Agriculture Committee on Nov. 21st, 2013

[The Chair, Conservative, Bev Shipley]

Good afternoon, everyone. It's good to be here.

I want to welcome everyone. We're going to open our meeting number six. This is on the Canada-European Union Comprehensive Economic and Trade Agreement and its effect on Canadian agriculture.

I want to welcome the witnesses. First of all from the Alberta Barley Commission, Lisa Skierka.

From the Barley Council of Canada, Brian Otto, chairman.

Lisa is actually the general manager and president of the Canadian Agri-Food Trade Alliance.

Thank you both for coming. You have 10 minutes for opening remarks.

I'll go to Lisa first.

[Lisa Skierka, President, Canadian Agri-Food Trade Alliance, General Manager , Alberta Barley Commission]

I defer to the chairman of the national organization.

[The Chair, Conservative, Bev Shipley]

Is that right? Isn't that good courtesy?

Brian, you're on. Thank you.

[Brian Otto, Chairman, Barley Council of Canada Working Group]

We have a good working relationship.

Good afternoon, everybody. Thank you for inviting the Barley Council of Canada to discuss the Canada-Europe trade agreement.

My name is Brian Otto. I'm a barley grower and also chair of the Barley Council of Canada. l have served on numerous boards as a director, including Alberta Barley, Western Grains Research Foundation, and I am the past president of the Western Barley Growers Association. My wife, Carolyn, and l have a farming operation south of Lethbridge, just north of the 49th parallel in Alberta.

On behalf of the Barley Council of Canada board, I want to congratulate the Canadian government on their efforts to eliminate trade barriers and make historic progress in Canada.

The BCC is supportive of CETA and what it means for the future of the agriculture industry. Trade agreements like these are the backbone of Canadian agriculture and our barley farmers fully recognize that CETA will strengthen the future of international exports and long-term profitability. This agreement will also help to build and expand our export markets, which are critical to ensuring sustainability of the entire barley value chain.

Canada is the fifth largest agrifood exporter in the world. We depend on exports to drive our economy and provide access for our agrifood products. Canada exported over 1.4 million tonnes of barley in 2012. This agreement will enable access to a market of 500 million consumers with a GDP of over $17 trillion. This will allow Canada to make significant headway in Europe and the European Union ahead of our major trading partners and competitors, such as the United States.

With the coast-to-coast trade agreements on the horizon—both CETA and the Trans-Pacific Partnership—the BCC supports the federal government's initiative to open up the international market for Canadian barley. For barley, tariffs can be up to $120 a tonne. These tariffs are significant. Down the road, CETA will ensure permanent duty-free access. The removal of tariffs on virtually all of Canada's agriculture and food products over time will give our export markets a significant boost. Currently, Canada agrifood exports to the EU are about $2.4 billion annually, a number that could increase by more than $1.5 billion annually under this agreement. This trade deal coincides with new marketing changes for barley in western Canada. CETA is the next step in solidifying the long-term profitability and sustainability of the entire Canadian barley value chain.

My board also recognizes that a win for the beef and pork industry is a win for us, because of our mutual interest in feed. Under CETA, beef exports to Europe are projected to increase by $600 million, and pork exports are projected to increase by $400 million. The livestock industry is crucial for Canadian barley farmers, as over 80% of our barley goes toward feed production. We anticipate this deal will drive significant growth in domestic feed grain sales as exports of beef and pork expand under the new deal.

As part of these trade negotiations, we understand that the European Union has raised concerns about Canada's outdated legislation with respect to plant breeders' rights. Currently, we are using old legislation from a 1978 convention governing international trade in seeds. Canada is one of only two developed countries in the world that has not brought its legislation into compliance with the 1991 seed convention, commonly known as UPOV-91. As part of CETA, we encourage the Canadian government to commit to modernizing our legislation so that Canadian farmers can benefit from increased investment in innovation, research, and development of new seed varieties in Canada. As a farmer from western Canada, l am excited about the new value-added opportunities we are seeing down the road.

The Barley Council of Canada fully supports CETA in principle and will provide ongoing support so Canadian farmers can start reaping the benefits of improved market access for barley, development in our domestic livestock sector, and access to new and improved seed varieties.

I'd like to thank you all for inviting us to make this presentation today.

[The Chair, Conservative, Bev Shipley]

Thank you, Mr. Otto.

Now we'll go to Lisa please.

[Lisa Skierka]

Good afternoon.

