Agriculture Committee on Feb. 1st, 2012

[André Coutu]

In Quebec's case, these are small manufacturing businesses. It's important to understand that, aside from Lassonde, Saputo and Agropur, the members of Agri-Food Export Group Quebec-Canada, in other words, the 350 businesses, have a sales figure of $25 million to $30 million or less.

In Quebec, the number one market is the United States. We sell about $2.7 billion in products a year. The second market is Japan, where our sales add up to $500 million a year. The third market is China, where our sales total $45 million a year.

It's very fashionable to speak of BRIC—Brazil, Russia, India and China. But we need major human resources and financial resources to get into those markets. It isn't within the scope of all the small Quebec and Canadian businesses. It's important to be careful with trendy things. Sure, India and China may be extraordinary markets for pork producers, but when you sell jam or mineral water to the tune of $2 or $3 million a year, you don't have the resources to get into these markets.

[The Chair, Conservative, Larry Miller]

We're right at the five-minute mark. We'll make it up to you another day.

We'll go to Mr. Zimmer for five minutes.

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

Thanks for coming today.

I have a question for Stefanie. I guess you represent many organizations.

We've often heard about emerging markets, but those emerging markets are also becoming emerging producers. I wanted to know what your organizations are doing to remain competitive in that new reality we see—we want you to purchase our products, but we are also going to be competing in your business. What is your organization doing on that?

[Stefanie Nagelschmitz]

Our organization is looking at those new markets very much on a case-by-case basis. As I mentioned, our membership is really diverse. You're going from people who are multinationals, selling all across the world, to others who are really only looking at one region in one province or at one province at a time. They really are taking it in their own hands. It's not something our organization works with them to do. They do that with their own private consultants or they go through organizations such as STEP, Manitoba Trade and Investment, or EDC. For example, the constituency that went to Agritechnica was organized through those three organizations.

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

Thank you.

I have a question for Mike. You mentioned the new reality of the open market and the CWB. We've heard great news back from B.C. grain producers and other organizations. They like the new opportunity, and they see many that way.

I have two questions for you. First is a broad question. What concerns do you have about the new situation, being that it's a new horizon, I guess, for your membership specifically?

Second, what are the new opportunities you see arising from this domestically and internationally?

[Mike Bast]

I have some concerns. I want to make sure that the new CWB has the chance to be an alternative for farmers as a market opportunity and is not something that's gone away immediately, as long as it can be there and be given the chance for farmers to own it and be open. And if it has success with its marketing, it should remain there.

The benefits we're seeing immediately. As of yesterday, I signed a contract for wheat. It was roughly 40¢ per bushel less, going through the open market, than under the board, at roughly $1.40. The base was in rail shipments coming off.

Some of the opportunities I guess I see coming forward from this are just being allowed to market my grain when I want and how I want, being able to finance my cashflow properly, and being able to look at opportunities when I need to.

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

Specifically, though, the CWB is in a transition period. Is your organization looking at becoming part of that new entity in the future? Is it looking at it in more of a broad sense, or is it going to be looking at actively being part of that organization?

[Mike Bast]

We picked the phone up the next day and started working with them. And that's not just with wheat and barley; we're exploring multiple different things that this new entity can get into for success for farmers.

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

All right, perfect.

I have another question for you in terms of marketing. We've heard a lot of comments about our rail situation in Canada. You as grain producers are all too aware of some of the challenges that have to be faced in terms of marketing internationally, and domestically as well.

What would be some suggestions you would have on transportation to CN or CP, if in a perfect world we could make recommendations to alleviate some of those struggles you have with the rail system?

[Mike Bast]

We have contracts with everybody we do business with, and they have penalties. That's what keeps us in line. But we don't have that with the railways. We're told when to show up, and when they have a hiccup we bear the cost.

If we're going to do business with everybody, including the railways, then we should be able to apply contracts with them. We know that things happen and mistakes happen, but somebody has to be accountable for them. That brings them into line.

If we're going to do something with the railways, it needs to have teeth, so they know if they're going to cause a delay by a week or cause problems throughout the whole system—because they're the middle man between the farmer and the buyer—there are repercussions to that.

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

How are we doing, Larry?

[The Chair, Conservative, Larry Miller]

You have a little better than a minute.

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

Sure.

We're talking about marketing today, specifically the federal government's role in agrimarketing.

I'll ask this question to Jacques, please.

You spoke a little bit about agrimarketing before. We talk about the niceness of the program and how well it works, but if you could change it, how would you make it better?

[Jacques Pomerleau]

I have to be honest, we have not been part of agrimarketing because we have our own fund. Maybe I'll let André answer that one....

[André Coutu]

As I said before, I think the pre-eminent solution would be to have, instead of a program, a fund over a period of five years, to guarantee the money for a limited time. I'm sure this would be great for all the businesses all over Canada.

That would be recommendation number one.

[Jacques Pomerleau]

Because we've been through this, I could add that we love having a multi-year fund exactly for those reasons. We would like ours to be renewed.

[The Chair, Conservative, Larry Miller]

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

[Malcolm Allen, NDP, Welland, ON]

Thank you, Chair.

And thank you, folks, for being with us.

I want to clarify something, Mr. Bast. I think I followed what you said in reply to Mr. Zimmer about the open market price you're looking at now. It's kind of a gross way of doing it, in the sense of gross dollars, but say the open market price—and I'll use fictitious numbers—is $10. Previously under the CWB it would have been minus $1.40. What you're saying now is that it's only minus 40¢ that you are able to attain.

Is that correct?

[Mike Bast]

As of yesterday it was 99¢, so it is a 40¢ difference.

[Malcolm Allen, NDP, Welland, ON]

If I'm hearing you right, the 40¢ is a plus to you. Right?

[Mike Bast]

Yes, it's in my pocket.

[Malcolm Allen, NDP, Welland, ON]

I thought that, but because of the way the conversation went I wanted to make sure.

[Mike Bast]

Now that may vary depending what buyer you do—

[Malcolm Allen, NDP, Welland, ON]

Sure. We were really just trying to clarify that one example. I know it will vary depending on when folks do forward contracts or don't do forward contracting, or where that open market price goes—sideways, downwards, upwards.

[Mike Bast]

The only note I was trying to make is that on wheat I have never had that opportunity, up until now.