Foreign Affairs Committee on Nov. 1st, 2023

[Steve Webb]

It goes through the entire area. Obviously where the fighting is taking place is heavily disrupted, but we also see reports of disruption through the entire channel—disruption at port facilities, both on the Danube and on the Black Sea, as well as disruptions in other parts of the system. It's a vertically integrated system and a challenge.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Could the food insecurity elevated by the situation be helped by boosting Ukraine's crop resiliency, or are the attacks too frequent to make a difference?

[Steve Webb]

I think as a general statement that anything we can do to improve the performance of crops is a positive outcome. It does not resolve the challenge of disruptions of the infrastructure through war, but again, it's an integrated system, so being able to enhance the resiliency and production at the farm level is the first step in building a sustainable food system.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

How accurate are the reports—

[The Chair, Liberal, Ali Ehsassi]

I'm afraid you're out of time, Mr. Aboultaif.

Next we go to Mr. Oliphant. You have four minutes.

[Rob Oliphant, Liberal, Don Valley West, ON]

Thank you, Mr. Chair.

I want to thank the witnesses for being here.

Before I begin, I want to echo Ms. McPherson's comments that it is very unfortunate that a Conservative member moved a concurrence debate on a report from this committee during our committee time. We do know that concurrence debates are absolutely appropriate. However, the Conservatives have presented hundreds of motions on concurrence. They could have chosen any one other than our report on Ukraine while we were attempting to follow up in good faith with a Conservative member of this committee on a study on fuel and food.

I think it's very disturbing that we're not able to have our full committee. I know that it especially affects smaller parties. Mr. Bergeron is in the House now. That is where he should be, because he's trying to debate from his party's perspective, but it's not fair to our committee, where we're continuing a study on Ukraine.

That said, I want to thank you, Dr. Webb, for your testimony. Honestly, I think you're one of the most inspiring witnesses we've had in a long time on any committee. I want more time with you. Just be aware that I may contact you to get more information from you.

I think what we're looking at is a complex web of issues that create food insecurity. I am still trying to work these out in my head, whether it is the war in Ukraine—the illegal invasion by Russia in Ukraine—which has displaced both agriculture production and transport, or population growth, climate change and yields, or all of those things that are contributing to the many issues that have placed food security at risk for hundreds of million of people on our planet.

What I want to ask you about is not the export of food grains and other foods so much as the export of that innovation and technology that you were talking about. It would seem to me, or I've long held the belief, that Africa has the ability to feed itself if we have appropriate technology and innovation on yields, nutrition and the sorts of crops that would be best employed in Africa and other places in the world.

What can we be doing to take that innovation that you, very rightly, are proud of in the Canadian agricultural industry and to export it around the world so that we are able to increase food security everywhere?

[Steve Webb]

Thank you for that question.

We at the Global Institute for Food Security, as well as partners here at the University of Saskatchewan, in particular Dr. Carol Henry in the pharmacy and nutrition department, were invited to submit a proposal to Global Affairs Canada to build capacity in Africa on and around the topic of not only food production but also around the nutrition component. Again, calories are key when you're hungry, but it's the right calories so that you can continue to avoid stunting and all the other issues that are important for growing a society.

Unfortunately, that effort was put on hold and not moved forward. What was interesting about the proposal, though, was that we at the Global Institute for Food Security were able to create partnership opportunities with the University of California at Davis's orphan African crops and plant breeding school to leverage Canada and our partners in the world to add capacity.

I think one thing that's super-important—it's one of the things we're doing in Bangladesh—is helping to build capacity in terms of the human capital in these geographies so that they're able to accept, adopt and apply the right tool for their region. It's important that we listen and understand and take the time to invest in that understanding and recognize that the Canadian solution works great here in Canada, but that it always has to be tweaked so that it fits the geography we're moving into.

Again, it needs to be done with local partners so that it gets adopted. If you give the best tools—

[The Chair, Liberal, Ali Ehsassi]

Mr. Webb, I'm afraid we have to move on. The time slot is over.

[Steve Webb]

Okay.

[Rob Oliphant, Liberal, Don Valley West, ON]

Thank you.

[The Chair, Liberal, Ali Ehsassi]

Let me give the members a heads-up that Mr. Legault is also experiencing some technical problems. That's what happened previously. I just wanted to put it out there for the members.

