Agriculture Committee on Nov. 23rd, 2010

[William Van Tassel]

It might be a very difficult question to answer, but you could look at it differently. In looking at the grains sector, if you go back a few years--three or four years--it wasn't that profitable. But it came up. If you look at the hog sector, there were different reasons the prices stayed low. You talked about the H1N1 and every problem possible; maybe there should be a study of each one.

Farms usually go from generation to generation, so I think there should be something much longer term than the three or four years.

You may also have to look at the regional economy. What does a farm bring to your rural economy? I think it makes much more return than what it costs the government, to start with, anyway.

[Randy Hoback, Conservative, Prince Albert, SK]

To quickly comment on the three years to five years, I agree with you. But unfortunately we have these things called WTO rules that limit us in the timeframes we can use for averages.

I know crop insurance uses a 10-year average. You throw the high and the low out in Saskatchewan, and in some ways that would make a lot more sense, as you said. But unfortunately we don't have that luxury. We have to live within the world rules we play in, so that's why we're forced to do it the way we are.

Am I done?

[The Chair, Conservative, Larry Miller]

[Inaudible--Editor]...Mr. Hoback.

I understand Mr. Easter and Mr. Eyking are splitting a round.

[Wayne Easter, Liberal, Malpeque, PE]

I want to come back to Curtiss.

Overall, on this whole discussion, one of the things that has me concerned is how we stack up against the rest of the world. Are we, as a country, going to support our producers equivalent to other producer support in the world, or are we not? Otherwise, we're going to fall behind.

I come back to the bare land value and your comments, Curtiss. As I understand it--and I have several Farm Credit Corporation cases myself right now--you could have an operation or land values at $400,000 and Farm Credit will not restructure with the current operator. They'd rather take the chance on selling that out, even if you can get financing to purchase that operation at the bare land value.

I find Farm Credit is more interested in putting people on the market than they are in keeping them on the farm. It's a huge problem.

You said, in your case, that you're in the top 5% of producers. You're an efficient operation. You have market problems, etc., that put you where you are, and the other things you mentioned.

Is Farm Credit of assistance in keeping guys on the land, or are they not, in terms of that kind of proposal?

[Curtiss G. Littlejohn]

That's a multi-part question, Wayne, but I'll tell you what I hear in the countryside.

There is a struggle with where Farm Credit's policy has been in the past. In talking with accountants and lawyers--producers call me all the time, and I'm the local rep--15 or 20 years ago, Farm Credit had a policy of finding the market value and then finding the quickest way to resolve at that value. They would do many things to make that happen. They would use trailer mortgages. They would use debt set-aside or plain debt writedown. They were in the business of trying to fund agriculture, and at the end of the day, if they sold it to the neighbour for $1, why wouldn't they move it back to the farmer for $1?

From what I'm being told there seems to have been a policy change at FCC. They will move so far, but then they're going to test the market. From research I have seen, I do know that every time they've tested the market in the last nine months it pretty much comes back at land value. With the gentleman we talked about earlier, if he and his church can raise the money to buy that farm back, or offer Farm Credit what they will probably get in the marketplace, it would seem like a reasonable business proposition to take that: reduce your costs and move on.

Having said that, there will come a point when the market needs to be tested; I don't know if that's every other week or every other month or once every six months. But we know in our business today, the hog business, that grain prices are going up and hog prices are not keeping up with that. Producers, at least in the next four or five months, are going to struggle to keep going.

I guess I'll leave that there.

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

I'm not going to talk about the programs. I think it was mentioned enough today that we need more fairness and more efficiency in the programs out there.

I'd like to talk a little more about getting more for your product. I have two quick questions.

You mentioned the George Westons and the Maple Leafs of the world and whether they should have a share in farms, a minority share, so that they make sure that they're profitable and pay the right price. It's debatable how that would work.

Mr. Bailey, on supply management and a marketing board for apples, to me, it's almost at the point where most of the apples are consumed. I know we export some. Would it work having a marketing board for apples—let's start with apples—in Canada?

[Roger Bailey]

Well, that's certainly on the table right now within the organizations. As a representative of the tree fruit organization, I would say yes. As a long-term strategy for the country, I don't know. It is pretty scary to be that far out of the world market if you're trading in the world market. I would prefer to see the government take agriculture seriously when they're talking about trade agreements.

In Canada, we only grow half enough apples. We only supply 50% of our Canadian consumption. So the decision has to be made. Is it a food security issue? There are farmers who would prefer to be under a marketing type of scheme, one way or another, than go out of business. In that sense, it certainly could be a good thing.

