Good morning, Chair Easter and honourable members of the finance committee.
I work for the potato farmers of P.E.I. The Prince Edward Island Potato Board represents approximately 180 potato farmers in this province. We work with other potato organizations in Canada and the United States, including the Canadian Potato Council and the United Potato Growers of Canada and the United States, as well as organizations here in P.E.I.
I'll give you some key aspects of the Prince Edward Island potato industry. There is more information in the package I've circulated. I know you definitely want to read that really quickly.
We are Canada's largest potato-producing province, with approximately 25% of total Canadian production and close to 30% of total seed potato production. It's an important source for the rest of Canada and other countries as well.
Potatoes are the most significant agricultural product produced in P.E.I., with farm cash receipts of over $242 million in 2017. Potatoes represent over half of our total farm cash receipts, and we exported over $410 million in seed, fresh potatoes and processed potato products from Prince Edward Island last year. I don't have data on what we sell in Canada, so that's another several million dollars.
Our seed and fresh potatoes as well as processed potato products are sold in more than 30 countries around the world, including in markets as diverse as Indonesia, Portugal, Vietnam and Uruguay.
Close to 60% of our crop is now processed here on the island, specifically for french fries, potato chips and dehydrated products. We're pleased to have this opportunity to meet with you today. I'll cut straight to our recommendations.
First, with regard to the Canadian Food Inspection Agency and cost recovery, we recommend that the government work with the Canadian potato industry to find efficiencies and means of streamlining the current approach to potato inspection and certification, and that instead of potentially further incurring Canadian Food Inspection Agency fees via the current round of cost recovery, support the competitiveness of the potato sector in Canada by reducing current fees by 50% going forward.
I don't say that lightly. We've done a lot of work on this, and our farmers here in P.E.I. already contribute over $1 million a year to CFIA in fees, and that's from 180 farms in this province. We're part of a task force that we formed in Canada to look at the potato industry in terms of the impact of cost recovery, and nationally that's around $2.8 million to CFIA. CFIA has advised us that their current cost recovery represents $55 million, so we feel that we're paying proportionally much more than are many other parts of Canadian agriculture.
Second, with regard to the Pest Management Regulatory Agency, we recommend that the government change the legislation under which the Pest Management Regulatory Agency operates to include consideration of the economic impacts of PMRA's decisions on the competitiveness of Canadian farms. As well, we respectfully ask that the government review the current approach of conducting re-evaluations of crop protectants. We've been losing access to many important crop protectants that are still being used in many other countries with which we compete, including the United States. We've also seen reductions in the uses permitted for products that have remained in the market after review. Farmers are in danger of not being able to manage pests properly, and they are definitely at a disadvantage to competing farmers in the United States in this important area.
Third, with regard to agricultural research and knowledge transfer, Andrew has covered that very well, but our recommendation is that the government increase the amount of funding available for research that benefits the agricultural sector and also provide a significant increase in funding for knowledge transfer. The P.E.I. potato industry, along with colleagues across Canada who are members of the Canadian Potato Council, have been strong participants in Agriculture Canada's national research cluster program; however, we understand that the demand for dollars under that program was much higher than what was available and there were important industry priorities that could not be funded.
Andrew also pointed out very well that the need for knowledge transfer should be seen as a major gap and that it's time to rethink some of the approaches we've had. It used to be an area of provincial jurisdiction, and they've really moved away from that with reductions in staff and so on, so it's a gap. Research without a pathway to the end-user for adoption is far from optimal.
Fourth, with regard to trade negotiating for market access, we recommend that the government continue its work on negotiating new trade agreements. It's absolutely clear that we have to find ways to diversify our trade. We look forward to hearing more details on the new agreement that was announced last night, and we believe there is untapped potential for Canada in other parts of the world. As part of this, we'd like to highlight that the government push harder for market access for products like Canadian seed and fresh potatoes.
Once a trade agreement has been negotiated, we find ourselves unable to take advantage of lower tariffs, as access to many of those markets still has to be negotiated. It's a two-part process. It's great that there's a free trade agreement, but products like potatoes still need phytosanitary access. That seems to be a low priority for some of the countries we sign FTAs with.
My fifth point is with regard to transportation. The government must find ways to address the chronic shortage of truck drivers in our country. We can produce the best potatoes in the world, but if we cannot get them and the products that we make from them to market efficiently, we cannot compete. There is a need to remove barriers to efficient transportation within Canada, such as varying weight tolerances by province on highways across the country and improving infrastructure to allow more efficient movement of products within Canada.
We have looked at some better ways to transport potatoes, even to the ports, but we find aging infrastructure, like bridges, hold us back from being able to use those.
Our last point today is about labour. The government needs to modify EI and access to foreign workers to address the shortage of labour on farms and other businesses here in Prince Edward Island and across Canada.
We could bring up other issues, but in the interest of time, we will stop there.
Thank you.