Agriculture Committee on May 13th, 2010

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

With out-of-the-box thinking like that, it's almost like going way back in the past to old farmers' cooperatives and working together that way. Sometimes the best ideas lie in the past anyway, and we just need to apply a modern technology to them.

In addition to that, there are other renewable energy sources. There are sugar beets and other things coming up that you can employ. Government has to be able to see outside the box and be able to support a system like that. From a federal government perspective, a nationwide perspective, what types of programs or supports could we put in place to support this maximizing capacity idea that you have?

[Matthew Ramsay]

As we approach it, the first thing we need to get is some collaborative trust between people. That doesn't have a dollar value associated with it. It's a grassroots type of thing.

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

You're asking the federal government to employ farmers to be trusting?

[Matthew Ramsay]

No, we're saying we're going to try to deliver on that. We realize we cannot stand back and let government throw something at us that may or may not work. We're looking to come at this from a grassroots perspective and build these networks of trust. Within that the need for capital funding is going to arise. Even to get these things, such as a shared storage space or anything like that, off the ground, there is absolutely going to be a need for federal support. I don't want to go throwing out specific solutions before we've done the groundwork and the due diligence. Once we get together and evaluate what the opportunities are, I think it will come in the form of our being able to say “This is what we want to do as a group. Can you guys help us out to get it kick-started?”

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

So a piece of the puzzle of attracting young farmers to the industry--and that's what we're talking about here today--would be having some sort of fund or grant available for innovative farm techniques or innovative organizational techniques?

[Matthew Ramsay]

Absolutely. Right now we're really hurting to try to get some funding in here just to get the research done, because we don't want to be making the mistake of overlooking something and 20 years down the road saying that was the wrong model. We want to make sure that a new model caters to the needs of all the stakeholders. From what we've seen so far, we think that's possible if we just approach it from a collaborative standpoint and quite frankly employ some transparency and be up front with people. It's been working for us so far.

So I guess at this point I wouldn't want to go specific on what exactly it is we need, but I know we're going to need funding in the way of getting these things off the ground. We even talked about stabilization funds among these networks. Something like that can always be kick-started with a little bit of funding to get the ball rolling. There are things like that, which we're already starting to identify, that will require funding, and we are going to be looking for federal support once we do our homework and make sure we have everyone on board. This has been described as being like trying to put a teepee together: we need everything to fall into place before we can actually call it something.

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

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Armstrong.

Mr. Easter, you have five minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Chair.

Thank you, folks, for coming and for the interesting presentations.

I'll start with the cattle producers first. Allan, we are doing a tour of the plant this afternoon, so the committee will get a chance to see some of the difficulty with the specified risk material removal and the plant operation.

Just with regard to the AgriStability reference margins, I want to be sure about what you're asking to hear. Last year there was in fact $900 million less than what I feel should have been triggered that was spent on safety nets. I'd rather see the money in farmers' hands than in those of the Department of Finance, to be honest with you. All that needed to be done was to change the viability test and the way the reference margins were calculated. It still would have been compatible with trade agreements. Is that basically what you're asking for with your Olympic averaging, changing it to say your best three years?

[Rinnie Bradley]

We feel that should be examined fairly closely to make sure more producers will qualify. As we've also mentioned, the calculation of the reference margin uses particular income and expenses that could be expanded as well.

I was speaking to our administrator of the program yesterday, and he said producers are just not participating, particularly because they felt the program had not lived up to expectations, particularly after BSE. I guess one of the other challenges with the program is there's no way of distinguishing one commodity from another. It's a whole-farm program. In P.E.I, many of our large beef operations are part of a potato operation, so when those beef operations suffered from significant losses due to BSE, they were still left with 51% of the total income or revenue on the farm, so they didn't qualify for any benefits from the AgriStability program.

[Wayne Easter, Liberal, Malpeque, PE]

What we get into is internal subsidization on multi-commodity farms, which we've got to find a way around.

Just on the—what did you call it, Matthew?—paradigm shift, I guess one of the difficulties is that no matter what we do on the farm, most of the efficiencies somebody else takes advantage of. Years ago, we had hog marketing boards and other marketing boards in place, which did give us market power. Supply management still does. But if we're more efficient, those efficiencies are passed on to somebody else and somebody takes advantage of our more efficient production.

I do like your whole idea of a collaborative approach. I think one of the best examples in the world, actually, is in Germany, where livestock operations have gotten together. They put liquid manure pits in all their operations. The liquid manure is picked up the same as a milk truck picks up milk, and it's trucked to a central depot. From that they produce hydroelectricity, there's water left over for irrigation, and some of the biomass goes back in the land as organic matter. That's what can be done.

Regardless of all the efficiencies that you can put in place through collaboration and other means, whether it's cheaper hydroelectricity through windmills and collaborating that way, how do we establish a balance of market power between primary producers and farmers and everything else they do and the industrial sector?

[Matthew Ramsay]

To start off with, efficiency isn't the only thing that.... Efficiency goes without saying. It implies something already in place for it to make sense--there's something at work and we're going to try to make it more efficient.

We're looking at actually creating something new. We're looking at an innovative business model. We don't think the answer lies solely in efficiency, just to clear that up.

