Agriculture Committee on Nov. 29th, 2011

[Dr. David Sparling]

Very much so. The agriculture and food sectors lag behind everybody else when it comes to using information technology. The fight against traceability to me is ridiculous. It helps identify your product as organic or local, which gives you a brand advantage. It also gives you good management information on which fields did the best, and which transportation company did the best. That to me is just a no-brainer. In every other industry they say it's good business to know where your product has been and what's happened to your product. If you know that, you can manage more efficiently. So traceability is one of the pieces I think has to be in our future.

We also need to become better at social media, which we don't really understand. That's important. I think there are 46 million people in the world on FarmVille on Facebook. Well, I don't think there are that many farmers in most of the developed world. It's 80 virtual...compared with one real farmer in the United States. There's this whole space. I have a Ph.D. student who is doing some interesting stuff on that. We need more of that to understand how we to use social media.

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

My question is for both Mr. Paszkowski and Mr. Klippenstein.

A number of witnesses have emphasized that there were losses in their production and in various agricultural sectors, that they could represent as much as 30% of production and that they were undermining productivity.

What about organic farming and vineyards? How is this problem being addressed?

[Kevin Klippenstein]

In the organic sector, there have been losses as well. Within what we're doing, we're very diversified. So if our peaches freeze out, for example, we plant more squash, or we plant more onions. We're a little different. We don't have crop losses so much. Overall, at the end of the year, we tend to either climb or stay the same. With other areas that are more mono-cropped, like organic potatoes, if they get flooded, they're wiped out.

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

And you, Mr. Paszkowski?

[Dan Paszkowski]

It's been a difficult couple of years in the wine industry. There's been a surplus of wine around the world. There's been an economic downturn. We have lost some wineries. Some wineries have been bought out. You have to look at doing business differently. Liquor boards were no longer selling $18, $19 bottles of wine; they're looking for $12 and $13 bottles of wine. So with your premium wines, you start producing higher-quality, lower-priced wines to be able to sell your product.

If you have inventory when the next vintage is coming in, you have a problem. If you have inventory, you can't get a bank loan, so you have to move your products. To stay alive and survive, all the wine-makers look at unique ways of producing a diversity of products that will sell to the consumers or meet the demands of the liquor boards. But it's been extremely difficult.

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

Am I out of time?

[The Chair, Conservative, Larry Miller]

Yes.

We now move to Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair, and thank you, ladies and gentlemen for coming here this afternoon.

I have quite a few questions. I think I'll start with David and move along from there. David, you were talking about the risk management programs and the AgriStability program, and about maybe taking some of those funds and putting them into more innovation-style programs. It's interesting, because I was talking to a group of farmers yesterday, and they were basically saying the same thing. This group was from Ontario. I guess I don't want to put words in your mouth, but one of the comments made in that meeting was that maybe we should do less and less with AgriStability and make sure that we have a good crop insurance program and a good AgriInvest program, and then throw those funds towards more innovation and market access.

[Dr. David Sparling]

That's a really interesting comment because the crop insurance program works well; it's responsive, it's fairly fast, and it's well understood. Producers are generally happy with that particular program.

The AgriInvest program, again, is very easy to understand because you get a certain percentage of sales back, up to a cap. I'm not totally convinced that every farmer actually needs that, but that's another issue.

As for the AgriStability program, I did some work with the OECD, and their recommendation was actually to do more with AgriInvest and less with AgriStability. AgriStability takes a long time and it's not predictable. So people don't know when they're going to get their money, they don't know how much money they're going to get, and it arrives a year and a half later. Either they survived or they didn't. The money comes along, and they say it's nice, but....

It doesn't have to be everything out, but I think a shift of that nature would probably make a lot of sense. I think the AgriRecovery program probably does what it's supposed to do. When there's a disaster out there, a region floods out, and nobody gets their crops in, or it's completely wiped out by drought, then the government is able to respond fairly quickly. Maybe we don't have the parameters well-enough defined.

