Debates of May 10th, 1994

Agriculture

[John Murphy, Liberal, Annapolis Valley—Hants, NS]

Mr. Speaker, I am pleased this evening to have the opportunity to add something to this important debate.

Annapolis Valley-Hants is home to a large and diverse agricultural and agri-food sector. I am committed to working closely with this sector and I am honoured to have the opportunity to bring its views to this place.

In order to help me effectively gain local input on agricultural issues I have set up an advisory committee made up of individuals from the local farming and processing sector. Meeting with this group has been of tremendous assistance to me in not only identifying local concerns but also highlighting workable solutions.

Most recently I received some very positive feedback from this group regarding the position of the minister of agriculture on our current dispute with the United States over wheat.

I would like to share with hon. members one particular response I received just yesterday: "Please continue to fight. Americans are tough traders but we must learn that our strengths and policies need to stay in place. So from my past business experience, hang tough".

That is precisely what we intend to do.

In contributing to this debate I would like to focus my comments on how we are assisting family farms. I would like to make it very clear that we must retain the family farm as a business unit. In my riding and the constituencies across this country, small and medium sized farms are the backbone of the local and regional economies. Through our commitment to enhance value added production, provide better access to capital and financing, and work with all of the stakeholders to redesign our supply management system, I believe that our policies are on the right track.

Our platform for the election last fall emphasized jobs and economic growth. The agri-food sector represents 8 per cent of our GDP and 15 per cent of all the jobs in this country. It is key to our success in achieving that growth and creating those jobs.

World markets are changing. Canadian consumers' tastes and needs are changing. Technology is giving farmers and food companies new ways to produce, market and manage to meet consumer demands. This is the sector where government support for innovation is vital.

Our platform, commitment to innovation and value added production, is particularly important to our government's focus on trade in agri-food. It is a high tech industry in which market share can only be maintained by being at the cutting edge of new technology.

Our government believes in innovation. As we stated in our red book: "For Canada comparative advantage now hinges not just on our natural resources, but on our technological prowess, our ability to be innovative".

One of the keys to this depends on a commitment to research. Better focused R and D is critical to our global competitiveness and economic growth. It is important for us to develop low cost processes and the new products we need to capture new markets.

Just yesterday the minister announced that the Department of Agriculture and Agri-food is launching a $500,000 pilot project for a new program called the agri-food R and D matching investment initiative. The goal of this initiative is to encourage further industry investment in research, especially where increased market potential exists. This innovative way will provide up to $25 million over the next four years.

In my riding I am proud to say that there are many examples of successful value added, community based initiatives. For example, the processing of hogs, chickens and fruits and vegetables can be found in communities throughout my riding.

Furthermore, a biotechnology firm located in my riding, the Efamol Research Institute, is making great gains in the area of value added non-food products. The Efamol Research Institute is a world leader in the research of the medical benefits derived from the oil of evening primrose plants.

I believe that as a government we must look to and work with the private sector to ensure that these companies are on the cutting edge of value added production.

Closely related to our focus on value added production is our commitment to provide comprehensive support for farmers through improved access to capital and financing. Time and time again farmers in my riding have said that in the past they have felt shut out by governments. Income support programs have often been passive in nature and put together on a piecemeal basis.

Statistics clearly show that most family farm operations would not be financially viable unless there was off-farm income coming into the household. However farmers in my riding and across Canada have also said that they do not want to rely on government handouts. Instead, they want the security of stable markets and the knowledge that the government will support them in their efforts to take advantage of new market opportunities.

Given these realities, we are redirecting our focus from providing merely a passive safety net to looking at comprehensive long term programs. We must ensure that these farms have access to the capital necessary to grow and to be competitive over the long term.

In order to improve access to capital for farms, we will focus on providing long term stability through established bodies such as the Farm Credit Corporation. Initiatives that we are committed to include are a long term mortgage program that would transfer some of the risk of interest rate fluctuations from the borrower to the Farm Credit Corporation, a vendor loan guarantee aimed at improving the availability of reasonably priced long term capital, and the agricultural equity development program which would allow the FCC to lease land acquired by foreclosures. This would allow the FCC to assist in getting foreclosed farmers back on their feet.

It is clear that farmers do not want us to repeat the policies of the past. They want to be masters of their own fate. They want government to help them with the tools that they need to be successful.

I would like to turn briefly to the critical issue of supply management and orderly marketing. In the past, supply management has worked to stabilize farmers' revenues while ensuring the supply of top quality and healthy food products. However many farmers have expressed concern over how the GATT agreement will affect their ability to remain competitive.

While we were not able to secure article XI during the GATT negotiations, we were able to ensure that a system of high tariffs will be put in place as a replacement to import quotas. In achieving this, we will be able to provide the necessary security for Canada's small farms and processors to remain competitive while they adjust to the new trade rules.

In the meantime, the GATT also opens new markets for these same products. The minister has stated on many occasions that it is his goal to see our agriculture exports almost double to $20 billion annually. In pursuing new international markets in such an aggressive manner, the government can ensure that Canada's rural communities will play an important role in generating economic growth.

The Financial Post reported this morning that according to a study by the Agri-Food Competitiveness Council, Canadian producers have nothing to fear from worldwide trade. I believe that the agri-food sector in my riding and across Canada can be the best in the world. I am committed to working with them to ensure that they have every opportunity to reach their potential.

With the GATT negotiations behind us, one of the biggest challenges facing our system of supply management is in the area of internal competition. More than ever there is a clear need for national and regional co-operation. In order to address this and other immediate challenges facing us, the parliamentary secretary has been working with a small task force.

