Good afternoon, everyone, and thanks for the opportunity to present to the committee today.
My name is Todd Lewis. I operate a grain and oilseed farm at Gray, Saskatchewan, with my brother and nephew. I am the president of the Agricultural Producers Association of Saskatchewan, or APAS.
APAS is Saskatchewan's general farm organization, representing over 16,000 farms and ranches, as well as 32 associate member organizations. We are a proud member of the Canadian Federation of Agriculture on the national level.
Saskatchewan producers are very big players in Canada's agricultural sector. We manage 40% of Canada's cultivated farmland and 35% of our nation's grasslands. Agriculture and food contribute $142 billion to the Canadian GDP, and Saskatchewan represents 10% of that total production. Agriculture and food make up 12% of Canada's total exports, and Saskatchewan agricultural producers make up one quarter of that total, which is worth $15 billion.
We are world-leading producers of several commodities. We have grown from being historically known for our wheat production as the breadbasket of the world to now being the world's leading producer of many other commodities. Canola was developed at the University of Saskatchewan in Saskatoon, and we are the world leader in canola production. Saskatchewan is the leading producer and exporter of lentils, flax, durum wheat, field peas, mustard, canary seed and malt barley. We sell high-quality cattle and hogs and meat products to international markets.
There's a common theme here, and that is our reliance on export markets for the large majority of our production. We have always relied on the international marketplace. Our distance from larger population centres in North America has been a disadvantage for the processing of consumer food products, so our supply chain has been focused on the shipment of bulk commodities for export by rail to distant ports.
Historically, provincial and federal governments have placed a high priority on increasing the value added to agricultural products through processing. Recently, we have had both levels of government set ambitious targets for value added and export growth, and ambitious targets for increases in production. There's a continued growth in demand for agricultural products worldwide and a strong desire to take advantage of this demand.
Producers share these goals. We would like to see the increased opportunities and added market stability that selling to local processors would provide, and we would like to see the increase in employment and economic activity for our communities.
Building on our worldwide reputation for high-quality and sustainable products, we can grow the processing sector. We can add value to our existing commodities, and we can take advantage of new opportunities. We can respond to the need for animal protein in emerging economies. We can build on our capacity in biofuels and biomaterials. We can develop opportunities with nutraceuticals, vegetable proteins and fibre products.
We have seen an increase in further processing in recent years. We are selling more canola oil from crush plants on the Prairies, and further processing of pulse crops for vegetable protein markets is being constructed. If we are to build for the ambitious production and export growth targets, Canada is going to have to focus on the sectors and regions that currently export unprocessed products and overcome the historical hurdles.
I will lay out a few examples.
Trade access is key. One barrier to the export of processed products is the trade and non-tariff barriers. Our industry is subject to wild swings in demand and prices due to trade wars and arbitrary decisions by foreign governments.
A fair market return is essential. Profit margins for farms and ranches are decreasing, and our input costs are increasing above the rate of inflation. Access to information on new opportunities is critical.
Transportation is also a key factor. We ship long distances to both domestic and international markets, and processed products require different transportation systems than bulk shipments of raw commodities.
Competitiveness is essential. It's hard to compete with jurisdictions that have lower costs, and we make it worse when we impose costs like the carbon tax that can't be passed along to prospective customers.
Access to modern high-speed Internet is essential to both processors and producers who are contributing to their supply chains. Access to adequate water and power supplies is essential. Access to labour resources is also essential.
Continued public research on crop and livestock development is essential. Canola was developed through a public program, and that investment created hundreds of billions of dollars of economic activity.
We need far-reaching investments like the one announced for irrigation recently. Irrigated production has huge potential in Saskatchewan, and the expansion will open the doors to new processing opportunities.
As producers, if we are being asked to increase our investment in increased and diversified production, we need a commitment to improve business risk management programs. This is especially important to young producers and new entrants. There is a major generational transfer of agricultural operations under way, and the new generation needs improved risk management to allow for the investment to expand the industry and meet growth targets.
Thanks for the opportunity to serve as a witness today. I look forward to the discussion and to your questions coming forward.