Agriculture Committee on Nov. 17th, 2011

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

But in the last bunch of years, certainly through any recessionary times, every business has had to look very hard at itself and inside itself. Am I spending this? Am I overspending on this product? Am I under-spending on this product? Is this supplier charging me too much?

How is it that farm businesses have not reached that, or certainly not to the same degree? You even said, “Well, 20% have a written business plan, and 71% have used that simply to secure financing”, or that that the reason for their business plan is that they can actually take it to a bank, or take it to someone and do it. I mean, the real answer is measuring results.

I'm going to pop over to Mr. Seguin, because you mentioned the other side of this same scenario. Where the federal government is spending money, you're suggesting that we lack measurement of the results of the money we're spending. Is that true? If so, how do we improve?

[Bob Seguin]

This has been a problem for decades. Part of my life was doing federal-provincial programming in income support, and we never asked some of those questions. How did this really change that farm family or that farm sector? How did this really affect the food processing sector? Did we get a better product? Does this really make the farm community more sustainable, financially or environmentally?

We never asked to see results, or what happened.

The challenge here for the federal and provincial governments of Canada is to ask some of these questions and to work with the farm community. Some of them may not want to have the questions asked, but work it through.

I think you'll find there are a sizeable number of farmers who do the right things—as my colleagues have asked about. But a larger number—for a number of good reasons, both personal and lifestyle—have other sources of income and don't place the same attention on it.

The Government of Canada and the provincial governments—with the limited resources they have from the taxpayers—need to find out how best to allocate them and where it will really work.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

The industry isn't measuring itself. If the individual business people involved in your industry aren't measuring themselves, how will we ever get those answers back regardless? That's maybe a rhetorical question.

But if we asked the questions you just asked, 80% of the people would not know the answer. They're not measuring it in their own businesses.

It really does come back, from a business management point of view, to suggest that the success is there, but the measurement needs to be done. There has to be a measurement, or we can't tell.

[Heather Watson]

That's just it, it's figuring out what that measurement is. For a lot of farmers, it's the bottom line. It's the profitability. I'm speaking very generally and I apologize, but it's what do you attribute your profitability to?

If that's your measure, if all you care about is profitability, what do you attribute it to, and if you don't know your cost of production then—

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

If that's your only measure, it's a really scary day at the bank—

[Heather Watson]

Exactly.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

—when all of a sudden you discover you missed that measurement.

[Heather Watson]

Yes.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

Because if all you're measuring is the profit.... You must measure other things along the way. That's true with all that we're saying here.

But more than one group today and,

Mr. Zettel, you said that the increased costs of setting up and moving forward with organic farms required a little bit more business management perhaps than regular agriculture, and I'm certain that from the organic side you must have members in your groups too that just, if you will, fly by the seat of their pants rather than run through management.

[Ted Zettel]

I have maybe one comment on that. We have to recognize that farming is not just the same as any other business. It is also a lifestyle choice, and people enter into it for reasons other than just a return on the investment.

You're not going to change that overnight, as it's just part of the culture of farming. But in the organic sector, I think we're in exactly the same predicament as many, many operations that don't really have a handle on their business.

[The Vice-Chair, NDP, Malcolm Allen]

Thank you, Mr. Preston.

Mr. Payne.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Chair.

My question is to the witnesses, through you, Chair. I'd also like to thank you all for coming here today. It has certainly been very informative.

I was amazed, as that was one of the areas I wanted to talk about—

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

I'm sorry.

[LaVar Payne, Conservative, Medicine Hat, AB]

No, no. It's great that you asked that question about the number of farmers lacking a business plan. Do you have any information as to why they're not using these plans, or is it—

[Johanne Van Rossum]

I would just like to point something out. I am a producer. The question producers ask themselves is whether they have the money to make their payments. As Heather said, the question is basically whether there is money left at the end of the year.

We are trying to create a management culture for our groups and our producers so that, in addition to production, they start thinking about management. This is possible because there have been deliverables and subsidies since 2005. That encourages producers to try it. Producers are going to see if they get something out of it.

Once they get a taste, we continue to follow up on them on a regular basis. It usually works very well, but it is one producer at a time. We are a group of 70 agricultural consultants who meet with producers.

There's only so much you can do.

We cannot meet with all of them. The Growing Forward program has been at least an incentive for them to try it. It is not very expensive. They tell themselves that they can see whether it works for their farms or not. If so, the producer may decide to continue.

We believe in the collective approach. If a producer tries it and it works, he will tell the others and that will give you five more. It is all about the long term. It is the incentive that counts.

