Agriculture Committee on March 1st, 2011

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thanks very much, Chair.

Mr. Zettel, I'm really enjoying your comments this morning. We've had a number of committee meetings on studying the biotechnology sector, and usually the conversation seems to gravitate towards the argument of GM versus organic. I think for almost every meeting we've had a nice balance. We've had an organic presence and we've had a non-organic or pro-GM presence. It's been good to have the discussion.

I've detected in some of the conversations we've had before with some of the more organic-oriented people who came before committee that they felt very threatened just by the existence of the GM crops, but what I'm reading here, and what I'm hearing you say, actually, in addition to what you delivered in terms of testimony to the committee, is that you're talking about a respectful existence of both farming systems and about measures that can be put in place to ensure that there is a respectful coexistence. I like that, because I think it better matches reality, reality being that it's very hard to put a moratorium on all GM. It's also very hard to say, on the other hand, that we should go full steam ahead on everything GM. Instead, we're going to have to find compromises here, and we want to make sure that policies that are put in place do foster this respectful coexistence, which is what I would call it.

We had the soybean growers in front of us. Within that product, that commodity, there are GM and non-GM soybean growers, and they seem to coexist. The question I asked was whether those farmers are getting along or whether they're at odds and at each others' throats about some of the issues that are being discussed. There's contamination and everything else. The response we got was that they seem to be coexisting, that there's mutual respect, and that they want to take appropriate measures.

I'm just wondering if you could expand on that a bit, because I found it encouraging and refreshing. I'm wondering if you can perhaps tell the committee what kinds of measures you would envision that would allow for this respectful coexistence.

[Ted Zettel]

Absolutely. Just to repeat, that is our goal, respectful coexistence, because we're a minority group within the farming community. Most of our neighbours are conventional farmers. Many of them are growers of genetically modified crops, so we have to find a way to work together.

Every crop is different. Soybeans are not a big problem. There's not a lot of drift between the GMO soybeans, and we can grow organic soybeans in the same area. The same with corn. You get a couple of fields in between or a bush in between and you're okay. Alfalfa is an entirely different story. That's where we have to make that distinction.

What can we do from a policy level? I think the fundamental thing to look at is a shift in the onus of keeping these products pure, a shift away from where it's always been traditionally, which is on the side of the organic farmer, and put some responsibility on the people who introduce the contaminating crop. Right now there's no such thing. There's nothing. As soon as the product is licensed, a new GE species, you can take it out and grow it anywhere. If it goes across your fence and contaminates your organic farmer's crop, which he's been growing and selling for 20 years, and now he can't sell it, you're free from any liability.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

If I could interrupt for a second, do you see the liability being more at a personal level, meaning one farm has an issue with another farm, or do you see it more at an organizational level, where you might have one sector or organization providing that kind of support or protection or compensation that you were talking about?

[Ted Zettel]

I'm not a litigation lawyer, but I know that liability tends to work its way up. It starts off at the individual level and works its way up to the supplier of the product and so on. There would eventually be a level of responsibility for the company that provides the product as well as for the individual farmer who uses the product.

In a dialogue as to how to keep these things separate, we could develop ways whereby there's a sharing of the responsibility that I think would be workable, but we need to establish the principle that both parties are responsible.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Let me ask one last question in the few seconds I have left.

Steve, because we have a lot of discussion about GM, could you move back to the biotechnology view of things and give the committee some concrete examples of biotechnology--not necessarily GM--in which these biotechnology advances are helping farmers and helping consumers?

[Dr. Steve Fabijanski]

I appreciate the opportunity to say that.

I think that for biotech, in terms of things like tissue culture, all canola varieties that are currently being grown--whether they are organic, GE, or conventional--were derived from a biotechnology process called anther culture, which makes them genetically pure individuals. Every variety goes through that. It's the same with wheat. The development of wheat came from the prairie regional laboratories; McKenzie wheat and other types of wheat have come through these tissue culture processes. These are processes that allow one to essentially modify the genetics of an organism through conventional techniques and essentially clone or develop unique and genetically pure varieties, which are desired by industry in order to deliver not only the uniform performance that growers need in order to schedule their production but also to provide very uniform yield at the end in terms of quality and overall consistency.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

And that might be non-GMO as well, right?

[Dr. Steve Fabijanski]

Exactly; they'll be non-GMO or conventional. They all go through that same biotechnology process, which is a laboratory process for producing them.

[The Chair, Conservative, Larry Miller]

Thanks, Mr. Lemieux.

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

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, witnesses. Those were good presentations, and we heard lots of different opinions.

I have one simple question to start with. Where is this huge demand in Canada coming from for GM alfalfa? Peter, can you answer?