On behalf of the Alberta Barley Commission, l' d like to thank you for inviting me here today to discuss CETA. I'm here on behalf of Alberta's 11,000-plus barley farmers. As general manager of the Alberta Barley Commission, I also serve as president of the Canadian Agri-Food Trade Alliance.

The Alberta Barley Commission's mandate is to grow our barley industry and its profitability. l'm pleased to say that the free trade agreement with Europe provides the means and the opportunity to do just that.

Canadian farmers grow exceptional barley and we're known around the world for a high-quality, premium product. Increased access to the European Union means our malting barley and food barley will continue to thrive. But even more importantly, increased access for our country's beef and pork industry is good news for Alberta's barley farmers because our biggest market is the hog and cattle feeding industry at home. Most notably, barley fuels the multi-billion dollar Alberta beef industry and gives Alberta beef its great taste and texture.

Eighty per cent of Alberta's barley goes to the feeding industry, which is why these numbers are so significant. Under CETA, beef exports to the EU are projected to increase by $600 million and pork exports are projected to increase by $400 million. This is why we expect CETA to drive significant growth in domestic feed grain sales as exports of beef and pork expand under the new trade deal.

Therefore, on behalf of the farmer members of the Alberta Barley Commission, l'd like to congratulate the Canadian government on taking down trade barriers and making a real difference for farmers.

CETA sets a precedent for comprehensive trade agreements going forward. It's an important deal that redefines Canada's role in international trade. But it's also important for the farmers at home, the people who work every day to feed their own families and whose livelihoods are affected by what happens across the country and across the world.

The Alberta Barley Commission believes smart trade agreements are the best way to ensure the Canadian economy remains vibrant and strong. Through trade we are able to ensure long-term viability for our farms. This is why we are pleased with CETA and look forward to Canada's involvement in the Trans-Pacific Partnership. Trade also makes our industry more sustainable throughout the entire value chain and provides new and growing markets for Canadian exports.

Food barley is one area of market growth for Alberta barley. We are actively developing hulless barley markets around the world, using our Health Canada health claim to talk about the benefits of eating barley, and I'm not just talking about beer. The health claim states that barley fibre helps lower your cholesterol, which is a risk factor in heart disease. By developing the food barley markets while also developing stronger trading relationships with the European Union, we are further investing in on-farm success. And we're helping people be healthier.

Developing new markets for our barley is one way farmers will benefit from the government's strong trade agenda. As you know, Canada is the fifth largest agrifood exporter in the world. We depend on exports to drive our economy and provide access for our agrifood products. Last year, Canada exported over 1.4 million tonnes of barley. Under CETA we will have access to a market of 500 million consumers with a GDP of over $17 trillion. The numbers speak for themselves. Reducing and eliminating tariffs on barley is good for our farmers and for our customers in Europe.

The Alberta Barley Commission fully supports CETA and looks forward to a more secure future for farmers.

Thank you.

[The Chair, Conservative, Bev Shipley]

Thank you very much for your great presentations. Now I'm going to turn to our members and we'll start off the witnesses for five minutes.

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you very much, Mr. Chair.

To our friends here today, you talked about the fact that you have this wondrous opportunity, this wondrous market, but how do you intend to exploit it? It's all wondrous to say it's wondrous, but quite frankly that doesn't get you another pound of barley out of the Prairies, or out of Alberta, into the EU. How do you intend to do that? What's the plan to exploit the opportunity that you say is before you? What exactly would that be? Do you have a sense of what you want to do, or is there a sense of how you're going to do this? I understand the tariff piece. We can leave the tariff piece out of it.

The second question I'll ask—because I know my voice won't last very long—is about the other side of it, the non-tariff barriers, which, as all of us around this table know, is one of the biggest impediments to agricultural trade. Are you assured that there aren't any in this agreement, and if so, do you have it in writing?

[Brian Otto]

I'll attempt to answer your question on how we intend to do this. That will be a work in a progress. I'll start with the malt industry.

In Canada we've witnessed a shortage of barley, and barley has been imported for the malt industry. If more opportunities present themselves to move malt barley the other way, that would create an opportunity for barley farmers here in Canada. So we have to work on those markets. The Barley Council of Canada has the malt industry at our table and it's something we'll have to discuss. What are our opportunities? At this point, I can't say what they are. We have to discuss that with our industry partners.

When you talk about non-tariff trade barriers, one of the ones that comes to mind is GMO. That's not a problem for barley. We don't have GMO barley in Canada. So when you start looking at that as a non-tariff trade barrier, it's not something that can affect barley in a significant way.

