Agriculture Committee on March 1st, 2011

[Ted Zettel]

As a taxpayer, I'd probably be disappointed if the government ended up being responsible for that. Let's face it: when we consider the ones that are already out there, the ones that have been used by innocent farmers for 15 years, we're not going to go back and make them responsible for that loss.

However, we have the future to think about. If there's a new product on the horizon that's going to multiply this problem, we can stop it. That's the first and most sensible thing to do.

In addition, I think that the provider of the seed has to be partially responsible at some point, along with the person who buys the seed and grows it. They'll take precautions against that kind of economic impact on their neighbours if there's a possibility that they'll be held responsible, but we need regulatory changes to put that in place.

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

Mr. Phillips, earlier you mentioned private investors. I have trouble imagining who would invest in seeds, other than Monsanto or Cargill, because I don't think there are many people with the wherewithal to develop certain seeds and get them approved.

There are a few organic companies in my riding that offer environmentally friendly products, but they do not have $100,000, $150,000 or $200,000 to get those products approved. Are you not concerned that, in the long term, too much private investment will lead to monopolies or one company with a monopoly over all the seeds, to the detriment of those who do not want to be forced to buy those same seeds?

[Dr. Peter W.B. Phillips]

Let me make two observations.

To the first question of whether there is private capital coming in, other than through the large multinationals, the short answer is yes. Most of the crops that are produced in Canada are subject to check-offs. Those check-offs are becoming quite a lucrative cash flow. For example, the pulse growers in Saskatchewan have done a five- to seven-year deal with the Crop Development Centre that's worth $10 million or $15 million. They have substantial capital, and have had for a long period of time in various crops, to direct research. In many cases they're not the majority of the money, but their money is very influential, because wherever they put it gives the multinationals a sense of where there might be a better market opportunity.

Your second question was the concern about a monopoly. Yes, that is a major concern when we lock into very high regulatory cost systems. The only people who can get through are multinationals. This happens in the drug industry. It happens in the agrifood industry and in the financial industry.

For all the best reasons, we erect barriers to entry, and then the only people who can get through are the wealthy. The response to that in many countries around the world is to ensure that we have a very effective elite germplasm line. These companies aren't producing elite germplasm in most cases, except in corn. The rest of the industry is adding technology on top of what's publicly available, so as long as you keep an elite germplasm line operating and effective, it means that any new entrant can come along and contest that market.

The good news is in the crop that we as Canadians put forward into the GM technology world: canola.

We do have competition. We have three major multinationals duking it out. They're not extracting the rents, the profits, that many of them thought they might, because they have to compete against each other. They're certainly getting a good profit, but they're leaving a fair chunk in the hands of producers and they're leaving a fair chunk in the hands of world consumers.

Monopoly is a critical issue, and in certain product categories there is a virtual monopoly by certain companies. The challenge is to create a system that attracts more than one large enterprise or that allows these producer-financed commodity groups to drive the research agenda so that even if there's a monopoly rent, there's a good chunk of it left in the hands of producers.

[The Chair, Conservative, Larry Miller]

Your time is up, Ms. Bonsant. Sorry.

Mr. Shipley, you have five minutes.

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

Thank you, Mr. Chairman.

I have a quick question. Actually, it's a request to Mr. Zettel.

In describing your principle 1, you indicated that organics have a lower carbon footprint and use less energy. I'm not sure what that's compared to. Would you please send us, as a committee, the research and the documentation for that statement?

[Ted Zettel]

Yes, absolutely.

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

Great. Thank you.

Steve, the company that you have is an intriguing industry. We haven't really talked much about it, other than through your presentation, so help me a little bit. You're talking about being able to grow new products. Farmers would be able to grow crops that would be used to produce energy, but they would not take away crops that are grown for food--for example, canola and soybeans--to be used for energy.

Am I somewhere on the right track?

[Dr. Steve Fabijanski]

You're exactly on the right track.

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

Would it not take out the same land that our soybeans and canola are grown on?

[Dr. Steve Fabijanski]

No. In the land categories across Canada, there are significant acreages that are considered to be category 3 or category 4 lands. Under typical climate conditions, you would not be able to raise any food crop there at a profit. Your inputs would be too high, your water requirements would be too high, and your fertilizer requirements would be too high.

That has actually driven the renewable carbon industry, if you will, to identify plants that are able to grow on marginal land with a lower input cost: lower water, lower fertilizer, and lower inputs from a weed control or pest control side. Inherently, these plants would be more resistant to insects and disease and better able to make use of the existing nutrients in the ground so that you don't have to add conventional fertilizer.

That is the way it needs to go for renewable energy. It is absolutely wrong to be diverting any food production into energy production to power our vehicles. Biotechnology offers not only a convenient but also a worthwhile solution to that challenge by being able to create and engineer a crop that requires less overall energy to process and to convert into liquid fuels for transportation.

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

Obviously, it would seem to me, with all the benefits that are coming from that.... You're talking about lower soil requirements and lower fertilizer requirements on a less productive soil. Is it a GMO?

[Dr. Steve Fabijanski]

The initial product will not be GMO, but in order to achieve the parity against petroleum, you will have to have it genetically modified to ensure that you can get the full opportunity for that crop to be able to produce oil.

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

Help me on where the research is on this, Steve, and then where we are--or where you are, I guess--in terms of taking the research that has been done. Where are you in terms of the development and the demonstration, and moving forward with it? Is there concern about the length of time it's going to take to actually get agriculture...?

I think somebody was saying in one of the presentations here that this part of the biotechnology industry is well known. I'm suggesting that actually what biotechnology is all about isn't very well known by Canadians or by the general consumer out there. We tend to focus on the issues that we've talked about here every meeting, it seems, but we're missing an opportunity that your company has in terms of moving ahead with a product that can grow on land that most likely has not been used for productive agriculture.

