Subcommittee on Food Safety Committee on April 22nd, 2009

[Sheila Weatherill]

Mr. Chairman, as I've said, we're partway through the investigation and are still in the process of looking at the evidence, so we're not ready with our recommendations yet. But I can tell you that we are looking very specifically into this area and into the new policy.

[David Anderson, Conservative, Cypress Hills—Grasslands, SK]

Mr. Chair, I'm going to turn the rest of my time over to Mr. Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I wonder whether the committee would consider at this time a motion. Senator Heffernan is here from Australia. He is a member of their Senate.

I don't know whether there is concurrence with the rest of the committee on this—

[The Chair, Conservative, Larry Miller]

We'll deal with that perhaps in a minute, Mr. Shipley, but we have still a couple of minutes left in your time, if you want to use it for questioning. Then we'll—

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

My only comment is that it's a very short time before we get back to this, but it would give him a few minutes to make a presentation, and I would—

[The Chair, Conservative, Larry Miller]

So what you're saying is that you're forfeiting the rest of your time; is that it?

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

That's right.

[The Chair, Conservative, Larry Miller]

On that note, as discussed with all the parties—some before, and Mr. Allen during the meeting—for the information of everyone in the room, we have Senator Bill Heffernan from Australia, who happens to be the chair of the agriculture committee there, which is undergoing a competition investigation or review in his country. He happened to call my office right about the time question period was starting today and requested to meet with me. I met with him, and while we did that, I took it upon myself to try to contact the rest of the members of the committee, who thought it was very appropriate that, if we could, we hear from him for a few minutes.

He has to leave to be at the airport by a quarter after six, as I think I indicated, and although there are still a few minutes left in this time, what I guess Mr. Easter would suggest and I'm asking direction on is whether we can suspend our questioning of Ms. Weatherill.

If I take more rounds of questioning, I'm going to have to take a set from both sides, just so you're aware of that. I'm at your disposal.

Are you okay with the suggestion?

[Some hon. members]

Agreed.

[The Chair, Conservative, Larry Miller]

Okay.

Thank you very much, Ms. Weatherill. We appreciate your taking the time to come here and we look forward to your report when it comes out. Thank you.

[Sheila Weatherill]

Thank you very much, Mr. Chairman.

[The Chair, Conservative, Larry Miller]

We're going to suspend this portion of the subcommittee meeting on food safety.

If I could, I'd like to have the members back to the table very shortly and we will continue on with Mr. Heffernan.

[The Chair, Conservative, Larry Miller]

I'd like to ask the members to come back to the table, please.

Once again, thank you very much, Mr. Heffernan, for agreeing to see us, and to the committee as a whole for taking the time to hear him. As I indicated, they're in the process of conducting a competitiveness study in their own country to deal with grocery stores and what have you.

So what I'm going to ask, Mr. Heffernan, is if you could take five minutes or a little more to explain where you're going and maybe there'll be some questions from our groups here as to that. Thank you.

[Bill Heffernan, Senator, Senate of Australia]

Thanks very much. I apologize for gatecrashing your committee. I'm very grateful, and if you come to Australia, we'll let you gatecrash one of our committees as a consequence.

I chair the Senate Select Committee on Agricultural and Related Industries in Australia. At the present time I'm doing an inquiry, in which you would be interested I'm sure, into the global cartel and monopoly behaviour of fertilizer companies. Eighty-five per cent of the world's rock phosphate is controlled by five companies.

Another committee that I'm chairing has the terms of reference for how we in the future will produce food that's affordable to the consumer, sustainable to the environment, and viable to the farmer--in other words, make it worthwhile for the farmer to get out of bed and be paid a reasonable margin for his work, against the background of things like consolidated retailing--that is, market pairing in retailing--the cartels of fuel and fertilizer, the effect of climate change, and a range of other issues.

The science we've collected in Australia shows that in Australia over the next 50 years.... The rainfall is in decline now, and this year if there isn't a serious, major rainfall event in southern Australia, the main river system is going to fail. It will stop flowing. Our biggest dam is down to 4%. Three of our rivers have three months' supply left in them. In the Murray-Darling Basin in Australia, where we have 6.2% of Australia's run-off--23,000 gigalitres--we do 73% of our water farming. If the science is 30% right on the prediction for the future, we're going to have to reconfigure the way we've settled and we do business in rural and regional Australia. There are big opportunities in the north, which for us is more or less an agricultural frontier.

Against that background, I would be interested in coming to terms with the doubling of the global food task in the next 40 years. The science is telling us that 30% of the agriculture capacity of Asia, where two-thirds of the world's population will live in the future, could go out of production. We decided to have a look at how Australia can continue to make its contribution to the global food task. I'm sure that's an issue that would interest the people in Canada. We are a net exporter of food. Our scientists at the CSIRO, our senior science base, is telling us that unless we get up to speed with technology and come to terms with what's going on, we will have no wheat to export by the year 2070. At the present time we export $4.2 billion worth of food.

