Evidence of meeting #14 for Agriculture and Agri-Food in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was farm.
A recording is available from Parliament.
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
Excellent. The Rahr malting plant there, they're tripling their storage. Is that what I understood you to say?
Member, Alberta Barley Commission, Grain Growers of Canada
They're doubling.
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
From 400,000 to 1.2 million, I think is what their company press release says.
Member, Alberta Barley Commission, Grain Growers of Canada
I believe the expansion is to double their actual holding capacity.
Conservative
Member, Alberta Barley Commission, Grain Growers of Canada
It could be. I'm not familiar with the numbers.
November 24th, 2011 / 4:20 p.m.
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
Do you believe that this investment would have been made if the changes to the Canadian Wheat Board weren't proposed?
Member, Alberta Barley Commission, Grain Growers of Canada
I have pretty good information that it likely wouldn't have.
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
Excellent.
I would like to ask Mr. Phillips a couple of questions, and feel free, Mr. Petersen, if you have answers to them as well....
Rail transportation and changes to the rail transportation system clearly are some things that are always brought up when we talk about competitiveness in the agriculture sector, particularly in western Canada. Level of service review, you touched on. You and I are both very familiar with that process.
I'd like to ask you some questions on technology and if there's a role technology can play in increasing competitiveness or facilitating a better rail system, things like better rail cars that load or unload easier, have a larger capacity and a lower footprint. Would these be things that your organization would see as beneficial?
Executive Director, Grain Growers of Canada
I have to say we probably haven't spent much time on that.
Where we think the railway should be using technology better is in letting us know when the trains are going to arrive. What happens now is that the grain elevator says the train will be there Thursday at noon, so the elevator manager has people like Randy Hoback, or whoever the farmer is in that area, gear up to haul their grain in to make sure it's in place. On Thursday at noon you bring in your extra staff, because you will have to work until midnight, and then the train never shows up.
Surely to goodness, if Canada Post can tell you where your parcel is, you can find a train of 100 cars somewhere. Why there can't be GPS systems with access to the grain elevator managers, so they can log on to a secure site and see that the train is still in Saskatoon...it's obviously half a day away, so there's no need to have everybody come in. That is where I could see technologies improving, in that sort of communication.
I'm probably not qualified to talk about whether new, lighter cars would be more fuel efficient to haul. I probably don't know much about that, but I would say the fleet is aging, and if there were incentives for re-investment, I think that would be a good thing to do.
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
That would be a benefit. I agree with you. I was on the transport file for a while, and I found it amazing that they could have 97% accuracy for time of arrival when it comes to passenger cars, but when it comes to shipping our wheat and barley or canola around the country, 64% is a great number for them.
The last question I have, and I know my time is going to be short, is on research. You brought it up, Mr. Phillips. We've done a lot of studies on research and we've had a lot of people here. I'm not a believer that total dollar numbers are always the answer, because a lot of research dollars don't end up getting spent. It's too bureaucratic; there's too much red tape that you have to go through.
The question I have is how important the commercialization factor is to your organization. How important is it that we know what we want to commercialize before we start the research, or is it more important that we have the research and that where it ends up is the most effective way? What would your organization's stance be on that?
Executive Director, Grain Growers of Canada
It's not a political answer, but it is a little bit of both. I think there has to be some of that blue-sky work out there. It seems a little crazy at the start, but eventually you discover some stuff. Then there has to be the other piece, as Mr. Surgeoner also mentioned, where you tie it in.
It's both. Whether the blend is three-quarters commercial oriented and one-quarter blue-sky, I probably don't know that, but it is both. It's not just one or the other.
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
I know you may not have a number right now, but could you get back to committee on what your organization would like to see when it comes to that?
Executive Director, Grain Growers of Canada
Sure. We have a board meeting next week and I'll put this on our agenda.
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
Thank you very much, gentlemen. I thank everybody for coming. I know my time is short, but it's always good to see you guys.
Conservative
The Chair Conservative Larry Miller
You're okay? Good.
Now I'll move to Mr. Easter for five minutes.
Liberal
Wayne Easter Liberal Malpeque, PE
Thank you. I knew he'd give me his half minute, Mr. Chair.
Thank you, folks, for coming. It's nice to be back for at least one meeting, Mr. Chair.
On the question that was just raised relative to the transportation issue, I think one of the big problems is that the service review is done but the government is failing to implement it. They're really falling down. The railways have been getting away with unbelievably poor service, gouging western Canadian farmers, which the Canadian Wheat Board showed was by many millions.
The government continues to sit on that service review rather than acting, so maybe the parliamentary secretary could take that back to the government and we could get it done.
I've always maintained, on this competitive issue, that farmers are the producers of wealth but they're caught in the middle. On the input side, you mostly have an oligopoly. You've got the fuel companies and the price of oil.
Can anybody tell me if there's competition at the level of $100 a barrel of oil, when in some places it costs $7 a barrel? In the oil sands it certainly costs a heck of a lot more, but there's no competition in the oil industry.