The mandate of this group is to determine how to make the necessary changes to Canada's orderly marketing system by making it flexible and viable over the long term. The task force has to this point consulted widely with all of the stakeholders. These groups must have a direct role to play in mapping out the future of supply management and orderly marketing in Canada.

There is no question that we face many challenges. There are no easy solutions, no quick fixes to the issues I have raised here today. As a government we have shown that we are up to the challenge before us: working with industry to set priorities, encouraging industry investment in technological development, investing in the skills of our people, and providing security and stability for small and medium sized farms and producers. These are the ways to keep the Canadian agri-food products competitive.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, just a brief comment for the hon. member. I appreciate very much the way he put on the record the concerns of his constituency. It is the kind of debate that I wished we had had all day. I know that he comes from an area where poultry is raised. I wonder if he shares the concern, as I do, about the recent disputes that we have had in the poultry sector of supply management. I am very concerned about that.

I want to see that sector get together and resolve its internal problems. I am of the opinion that the greatest danger to supply management at the present time is not the GATT agreement that we have just signed, but the danger of the implosion that structures sometimes have once they get to a certain age. There is a maturity in the system now. It works well. However there is also the tendency for structures after a while to deteriorate and I want to know if he shares that concern with me.

[John Murphy, Liberal, Annapolis Valley—Hants, NS]

Mr. Speaker, I thank the member for his question.

I do share this concern. In my riding of Annapolis Valley-Hants we produce 78 per cent of all the poultry in Nova Scotia. What is happening with regard to the quota system, the lack of working together by the provinces to live up to the rules and regulations of our system is of major concern.

As we know, there is an overproduction in two of the provinces and the overflow is coming to the east coast. Consequently the price of chicken in our area is going down and that is a real threat to the small business farms that are running the poultry industry.

I share with the member the concern that we as a country are not now inundated with external problems, we have internal problems. The internal problems need to be worked out between the provinces. We need to sit down. We have to remember that we are a generous country that wants to survive from coast to coast. The poultry industry needs to survive but it will only survive if all of the provinces play by the rules and we find a consensus to work out our difficulties.

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Mr. Speaker, it is a pleasure this evening for me to rise and pay tribute to my hon. friend from Annapolis Valley-Hants for his very informative discussion on agriculture.

Being a member of the standing committee on agriculture I take pride in being able to talk about the concerns of agriculture, specifically in Souris-Moose Mountain which is a very large rural riding in southeast Saskatchewan.

One of the concerns we have is the movement of grain and the situation it poses for all of us. With this question in mind, it is necessary for us to take a look at the problems that have been created. We may have tarnished Canada's reputation as a reliable shipper and supplier of grains and oilseeds because of our inability to ship on time.

There are some factors which severely challenge Canada's ability. We must meet the demands though. Our western agricultural community was built on exporting grains and oilseeds to overseas markets. Canada has built and maintained for over half a century an excellent reputation as a dependable supplier. We have high quality grains and oilseeds and because we have that reputation, we must work diligently to protect and maintain it. That is why the current situation concerning grain transportation needs to be addressed.

Canada's inability is causing some concern in our Asian markets, namely Japan and China. The government is not content to let this situation continue. Over the past few weeks we have seen at least 40 vessels tied up at the port of Vancouver. There are demurrage charges in the amount of $10 million.

Where do those demurrage charges go back to? They go right back to the farmer, who is the person who is suffering most and yet must pay those costs. How about the cost of sales that are lost? The Canadian Wheat Board estimates that we have lost $280 million in sales because we do not deliver on time.

Our customers look elsewhere to satisfy their needs. I know that Japanese canola customers have already looked to Australia and Europe for new suppliers. When a market is lost in Canada the farmers cannot afford it nor do they want to see it happen.

The government is very concerned that the grain movement situation be placed as a high priority and that we work toward solutions. The issue is not simple. A number of factors have led to the shortfall in a number of rail cars. One is the movement of grain to southern markets and a turnaround time of possibly 40 days. In most cases, it is at least two times the normal length of shipping time in Canadian markets.

That rail car shortfall is due to several factors. The Mississippi flood caused the normal use of U.S. cars to be limited to us and we have had to turn to other means. The late harvest last year caused problems for us in moving our grains to the port of Thunder Bay and to the west coast.

Unexpected increases in the movement of canola also created problems at Thunder Bay. The operation at country terminals because of the extreme cold weather in January and February caused additional problems. The work stoppage at the port of Vancouver did not help at all. A 13-day shutdown because of labour unrest caused the terminals back up.

We are looking to solving these problems. How do we get weekend loading? How do we ensure that we can have seven days a week of service at those ports? However the key players in the grain and marketing industry realize there is a problem. I am confident that they are going to take a look at the turnaround time of the cars.

Both railways have increased their budgets for maintenance. Railways have also modified their train service and have increased the switching budgets. CN has just added 765 boxcars from Hudson Bay into the Thunder Bay shipping area.

Shippers have been allowed to bring in private cars. We have introduced an emergency trucking program, a subsidy through the Western Grains Transportation Act which will allow movement to Thunder Bay and to Vancouver. Therefore we are now looking to weekend loading and unloading, an efficiency in the system that we have not had for some time.

Senior executive officers of railway grain transportation and of government are going to look at the problem. They are going to review the shortfalls for 1994-95. We have set up a human resources Canada commission to study the labour issues in western grain transportation. The report should be due in July.