[Dr. Peter W.B. Phillips]

No, I'm not an alfalfa guy. Maybe I can address that a little more deeply, though.

This is the question of how an innovation enters a marketplace. In the absence of a market access, you never you know what demand will be. I did some work on GM wheat, and we had estimates in the public domain of 0% to 100%. When we did the survey in Canada and the United States, we found 30% to 40% would take it up in the first year, but in very small amounts, just to test it, as they did with canola back in the 1990s.

[Wayne Easter, Liberal, Malpeque, PE]

Ted, do you know of anyone demanding it in Canada?

[Ted Zettel]

Among the farmers, no, I don't.

[Dr. Steve Fabijanski]

I'm not familiar with the alfalfa market, so I can't comment.

[Wayne Easter, Liberal, Malpeque, PE]

I went through the rBGH fight--in fact, I led it--whenever it was, in the late 1990s. We heard the same thing you said, Steve--that investment would dry up if we dared ban it. I remember Monsanto sitting in the room and the lobbyist phone calls and MPs being taken out for meals. My God, there was going to be a huge disaster. Has Canada been hurt because we didn't have rBGH? I don't think so.

In fact, I believe Walmart right now is saying they don't want milk produced with rBGH in their stores. I maintain that there are good GMOs and bad GMOs. I think we, as the public, have to err on the side of caution. With everything I'm hearing on alfalfa in particular, I think we have to err on the side of caution. I guess it's a question of how you find that balance and how you establish the regulatory system to weed out the good from the bad.

Peter, do you want to answer just one other question on that area? I know from the rBGH fight that trying to get information out of Health Canada was like pulling hens' teeth. In fact, they were on the side of Monsanto. You couldn't get information from them. How do we, in our position, set up a system in which you get public independent research that isn't from the company doing its own and promoting its own self-interest, but is research that has no axes to grind and no favours to make?

[Dr. Peter W.B. Phillips]

I have two quick points. First, regarding the order, CBAC actually gave you the answer on that. We need more transparency. Canada publishes virtually nothing when we review things. In the United States, they put most of it in the federal registry, so there is a process. It's just that somehow justice has got us tied up so that everything the firms produce is now deemed to be commercially confidential. Many of the firms say they'd rather have the regulator release it. If they release it, it looks as though it's not the same stuff. It's that question of providence.

Let me go back to the first question, which was about how we know what the government should do around these new releases. You'll remember that I said you could lead, follow, or get out of the way; well, one way of leading is a moratorium, but that has significant effects, and you have to know you are right: if you make a mistake, the government is going to be held responsible for stalling a technology that might have been valuable.

A second model is to follow. The introduction of canola is a good example of that. The canola industry worked with the proponents and the new technology. They worked with the grain commission. They worked with the scientists at Agriculture Canada and NRC. They went out and positioned it in an identity-preserved system that contained it until they had regulatory approval in Japan, which was their key foreign market at that point. That's the second model: follow.

The third one is get out of the way. I'd argue that's what happened in wheat. The federal government didn't really say anything about wheat. They were just mum. It was the producers, 206 NGOs, the Wheat Board, and a whole bunch of others who said, “Look,”--as they might do in the alfalfa case--“we don't want that technology at this point in our marketplace”.

So you have stages of options. It's not moratorium or nothing. If there is a will, there is a way of managing the safe introduction or the rejection of a technology through the marketplace.

[The Chair, Conservative, Larry Miller]

Your time has expired, Wayne.

Be very brief, Ted. They're out of time.

[Ted Zettel]

Just to comment on the rBGH dispute, I also was involved in that back in the late 1970s. I was at a meeting two weeks ago here in Ottawa with heads of Health Canada, the Dairy Farmers of Canada, and the organic sector. I can safely say there's nobody in the dairy industry in Canada who isn't overjoyed that we dodged that bullet. That's hindsight now, but we're glad we don't have that. It was a disaster for the U.S. dairy industry.

[The Chair, Conservative, Larry Miller]

Okay, thank you.

Mr. Hoback, you have five minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Mr. Chair.

Mr. Chair, actually this is really interesting. This morning I had a clipping come across my desk. The EU is now going to accept a 0.1% low-level presence in feed grains, so we're already starting to see the results of our committee work in talking about low-level presence. I really want to commend the minister and the staff for working with the EU to get a low-level presence that's actually going to help our guys out.

I want to go back to the biotechnology study. We get into conflict over GMOs, and I find that really frustrating, because GMOs are just one finger in the spoke. I understand there are issues around certain crops such as alfalfa, or whatever, and everything else, but in the biotech sector--and I think everybody needs to understand this--there's the regulatory approval process they have to go through, and then there's the registration process through which the variety gets registered and actually gets grown.

