For my part, I would like to raise three key areas important to helping increase competitiveness within our agriculture industry.
First, an increase in overall research funding, public and private, is needed. Those of you who have been around this committee understand that farmers are divided on many issues, but this is the one that unites all of us.
We appreciate that the federal government has started putting more money into research in the last few years, and we recognize there has been an effort through both science clusters and the DIAPs. These programs ensure that actual commodity associations and actual farmers have more influence on our research priorities.
The private sector is also a huge investor in research and innovation in Canada. But it is primarily involved in only three crops: corn, soybeans, and canola. The public sector often works on core agronomics and diseases where there may not be a commercial return, and without that return there is limited incentive for the private sector to invest. It would take an increased investment of $26 million per year for 10 years—that is, each and every year you would have to add $26 million to get us back to 1994 public research levels at Agriculture Canada.
But we also realize the fiscal reality of trying to achieve a balanced budget in these turbulent times. The Grain Growers of Canada has a new proposal to help increase public funding: change the accounting for royalty income within Ag Canada. For example, if you have an Ag Canada scientist who develops a new variety of wheat, royalty income flows back to Ag Canada. Today, that goes into the Ag Canada budget. But then the government puts that much less money into Ag Canada. This should change.
We suggest that in the absence of increased direct federal contributions, at a minimum the government should commit to the current Ag Canada research budget and adjust for inflation. Next, the government should allow all royalty streams generated by Ag Canada discoveries to be added on top of the research budget. With no new government cash, the research budget would grow by $5 million or $6 million next year. This would increase as scientists see that their programs can grow when they develop products that farmers want. It's win-win.
We also think the federal government can play a bigger leadership role in encouraging private-public partnerships.
The second issue today is trade and market access. At the Grain Growers of Canada, we believe the government doesn't owe farmers a living, but it does owe them a policy environment where they can make a living.
Increasing our trade opportunities and market access are two very important areas for our farmers. Over 90% of Canadian farmers rely on exports or export prices for their success, so bilateral trade agreements are helping to keep us on par with our competitors. Markets like the European Union and the trans-Pacific partnership will be critical to our future success.
But as important as new trade deals are, it is just as important is to ensure ongoing market access. The Market Access Secretariat is a good example of how the government can help farmers. It is one thing to open a market; it is another to ensure that trade can actually happen in a world where artificial trade barriers often exist.
Lastly, reliable rail transportation is needed to increase our competitive edge. When we don't deliver grain on time to our customers, either they start looking elsewhere or the penalties and demurrage lower the price we receive for our grain. That is why the rail service review process and the new appointment of facilitator Jim Dinning has been so important. We are happy to see the government moving this file along.
In summary, with your help and the right tools, the future and competitiveness of Canadian agriculture has never looked brighter.
Thank you. We look forward to questions.