Thank you to the committee for letting me make a few remarks today. I'm very happy to accept the invitation to present to you today. I have an important message from Grain Farmers of Ontario and the farmer members we represent.
My name is Markus Haerle. I am the chair of Grain Farmers of Ontario, and I farm just 45 minutes east of Ottawa, in St. Isidore.
Grain Farmers of Ontario is Ontario's largest commodity organization, representing 28,000 grain farmers who produce grain and oilseeds. The grain business in Ontario represents roughly $18 billion in economic output and is responsible for 75,000 jobs.
I'm here today to talk to you about the impact of COVID on Ontario grain farms and farmer members and the need to fix business risk management programming immediately.
Farmers take pride in their job of growing food for the Canadian consumer. We grow crops that are used for animal feed. We also grow those crops that are directly consumed when made into bread, tofu and ethanol that people in this country and around the world rely on.
Farm businesses are the backbone of the rural communities in which we live and operate our farm businesses. People and businesses in rural communities rely on the economics that the farms create.
I have some data in the backgrounder for you that outlines the situation facing our members in terms of numbers. I'm not going to get into the numbers, but the document is a good reference.
These current times of COVID are presenting risks that are bigger and more uncertain than I have ever experienced in my farming career. The acute issues are that demand is down for last year’s crops and the prices are at a point where we cannot even break even. I've heard lately from some of my members a demand that we take action. I've also heard from consumers and the public that the general public is still eating, so that means we as farmers are still relied upon to produce the food they require every day, but in reality, demand is down. That is not only with food, but also with ethanol.
I'll give you a few examples. Restaurants, university cafeterias and other commercial distributors of food are closed, which has meant that for beef, chicken, pork and products that rely on the grains we grow, production capacity has had to be reduced. Ethanol production in the U.S. actually came to a halt in response to people not driving their cars. Here in Ontario, our ethanol industry is producing only at 50% capacity.
We cannot seem to get the government to listen to those concerns and take action.
What's happening is that the U.S. government is providing support for its farmers as we speak. President Trump established a coronavirus aid, relief and economic security program right away, and what farmers are facing because of the drop in price, they are getting compensated for. We cannot compete on the world stage, and everyone expects that there will be another payment before the fall election in the U.S.
Grain farmers cannot compete with farmers who are able to survive these low prices with support from their government. The U.S. farmer is our direct competitor.
It was Prime Minister Harper's government that cut the programs. As we speak about AgriStability, that was one of the programs that was reduced back in those days. At that time, the prices the farmers got for their commodities were good, but we knew that those times would be very short-lived and these programs only pay out whenever times are bad and the existence of these programs give farmers the security to reinvest in their businesses.
Now we are in crisis. Prices of all our commodities are below the amount of money that we have spent to grow those crops. This is particularly bad for corn. Experts are saying the recovery will be slow. No matter whether or not the economy opens back up and things get back to normal, it takes time for commodity markets to rebound. History tells us that prices drop fast and only return slowly. The government platform promised to address AgriStability in the election. The platform specifically named this program AgriStability, and yet we have seen no action from this going forward.
All our farm groups across the country have talked to government, provided the data and shown the issues from COVID, and we have seen no action. For our farmer members and the organization, food security and domestic policy that provide support for farmers to survive downturns that are outside of our control are not partisan issues.