Evidence of meeting #17 for Agriculture and Agri-Food in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was meetings.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Markus Haerle  Chair, Grain Farmers of Ontario
Mark Brock  Co-chair, National Program Advisory Committee, Department of Agriculture and Agri-Food
Benoit Legault  Chief Executive Officer, Producteurs de grains du Québec
Todd Lewis  President, Agricultural Producers Association of Saskatchewan
Alan Ker  Ontario Agricultural College Research Chair in Agricultural Risk and Policy, Professor, Department of Food, Agricultural and Resource Economics and Managing, As an Individual
Corentin Bialais  Committee Researcher
Clerk of the Committee  Mr. Marc-Olivier Girard

2:45 p.m.

NDP

Alistair MacGregor NDP Cowichan—Malahat—Langford, BC

Thank you.

2:45 p.m.

Liberal

The Chair Liberal Pat Finnigan

Now we'll go to Mr. Lawrence, for five minutes.

2:45 p.m.

Conservative

Philip Lawrence Conservative Northumberland—Peterborough South, ON

Thank you very much.

Mr. Brock and Mr. Haerle, I appreciate your time. There has been some great testimony so far. We know that we should all be out planting right now, so I appreciate that.

It's important to look at the evolving situation, so I want to go back and compare our current situation, even pre-COVID, to 2015.

Mr. Haerle, I'll start with you. Could you describe the prices in 2015, or thereabouts, versus the prices now?

2:45 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

We have seen basically from history, back in that time frame, that it's not only the prices that we have to be concerned about; it's also the inputs we buy. Everything has increased in price on the input side, so of course we're going to have to get more from the marketplace to cover our costs.

Going back to that time, we have lost 15% to 20% on some commodities in terms of their pricing, and that's a direct COVID impact. It is actually there.

2:45 p.m.

Conservative

Philip Lawrence Conservative Northumberland—Peterborough South, ON

Okay. I promise you that we will get to the input side as well.

Also, with respect to marketing your grain, what about the market access from 2015 until now?

2:45 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

In certain markets, it has improved; in other markets, it has degraded. That has a lot to do with some of the new trade deals that the government has signed in the past few years to help us out with market access.

However, in today's world, things can change overnight. It just takes one president to put out the wrong tweet and the whole world is upside down. That's exactly what happened to our soybean issue back two years ago. We had great opportunities in the European Union. We were a player in China, but not as big. Then the disputes happened with China and the U.S.

They took the European markets away. We went into China. Then the Canadian government stepped up and created an issue internally with the Huawei executive. Well, there we go. Now we have an issue.

2:45 p.m.

Conservative

Philip Lawrence Conservative Northumberland—Peterborough South, ON

All right.

Now getting to inputs, you're saying that costs have increased. My colleague Ms. Rood, I believe, asked you a question specifically with respect to the carbon tax. Costs, including obviously the cost of the carbon tax, have increased the costs of inputs.

2:45 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

Yes. We're not just getting the carbon tax downloaded to us on the corn-drying side or commodity-drying side; it's also on transport. On inputs that we buy, we have to absorb that within. We're basically saying it's $14 an acre of carbon tax cost that's downloaded to the farmer at the moment in Ontario. This just increased a month ago, and we're going to see another—

2:45 p.m.

Conservative

Philip Lawrence Conservative Northumberland—Peterborough South, ON

Just on that, what's the average acreage of your farmers, of your members? Do you happen to know?

2:45 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

It's roughly about 700 to 800 acres in Ontario. If you take me as an example, I farm a bit more than 2,000 acres. I paid five and a half thousand dollars of carbon tax last year only on corn drying.

2:45 p.m.

Conservative

Philip Lawrence Conservative Northumberland—Peterborough South, ON

The minister recently said that, on average, it was about $200 that grain farmers were paying for that. What do you think about that?

2:45 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

I don't know where she gets her figures from, but it's a very simple calculation where they went wrong. They took the whole amount of tax that was collected through the fall season and divided it by all the farms that produce grains and oilseeds, but it's not all the tons that get dried, because wheat doesn't get dried, and some soybeans don't get dried, but corn has to be dried. It depends what your split on the farm is of the commodities you grow.

