International Trade Committee on Dec. 5th, 2006

[The Chair, Conservative, Leon Benoit]

Good morning, everyone. It's good to be back after one day off committee for the Liberal leadership convention.

I understand, Monsieur LeBlanc, that you played a role in MCing that. You didn't win, of course, but then you didn't run. So that's fine. I understand you did a great job of MCing the event.

Now we'll go straight to the witnesses. After each of you--each group--has your, roughly, eight minutes, we'll go to the questioning. This is the usual format.

Today, pursuant to Standing Order 108(2), we will continue our study on Canada's trade policy.

We will have the witnesses in the order they appear on the agenda, starting with the Canadian Federation of Agriculture. I'm not sure whether Marvin Shauf, second vice-president, or Clinton Monchuk, policy analyst, will make the presentation, but go ahead, as you choose.

[Marvin Shauf, Second Vice-President, Canadian Federation of Agriculture]

Thank you, Mr. Chairman, and thank you for the opportunity to be here. I have Clinton Monchuk, who is the Canadian Federation of Agriculture trade policy analyst, here for technical support.

CFA is the largest farm organization in Canada. CFA represents general farm organizations in every province, as well as national commodity groups. CFA has been very active in trade negotiations, having just sponsored an afternoon session at the WTO public forum in Geneva, with the theme, “The Doha Round, Where do we go from here and what are the implications?”

CFA feels that the multilateral trade agreement through the WTO is the optimal method of achieving fair and equitable trade. During the past couple of years we have witnessed that this process is difficult and negotiating consensus is sometimes not achievable. Therefore, we've seen many of our competitors, such as the U.S., Australia, and Mexico, focus their efforts on bilateral and regional trade agreements that will allow their industry increased competitive advantage over Canada. Bilateral agreements do not address domestic support issues, which are key to much of the trade problems we have in the world.

WTO, the trade policy approach that the Government of Canada has taken, is on the right track. The Canadian federation continues to support the balanced trade approach and will continue to advocate that position internationally through our membership in the International Federation of Agricultural Producers, Cairns Group Farm Leaders, and North American and European farm leaders.

Specifically on WTO negotiations relative to export competition, we would like to see countries eliminate the use of all export subsidies while still maintaining the right to have non-trade-distorting, producer-oriented SDEs. In domestic support, we require an equitable reduction of domestic support where larger spenders would be required to reduce their level of support to a larger extent than small spenders. Provisions in existing country proposals that include product-specific capping are problematic. This, in effect, gives countries the ability to continue to spend large levels of money without equity.

For example, the United States spent $1.06 billion in product-specific sugar support in the last WTO notification, in 2001. That was 52.2% of their value of production. Canada did not provide any product-specific support to our sugar beet producers during that period. If we base product-specific caps on historical spending, we institutionalize the high level of support they paid to their producers while restricting other countries, including Canada, as we did not provide that support before.

On market access, we need real increases in market access that actually allow for profitable access into other markets while respecting the sensitivities of certain Canadian products. The sensitive product category should be used for its intended purpose so that the tariff reduction category can be used aggressively for market access improvement. We must also recognize non-tariff trade barriers that have effectively restricted our market access into countries throughout the globe.

The July 2004 framework text and Hong Kong ministerial text still allow Canada to continue negotiating the Doha Round without undermining Canada's supply management. Both frameworks would allow for significant increases in market access, which would benefit our exporters and allow the continued existence of state trading enterprises.

On bilateral and regional free trade agreements, due to the difficulties associated with having 150 countries agree on one multilateral trade agreement, many countries have elected to gain market access improvements through bilateral and regional trade agreement. Canada has fallen behind some of our main competitors internationally on the bilateral regional FTA front. If we do not increase our efforts to finalize existing negotiations and continue to seek out new partners, our exporters will increasingly be pushed out of existing markets and find it difficult to expand into new markets.

CFA supports the government's current direction of FTA negotiations and hopes the Department of International Trade continues its effort in other key markets. Current negotiations with the Dominican Republic, the Central America four, European Free Trade Association, Singapore, and most recently the South Korean FTA are essential to gaining and holding market access. CFA, along with other forward-thinking organizations, outlined the list of future trade agreements the government should focus its efforts on. These areas include China; Japan; the Andean community including Ecuador, Colombia, Peru, Bolivia, and Venezuela; India; and Morocco.

