Agriculture Committee on March 10th, 2020

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

Thank you.

Mr. Caron, I sense a welcome unanimity about the need to make improvements to the AgriStability program. They would involve covering losses at 85% of the reference margin and removing the limit on that margin.

So that we can be sure that this is in the minutes, could you explain to me the need for those two measures? It has been stated that the government does not intend to increase expenditures. You clearly mentioned that amending the programs in a cost-neutral way is impossible and that increasing the investments really has to be the way to go.

I would like to hear your comments on that. We do not want to end up only with an increase in the coverage threshold, or only with the removal of the limit on the margin.

[Martin Caron]

I will start the answer and let Mr. Tougas continue with more specifics.

In terms of the consensus, I want to tell you that we are part of a consultation committee made up of various partners from the provinces. Everyone agrees with the need to cover losses starting at 85% of the threshold and with removing the limit on the reference margin. So the unanimity is real. That was communicated a little later in the meeting between the representatives, the agriculture ministers of each province, and Ms. Bibeau.

Now Mr. Tougas can take over.

[David Tougas]

The two measures are actually complementary. The first increases support for the reference margin and the other, as I mentioned earlier, corrects the unfairness between agricultural crops.

Both measures really are valid, in our view, with each playing a different role in the way the program is currently implemented.

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

Okay, thank you.

We understand completely that both measures are essential.

I would also like to go back to what you said earlier about a quick and specific response being essential. My colleague Mr. Lehoux was talking about making a parallel fund available. I think we agree on that as well.

Do you have any suggestions for specific changes that could be made to better handle the paperwork and speed up the processing of claims?

[David Tougas]

Various provincial organizations operate the federal programs. I can mention Financière agricole specifically. There is quite significant collaboration between the accountants and Financière agricole officials, with the result that, for Quebec at least, the problems are perhaps less acute than elsewhere in Canada.

That's why we didn’t really focus on it. We are not denying that there are problems and that things need to be corrected, but in Quebec, it is not a major issue.

[Martin Caron]

I would like to add one point. Very often, the problem is because of a delay in processing. With the AgriStability program, participants have 18 months to submit a claim. If agricultural companies have problems for one reason or another or if an international conflict results in prices going down, farmers have to wait 18 months before they receive any money.

So we are of the view that there should be an accelerated processing method. I know that there already is one, but it is not often used. There should be one for certain specific cases, however. I repeat our request: a parallel fund should be set up so that we can act when specific situations arise.

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

Mr. Caron, other participants have talked about setting up a permanent working group.

Do you think that it is a good idea, in the sense that it would keep this matter front and centre on an ongoing basis?

[Martin Caron]

It is a very good idea.

We must keep in mind that access to risk management funds for our companies would allow our farming companies to reinvest in new technologies, to move towards innovation and research. At the moment, we see farmers running out of steam in those areas.

[The Chair, Liberal, Pat Finnigan]

Thank you.

[Martin Caron]

A committee should be established and it should discuss a vision that focuses on development.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Caron and Mr. Perron.

The floor now goes to

Mr. MacGregor for up to six minutes.

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

Thank you, Chair.

Ms. Ward, this report is very well done. I appreciate how stark the information in it is. Just in reading some of the statistics, Canadian farm debt has nearly doubled in the last 20 years and is now realized at over $100 billion. It looks to me very much as if farmers have been doing their job in getting our production up, but despite the fact they have been working so hard and have gone to some great lengths to increase our production, they're still seeing such a small slice of the pie at the end of the day. I think all of us around this committee and the Government of Canada really have to take a look at this because there are some very sad figures.

I like your holistic approach to this. The business risk management programs are the federal backstop to when times are really bad. However, I think the crux of your comment was that the best way we can help farmers manage risk is to make sure they have that sizeable income to help them.

Can you expand on that? I think it's important that our committee report really drives home this fact.

[Katie Ward]

Absolutely. One thing that is made mention of quite often is that there has been a really large increase in farm assets that goes along with this accumulation of farm debt. The problem with that is that when you have a couple of bad years, such as we've had especially this past year, an interruption in cash flow to that extent, you can't rely on just assets to offset your debt when you have cash payments you have to make.

We really do need that as a backstop, but if we can have support for our farms to be able to make an income off our farms and not be reliant on off-farm jobs in a lot of cases, especially for small and medium-sized producers who are serving a lot of our domestic market, if we can make money on our farms, we won't need to dip into BRM programs quite as often if bad times hit, or when they do.

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

Yes. Keystone Agricultural Producers made mention of the fact that Manitoba farmers are going to be investing over $3 billion before they even start to realize an income, so those input costs are quite tremendous.