I'm glad to hear that. I've heard it from more than one producer. A lot of the people I know say the government money's nice, but they certainly don't count on it in their planning.

[Randy Hoback, Conservative, Prince Albert, SK]

Again, I could go for another 20 minutes.

[Dr. David Sparling]

I'm sure we could talk about this all day.

[Randy Hoback, Conservative, Prince Albert, SK]

There are lots of interesting ideas around that, and there's a different way of thinking now than when you were under the gun and you had to get cash to get going.

I'm going to move on to the Klippensteins.

I want to congratulate you on the outstanding young farmer award. Actually, I was nominated for that program back in '03-'04 in Saskatchewan. I didn't win, but it's a good program.

[Valeriote]

In 1903?

[Some hon. members]

Oh, oh!

[Randy Hoback, Conservative, Prince Albert, SK]

You're not going to put that in my time, are you?

It's interesting. We both come from the same Outstanding Young Farmers program, but we're at different ends of the scale when it comes to the different types of production.

As a legislator, my role here is to make sure that Canadians have safe food and food they can afford. When we go through our role of dictating legislation or regulations around food safety, that's foremost in our minds. We really don't care if it's organic or not. We really don't care if it's GMO or not, because science would prove whether it's safe or not. It's hard for me to say, and to hear you say, that we should get rid of all the farmers who grow GMO, just so we can have an organic sector based on market.

Basically you're saying you're marketing organics because you perceive them to be safer. But we have no science-based facts to say that. If we did, we would do that. We, as legislators, would say if a type of food were no longer safe for you to eat.

Then it comes back to what you're really doing, which is marketing a product, and you're doing it based on, maybe, people's feelings, or wishes, or wants. That's fine, that's the free marketplace. But it's hard for me as a legislator to say that I can support you on that, because I can't.

Then I come back to you, because it's going to be really tough as we move forward, as we see more GMO crops and different varieties come forward. Alfalfa is a good example. I can look at GMO alfalfa and probably say it's safe to eat and everything else. There are all sorts of reasons in the organic sector not to do it. But there seems to be no willingness in the organic sector to look at low-level presence, because they are just marketing organic, and the definition of organic can be 90%, or it can be 85%. It's something the industry can decide will be the organic label for Canada, but they seem unwilling to do it.

How do we move forward? Is there any way to move forward? The reality is that GMOs aren't going anywhere. How are you going to survive? The reality is that you're going to be forced to survive with low-level presence. How are you going to react to that situation?

[Kevin Klippenstein]

I guess the question is whether there is science to prove that it is healthy, right now. You look at all the—

[Randy Hoback, Conservative, Prince Albert, SK]

Again, we can go to science, we can go over and over it again with different researchers. With GMO foods, you can look at some of the new research coming out in the biotech sector, saying that it's producing different types of health foods for you, which the organic sector should maybe embrace, because it would reduce fertilizer, it would reduce water consumption. But the perception in your industry is that you don't want anything to do with GMO, based on a perception that it was not based on science. It was based on fear. I guess that's the fear.

Unfortunately, I only get five minutes, so I'm going to move on to my friend in the vineyard.

One more, Chair.

[The Chair, Conservative, Larry Miller]

Be very brief. I've been pretty generous to everybody today, so make it brief.

[Randy Hoback, Conservative, Prince Albert, SK]

I just have to ask this question because constituents keep asking me this question. I come from Saskatchewan. Why can't I go to Safeway and get my wine? Why do I have to go to a liquor board store? If you go to Florida and you go down to Walmart, you can have a selection of row upon row of wine, and row upon row of different types of alcohol and beer. Why do we feel here in Canada that we need to go to a specialty store? Why do we need to limit the access from one province to the other on wine? Can you explain this to me? Is this something that we can maybe mature beyond and actually move forward?

The other problem I have is that it's not federal, but provincial. I'll leave it at that.

