Thank you, Mr. Chair.
Good morning. Thank you for the invitation to appear before the Standing Committee on Agriculture and Agri-Food on this critical piece of agricultural policy.
The next agricultural policy framework sets the direction for agriculture policy, starting in March of 2018. This framework is important for farmers, who face challenges to manage evolving pest pressures and unpredictable weather patterns while continually providing high-quality safe food to Canadians and global customers.
My name is Brett Halstead. I am the president of the Canadian Canola Growers Association. I farm near Nokomis, Saskatchewan, about an hour and a half north of Regina, where I'm lucky enough to have three generations working and farming together. We grow grains and oilseeds and manage a beef cattle herd.
The CCGA is the national association of canola farmers, representing 43,000 growers from Ontario to B.C. on national and international issues, policies, and programs that affect their profitability. The CCGA is also the administrator of the cash advance payments program.
Canola is a major crop, generating nearly $8 billion in farm cash receipts in 2015. It's a major contributor to the Canadian economy, providing $19.3 billion in economic benefits and employing a quarter of a million people. The next agricultural policy framework will play an important role in our sector.
Today I'd like to focus on four priority areas. These are farm income safety nets or business risk management programs; science and innovation; environmental sustainability and climate change; and markets and trade. These areas have the greatest impact on farmers directly.
A fundamental pillar of the framework is the suite of business risk management programs. They provide important risk management tools for overcoming production challenges and market volatility. While farmers look first to the markets for their returns, there are many risks that are simply beyond their control, such as floods, weather variability, and market collapses.
As an illustration, today, farmers in central and northern Alberta and Saskatchewan are currently struggling to harvest their 2016 crop due to a wet fall and an early snowfall. This year was expected to be a record harvest, but nearly 4 million tonnes of canola are still on the ground, and that's over 20% of our projected harvest. Predictable, flexible business risk management programs provide the backstop to help farmers manage unforeseen losses.
As the next framework takes shape, it is essential that funding for BRM programs not be eroded at the expense of other framework priorities. If farmers are not able to remain in business and manage their risks, little else will matter. That is why we see funding for BRM programs as fundamental in the next policy framework.
Looking at the current programs specifically, farmers are generally satisfied with AgriInsurance and AgriInvest. These programs are well understood, easy to use and predictable. Participation rates in AgriInsurance are acceptable and reflect the fact that farmers see value in protecting against production losses. The program is predictable and well understood, with a simple application and trigger to it. It could have some improved yield and pricing information that would keep up with market trends, but in general it's good.
AgriInvest provides farmers with an opportunity to build funds and use those dollars when and where they see fit on the farm. This could help in low-return years as bridge funding where cash flow is tight between harvests.
That brings me to AgriStability. Of the core programs, it is AgriStability that is the most concerning. Changes made to AgriStability under Growing Forward 2 significantly reduced coverage to producers. This, coupled with a lack of predictability and a complex application form, has led to declining participation rates. As of 2013, only 36% of farmers saw enough value in this program, and that's dropped since then. That includes me; I have stepped out of the program. Low participation levels are the result, and many farmers may be exposed to market risks not covered by AgriInsurance.
Simply returning the program to previous levels may not be enough to address all these concerns. For that reason, CCGA recommends that a national safety net, a national committee of associations, be established to further explore the effectiveness of the current suite of programs and make recommendations on how to refine them in the next agricultural policy framework.
Beyond BRM programming, investment in research is also critical to helping farmers manage many of the risks they face on their farms. Long-term production risks, new insect populations, disease or weed species, or climate change can be managed through investment in research that helps farmers become more adaptable and resilient.
Since its development in the seventies, canola has grown to become the largest field crop in western Canada. Research and innovation was and continues to be a key driving force in that success. It ensures that canola farmers remain competitive in the global oilseed market and have the tools to respond to agronomic pressures and the challenges of production practices. To that end, the AgriInnovation program is working well. The research cluster approach brings the canola value chain together, ensures priorities are set collaboratively, and makes sure public funding is targeted to areas that matter most.
CCGA supports the continuation of this program post-March 2018. A seamless transition among the policy frameworks is important in ensuring the time invested and the research momentum are not lost.
Climate change presents a new and evolving risk. Weather events have become increasingly extreme and unpredictable in recent years. Changing weather patterns offer new opportunities to farmers. At the same time, unpredictable weather can ruin a crop. While our industry is investing in ways to address climate change and farmers are making changes to their practices, more research and assistance are required in this area.
Research into new agronomic and sustainable practices specific to soil types in ecozones will assist in making crops more resilient to weather events and farming practices more sustainable overall.
The government's recent announcement of a carbon-pricing policy will have an impact on farmers, and this should be considered in the design of the next agricultural policy framework. It presents both challenges and opportunities. On the opportunities side, Canadian farmers have already made significant gains in reducing their greenhouse gas emissions through low- and no-till systems. As a result, canola farmers play an important role in sequestering carbon in the soil, and this needs to be recognized in any system that's implemented.
Pricing carbon has the potential to significantly increase the costs of production for farmers, thereby reducing our global competitiveness. Depending on the design and implementation of a carbon tax, it would increase the price of farmers' largest inputs, such as fuel and fertilizer. It could also impact the cost of rail transportation and the cost structure of processing plants, both of which would result in additional costs being downloaded to farmers.
Farmers cannot pass along any of these increased costs, as they are price-takers in a global market. This is of particular concern given that canola is an export-dependent crop and we must compete with farmers who operate their business in an environment that will not have these additional costs. Consideration for how the government can help to ensure farmers remain competitive should be included in the next framework.
There is still work to be done to fully understand the impact that carbon-pricing policies will have on farmers in particular, as some jurisdictions do not have defined policies yet. Researching new best practices and investing in new environmental technology areas are where the next framework can focus. Farmers have a history of rapidly adapting to new technologies that have proven to soften their environmental footprint while protecting their profitability, and they will continue to do so as new technologies and new practices are discovered. Government can help speed up this process by investing in research that will identify these technologies.
Last, 90% of Canadian canola production is exported to over 50 countries. In 2015, exports of seed, oil, and meal generated $8.9 billion in sales. Continued access to existing markets and expansion of new market opportunities are critical priorities for canola farmers. The AgriMarketing program has been invaluable in helping the canola industry develop and implement strong marketing and promotion programs in priority regions. Growing Forward 2 funding also supports the market access secretariat. The secretariat provides an important service in resolving trade barriers as they arise and in promoting global solutions to prevent barriers—