[Wayne Easter, Liberal, Malpeque, PE]

I want to interrupt you for a second, because we're going to run out of time.

In terms of the proposal you're putting forward—and I like the thinking out of the box—what role can governments play, both federal and provincial, if any, or what role do you expect them to play?

[Matthew Ramsay]

As I said before, we're looking to take this and build it from the bottom up, because I think this has to start and end with farmers working together--a few men in a room and who knows where it will go from there. We're past that point. We know that we can bring farmers together. We know this. We have the primary data in hand.

Where government is going to come in for us is when we establish our networks, identify the primary areas that each sector of the network is going to be responsible for, and highlight some initiatives that we want to start implementing. That is when government is going to come in and hopefully provide us with funding. Not only that, if we do find a suitable, scalable, and sustainable model that will help to secure a future in agriculture, we're going to need the government to help promote and push it across.

We've already discussed this with the provincial government, but I think at some point if we can work together and find a model that can meet the demands of today's farmer, then the role of everyone will be to embrace it, and to try to play whatever part they can.

Again, I don't want to get into specifics, because it would just be pointless, but we're not asking you guys to solve the problem. We're just asking to meet us halfway. We plan on starting this at a grassroots level, and we hope that if we can demonstrate the value in it, we can continue to get that support.

[The Chair, Conservative, Larry Miller]

Thank you, Matthew.

Now I'll move to Mr. Shipley for five minutes.

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

Thanks a lot, folks, for coming out.

Actually, in the discussion this morning, Matthew and Mr. Gallant, you were talking about taking the processing, and moving on, how do we become profitable in the marketplace? How do we become part of that, if we take the risk and we become part of the benefits that come in taking us beyond, a price-taker in terms of our product?

Mr. Gallant, I want to talk about a couple of things. One is what you mentioned about moving on in terms of value added to primary production. I'd also like to hear your comment about your place and how you see that succession plan working. Is there much planning, quite honestly, in farm families in terms of moving that from one generation to the next?

Secondly, you've touched on something that was talked about in New Brunswick. This was set up under a dairy management group. It talked more about the production management, building a competence within a group of seven or nine producers, or whatever it was. They were given an A or a B, or a 1, 2, or 3, and no names were attached. They've actually built that competence and shared information based on that competence—now they know who A is and who B is—to become more aggressive in their efficiencies.

Also there is your part, and their part also, about what to do now in terms of going beyond just the efficiency part of it. This is the most exciting part, because when I was actively farming, I was in dairy and in the open market, and we basically, at the start, grew crops for food. That's what we did. Now—and this is what you're talking about—we grow crops for food, for industry, for nutraceuticals, and maybe for the pharmacy. I don't know what all we'll grow crops for, but it still comes back to we still have that product for food. That's where you're taking us. That's where we need to bring together those thoughts in some sort of innovation funding with the research to help.

Is that the area? Are we hearing it right from you?

[Matthew Ramsay]

Again, we come to you not with any specific answers. We're still asking these questions.

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

So as a framework.

[Matthew Ramsay]

Yes, and I think what we're looking to do is establish a framework that is reflective of the total field, which is the ecological and the economical, and basically the issues that we've gotten from the farmers we've spoken to, which are echoed across the country. I think it would be foolish to just start implementing things before we did a little more research. So I think this is about dollars and innovation and trying to secure a model that works before we start building castles.

[A voice]

Baby steps.

[Matthew Ramsay]

Yes.

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

Does that have to be regional? How do you see this? Would it be national, which would actually become regional?

I'll give you an example. We had a presidents' council that was actually about promotion of agriculture, promotion of agricultural products.

Federally, we can do some things. We have great Canadian food, and it's nutritious; everyone should buy it. When you come down to the regional level, you say, well, you should buy P.E.I. potatoes. Locally, the organizations say this is what we produce locally in our markets.

So how do you see this?

[Matthew Ramsay]

I see it as regional and I see it as a bottom-up approach, because I think this collaborative trust can only be built by starting with a few farmers, and then when those few farmers see the added value they've created by cooperating and making use of these idle resources, that will start a bit of a chain reaction.

I don't think we can come to people with some sort of preordained framework and say “Here, you follow this, and you guys follow this.” I think we need pilot projects. We really need to start it and validate it in action.

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

So do you see it, then, coming locally and with your regionals or your provinces? You'd say, “This really worked in P.E.I. and New Brunswick”, and then go to the national level and say, “How do we get this innovation funding?”

[Matthew Ramsay]

Yes, and that's why we try to keep it as an abstract framework for agriculture. We don't want to tie it into specific geography. We want to look at the total field, the demands that are on farmers, the issues they face, and also reconcile that with the global economy. This is a huge thing we tend to underestimate.

Food safety is arguably tied to global trends and information demands, and this is only going to get worse. A new framework needs to be sensitive to those things as well. It needs to be holistic. But to answer your question, this is going to be something that starts from the ground up where government is going to meet us in the middle and help us out with what we find we're going to need, because it is a very iterative and adaptive process. I can't tell you where this is going to be in a month, but I know it's going to be somewhere, based on the momentum we have so far.

To answer your question, it's definitely more a regional thing than something that would be outlined on a national level.