace else. There is an advantage to the processor or the retailer to put that on; that's all it would have been.

I don't want to debate that, but I wanted to point that out.

We'll now move to Jim Boyd, for seven minutes, please.

[Jim Boyd, As an Individual]

First of all, I'd like to thank you for the privilege of expressing my views and opinions.

I'm from a small operation, a dairy farm. We milk approximately 40 cows. I came home to the family farm--I'm working at taking over from my father--in 2005 on a full-time basis.

There are four main areas that I'd like to talk about, the first being supply management. Supply management is a model that works. It's all about stability. It's expensive to get in, but, to me, returns are the most stable of all agricultural commodities. The system needs to be protected first by producers, to govern supply, and also by government, against the erosion of domestic markets. Seventy percent of the revenue coming from Canada stays in Canada.

The recent throne speech firmly defended the system. As a young producer, I hope this continues to be Canada's firm stand. Supply management is a fair system for all levels: to the producer, to earn an income for what you produce; to the processor, to give a constant supply of a product; to the consumer, to be supplied with a high-quality product on a consistent basis.

The second area is food quality. All people at all times should have physical, economical access to sufficient safe and nutritious food to meet their needs and maintain a healthy lifestyle. Producers are constantly increasing efficiencies to provide a cheaper product to the consumer and to stay economically viable. In the 1970s, approximately 50% of the agricultural products purchased went back to the primary producer. Today, it's approximately 18%. Producers are trying to produce high-quality food under regulations that protect the producer and the consumer. Consumers are looking at the price. Maybe the import products are cheaper, but are they being produced under the same regulations? Shouldn't we be comparing apples with apples? Consumers need to be educated on where their food is coming from and how it's being grown. As has been mentioned here already, and as I've been told, 51% of the cost of the product...it can be labelled “Product of Canada”.

Producers and government need to work together to see that producers earn a fair price and consumers purchase what they think they are purchasing.

No producers? Some day there's no food. That's what I'm trying to say. What will our kids be eating? Will it be safe and well labelled?

The third point I'd like to make is that professionals are needed to help producers measure individual profitability. Sometimes a neutral set of eyes sees things that can be improved upon without huge expenses, and can see sources of financing or where it would be wise to invest. Constructive criticism has nothing to do with emotional attachments or personal goals, although they're important as well.

My last point is on labour costs and availability. Margins are getting tighter in the agriculture industry. The minimum wage is increasing. People are less willing to work on farms. For seasonal workers, the cropping seasons are not quite long enough to give them their EI.

To sum up, I'm proud to stand and say, anywhere at all, that I am a farmer. My heart's concern is that while some see an acre of cropland as being worth $30,000 to a building lot, I see it as less farmland, less food, hungry people.

Farmers need to be compensated for keeping their cropland in production, not as a subdivision. Do we need people to go hungry in this country to change the mindset? Protect producers and feed our people.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you, Jim.

We'll now move to Bob Woods.