Agriculture Committee on June 9th, 2022

[The Chair, Liberal, Kody Blois]

I call this meeting to order.

Welcome to meeting no. 23 of the House of Commons Standing Committee on Agriculture and Agri-Food.

I will start with a few reminders.

Today's meeting is taking place in a hybrid format, pursuant to the House Order of November 25, 2021. The proceedings will be made available via the House of Commons website. So you are aware, the webcast will always show the person speaking, rather than the entirety of the committee.

Of course, screenshots or taking photos of your screen is not permitted.

Colleagues, we'll just be mindful of the health protocols in the room.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, May 30, 2022, the committee is continuing its study of global food insecurity.

Colleagues, I would remark that we had a very good first meeting on this topic. The information was helpful. I appreciated your questions. I think the information we got back was very credible. We had great witnesses.

Today will be no different. For the first hour, I'm very pleased to say, we have Mykola Solskyi, the Minister of Agrarian Policy and Food of Ukraine.

Minister, I know that right now, as I check my watch, it might be 11:30 p.m. in Ukraine, so thank you for making this appearance. Thank you for being here today. Your testimony is important. We stand with you. We heard from one of your parliamentary colleagues, Yulia Klymenko, one of the members of parliament of Ukraine, and we look forward to hearing from you. We know that this is a challenging time.

You will have up to five minutes. I'll allow a little bit more, if you'd like. We want to hear some opening remarks from you. Then we will turn it over to our members of Parliament, who are excited to be able to engage and ask you questions accordingly.

Thank you again, and welcome.

The final thing I'll say is that we've been very blessed, as I've mentioned a number of times, to have 41 Ukrainian interns on the Hill as part of the Canada-Ukraine parliamentary program. A number of them are in the room. They've been invaluable in connecting us to you and your government.

Thank you so much.

Over to you, Minister.

[Mykola Solskyi, Minister of Agrarian Policy and Food of Ukraine, Verkhovna Rada of Ukraine]

Duzhe djakuyu za zaproshennia.

Dear distinguished parliamentarians, today is the 106th day that Ukraine has heroically resisted Russian attacks.

During these days, the war in our country has already caused thousands of civilian victims and has brought sorrow to millions of people with the destruction of civilian and other critical infrastructure, including agricultural land.

First of all, I would like to thank you and your country for the support you have provided during this difficult and traumatic time for my country. Without your political, humanitarian, military and financial assistance, it would be extremely difficult for us to fight the overwhelming forces of the enemy. Thank you for your sincere words of support and solidarity. Along with the adamant spirit of the Ukrainian people and the courage of the armed forces of Ukraine, your support is the key to Ukraine's success in defending its independence, sovereignty and territorial integrity.

The war has stalled Ukrainian exports. Due to the blockade of Ukrainian seaports, more than 20 million tonnes of grain are not on the world market. The blockade of ports has dramatically reduced our export opportunities. In March we exported 200,000 tonnes. In April we exported one million tonnes. In May we exported 1.7 million tonnes. In comparison, the export of agricultural products had been up to five million to six million tonnes per month before the war began. In the current situation, two million tonnes per month would be the maximum amount that we can achieve.

European countries will begin harvesting in a month, and, in our opinion, the Romanian port of Constanta will mostly work with European companies, and its capacity will be loaded with their exports. It will further complicate the export of Ukrainian products.

The blockade of Ukrainian exports has already lead to a record price increase on the world market and will certainly provoke a global food crisis. I would like to highlight that the only reason world food prices are rising is because of a senseless attack by the Russian Federation on Ukraine, and it has nothing to do with the sanctions on fertilizers, including potash. It is a manipulation from the Russian Federation and the Republic of Belarus and nothing more.

We are also approaching another problem, the storage of grain in Ukraine. The total storage capacity until February 24 was 75 million tonnes of grain. We currently have only 60 million tonnes of storage facilities left as a result of destruction and temporary occupation. Given the current low rate of exports, last year's harvest and our harvest forecast, the shortage of storage capacity will reach 10 million to 15 million tonnes by October. That's why we have an urgent need to set up temporary grain storage.