I was hoping you could expand a little more in detail on specifically why diversified farms are having more trouble. I'd like to drive down on that just to see if there's some way we can tease out a recommendation or include it in our report as to why those diversified farming operations are having more trouble with the program.

[Katie Ward]

A lot of the challenge for a small, diversified farm is that they tend to be very labour-intensive. When you're dealing with weather, unruly livestock or what have you, there are only so many hours in the day that you have to give to paperwork. The more we can simplify things and the more we can give easier access in terms of time....

Time is money for these young farmers as well. To have to spend hours puzzling over paperwork just to apply for a program that's going to cost you money to apply for and you probably aren't going to get a payout anyway, if you have to lose 30% of your expected income, it doesn't seem as though it's worth the trouble and the time to put in that extra effort.

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

Is it also a case that some of the crops are not going to be covered by the production insurance?

[Katie Ward]

Yes, as my colleague from CFA mentioned earlier, there's a real challenge with some of the livestock and horticulture commodities in terms of access, and they don't receive as adequate coverage. We really would like to see equitability across sectors. There definitely needs to be some more research on that.

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

Great. Thank you.

Ms. Rosher, I'll turn to you for a second.

In its testimony earlier, the CFA mentioned the establishment of a technical working group. We've heard that sometimes the BRM suite of programs are not quick enough to adapt to the changing realities we see.

If we look at Growing Forward 1, Growing Forward 2 and the Canadian agricultural partnership, these are five-year programs, funding arrangements. Do you have any recommendations on what that technical working group would look like, and how can we construct these programs to be a bit more responsive in the future rather than relying on annual FPT meetings or the next policy framework coming into place?

[Patty Rosher]

We certainly support a technical working group. Of course, we're also a member of the CFA and part of the AGgrowth Coalition. We do think there's a role for us to play in providing that more immediate input on how farmers would perceive changes that are being proposed. Certainly, we communicate to the provincial government, which then feeds into the FPT discussions, but it's a very long cycle. Therefore, we would like to be a bit more responsive.

Because we have access to the farmers, we go back to them and ask, “What does this look like for you? Yes? No?”, and we can provide more immediate input.

We meet with MASC, our crop insurance corporation here, on a very regular basis. They do wait, year by year, before they tweak their programs, but it's a much more immediate input because we can talk to them about the input—

[The Chair, Liberal, Pat Finnigan]

Thank you, Ms. Rosher. Unfortunately, we're out of time.

The second round is going to be a bit short. I'm going to have to cut it to three minutes each.

Mr. Soroka, you have three minutes.

[Gerald Soroka, Conservative, Yellowhead, AB]

Thank you for coming today. I'll make this as quick as possible.

Mr. Caron, you mentioned direct farm subsidy programs in the United States as well as in Europe. Do you think these programs could be adjusted? Our business risk management programs are more for risk than a direct subsidy.

Maybe either Ms. Rosher or Mr. Caron could address those programs.

[Martin Caron]

First, I would like to clarify things. As you have just mentioned, some risks are considered normal. At that point, risk management programs have to come into play. However, with international conflicts, like the ones that have flared up with China, or a biosafety incident, like the ones we have seen in recent years, we have to have specific programs. Funds must be available so that we can react quickly. The two programs really have to be separated.

[Patty Rosher]

Something we discussed with our partners in the other prairie provinces is a support program based on the U.S. one recently put in place for their soybean growers. That's a per-acre payment. We want to avoid anything that's a production volume payment: this is a per acre payment linked to a measurable impact upon farmer return of a specific event. That is of interest, and looking at an ad hoc payment is something that was supported at CFA.

We do have AgriRecovery, though. AgriRecovery seems to be very hard to trigger, especially in Manitoba. We have livestock producers in the Interlake, where we had a horrible year. We have this AgriRecovery framework in place. Let's look at it to make sure it can be more responsive and that there is a way for industry to trigger it effectively.

[Gerald Soroka, Conservative, Yellowhead, AB]

A problem with many of the programs is that by the time they are triggered, you're almost destitute. By that time it's too late, so what does the program help? This is why the uptake isn't coming forward on these programs.

But what about the young farmers? You talked a bit, Patty, about their not being able to even get crop insurance. For with many of these other programs, though, if you don't have a parent or family to start you off, how are you even going to start in agriculture now?

Do you think we need a program that way?

[Patty Rosher]

Oh, yes. That's a very interesting point. Most of our young farmers are attached to their parents' farm. We run into city kids who want to get into agriculture, and that's great. Their entry has mostly been into market-garden farming or very small-scale direct marketing farms. That's great; we like to see that influx. We'd like to support it as well. I'm not sure how the business risk management program we're talking about helps those people, but this is a really interesting area to talk about.