[Malcolm Allen, NDP, Welland, ON]

I don't know if you want to add to that or not, Lisa.

[Lisa Skierka]

I have to say you're absolutely right. We're thrilled about this trade agreement and we understand that there's going to be a learning curve as the details are finalized. We have some time to get there.

Certainly, for the barley industry the access for Canadian beef and pork is significant, simply because those two industries have had a few hard years. They are up and running again and have the room to grow a high-quality premium product, which is what the European Union wants. It's a lot of work but I think we're up for it.

[Malcolm Allen, NDP, Welland, ON]

I don't think I would argue that you're not. Maybe you've taken the wrong sense because my voice doesn't work very well and I'm trying to cut words out.

The sense that I'm trying to get from you is that we don't produce enough barley for the malt industry and domestic consumption. So the issue is that we are now going to have this wondrous market of half a billion people to supply barley to, but we can't supply ourselves enough barley.

[Ruth Ellen Brosseau, NDP, Berthier—Maskinongé, QC]

We don't have enough to make our beer.

[Malcolm Allen, NDP, Welland, ON]

I hear what you're saying. I like barley sandwiches as much as anybody else. Mr. Chair, maybe I need one or two for my throat.

I hear what you're saying and part of it is price. I get that. Farmers aren't going to grow barley if they can make more money doing something else. I get that. But I'm not sure I get the leap to our somehow growing more barley to supply that market when we can't even supply our own. I'm not quite sure I get that leap.

[Brian Otto]

I think you misunderstood or maybe I misled you a little bit on this.

Canada produces enough barley. Only 20% of the barley grown in Canada is used for malt. We grow enough barley. About three years ago, there was a severe shortage of barley. The acreage had dropped to 5.7 million acres. In 2004 we had 12.1 million acres of barley. We had something in the marketplace where producers felt it was more profitable not to grow barley and to grow something else. In the past year, though, we have moved back to about 9.3 million to 9.4 million acres.

Where we see barley coming into Canada is when the weather causes us to run into situations of low acreage or poor-quality barley. But with the malt industry in Europe, we have an opportunity because most of the barley grown in western Canada is of malt variety, not feed variety. So if we can open that market in Europe for our malt, it's definitely an opportunity for farmers in Canada.

[The Chair, Conservative, Bev Shipley]

Thank you very much, Mr. Allen.

I'll move now to Mr. Lemieux.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thank you for your presentations.

You mentioned that 80% of the barley grown is used in feed here in Canada. Do you see CETA as giving us the indirect benefit of selling larger herds of cattle, pork, or hogs into Europe, or do you see mainly direct sales into Europe? Or do you see it as both?

[Brian Otto]

I can't speak on behalf of the beef or the hog industry.

The way I would look at it is that we are facing significant challenges for our meat industry here in Canada to put it to our traditional trading partner. If we can open up another market, another alternative for our beef and our hogs, that can be nothing but beneficial to Canada.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

I agree. I just wonder whether you see the advantages to barley growers as being providing more feed to beef in Canada, to be sold into Europe. Or do you see the benefit to barley growers being direct sales of barley into Europe? Or is it both?

[Brian Otto]

I would say you're going to see what I call the value-added part of it, through a cow or a hog. If we can increase the size of the herd, of course, there is more demand for barley growing in Alberta, Saskatchewan, and Manitoba. Even in the Maritimes they're looking to expand their barley acres into a feeding industry and into alternative uses.

As you expand your market, as you create more demand for whatever that barley...whether it's going directly to them, or through a hog or a cow, that has to be a benefit for barley producers in Canada.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Yes.

Lisa, do you want to comment on that?

[Lisa Skierka]

The only thing I'd say is that historically the barley that isn't used for malt goes back into the feed industry. It makes it an almost fail-safe crop for farmers.

However, by opening up more markets we can encourage farmers to grow more barley because they'll get a better price for it. That sense of profitability is what drives it. Barley, as a crop, is very good for the ground, for soil, for sustainability for crop rotation. So it's good to get it back in the rotation, but it has to be competitive to be there.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Right, so you're basically saying that as barley prices or opportunities present themselves, it's giving the farmers more freedom to choose among a lot of different competitive products to grow on their land.

[Lisa Skierka]

That's right. Increased demand is good for barley development.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Let me just follow up. Brian, you mentioned UPOV 91, and how you feel that plant breeders' rights need to be strengthened.

I just want you to clarify or perhaps elaborate on how you would see that benefiting the barley industry.