Clearly much has been done but much remains to be done. This problem cannot be solved by looking at one issue alone. More than rail cars are the problem for us.

The Canadian grain marketing system must continue to run efficiently in the face of the changing marketplace. Western Canada is now producing a different mix of grains and oilseeds and specialty crops. It is time we examined Canada's grain marketing system to look where the grain is going and determine whether the system is in place to make sure we get it there.

Canada is now competing in a world market that has changed since last year. The General Agreement on Tariffs and Trade is certainly going to change our way of marketing. The agreement means new marketing opportunities for Canada's grains and oilseeds throughout the world. A strong, efficient grain marketing system will continue to be the backbone of our industry. It is vital to ensure that kind of system takes us into the year 2000.

Concerning grain marketing, handling and transportation, different groups and representatives from grain companies, railways, and labour unions involved in grain handling will be meeting in Winnipeg on May 16 to review the problem and hopefully come to some resolution. We look forward to an industry in which government along with the others in the system bring us a proper grain handling system for our oilseeds and our grains.

I want to turn for a moment in the final part of my speech to review some matters in my riding.

In Weyburn an ethanol plant is proposed to come on stream. Moosomin would like to see one come on stream. In Kipling, pork producers are looking to introduce a new breed. In Broadview we have a maple syrup program, a wood products future and ethanol. Inland Terminal is certainly a major impact on the Weyburn area. The PMU farms in southeast Saskatchewan are growing, but they need protection. They need some assurance that we will support them. PMU stands for pregnant mare urine.

Our specialty crops continue to be enhanced. However, we are facing a rural decline in southeast Saskatchewan. Added to that is the fact that Saskatchewan along with Atlantic Canada has the largest amount of debt in the agricultural sector which is a deep, deep concern.

We want to ensure that we have a whole farm safety net program to deal with the debts, to help the people who are working the farms of southeast Saskatchewan move forward.

Saskatoon has one of the most outstanding research centres in the biotechnical field in Canada and certainly in the world. It has just introduced sunola which is a new sunflower oil. There are 100,000 acres under production. That particular crop is certainly going to enhance the viability of farming in Saskatchewan.

In closing I deem it a privilege to speak on behalf of the agricultural program that our government has put forward. It is very forward looking. It is going to take us into the future.

On behalf of the rural community of southeast Saskatchewan it has been a pleasure for me to rise in this House and speak in this debate.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Mr. Speaker, I listened closely to the remarks of the hon. member for Souris-Moose Mountain. I share with him responsibilities for many farmers in the province of Saskatchewan. Many of them are looking in this spring of hope to an opportunity to have a much better year than they had previously, both financially and cropwise.

The hon. member in his remarks commented on the problems of transportation and moving the grain to ports. I am wondering if the member is aware that the railways have fallen short of their requirements in terms of shipping.

In fact, I understand in the second quarter of the current crop year railways reached only 75 per cent of their targets on shipments to the west coast and 82 per cent of their targets to Thunder Bay. The Western Grain Transportation Act allows for penalties to be applied to the railways should they fall short of their commitments or targets.

Would the member for Souris-Moose Mountain agree that perhaps the federal government should examine imposing the penalty clauses of the WGTA at this time when, as we realize, they have never been applied in the past?

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Mr. Speaker, I want to thank the hon. member opposite for the question on transportation.

I can say to the hon. member being on the subcommittee on agriculture and transportation and looking at that very important question he raised, one of the features was that particular point.

When railways are not meeting expectations and their delivery quotas there should be some redress. Some penalties should be put in place to encourage them to work efficiently or pay the costs.

One of the problems I had was that if it was going to be in the form of a demurrage and the railways were going to charge it back I kept asking the others who it was going to be charged back to. If it was going to go back to the farmers then I would not support it. Their position was, and I am sure we will see it come forward as a recommendation, that where railways do not meet and follow through with their production quotas there should be a penalty in place.

I certainly understand what the hon. member is saying. I think that will likely come forward as a recommendation from the committee.

[Allan Kerpan, Reform, Moose Jaw—Lake Centre, SK]

Mr. Speaker, I wish to advise the chair that I will be sharing my time with the member for Fraser Valley East.

I am pleased to participate today on this long awaited debate on agriculture. It is the first time in the four months of this Parliament's sitting that we have had a government sponsored debate on agriculture. It is good to see that our friends opposite have cranked up their tractors and are heading out to the fields to do some work.

Farmers across our country are busy with their spring work and seeding. New seed is going into the ground. I believe that as farmers drive up and down the fields in their tractors their radios are tuned into the news to see if there are any new ideas and any new initiatives coming forth from Ottawa this spring about farming.

It is time for new ideas and new approaches to agriculture in Canada. Old ideas, like old seed, will not produce the results we need. The basic new idea we need in agriculture is that government must get out of the way of farmers. Farmers do not want government as their major partner in business. They realize the way to solutions for our problems is to open up the process and let farmers take control of their own destiny. Let farmers determine and choose the solutions. Let them get involved directly about how they want to produce, process, insure, transport and sell their crops.

I want to focus my remarks today on new ideas about some safety nets and also touch on the farm debt problem as it relates to the Farm Credit Corporation. There is no question that farming is a high risk business, perhaps more so than any other industry. We face matters over which we have very little control. There are basically three of them: trade distorting influences, market cycles, and good old mother nature.

On this matter of dealing with mother nature there was some discussion by farmers in my riding during the election campaign last fall as to whether the weather was provincial or federal responsibility. It was finally decided it must be federal because it does cross provincial borders.

