Thank you. I would like to thank you for the invitation to make a presentation.
As you just mentioned, my name is Ron Bonnett. I am a beef producer from northern Ontario, and I'm also second vice-president of the organization.
There's no doubt there are a number of issues facing the agricultural industry today. We could come with a huge shopping list of some of those issues that are facing us, whether it be the impact of regulations, the impact of the Canadian dollar, or something about the response of some of the farm programs, but the CFA and its membership have decided to focus on four key issues.
As a bit of background, so that you know, the Canadian Federation of Agriculture actually represents about 200,000 farmers across the country. We also have, as memberships, a number of different commodity organizations.
I believe you have a copy provided to you earlier with some of the details of things that we're putting forward, and you can refer to those at a later date. In order to give an overview, the four issues I guess could be divided into two separate categories. The first one would be dealing with support for the industry and the other two are more designed to help reposition the industry to take advantage of innovation coming forward.
First, on the support side, I don't think it's any secret that the hog industry is basically weathering a perfect storm at this time. With high feed prices and our Canadian dollar, it has basically undermined production, and many farmers are losing up to $50 a hog on hogs shipped out of their barns.
The industry sat down and took a look at what would be needed to get them through this. They realize they're going to need a combination of stabilization, as well as some transition funds to assist some producers who do make the decision to get out of the industry.
I won't get into a lot of the technical terms about the types of programs that are available. There are two that are in existence right now: the AgriInvest program and the AgriStability program. The one request is that there's an ability to draw forward from future-year payments some of the funds that would be available. So that would assist with short-term cashflow. There's also a request that there be some backstop to some short-term loans to assist producers as they move forward. There's also a need to look at some of the payment caps that were put in place on the AgriInvest and the AgriStability program because of the fact that the losses are so deep it may go above the caps that have been put in place.
The final thing I should mention on the hog industry, too, is the fact that in some areas of the country they have come through some disease outbreaks in the last couple of years, and that has added another complication: the reference margins they have in existing programs are not as high as they could be, and there needs to be recognition of that.
The second point on support I wanted to make was to take a look at the suite of safety net programs that we have in place for farmers. They have AgriInvest, AgriStability, and two others--AgriRecovery and AgriInsurance. We're proposing another one, and it would be called AgriPlex.
I think there are a number of provinces and a number of commodities that have expressed concern about the fact that this is not a one-size-fits-all program across the country. There needs to be some flexibility so that provinces and producers within those provinces can put programs in place that work. Here in Quebec they have some production insurance programs that have worked really well. That could be money that would help assist in those programs. I know Ontario is developing some programs to work. In New Brunswick they want to make investments in some environmental things. But the concept would be to have a pool of money established to support those types of initiatives.
From a pragmatic point of view, if you look back at the history of agricultural spending over the years, there have been a number of ad hoc payments, and by putting a program like this in, it would provide stability I think to the Department of Finance, so there was money set aside to cover off some of these unanticipated things, and at the same time it would give some stability to the farm community.
Now I would like to move in and talk about positioning. The first thing we want to look at is a “Grown in Canada” program. I think a number of people would have seen the coverage on Marketplace and W-FIVE about the concern consumers have about what it is they're buying. Are they buying Canadian product or not?
We're proposing a two-pronged program. We've already started talks with the retail and processing sector to establish a new category of product called the “Grown in Canada” product. We would still leave the existing “Product of Canada” that covers the processing, but there would be another specific category established with our own governance and supervision to make sure that the product was verified “Product of Canada”. But tied to that there would have to be a marketing program, and that marketing program, we're suggesting, should be about $20 million a year to help consumers in making the decision to move ahead.
The final point I want to make is on making investment. We've come out with a Canadian cooperative investment plan. This would be a tax incentive to encourage producers to invest, and we're suggesting a tax credit of up 125% for co-op investment. These, in a package, I think would assist to help reposition the industry.
Thank you for your attention.