Madame Larouche, you have two minutes.

[Andréanne Larouche, Bloc, Shefford, QC]

Thank you, Mr. Chair.

I agree with the members that it is unacceptable for a debate to be taking place in the House during our committee time. It is also very unfortunate that the committee wasn't able to hear from the United Nations World Food Programme representative because of technical issues. I'm going to ask some questions, in the hope it will be possible to provide the committee with written answers.

Turning to the national policies of a number of key countries, I want to highlight something Radio-Canada reported a few days ago: it is increasingly difficult for Ukraine to export its grain. Hungary, Slovakia and even Poland are now blocking access to Ukraine's grain to protect their own farmers.

What discussions have you had with those countries to make it easier to move the grain by land? Has ground transportation proven to be a good way for Ukraine to export its products? Is it as fast as marine shipping? We'll have to see. Can Ukraine's grain be exported via Moldavia and Romania? In September, two cargo ships were able to transport Ukrainian grain by travelling through the coastal waters of Moldavia, Romania and Bulgaria. Is that a plausible solution? I hope we can get answers to these questions.

Mr. Legault, I hope you're not still having technical issues. In your opening statement, you talked about our relationships with foreign suppliers of nitrogen.

When it comes to inputs, what countries do we have those relationships with?

[Benoit Legault]

I just got a message from the technicians about my mike. My apologies.

The information actually comes to us through third parties, in other words, through business relationships that fertilizer importers out east have. It was pointed out to us that, since the start of the war in Ukraine, the imports traditionally came from Russia, Belarus and Ukraine, given the product volume, quality and cost. Where the product is manufactured isn't always known. Sometimes, it's manufactured in Russia and stored in Ukraine. According to what we heard, those three countries were really the main suppliers. I'm talking mostly about nitrogen fertilizer.

[The Chair, Liberal, Ali Ehsassi]

Thank you.

For the last question, we go to MP McPherson. You have two minutes.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Thank you very much, Mr. Chair. Thank you to the witnesses for being with us today.

I have a question for you on the disconnect between food prices and food price inflation.

We know that the FAO and the food price index have shown that there were record prices for food in 2022 but that there's been a steady decline since. However, the consumer price index has not abated, and the World Bank's most recent food security update from October 12 noted that real food price inflation year over year has exceeded overall inflation in 78% of 163 countries.

Mr. Webb, perhaps I could start with you. Could you explain what is causing the disconnect between the decrease in food commodity prices and the persistent food price inflation? Do you expect the food price inflation to continue to decrease in coming months, and why or why not?

[Steve Webb]

I apologize, but it's not my area of expertise to comment on that specific issue, other than to say that when one thinks about the movement of materials through the supply chain, one realizes that it takes a while for things to clear the supply chain and to see where prices move to. I think it's a question best addressed by the food retailers and food manufacturers.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Just from your answer, I would think that you do expect that there would be a decrease in food prices as things start to even out from when we had the backlog during COVID.

[Steve Webb]

That would be my hope, but it also relies on our ability to continue to produce material. The carry-over in crop production is less each year, and being able to make sure that we can move the product into the right place helps with price points. We're seeing countries like Argentina undergo a significant drought, and they're importing soybeans to fill their crush capacity there, so again we're seeing the global nature of food and the impact on moving food around the world.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Of course the retailers would have to play a role in that as well.

Thank you, Mr. Chair.

[The Chair, Liberal, Ali Ehsassi]

Thank you. I'm afraid you are out of time, MP McPherson.

At this point I will take the opportunity to thank Mr. Legault and Mr. Webb.

Thank you very, very much for being with us and for sharing your expertise.

I will suspend for approximately five minutes so we can go to the next panel. We'll be back in a few minutes.

[The Chair, Liberal, Ali Ehsassi]

Welcome back, everyone.

We will now resume our meeting on the study on the situation at the Russia-Ukraine border and implications for peace and security.

I'd like to welcome our next roster of witnesses.

We're grateful to have Mr. Paul Hagerman, director of public policy at the Canadian Foodgrains Bank. From the Grain Farmers of Ontario, we have Ms. Deborah Conlon, director for government relations. From SOCODEVI, we have François Dionne, director of the international program.