New ideas are needed as to how to make adjustments in light of the GATT and the NAFTA so that we can take full advantage of new market opportunities.

There have been some gripes about GRIP in my home province of Saskatchewan, so much so we have given notice that we are withdrawing from the program after the 1994 crop year. Why is this? Because farmers right across our province think it is a lousy, useless program. Some of their main concerns are that it has declining support levels, the premiums are too high, there is a lack of producer consultation in developing it and the payment process is too long.

Saskatchewan has the largest number of producers in the program of any province in Canada, some 42,000 when it started in 1993 and an insured acreage of some 23 million acres. Our involvement was almost twice that of any other province, but we are pulling out. For the most highly involved province to do so makes a big statement about the need for the program to be scrapped after only three years of operation.

It is a tremendously highly bureaucratic program. The program works by building on conventional crop insurance by offering producers a form of revenue insurance. Producers are provided with a guaranteed target revenue. Indemnities are paid throughout the crop year and are triggered when the value of an eligible crop falls short of the target revenue. The premiums are shared by federal and provincial governments as well as producers.

In the event that the premium income and accumulated reserves are insufficient to cover indemnity to payments to producers, the federal and provincial governments share the deficit financing. Deficit financing. I do not like to say those two words. Deficits are financed 65 per cent by the federal government and 35 per cent by the provincial government.

Does that sound bureaucratic? I believe it does. Well it is, at least according to most of the farmers I talked to, and the results are predictable. As of March 31, 1993 there were outstanding interest bearing advances of $64 million. The program is in the red.

What are we proposing for this revenue insurance for farmers? Reformers have always believed that GRIP should be discontinued. We believe it inhibits farmers' abilities to compete. It discourages good land stewardship and is market distorting. It promotes producer dependence and is in violation of international trade rules. The implementation of streamlined comprehensive safety nets is a priority for ensuring necessary stability in all sectors of agriculture. This Reform process must be based on trust by providing for direct stakeholder consultation.

I want to touch on some of the problems of farm debt as it relates to the Farm Credit Corporation. The Farm Credit Corporation mandate states that the purpose of the FCC is to enhance rural Canada by providing specialized and personalized financial services to farming operations and to those businesses in rural Canada that are related to farming.

That is a very honourable mandate, but if one goes out into the country and listens to farmers talk about the FCC. one realizes this mandate is not being achieved. Farmers in my riding tell me that when it comes to dealing with this government organization it is much more difficult than dealing with the chartered banks or credit unions. I have heard horror story after horror story of unrelenting badgering by Farm Credit Corporation officials as they give their brand of personal service to farmers.

For example, last week I had a call from a farmer in my riding who had leased back his farm from the Farm Credit Corporation after FCC had taken it away from him. The deadline to pay his lease was May 2. He was in arrears by some $12,500. The Farm Credit Corporation would have been completely justified in taking back the land on May 2. On May 1 he called me and told me he had some private backing available to pay one-third of his arrears on May 2 and the balance by certified cheque on May 31. This sounded completely reasonable to me and a solution to the problem.

He asked me to act on his behalf with the Farm Credit Corporation. After explaining the position to both the case worker and the regional manager, I came away frustrated and very angry. They both told me they were not interested in his proposal and they were only interested in doing business with someone who would pay. It is not that this farmer would not pay; it is that he could not pay.

The bottom line here is that we will lose a 55-year old farmer who has little or no chance of any other career in rural Saskatchewan. Now the corporation has no chance of ever recouping this farmer's back rent. He most likely will end up on social assistance.

These two bureaucrats told me they had to be more fiscally responsible to Farm Credit Corporation. That to me is not very fiscally responsible. We had the chance to save a farmer, if only for the short term, yet we chose to play God with another farm family's life.

These are the kinds of stories I hear on a regular basis in my province. At times I am embarrassed to be part of a government that deals so heavy-handedly with people's lives. If it were within my power a noise would have been heard all across this country last week. That noise would have been the heads rolling in the Farm Credit Corporation in Regina. My question is: Do we as a government have any business in the banking business? I think not.

As I mentioned before farmers want to be able to control their own destiny. All they ask for are fair rules and a level playing field. If we look at government spending on agriculture in the past we see that we have spent adequate dollars. A budget of somewhere in the neighbourhood of $2.5 billion is not by any means insignificant. What we need to do is spend smarter, not necessarily more. The government must be prepared to show leadership in developing farm programs by farmers for farmers.

In conclusion, there are not many things a farmer cannot fix if he can get his hands on them. Let us get the farmers in on this discussion this year and let the seeds of common sense that have made our country great bring forth the harvest of an industry that will be second to none in the entire world.

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Mr. Speaker, I noted with interest the comments of my fellow member from Saskatchewan. He highlighted, in particular at the end of his speech, the common sense in making sure we have farmers working together.

In light of that and knowing that the parliamentary secretary had an opportunity to contact 180 different groups to take a look at supply management and other features, I think that is a positive step. I am glad he mentioned there is a direction we can move in.

With regard to GRIP, he mentioned that GRIP should be scrapped, should be done away with. Yet when we look at other parts of Canada, other provinces, we find it working well. It is a useful mechanism that will be continued.

Why is the problem in Saskatchewan so different from the rest of Canada in relation to GRIP? Maybe he could identify the problems that created it, other than just saying let us get rid of the whole program when I know other provinces are saying no

and that they think there are some benefits to the program. I wonder if the hon. member could respond.

