Evidence of meeting #19 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
Randy Hoback Conservative Prince Albert, SK
Thank you, Chair.
I thank all the witnesses for being here today. It's great to see you out here in December to talk about our future. I think that's very important. Thank you for doing that.
Mr. Gowland, I want to talk to you a little bit. You made a comment in your presentation about the importance of trade. Just give us an idea of how you would see more investment in trade and how that would help your operation. What types of investments would you look at for that?
Owner-Operator, Farm Business, As an Individual
Our operation—corn, soybeans, and wheat—is a traditional Ontario crop rotation, and you could throw a few white beans in there. Certainly, the soybeans, wheat, and white beans are very dependent on exports. Basically, all of the soybeans at our farm operation are dependent on exports. They go into the European Union, Japan, and Southeast Asia.
The way I look at it, we need to continually look at ways we can better penetrate markets. I have had some farm organization experience and some opportunities to see some of these markets first-hand. Probably back 10 or 12 years ago or more—and it didn't matter what commodity it was—tariff trade barriers were the big thing. We had to look at how we could minimize the impact or how we could penetrate markets if we moved those trade barriers down somewhat. They still are important.
On the trade side, we need to be very cognizant all the time of the whole situation of market access in the non-tariff trade barrier situation. If there is a focal point—it doesn't matter if you are a beef, hog, or grains and oilseeds producer—it is the need to make sure we're looking after issues of biotechnology, unapproved events, and you name it.
I'll let Arden and Louis speak about that as far as the red meats go, because I am not an expert in those. I've never owned cattle.
Certainly, those are the areas we need to push on.
Conservative
Randy Hoback Conservative Prince Albert, SK
Unfortunately, I have only five minutes, and there are so many other things I want to talk about.
You talked about AgriInvest...and I forget the rest. One of the comments I'd have is about the caps that are placed on AgriInvest at this point in time, especially out in the Prairies. Are you in favour of seeing those caps maintained, or would you like to see those caps go? Or, if you want a cap, what would you cap it at? What needs to be done on that?
Arden, I will start with you if that's okay.
Farmer, As an Individual
When I was looking at this, I saw some figures. Ontario has approximately 23.25% of the non-supply managed agriculture production in Canada. We are presently getting 16.5% of AgriInvest, AgriRecovery, and AgriStability funding.
Conservative
Randy Hoback Conservative Prince Albert, SK
It is hard for the individual producers. What they can put into AgriInvest is capped.
Farmer, As an Individual
That was going to be the answer to my question. That's why I was looking at 2% or so, because I figured that was a better way for Ontario farmers to have more money to be put into a program. I would up the caps. Right now it's 22.5%. I would up it to 30%, 35%, or 40% so farmers can access more. If you're not going to change it for diversified farms, then in my opinion you have to make AgriInvest higher.
Conservative
Randy Hoback Conservative Prince Albert, SK
Where that creates a problem for me now is that I have some operations in the Prairies that are doing sales in excess of $6 million or $10 million. Then you have a cap of $35,000. Mind you, they're capped on the AgriStability side of it too. Do you see that as something we need to work on? How do we handle that? They are your true commercial producers. There's no doubt about that.
Farmer, As an Individual
On the whole issue of caps, I would say the farms who are bigger want higher caps. In the future, I would see a need to keep raising the caps as farm sizes increase. I would maybe make it an ongoing thing, not that you have to go to legislation all the time. If you say the top 10% of farms are this big, we'll up it by 3% or 5% or something like that, instead of putting it in legislation and tying it up for five years.
That's why I pointed out that we in Ontario tweak AgriInsurance every year, even though it's an existing program. I would like to see flexibility put into the program even if it's going forward, so we can address issues like that on an ongoing basis.
Owner-Operator, Farm Business, As an Individual
You make a good point, Mr. Hoback. The fact is that 1.5% currently—the $22,500 cap—is $1.5 million of allowable net sales, not gross sales. If you bump that to 2%, suddenly that brings you back down to that cap of $1 million; a lot of operations have become a lot bigger than that.
There has to be some sort of system to move that forward. That's certainly the situation of farms getting larger. If you are going to go to a system where it's whole farm, and they start to look after their own business interests but not the financial management of those, I think we have to move up that scale with them.
Conservative
The Chair Conservative Larry Miller
You're actually out of time.
We'll now move to Ms. Raynault for five minutes.
NDP
Francine Raynault NDP Joliette, QC
Thank you, Mr. Chair.
Thank you for having accepted the committee's invitation. My question is for Mr. Gowland.
It is great how confident you are about the way you manage your business. What recommendations would you make to your fellow producers to make their businesses stable and profitable? Does everything have to be based on a good business plan and on in-depth knowledge of business risk management programs?
Owner-Operator, Farm Business, As an Individual
Thank you for the question.