We recognize the difficulty in achieving a successful outcome in all these areas. However, the current resources working on bilateral regional free trade agreements are not sufficient. For Canada to continue its successful role as a large exporter of agriculture goods, we will require more resources to gain new market access and secure existing markets where free trade agreements from other countries threaten to displace Canadian product.

Thank you again for giving CFA the opportunity to present today.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. Shauf.

We now go to the Dairy Farmers of Canada. We have with us today Jacques Laforge, president, and Yves Leduc, director of international trade.

Please go ahead, gentlemen.

[Jacques Laforge, President, Dairy Farmers of Canada]

Thank you very much, Mr. Chairman.

I have a presentation that will be made partly in English and partly in French.

First, I'd like to start by giving a bit of background on the organization. We represent all dairy farmers in Canada from a little over 15,000 farms. We market under a supply management system that has worked fairly well for us in all aspects.

Just to give you some background, when we talk about the Canadian dairy market, a lot of countries around the world are very--if I can use the word--jealous of the return dairy farmers are getting compared to the retail price. There are a lot of reasons for that. Producers, every year, invest to the tune of about $90 million in marketing and promotion. That's how we have kept this a very viable market for all industry stakeholders, including retailers and processors. It's a market that, for the last 40 years, we've spent a lot of time developing, especially the cheese market. It's a very viable market for us, and we want it to be maintained as it is today.

That's why, when we go to WTO trade negotiations, we state so clearly that Canada has some offensive interests but also some defensive interests. Our defensive interest--because we are in a sensitive sector and because we invest that kind of money--is to secure our domestic market as much as possible.

We know that the WTO negotiations, for the next few months, are going to be quite an uphill battle, and the survival of supply management is a key concern for us. When we go back to November 22, 2005, when all political parties supported the House motion saying that supply management had to stay intact with its three pillars, that was something.... When we travel in international circles and talk to other farm groups across the globe, they come to the conclusion that the system must be extremely viable for all the stakeholders in the chain if all parties in one country support a common interest in a farm policy. It's something unseen anywhere else around the world. And I think we should use that as much as possible to show how we have been able to keep successful dairy commodities without paying subsidies, as we have had to do for other commodities.

We also need to ensure in the House that our house is in order when we go to this trade negotiation, because when you have offensive and defensive interests, you always have to keep a balance. What we'd like to point out about this balance is that the bulk of the revenue from Canada's agriculture and agrifood production, over 70%, comes from the domestic market. We do export an awful lot, but when you look at the actual revenue--and there's an appendix here to explain that--we have to keep that in mind, because it's a very high percentage.

Government support of supply management must be reflected in Canada's agricultural policy. We know that we are under an APF discussion here, the APF-2. Because everything is about farm revenue and farm income and how we make that sector more profitable in the food chain, it should be very clearly stated that one of the programs that should be looked at is supply management, maybe, for other commodities. Basically, to do that you need a very good producer pricing system, strong import controls, and production discipline. It's becoming clear that if you want a better return, you have to manage your inventory or manage your production somehow so that you don't create a surplus. There's the old saying: a 5% surplus in a commodity that's not organized depresses the price by 50%. This is how supply management really cures the balancing between the processors and the rest of the food chain.

We need to strengthen our import control measures which are necessary to run an efficient supply management system. We would like the government to do a certain number of things.

I will read the list, as these measures are quite specific:

- the operationalization of Canada's right to use the Special Safeguard Measures, permitted under the WTO Agreement. It is incomprehensible that Canada has not yet made its measures operational while the EU and the US began to enforce these measures as soon as the WTO Agreement was implemented;

- exercising our rights such as Article XXVIII of the GATT, just like the EU did in the case of salted chicken, for example;

- using due restraint when considering whether to issue supplementary imports permits. Quite often, when the government issues supplementary imports permits, it is detrimental to farmers;

- reviewing CITT and CBSA practices to ensure greater transparency and ensure that producers of raw products have standing in the context of Canada's trade remedy regime. For example, with respect to increasing butter oil or milk protein concentrate imports, dairy farmers in Canada do not have standing to submit complaints to initiate antidumping or countervail proceedings. The rationale is that dairy farmers produce milk rather than butter or milk protein, although both can only be found in milk. Dairy producers are the ones who are seriously injured, but they cannot have access to antidumping or countervail proceedings because they have no standing.

