Thank you for inviting me.
My name is Nirmal Dhaliwal, and I live in Oliver, B.C. I've been farming since 1990, when my parents purchased our first orchard. I currently operate 25 acres of cherries, apples, and prunes. I also have a full-time job outside the orchard.
I'd like to start by saying that I am speaking as a member of the Indo-Canadian farm community in the Okanagan Valley. We are about 50% of the tree fruit industry here. Our community is integrated into the whole-farm community. For example, I am also a member of the BC Fruit Growers’ Association executive, as well as a director of the Okanagan Tree Fruit Cooperative. However, as relative newcomers to the tree fruit industry, our Indo-Canadian growers have the same special concerns about government programs as all new entrants. I am looking forward to presenting to the agriculture and agrifood committee some comments and suggestions for the next five-year federal-provincial agreement on business risk management programs, Growing Forward 2.
The advance payments program is essential to the tree fruit industry, as apples and pears are storage crops. The program provides cashflow for growers and allows them to market their crop during optimal marketing periods, rather than selling quickly and at potentially lower prices due to the need to generate cash for current expenses. The need for liquidity is especially true for new growers and therefore for the Indo-Canadian farming community. The increase in the amount of interest-free advances is very much appreciated and is an example of a financial program that really works for the farming community.
Another risk management program is AgriInvest. This savings account program is popular with growers, as it helps to generate needed investments for farm improvements. Many in my community have farms that need improvements, especially buildings and equipment. This program helps us gather the funds needed to begin the renewal of our farms. Also, the funds in the account provide relief for the small, unexpected financial challenges that everyone experiences in farming. The main comment I hear is that the amount of government matching funding should be increased for this program. I believe there is some willingness to trade off improvements in AgriInvest for slight reductions in coverage in other business risk management programs, but there is a balance to be achieved and we are close to that balance at this time.
AgriStability is the problem child. While the provincial administration has improved delivery over the federal administration, there are still problems of communication with those portions of the program that remain administered by the federal government, for example, access to income data. Why is there not a practical solution offered by the federal government, like a check box on the income tax form authorizing the income tax department to expedite the delivery of my information to the provincial AgriStability administration? When I need help due to an unexpected downturn, it hurts more that the administration is not working well.
Because of all of the historic problems with the federal delivery of this program, growers are probably most willing to trade this program off for other program benefits. But in many ways, this should be the most important program for protecting growers' incomes from severe financial declines.
The AgriInsurance program, or crop insurance, is very important in the tree fruit industry. Our crops are high-value crops—about $10,000 to $12,000 per acre in revenue—but apples are very susceptible to occasional hail storms, and cherries are sensitive to rain. A damaged crop is not marketable, even for juice. Often hail- or rain-damaged crops have the majority of input expenses incurred at the time of damage, so crop damage or loss would be devastating without crop insurance.
I would like to see the national crop insurance rules reconsidered to encourage diversification. For example, if I have damage to late-season apples, which account for 10% of my acreage and production, this segment of my crop would be 100% damaged and unmarketable, yet there would be no crop insurance due to the pooling of this loss with all of my apple production. This just does not make sense, because instead of encouraging diversification, the crop insurance program is encouraging me to be a monoculture.
If there is damage to that variety due to timing of a weather event, then my whole crop of the same variety would be covered. If that variety is only 10% of my crop, then the loss is not insured, as it falls below my deductible.
I think there needs to be more flexibility in the crop insurance so that provinces can have some rules for tree fruit that may not make sense for grain, and vice versa. As long as the program remains financially sound, there should be more provincial flexibility.
The AgriRecovery program did not help the tree fruit industry in its time of need. In the fall of 2008, we had a late-season freeze that affected the last 10% of the crop, which was still hanging on the trees. AgriStability and AgriInsurance did not provide coverage, mainly because of deductibles or because the frost damage became apparent only after the crop was harvested.
AgriRecovery was not accepted by the province in this case. I feel that provision of AgriRecovery is uneven between provinces and commodities in similar circumstances. For this reason alone, the resources should be directed to better use.
In summary, the advance payments program is essential. Second, the AgriInsurance program is very helpful for investments and short, shallow financial challenges. Third, on AgriStability, if we continue to improve communication of data between federal and provincial governments, it will help growers in deep financial declines, but the problem of long-term but not permanent declines is not covered by AgriStability. Fourth, AgriRecovery coverage is inconsistent and problematic.
I hope these comments are helpful and useful to the committee. Thank you for taking the time to hear from the Indo-Canadian farm community in the Okanagan Valley of B.C. I would be happy to answer any questions.