Evidence of meeting #57 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 research.
A recording is available from Parliament.
Conservative
Blake Richards Conservative Wild Rose, AB
It sounds like there's great opportunity ahead in the industry. I appreciate that very much. I guess I'm out of time for the other questions.
Conservative
The Chair Conservative Merv Tweed
I'll thank our guests for being here. We appreciate it.
We're going to move into the next hour, but thank you for the information you've provided.
We'll take a two-minute recess while we load up the video conferencing.
Conservative
The Chair Conservative Merv Tweed
Welcome back to part two. This is going to be done via video conference in Calgary, Alberta. Joining us from the Barley Council of Canada Working Group, Mr. Brian Otto, the chairman.
Also joining us very soon, we hope, will be Mr. Rick Istead who is with the Alberta Wheat Commission.
Mr. Otto, I know you've been advised to have some opening remarks and, depending on our next guest, we'll proceed with either questions or continued reports.
I will give you the floor now.
Rick Istead General Manager, Alberta Wheat Commission
Thank you, Mr. Chairman.
Actually, this is Rick Istead with the Alberta Wheat Commission. It isn't Brian Otto.
Conservative
The Chair Conservative Merv Tweed
I apologize for that. Some issues have arisen today and we had you labelled improperly, but please continue.
General Manager, Alberta Wheat Commission
It's not a problem.
Good morning, and thank you for allowing me this opportunity to introduce you to Canada's first all-wheat provincial producer commission and how we intend to participate in and help shape the wheat supply chain here in Canada.
My name is Rick Istead and I'm the general manager of the Alberta Wheat Commission. This is also a very special day for me as 40 years ago today I began my career in agriculture. Over that period of time my passion for agriculture, and in particular Canadian agriculture, has grown exponentially, largely as a result of working with farmers across the country and numerous stakeholders in our industry.
Farmers are also passionate about their chosen livelihood. I have found them to be a resilient bunch, extremely innovative and always willing to try new things. And they are fully prepared to accept the challenge that lies ahead of them to feed a growing and hungry world. If we provide them with innovative tools and allow them unhindered access to world markets, they can compete with the best of the best.
Today I'm here to share with you one aspect of an agricultural and agrifood products supply chain, how the Alberta Wheat Commission intends to play a role in helping advance Canada's wheat industry, and what I see as the next steps in developing a wheat value chain.
First off, I will provide some points on the significance of wheat to Alberta.
Some 30% of western Canada's wheat, 6.6 million tonnes, is grown in Alberta. Wheat is the province's largest crop by area within the province and annual production is normally in the range of 7.5 million tonnes. Alberta's wheat producers grow all nine registered western wheat classes with Canadian western red spring and durum wheat accounting for approximately 90% of the total acreage.
It is predicted that by 2050 world wheat production will need to increase from the current 660 million tonnes a year, to 880 million tonnes to meet the demand from a world population of 9.1 billion. Production capacity and the province's relative closeness to port, and in turn Asian markets, gives Alberta a competitive advantage to participate in this predicted market and trade growth over the next four decades.
Alberta producers need our support to not just maintain but to meet this growing demand, and to grow the competitiveness and profitability of Alberta wheat.
After almost four years of planning and consultations, the Alberta Wheat Commission, AWC, formally established under the Marketing of Agricultural Products Act here in Alberta was launched on August 1, 2012. This is the first time not only in the history of Alberta, but also in the history of any of the western provinces, that all types of wheat are being represented by one group. The organization is producer focused, producer funded, and producer governed.
The majority of the AWC's revenue is generated by a mandatory, refundable provincial service charge or check-off of 70¢ per tonne for all wheat classes grown, regardless of end use. The organization's membership is comprised of producers who grow and market wheat in Alberta and who contribute a service charge or check-off to the commission when they sell their wheat. That's currently estimated to be 11,000 producers in the province.
The AWC is comprised of five regions, and each region is served by two elected directors and three regional representatives. The AWC is currently being governed by an interim board of directors, but with inaugural regional elections currently under way, the AWC will have their first ever producer-elected board of directors and regional representatives in place by the end of January. The commission is operated by a general manager, who reports to the board of directors, and who is responsible for executing the commission's strategic and annual business plans and overseeing AWC staff.
The AWC will play a critical role in advancing Alberta's wheat industry by: representing the interests of and helping to increase the profitability of Alberta's wheat producers; providing leadership that improves the demand, agronomic competitiveness, and profitability of Alberta-produced wheat; and contributing to wheat-related policy development initiatives that will help not only build capacity, but encourage investment in the wheat industry.
We plan to deliver value to Alberta's wheat producers and Alberta's wheat industry by investing in research and development initiatives targeted at genetic and agronomic improvements and in market development initiatives focused on end-use demand; by identifying opportunities and developing policy and advocacy initiatives that encourage investments in Alberta's wheat industry; by communicating and sharing knowledge with our members and stakeholder partners; by developing future farm leaders; and by collaborating and partnering with like-minded organizations.