Proceeding with the above measures will increase Canada's credibility at the international level. Let me give you a simple example: how can Canada be taken seriously when it demands that the special safeguards mechanisms be maintained when these measures are not operational in Canada? Canada is all talk, but there is very little action. Take, for example, the safeguard measures for butter oil. Producers have lost about 50% of their ice cream market. When we look at the product itself and at the impact on dairy producers, we realize that these are reasons enough to justify the setting in place of safeguard measures.

The recess at the WTO is an indication that the proposals laid on the negotiating table need to be reviewed. Although efforts are being multiplied to officially restart the talks in Geneva, the likelihood of another failed attempt remains high. Discussions are being held in many quarters, but there has been very little progress to date. We are all aware that the talks could be stalled for two to three years if no agreement is reached by March.

We have our views on this: the developed world has provided support to its agriculture for decades and this is not likely to change. Because of the green box programs and the decoupled support provided by the EU and the US to their producers, we don't foresee any changes in the near future. The only thing that would change is the location or the name. The United States has semi-green and semi-blue programs. They have a whole host of things. In view of the deadlock in the negotiations, we don't really think there will be too many accommodations for agriculture in Canada, unless we provide access to clean markets, as Marvin has just said.

With that in mind, we must be well aware of the issues and ensure that Canada's interests are taken into account.

In the event that the delay extends beyond March, we will have to review how our system can be less at risk from a WTO perspective. Dairy farmers of Canada do not believe in an unregulated market place. Trade liberalization will not improve the overall economic welfare of the diary farmers. A USDA sponsored study, appended to our brief, demonstrates that the opposite is true.

The negotiations will concentrate on how to eliminate subsidized exports, how to regulate the green boxes, and how to decouple the blue boxes and the payments. While those issues are being negotiated, the interest of producers worldwide will not really be discussed, because farm income is too weak or none existent. That is the problem. That is the context within which these issues must be approached.

Let's be positive and try to wrap up the negotiation while emphasizing our interests, if at all possible. We have the time. We hope that the Canadian government will review its approach and acknowledge the dilemma in which we find ourselves, so that we will not be on the loosing end, unable to turn back. That possibility is fast approaching. There must be some repositioning and strategic thinking by the Canadian government when it comes to Canada's industry as a whole.

Thank you very much, Mr. Chairman.

[The Chair, Conservative, Leon Benoit]

Merci, Monsieur Laforge.

We will now go to Rick White, policy director of the Canadian Canola Growers Association.

Go ahead, please, Mr. White.

[Rick White, Policy Director, Canadian Canola Growers Association]

Thank you, Mr. Chairman, and thank you for allowing the Canadian Canola Growers Association to speak to you and your committee today. It's a real privilege for us to be here. International trade is a very important topic to us as well.

We've distributed our submission to the committee, and I'll hit the highlights, I guess, in a summary-type fashion and give you an overview of our position.

To tell you a little bit about the Canadian Canola Growers Association first, we represent about 60,000 voting members, and that is about 95% of the canola growers across Canada. CCGA is governed by a board of directors of elected representatives from our member organizations, and our mission is to influence national issues and policies and enhance the profitability of Canadian canola growers.

Our member organizations include the Ontario Canola Growers Association, the Manitoba Canola Growers Association, the Saskatchewan Canola Growers Association, the Saskatchewan Canola Development Commission, the Alberta Canola Producers Commission, and the British Columbia Grain Producers.

Canola depends a lot on trade. Every year our 60,000 farmers who produce canola on their farms produce about six million to seven million tonnes a year. In 2005, Canadian farmers actually produced 9.6 million tonnes of canola.

The farm gate value of that canola, depending on the price, is about $2 billion to $2.5 billion, and that's at the farm gate; it's the value that farmers receive. That can represent anywhere from one-third to one-half of a farmer's gross revenue in any given year. The value of the industry as a whole--the canola industry specifically--generates about $11 billion in economic activity annually.

Canola, of course, depends heavily on trade. Half our Canadian production is exported as seed to major markets, such as Japan, Mexico, and the U.S. The other half of that seed is crushed for oil here in Canada, and half of that oil is exported to markets such as the U.S., China, Japan, South Korea, and other foreign destinations. So we rely very heavily on the international market.

