Evidence of meeting #4 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 industry.
A recording is available from Parliament.
4:55 p.m.
Liberal
4:55 p.m.
Associate Dean of Research and Graduate Studies, College of Management and Economics, University of Guelph, As an Individual
Innovation is really about selling something to someone who doesn't know he needs it but he does need it. That's really what innovation is, and I'm not convinced that agriculture in Canada has done a good job recognizing these opportunities over the last few years. We're particularly good at growing things very quickly and producing things, but without really understanding whether there's actually a marketing purpose to whatever we're growing faster and better and tastier.
I certainly agree with JoAnne's comment. We need to assess the marketability of anything we grow and do in agriculture and connect the two ends of the food continuum, as I was mentioning earlier.
The other thing we need to do within agriculture and food is nurture entrepreneurship. Lots of farmers out there have great ideas. At times I just don't feel that they're well supported or recognized as being entrepreneurs. Certainly universities would have a role to play in building or nurturing entrepreneurship within agriculture and food in Canada. Right now there are a lot of folks out there who are just building new products and ideas. They're thinking about certain things, but they're not at the point where they're willing to share all that much. They're not ready to go on Dragons' Den yet, unfortunately. We just need to push them enough so that they actually have the courage to move forward. And of course they need access to venture capital, which is always a big challenge in Canada. There's not a whole lot of venture capital out there. We need to make sure that these entrepreneurs have access to venture capital as much as possible.
5 p.m.
Chair, Canadian Swine Research and Development Cluster
—I would nevertheless like to answer the question.
With regard to what you mentioned, I'm not concerned. I'm confident and I have every hope that businesses will manage to adjust to those changes. These are major changes, but there is a lot more coordination within the value chains, the national pork value chains and other value chains. People will start moving. Innovation will clearly be central to all that. The industry is changing, but people will meet that challenge. We must trust in the entrepreneurial abilities of individuals and groups. Facilitating those changes is the government's role.
In short, I fundamentally have every hope that those changes will occur.
5 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
Thank you, Mr. Chair.
Just to build on what Mr. Boughen asked in his first question--he asked if basically we could do things to help put more money in the pockets of farmers and farm producers. My question is, seeing as we're talking about Growing Forward 2 and we're talking about science and innovation, does what is there currently allow you folks to work with industry and the producers to do that, or are there areas we need to improve upon?
Generally, it sounds to me that, overall, the four of you are satisfied with the suite of programs. That's what I took away from today's discussion. But is there more we can do, and if so, what is it?
5 p.m.
Chief Executive Officer, Vineland Research and Innovation Centre
The one thing that comes to mind is to make certain that you don't create entitlements, and that when the next round of investment comes, it's based on the same merit the first round was based on. I think that's very critical, because you want to create some tension. All the scientists underneath, who are doing the projects, you can know their feet are held to the fire. So I think the organizations that are receiving the money shouldn't automatically get it, and that those programs and their plans need to be rock solid. They need to have delivered in the last round. I think this is very important, that you invest in success. I'd say that's a piece of advice from me, and I'm conflicted...I get the money. But I believe very strongly that you should make sure that happens.
The program itself is a great idea. It could be bigger. We could bring more people in as well, but of course as it sits now, I think you've done pretty well.
5 p.m.
President, Canola Council of Canada
I think the program has been absolutely amazing. It's given us flexibility to take industry initiatives that Agriculture and Agri-Food Canada would never have looked at.
On the human nutrition trials and on the meal studies, the expertise is not within Agriculture Canada, so we have had to go to the universities--the University of Toronto and the Neutraceutical Centre at the U of M--and we even have one site located in the U.S. So it's been remarkable in terms of its flexibility.
I agree with Jim in terms of making sure there's good strong competition for the dollars going in.
I think the funding ratio should stay the same. Right now it's a 25:75 ratio. When you take a look at the research costs for some of these initiatives, they're substantial. And even though we're a large and profitable industry, it's very difficult for us to do human nutrition trials on our own, so that kind of partnership has been important.
5:05 p.m.
Chair, Canadian Swine Research and Development Cluster
I've commented on the current program, which is very well defined and is achieving the established objectives.
It's the research capability in certain sectors that might trouble us in the medium term. The researchers we need today are not the researchers we needed 20 or 30 years ago. Research fields are changing very quickly, and even when we call upon researchers, we receive research proposals from well-established researchers.
In some cases, we have projects in research fields that are important for us. However, we're not getting a satisfactory response because no one has yet developed the required research expertise. Consequently, we also have to have a critical mass of researchers who can meet our needs.
The scientific clusters program currently does not address this issue. It simply makes it possible to work with the best researchers in the entire scientific community. However, there's an obligation to prepare the next generation of researchers.
5:05 p.m.
Conservative
Ben Lobb Conservative Huron—Bruce, ON
I have a specific question, Mr. Miville. It's to do with the pork industry.
I just wonder, for the pleasure of the committee...obviously there are some economic issues feeding $6 corn to $1.85 pork. That would be the best-case scenario some days. Is there a study or any research going on? I'm sure there is, and maybe you could tell the committee about conversion ratios that you're looking at right now through genetics or alternative feed stock to maybe improve the economics in the pork sector.
5:05 p.m.
Chair, Canadian Swine Research and Development Cluster
Yes. In the last competition we held in the context of the scientific cluster, we noted seven or eight fields of expertise or strategic areas important for hog producers.
