Agriculture Committee on May 13th, 2010

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

Thank you, Mr. Chair.

And I thank the witnesses for coming here this morning.

As we go across the country we've been hearing from many different types of agriculture, from the perspective of young people. Of course, the sad part is that we're hearing more doom and gloom than positive, but as a committee we have to pull this stuff together and try to see what we can do to help the new industries.

My question is more about what's going to happen with the potato industry in P.E.I. I understand that one thing in the North American context is that the consumption of potatoes is going down. We hear Cavendish Farms is telling growers to produce fewer potatoes. It's also my understanding that barley is a big crop rotator for potatoes and the home for a lot of barley was the hog industry, which is in a bit of a tailspin. But too much doom and gloom...where is it all going to end with the potato industry? Do you foresee we're going to have fewer potatoes being grown in P.E.I.? Is there something else that can be grown there? What can be done? Are there new markets?

The other sad part, I guess, is that the price for potatoes over the last few years is staying relatively low, so a lot of the programs that are available now you can't draw from because your markets are already too low to draw from them.

It sounds, from my side, that it's pretty doom and gloom, but is there any silver lining here? Is there any way we can turn this around? Is there another crop that's compatible? We had some grain growers here this morning with canola and things like that, but where is that industry going to be in ten years, and what can we do as a federal government to either help that industry or transform it to something else?

[Matthew Ramsay]

I think where we start again comes back to the information flowing between stakeholders within the industry. If the market demands that we grow fewer potatoes, then we need to be able to react to that quicker than we have been.

Where I see incredible potential is in some renewable energies. There are other crops, other than barley, that we can be putting in place. Off the top of my head, I know canola can be grown here. The oilseeds can produce biodiesel, which can in turn fuel our tractors, but that's just one example.

I think the main thing is that we take a better grip on what is going on and understand the market dynamics a little more, as would be expected in any other industry. We need to establish some proactive farming. We're very reactive right now, and we need to start looking forward.

From the experiences that we've had, we're looking at introducing a new agricultural model, one that is not based on linear sort of production but is based on collaborative networks that support autonomous units of production, so that the upper layer runs the logistics for the units of production. In that way, we can create scalable production units whereby if we find that one crop is demanded less than the other, we have the economic bandwidths to make adjustments and to sort of transmogrify the operation so that it is producing—

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

I think you and Trent are both potato growers, right?

[Matthew Ramsay]

Yes.

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

So how do you see that translating down on the farm? I'm guessing you both sell to Cavendish. If they say this thing is not going to get much better, how would you see it with your crops? I know technology and interface, but how would you see it on the farm besides those rotating crops? Do you see yourselves just growing fewer and fewer potatoes?

[Trent Cousins]

We'd hoped that the markets would improve. That's the best-case scenario, but, yes, you look at—I don't know the exact numbers, but in our research I think in 2005 or 2007 there were 96,000 acres grown, and this year I think they're looking at 85,000.

About how I said that I didn't see a future at one point, it's because I looked at it and I said farming's kind of on its own. It's not really, but if you look at farming as any other business in any other economy, if the demand isn't there, you scale back production, right? In farming, it's harder to scale back production when you have the investment in capital and what not.

If you have a combine that can cut down 1,000 acres of barley no problem and you're only growing 500, that's a bit of an issue. That's where information-sharing comes into it with farmers. Two farmers only need one combine, instead of a combine at every farm. Things like that can help with scaling back production. I'd rather not scale back production, though.

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

So should we as a federal government encourage and help this cooperative thing among farmers, machinery cooperatives, giving cheaper loans or even outright grants to help farmers to do cooperative things, to move down that road?

[Matthew Ramsay]

I don't think there's any other way. We need to break traditions and we need to start getting farmers to be collaborative in the way they work. We can still preserve that autonomy, but we need a higher level, armed with a little broader sight so that we can make better use of these resource flows because, as Trent said, we can no longer afford to have this machinery and this land sitting idle.

When you combine people, you create things that you couldn't have otherwise had, and that's where we're going, because we can list a number of examples where if a collaborative network was in place, we could do these certain initiatives. But an individual farmer doesn't have the capital and he doesn't have the economies of scale to achieve these things. We need to find that intersection between the individual and the collective. We need to make it scalable and responsive to the market, and right now we're just not quite there, I don't feel.

[The Chair, Conservative, Larry Miller]

Thank you.

Ms. Bonsant, five minutes.

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

You are the last group we are meeting with, and it is very interesting to see a bunch of young men so passionate about agriculture. I encourage you to continue the work that you are doing. It is true that, in Quebec, we made a social choice and we worked hard to keep supply management, but the government also made a choice about secondary and tertiary processing on dairy farms.