I want to explain to each of our witnesses that you have five minutes for your opening remarks, after which we will go to the members for questions.

If you're very close to the five-minute mark, I will hold my phone up, which means you should please wrap up your comments within 15 to 20 seconds. That's for your opening remarks as well as questions that are posed by the members here, because we're allotted time frames for each one of those questions.

That said, we will start with you, Mr. Hagerman. The floor is yours. You have five minutes for your opening remarks.

[Paul Hagerman, Director of Public Policy, Canadian Foodgrains Bank]

Thank you very much for the invitation today.

I'm going to focus specifically on food in countries other than Ukraine.

Globally, we were winning the war on hunger for decades. More people were eating complete diets and fewer people were going hungry, but around 2018, we started losing that war. Hunger increased due to conflict, climate change and COVID. Now, 120 million more people are hungry than before COVID. That takes us to the war in Ukraine.

The war in Ukraine is making the fight against hunger harder. Before the war, Ukraine and Russia were major exporters of food and fertilizer. Most of that moved through the Black Sea. When the war started, that shipping stopped, and it's been disrupted ever since. The prices of food and fertilizer rose. Since then, the prices have come down somewhat at the international level, but they're still higher and more volatile than they were before the war. As it was stated in the last hour, prices at the consumer level are still very high. Sometimes they're 100% more than they were before the war.

Families eat less, farmers use less fertilizer and families are shifting to what we call negative coping strategies. These are things that are going to cause more problems later. They pull their kids out of school. Kids get married early. Kids are forced to go to work. Farmers have to sell their livestock.

In addition, aid donors are shifting their aid from long-term things like agriculture to short-term things like humanitarian assistance.

A lot of this is a repeat of what we saw around 2008, when there was a global food crisis. This really showed the vulnerability of food-importing countries, especially poor countries that had to import food and whose prices went way up. There were food riots in at least 14 countries around the world, and this was one of the major factors that led to the Arab Spring.

Collectively, we realized we had been neglecting agriculture, especially the small-scale farmers who grow most of the food that's eaten in developing countries. In response, the G7 massively invested in agriculture. Canada doubled its aid for agriculture. The resulting rise in farm productivity meant that millions of farmers produced more. They ate better and they made more money, and global hunger went to its lowest level ever.

We then forgot about the importance of agriculture. Aid from food systems declined and hunger started to climb, and then we had COVID, and then we had climate disasters, and then we had the war in Ukraine—and it's all getting worse.

Your study now is looking at peace and security issues. I'm not going to talk about Ukraine itself. That's not my expertise. However, I can tell you that the high and volatile food prices are a threat to peace in many countries and a threat to global stability. We heard in the first hour from Mr. Webb that food security equals global security. I have to emphasize that again.

Earlier this week, Canada's Minister of Foreign Affairs gave a speech in which she said:

We are in the midst of a geopolitical rebalancing as increasingly frequent and complex crises shake the foundation of the system that has kept us safe.

We must now chart a path towards building a steady footing for our children, reinforce the international system that has brought about global stability, and reshape it to become more inclusive.

Today I want to suggest to you that one of the ways to build peace and preserve global stability is to make sure that everybody has food to eat. To do that, we should invest more in small-scale farming.

To explain why, let me give you two examples. In India in the 1940s, over two million people died because the country was not producing enough food to feed its people. In the sixties, it invested in agriculture big time. By the seventies, it was self-sufficient. Now, India's the biggest exporter of rice in the world.

The second example is from my own organization, the Canadian Foodgrains Bank, and I should say that this project was supported by Global Affairs Canada. Starting in 2015, we worked with 60,000 farmers in east Africa, promoting conservation agriculture. It was so nice to hear MP Hoback in the first hour talking about no-till farming and Canada's innovation. It's the same stuff. It works with farmers in Saskatchewan with 5,000 hectares and it works with farmers in Ethiopia with half a hectare. It's the same principles, but with different tools. That helped farmers to increase productivity and soil health.

It's not really about inputs; it's mostly about management. Those 60,000 farmers we worked with increased their food production, on average, by two to three times, with less work. It was a huge success.

