Agriculture Committee on June 19th, 2020

[Rick Bergmann]

That's a very, very good question, Mr. Ellis. It really varies from year to year. What we do is we plan our farm for positive results. We do everything we can. Then things come our way that destroy that positive cash flow and create a loss. Again, COVID has done that.

To answer your question in terms of the average, I'd go back to Mr. Ahrens' comments with regard to our sector. We have farrow-to-finish producers who send animals to marketplace. We also have integrated models that own processing plants where they would not have the level of hurt that we would have. The profit-loss scenario would be different. Right now, the independent pork producer across Canada is on an island, and has very little protection, if any, in the situation.

This is a little bit off topic, but I would like to address the comment that was made with regard to AgriInvest. Pork producers don't use it as a pension plan. I talked with one producer not long ago. He said he had a little bit of money—it's gone now—in his account, and it was basically his last lifeline. If he has five employees and he's at the end of his rope, he has to employ those employees to the very end, because if they leave, who will look after all the animals?

I would like to defend the position that it is not a pension plan for the pork sector. If it is for other sectors, I can fully respect and understand that point of view, but for us, it's our last lifeline. That lifeline is fast eroding.

Mr. Ellis, I hope I answered your question. I deviated somewhat from it, but I wanted to get that point across.

[Neil Ellis, Liberal, Bay of Quinte, ON]

Thank you.

I don't know how much time I have left, Mr. Chair.

[The Vice-Chair, Conservative, John Barlow]

Sorry, Mr. Ellis. Your time is up at six minutes. Thank you very much.

Mr. Perron, it's your turn for six minutes, please.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

I want to thank the witnesses who are participating in this meeting.

Mr. McClean, like virtually every witness we've heard from, you outlined the changes urgently needed for AgriStability. You spoke of raising the coverage level and eliminating the reference margin. You also said that AgriStability was an obstacle to diversification.

Do you know what could be done to ensure that AgriStability is no longer an obstacle to diversification?

[Bernie McClean]

Just to be clear, there's no obstacle to diversification as I have done on my farm. A grains-only situation was not profitable. We're trying to alleviate that through diversifying our own operation. I'm not saying that's getting there. I have real-life examples here of the last two years that would follow very closely with the CCGA model farm, which would indicate—and I have it here beside me—I've lost money the last two years in a row. I have my AgriStability calculations right here in front of me, and they did not help at all. CCGA's ask, along with AGgrowth Coalition, is to move the 70% back up to 85% with removal of that reference mark to the limit. That would help cover the losses I had. The model farm that CCGA has developed would indicate the same thing.

I'll stick to it. That would be the ask of the Canadian Canola Growers Association and in large part AGgrowth Coalition—

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Okay. That's very clear. Thank you.

Mr. Martin, you also spoke about the fact that AgriStability was preventing diversification. In your opinion, could any quick change to the program help resolve the issue?

[Larry Martin]

I don't think I said it prevented diversification. I simply said it doesn't encourage diversification because of the way the margin is calculated.

Most of the people I deal with, the six progressive farmers in Ontario I have in my peer group whom I was talking to about this yesterday, are not using AgriStability. All of them are diversified to a large extent. They need to have things to help them with the diversification. I don't think you can change AgriStability to encourage diversification. I think you have to do it through a different mechanism. I don't know how you get around the issue of the way the margins are calculated if we want to stay WTO compliant. I don't have any problem with increasing the percentages to 85%, as Mr. McClean and others have been suggesting. That would help the issues that most people have, but I don't see how that program can be used to encourage diversification.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Okay. Thank you. I wanted to clarify this point.

You spoke about AgriInvest and pointed out that major changes should be made to the program. In other meetings, people have even said that the program should be considerably improved and that it could potentially replace the other programs. You spoke about management training, which is significant. You also spoke about the implementation of technology.

For AgriInvest, would it be possible to encourage investment to improve production technologies? Is this what you have in mind? If not, what do you propose for AgriInvest?

[Larry Martin]

Are you asking me?

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Yes, I'm speaking to you, Mr. Martin.

[Larry Martin]

I really like the idea that I've seen in other countries where you have the industry round table. Australia does this; Holland does this, and Denmark does it. It's a total industry round table that comes together and says, “These are the things we need to do to become more competitive internationally and therefore these are the things we need to invest in.”

To me, if you tie that model together with more money to invest with and say that if they're going to invest they can still use it for income insurance, I don't have a problem with that, but also tie it to investments in the kinds of things that the industry thinks it needs to go forward. I think that's a very progressive approach.

At the same time, I want to be really clear on what I said before, which was that people are using it as a pension fund. That's not everybody or any industry. The younger progressive farmers in my peer group are all investing heavily, and they're saying that it's probably the people who aren't trying to progress who are the ones who are using it as a pension plan.

[The Vice-Chair, Conservative, John Barlow]

Thank you, Mr. Perron.

Mr. MacGregor, please, for six minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you very much, Chair, and thank you to all of the witnesses for appearing before our committee and contributing to our study on the business risk management suite of programs.