However, the price of all Canadian canola seed, oil, and meal is priced in the world market, and that international marketplace is distorted by subsidies and tariffs. These subsidies and tariffs are costing us money every day. Estimates are that trade-distorting subsidies cost Canada's grains and oilseeds sector about $1.3 billion every year, and that's an Ag Canada estimate. It's getting stale now. The study was done in 2000 or 2001, but it's the best estimate we have right now.

The tariffs and quotas are costing us about another $1.2 billion every single year. That's the grains and oilseeds sector of Canada, and this figure came from the George Morris Centre study.

When we look specifically at canola and look at the domestic support and export subsidy number of $1.3 billion in trade injury, about $260 million of that is attributable to canola. That's how much canola is being hit, simply on domestic support and export subsidies.

When you look at tariffs and quotas, canola's share of that $1.2 billion trade injury is about $540 million every year. The total damage is about $800 million to canola every year. That's due to these trade-distorting practices of other countries.

As a result, Canadian canola growers need real and meaningful trade liberalization in all three pillars of the WTO negotiations on domestic support, export competition, and market access. I'll touch on each one of those pillars briefly, to give you an idea of what we're looking for with each one of those pillars.

On domestic support, our long-term goal is the total elimination of all trade-distorting domestic support, and we are supportive of the Government of Canada's position, which calls for the maximum possible reduction or elimination of production and trade-distorting domestic support. We do support that.

If WTO member countries choose to support their agricultural sectors, it should be done with programs and policies that do not distort production or trade. And we need to set the WTO rules to encourage them to use non-trade-distorting support.

We need deep cuts to subsidies to ensure that the higher subsidies are cut deeper in a progressive way, and I think we're on track on that in the negotiations. Also, the trade-distorting domestic support must be capped on a product-specific basis to improve the competitive situation of our Canadian canola producers here in Canada.

On export competition, we need an early elimination of all forms of export subsidies, including the subsidy elements of export credit, food aid, export market promotion, export taxes, etc. These export subsidies are not being used all the time, but they are being use periodically. They are a substantial threat to us when countries such as the EU ramp up their programs. They have the ability to do it under the current WTO rules, and we need to eliminate it.

On market access, the Canadian canola industry needs deep cuts to tariffs in all tiers of the tariff reduction formula to allow our industry to capture the market opportunities that exist worldwide.

We also need to deal with tariff escalation. It's an issue in canola, and it's a very serious competitive issue for us. Addressing tariff escalation must be a priority in this round.

Tariff escalation occurs when the tariff on the raw product is lower than the tariff on the value-added product, such as oil. It keeps our crushing industry or our value-added activity from Canada and exports the job opportunities and economic activity to other countries. Japan is a prime example of that.

Canola seed also competes directly with soybeans and other products like that. We need tariff parity for those directly competing products, and it has to be a priority in these negotiations as well. There are several examples where soybeans get a preferential tariff to canola. It's not fair. We compete head to head with them. We have difficulty competing with them when they get a preferred and lower tariff than we face for our Canadian canola. The parity issue has to be addressed.

On sensitive products, we need within-quota tariffs to go down, quota volumes expanded, and over-quota tariffs cut substantially to achieve real and meaningful access to canola markets that might be declared sensitive products.

An example is India. They currently have a 75% tariff on oil, 45% within quota and 75% over quota, and a 30% tariff on seed. We know that India will be classifying their vegetable oil market as sensitive. We have to get the rules right so that we can get access into the sensitive markets of other countries.

That's it in a nutshell, Mr. Chairman.

Thank you again for the opportunity to speak to you today. I look forward to the questions later.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. White.

We'll now go to the Canadian Agri-Food Trade Alliance, to the past president, Liam McCreery.

Go ahead, Liam.

[Liam McCreery, Past-President, Canadian Agri-Food Trade Alliance]

Thank you, Mr. Chair, and thank you for allowing me to make a presentation today. It's an honour to be allowed to speak to such a distinguished group. The ladies and gentlemen in this room have a very important job and a very important role in the Parliament of Canada, so I am honoured to be here.

I'm also happy to be here because we had a half millimetre of snow in Toronto last night, there were over 100 accidents, and my plane was delayed. You wonder what's going to happen when it actually snows.

