Evidence of meeting #29 for Agriculture and Agri-Food in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was semex.
A recording is available from Parliament.
Senior Geneticist, Semex Alliance
Semex, for that matter, has a policy of using at least 3% of its gross revenues for research. We in fact use more than that. We do contribute to research. We don't expect the government to pay for everything, of course. We think it's very important for us.
Conservative
Randy Hoback Conservative Prince Albert, SK
That's where I get confused, because you say you want the cluster money, but you want the research positions. You want more and you want more. At the end of the day, there are only so many dollars that taxpayers are willing to spend. How do you prioritize?
Again, we've given you the tools to prioritize in the clusters. We've pulled it away from us, which is what you asked us to do. Now you have the priority, and you're saying that you're not getting what you need out of it. Is that a set-up problem in the clusters? What is it?
Senior Geneticist, Semex Alliance
What I'm saying is that we did get money from the dairy cluster for our genetics and genomics, but it's a limited amount. It's very small compared to what our main competition is getting, whether it's in the U.S. or Europe. We need more sources of funding to be able to able to carry it out, to be competitive. That's where we think it would make sense for Genome Canada to carry out projects in the area of dairy genomics. That's essentially the message.
Conservative
Randy Hoback Conservative Prince Albert, SK
As I said, Genome Canada received some $65 million in last year's budget, and they were very, very, very happy. There were no complaints from Genome Canada. I just find it interesting that now.... I guess that's what happens: you have so many people looking for their projects and saying that they need more, they need this, they need that, and there are only so many dollars to go around.
Again, you look at your business model and you say that if you need more research and development to maintain your leadership edge, whether it's semen, tractors, or air seeders, you realize how much you have to adjust your percentages in research and development to get that, because that is your business. If another business is out-competing you because they're spending more money on research and development, I don't know if the taxpayers are necessarily supposed to be there for you. They're there to help you, but in the same breath, they're not there to pay all your research and development bills.
Senior Geneticist, Semex Alliance
Well, I totally agree with that. As I said, we don't expect to have.... We expect the government to match, maybe, the money that we provide for research.
Conservative
Randy Hoback Conservative Prince Albert, SK
To match it? Again, in a lot of sectors, they won't even match. They're not even close.
I'm a taxpayer, and I am pushing back, but it troubles me when I see an increase in spending in research and development. I look at the $12 million and the $14 million. There's $26 million there. There's $65 million at Genome Canada. That's what I know about just by looking quickly. I'm not looking at tax credits, and I'm not counting all the incentives sitting there that are also available to different corporations and groups.
Do you see what I'm saying? Okay, we lost two positions, but you know what? You had every opportunity to hire those people or support their research through the clusters and you didn't do it. Why?
Senior Geneticist, Semex Alliance
Because they have other priorities as well. The Dairy Farmers of Canada have priorities in terms of health. They have priorities in terms of nutrition, human nutrition in using their products, and priorities regarding animal nutrition, and so on. When you divide this among all the areas, there is not that much left for genomics. Really, for genomics, it would be fairly logical that Genome Canada would be involved.
Conservative
The Chair Conservative Bev Shipley
Thank you very much for your time and questions.
Mr. Eyking, please, for five minutes.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Gentlemen, thank you for participating with us today.
I'll go first to Pulse Canada and Mr. Watts.
Recently I was in Regina at a research station. They were saying that one of the crops was fenugreek. It's pretty popular. Is that a pulse crop?
Director, Market Innovation, Pulse Canada
Fenugreek is a pulse crop. That's correct.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
I'd never heard of it before, and they were telling me how they were selling it in the Middle East. It has been quite lucrative, although it's a little harder to grow.
Can you tell me a little bit more about it?
Director, Market Innovation, Pulse Canada
It is a pulse crop. It's very small. There's a very small amount of it produced. It does not fall under the mandate of Pulse Canada, not yet, anyway.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Do you see that as one of the growing crops, or does it just have a very small niche market and that's it?
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Okay.
Your other products, your other crops are peas, beans, and lentils. Most of these crops are good for the soil too. I guess that makes them a so-called crop of the future. Lentils, for example, put nitrogen back into the soil. It's easier on the soil than some of the other crops, I guess.
You mentioned that Galen Weston said that pulse is the crop of the future. Most of these pulse crops are also in big demand in the Asian countries, where there are going to be more consumers. Can you tell me a bit about the so-called new market, how we in Canada can adjust to the new markets that are out there, and how you can adapt to that with research?
Director, Market Innovation, Pulse Canada
That's a great question.
In 2013 China was the largest buyer of Canadian peas for the first time in history, up until now. Of course India has been our largest export market for pulse crops, taking primarily peas and lentils, with typically between a million and a million and a half tonnes a year. That's about a quarter of our total production in Canada. It's a huge market in India.
