Agriculture Committee on Dec. 15th, 2011

[Allan Ling]

Could I respond?

[The Chair, Conservative, Larry Miller]

Certainly.

[Allan Ling]

We look at the era of cheap food as being over. We, as farmers, cannot afford to produce cheap food any more. Yes, our prices have improved for grains, oilseeds, and livestock, but we must remind ourselves that we're still not back to the 2003 level of cattle prices in this country, and our input prices have gone up. With our grains and oilseeds, we've seen a little slackening recently.

Where we're coming from, in the Atlantic region, is that we can't stress enough the importance of our safety net programs. We must keep them. Our first line of defence, of course, is the crop insurance, which mostly looks after the weather-related problems because, you are right, Mother Nature does win. We saw it in the maritime region this fall, where we've had a tremendous amount of rain and a very poor growing season in July that affected a lot of our crops. We can't stress enough how important that is.

Thank you.

[The Chair, Conservative, Larry Miller]

We'll move to Mr. Zimmer, for five minutes.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Thanks for coming today.

I just have a question for Mr. Wipf. You sounded very concerned, and you had a question about how we help farmers get off the BRM programs and make a living, especially the smaller operations.

I wanted you to answer your own question. How do we do that?

[Kevin Wipf]

It's our view that we're dealing with a marketplace that has very powerful interests operating on either side of any farmer. We don't see this idea of acting individually, or farmers trying to eliminate or compete with each other.

That's what this is about. It's about farmers actually not making an income, because there is a power imbalance between them and the forces on either side of them: the input suppliers and those controlling the transportation and—

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

You say there is a power imbalance. I am asking how you propose to change that power imbalance.

[Kevin Wipf]

We have a policy issue right now that's under way. For us, it is a mistake to try to eliminate an institution where farmers act collectively to give them market power in an industry that is dominated by very few players. For us, the answer would be institutions that allow farmers collectively to have power in the marketplace, equivalent to or more than those companies they have to deal with.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

I know what you're referring to, but we've seen farmers do quite well in other crops. You're referring specifically to the Wheat Board.

[Kevin Wipf]

Yes.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

But how is it that farmers are being successful with canola and other pulse crops? How is it happening in that industry? You say the sky is falling for wheat. Why hasn't it fallen for the other crops?

[Kevin Wipf]

Why is farm income so low? Why are we spending $3.5 billion on BRM if everyone is doing so well?

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

I'd like to go to Travis to ask a question. You seem much more optimistic about the future of agriculture.

I want you to explain a little bit of your optimism. With reference to the BRM programs in your answer, we know the pie is not going to get bigger; it's going to stay the same, if not get smaller. You have alluded to this, or you talked about it. What specifically would you say we need to keep to sustain the sector's viability, especially the good news for cattle producers?

[Travis Toews]

Thank you for that question.

We have policy on the books, and I firmly believe that the producers really need to look after, manage, and be responsible for their day-to-day, normal, regular business risk management.

We believe there is a place for shared responsibility in the disaster tiers, so we would place a priority on disaster programming. As such, we've made recommendations in the past around creating a disaster program. We were pleased when AgriRecovery was initiated. We have some recommendations to further enhance that program, but that is where our priority would lie, as opposed to the income stabilization aspect. We also believe there's an important role for insurance on a cost-shared basis, again with producers taking responsibility as well.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

Do I still have time, Larry?

[The Chair, Conservative, Larry Miller]

You have almost a minute and a half.

[Bob Zimmer, Conservative, Prince George—Peace River, BC]

We share the Peace River. You're on the east side of the Peace River, and we're on the west. In B.C., a lot of our farmers look at the Alberta model, especially price-insurance-wise. If you could you develop that--I guess you have it to an extent now in Alberta--what would you design that program to look like on a federal level for cattlemen?

[Travis Toews]

Well, I think Alberta has provided us a model to work from. I think one important piece is that the model, the whole insurance pricing scheme, is based on the market, on expected future prices, so it remains market driven. I believe that any type of insurance model or any program needs to remain market driven.

So I think Alberta has given us a good model. We do suggest that there is a role for governments to share the costs of the premiums, consistent with that applied to grain producers across the country, and, in a sense, to level that playing field.

[The Chair, Conservative, Larry Miller]

Thank you very much.

That's pretty well it for your time.

We'll now move to Mr. Valeriote for five minutes.