[Allan Kerpan, Reform, Moose Jaw—Lake Centre, SK]

Mr. Speaker, first I would like to mention on the subject of farmer consultation that I encourage the government to become more involved in it. What we will see happening is that farmers, the stakeholders who can take part in the decision, will get behind whoever is in power at the particular time if they have the opportunity to become real players in the discussion.

If the hon. member wants to talk about GRIP, if we look only at the numbers we see that Saskatchewan makes up half or more of the participants. That in itself says something to me. If we talk to farmers in western Canada, and I speak mainly about Saskatchewan because that is my area and that is where I do my work, they tell us for the reasons I said that it does not work. There is no farmer consultation. It is too heavily bureaucratic. It takes up to 18 months to get final payments.

It is simply not the answer given the problems we see today. It is too expensive for federal and provincial governments and the producers. The negatives far outweigh the benefits of the program. It simply was never a good program to start with. It only took us two years in Saskatchewan to realize that. It just has to go. There is no question about it.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Mr. Speaker, I have a question which I have divided into two short parts.

The first part is on GRIP. In 1991 when the previous government brought in GRIP my colleagues in the NDP in the House and I were among a very few who spoke against GRIP and predicted many of the problems that have beset the program ever since.

We were criticized quite heavily throughout Saskatchewan and elsewhere by farmers who did not support the NDP generally. We were criticized because the farm economy was in such bad shape that farmers were prepared to accept any program that would provide them with some very quick relief. Certainly we admit the first year of GRIP provided some incredible relief for Saskatchewan and other farmers. We realize many producers, in the atmosphere of needing money in 1990-91, were prepared to accept the program they knew was not going to be acceptable in the long term.

The member referred earlier to the Reform always being against GRIP. Where were their members in 1991 in Saskatchewan when the program was being promoted by the Conservative Party to the support of many farmers in Saskatchewan?

The second point I wanted to make with regard to the Farm Credit Corporation-

[The Acting Speaker (Mr. Kilger)]

When members have split their time I know 10-minute interventions with 5-minute question and comments are very short.

However I ask the member for Moose Jaw-Lake Centre to reply to the first question.

[Allan Kerpan, Reform, Moose Jaw—Lake Centre, SK]

Mr. Speaker, with regard to the GRIP question, one of the other elements that has made it a negative or poor program from our point of view has been that it has been open to abuse by farmers. It encourages poor farming practices. That is one thing that has been very negative about it.

I will not take any more time, except to say that in 1991 there were no Reform members of Parliament in Saskatchewan. Had there been we would certainly have been aligned with the NDP on that particular point.

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, I am addressing a subject that concerns 36,000 agricultural producers in Canada. The topic is vital because each one has a vital stake in a set of rules that govern their agricultural production. We call these rules the supply management system.

Supply management has been kind to the producers of my own constituency. We have a healthy industry in the Fraser Valley that has contributed much to our community.

Agricultural activity continues to be the backbone of the Chilliwack-Abbotsford area. I would be remiss if I did not mention another agricultural mainstay of my riding, so I want to speak for a moment on the federal agricultural research station located in Agassiz, B.C., which for decades has served our dairy community. Unfortunately its role in the future of the agricultural industry has been threatened of late.

For a while we heard false rumours that the station was to be closed. Then we heard that the station's dairy herd was moving to the unlikely town of Oyster River on Vancouver Island, a place far removed from the Fraser Valley and the mainstay of the industry, where new facilities would have to be built and feed transported at a tremendous cost. Not only that, the milk would have to be transported off Vancouver Island back to the mainland. It did not make a lot of sense.

We further heard that the University of British Columbia was willing to move its experimental herd to Agassiz and build a research facility there but that it would follow the station's dairy herd to Oyster River if the station chose to relocate it there. We brought the matter up with the minister and his parliamentary secretary. I would like to thank them for placing the relocation process on hold pending further investigation. I am confident that once the facts are all out on the table the Agassiz dairy herd should have a solid place in our research future.

I shared these details so that my constituents might be clear about the situation. I publicly urge the minister to make every effort to resolve the impasse among the local producers, the processors and the officials at the station or in Ottawa. I stand ready to assist in bringing the parties together so that the dairy community and the local community will continue to benefit from the research herd remaining in Agassiz and benefit from the university's significant contribution. That is our local situation.

I also want to touch on the national supply management problem that we cannot ignore. The problem is that our system has been abruptly challenged by a larger set of trading rules. These new rules operate on a global basis. They operate between nations, not within nations. The new rules are the free trade agreement, the NAFTA and the GATT. These agreements threaten to swamp our national rules and thus affect the livelihood of many thousands of producers.

The old rules are like a river that has cut a deep channel over the years. With each passing year the river's course has become deeper and more resistant to change. Once our supply management system was instituted economic interests were channelled in a specific direction and financial interests are now deeply entrenched.

A new channel is being cut by the outside world and we have little choice but to direct our economic river into the mainstream of the world's economy. Our supply managed sectors are realizing the need to explore new markets and to develop new products for the global economy of the future. The streams that fed our made in Canada agricultural policy have been rerouted. Our supply managed sectors must change with the times.

The major obstacle to change is the economic interests that I mentioned earlier. The winners for the last 20 years, the producers and the processors within the supply management industry, may stand to lose some of their security when the rules change.

