Agriculture Committee on Oct. 25th, 2016

[Ron Bonnett]

We've made some specific recommendations as to how tax policy applies to the transfer specifically to family farms that are taxing the next generation. Rather than getting into detail, there's some twist to the way the tax policy is worded that sometimes causes siblings to be treated differently depending on whether it's a corporate structure the farm has or it's a sole proprietorship.

We have staff behind us who could give you all the details on that. We've been asking for that budget for a couple of years now. In addition, you could be taking a look at how interest income from people who are holding the mortgage on a farm that's in a transitional situation would be treated.

Those would be two I would look at very quickly.

[Joe Peschisolido, Liberal, Steveston—Richmond East, BC]

Following up on a question that Mr. Gourde asked, on a philosophical question, the cranberry industry, as you know, is a co-operative model and in my neck of the woods, in east Richmond, Ocean Spray is huge, and not only here in Canada but also in the United States. Is this a model that can be transferred to other sectors of agriculture outside of cranberries, and also outside of crops and into animal husbandry as well?

[Ron Bonnett]

I think it's one of the models that could be used, but I also know that there are a number of other initiatives that are taking place. I know in some of the eastern provinces local federations of agriculture have actually gone into the ownership of machinery, and renting that machinery out to farmers. By doing that, they can buy more sophisticated equipment that one farmer couldn't buy, so you get the advantage of scale yet reduce the cost for those farmers. There are a number of different models and tools that can be used. It may be a co-op machinery ownership. It may be co-op marketing. There are a whole number of models that can be used to address that issue of capital costs.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Peschisolido.

Mr. Gourde, do you have a question?

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Mr. Chair, I would like to point out that, in my riding, there are currently large second-generation farms. They're worth $25 million or more. They are for sale in American magazines. This is happening now. Not 20 years from now. It's already happening. Philosophically, it would be worth addressing it.

There's a duality to the risk management program, now and for the future. There is the area of supply management, which is relatively stable, economically speaking, and there are the other sectors that must be competitive internationally when it comes to food prices.

The program isn't perfect in either respect, but it encompasses all production. Could changes be made to adapt it for both?

[Ron Bonnett]

I'm not sure if I'm specifically answering your question, but with the business risk management program—as mentioned in the presentation—I think with the changes to AgriStability farmers basically backed away. They didn't see value in the program. On AgriInsurance, where your crop insurance programs are in place, those have worked I think very well. They cover that risk. I think by looking at reinvesting in AgriStability, that helps address some of the income declines that take place from time to time in the industry.

One of the other things I think that is always a bit of a difficult thing when we're designing programming is making sure that it isn't countervailable from a trade perspective. That's always been an issue. I think we've managed to design programs that have not been challenged. I think it's something that still has to be kept in mind because we are a trading nation.

The answer to your question, are these programs being effective, and what needs to be done to design...? I wouldn't tinker with something that's working like the insurance programs. For the AgriInvest, I think having an increase in the government contribution to that would give farmers more to make some strategic investments, but as well I think we should be looking at the AgriStability and getting it redesigned to work better.

[Fiona Cook]

I would just echo what Ron said, particularly the AgriInvest, AgriInsurance, those seem to be working well, but AgriStability.... To your point about farms being different depending on what you're producing, the size, how diversified you are, we'd like to drill down a little bit more into AgriStability. We don't have the proposals right now, we're still working with groups on it, but we'd like see more flexibility introduced in that program itself. Restore the 85%, but then try to design it to be more flexible so that different types of farms have choices.

Thank you.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

I'd like to hear what Mr. Siemens has to say about supply management.

[Kurt Siemens]

On the supply management side, if I'm answering your question correctly, I think we would use more of the agricultural policy framework funding for the research side and innovation and those types of things, more so than AgriStability.

The other one, AgriRecovery, that's maybe one that some of supply management might use for a major incident like flooding and those types of things. Other than that, I think in terms of supply management, because of the ability that we have, we've been able to run some of our programs and do some of our policies just from our own funding and working in that way.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Siemens.

Ms. Moore, you have a question?

[Christine Moore, NDP, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

How can we make sure that family farms are maintained and ensure that what we already have locally remains in place? What can we do to stem the flow in the communities? There have already been losses, and it will be difficult to reverse the situation. However, what action can we take locally to counter the trend that is emerging?

[Ron Bonnett]

One of the things that has to be recognized is that farming is a business. If we're not making a profit, no farm is going to stay in business.

If it's small farms that people want to protect, they're going to have to find a niche market that gives them high enough margins that they can stay in place. For those farmers who are more commercial, larger based, they're going to have to use innovation, technology, every tool they have to reduce their cost structure, so that they can be competitive on a world scale.

[The Chair, Liberal, Pat Finnigan]

Sorry, the bells are starting.

Are we content to adjourn at this point?

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

I thought we had agreed to do an extra five or 10 minutes to hear the answers to the questions. As we agreed before, we were not going to panic and we could stay for 10 minutes. I don't know why we're out of here.

[The Chair, Liberal, Pat Finnigan]

There is no consent to continue sitting, so we will adjourn.

I want to thank all of our—

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

We came and asked you guys before. Why would you say no?

[The Chair, Liberal, Pat Finnigan]

Thank you for coming and presenting. I'm sorry that we have to cut it short, but thanks. It was valuable for our study.

Thanks, everyone.

The meeting is adjourned.