Good evening to the members and the chair.
Thank you for having invited us to take part in this meeting.
The Quebec produce sector covers approximately 36,5000 hectares of cultivated land that generated over $500 million in revenue in 2020. The mandate of the Quebec Produce Growers Association includes providing market access to growers and creating conditions conducive to economic success. We now conduct much of our work at Place des producteurs, in Montreal, one of the largest fresh fruit and vegetable distribution infrastructures in the country.
The growing, harvesting, packaging and marketing of fruit and vegetables generate substantial production costs and require huge capital investments. Not only that, but producers and sellers of fruit and vegetables for consumption by our neighbours to the south face an additional financial risk because of the lack of financial protection if American clients go bankrupt. Approximately half of Quebec's vegetables are exported to the United States. Fresh fruit and vegetables are not like other food products, such as preserves. They are very perishable, meaning that it's impossible to take back the vegetables in the event of non-payment. That's the nub of the problem. The federal government's current rules seriously limit the capacity of growers and sellers to obtain compensation if the buyer declares bankruptcy. Practically speaking, sellers have no protection.
In the United States, if a produce buyer goes bankrupt, the growers and sellers can avail themselves of trustee provisions under the U.S. Perishable Agricultural Commodities Act, the PACA, to obtain payment. Our growers and sellers do not have protection for payment in the event of bankruptcy, which can mean disproportionate financial risks for them. The perishability of fresh produce makes growers vulnerable, particularly in Quebec, where 70% of farms have fewer than five hectares of land. When product buyers become insolvent, vegetables that have not been paid for no longer have any value.
In short, the absence of financial protection puts horticultural growers in Canada in a highly vulnerable financial position for three main reasons. The first is the risk of not being paid for the products they grew, at a time when major production cost increases have been significantly cutting into the profit margins. The second is the imbalance in terms of trade risk management with the United States. The third is the lack of access to reciprocal preferential protection for exports to the United States.