The most effective way to solve the export problem is to defeat the Russian army on Ukrainian territories so we call on continuing help for the Ukrainian army and for the supply weapons needed to protect our territories. We understand that the war can't be stopped in the short term, so we plan to cover the shortage of storage with temporary storage facilities, modular construction and plastic bags. It's obvious that the shortage is quite large, so we would be very grateful if the Government of Canada should consider the possibility to provide us with such temporary storage, at least in some part. That would significantly help to preserve the crop and help us to supply world markets in the future.

Finally, I would like to emphasize again that the only solution for Ukrainian products to be exported and to prevent deepening the global food crisis is to defeat the Russian army in Ukrainian territory and to completely unblock Ukrainian ports and organize regular shipping. As for other temporary measures such as humanitarian corridors, you know that they are an issue as, in the conditions of the war, the cost of ship, freight and insurance will be too high while the situation will remain critically insecure.

Only the end of the war can grant a secure moment in the Black Sea. Therefore, I appeal to you: Don't stop the supplies of weapons to Ukraine, and increase them.

Don't suspend existing sanctions. Impose new sanctions on Russia, Belarus and any of their supporters. Continue to support Ukraine and it's position in the international arena.

Thank you very much for your attention.

[The Chair, Liberal, Kody Blois]

Thank you very much, Minister Solskyi.

Let me commend you, Minister, on your English. I know that's not always easy, especially before a parliamentary committee.

We do have the benefit, colleagues, of having Ukrainian translation. I'd like to thank our clerk for making that happen. That is actually on the auxiliary channel. The minister will have access to hear in Ukrainian members' questions in English or French. Of course, there will then a bit of a delay from the interpreters picking up the Ukrainian translation back, so just be prepared for a little bit of a delay.

Minister, make sure that you have your Ukrainian channel set accordingly.

We're going to start with the Conservatives for the question period.

Mr. Barlow, you are up first for six minutes.

[John Barlow, Conservative, Foothills, AB]

Thank you, Mr. Chair.

I think I speak for all of us that it's an incredible honour, Minister, for you to take the time to be with us, certainly considering the immensely stressful war that you're trying to deal with. I think it's critically important that Canada stand with Ukraine, certainly for most of us who represent western Canada.

Our agriculture industry was literally built on the backs of Ukrainian immigrants who came here more than 100 years ago and broke the ground and built our agriculture industry. Thank you. We are certainly thinking of you.

I'll just get to my questions first off.

We've been speaking a lot about military equipment and how we can help you with that. I certainly don't foresee our discontinuing that. We know how important it is to provide the resources to Ukraine to help on the military side.

You spoke about storage. Are there some things that we can do in Canada to help you on the agriculture side, like seeds, farm equipment, machinery or fuel? What would that temporary storage look like? I know your storage is much different than we have. We store a lot on farm, while you have more of a hub of storage.

Are there some steps or things that we can do to provide some assistance on that side?

[Mykola Solskyi]

[Witness spoke in Ukrainian, interpreted as follows:]

Thank you.

Indeed, in Ukraine we do have these permanent grain storage facilities. However, for a while now Ukrainian farmers have been using these temporary storage facilities, especially in times of high-yield harvests. These are plastic bags. We also have a temporary storage experience similar to what is being used in Canada. These are temporary round structures on top of which, under a film, the grain is affixed and special machinery loads it on top of these structures.

Another thing that would be very important for Ukraine.... We have a lot of displaced persons. Several million people have moved away from the war-torn areas. We need jobs for them, including in the agrarian sector. One area that we'll be looking at is berry picking, fruit picking and small orchards up to 25 hectares, or 60 to 70 acres, in other words.

We approached the Canadian government with a request for assistance with tree saplings. We also had meetings with the Minister of Agriculture for Canada and we mentioned this.

Our export goes through railway and roads towards Hungary, Slovakia, Poland and Romania. We need additional veterinarian and phytosanitary laboratories in order to speed up the export. That's the kind of assistance we would also need.