[Dan Paszkowski]

Very quickly, the federal legislation in 1928 created the monopolies and gave all of the powers of first receipt in the monopoly to a monopoly system for any alcohol entering into the province, or from out of the country coming into the province. Along with that, it gave them the right to regulate the sale of alcohol within their jurisdictions. I know in Ontario, the Wine Council of Ontario is seeking some boutique private wine stores to be able to sell both Canadian and imported wines as trade compliant. That's a decision the Government of Ontario will take. Likewise in other provinces to be able to sell wine in your grocery stores.... In Ontario, a number of wineries have private licenses that predate free trade, and they're located in some Loblaws. In Nova Scotia, the Nova Scotia Liquor Commission has included some of its agency stores in Sobeys, for example, but it's a decision of the provincial government, unfortunately.

[The Chair, Conservative, Larry Miller]

Okay. Thank you very much.

Mr. Lemieux, you have the last five minutes.

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

Thank you very much, Chair.

I'll just start my line of questioning by looking at the issue of business-type management when it comes to farms, and this overlaps with commodities. If you're an organic farmer, there are certain farm-related decisions that you're going to make that will have an impact on your farm as a business, but there are also business-specific issues that arise.

To give you some examples, in succession planning there are tax implications and capital gains exemptions you need to know about. One of you made a comment about servicing debt levels. This is a very real problem. Farmers need some knowledge in regard to the following. Do you service your debt when, for example, you have a good crop year like this year? Do you buy new equipment for the farm, or do you buy the farm beside you—because capital acquisitions actually have been escalating very nicely over these last five years or ten years, so it's seen as an investment? How do you make that decision?

I want to ask each one of you a slightly different question. I'll start with the wine industry. You were mentioning, for example, that if you're carrying stock from previous years, you can't get a loan. That's key information for vintners, so what I'd like to know is whether you promote business-type courses as an association. How do you promote them? Do you run them? Could you fill us in a bit on how business acumen might be developed amongst your sector?

[Dan Paszkowski]

We do a number of workshops and seminars on a variety of issues, such as export development, and, for example, on our food safety system or HACCP system that we've developed. We haven't done any business-type of educational programs. We did have that as part of our national research strategy. It was included within that.

Unfortunately, through Growing Forward 1, the funding for a nationally based research program didn't follow through. The regions went towards the DIAP regional research dollars they had control of within the region. So we didn't get the funding to be able to do the larger umbrella type of work that we were interested in.

In terms of the inventory component, it's a reality that if you can't sell your product and you have inventory, a bank will not give you a loan. If you do have a private store or another avenue to sell your wine through, you'll bring your inventory down and you'll be able to get a loan to make more investments in your facilities. Otherwise you're capped off.

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

All right. Let me just move over to the organics side.

You're running these kinds of courses, but you were saying that it costs a nominal fee, if any fee at all. One of the things that I've noticed in talking with some farmers is that they often don't want to pay. Although the farm is a business, they don't really see it as a business decision to pay for something, even an accountant. I can detect sometimes that there's resentment having to pay an accountant to do their books, and yet, to me, of course, you're running a business and you'd of course use an accountant to do your books. Why wouldn't you?

I would think the same applies to the courses you're offering. Of course you would pay to take a course from which you would benefit. Actually, I think there have been some studies indicating that when we pay for something, we tend to get more out of it because we've invested our hard-earned money in it. I'm wondering what you've detected through the courses you're running. I imagine you've looked at fee schedules, and you must have made some decisions based on either intuition or some information that you've gathered. Can you share some of that with us in terms of attitudes that you've detected through these courses you're running?

[Kevin Klippenstein]

Farmers don't take their farm as a business. That's number one. Even talking to old-time farmers, they say, “Hey, i'm here to grow this and plant this, and if I sell it and make some money, that's great.” Business is at the bottom of the scale.

So that's one thing that we do with our apprenticeship program: We teach them business and explain accounting to them.