I find it interesting. The alfalfa might go through the regulatory process, but then it will have to go through the varietal registration process. That's when everything will come out in terms of market acceptance, what varieties will be acceptable, and that whole end of it. That's where we'll see the debate that we saw in wheat when we decided not to go down the course of GMO wheat.

I don't want everybody to get out of control, saying that just because alfalfa has been approved through the regulatory process, it's going to be planted next week somewhere in Canada. If they grow it in the U.S., we can't control that. The U.S. will do what the U.S. does. That's the way it is, so we'll go from there.

One thing I want to look at is that I think the biotech sector offers a lot of answers to the GMO type of crop breeding. There are other types of breeding using genetics or genomics, and we can go there. What do we do to encourage these types of breedings in these types of sectors to grow?

Steve, you talked about raising capital and flow-through shares. Do you have any other ideas about what we could do to help your sector grow? We need that sector to grow. What are the barriers limiting your growth right now?

[Dr. Steve Fabijanski]

For us, the barriers limiting our growth are really in two areas. One is how long it will take me to get to the point where I can actually bring a product to market and understand if the market is going to accept it. Respectfully, I would say that suggesting we should put a moratorium on certain products because we're not sure about them doesn't help, because it really does give uncertainty. The uncertainty discourages private investment.

The other thing we have to look at to make the sector grow is getting people to become aware of the fact that agriculture is not only about food. It's about the environment. It's about developing new opportunities. It's about land stewardship. It's about a lot of things that the general public and probably even a lot of general members of government don't appreciate in terms of what agriculture can bring to the table, and that's the sort of policy we need to encourage so that it cuts across. It's actually far more than just farming. It's an economic engine, and it's an economic engine that needs to be fuelled and speeded up so that it can create more value.

[Randy Hoback, Conservative, Prince Albert, SK]

I know you talked about the regulatory side of things being an issue. There are new technologies that have come into the system compared with what we had even five years ago or two years ago. Is the regulatory system fluid enough and advancing quickly enough to keep up with the new technologies and to allow us to speed up the process while doing so in a safe manner?

Peter, could you comment on that?

[Dr. Peter W.B. Phillips]

In some places, yes, it is; in many places, no, it's not.

It's not that the regulators aren't capable of doing the technical assessment. In many cases, it's that the legal authorities for them to be able to make a judgment are delayed. They're in the pipeline; they're just not fully articulated. There's a gap in the regulatory system, and you can't point to any one thing and say, “If you could just fix that one thing, the system would work”. What you're hearing from companies is that they have a vague idea that the system is improving, but there are some gaps there, and that's a hard sell when you go to the private capital markets to raise funds for the commercialization process, which is where a lot of the costs will be.

You asked how we can accelerate innovation. Let's look at the federal side. You spend a lot of money, but you don't always spend it very well. You spend it in short bursts, and you often end up putting it in interesting places, but it doesn't necessarily go to the high-impact places. I think if you had some discussion with the Genome Canada world, which is working with Agriculture and Agri-Food and the environmental file, you'd find that they've put virtually nothing in the last five years into any major crop area: there was nothing in pulses, nothing in canola. Canola's wrapped up. There was nothing in wheat and virtually nothing in the livestock area. You have a lot of good science, but it's not connected to the needs of the industry today.

Then there is the IP question. The federal government owns a lot of intellectual property. Don't kid yourself: you may be a public-good institution, but you have a lot of private intellectual property, and it's hard to get it leveraged out in some cases. Federal policies are sometimes more stringent than those in the private sector, so it's extremely expensive to license or commercialize technology. That's an area that I know Industry Canada, Agrculture Canada, and all the other agencies that do research have been concerned about. It's one that we talk about and study, but we revert to the stovepipe that each individual entity owns its intellectual property.

I've heard from private companies that in some cases it's easier for them to go as an agent of two public institutions to do the licensing of technology between two public institutions, meaning that NRC and Ag Canada sometimes can't get the technology between them, even though it's held in the name of the Queen, yet a large multinational can do it. You have a bunch of these things generating frictions that slow down commercialization and value generation.

[The Chair, Conservative, Larry Miller]

Thank you, Mr. Phillips.

I'll move to Ms. Bonsant.

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

I want to come back to you, Mr. Zettel.

You said many farmers were moving to try to find a better environment for organic farming. The distance of 0.8 kilometres between GMO crops and organic crops is insufficient because of the wind, air and pollination.

Who do you think should be responsible for compensating the commercial losses of organic farmers? An increasing number of organic farms are unable to sell their products. Eventually, they will go bankrupt. Who should be responsible for the loss of income suffered by those farmers?