While we will continue to move forward in our strategic priority areas, as a brand new organization our primary focus in our first full year of operations will be the following. We intend: to take part in a planning and strategic plan development; to hold regional elections, which are currently under way; to develop a solid organizational foundation upon which to begin operations; to establish clear operational policies and procedures; to hire core staff necessary to carry out the work of the organization; to secure office space; to demonstrate value through networking and regular communications; to establish and grow strategic relationships; and perhaps most importantly, to encourage producer engagement.
Even though we are a brand new organization, we are already being recognized and being asked for our advice and our position on certain policy matters and certain issues and opportunities currently facing Canada's wheat industry.
One such matter is the creation of a national organization to represent the interests of Canada's wheat value chain. We know that our provincial neighbours, Manitoba and Saskatchewan, are currently engaging their producers in a dialogue on the value of creating their own wheat and barley commissions in their provinces. They are both looking at setting up their own wheat and barley commissions by August 1, 2013.
This foundation is certainly needed before we can move to the next step of creating a national council, perhaps one structured and governed similarly to the Canola Council of Canada, which we have to say has been an incredible success story for Canada's canola industry.
There are some who say we should have a national cereals council and others who say no, that we should start with separate wheat and barley councils to give those commodities the focus and support they deserve and need.
The Alberta Wheat Commission, along with a number of other producer organizations, is endorsing separate councils. In fact, the barley industry has recently announced and has moved forward with the Barley Council of Canada, which we believe makes sense. We applaud them for taking this initiative.
Once Manitoba and Saskatchewan get their provincial wheat and barley commissions up and running, we will need to bring all of the wheat value chain partners and wheat industry stakeholders together around the table to debate and develop our road map for the future. The Alberta Wheat Commission intends to take a leadership role in this journey to advance Canada's wheat industry.
Thank you.
Conservative
The Chair Conservative Merv Tweed
Thank you very much.
Mr. Otto, welcome. We understand you had some traffic challenges in getting here, but please proceed.
Brian Otto Chairman, Barley Council of Canada Working Group
I apologize for being late. Yes, I've had a good tour of this part of Calgary this morning in the dark. It's been a bit difficult to find this place. Garmin is a great thing for GPS, but it doesn't always get you to where you want to be.
Anyway, thank you, Mr. Chairman
Good morning, committee members. Thank you for inviting me here today to speak about the barley supply chain as well as opportunities and challenges facing the barley industry.
Today I am here in my capacity as chairman of the Barley Council of Canada Working Group, but I am also a farmer and I have been actively involved with a wide range of agricultural organizations, including the Western Barley Growers Association, of which I was president until a year ago. I also served six years on the board of directors of the Alberta Barley Commission.
To give you some background information about the Barley Council of Canada, the Barley Council of Canada Working Group was formed in 2011. As you can see from our brief, it includes a great cross-section of the barley industry in Canada from coast to coast. Besides bringing together farmers and industry leaders, the working group has also taken the time to conduct research in order to understand what its role can and should be within the barley value chain. We are currently finalizing our bylaws and business plan and hope to incorporate the Barley Council of Canada, or as we like to refer to it, BCC, by the end of this calendar year.
Before I address the challenges and opportunities facing our industry, I’d like to talk to you about barley as a crop. Barley is a great crop for Canada. It is well suited to grow in our climate. It makes an excellent rotational crop. It has a wide variety of potential end uses. It can be used for the feed industry for livestock, for malt for the brewing industry, and to make healthy food for consumers. Despite this variety of uses, we have yet to truly maximize the potential for Canada’s barley crop.
Our industry has conducted research into why this has happened. In the past year, two major studies have been completed on the Canadian barley industry. The “Business Case Assessment of the Western Canadian Barley Sector: In Search of the Optimal Marketing Structure” was initiated by the Western Barley Growers Association with support from the Alberta Barley Commission and was completed in March 2012. The Barley Council of Canada Working Group report on research, stakeholder consultation, and analysis was carried out by Synthesis Agri-Food Network and was completed in early November.
Both of these studies examined the opportunities and challenges facing the barley industry. Both identify a great need to form a national barley council and for it to take a leadership role. The Barley Council of Canada Working Group, through its consultation with the barley industry, as well as by using these studies, has also identified four priority areas for our value chain. These will also be key priorities for the Barley Council of Canada going forward.
The first priority we discovered is support of varietal development and innovation through quality research and breeding programs. The Barley Council of Canada will support varietal development research to improve yield and quality. It will provide a unified voice for barley research and help attract research and innovation funding without duplicating existing efforts or mandates of other organizations. We will take on a coordinating role for research and, working with farmers, industry members, researchers, and various levels of government, we will develop a national research strategy to encourage innovation and efficiency in our industry.
The second priority we identified was crop production and a commitment to grower profitability and best practices. The Barley Council of Canada will support and collaborate with agronomic researchers to develop best practices to manage production issues. The Barley Council of Canada will also educate growers on the customer requirements for Canadian barley and how best to achieve these requirements. It's important that the needs of barley end users are met and equally important that these needs are communicated to barley farmers so that they can grow exactly what the industry wants and so that they can achieve greater success in their own farming operations.