Thank you.

[John Barlow, Conservative, Foothills, AB]

Thank you

You just mentioned rail and highways as well. It's my understanding—and I want some clarification from you, Minister on this—that the rail system, and in many cases Soviet-era rail systems, are not compatible with the rail systems of some of the countries around you, such as Poland and Romania, which causes a real problem with your supply chain, especially with the blockade in Odessa.

Are there any steps that can be taken to try to address that? Is it simply that you are moving railcars to the border and then having to move the commodities, grain or barley, onto different cars to keep moving it? Is that the situation?

[Mykola Solskyi]

[Witness speaks in Ukrainian, interpreted as follows:]

Yes, you're absolutely right. We have our type of railway cars, and the distance between the rails is different in our country from what it is in our European neighbours, so when we get to a border, we have two options. Option number one is to somehow reload the cargo into European railways cars. Option number two, in some countries, for example in Romania, is that there is a special procedure whereby Ukrainian cargo is fixed with actual wheels that are able to use the Romanian railway system.

Of course, it complicates the logistics and complicates the process of transporting goods.

We were not ready for the developments we have now, and because of that we see long delays in crossing borders. It takes a few days. At the same time we see that the European Union doesn't have enough cargo containers because the European Union also wasn't prepared for this particular war and such developments. European businesses are also not ready to quickly build the necessary number of cargo railway cars because in previous years they didn't have such a quantity, and they tell us that if, in a few months, in six months, in one year, hopefully Black Sea ports will open, we will have many railway cars for cargo that we won't be able to use, to fill.

This leads to a situation in which transport in Europe, in terms of the number of these cargo cars, is not increasing in such numbers that we would be able to use to move our grain.

We understand that we used to be able to load a Panamax 70,000-tonne ship over a one-day period, a 24-hour period, but now it will take much longer to use the railway.

[The Chair, Liberal, Kody Blois]

Thank you, Minister, and I apologize. I have to keep the time. I gave a little bit extra because, of course, we really want to hear from you.

I'll go to Mr. Drouin right now for six minutes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you so much, Minister Solskyi. I can't imagine what the agricultural community and your people are going through. I have the honour of representing 1,200 people of Ukrainian descent in my riding, and I also have the honour of working with a fine Ukrainian, Iryna, who is interning in my office.

Thank you for being here. I guess it is tonight for you.

You've mentioned that normally your storage facilities would accept 75 millions tonnes and now you're at 60 million tonnes. Is the direct reason because of the Russian bombing?

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you.

My understanding is that in normal times you would have 75 million tonnes of storage capacity, and now you're at 60 million tonnes. Is the direct reason because of the Russian bombing?

[Mykola Solskyi]

[Witness speaks in Ukrainian, interpreted as follows:]

Yes, this is a direct result. The main reason is that the part of Ukraine in the east and south is occupied by Russia, and we have a number of storage facilities there.

The second reason is that the elevators in Ukraine were not used for a long or extended period of time. The grains weren't stored there for a long time. They would be stored there for a short period of time and then moved on to ports.

Now we are exporting three times less grain than normal, and that's why we have our storage facilities filled. There is no turnover. We foresee that in the autumn, we'll have a lot of corn. We'll have a lot of it. We wonder if our ports will still be blocked at that time or if they will be partially open, but there will be fewer ships than before, for a number of reasons.

Maybe 10 million tonnes to 15 million tonnes of our crop will need to be stored in order to export it at a later date. That's taking into account that we have already decreased our forecast for crop productions, taking into account the war.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

We met with the Food and Agriculture Organization this morning, and we heard you on storage. They said that they would be able to set up temporary grain storage fairly quickly, but that only lasts four months.

We asked about the status of seaports. We've seen terrible and shocking images in Canada of the bombing of certain grain terminals at some seaports.

There's a crop season coming in July. It is your opinion that if we push back the Russians, the infrastructure would be in good enough shape to be able to continue exporting those grains through the seaport, or are you still analyzing the infrastructure status?