Mr. Gallant, you said earlier that there is a gap between producers, processors and buyers. If processors make money, you could make money too. They came to Quebec; they came to see the people who make cheese, raw milk, all those products. I do not want to tell you what you should do, but I think there would be great opportunities for those of you who are in dairy production. We ate cheese yesterday. It was good. Cheese does not taste the same across Canada because the types of cows are different, the temperature is not the same, and so on.

What do you think about getting financial assistance from the provincial government to allow you to have secondary and tertiary processing? Could that improve your income?

You can answer in English.

[Mathieu Gallant]

In the dairy industry, we have to knock on several doors to be able to carry out our activities; we are dealing with the environment, health care and the federation. At the same time, we must consult with community organizations and there are a lot of things to do. A young man of 25 may think he has a lot of experience, but when he shows up before such and such an organization, he is not necessarily taken seriously. It is true that they are looking for people to take the baton in agriculture, but not all young people are aware of what that takes.

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

I did not know it was like that here. I am very pleased to find that out.

Mr. Ramsay, you talked about a shortage of workers. Are you talking about a shortage of workers specialized in repairing trucks and tractors, or in agriculture?

[Matthew Ramsay]

I think what we're talking about is creating some professional roles that currently don't exist for the youth in these industries. Currently we have a lot of seasonal work and a lot of jobs that most students out of high school or even a year or two out of university wouldn't consider professional. I don't think anyone can deny there is a trend here that sees a lot of our youth leaving for other places.

If we could employ, if we could embrace this informational age.... We know the burdens of food safety; we know it's only going to get worse. As the world becomes more connected, more information is demanded from everyone. We have a generation who was born to intuitively use these technologies of communication and information-sharing. I think there's a huge opportunity to create a new role, a new information professional for the agricultural sector--and it's not even limited to that sector, but for this discussion we'll use it for that--who understands the information flows and the administrative burdens on a typical farming operation and who would be able to take that and probably do it in half of the time that most of our farmers can. I know from a personal perspective, my father will write something down four times, and he doesn't understand that by using a computer he can avoid doing all that. That's a small example, but it does demonstrate how much more well equipped our youth are to deal with these information dynamics. I think there is huge potential for us to create jobs in these collaborative structures we talk about.

Currently it's very hard to get an individual on a single farm and provide him with enough work to keep him going, but when you connect ten farmers, all of a sudden these opportunities emerge.

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

That is true.

I have another question. I understand what you are saying about the labour force, but do you have access to high-speed Internet everywhere here? Is the system well distributed or are you still working at a slow and dead speed?

[Wayne Easter, Liberal, Malpeque, PE]

It's always dead.

[Matthew Ramsay]

We're getting there.

[Voices]

Oh, oh!

[The Chair, Conservative, Larry Miller]

I know. I think there are still pockets across the country. I have a few in my riding. It's getting better, but it's slow.

Mr. Allen, for five minutes.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Mr. Chair.

My home is similarly equipped with a carrier pigeon. Everyone refuses to use a computer at my house because it's so slow.

I have a couple of questions for Matthew and Trent, and then for Mathieu at the end. When we start to talk about value-added change, it drives me half crazy, to be honest. As someone from the auto sector, I heard this for a long time. But let me give you my experience really quickly, as I only have five minutes.

The bottom of the value-added chain is the small guy who makes the bits, and he's the guy who gets run out of business at the end of the day. They go and find somebody else who wants to start by making the bits. The problem with agriculture is that you make a big bit. You make a bit that we're actually going to consume at some point, at the end of the day. But regarding the value added to agriculture, quite frankly, I wouldn't eat half of the stuff that's in the centre of the grocery store with value added to it. It's not healthy for me any more, especially at my age.

So I have difficulty with the terminology sometimes. I would ask folks to think about it, because you are not necessarily adding value to foodstuffs; the stuff you make is actually of the highest value we can possibly have. Whatever we add to it, somebody else marks it up and takes a couple more pennies for themselves. We just don't get money for you. So I'm not so sure I like the term. In fact, I know I don't like the term, and I would just ask folks to think about the terminology.

In Mathieu's case, he's talking about becoming a processor, not necessarily a primary producer—if he's talking about doing cheese. So I guess my question to Mathieu is, do you see compatibility between being a primary producer and a processor as well, or do you see a distinct difference between the two and think that you should choose? I ask this because in the dairy industry not all of you can be processors and farmers and producers. I'll go around shopping for cheese for the cheapest price and Allan may want to make it cheaper than you do, in which case you'll be running to the bottom again, and I don't think that's a good place to be.