The third priority is to develop markets and improve market access in a manner that complements the existing initiatives. The Barley Council of Canada will expand domestic and international markets by providing a unified voice for the barley industry with government and by working to develop new international and domestic marketing opportunities, such as barley food.
The Barley Council of Canada will take on the role of providing a focus and a voice for the barley industry by communicating and collaborating with existing industry groups, as well as other commodity councils and associations on general trade and market access issues that affect all commodities.
The fourth priority that we identified is improvement in the understanding of the barley industry throughout the value chain and with government stakeholders. The Barley Council of Canada will ensure that all levels of the barley value chain and government have a solid understanding of the issues and opportunities facing the barley sector in order to ensure the industry’s long-term success. In acting as a conduit between barley farmers, researchers, industry stakeholders, and government, the Barley Council of Canada will take on an important role in improving value chain communication, and will provide a unified voice to encourage further investment in processing, research, and innovation.
As you can see, the Barley Council of Canada has big plans to grow Canada's barley industry. In having a dedicated, commodity-specific council, we believe barley will achieve the same success as such other crops as canola and pulse.
When the Barley Council of Canada takes on the leadership role our industry has so clearly identified as a need, it will work collaboratively with barley farmers, members of industry, and various levels of government. The Barley Council of Canada will develop and implement a common vision that will enable long-term profitability and sustainable growth of the Canadian barley industry through value chain collaboration.
I thank you for your time, and I look forward to your questions.
NDP
Francine Raynault NDP Joliette, QC
Thank you, Mr. Chair.
Thank you to our witnesses for agreeing to be here today.
My question is for Mr. Istead.
As of August 1, 2012, the Canadian Wheat Board is no longer the only single desk seller for western Canada's wheat and barley. Since August, what have the biggest changes in the wheat and barley supply chain been?
General Manager, Alberta Wheat Commission
Since August 1, from what we're hearing from the field, obviously there has been a big change in how wheat and barley have been marketed here in western Canada. Obviously it's a time of transition. Certain producers are having some difficulty, some angst, with it, but I would say the majority of producers are looking at it positively. The pricing is excellent. We're seeing large volumes actually traded currently.
A recent survey conducted by a corporate company, BASF Canada, measured the position of producers in terms of the wheat and barley open market, and 84% of them responded positively, that they saw this as a benefit to the profitability on their farm.
Did I answer your question?
NDP
Francine Raynault NDP Joliette, QC
Yes, thank you.
Bill C-45 would make changes to the Canada Grain Act, such as doing away with mandatory inward weighing and inspection. Other reforms supported by a number of industry stakeholders have yet to be proposed, such as changes to the Canadian Grain Commission's governance model and licensing for third parties to conduct outward weighing and inspection.
What further reforms to the Canadian Grain Commission would you like to see?
General Manager, Alberta Wheat Commission
We're appreciative of the changes that have been made in the Canada Grain Act with respect to the operation of the Canadian Grain Commission, although we would like to see further changes implemented. Our organization intends to respond to the proposed fee increases, which we feel are excessive. I think we need to go back and really challenge the Canadian Grain Commission on what value-added services are really necessary in this changed market for marketing wheat and barley.
NDP
Francine Raynault NDP Joliette, QC
My next question is for Mr. Otto.
You mentioned best practices in your presentation. Would you kindly expand on that?
Chairman, Barley Council of Canada Working Group
In growing barley in western Canada, and we'll use malt barley as an example, there are certain practices on the farm that we can use to ensure that we're growing the quality of barley that the malt industry is looking for. Not all malt companies are looking for the same specs in the barley. They're looking for different attributes.
How do we grow the barley to meet the customer's needs? That's what we will identify and try to give the farmer. We want to grow the barley that the industry is looking for, to the specifications that the malt company is looking for, and make sure that it meets the customer's needs.
NDP
Chairman, Barley Council of Canada Working Group
No, it is not GMO barley. There is no GMO barley available in Canada.
Chairman, Barley Council of Canada Working Group
When you say barley, are you talking to the malt industry or to the feed industry? Is that what you're looking for?
Chairman, Barley Council of Canada Working Group
To give you a little background on barley grown in western Canada, and Alberta grows over 50% of the barley grown in western Canada, 80% of that barley or a little less than 80% of that barley will go into the feed industry. About 22% to 23% is grown for the malt industry. In this case, this year we have between 8.8 million and about 9.1 million or 9.2 million tonnes of barley to market in western Canada. Of that, about 22% or 23% will end up in the malt industry.
Personally, on my own farm, my malt barley has been marketed to domestic malt companies in Alberta, in Calgary, and up at Alix, Alberta. I have delivered some feed barley to the feed industry. As a matter of fact, it's the first time that I've been able to deliver feed barley into the United States, and it went to a Hutterite colony in Montana. That's the benefit of the new marketing system that we have in place. I'm able to access that marketplace and I did pick up a premium on my feed barley because they're short of feed barley down there.
Conservative
Brian Storseth Conservative Westlock—St. Paul, AB
Thank you very much. It's good to see you again, Mr. Otto and Mr. Istead.
Mr. Istead, when you were talking about the survey, you said 80% of the producers who were surveyed responded positively to the changes that have been made.