[Dr. Steve Fabijanski]

I'll try to get back to the beginning of that question.

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

Yes. I'm sorry about that.

[Dr. Steve Fabijanski]

In terms of where we're at on development, we will be launching our first product in 2012. It will not be genetically modified. Our genetically modified product will be in 2014.

In terms of grower demands and farmers' awareness of this, the Saskatchewan Mustard Development Commission has suggested to us that their initial take on this would be that they would like to buy seed to plant a minimum of 150,000 acres to start. They recognize that this is a huge opportunity for them, because they are saddled with the challenge of being in the drier areas and the poorer soil types that are used to grow mustards and not the canola types, and they need income diversification.

There's been quite a bit of recent survey work done across North America, and it suggests that up to 75% of the growers are looking for alternative crops for income diversification, income security, and being able to build new markets.

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

I think that in the area in Ontario where I come from, it may not be as much. We don't have much of that marginal land in the southwestern part of Ontario, but I can tell you that to the north, there would appear to me to be a lot of opportunities for agriculture.

Can you also talk about where this relates to...? I think you mentioned being carbon neutral. Where would that be in terms of other products or other options that are out there?

[Dr. Steve Fabijanski]

Well, plants take carbon from the atmosphere--greenhouse gases--and convert that carbon into hydrocarbons that we can use. That's why it becomes carbon neutral; we are actually not taking any fossil fuels from the ground and converting them to that.

What you're looking at is producing as much usable hydrocarbons on an acre of land with minimal costs and minimal amount of environmental footprint. By being able to reduce fertilizer requirements, reduce water use, reduce equipment time--with fewer passes in the field with the tractor, you're able to save on fuels--you're really looking at some significant benefits in terms of overall greenhouse gas savings.

As part of the SDTC funding that we have, we are actually quantifying that sustainability index. All governments are now looking at renewable fuels as having to have a life cycle analysis that demonstrates that indeed they provide a greenhouse gas benefit. I can tell you right now that corn ethanol does not, whereas an oil-based crop, such as biodiesel, does actually have the greenhouse gas benefits to allow it to claim that.

[The Chair, Conservative, Larry Miller]

You're out of time.

I'll move to Mr. Eyking for the last five minutes.

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

Thank you, Mr. Chair, and I thank the guests for coming today.

In The Globe and Mail today there's a whole issue on hunger. It seems that when you read all the different articles now, economics is second and food is first--how we're going to produce food, and how much we should produce. When you look at the whole science part of it, as MPs we're on an agriculture committee thinking about farmers and food production, but we also represent the constituents out there, and they're very concerned about food.

I think we have a problem with consumers getting a mixed message. The underdeveloped countries are only worried about starvation. Our constituents are more worried about food safety. I find the problem, no matter how much work we do here, which you say is science-based, is that we get these findings out of Europe. I don't know how true they are, and some of you can comment on that. They're giving GMO foods to mice, and this is happening. All this stuff is going on. We can laugh about it and shrug it off, but decision-making is sometimes not based on practicality and logic; it's based on emotion. The decision-making that happened in Europe was mostly emotional, but they made those decisions.

I'd like to have some comments on the so-called science that's out there and being portrayed. We try to steer away from the GMO topic, but it's the elephant in the room all the time. If we don't deal with it properly, it's going to hinder all the other things we're doing, so I'd like to have some comments about those studies that are coming forth in Europe, and the monster food, the GMOs. What can we tell our constituents about that part of it?

[Ted Zettel]

One of the things you have to conclude, as any rational person should, is that the science is mixed. If you had enough money, scientists could probably come up with whatever conclusion you were after, especially in the life sciences in the fields of biology, where we don't fully understand the mechanisms at work. Biology, ecology, and the health of people, animals, plants, and agricultural systems are very complex, and our understanding of them is in its infancy. That's a statement that good scientists around the world would agree with.

If we take that as a working hypothesis, what is the best and most sensible response? It is the precautionary principle that your colleague has alluded to. If we don't need something, stay away from it. If we really need it, as we do in the case of producing biofuels on marginal land, go for it. That is what I would tell your constituents if they asked me that question.

[The Chair, Conservative, Larry Miller]

Go ahead, Mr. Phillips.

[Dr. Peter W.B. Phillips]

You've asked the big question of the 21st century. How do you normalize science? How do you take all these different ideas and come to some conclusion?

There are a lot of processes. There isn't as much diversity in the scientific world as you might think. There's a strong central tendency to believe that so far, the technology as it is used has not generated differential risk in our food system. Remember, our food system isn't risk-free now. Most of the things that kill us have nothing to do with biotech.

That seems to be the norm, but the basic question that I think you're getting at is where you, as members of Parliament and the federal government, can play a role in normalizing and assisting us to understand this profusion of knowledge.

I'd make two points: one, I don't think you want to chase after every story in the newspaper, because the science is moving in fits and starts. Seldom is one new article going to change the general opinion on what science is about.

The second point is that I think the bureaucracy itself has a lot of capacity, but for the better part of 15 years it has not been part of normalizing the science in any substantive way. In the early days of biotech, Canada was very aggressive at the OECD. We normalized a lot of the science through consensus documents. We brought all that knowledge into a common platform so that people understood what it was about. I think we've devolved that responsibility to others. If we're going to be a player in the 21st century, we have to take some of that responsibility back in Canada.

[The Chair, Conservative, Larry Miller]

Thank you very much.

We are out of time. I'd like to thank all of our witnesses for being here today and for participating in this discussion. At some point we'll be putting out a report on the biotech industry, and it will be available. Thanks again.

The meeting is adjourned until Thursday.