[Mathieu Gallant]

With all the research that I've done, right now the way it stands—in P.E.I. anyways—you're either a producer or a processor. There's no advantage to being one or the other. One thing that's an issue is that in the pooled P-5 price, everybody pays the same thing for marketing, administration, accounting, and transportation. But say that I looked at doing some on-farm processing; I'd still have to pay the national transportation fee, even though I'm hauling my milk myself. It's just going back and forth. But no, there's really no....

I find there's a big line between the actual producer and the processor and that value-adding isn't a science; it's just something that you can do. You don't have to be a scientist to do it. If I can do it, anybody can. It's a way of encouraging more people to look at the different aspects, because you can pretty much double your income coming into that. But there's just no push for anybody to get in, because you are competing with Saputo, Agropur, and all the other large companies—though there is development now for niche markets as well.

[Malcolm Allen, NDP, Welland, ON]

To the other two, you talked about IT and information sharing, which I find fascinating. Young folks, think about it: I think you are actually hard-wired, when you're born, to be truthful. I know my kids are about your age, and I still use a pencil and a piece of paper. I probably write things down six times, like your dad does, and can't find the other five.

But how do you see that structure coming about? Because somebody's going to have to pay for it. Do those information technologists now become part of an agricultural department, provincially or federally, or do they work in a cooperative place? And who actually is going to fund that? Because someone is going to have to pay these folks, and they're going to want to be paid relatively well to attract them.

[Matthew Ramsay]

Exactly.

What currently happens is every food safety and administrative burden right now is being paid for by the farmer. We're looking at taking the total workload across, I'll say, a hypothetical network of farmers and creating a position in this that would address that total workload.

As I said, right now, on an individual farm there is just not enough work to employ a professional, and this is going to come back to total value. When I say “total value”, I don't mean it in terms of the margins that are being extracted on the retail end; I mean in terms of when you combine a group of people who are trustworthy and capable of working together there is more there than there currently is as they are as individuals.

The whole is greater than the sum of the parts, and when we start talking about information that's when we get into total value. When you start combining the information of several farmers, all of a sudden you see data sets that didn't currently exist. This is our total value, and this is also where we can create enough work for a young professional to satisfy himself. But really the money part of it is being paid for right now.

We're looking at it more as a reorganization of resources to create more homogenous positions and more fully rewarding positions instead of these fragmented little tidbits of seasonal work here and there. That's really what we're coming at it from, not of creating something new that we have to pay for.

[The Chair, Conservative, Larry Miller]

Thank you.

Now to Mr. Armstrong, five minutes.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

I want to thank you all for coming today and presenting. I found this session very refreshing; there were some new approaches and some out-of-the-box thinking.

I have several questions.

Matthew, I think if I were a farmer in P.E.I. I would join your network, because I'd be afraid to be left behind.

You've talked a lot about, as I refer to it, maximizing organizational capacity, and using that capacity to support all the people and maximize all the value in there. Just because of the nature of your out-of-the-box thinking, new products are probably something you're looking into quite heavily.

Have you done any research or background looking into green energy production on farms? Specifically, of course wind power is something P.E.I. has taken a lead on. The other one that's been prevalent in my riding, which is Colchester Country—we grow a lot of grass—is a possible venture into grass pellets. I know P.E.I. has dabbled in that as well.

Do you have any comments on that as something we can add to to develop more farm income and profitability?

[Matthew Ramsay]

Yes. In the discussions that we've had, renewables have been at the forefront. That comes back to this whole being greater than the sum of the parts. Certain things like wind energy and biodiesel production require a certain critical mass of capital before it's feasible. When we get into talking about reconciling the ecological with the economical, we need to look at the proper configurations, in terms of groups of farmers, that would support these things.

Actually, one of our main goals is to try to create a network that could support these renewable energies and to see these networks start being able to produce their own fuels, and fuel themselves. Because it has been done. The technology is there. We see it as something that we need to reorganize so that it becomes efficient and it makes sense. Right now to put up a huge V90 wind turbine on a single farm is not feasible. But you put ten farmers together and all of a sudden they're providing energy for themselves at a satisfiable economic burden, I would say.

If I can speak to that in any way, it would be that these networks are geared for exactly that type of thing, so that we can make the best use of all technologies and create scalable units so that we can match up the economical imperatives with the ecological ones and move forward that way. It's about creating flexibility and creating the capacity to actually make these things happen.