[Mykola Solskyi]

[Witness speaks in Ukrainian, interpreted as follows:]

What we can say is only what we know now—today. We cannot really forecast with any degree of certainty what will happen, how many new shellings and new missiles will be launched, and what next extractions will take place. If, let's say, today the war stopped, there is no critical damage to the agriculture infrastructure. There is only one big port that has been seriously hampered, not destroyed.

We think that maybe 10% of our port facilities will need to be repaired at this point. There are some elevators that are partially destroyed, but it's a small percentage of our total storage facilities.

We have some bridges that have been destroyed. We have some roads that are damaged. But if, let's say, the war will stop tomorrow, I think we would pretty quickly renew and re-establish our infrastructure.

At this time, we don't know when this war will end. What we've seen over the last two months is that they have increased the number of shellings. They are also targeting more and more agriculture infrastructure and ports, which wasn't the case before.

We're thinking that the Russians are paying more attention now to agricultural infrastructure, and it also coincides with their international rhetoric, when we talk about global food security.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you so much, Minister.

I'm out of time, so I'll let my colleagues jump in here. Thanks you so much.

[The Chair, Liberal, Kody Blois]

Mr. Perron now has the floor for six minutes.

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

Thank you very much, Mr. Chair.

Minister Solskyi, let me begin by saying that our hearts go out to you. We thank you very much for taking the time to speak with us. I assure you that there is no partisanship here when it comes to Ukraine and that we'll do everything we can to help you.

At the last meeting, we spoke at length with Ms. Klymenko about the urgency of unblocking the ports, including the port of Odessa, and creating some kind of safe corridor. I know that there have been negotiations and unreasonable demands from the Russians.

Can you provide an update on the situation? Are there any discussions going on? Will a safe corridor be possible? Are you in discussions with NATO about this?

[Mykola Solskyi]

[Witness spoke in Ukrainian, interpreted as follows:]

Negotiations are currently taking place between the United Nations and Russia. Turkey is also partaking in these discussions. They're talking about how to open Ukrainian ports and lift the blockade. We've directed our proposals from Ukraine as to how we see it happening. We're hoping that this next week we'll get some feedback as to next steps or next meetings, but this is a process. It takes time, and no one is certain when it will lead to results and when it will be completed.

In my view, the proclamations that the Russians make and their actions are totally different things. We've seen Russian ministers stating that they are not against exporting Ukrainian grains and that they will not be preventing Ukraine from doing this, but at the same time, we see the missile attacks against Ukrainian ports that are used for agriculture shipments, as well as missile attacks and shelling of the bridges that are used for moving agricultural cargo. Ninety percent of cargo is agricultural. The Russians know that, and yet they are attacking it with missiles and shelling.

We have to be mindful of that when we hear Russians stating that they will not prevent Ukraine from exporting agricultural goods and ships from Ukraine. It's just talk. Until Russian ships move away from Ukrainian ports, international shipping lines will not be sending their ships to Ukraine or to Ukrainian ports because of the insurance cost, because of different circumstances. It's a very difficult situation.

Prior to the war, we were sending 200 ships from Ukrainian ports. In current circumstances, it may be 10 or 15 ships a month, which is a very small number. It's like a symbolic process that will not resolve food shortages for the world or Ukrainian exports.

My opinion is that Russians are making loud statements, but at the same time their actions go against those statements, and we cannot really trust the Russian statements. World business organizations and governments will not put much trust in Russian statements, and they will only monitor and pay attention to actual actions on the ground.

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

Thank you very much.

What about access to fertilizer in Ukraine? We know that planting has been done on some of the land. What crops are you expecting compared to other years? I know that 20% of the land is in occupied territory. Considering how difficult it is to get fertilizer, will the crop yield be different?

[Mykola Solskyi]

[Witness spoke in Ukrainian, interpreted as follows:]

Last year the total harvest in Ukraine was approximately 115 million tonnes. This year we're expecting—if the weather co-operates, in addition to the war—about 60 million tonnes of harvest. About 35-plus million tonnes will need to be exported. Even if we are decreasing the harvest, the export volumes are still quite large.

