Bill C-18 Committee on Nov. 1st, 2011

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Bob. It's nice to see you again in your capacity with the FNA.

Let me state at the beginning—and I'm sure you probably agree—that this whole process is a travesty. It's a sham. It's a farce to think that a standing committee can deal with such a comprehensive, sweeping piece of legislation in two short evening meetings. Here is something you may not know. Even the clause-by-clause analysis of this bill has been limited to one evening session. No party is allowed to speak for more than five minutes on any clause, even if there are ten amendments on that cause. It's limited to five minutes per party, per clause. And if we're not finished by midnight, we'll be deemed to be finished and this bill will be over.

We're dealing with a done deal, so I can accept.... Even though I know you're a friend of the Canadian Wheat Board traditionally, and have been for probably your entire professional life, I understand why you're coming here with a presentation with ideas for how farmers might cope with the predictable consequences of this piece of legislation.

We're being asked to buy a pig in a poke here, Bob. We're being asked on the whim of the minister to accept this notion that the government says everything will be better for farmers if we get rid of the Wheat Board. They've never presented a single piece of documentary evidence or a single business plan. There has been no cost-benefit analysis, no studies, nothing to prove their case.

Yet their whole focus has been that they want to fast-track this to provide certainty, stability, and predictability in the marketplace. Wouldn't you agree that the best way to ensure stability, predictability, and certainly in the marketplace, in uncertain economic times internationally, would be to do nothing at all? Don't pull the rug out from under the Canadian Wheat Board. At least don't do it now, not this year, when we're just trying to recover from the global international crisis and possibly going into round two of a global international crisis. Why pull the rug out from underneath the rural prairie farm economy like this?

My question to you would be, as a veteran of this industry for many years, why now? Why the hurry? Can you see any rhyme or reason in this, other than the whim and the notion of an obsessed minister and his equally obsessed parliamentary secretary?

[Bob Friesen]

Mr. Martin, you will probably be disappointed in my answer. I sympathize with your constituents in your riding. I also know where you're coming from when you talk about process, etc. However, in the discussion in our organization—and perhaps therein lies the difference—I represent a whole host of farmers. Some of them like and rely on the Wheat Board; others would rather not have the Wheat Board. I represent that eclectic group of farmers.

In our organization, we had to sit down and say, “Okay, what's coming? Where will the puck be? What can we do to empower our farmers within that environment?” That's the reason I'm here presenting.

[Pat Martin, NDP, Winnipeg Centre, MB]

That's a very logical approach.

[Bob Friesen]

My role here is strictly to try to, as I said earlier, help be an architect in a system that will facilitate optimizing farmers' revenue, reducing their costs, making sure they're cost-competitive, and empowering them in whatever grain handling, transportation, and marketing environment we have.

[Pat Martin, NDP, Winnipeg Centre, MB]

Also, to help them to cope with what you call the far-reaching implications of doing away with the Canadian Wheat Board. I'm glad you came here with concrete recommendations as to how producers might cope. All of your ideas were cost factors. All of your ideas called for government spending to help them cope. This is what's unknown to us. The total cost of this free market flight of fancy of Mr. Anderson's here is untested, unproved, and open-ended. It's a blank cheque they're asking us to write just to fulfill this, as I say, life's ambition, this dream of theirs to abolish the Wheat Board.

I believe everything you have recommended and said to us has merit in helping producers cope with the implications. All of them were cost factors. We heard KPMG estimate $500 million in hard costs just to close up this $6 billion per year corporation. What you're suggesting is there's going to have to be a lot more spending, or else we're going to lose producers. Has your analysis of the implications of this bill led you to believe some producers will in fact leave the family farm as a result? Will small producers be affected to that extent?

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Martin. Your time is expired.

Mr. Friesen, please feel welcome to answer the question.

[Bob Friesen]

Actually, our look at this has been a little more technical and a little more objective than that. We've been looking at areas in which we think we can help facilitate the process. We haven't done a macro-analysis of the sort you're talking about.

[Pat Martin, NDP, Winnipeg Centre, MB]

It seems nobody has.

[The Chair, Conservative, Blaine Calkins]

Mr. Warkentin, the floor is yours for five minutes.

[Chris Warkentin, Conservative, Peace River, AB]

Thank you very much. I appreciate Mr. Martin's segue into my questions.

I thank you, Mr. Friesen, for your testimony today and also for your pragmatic approach. I wish the existing directors of the Canadian Wheat Board were as pragmatic about reaching out and seeking to undertake the work that farmers across the western provinces wish they would undertake, which is to be pragmatic and responsible with the resources that farmers have entrusted to them as well as to undertake a plan for the future.

Mr. Martin just referenced smaller producers, and some of the most important smaller producers today in the market are younger farmers, people who are trying to break into the industry. I happen to represent a whole host of young producers who come and speak to me about this issue and their desire to break into new and innovative markets. Some guys want to start organic enterprises. Others want to produce wheat and barley that will be destined for a specific market within the world or will be for domestic consumption.