To promote peace and stability, I encourage Canada to step up its support for food systems around the world. It's not only small-scale farmers themselves, but all of the food-related businesses upstream and downstream, like equipment manufacturers and food processors.

Canada's aid budget was cut drastically in the 2023 budget. In 2024, it should be restored, and food systems should be a priority. Agriculture is important in Canada. We could be known for this around the world.

Thank you.

[The Chair, Liberal, Ali Ehsassi]

Thank you very much, Mr. Hagerman.

We now go to Ms. Conlon. You have five minutes.

[Deborah Conlon, Director, Government Relations, Grain Farmers of Ontario]

Thank you for inviting me to speak to you today. This is an important topic that your committee is examining.

I'm here representing the Grain Farmers of Ontario. We are Ontario's largest commodity organization. We represent 28,000 grain and oilseed farmers. We farm on seven million acres. We produce $5 billion in farm gate receipts and employ 90,000 people. We produce 200 million metric tonnes of grain, and that grain is corn, soy, wheat, oats and barley. We play a crucial role in producing food for Canadians and people around the world.

Farm financial sustainability is an integral part of the food system. In recent years our farmers have faced numerous challenges that have impacted markets and input prices. These challenges include the illegal invasion of Ukraine, the pandemic response, China's soybean import restrictions, labour disruptions, the CN strike a few years ago and the seaway strike just this past week in the middle of harvest. These events impose significant costs on farmers, which they cannot pass on: Farmers pay for these costs themselves.

Farmers in Ontario compete directly with farmers in the United States, and the U.S. provides financial support to farmers facing risks and challenges beyond their control. Canada's business risk management suite falls short for grain farmers in Ontario.

If you look back to the situation facing our farmers in 2022, you see that Canada's sanctions and tariffs impacted our farmers specifically. To protect themselves from price shocks, farmers had already booked their fertilizer in advance as they always do, and Canada's removal of Russia and Belarus from the MFN status had an impact. Farmers in Canada had to pay a 35% tariff on fertilizer imports, something their U.S. counterparts did not have to do. The invasion led to a global spike of fertilizer prices. Ontario farmers not only lost their low-cost source of fertilizer, but the replacement costs of the same amount of fertilizer were a lot higher.

The government's support in securing fertilizer supply that spring was appreciated; however, farmers incurred an estimated $200 million in additional costs that growing season. Direct payments to offset these expenses have not been provided, and the business risk management suite does not cover these costs.

Every time we encounter these shocks that I've listed above, we look at the impact and how we could avoid these or plan for these in the future. Two reports I can share with the committee deal with the situation facing farmers on fertilizer supply and then with a comparison with the U.S.

The first report, by Josh Linville, who is a world expert in fertilizer supply, focuses on the importance of securing a stable fertilizer supply. His recommendations include securing global supply guarantees with key countries, considering emergency strategic reserves, addressing supply chain logistics, improving rail transport and costs as well as trucking, and looking at what can be done to improve on-farm storage as well as port storage and offloading—we have a very tight system in Ontario and Quebec—and creating an exemption for the tariffs to ensure unhindered trade flow.

The second report compares funding for farmers in the U.S. and Ontario, showing that U.S. farmers have received more support through their BRM programming over these last few years of challenges. In fact, there's about a 30% difference between what the U.S. farmers are getting and what the Ontario farmers are receiving from the Canadian government.

Longer-term solutions can be also found in Linville's report, which include looking at incentives for building capacity for fertilizer production in eastern Canada.

As we look ahead to the future of global fertilizer markets and other commodity challenges, we see that they will persist. Increasing logistical capacities and production may take years. Implementing these strategies today will help alleviate future supply issues.

In the interim, we'd like to see assessments of risks in the system as well as improvements to BRM programming, specifically to deal with the shortfall in coverage provided by AgriStability, which was intended to address these kinds of risks.

This will go a long way toward increasing resiliency in the food system and keeping farmers in Ontario growing while they face these challenges that are beyond their control.

We appreciate your time and attention to these critical issues affecting our sector and food security. I look forward to your questions.

Thank you again for inviting me to speak with you today.

[The Chair, Liberal, Ali Ehsassi]

Thank you very much, Ms. Conlon.

We will now go to Mr. Dionne. Similarly, you have five minutes.