However, I think what you're alluding to is the growth and opportunity in the east Asian market, China in particular. We've seen massive growth and exports of peas to China. Your question about how we can tap into that market in the future is a great one.
I'll give you one example from Saskatchewan, the biggest pulse-growing province. The Saskatchewan Pulse Growers recently invested nearly half a million dollars in a research project in China to try to incorporate pulse ingredients into such staple Chinese food products as steamed buns, noodles, and baked biscuits.
That's how we have to adapt to the new and changing marketplace. We have to invest in R and D to help Canadian processors sell into these markets and also work with the importing markets to help them use these ingredients in their food products.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
It's not only your variety; it's also adding value to your products to make them easier to sell or more adaptable to the new markets, is it?
Director, Market Innovation, Pulse Canada
That's right. Exactly.
I mentioned that we had a project at the Canadian International Grains Institute in Winnipeg. We received matching funding through the agri-innovation program over the last four years to look at how to mill pulses into flours that can be used in food product applications. We can take that technology to companies like General Mills or Kraft in North America, but we can also take it to the big food companies in China and other markets around the world to help them use Canadian ingredients in their food products.
Liberal
Mark Eyking Liberal Sydney—Victoria, NS
Thank you.
I will turn now to Semex. You were talking about many of the products you sell to, I think, New Zealand and Australia. Many of the countries have the same climate we do, so it's probably easier to adapt. I have a couple of questions.
First, with regard to most of the embryos or the semen you sell, is that from Holsteins?
Second, we know that Asia is becoming a bigger consumer of dairy products, but Africa and Central America are also increasing. How do you deal with those warmer climates? Do the cattle have to be a different breed, or a different...? Do you have research stations helping you with that? Or are they markets at all, those two?
Senior Geneticist, Semex Alliance
In answer to the first question, yes, the main breed we export is Holstein. Ninety-five per cent of the cows in Canada are Holstein anyway. We do, however, sell semen from some breeds like Brahman, for example. Brahman are adapted to tropical countries. We also have them in Brazil. For example, we opened Semex Brasil, and we are using some of the breeds in Brazil because they are better adapted to the climate.
In China, we have Semex China. We opened Semex China in a couple of years. We have our own installation in Semex China. There are mostly Holsteins there because it's not necessarily a tropical climate.
We've also started doing buffalo, for example. We source water buffaloes in Italy, because they are used to produce mozzarella in Italy, and we are selling that. We now have a market in India for these water buffaloes. We work with the Italians on the selection of the water buffalo, and we sell the semen.
Conservative
The Chair Conservative Bev Shipley
Thank you, Mr. Eyking. You're well over the time.
I'm going to Mr. Maguire now.
Conservative
Larry Maguire Conservative Brandon—Souris, MB
Thank you to our presenters, Mr. Chesnais and Mr. Watts.
Peter, I wonder if I could ask you a question with regard to the pulse area and the opportunities you see. Earlier today we heard from Mr. Brandle from Vineland about how there will be nine billion people by 2050 and how the opportunities for expansion in the pulse industry in your area are growing.
I remember the innovation and research from the days when I was farming. Can you elaborate regarding the sustainable and ethically produced areas that you talked about in your presentation? I liked your last comment about Canada being the world's preferred supplier of food products. Can you elaborate on the opportunities you see, not just in terms of the nine billion people but particularly with regard to the trade agreements that have already been signed?
Director, Market Innovation, Pulse Canada
I'm not quite sure how I can tie environmental sustainability in with the trade agreements specifically, but we are seeing that food companies are increasingly interested in environmental sustainability, and they are putting more and more requirements on suppliers of ingredients. They want to know how crops are produced. As you probably know, they're now coming up with questionnaires for producers so they can respond to requests from their consumers about how crops are grown.
The pulse industry has a great story. Earlier a gentleman mentioned that pulse crops fix nitrogen, so we have a great sustainability story in Canada now with about 15% of the area in western Canada being sown with pulse crops each year. We're getting close to about a one-in-five rotation. That's primarily peas and lentils, of course.
The sustainability story is very strong. It's several years behind health and nutrition. That's still the big focus for the food companies, but companies like Unilever have committed to 100% sustainable sourcing by 2020. Retailers like Walmart are leading the charge. They just held an expo last week in the U.K. with 150 manufacturers and retailers from around the world. It was called the Sustainable Product Expo.
We're going to see more and more requests for information about environmental sustainability, and Canada has a great opportunity to capitalize on that.
Conservative
Larry Maguire Conservative Brandon—Souris, MB
So you see the sustainability coming from an accountability through just record-keeping and that sort of thing with regard to the type of production the farmers are doing today and then following it through the processing chain.