Anyway, I'm going to try to do three things today. I'm going to talk about the history of the Canadian Agri-Food Trade Alliance and how that fits in with the WTO, and to fit that into the current situation at the WTO. Then I'm going to give you my ask. Everyone here today has an ask. I'm up front about it. I'm going to do it at the end, but I'll do it at the front so you know what it is: we need Canada to take a leadership role in getting the WTO talks back on the rails, and we need Canada to work with other countries on gaining convergence. On the toughest topics, sensitive products, Canada is isolated in the world, 149 to 1. That's my ask, and I'll ask again at the end. I just wanted you to know I was going to ask.

On the Canadian Agri-Food Trade Alliance, our genesis goes back to the late 1990s.

My name is Liam McCreery. I'm a farmer from southern Ontario. I grow soybeans, corn, and wheat. In the late 1990s, a group of like-minded people got together in Ottawa and looked at the Uruguay Round of the WTO. The reason we looked at it was we were being devastated by the effects of what the Americans were doing with the U.S. Farm Bill, what the Europeans were doing with tariffs, what the Japanese were doing with tariffs and subsidies, and we thought surely what they were doing couldn't be legal, because in the mid-1990s our government negotiated a free trade agreement at the WTO called the Uruguay Round. What we found out was they really hadn't negotiated a free trade agreement. They negotiated a framework from which to move toward free trade in agriculture. It was excellent news that we had a Uruguay Round, but we still had to deal with huge subsidies and tariffs.

In the late 1990s, like-minded groups such as the Ontario Soybean Growers and others from across Canada formed a group called the Canadian Alliance of Agri-Food Exporters. You guys are all political types. You know what happened in the late 1990s. The Reform Party changed its name to the Alliance. We had to change our name too, and we became CAFTA, which is the only trade advocacy organization that represents the entire agricultural value chain in Canada. We're very proud of that. CAFTA's members represent over half of Canada's primary producers and account for approximately 60% of Canada's total cash receipts. We have 14 members. You've already heard from one of our great members, the Canadian Canola Growers Association.

I'm going to highlight two of the groups, the Grain Growers of Canada, which represents the largest sector in Canadian agriculture, and the Canadian Cattlemen's Association, which represents the second largest primary agricultural sector in Canada. We have another 12 members as well. The reason I point that out is that CAFTA really does represent the majority of Canadian farmers' trade interests.

Your excellent clerk has our submission. I apologize that it's only in English. He has told me he will distribute it when it's done in both official languages.

That's what CAFTA is.

Let's talk about trade in terms of the context of all of Canada. Everyone in the room will be very familiar with the fact that over 40% of Canada's gross domestic product comes from international trade. That's why we're here today, to talk about trade. From an agricultural point of view, let's zero in on the great sector of agriculture. Canada is the world's third largest exporter of agricultural and agrifood products--the third. We have the ninth largest economy; we're the third largest exporter of agricultural products.

Over half of our farm gate crosses borders. To flip that around, if we didn't have international trade for agricultural products, and some will advocate that, over half of Canadian producers would have to go away. That's over 120,000 producers. This is a very key point for agriculture: over 91% of us rely on international markets either as a destination for our products or for a price-setting mechanism. That's the reality. Whether I sell my soybeans through my broker to Asian buyers or I sell my corn here in Ontario, the price is decided in Chicago. That price in Chicago is absolutely distorted because of American subsidies, European subsidies, and tariffs in the richest of the rich countries of the world.

I really would ask that the members take the time--I know how busy you are--to read the submission when the clerk circulates it. It will define clearly the devastating effects of these distortions on CAFTA members.

These numbers are measured in the billions. You talked about the $1.3 billion for the subsidies, Rick. You talked about the $1.6 billion for the tariffs. It's close to $3 billion just for the grains and oilseeds sector. I will quickly go through this.

I hope we're here to talk about the Doha Round and the fact that it is off the rails, and we need momentum to get it back on the rails for a successful conclusion. It's important to remember, too, that the Doha Round is about more than us. Canada is very linked to trade--it's nearly half of our economy--but developing countries around the world also would like to participate in international markets to better their own lot. It's important to remember this is not just about trade; it's about foreign affairs.