The word “obsessed” came up when I was speaking to some of my colleagues. I've become obsessed with this issue because my constituents are obsessed with this issue. They want to have maximum freedom and maximum capacity to go and seek new and innovative markets for their products so they can capitalize and get the best return for their smaller farms. Then they may be able to grow, and they may be able to raise their families on the family farm or break into the market as independent farmers.

You spoke specifically about assisting farmers in that enterprise, to seek additional and new innovative markets. I wonder if you could just say a little bit, in addition to what you've mentioned thus far, about your organization's plans to assist younger farmers specifically who know that there are innovative markets out there, who know that there are opportunities for them to create niche products. I think this is a partnership that's going to be very helpful.

What are you going to do for these smaller farmers, or how do you think you might be able to assist these younger and innovative farmers?

[Bob Friesen]

We think there's opportunity in marketing. In fact, FNA started an entity that we call FNA Foods a few years ago. FNA Foods was there strictly to aggregate, in this case special crops, and find niche markets for those special crops.

We believe there may be a lot of benefit and merit in gathering a group of farmers who want to work together with FNA. FNA is a farmer member organization. When I say FNA or when I say “we”, I include all the farmer members we have. There may be a willingness by some farmers to say “yes, let's work together”. I'm convinced there's empowerment in a group of farmers aggregating, a group of farmers investing in a shortline, a group of farmers marketing their grain together and finding port position. I believe that can happen, and certainly our task force is looking at that and determining where there will be opportunities of that nature.

That's also one of the reasons we suggested the AgriInvest stimulus initiative, because—and this is interesting and a bit of a segue—we know that young farmers look at the industry differently than would guys my age. In my case, I'm there to maintain and try to keep my equity. Younger farmers may be much more willing to stick their neck out. They're willing to bet on the future, and they're in the position to do it. Both of them make perfectly good business sense, but the younger farmers are more willing to stick their neck out and invest in the future. We believe this AgriInvest stimulus initiative is also perfect for them.

[Chris Warkentin, Conservative, Peace River, AB]

I appreciate your willingness to work to empower younger farmers. You talk about how younger farmers are willing to stick their necks out. I recently saw a poll. It may be a rural legend, but apparently the Wheat Board looks at farmers and if they're 25 years of age they believe there's a 25% chance that those farmers will support the single marketing program of the Wheat Board. If they're 35 years old, they figure it would be about 35%. If they're 65 years old, there's a good chance that 65% of them are going to support the board.

I don't know if that's true or not, but it seems to be consistent with what I've heard from the farmers in my constituency, where younger farmers are driven to seek alternatives to the current pool system. Younger farmers find it offensive that the federal government imposed the Wheat Board on them as western Canadian farmers, as a war measures act to supply cheap grain to Europe. Many farmers believe this continues to be the policy of the Canadian Wheat Board, and the younger farmers are disturbed by this.

In terms of the access--

[The Chair, Conservative, Blaine Calkins]

Mr. Warkentin, could you get to your question? Your time has expired, and I would like Mr. Friesen to have an opportunity.

[Chris Warkentin, Conservative, Peace River, AB]

I do apologize about that.

The point is that younger farmers are looking for change. You obviously are willing to be a partner with them, and I think it's important that younger farmers who are listening to this debate understand there are willing partners who are going to undertake pooling options with your organization, or that this may be an opportunity that can be facilitated through your organization.

[The Chair, Conservative, Blaine Calkins]

Mr. Friesen, a brief answer, please, sir.

[Bob Friesen]

Yes, we're looking at exactly that as well.

[The Chair, Conservative, Blaine Calkins]

That was very brief.

Mr. Valeriote, five minutes, please.

[Frank Valeriote, Liberal, Guelph, ON]

Thank you, Mr. Chair.

Thank you, Mr. Friesen, for appearing before the committee.

For consistency's sake I'm going to ask you a question that I asked of one of the previous witnesses.

I've been on the agriculture committee now for three years, and I've heard from farmers appearing at that committee and elsewhere. They've expressed their concern that in the absence of action on the rail service review, getting crops around the prairies to their points of destination is very difficult as it is, and the clout that the Canadian Wheat Board provides gives farmers an edge that they need. They're concerned about the gap that is going to be created in the absence of the clout of the Canadian Wheat Board.

That question arises from my review, not only from my discussion with the farmers, but the report of the working group on marketing freedom. On page 8 and other pages they say the minister and the government should give market forces every opportunity to work and interventions should be considered only when necessary, and they refer to the Competition Act and the Competition Bureau as tools the minister can effectively use to address anti-competitive behaviour.

My concern is that farmers have come before our committee many times and said this is an ineffective tool. There's really nothing that the Competition Bureau has ever done, particularly with respect to the railways, who will even give them cars that have holes in them, and they lose their grain as the cars are running down the tracks.

So I'm wondering, since on page 10 of that report--Mr. Allen made reference to this in one of his questions--they're suggesting the bar be set high, and the government be reluctant to intervene, do you see a gap? Do you see a loss of clout? Do you see the Competition Act and the Competition Bureau as effective tools that can be used to prevent the abuse that everyone fears the farmers will suffer at the hands of the railway?