[Bob Seguin]

We shouldn't assume that the farm community across Canada is way behind the Stone Age. Every sector has gone through the same challenges. An acceptable style of business management had to increase, improve, and become more sophisticated. There are a number of farmers across Canada who are highly sophisticated in managing large operations that even many people in the non-farm sector would find amazing. The challenge is how you raise over time the entire cadre. It just takes time and effort.

The challenges Ted and my colleagues from the farm management community raised concerned personal preferences and comfort with an acceptable style, which take time to move. The sector has had incredible expansion in capacity. What I have found though--and this is a challenge to governments--is that over time, governments have disinvested in this. The same extension networks don't exist. The same university support doesn't exist. It's not that you need to subsidize it to the hilt, but is that outreach what it used to be?

In the United States, one of the major programs for manufacturers is based on the land grant colleges, which is what all extension agriculture in Canada was based on. This is one of the big supports in the United States for its manufacturing sector. It is the same general concept that we would use in extension agriculture for how to bring that whole skill set to the small- and medium-size players.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay, thank you.

I also had some questions for either Ms. Watson or Mr. Robert.

In your opening remarks, you talked about minimizing red tape. We do have a red tape reduction process ongoing here in the House. Do you have any particular examples you could provide us with that you think would be beneficial?

Secondly, have you passed those suggestions on to the various organizations or to government?

[Richard Robert]

I am not sure I understood your question correctly.

You were talking about keeping programs simple and minimizing red tape or reducing paperwork, correct?

Programs have been set up. There are still some in Quebec, but there are a bunch of documents to fill out. In order to be able to get help to prepare a business plan or a farm transfer plan, there is a lot of paperwork to go through. Producers get sort of lost in all that. That is why we have said that it is important to keep everything simple and to tailor it to the size of the business. I understand that efforts have been made to standardize things from coast to coast to coast, but...

Earlier there was a discussion about small and large farms. Essentially, you have to adapt to the size of the business and the needs of producers rather than make the producers follow a program. We recommend keeping things simple, but does that always work? I know it is complicated. The easier the process is, the more appealing it will be for producers and the more they are going to use it.

I am not sure if I have really answered your question.

[LaVar Payne, Conservative, Medicine Hat, AB]

Yes, thank you.

[The Vice-Chair, NDP, Malcolm Allen]

Thank you, Mr. Payne.

That completes everyone this round.

There are a few minutes left, so I'd be happy to take a short question from each side. I'll go to this side first and then come back to the government.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thanks, Malcolm.

This is mainly for Mr. Seguin.

We know we have some of the best farmers in the world, who are doing the very best they can. They're innovative, yet a lot of them are finding it very difficult to make money, and we have tried to come up with all sorts of ways to help them.

I'll never forget one time in a committee when a farmer said to us, “Help us compete against foreign governments.”

Is there a more specific role for our government in this regard? Keep in mind that the U.S. heavily subsidizes certain groups—for example, rice farmers who then flood the markets in Africa, or apple farmers who flood our markets and put our farmers out of business. Is there a way our government can play a more active role to help our farmers compete against foreign governments?

[Bob Seguin]

On the question of subsidies and the impact on domestic markets, the Government of Canada has the capacity to look at—and has done so at the request of the farm community—how product coming into Canada is dumping and countervailable, as well as to take action, to be supportive, and to help with the analysis so that the community can at least operate on a more level playing field.

The other challenge is whether the standards being demanded of imported products are equivalent or harmonizable with the ones being request of the Canadian operations across Canada. If they're not, then why not? But if the product coming in is equal to or superior to ours, how do we then help our companies and our farm community raise their standards?

So there are a number of things here about information, market analysis, and taking advantage of the existing tools the Government of Canada has available. The other challenge to prove is whether damage is being done. Is it?

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thank you.

[The Vice-Chair, NDP, Malcolm Allen]

Does anyone on the government side care to ask a question?

Mr. Preston, no?

There are a few minutes. I'm happy to let folks speak, if they have an additional question, and if not I'll let it go to Mr. Eyking for a couple of minutes. If I see no more hands, I'll ask for an adjournment. It's up to you.

[Joe Preston, Conservative, Elgin—Middlesex—London, ON]

I had a quick one for Mr. Zettel, if you and my colleagues don't mind.

You've stated there's been exceptional growth in your industry, and perhaps you're only being held back by the number of farmers who actually want to enter the organic piece.

Part of my question is how you can attract more people. Obviously you're profitable in doing it, so I guess we simply have to tell other people that you're profitable, and they may want to enter the organic side.

We also mentioned that the import of organic goods is increasing and taking some of your market from you, too. That's not a way to keep you level; it's not what needs to happen. Are we keeping pace with the countries that are exporting organic goods to us? What's the trade imbalance on organic goods coming into and leaving our country?