When we go back to 2001--here's a bit of a history lesson--there was a very ambitious plan laid out in the Doha Round. Fast forward to 2004: the July framework further defined it. Canada did support both of those--the launch of the Doha Round and the July 2004 framework.

Let's remember that at the July 2004 framework they said there would be reductions in all tariffs, and every other country in the world has said that is the case. That's the basis we're moving ahead on, what we agreed to.

What are the consequences of a failure to negotiate an agreement?

I see I have one minute, so I'd better hurry.

Let's pick on the United States for a minute. People are pretty upset, and should be, that the Americans spent $15 billion in trade-distorting support that year, $10 billion of it going to corn farmers. Under the current WTO rules, they could ramp that up to $19 billion. I'm a corn producer. I saw what happened to the markets last year when the Americans dumped $10 billion into that market. Right now the Americans have put something on the table that would limit that trade-distorting support to $7 billion. That's what's on the table. If we do not get a successful Doha Round, that's what we could lose.

Back to my number one ask. It's absolutely vital that the Government of Canada support Pascal Lamy's call for a relaunch of the negotiations, and it's absolutely vital that Canada, as one of the largest trading countries in the world, a world leader, and a country that's vitally dependent on trade, actually start to work on convergence.

Again, I can't emphasize it enough. The toughest nut to crack of the WTO is sensitive products. We absolutely understand that, and Canada has made a decision not to participate in those talks. We are isolated: 149 to 1. There's no nice way to put sugar on it and say that's not the case. We have to get engaged.

As we negotiate, I hope we also remember that we have made a commitment as a country for all three pillars, which Rick so ably outlined in his presentation.

Mr. Chair, you asked that I keep my presentation to eight minutes. Thank you for the extra minute. I really appreciate that. One last plug: please read this document. It has a lot of information that's very useful, and I'm sorry to make your job tough, but the reality is that you are the decision-makers who can make the plight of 91% of producers in Canada better.

Thank you.

[The Chair, Conservative, Leon Benoit]

Thank you very much, Mr. McCreery.

We will now go directly to questions, starting with a seven-minute round.

Mr. Eyking.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you, Mr. Chair. I thank all the witnesses for coming here today. I have heard them a few times before at the agriculture committee and the trade committee, and it's great to see them back.

My first question deals with the SM5. I was quite involved with the negotiations in Geneva the last couple of times, and SM5 was well represented there. They did a great job for us, keeping us supplied with information. As they know, it's hard to find allies around the world table for us. Most of the time we're doing our best just to defend our system, and I think we have to get more allies out there.

Eastern Europe and Africa are slowly increasing their food production, and I think over the next ten years they might be self-sustaining in their food production. I think supply management would be a good fit in these developing regions. So I guess my question is this. Is there any way the government or the SM5 can work together so that maybe we can change from defending our position more to promoting our position out there, so that in the future we would have more allies around the table?

That would be my first question, Mr. Chair.

[Jacques Laforge]

Yes, there is a fair amount of effort done by some farm groups in Canada.

For instance, the UPA in Quebec and the UPA DI, which is the development arm, are working very closely with all the French-speaking countries in Africa and with a very high level of government. They're looking at how to adapt supply management in the food development policy to regain some of the losses and create a domestic economy that makes it worthwhile. There's a lot of discussion. There's a lot of work being done as we speak.

As far as other countries, we talk at all kinds of agricultural seminars. Farm income around the world is an issue, and a lot of regions are actually looking at how supply management works.

We even have a group of European dairy farmers looking at it right now. They have come to Canada. We've sent people over there to explain how it works, what the criteria are, and what the production discipline is in order to get a decent return. There is quite a bit of interest.

The issue right now is on how they will be able to implement these kinds of policies inside a WTO negotiation, from their country's perspective, and it's what they're looking at in a lot of areas.

I think it's a key element. No matter what commodity you're in, farm income is an issue. If we want to address farm income from a market-oriented standpoint and not from a government treasury, we have to look at something that is similar.

It might not be 100% supply management, as we have in Canada, but there has to be some kind of production control to get a fair return to the farm. Otherwise a 5% surplus creates a drastic effect on the price the producer gets.