The rules of the old game are written by an old name in Canada. Pierre Trudeau promised a national supply management system in 1970 and the Liberal Party has defended it ever since. Even as recently as last year's election period Liberal candidates were still holding on to the past insisting that article XI(2)(c) regarding import quotas would be strengthened and clarified under the GATT arrangement they promised to producers. The flip-flop immediately after the election reinforced my belief that the Liberals were not being frank with the agricultural community.

Political gamesmanship does not go over very well with the agricultural community. Saying one thing while doing another is guaranteed to raise their ire and raise their concerns as it should. It is a case of once bitten twice shy, and the supply managed industry is checking for bite marks as we speak. This time it needs to know the facts, not the wishful thinking, so it can start planning its future.

For example, the task force on the future of supply management calls on the system to become "fully market responsive". Yet the whole weight of the report focuses on preserving the system, a system that is not fundamentally market responsive. There is a contradiction here. Which will it be: status quo or market driven?

New interests are arising in Canada. They are the producers who have been waiting many years to get into the system but have been legally barred from doing so because they could not afford to buy the right to produce. What is their status? There are consumers as well, consumers who have paid higher prices for food products for over 20 years to ensure a steady supply and to ensure that producers within the system received an adequate price that they have set for themselves.

There is also a new political party that gives voice to those previously shut out of the system. The Reform Party of Canada is the new political vehicle for the average consumer and the average producer who wants to grow, sell and buy agricultural goods without unnecessary government interference; those who want to buy quality food at more competitive prices; and those who want to produce it, not only for Canada but for the global marketplace.

This is not to say that current producers are doing something wrong. Far from it. We have an excellent, productive industry producing the highest quality food in the world. However Reformers insist that the world economy is forcing change upon us. To resist that change is not possible. It will harm us in the long term. We must not obstruct inevitable change, but we must construct that change so that the transition from a managed to a less managed system will continue to be orderly. We want to avoid financial hardship for the supply managed sectors. We must lay out a workable, innovative work plan for all the stakeholders and then stick to it.

This problem also touches on national unity. As members may be aware, agricultural production was increased during World War II to serve the allies overseas. After the war the supply management system froze the allocation of quota at historic levels of production. Quebec, for instance, produced a lot of milk during the war. Today it still produces almost half of all industrialized milk in Canada. The right to do so is protected by law.

Quebec is not about to give up its share of the markets in other parts of Canada now, even though it is obviously inefficient to ship butter and other milk products to B.C. instead of producing it right in B.C. Allocating production through political decisions

is another fundamental inefficiency. We will not survive in the world economy unless we are able to increase our efficiency.

I have a special word of caution for my friends in the Bloc. At least within the national system farmers in Quebec can bargain to retain their production rights, but what if Quebec opts out of Canada? Would Canadian producers gladly accept Quebec's produce when producers all over the country are clamouring to increase their production to serve their local populations?

Quebec's privilege within the system has been maintained at least in part to preserve national unity and that incentive would disappear if Quebec separated from Canada. Quebec would lose the market share it currently enjoys within the Canadian system and western producers would happily move quickly to fill that market share.

Farmers all over Quebec would suddenly have to scramble to sell their produce. They would not be able to sell all of the excess in the United States. They would have to look at overseas markets. The adjustment would be painful indeed. Agriculture in Quebec may be permanently stunted as a result.

The industry can co-operate together on a national basis to find an orderly way to convert to a less regulated market, a way that would be fair to producers and benefit consumers all across this great land. One thing the government can do is promote more agricultural exports that would allow increases in production over present quota allocations.

We commend the efforts of the Minister for International Trade to increase exports and we urge the minister of agriculture to follow his lead and work harder to develop these export markets.

I have another example to illustrate that. The cruise ships that dock in Vancouver recently wanted to buy 20,000 dozen eggs from a B.C. processor-producer but finally gave up trying to get the necessary permission from the marketing board to supply them. The eggs were finally shipped from the United States and we lost that market.

This kind of rigidity is no longer acceptable. We must take advantage of the opportunities available to us in the marketplace. Let us hope that Ontario's recent decision to boost chicken production is a sign of a positive change in attitude. Indeed, we must allow all agricultural sectors to be market responsive.

Right now producers and processors collaborate to set their own prices using a complex cost of production formula but the market, not producers and processors, should set the prices for these products. We can help by including all supply managed sectors in the government's whole farm income stabilization plan. This would be a safety net based on total farm income applying to all farmers.

The managed sectors need to embrace this whole farm plan even though it would expose producers to market prices which might be lower than the supply managed prices they calculate for themselves. If the supply managed sectors are allowed to opt out of the whole farm alternative and continue on as at present, a GATT panel may rule against them and once again Canada could suffer trade penalties as a result. We could also suffer the insecurity of once again throwing this whole supply managed system into the wind.

Our producers cannot escape change. The old ways are no longer the best ways. It is time for us to free up our internal markets to include more producers and processors and benefit Canadian consumers, to strike down interprovincial barriers to trade, to capitalize on our nation's abundant agricultural potential by increasing production for markets all over the world.

As Reformers have said for years now, give Canadians the tools of deregulation, give farmers the freedom to make economic decisions without interference and they will do the job of competing with the best in the world for price and quality.

[Murray Calder, Liberal, Wellington—Grey—Dufferin—Simcoe, ON]

Mr. Speaker, I listened with a lot of interest to the member's comments. I cannot say that I agree with all of them.

I am a poultry producer and I work under supply management. There are a few things I would like to clarify before I ask my question. First, if you go to the supermarket and take a look at the meat shelf, you will find that poultry is probably the most inexpensive buy on the shelf.

