Agriculture Committee on Nov. 15th, 2011

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Thank you, Mr. Chair.

Thank you very much for being here today, Mr. Meredith. Thank you also for making the effort to speak French with us today.

One of my questions is on organic agriculture, which is developing rapidly all over the world. In Canada, some studies even indicate a rate of growth of more than 150% in this market in the past few years, and also that there is much more demand than supply. Do you believe that more should be done within Growing Forward 2 for this part of the market?

[Greg Meredith]

I'm sorry for my French.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

You can answer in English, I don't mind; it's okay.

[Greg Meredith]

I will try answering in French.

Of course, organic agriculture is growing rapidly. In 2009, the government established new standards for organic farming. Canada now has the opportunity to establish a certification policy based on those new national standards. I believe that there are now 4,000 farmers being certified under the program. We started with a cluster in the organic sector. We provided $6.5 million in development funding for that sector.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

As far as I am concerned, $6.5 million is not very much. I believe that we should put even more emphasis on adding value to local products, on encouraging local purchases, perhaps through labeling or other measures. Could that be part of a food sovereignty program? That is an question that a lot of Canadians are asking themselves. They want to know if our internal trade is sufficiently protected to ensure that made-in-Canada products are sold on Canadian markets. In particular...

I apologize, I have completely lost my train of thought. That happens sometimes. This is still a learning period.

In terms of food sovereignty, we should especially make sure that prices are affordable for Canadians. Do you believe that we should do more to add value to our products and to facilitate their marketing? We should also make sure that there will be enough products for our fellow citizens to buy.

[Greg Meredith]

Just to make sure that I'm clear, the figure is $6.5 million.

[Jean Rousseau, NDP, Compton—Stanstead, QC]

Million: okay.

That seems very low.

[Greg Meredith]

It's leveraging quite a bit more money. Normally the cluster program leverages approximately 40¢ from the industry for every dollar we invest. So there is an opportunity to grow it.

In terms of food sovereignty, we want to be a bit careful because we do have trade obligations and people do like to have the choice of domestic or imported. But during our consultations we have definitely seen the same trends that you would have seen toward local, toward organic, toward preferences for niche foods, and foods the provenance of which you are sure of: you know where it came from and you know how it was produced.

So in terms of Growing Forward 2 we're looking at how we connect farmers to that demand and help them to respond to it so they take advantage of what consumers are asking for. There is clearly a preference in Canada for Canadian foods and Canadian-grown foods. It's just good commerce to help entrepreneurs take advantage of consumer demand.

There are business models, some of which are better than others for doing that. There are niche markets. There are all kinds of opportunities in the new policy framework to say that if the consumer wants it, we should be delivering it. We can help farmers do that.

In terms of making sure there is enough, I don't think that is a big problem, to be honest, simply because we already are exporting almost half of what we produce. So if we can grow our domestic market share, we certainly have the productive capacity to fill it.

[The Chair, Conservative, Larry Miller]

Your time is up.

We now move to Mr. Lobb, for five minutes.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thank you, Mr. Chair.

The first question builds on Mr. Storseth's question around AgriStability. One of the comments I've heard from many farmers is that it's not bankable, that in fact the banks won't allow any future payment to actually be used for a line of credit or to apply for any expansion.

Is there any work being done on that, to work with the banking facilities to add the predictability to AgriStability?

[Greg Meredith]

No, not directly with the banking community, not directly with the FIs, at this point, but what you're pointing to is an accurate depiction of the problem, for sure.

By “bankable”, we mean exactly as you describe it: the ability of a farmer to say there is my form, it says I'm going to get x thousand dollars, and I'd like to borrow against it, use it as security or what have you, and build an operating line of credit on it.

So that is a weakness of the program, and we're actually using our own producer group, the national producer advisory committee, to try to look at alternatives. One of the alternatives, of course, is this idea of a model against which you pay out depending on a producer's performance. One of the reasons we are slow and somewhat unpredictable is that we rely on tax-filer data, meaning data the producer uses to file his or her taxes. There's a built-in lag there.

We have not solved the challenge of bankability. The only thing I can--

[Ben Lobb, Conservative, Huron—Bruce, ON]

So that's something that the department can continue to work on in the future.

I have one more item on AgriStability related to three specific points: reference margins, Olympic averages, and viability tests. Obviously, you've probably heard about it time and time again from producer groups, specifically from beef and pork, probably, and a few years ago from the commodities.

As we look to the next round of Growing Forward 2, do you feel, from what you can tell us, that at this point in time the department and the other provinces are going to be able to get this done finally? I know that this has been a long-outstanding multi-year issue.

[Greg Meredith]

It might be worthwhile to ask--I'm looking for a nodding of heads--if everybody knows what reference margin, viability test, and Olympic average refers to.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Sorry, but just for the sake of time, we're probably just going to have to--

[Greg Meredith]

Assume that people know.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Yes.

[Greg Meredith]

Those are three core issues we hear about all the time, so we're very aware that people would like improvements in each one of those.

We don't call it the viability test, just for the record. Everybody else does, but we don't, officially.

We took these specific issues to FPT ministers on more than one occasion in the past two or two-and-a-half years. In each instance, the collective of ministers said, no, we don't choose to go down this path. Because we're a shared jurisdiction--these programs are all federally and provincially shared--the federal minister can't unilaterally change these programs.

So we bring proposals, and generally speaking, the issue is one of fairness: who's going to win in this and who's going to lose--because some would lose and some wouldn't--and what's it going to cost?

On those occasions where we have proposed it, ministers have said, collectively, no.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Is it public which provincial ministers say no? Is it on the public record as to which provinces specifically say no to the improvements to those three categories I mentioned?

[Greg Meredith]

No.

[Ben Lobb, Conservative, Huron—Bruce, ON]

It's confidential.

[Greg Meredith]

We do try to have a collective outcome, make a collective decision.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Okay.

I'll move along to the advance payment program. A couple of years ago, of course, beef and pork were huge appliers for the advance payment program. Some of them asked for $400,000. The payments have been pushed out more than one time.

I wonder if you could remind the committee of when the big percentage of dollars are due. Does the department have a projection as to how many or what percentage will actually be able to be repaid? Or do they need to be extended again?

[Greg Meredith]

The issue there was that the cattle and hog sector was hurting badly. The government put through changes to the agriculture marketing products act, which allowed us to extend what we called loans for special economic hardship, which these subsectors were in, no question. The minister has given them a couple of stays of default. If I'm correct, the cattle industry will start paying back in March 2012 and the hog industry will start in March 2013.

I don't know that we have a hard figure about what percentage will be able to repay. It's true, though, that both of those sectors are doing much better than they were during the sort of dip, the trough, when we had to extend those initial loans under the APP.

So if we have a specific forecast, I'd have to get back to the committee to let you know.

[The Chair, Conservative, Larry Miller]

Okay.

[Ben Lobb, Conservative, Huron—Bruce, ON]

[Inaudible--Editor]...three-minute rounds for questions, I might have all my questions done.