I'll start with the Canadian Canola Growers Association.

Mr. McClean, I'll just follow up on Mr. Ellis's question about the technical working group. At an earlier meeting, the co-chair of the national program advisory committee appeared before us, and he gave us some recommendations that they've done on improving the BRM programs and putting mechanisms in place to evaluate and develop new BRM programs.

I'm wondering what your thoughts are on the current structure that exists and how your idea of a technical working group would mesh with the structure that's already in place.

[Bernie McClean]

Thanks for the question. Actually, I'm going to invite Dave Carey to join in on the conversation and let him take the lead on it, sir, if you don't mind.

[Dave Carey]

Thanks.

I did have the chance to watch Mr. Brock's testimony. I think what we're asking for is a technical working group laser-focused on AgriStability. As opposed to looking at everything broadly, let's have a group that can really dive into how AgriStability is or is not working and understand where the governments are at both the federal and the provincial levels.

I think what we're asking for more than anything, Mr. MacGregor, is a venue to have an open and honest dialogue and back and forth, with access to data. As Bernie alluded to in his opening comments, we hear a lot of suggestions about money in AgriInvest but, despite requests, we have never been given the dollar figures by the commodity, the region, etc. It's a venue much like the FPT, with everyone coming together. The idea is meaningful input.

Much as Mr. Martin said, it's something like the agriculture value chain round table. I think the NPAC works well. I think it has a broader mandate than what we're looking for. It's really about making sure that AgriStability insures not against profitability but against extreme loss.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you for that clarification.

Mr. Bergmann, I'll turn to you next. Regarding the troubling time that you and your industry have gone through, thank you for illuminating that. It's pretty tough. We're sharing a lot of empathy for what you and your fellows are going through.

I want to talk about AgriRecovery. You stated quite clearly that it hasn't worked. I just want to know your thoughts on BRM programs and how they've dealt with this pandemic. AgriRecovery did have some funds flow through it specifically for pork and cattle, but you're still of the opinion that it doesn't work. Does AgriRecovery simply need more commitments for funding? I would appreciate having you illuminate that point a bit more for the committee.

[Rick Bergmann]

I'll start off and invite Mr. Ahrens to wrap it up if he has any concluding comments on that one.

On AgriRecovery, as you are all aware, there was an announcement some time ago by our government to help us. AgriRecovery, for my farm and many others, when it comes down to it.... Earlier on, the question was about euthanizing pigs and so on. AgriRecovery will pay me for a shovel to dig a hole and AgriRecovery will pay me for destroying animals, but AgriRecovery will not help me with the loss that I've just incurred by destroying those animals. Something's wrong with this picture. That's a very blatant, very candid answer to the question.

Doug, maybe you have something better to add that will polish up the answer a little better.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Answer quickly if you can, please, as I want to get in one more question.

[Doug Ahrens]

I think Rick has answered the question fairly quickly.

We did have some concessions from government when we were really looking at a welfare slaughter, holding pigs back during COVID that we couldn't get to processing. It was very frustrating trying to figure out the nuances of that program because, just as AgriRecovery says, when something within the business model doesn't fit the market.... We as farmers would have expected that the recovery process would have helped compensate for all the moves, but it only chose some very small pieces of the puzzle.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thanks for that clarification. Sorry, but I have to get in one more question.

I'll return to Mr. Carey and Mr. McClean of the Canadian Canola Growers Association.

Mr. McClean, you mentioned that you want the federal government to act now. You want to see that federal leadership in advance of the meeting in October. The Canadian agricultural partnership amending formula for AgriStability requires a certain percentage of the provinces to jump in to amend it. How does it mesh with that amending formula? Do you want the federal government to say, “Look, we're not going to wait for the provinces. We see that the need is great, and we're going to step in to fill the breach now”?

[Bernie McClean]

Thanks for the question.

Yes, in an ideal world, I think I'm there, with the federal government needing to act, give the leadership and show the provinces that they're willing to make sure the agriculture sector as a whole is going to survive. COVID has been a huge thing, obviously. We had lots of issues prior to this, and it's even more important now that....

Yes, we would like to see that leadership at the federal level, and we encourage the provinces to come along.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Great. Thank you so much.

[The Vice-Chair, Conservative, John Barlow]

Thanks, Mr. MacGregor. You had 10 seconds left, but we'll just end it there.

Unfortunately, that's all the time we have for our first panel.

I want to thank all of our witnesses for taking time out of their busy schedules to be with us today. We certainly appreciate all of your testimony and your insight. To the Canadian Canola Growers Association, Agri-Food Management Excellence and the Canadian Pork Council, thank you very much for being with us today. Have a great weekend.

[Larry Martin]

Thank you very much.

[The Vice-Chair, Conservative, John Barlow]

We'll take a couple of minutes to get the next group of witnesses ready. Once the clerk gives me the signal, we'll carry on with the second half of our meeting.

The meeting is suspended.