As a poultry producer, I make x dollars during the year because I have x number of chickens that I can grow. If I find ways of bringing my overhead costs down, I up my profit margins. That is what makes my industry so efficient.

It is a stable industry under supply management. A stable industry has money to put into research and development. As I said previously today, in the early 1950s it took 14 to 16 weeks to raise a four pound bird. A male bird now can be raised to that same weight in 37 days. That is research and development. That is from a stable industry.

The member suggests we are going to do away with supply management. We are not because we replaced import quotas with tariffs that effectively protect the industry within Canada. I would caution the member that as we look at lowering provincial barriers across the country, this national board will replace that same job.

We have to take a look at what happened in the United States. In 1958 Tyson Foods vertically integrated. We are talking about rural Canada. The strength of rural Canada is its farmers. Tyson Foods vertically integrated. Eighty per cent of the chicken production that was bordered along Canada went to the south central states. I know because I bought up some of that surplus equipment for my farming operation. It went dirt cheap. These

guys could not survive because of overhead costs and the price that they were getting for their poultry.

Within our industry we have health standards which the United States does not even come close to. A declassed bird in the United States is 60 per cent bruising and is sold off of the shelf. You will not see that here in Canada. We have pride in the products that we are putting forward.

Our farmers were protected under the GATT because the levels were set high enough to protect the industry. We have an efficient and stable industry under supply management which is putting forward an inexpensive food product.

I guess I have to ask the hon. member: What more do you want?

[Chuck Strahl, Reform, Fraser Valley East, BC]

Mr. Speaker, I can tell you what we want. We want consistency.

I was reading a pamphlet from the election period. It happens to be one of mine. Perhaps that is why I was reading it. We said all along during the negotiations for GATT that we would be replacing article XI 2(c) with appropriate and equivalent tariffication.

We were raked over the coals incessantly, consistently, persistently by members like the one opposite who said that that was an unworkable option, that it would not work, that we were trying to destroy the industry.

Perhaps I could read just a brief bit here. It states: "All of the other political parties are supporting a contradictory trade position. They are calling for the elimination of export subsidies by other countries but they want to strength article XI 2(c) which permits Canada to impose import quotas. Reformers are asking, what will the other parties do if they are faced with signing a GATT agreement, which includes tariffication of access restrictions? What will they do?"

I fought incessant battles in my own riding because we said we would prepare farmers for the 21st century. We said: "Let's not kid ourselves". One of the stories I get now from my farmers back home where I have a lot of supply management is: "At least you told the truth during the election and not only that at least I can trust you to plan for the future". They feel very let down that they were promised something that was undeliverable during the campaign by the Liberal Party. Now they are having to try to readjust mid-course, midstream in that river I was talking about. They are nervous now about what the next thing might be.

[Susan Whelan, Liberal, Parliamentary Secretary to Minister of National Revenue]

Mr. Speaker, I would like to advise at the beginning that I will be splitting my time with the hon. member for Lambton-Middlesex.

I want to start today with an article that appeared in this morning's Globe and Mail : Thomas Homer-Dixon notes that the current crisis in Rwanda is in part being driven by severe land and food scarcity''. He further wrote:Rwanda has eight million people crammed into an area the size of Vermont. Its population doubles every five years. Extreme nutrient depletion affects the soil in half the country and agricultural production per capita fell by almost 20 per cent between 1980 and 1990. The land competition fuels the vicious ethnic animosity between Hutus and Tutsis and the collapse of civil order has made the country incapable of dealing with underlying scarcity and population problems''.

This clearly underlines why agriculture, no matter how much we talk of the new economy of the electronic revolution, is and always will be of central importance. Without food we cannot have peace. Without peace we cannot have food.

That is why we called our agricultural paper "Food security for Canadians and a fair return for Canadian farmers". Food security for Canadians and a fair return for farmers are the cornerstones of this government's agricultural policy.

In order to achieve that, and I quote from the red book: "The government is committed to achieving the full potential of the Canadian agri-food sector by developing new markets and maintaining existing ones while capitalizing on economic opportunities for value added regional development. Producers across this country have told us many times that they do not want their livelihoods to be dependent on government handouts. They do not want any special treatment. What they want is the opportunity to derive their income from the marketplace. One of this government's top priorities in this regard is to ensure that all Canadian producers-that is all Canadian producers-enjoy fair and unrestricted access to those marketplaces at home, within North America and abroad. This is why trade has been such an important issue in agriculture since the day this government took office last fall.

This government strongly believes that Canada has the products, the expertise and the technology to compete and win in any market. But in order to do that, Canadians must not be prevented from getting to the starting line.

To ensure that the federal government is working on a number of fronts to secure greater market access for Canadian producers and to do that since last October, the single most dominant issue for this government and for Canada's agri-food sector has been international trade.

It began with the conclusion of the Uruguay round of multilateral trade negotiations under the GATT after seven years of negotiations. Under GATT member countries will reduce agri-food export subsidies by 21 per cent by volume and 36 per cent by value over a period of six years. As greater disciplines are brought to bear on such price distorting programs as the U.S. export enhancement program and the European union's common agricultural policy, international prices for grains and oilseeds should gradually improve over time.

It is true that we did not get everything we wanted in Geneva. As we entered the negotiations late in the game it was not possible to build enough support for a strengthened and clarified article XI 2(c). We were, however, able to negotiate tariffs which will enable supply management to continue to exist as an effective Canadian approach to producing and marketing dairy, egg and poultry products.