As for fertilizer, some farmholds had stocks of fertilizer. The war started on February 24, just before the sowing season started in Ukraine. They had a certain stock of nitrate fertilizer and other fertilizers that were used by the farmers. For next year it's difficult to forecast. Fertilizer prices are quite high, but we think fertilizer will arrive in Ukraine from other markets through western Europe.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Minister and Mr. Perron.

Mr. MacGregor, you have the floor for six minutes.

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

Thank you very much, Mr. Chair.

Minister, I'd like to echo the comments of my colleagues around the table. I'd like to thank you for your time today and express along with them our solidarity for you, your people and your country.

I had a chance to speak with the Food and Agriculture Organization of the United Nations this morning. One of the questions I asked was about the Ukrainian territory that Russia now occupies. We've heard reports that they have stolen Ukrainian grain for their own profit.

What can countries like Canada and the rest of the international community do to make sure that we are keeping tabs on that stolen grain and holding Russia to account for it but also any countries that might knowingly be buying that stolen Ukrainian grain? Can you maybe talk a little bit about that and about any information you might have?

[Mykola Solskyi]

[Witness spoke in Ukrainian, interpreted as follows:]

Thank you, distinguished colleague. The grain that is being taken out of Ukraine is wheat. We have in these regions large storage of wheat. We see that about 500,000 to 600,000 tonnes has already been taken out of the country by the Russians. They've loaded it in the Ukrainian port of Sevastopol. Every ship leaving Sevastopol loaded with grain is loaded with Ukrainian grain because they have no other wheat there. This grain is difficult to sell. We have reacted to this and were able to turn these ships away from Egypt where they were initially heading.

They were diverted and went to Syria. We have no allies in Syria. That's where those ships arrived. Here's what we're observing lately. They are now taking this grain to Russia. They mix it with the Russian grain and claim that the origin of this grain is Russian, that it's been harvested in Russia. Since there is no ban on Russian grain, realistically I understand how difficult in this situation it would be to put an export ban on Russian grain given the prices and given the needs in North Africa and Asia. We try to track this stolen grain, but it takes a separate investigation for each case. You can never be quite sure whether the grain is just Russian grain or if it's a mix of Ukrainian and Russian grain, and the documents have been falsified.

We have been collecting evidence and have been talking to the G7 agriculture ministers. We spoke with them four weeks ago in Stuttgart. We will be asking for sanctions against shipowners who are transporting such grain if we have evidence about that, and sanctions against those who are buying and selling that grain in order to discourage this practice from happening in the future and making it more complicated for Russia.

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

Thank you, Minister.

The second question I have is about the Ukrainian farmers who now find themselves in occupied territory with Russian soldiers around and in control. What has your government learned about the plight of those Ukrainian farmers? Could you talk about anything you have learned about the Ukrainian farmers who now find themselves under Russian occupation and what is happening to their farms, how they are doing, and so on.

[Mykola Solskyi]

[Witness spoke in Ukrainian, interpreted as follows:]

They are obviously in very difficult conditions. The areas where they live are under occupation. The main issues that Ukrainian farmers encounter in the occupied territories are the following.

The occupation forces ask them to live according to Russian laws and to register as Russian enterprises. Whoever objects to this can see their grain confiscated. In addition, Russia will take away their business if they see that the farmers are not complying. In the Kherson and Zaporizhzhia areas that are under occupation, we see that Ukrainian farmers are not complying with the Russian demands and are trying to survive. They spend more time in the fields. They try to prevent Russians from finding them. They are evacuating their family members. They're making it complicated for the occupation forces to find them and to communicate with them.

The occupation forces, despite their complete cruelty, are also trying to use this as a publicity stunt. They're trying to use this to calm the local population, get them to register as a Russian business, and then show on TV that everything is peaceful and the farmers are happy. But we see that this is not working. Even Russians watching Russian television do not believe that this is the case.

Farmers are just taking it day to day. Every day they're making new pretexts to run away or avoid the occupation forces.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Minister and Mr. MacGregor.

Mr. Lehoux, you have the floor for five minutes.