As a producer, first and foremost through my career...we look at it as a true business. The farming side of it is a good lifestyle, but all producers need to be very cognizant that it is a business. We have to be pretty receptive.... Something we've done in our operation for many years is the whole aspect of looking at your markets, seeing what's out there, bringing things backwards from those markets, and seeing how you fit into that big picture.
Certainly, we look at the bottom line of what we need to support our family, to handle any debt management over the years, and those types of things; then you work backwards and look at situations that are going to make you the money to do all of that. That's been our business philosophy over the years. Something I like to discuss in open forums, with neighbours and with other individuals within the provincial and national communities, is that we always have to be cognizant of what's out there in the world. I said global before; that's whether it's local, domestic, or around the world. The fact is that you have to know that market.
I've had some privileges to travel, and I think we have to recognize that there is a big world out there to buy commodities. We're not the only ones out there selling commodities. I've been to lots of places in the world where you think you're the only show in town, but you might as well face the fact that there's somebody else sitting in the waiting room and coming in the door behind you who is probably going to try to sell their wares, too. Globally, I think production is ramping up.
As I mentioned in my presentation, with business risk management we want programs that aren't going to, in my opinion, have you sitting on a crutch and wondering if you're going to make it and whether you have enough money. That's a hard way to go through life, waiting on government payments all the time. I've seen people do that. I've been on other boards and in other operations and cooperatives and that type of stuff. There are a lot of problems out there sometimes, and you can be sympathetic, but it still comes down to the fact that it is a business, so we should treat it like a business. If we can have a tool....
I think we're privileged in agriculture that we do get some money, because there are a lot of businesses that don't receive any. I know of some local businesses in our area right now; there's a large equipment sales retail outlet that went into receivership. For those guys who are running the little places in these towns, there are no handouts. So we are privileged to have money come into agriculture, and I would like to say thank you for that.
We have to make sure we're responsible in how we divvy that pie up and how we get it out there. We have to keep it simple, and keep it to a situation that is whole farm and that can be managed.
I hope that answers the question.
Conservative
NDP
Francine Raynault NDP Joliette, QC
My next question is for all of the witnesses. The AgriStability program has been heavily criticized. What changes, in your opinion, should be made to it to help farmers quickly address their financial problems?
Perhaps Mr. Dechaine can answer the question.
Farmer, As an Individual
Again, what I would like to see is multi-enterprise coverage. I also would like to see compensating farmers somehow so that we don't have our declining margins due to what I call political interference, such as when the BSE hit us and they wouldn't open the borders for us, etc. I applaud the government for helping us, but it didn't help our margins for a lot of beef farmers who had the negative margins—or pork farmers. I would say that you have to somehow get the politics out of the AgriStability, get that portion out. Then I think it would be a good program.
Conservative
The Chair Conservative Larry Miller
Thank you. We have a few seconds.
Does anybody want to comment further?
Mr. Dechaine.
Farmer, As an Individual
On the AgriStability program, the paperwork is too much. I believe it should be based more on your income. Also, it's 15 to 18 months after you've done your year-end when you're trying to figure out these papers. Then a verifier comes back and you don't know what's going on; you're already working on your next year.
Conservative
December 13th, 2011 / 4:20 p.m.
Conservative
LaVar Payne Conservative Medicine Hat, AB
Thank you, Chair.
I thank the witnesses for coming in today.
A couple of times I heard you folks talk particularly about being consistent nationally, province to province. I'm wondering if you can say what particular aspects you think we need to be more flexible about in terms of province to province.... Or should the programs be identical from province to province? What exactly would that mean for the farmers? That's a question for whoever wants to answer.
Farmer, As an Individual
I'll answer that. As I pointed out in my presentation, something like AgriInsurance is in all provinces. Basically it's crop insurance, but it's different in each province. As you know, it's 60% from the feds and 40% from the provinces, and for crop insurance, in our case a large portion also comes from the farmers in Ontario.
I think it should be made available but with the flexibility that the farmers can work with their governments in each region to make a program work. That's why I'd like to see a little more flexibility within AgriInvest, AgriStability, and AgriInsurance, to tweak it to make it work for the province that it's in.
Owner-Operator, Farm Business, As an Individual
Yes, I can answer that.
Certainly I think you don't want any interprovincial advantages or disadvantages, as far as commodity marketing and stuff are concerned. It's great, I think, that the provinces can get involved, depending on what level of support they can put in, but at the end of the day, again, I look at this as a Canadian producer. I farm in Ontario, I know, but as a Canadian producer the situation is that when we're exporting product—and the majority of the product in this country outside the supply-managed system is exported—you're waving the Canadian flag.
To have a province that's disadvantaged or advantaged going into that scenario, that's not flying the flag really well. I guess I'm doing a patriotic thing here, but it's a situation that I think.... We're selling Canadian product, but let's not disadvantage provinces here in those types of programs that are put in place.
So yes, I think there's an opportunity to have some types of flexibility, but again, I think there need to be some parameters around that.