We've been doing constant work over the last few years. I would say the UPA DI has been at least five or six years in Africa. There has been some work in Europe over the last two years. It's an ongoing discussion.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

You mentioned some farm groups are already working on it, but it doesn't seem to be in the mandate for Agriculture Canada to do that.

Do you think CIDA should have a bigger role to help farm groups in Canada or to install that practice when they're helping other countries?

[Jacques Laforge]

Yes. I think it's also a choice the Canadian government can make.

But for the UPA DI project that is going on in Africa, I think some CIDA dollars are channelled through that. There is some help and some support from CIDA to do it.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

Thank you very much.

My next question is about the marketing of our grains. You know that the quality and the reliability of our grains are well known around the world.

I was in Yemen, and they mentioned the word “Canada”. The people in the market didn't realize Canada was a country. They thought “Canada” was a grain, because it was used so much. That shows how good the quality is.

I personally think the efficiency has a lot to do with our farmers, of course, but it also has to do with our wheat boards. They have kept the quality up and kept the product moving.

My question would be this. If this system collapses and the wheat board collapses, how are we going to maintain quality and reliability in the world markets?

I don't know who wants to answer that question.

[The Chair, Conservative, Leon Benoit]

Mr. Shauf, and then Mr. McCreery.

[Marvin Shauf]

I think Canada has an ability to maintain the quality reputation that we have as long as there is an ability to provide producers with sufficient money for doing what they're doing.

We have a problem in doing that. Whether or not we have a Canadian Wheat Board, whether or not we have a Canadian Grain Commission, we have a problem in getting sufficient money for producers.

The Canadian Wheat Board can offer producers some power in the marketplace. The Canadian Grain Commission can maintain the ability to work with the quality, and we can continue to provide that to an international marketplace.

A real issue when it comes to trade I think is dealing with the marketplace and the values in that marketplace. When we talk about competition or competing in that international marketplace, we really have to look at a disadvantage Canada has, whether we have a Canadian Wheat Board or we don't, and this is the fact that Canadian grain producers, Canadian wheat producers, canola producers--take any one of them--are effectively competing with producers across the line that continue to produce product even if the commodity value goes to zero. That's what the U.S. Farm Bill provides them.

Absolutely, we have some tools we can use. We have them right now. It will present some different challenges if that system collapses. Our ultimate objective in trade, though, is to bring sufficient dollars into the producer's pocket to be able to maintain reputation, maintain quality, and have a reliable trading system in the world.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Shauf.

Very briefly, Mr. McCreery, and then Mr. Eyking's time is up.

[Liam McCreery]

Thank you, Mr. Chair.

If the member is truly interested in looking at an example of what happens when the monopoly powers are taken away from an entity like the Wheat Board, you could look at my province. I am a Canadian farmer in the province of Ontario. We used to have to sell through the Ontario Wheat Producers' Marketing Board. We can now sell either through the Wheat Board or on our own.

I don't feel the quality of my wheat or my ability to segregate my wheat or market my wheat has gone down with the monopoly powers being taken away.

And I will say, Mr. Eyking, you have been a strong promoter of protecting sensitive products in Geneva. I just want you to remember, the two largest sectors in Canada are grains and oilseeds and red meat. Those are the two most sensitive products in the world.

So when you're in Geneva advocating to protect sensitive products, you are going after Canada's two largest sectors.

[Mark Eyking, Liberal, Sydney—Victoria, NS]

That's debatable.

[Liam McCreery]

No, it's not debatable, sir.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. McCreery.

We'll go now to Monsieur Cardin for seven minutes.

[Serge Cardin, Bloc, Sherbrooke, QC]

Good morning gentlemen. I'm happy to meet you. I'm not well versed in matters relating to agriculture. I will begin by asking you a very simple question.

When it comes to globalization and international trade, should all agricultural products be given the same weight as any other products, whether it be metal, or any other non-perishable commodity?

In order to promote the liberalization of the markets, should agriculture be subjected to the same regulations and the same conditions as are the other sectors?

[The Chair, Conservative, Leon Benoit]

Who is that question directed to, Monsieur Cardin?

[Serge Cardin, Bloc, Sherbrooke, QC]

To all of the witnesses, since their position will likely differ because of the products that they represent.

[The Chair, Conservative, Leon Benoit]

Okay, thank you.

Mr. Shauf, Mr. White, and Mr. Laforge, and then Mr. McCreery.