[Bob Friesen]

That's an excellent question.

First of all, we're very concerned about the lack of empowerment of farmers against a very consolidated grain handling industry, as well as against the railways. That's one of the reasons why FNA is where FNA is, because in the face and in the wake of consolidation, we're there to try to empower farmers.

As far as anti-competitive behaviour, we're very concerned about our Competition Act, but that has already stemmed from our experience in some other industry sectors, say the seed industry. There are things in technical use agreements that have us seriously concerned. And there are some of the experiences we've had in Atlantic Canada to give farmers the option of using an organization like FNA. So I wouldn't express the same level of confidence in the Competition Act and the Competition Bureau that has been expressed before. I think the government should look very seriously at ensuring that the Competition Bureau has the teeth, if that's what's needed, or the courage to make sure they scrutinize very carefully, because farmers need that. Farmers need to make sure there isn't anti-competitive behaviour.

By the way, in my international experience, that is a concern all around the world.

[Frank Valeriote, Liberal, Guelph, ON]

I have another small question, if I might.

Mr. Knubley previously referred to the C.D. Howe Institute and to the George Morris Centre. I know the people at the George Morris Centre. It's in Guelph. They are typically conservative-leaning think-tanks. There is nothing wrong with that. You need to hear from all sources all the time, in balance.

One of the other conservative magazines, The Economist, recently said that smaller producers faced with mounting market costs will inevitably have to sell their farms to bigger rivals and agri-business companies, devastating small prairie towns whose economies depend on individual farmers with disposable income.

What causes me concern is not so much what's in the bill but what is not in the bill. As parliamentarians, we have to look five, ten, fifteen years down the road. I'm concerned about food security and food sovereignty. I'm concerned about some of these small farms being bought up by large agri-businesses and, more likely, by foreign countries whose concern will be more with their interests than with our food sovereignty.

Does that concern you—the purchasing of all of these small farms by big agri-business or other countries? Should there be some legislation to keep that from happening in order to protect our food sovereignty?

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Valeriote. Your time has expired.

Mr. Friesen, please feel welcome to answer the question.

[Bob Friesen]

Creating legislation to save small farmers is a whole new subject. Are we concerned about the family farm? Yes. Are we concerned about small to medium-sized farms having less power in the marketplace? Yes, but that's exactly why we are doing what we're doing. That's why FNA was started back in 1998, for the input side. Now we’ve started doing the same thing for the market side, and we want to continue to help empower farmers there, because we think 10,000 farmers working together can do an awful lot of good.

That's also why I suggested making sure that the new board of the Wheat Board, whoever that may be, has the impetus and the incentive to try to make that a successful marketing agency so that in the five-year transition period there is something viable farmers can use, if they so choose, so that at the end of those five years there is something farmers can embrace and can say it is theirs, it is working, and it is what they want to use, for those farmers who want to use it.

[The Chair, Conservative, Blaine Calkins]

Thank you, Mr. Friesen.

Mr. Merrifield, please.

[Rob Merrifield, Conservative, Yellowhead, AB]

Thank you very much for coming in, Bob, at this late evening hour.

I applaud what you're doing as an organization. In fact, we use Farmers of North America on our farm, and you have certainly reduced inputs as we exercise the opportunity you provide for farmers. That's very good, and I applaud that.

I know you were in my office here recently and talked about this plan for AgriInvest, but from the informal study done in 2008, we heard that breaking the monopoly of the Wheat Board would actually increase income to farmers in the prairies by somewhere between $400 million and $600 million. So that's $500 million, not just for one year but for every year. That is a conservative amount, according to this study. Therein lies a significant amount of money. You're talking about $450 million and $285 million from the two funds coming together to free up some of those dollars for investing in agri-investments.

If you look at it that way, the subsidization of the Wheat Board right now by prairie farmers is significantly more than that, on a yearly basis. So I would challenge you, if you're working on behalf of farmers, to consider that as you move forward.

You talked about the movement of goods, and I couldn't agree with you more. Railways and a rail freight review are absolutely paramount to moving along with this so that farmers have the opportunity to get their product to shore and off to market.

Shortline rail is also part of it. We talked about producer cars. We talked about a rail freight service review, but shortline rail you have some interest in and knowledge of regarding the rail service review. Can you comment on what you would see as an opportunity for shortline rail?

[Bob Friesen]

I am not an expert on shortline rail. I know they benefit farmers, and I know a lot of farmers who have invested in shortline rail. I believe it helps make the transportation system more efficient. I believe it facilitates producer cars, which farmers feel bring more dollars back into their pockets.

I can't elaborate on the logistics of shortline rail, and I apologize for that. I was hoping to bring an expert, but it was rather short notice. We were concerned about making sure that the service agreement was held to or that there was going to be a mechanism for compliance to make sure that service was improved.

We also think there should be a costing component to it. But make sure that railways don't interpret a suggestion to improve service as a signal to charge more. The whole railway service issue is huge for FNA, even with what we've already done with FNA foods and aggregating specialty crops.