Against that background, and with your indulgence, Mr. Chairman--and I'm very grateful for the opportunity to address your committee--we in Australia were interested in the consolidated retailing side with the ACCC as our supervising body. At a parliamentary level, we have challenged some of the findings of the ACCC. For instance, the ACCC said in an investigation they conducted that there wasn't a problem in fertilizer sales in Australia. One company has 73% of the wholesale sales and 100% of the manufacture, and yet they said there wasn't a monopoly. So we challenged that. We're now undoing that monopoly. We are bringing into production a couple more phosphate mines, which again will treble our phosphate capacity.

In our retailing, we have two companies, Coles and Woolworths, that control 70% of our retailing. I note from my notes that you have five companies that control 60% of your retailing. We have two companies that control 70-odd per cent. The United States, I notice, has five companies that control 40%. What I was interested in is whether you, by regulation.... I spoke to the person from your ACCC equivalent this morning, who said that for them as the regulator, if there isn't 35% of the market tied up by one body, it's not an issue. I was just wondering where you fellows were up to. We'd be interested; you seem to be doing better than we are.

Swift, the Brazilian company who has just taken over CONAGUA's interest in Australia—will have 40% of the kill in Australia. We note that our farmers are getting between 40% and 50% less per beast at the farm gate, and our consumers are paying 40% to 50% more at the supermarket than the Americans are.

I'm just interested to hear how you're getting on here in Canada.

[The Chair, Conservative, Larry Miller]

We're just about to get into more depth there, Mr. Heffernan. It's probably premature to say exactly what we're going to find. In fact, it's very premature. But it seems that the committee recognizes that there's a problem, and that's certainly why we put a put a fairly high priority on it.

With the indulgence of the members, because this isn't something that was regularly planned, I wondered if we can go around the table and each member would get one question, because Mr. Heffernan's time is limited as well.

[Bill Heffernan]

Mr. Chairman, if you want to throw things at me or yell at me, I'm quite accommodating.

[The Chair, Conservative, Larry Miller]

I'm sure we won't do that.

Mr. Easter, you're next.

[Wayne Easter, Liberal, Malpeque, PE]

Around here we never even yell at our own government, even though they've a record of failure in farm policy.

[Bill Heffernan]

You do a lot of clapping in the chamber. We don't allow that in Australia.

[Wayne Easter, Liberal, Malpeque, PE]

Let me just say this, Senator, that if you really believe that our farmers are doing better than yours, then yours are in real trouble. We've lost 3,600 farmers a year up until 2006-07. We've got debt loads of $54 billion, which is four times higher than the debt load of American farmers. We have a beef and hog industry that's in very serious trouble.

If we listen to some of the industry players, then we're led to believe that your farmers are better off than ours. You're led to believe our farmers are better off than yours. I think one of the difficulties we have is that the people who do the negotiations are mostly trade ministers. Maybe the agriculture ministers need to get together. Our minister, to his credit, is now trying to promote beef sales in other countries, which is a good thing. We have to find a way of farmers and ministers getting together on a global scale, because they're up against these monopolies that are absolutely huge and global.

From my point of view, we're all pawns in their game. That's what's happening.

[Bill Heffernan]

I should, Mr. Chairman, declare an interest. I am a farmer and I've lived on a farm all my life--

[Wayne Easter, Liberal, Malpeque, PE]

So am I.

[Bill Heffernan]

I usually run 10,000 breeding ewes--that's sheep--500 or 600 cows, and a crop of a couple of thousand acres. We actually haven't had a season. We've had three complete failures in a row, which is pretty catastrophic for farmers. I'm not too sure whether I'd like to get into comparisons about who's doing better or worse, Canada or us. We all have expectations of the institution in Australia of what we call family farming, where you get up in the morning and defy common sense and go to work. I'm sure that in the future, given the global food task, what's in the fridge is going to be more important than what's in the garage, because the world seems to be obsessed with modelling the future energy task but not the food task.

I'm also sure that we would love to have your thoughts, formally or informally, into the inquiry we're doing, because the more on-the-ground information we have as to how are we going to task the food task in the future.... The urban mob—and you can't blame them—go to the supermarket and the milk's there, the meat's there, and the veggies are there, but they have no idea how it gets there as long as it's there. I have to say that in our country in some cases--and I'll say generally not always, because they might be litigious--if you have to take a contract with some of the monopoly suppliers, the resellers, you end up wanting to jump off a cliff because they eventually cut all their costs back to you and all the profits forward to the consumer. This is a continuing serious problem.

Can I also say that one of the things we're conscious of in the future for the development of northern Australia—and I chaired under the previous government the Northern Development Taskforce—our Australian Federal Police Commission has said that Australia's greatest challenge to its sovereignty would be the displacement of people on the planet in the future. I won't go into that today, but there you go.

[The Chair, Conservative, Larry Miller]

Mr. Bellavance, do you have a question?

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

We should urge him to put in his earpiece.