Agriculture Committee on June 19th, 2020

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Keeping it simple is what we're looking for here. We're looking for simple solutions that we can help improve.

I also know there is a lot of investment in your sector, bigger investments, bigger returns on investment with the greenhouse sector, and you're susceptible to pests. When infestation occurs, all your crops have to be destroyed, and being inside, you could add more dollars per square foot, so when something catastrophic happens, it's on a much larger scale as opposed to the outdoor sectors.

How would that work for you with AgriStability, and stabilizing your effect with the industry?

[Andy Kuyvenhoven]

I'm not exactly sure what you're getting at.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

How much different would the margins be at 70%? How much different would that be for your sector versus the other sectors? Is it the same request?

[Andy Kuyvenhoven]

We're looking for the 85%, and ideally, we would be at 85%. That would be the balance. Most of my farmers are entrepreneurs. They are independent businessmen. They want to make money. They don't want government handouts, but when catastrophe hits, we need something that's sustainable, and 85% is what our studies are showing us to be the magic number that doesn't pay out to profitability as easily, and yet keeps farms sustainable.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you. I appreciate that.

Mr. Gilroy or Mr. VanderHout, you talked about how diversification can help, but also that individual risks can be explored. Can you elaborate on that, filling those needs and gaps on individual risks.

[Brian Gilroy]

What we're looking at is doing a diversification study that takes into account how individual farm operations through diversification minimize the risk of triggering, and taking into account that if we're diversified, we should either pay a lower premium and/or be able to offset losses in parts of our overall production.

I hope that answers your question.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

I believe it does, and I appreciate your time.

[The Vice-Chair, Conservative, John Barlow]

Mr. Perron, for six minutes.

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

Thank you, Mr. Chair.

I want to thank the witnesses for joining us.

Mr. VanderHout, I'll build on the last question. You spoke about diversification. I've discussed this with the previous witnesses. It's a nice coincidence. Basically, you're saying that, to ensure that AgriStability doesn't affect diversification, there should be lower premiums if the farm is diversified.

Is that right?

[Jan VanderHout]

Perhaps it could be better coverage when the farm is taking its own measures to reduce the risk. It would incentivize farms to hedge their risks through diversification.

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

Okay.

You spoke earlier about the need for a new insurance product for horticulture. I know that produce growers are advocating for legislation that would prioritize them in the event of a client's bankruptcy. Would this type of legislation help you in your search for support?

[Jan VanderHout]

I am very much in favour of both of those things. As for the bankruptcy protection, I consider financial protection for produce growers essential for empowering the growers to have confidence that they are going to get paid. The reality is that by the time a bankruptcy registers, we could be on the hook for weeks and weeks of sales, and this could leave us in a bad position.

As for insurance, the challenge we have is that not all vegetable and fruit crops are insurable right now. I happen to be a greenhouse cucumber grower. Our crops are not insurable, and this leaves us in a particularly challenging place because we have no backstop available to us other than AgriStability. To reinforce Mr. Kuyvenhoven's comments, 70% of 70% just doesn't do it for us. Our margins are far narrower than that, so 85% of 85% is the only acceptable solution, I think, from both sides.

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

Thank you, Mr. VanderHout. I heard you loud and clear.

Mr. Kuyvenhoven, you spoke about the difficulties faced by small growers, which need a risk management system. What changes could we make to risk management programs to better cover small businesses?

[Andy Kuyvenhoven]

Yes. What we could do first and foremost, as Mr. VanderHout and I have said, is to 85% of 85%. That payment would be crucial.

I think we should improve the AgriRecovery program so that if small growers have a quarantine event of some type, they get coverage for their products. Specifically, throwing a product out is not being covered. Those are two key areas that I think the smaller growers would benefit from.

Of course, there is still one question: What is a small grower? I'm six feet tall and weigh about 200 pounds. Am I a small grower or not? That's the question from a perspective of size and the dollar value they are turning over. I think that's the challenge we have.

I hope I've answered your question.

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

You answered my question, and you did so with humour. Thank you.

Ms. Johanson, you seemed to have a great deal to say. In fact, you spoke very quickly. I tip my hat to the interpreters who managed to keep up with you.

You started by speaking about the consensus on increasing the AgriStability reference margin to 85%, removing the reference margin limit, and increasing the maximum payout from $3 million to $5 million. I agree with all this.

You then spoke about AgriInvest. You seemed to want the program to become better and to replace the other programs. If you were in the department and you had the authority, what changes would you propose today?

[Jenneth Johanson]

Just to clarify, is this specific to AgriStability?

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

Yes, that's right.

[Jenneth Johanson]

My priority as a producer is to maintain my viability. If AgriStability is going to remain, we should fix it and increase it, as others have already said, to bring the contribution level up to 85% from the current 70%. If it's not going to be fixed—and I apologize for speaking too quickly earlier—I strongly suggest getting rid of it and starting over through a mechanism like AgriInvest, which we have right now, increasing our matchable levels up to 5%.

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

Thank you. This clarifies your comments.

Could a much more generous version of the AgriInvest program replace this?

[The Vice-Chair, Conservative, John Barlow]

Thank you, Mr. Perron. That's the end of your six minutes.

Mr. MacGregor, the floor is yours now for six minutes.

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

Thank you, Chair.

I want to talk to the Canadian Horticultural Council about the availability of reliable labour as a risk.

During this COVID-19 pandemic, the federal government has indicated that it wants to talk to the provinces and territories about including labour shortages as an eligible risk for the horticultural sector under AgriInsurance. I'd like your feedback on that. Yes, this has been an abnormal year for labour in particular, but it's not a new problem. I think every year we continue to hear about the strains on our agricultural sector and their troubles in getting reliable labour. Can you give me and the committee your thoughts on that?

[Jan VanderHout]

Absolutely, labour is a much bigger problem this year. In years past we also were challenged by labour shortages, and more often than not they were filled through the use of temporary foreign workers. This year, although the Canadian government has done a good job at helping us to get them here, not all of the temporary foreign workers are arriving. Some farms are at as low as 50%, or even fewer workers. I am currently missing five workers out of 30. This is a big strain. It should be covered by whatever program. This year's big exposure is labour.

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

This is a follow up. I'd like to get Canadian Horticultural's perspective. Do they want to see that as a stable part of the BRM programs going beyond the pandemic, given the labour shortages we've experienced? What are your thoughts on what that structure would look? How would a person be compensated if they could not find enough people to work on their farm and it's severely impacting their operations and their ability to generate revenue?

[Brian Gilroy]

We have put forward some recommendations. I'm sorry I don't have them in front of me right now.

One challenge with having it as part of a production insurance plan is that they're provincially administered. One province may choose to use that type of program while others will not. We'd like to see a consistent cross-Canada solution to that problem.

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

That's great. Okay. Thank you very much.

I'll switch to the oat growers. I'm wondering what your thoughts are on the current feedback mechanism we have for the BRM programs. For example, we have had the national program advisory committee co-chair appear before the committee. He gave us his thoughts on how to reform the BRM programs based on the feedback. In your opinion, is that current structure working? Do you feel that that committee is hearing producers' concerns? Are they an effective way of getting the government to seriously listen to these concerns and act on them?