On the fertilizer side, we had the potash issue last year. If you want to talk about supply management, that's administrative supply. They were basically shutting down some mines in order to ensure the supply was a little tight so prices would go up. That's on the input side.
On the output side, you've got the transportation, which you already mentioned. You've got two railways, western farmers who are 900 miles from tidewater position. You've got a few grain companies. I could tell you lots of stories on the potato industry in P.E.I. The problem there is that if you're going to do business with any of the potato companies now, you have to buy all your products from them or you don't get a contract. So there's no competition there, on both the input and output sides.
If we're talking about competitiveness, how would you suggest we get some competition and fair play on both sides of the producer? I think that's the key question. Our producers can compete around the world if they're given a fair playing field, but they're trapped. Have you any suggestions on what needs to be done, on both sides of the producer, in order to challenge that?
James, I know you guys are doing something, not collective bargaining, I guess, but in terms of volume pricing to try to bring down prices somewhat on the inputs.
The research is absolutely great, Gord. Nobody knows how many products are made out of soybeans or corn. I mean, there are car parts and everything else now.
How do you ensure there's fair competition on the inputs and outputs, or the services that are looking after the outputs from farmers, so they do have fair play? Are there any suggestions in that area?
We've had hearings here on the Competition Bureau and still nothing has been done. I'm not going to blame your government; we did nothing either. I don't know why governments can't deal with the Competition Bureau and at least make it as strong in Canada as the one in the United States. Is that the answer? I don't know.
Who wants to start? It's a simple question.
Executive Director, Grain Growers of Canada
There's a guest who can't see us all the time.
Senior Policy Analyst, Saskatchewan and Agri-business, Canadian Federation of Independent Business
Thank you.
President, Ontario Agri-Food Technologies
If you want, I can start on a concept that we're working on. In new markets where we don't have history, as I will call it—because in agriculture there's a lot of history and people don't get along—different groups have put different kinds of investments into a project.
So we're working on one right now, for example, to create the inside wheel-well coverings for Volkswagen, and that's a combination of recycled plastic, etc. The farmers are putting in capital investment. The actual manufacturers are putting in capital investment. The farmer provides open books between both parties. I'm not worried about the farmers' inputs; I'm worried that he gets 15% return on his high-capital investment. But I also say the manufacturer, who's buying big extruding equipment, etc., is allowed the same advantage—so whoever has differential on the capital investment.
Once you are paid back, you are equal partners and profit beyond your capital return is shared equally, because you're both essential to make this happen. You must have this right at the start, as these markets are being developed and as these people sit down and start the process to make it. Where I have existing markets, that's far more difficult to do.
President and Chief Executive Officer, Farmers of North America Inc.
If I may, Mr. Chairman, and thank you for the comments and the questions. You've hit what I would say is probably the fundamental problem with farming. We are tremendous producers of wealth—absolutely, no question. In fairness, we don't get to keep nearly as much as we should, given the amount of work and effort that we put in, as Virginia aptly talked about and some of the farmers gave as first-hand responses back to their organization.
Again, to me, it's something that farmers, if in an innovative environment that allows farmers to participate in the marketplace in such a way.... That's what we're trying to do with farmers in North America, to be able to have strategic investments and strategic positions in the marketplace to allow competition to work freely.
It is very, very difficult, particularly when you don't have a Competition Bureau that you can get to work with you. That is the most frustrating part. It seems that there isn't a merger that they don't like.
I can understand they want our organizations and companies to be globally competitive, but when you allow them to be globally competitive you're doing it at the expense of the SMEs. The small and medium enterprises have to pay more for their inputs and the business they're doing with those companies, even if those companies are more globally competitive. To me that's a direct policy decision, to allow that to happen at the expense of one and to the benefit of the other. It's really a question of what is it that you want to have. That's a question that has to be asked with regard to the Competition Bureau.
There are very strategic ways on the input side, and it's hardly at all about what our organization does. It's not just about volume buying. For example, on the innovative side, we have companies that are banding farmers together, not only on strategic investment but on certain research, such as LCO technologies that help the transfer of nutrients from fertilizer in the soils back into the plant. It's farmers being involved in that primary research and owning that research, or at least having the ability to ensure that in the marketplace those that are involved in that part of the business have to compete with an entity that does that.
We're looking at the same thing in the grain-handling sector. We may make this legislation look really good if we can provide competition in that whole marketplace of the grain-handling sector.
There isn't an analyst out there—whether you look at Credit Suisse or BMO Capital Markets—that isn't positive, that isn't saying the pipeline revenue for these companies will increase. Every dollar of pipeline revenue per tonne is an extra $50 million bill for farmers. Our job is to ensure that doesn't happen, that our companies become efficient and competitive, and that those costs are a cost of providing those services plus a reasonable profit and not otherwise.
But it does take organization. Farmers really don't have cooperatives anymore in the grain-handling sector and a lot of other sectors. We just have to pull them together, and I think that's part of the solution, or it is for the most part a commercial solution.