2:45 p.m.

Conservative

Philip Lawrence Conservative Northumberland—Peterborough South, ON

Perfect. I'm cognizant of time, so I want to thank you very much for those great answers.

When we look at the overall picture, since 2015 prices are down, markets are comme ci comme ça and the inputs have gone up in price. What about the support programs? Have there been enhancements since 2015?

2:45 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

No, there haven't been, because all support programs.... AgriStability was clipped already prior to that. Then AgriInvest was reduced as well from 1.5% to 1.0%. There are fewer support programs that support the grain sector at the moment than before.

2:45 p.m.

Conservative

Philip Lawrence Conservative Northumberland—Peterborough South, ON

If we look globally since 2015—I'm asking you to speculate a little bit, but I'm sure you're at least somewhat knowledgeable globally about the world—has agriculture become less competitive or more competitive in the last five years?

2:45 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

It has become more competitive on the world stage. Depending on the government or country that's producing, it puts a lot of pressure on the marketplace. If you take, for instance, the U.S. and Brazil, they can shift production significantly to a different manner, and we're competing with that on the world stage, because we want to access those markets like they do. That creates a challenge.

2:50 p.m.

Liberal

The Chair Liberal Pat Finnigan

Thank you, Mr. Haerle.

Thank you, Mr. Lawrence.

Now we'll go to Mr. Blois for five minutes.

2:50 p.m.

Liberal

Kody Blois Liberal Kings—Hants, NS

Thank you, Mr. Chair.

I'm going to start my questions with Mr. Haerle.

During your remarks, you mentioned the fact that grain farmers were losing money. Essentially, it was costing more than what they could get in return from the market. Am I to understand right now that farmers, literally, every time they ship product, are losing money, or have they just lost margins on what their prior profit margin had been?

2:50 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

If you take, for instance, the crop that was produced last year, that often enough was pre-sold into forward contracts. It's somewhat not as bad as what they are planting at the moment.

At the moment, what's being put in the ground is the crop that's going to be the big question mark. We have to remember that there have been contracts for shipments going to processors that were delayed, deferred and cancelled. An ethanol industry that is at 50% capacity cannot take 100% of its input—

2:50 p.m.

Liberal

Kody Blois Liberal Kings—Hants, NS

I appreciate that, Mr. Haerle. What I'm hearing is that it's not all farmers who are necessarily losing money, but there's disruption in the market. I take your point on that.

I want to move to some of the commercials I've seen from the Grain Farmers of Ontario. You mentioned that the president can change the world with one tweet. You used that as part of some marketing campaign in terms of the shelves being bare and some of the concerns that you wanted to raise as an industry. We've had other groups that have said there are disruptions but that we probably are not going to expect any bare shelves. Is that still the expectation, that we're going to see bare shelves in stores across Canada?

2:50 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

Well, it depends on where this pandemic is going to lead us. If we have a second wave, that would be a great disaster for the grain and oilseed sector. There is no way this sector can recoup in a short time frame out of the first, initial stage of the pandemic. The shelves are supplied to a certain degree, but all the backlog is downloaded to the farmer. That's where the cash flow issues are created.

2:50 p.m.

Liberal

Kody Blois Liberal Kings—Hants, NS

I appreciate that. That's helpful.

I want to raise a point.... You just talked with Mr. Lawrence about the geopolitical dynamic between Canada and China. I forget your exact quote, but it was something along the lines that the Canadian government intervened.

Actually, the Canadian government didn't intervene. It was upholding the rule of law and staying away from it.

Is it the position of the Grain Farmers of Ontario that the Canadian government should have handled that situation differently?

June 12th, 2020 / 2:50 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

The stance of the Grain Farmers of Ontario, I have to say, is that we were the ones who got hurt behind the situation. I cannot say that the government should have handled it differently, but we should have be compensated for that loss that we had, because—

2:50 p.m.

Liberal

Kody Blois Liberal Kings—Hants, NS

Right, but you....

2:50 p.m.

Chair, Grain Farmers of Ontario

Markus Haerle

—this was a direct impact to us. I am not going to say what it should have done, but there should have been action coming back from government to make sure that no industry had to suffer from a decision that was made at that point.