[Frank Valeriote, Liberal, Guelph, ON]

Thank you.

Thank you, gentlemen, for being here, and thanks to those from Charlottetown.

A couple of years ago we did a study on competitiveness in the agricultural industry. It was really an enlightening project, and I think that we determined then still applies. The way to help us to be more competitive is to develop more harmony between the regulations in the States and ours here, and to perhaps make our anti-competitive legislation a little stronger, so that processors, retailers, and input suppliers who sometimes exhibit some anti-competitive behaviour might be brought into check in some ways. You know about the study and you know all the other issues associated with it.

In the last month, we've heard about tweaking our BRM programs, only with respect to the speed with which the payments are made and the Olympic model or other models that might be used. You know all of that as well. Only one person said “AgriInvest and forget the rest”. It was a comment made, I think, on Tuesday, by a farmer from Ontario. I don't know that anybody on this panel shares that view. I don't hear Travis saying that we should get rid of it. I think he's saying that we have to focus on innovation, too, if we're going to remain competitive and help those people who aren't deriving income as much off farm and more on farm, to help them lift themselves up.

I have two questions, though. One is about something I heard a couple of years ago. I wonder if it still applies. Is there a disparity between what the provincial ministers of agriculture offer farmers in the form of income stabilization and other programs, a disparity that maybe makes the experience of an Ontario farmer different from that of a farmer in Alberta or Quebec? I'd like to know more about that.

Travis, maybe you can answer that first question.

My second question is for Humphrey, Kevin, or Allan, and it is with respect to the definition of a natural disaster. You know what? We're into global warming and its effects already. I'm hoping that most of us at this table recognize that. As we're not really dealing with the adjustment to global warming, I'm wondering if we should be looking more closely at the definition of a natural disaster, given that the effects of climate change are upon us.

Travis, could you go with the first question? You're welcome to address the second as well if there's time. Then the others can address them as well.

[Travis Toews]

Thanks for that. I will touch on the first question.

Certainly there is not a level playing field amongst the provinces. That is a concern for us, because we don't believe government policy should dictate the competitive advantage or disadvantage of any region or any producer in that region. That certainly does exist.

There are a number of examples of it. I think crop insurance is rolled out a little differently from province to province. That's one example. We've seen provinces respond to disaster situations in different ways. Certainly during the BSE crisis, some provinces responded differently from others, and that again provided an unlevel playing field.

We have specific programs right now in Quebec, and one getting prepared in Ontario, that are different, very different, from those programs in the rest of Canada, which concerns us.

[Frank Valeriote, Liberal, Guelph, ON]

Very quickly, do you think the federal Minister of Agriculture should try to address this and show leadership in the area, and talk to the ministers during discussions on Growing Forward 2?

[Travis Toews]

Again, we absolutely support an initiative to remove the provincial barriers, if you will, or disparities in the programming. We know that the minister has worked to address it. We encourage him to continue.

[Humphrey Banack]

Provincial disparities are part of the insurance programs we have now.

As I travel through the three western provinces, I am very closely in touch with Alberta, Saskatchewan, and Manitoba. The crop insurance program that I have on my grains and oilseeds farm in Alberta is a Cadillac. The producers in Saskatchewan look at it and see that they're not there, and the producers in Manitoba aren't there either.

From a crop insurance perspective, I believe that it's just different things. As Travis stated, the price insurance programs we have for the cattle, and now for the pork industry, are something that our Alberta producers have that are not there in other provinces. I believe it's important to have these programs on a nationwide basis. The program in Alberta, as I understand it, is totally self-funding. It could be made into a lot more attractive program with a little bit of help from government subsidies as far as premiums go.

I think that's an important part of where we have to go, because as we develop these programs, you want producers to make decisions on what risks they see and how to manage them. But we have to always remember that the bottom, AgriStability, has to be there, because there will cracks that they will fall through. There has to be something for them to land on.

We can't totally destroy the AgriStability program because, as we know, the additional programs are all funded by AgriStability in the end anyway. If I draw from any of the other programs, such as crop insurance, it comes off my AgriStability. It's all out of one fund. But this is encouraging producers to be involved in some of that risk management. Will the pool of money change? As I see it, probably not a whole bunch.

As far as natural disasters--

[Frank Valeriote, Liberal, Guelph, ON]

Can--

Sorry, go ahead.