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

I'm not saying that we shouldn't import apples.

[Roger Bailey]

No, far be it from anybody to say that. We don't supply anywhere near enough.

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

I'm afraid that you'll come back here in 10 years' time and we'll only have one-quarter of the apples supplied in Canada. And the things that you said should have been changed on imports and regulations didn't happen. You wonder if maybe now is the time to stop the bleeding and have some sort of control of this situation.

[Roger Bailey]

Well, a lot of the tools are in place. Regardless of whether there's a marketing board, a lot of the tools are in place to stop the dumping. You've made the agreements. We just don't have a mechanism there, such as AgriStability. It's $300,000 to get an anti-dump in place that won't be in place until after the season is over. Those are the issues. The government has policies in place to help us with that; they're just not timely. The ship is too big. There needs to be a mechanism put in place to say, “Okay, it's a no-brainer. Washington State has a massive crop this year. There is going to be dumping. Therefore, we're going to be proactively putting an anti-dump in place.”

I don't remember what year, but when I was involved in the industry before, the industry went ahead to try to get an anti-dump, and even though the Americans didn't counter it, we weren't give it. If that's the level of support we're getting from our government, with tools they've already put in place, then the rest of this stuff is redundant.

[The Chair, Conservative, Larry Miller]

What year was that?

[Roger Bailey]

It's going back a ways now. I don't think I'll pick off the year, because I wasn't personally involved in that, but it was half a dozen years or so ago. And the same thing could happen any year. Our industry has just said that we're not wasting the money trying, because even if we win, the government won't go with it.

[The Chair, Conservative, Larry Miller]

Okay. Thank you.

Mr. Storseth, you have five minutes.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Thank you very much, Mr. Chair.

Thank you, gentlemen, for coming today.

Stuart, you're from my neck of the country. You're a young farmer getting into it. I'd like to ask you some questions.

First of all, we all have complaints about any kind of banking industry, but at the end of the day, Farm Credit Canada has been very positive in my area. Without them, we wouldn't have a lot of the farms we do. What's your general opinion of Farm Credit and the role they play?

[Stuart Person]

Well, they play an important part for the agriculture industry. They are way more flexible than the big banks, right? The programs they have in place are structured such that it does make it affordable for a young farmer like me, for example, to maybe purchase my father's operation and buy him out over time and then expand. However, they still have rules to follow, and they have gone down that road in recent years where they're getting a little tighter. They're probably accountable to somebody down here. If they have too many losses, somebody starts to raise the flag.

It is probably good for them to have checks and balances in play, but at the same time, their checks and balances are probably working as well as AgriStability in certain areas. It just doesn't quite work.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

When it comes to responsiveness, that's something we hear all the time. I agree, these programs need to be more responsive than they traditionally have been. When it comes to agricultural recovery in northeast Alberta, and all of Alberta, when we had the drought it took almost a year to get ag recovery money, which was far more responsive than we've seen in the past. I was led to believe by the producers in southern Alberta whom I've talked to, and some in the Yorkton area, that it was a lot quicker when it came to the floor relief money this time. Would you say the ag recovery program has become more responsive, or is it responsive enough at this point?

[Stuart Person]

It was very responsive this spring. I'm not sure $30 an acre was the right number.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

And arguably we'll never find the number that everybody is going to agree on.

[Stuart Person]

Ultimately, for the producers who are properly insured under crop insurance and AgriStability, it was more or less an advance.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

That's my next question for you.

When it comes to all these programs--and all you can really answer for is your sector of the industry--what's more important to you, a real insurance program that's bankable, dependable, and based on premiums, or continuing to try to adjust the AgriStability program and the margin-based programs, whatever you call them?

[Stuart Person]

I think that's the same question. If you put the right programs in place, you will have an insurance policy in place. For me to make the kind of investment I need to make to be a sustainable farmer, I don't have the appetite for that risk level. My friends who are doing it are doing it because their dads are just handing it over, saying here's my $7 million farm, I only need $40,000 a year to live, enjoy. It's pretty easy if that's the case, right?

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

How much time do I have, Mr. Chair?

[The Chair, Conservative, Larry Miller]

A minute and a half.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Would you rather see a premium-based program, where farmers can pick and choose how much...? For example, some of my guys...one guy does 4,000 acres. He wants to be able to insure this much on this and make that decision himself...or this margin-based program, which the government dictates a lot of. Just quickly, because I have another question, where would you rather that be, or is it both?