Thank you very much, Mr. Chair, and thank you very much for the invitation.
I would also like to applaud this year's theme, which is Canada's place in a competitive world, because that fits really well with where the Canadian Federation of Agriculture is trying to move the entire agriculture and agrifood industry.
As most of you know, CFA is a national federation of organizations, with general farm organizations from every province as members, as well as numerous commodity organizations.
The importance of agriculture and agrifood in Canada is undisputed. We generate somewhere around $130 billion of revenue a year. That's about 8.5% of our GDP. One in seven jobs goes to agriculture, which is almost two million jobs a year, $26 billion in exports, and in fact it contributes $6 billion to our trade balance.
This may surprise you: I am not here today to ask you for money. How much more money we need in agriculture is currently outstanding; however, what is not outstanding is the need for us to be much more strategic in the way we spend the money that is already being invested in agriculture. If you look at the almost $5 billion a year that both levels of government have invested in agriculture in the last few years, it's a significant amount of money, but we need to ask ourselves whether we are flowing that money as strategically as we possibly can.
When you look at the amber spending as a value of farm gate production, ours has been increasing for the last several years and in fact is getting closer and closer to what the U.S. is spending in amber. Of course, if you include their green spending, they spend almost 40% of the value of agricultural production in their industry. That compares to about 13% in Canada. But if you look at the way they spend the money, and you look at the last few years in realized net income, you will realize that Canadian farmers are coming out of the absolute worst three years in net income in history, and they continue to compete against U.S. farmers, who are coming out of the best three years in farm income in history.
So we need to be much more strategic in the way we invest money. If you look at the way the U.S. is priming the pump at the bottom of agriculture, they are spending most of their money in the grains and oilseeds sector, which then accrues benefits and cross-subsidizes into valued-added industries such as hog feeding, cattle feeding, and the biofuel industry. So they've really primed the pump, which is accruing benefits throughout the entire agricultural sector.
While Canadian farmers are some of the most competitive farmers in the world, we also need competitive policy to be able to compete against the agricultural industries in other countries. We need a vision for agriculture that consists of a vibrant, dynamic industry within an environment that allows all sectors in the chain to be profitable. So the CFA members decided a few years ago that we need to look at a Canadian farm bill. What can we do ensure that we can turn our industry towards profitability?
If you look at the last agricultural policy framework, it was merely a collage of funding programs—very important funding programs, funding programs that farmers needed to mitigate some of the impacts of added input costs when it comes to on-farm food safety programs, environmental sustainable programs, etc., but it was a collage of funding programs. Not nearly enough time was spent on strategy--what kinds of strategies can we implement and adopt to ensure that we move agriculture towards profitability?
What we did is develop three pillars. One is a public goods and services pillar. We need to make sure that when farmers implement on-farm food safety programs, environmentally sustainable programs, we don't victimize those programs against the net income experienced by farm families. So we need public help in paying for some of those costs.
When we look at business risk management, we need to be more strategic in how we flow that money. We need to separate disaster from stabilization. We're suggesting, and have talked to the minister, about looking at the merits of implementing a top tier in CAIS and having a NISA-like program in that top tier that would add predictability and bankability to that program. We need to bring back the ability for provinces to have companion programs to make sure they can address regional or province-specific needs in those areas. We also need to look at declining margins. We have a severe declining margin problem in the grains and oilseeds sector. We need to look at that.
My last point is that we also added a strategic growth pillar. That talks about top-down investment and value-added, bottom-up investment at the primary production sector, making sure farmers have all the tools they need to empower them in the marketplace and making sure we invest adequate money in research and innovation as well.