We are now thinking about our next strategic framework, about the directions research should take, and it's clear to us that hog feed will be important. The cost of hog feed represents more than half of production costs. We believe there are still gains to be made, if only through the use of new ingredients, feeds, etc.
We're relying on the scientific community to help us in this regard in an upcoming research competition. We believe there are definitely gains to be made.
5:05 p.m.
Liberal
5:05 p.m.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
Thanks again, Mr. Chair.
I'm going to pursue a question I asked before. I will leave it open to anybody to answer. We talk about innovation, and somehow we say maybe we are not doing as well because we are not innovating enough. It's a fact—people can dispute it—that we have some of the best farmers in the world. We know there is land being plowed up in the Niagara peninsula because people aren't making money. Okanagan people are converting to grapes because they are not getting any money. Yet these are some of the most innovative people in the world. We know, apparently, that before NAFTA, there were in-season tariffs, and we had people making money in the horticulture sector. We know, at the same time, that we're trying to strike a deal with the European Union, which is very protectionist. They have a 0.5% quota on pork. I doubt very much they are going to increase that quota for our producers, whereas our supply management is 7.5%.
Here is a general question we all have to answer at some point in time: how do we make an industry such as horticulture profitable in Canada and at the same time continue to advance other sectors such as canola and other grain sectors or cattle in getting more markets? How can we as a country do that? We are a trading nation. We need to trade. At the same time, we can't have our farmers going out of work because they can't make any money.
This is a philosophical question. I would like to throw that open to anybody on the panel.
Thank you.
5:10 p.m.
Chief Executive Officer, Vineland Research and Innovation Centre
Do you want a philosophical answer?
If you think about the grape industry, in fact, the free trade agreement is what created the very successful industry we have now. The old industry disappeared and died, as it should have. A new one was born that was way better. People are going in to grapes because you can make buckets of money. The value you add on grapes that are turned into wine is huge. That's one slice of the pie.
In other crops, when I think of fruit trees--and I don't know the Okanagan as well as I know Niagara, but I see there was a failure to innovate. Our production systems are old and antiquated. Our labour cost is in some cases up to 60% of the cost of harvest. What needs to happen is you need to shift your production system to what looks like a hedge row, because you can automate and use much less labour. That has happened much too slowly.
I can't speak to the reasons why it went that way, but that's the situation. They see that now. We did a strategy with the tender fruit industry—that's pears, peaches, plums, and apples—and they know what their issues are. They are moving very quickly to fix them now.
The other thing is, there was a problem with value chain communication. They didn't really understand their customer very well. They didn't understand the fact that in horticulture, very particularly, people buy those things based on what they look like. That consumer preference piece is extremely important.
How do you speak to people about Niagara peaches or Okanagan peaches, to tell them about the value of that? We commoditized them, and people took them for granted. That part is being reversed as well. That's part of our relationship with the retail guys, who speak directly to consumers.
5:10 p.m.
NDP
Alex Atamanenko NDP British Columbia Southern Interior, BC
I'm just going to interrupt you for a second. Sorry, we only have a couple of minutes.
A couple of summers ago, our cherry growers in B.C. lost a pile of money. They lost a pile of money because all of a sudden we had cherries from Washington state being dumped by truckloads. Our cherry producers in B.C. could have fed all of western Canada. They are the best in the world. There is clearly something not right here. We need to fix it, but at the same time not at the expense of other agricultural sectors. Is there another solution rather than saying innovation, innovation, innovation? We are doing it, and yet people are losing money.
5:10 p.m.
Chief Executive Officer, Vineland Research and Innovation Centre
Go ahead, Sylvain. It's not a question that has an answer.
5:10 p.m.
Associate Dean of Research and Graduate Studies, College of Management and Economics, University of Guelph, As an Individual
At some point, farmers need to understand not only that the landscape is shifting but that it's always going to be shifting. Markets are going to become more volatile than ever. There is a new reality out there. As a trading nation, we have to accept the fact that when it comes to international commerce, we sell things and we buy things. It goes both ways. If we are willing to play the game, we have to accept that.
Now, where the government should play a role is in that realignment phase. Farmers will have to make decisions and do other things and grow new products for new markets. It takes time for farmers to become competitive. That's where governments should actually help and support farmers, when there is that critical phase of one to two years of realignment into a new industry, to capitalize on these opportunities. Then, at some point, industry will pick it up. That's how you generate innovative initiatives.
5:10 p.m.
Conservative
Pierre Lemieux Conservative Glengarry—Prescott—Russell, ON
Thanks, Chair.
I want to follow up on this theme of transitioning science or innovation into the marketplace. It's a two-part question.
First, do you think the government has a role to play in that? The fear, of course, is that the government picks winners and losers, like the government is supposed to somehow determine that this, this, and this is what we should invest in to try to transition into the marketplace, but not that.
Second, though, I need to ask this question at the same time. If you feel that the government has a role to play in helping to finance the transition of science and innovation into the marketplace, what are your thoughts on using some of your current allocation of research funding to do so? Would you be open to that or not? It's easy to say yes, the government should be involved, and we need more money, but what if I turned it around and said yes, the government is involved and how much of your current allocation would you want to devote to that? That's a very real and practical possibility.
Let me ask those two questions to people who would like to answer.