We have not stopped there, however. To assist this sector with these adjustments a federal-provincial industry task force on orderly marketing has been established. Its mandate is to consult with all affected sectors of the industry, to develop co-operative processes to deal with the new rules in advance of the GATT implementation in 1995.

Under the task force five ad hoc review committees have been established for the dairy, chicken, broiler hatching eggs, turkey and egg industries. These committees will help draft a task force report to be submitted to the national and provincial agriculture ministers when they meet in Winnipeg in July.

As well, the U.S. is our largest trading partner. In 1991 Canada exported $11 billion worth of agricultural product to the world, of which $4.7 billion was exported to the United States. However, the federal government is also pursuing improved market access with the United States. Under the free trade agreement the last government promised guaranteed access, but we all know what we got was guaranteed harassment. That is why I support the minister's promise to push these negotiations to the wall.

This government has made it clear to the Americans that there will not be a deal unless it is a good deal for Canada. That means a good deal for the grains, processing and supply managed sectors. We will not trade off the interests of one for another.

Canada will continue the dialogue as long as necessary in order to reach a satisfactory conclusion. It has been made very clear to the United States that if it proceeds with recent threats regarding unilateral actions Canada will have no choice but to respond in kind. We are fully prepared to follow through in this area.

I would like to now turn to marketing. This government is committed to achieving the full potential of the Canadian agri-food sector by developing new markets and maintaining existing ones. To help the sector take advantage of new trade opportunities the government has created a new branch of Agriculture and Agri-food Canada, market and industry services. This new branch has offices in all provinces and will work with industry to increase its share of both domestic and international markets. It is through increasing the sector's ability to meet customer demands that we will be achieving our goal of providing financial security for Canadian farm families and jobs for the Canadian agri-food sector.

In Essex County, my home county, we can grow any product grown in the world. Farmers in my area in conjunction with the Windsor-Essex Development Commission have taken their own steps to prepare a marketing plan for the future. They started by conducting a comprehensive survey to identify those areas in which they can excel. Their goal is to identify markets and to find areas where we can substitute imported product for domestic product.

For example, one of the findings of the commission was although in my region there are five wineries, 60 per cent of the grape juice concentrate is imported from outside of the region from areas such as Chile, Europe and California. Those varieties of grapes could be grown in Essex County and we could substitute local product for imported product.

The survey also found that there is a need to identify market niches and corresponding products that local producers can add value to before export. Both of these ideas tie in with two items the minister spoke of this morning.

The minister of agriculture told the House that we must listen carefully to what the market is saying and not just try to sell what we produce now but produce what the market wants to buy. To that end the federal government has 55 trade commissioners and commercial officers working on agri-food trade development in more than 150 foreign markets. This includes 18 agri-food specialists.

To further assist us at home an agri-food industry council will be established later this year to advise on processes to improve Canada's market strengths, promote economic growth and create jobs.

The minister also spoke this morning of his role in rural renewal. It is clear, as a survey in my area found, that it is not good enough just to export raw product but we must export further processed products where the value is added in Canada. It is through such further processing that we can renew our rural areas. This will create jobs in these areas by keeping more dollars circulating within our communities as well as bring greater amounts of money into Canada.

Agriculture and Agri-Food Canada is also working in co-operation with other federal departments and provinces to establish a single window marketing service for Canadian industry. A single window service will provide access to programs such as the agri-food industry marketing strategy program which helps agri-food associations develop and implement marketing plans, or the new getting ready to go global program which provides cost shared assistance to food and beverage processors to develop new strategies and initiatives.

In addition to easing restrictive barriers through trade agreements and providing market service and information to industry, the government is also constantly seeking out new markets and working to maintain and improve existing markets. This government is also looking to Asia for new markets and opportunities.

A concrete example of this is the minister's recent two week trade mission to the Asia Pacific. Accompanied by the Governor General, the minister headed a delegation that included 15 Canadian farm leaders and agribusiness officials.

Canada has some of the most productive land in the world. The article by Thomas Homer Dixon which I referred to earlier warns that a world food crisis is pending. A recent report of the International Food Policy Research Institute notes that grain production per capita has been flat since 1980. Canada has a responsibility to ensure that we protect our land so we can help feed a hungry world. The best way to do that is to protect our farmers. In doing so we will protect ourselves.

In conclusion, if one looks at the situation in the former Yugoslavia and if one asks the people there what they wanted more than anything, I believe they would ask for the two things we have in great abundance in Canada, bread and peace. The power expressed in the idea of bread and peace is fundamental. It was a promise of bread and peace that allowed the Bolsheviks to overtake Russia in 1917.

It is our abundance of bread and peace that underpinned our economic prosperity in the past and we must never forget its importance to our future.

Now we must move forward to implement an agricultural policy that ensures our future prosperity.

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Mr. Speaker, I would first like to congratulate the Parliamentary Secretary to the Minister of National revenue on her speech. Allow me to make a comment and perhaps ask a few questions that will be included in my comment.

In her introduction, the hon. member explained to us that, in order to achieve a certain level of peace in the world, it was necessary for us to provide underdeveloped countries with products such as agricultural products, agri-food products, et cetera. Then she told us that we should assist our farmers in developing and rationalizing their production precisely to enable Canada to find new markets and develop them and to ensure that our farmers receive adequate income.

I would like to ask the parliamentary secretary, first, where does she see these new markets? Where could Canada direct this agri-food sector? And I would also ask her the following question: Has the party she represents re-examined its position or done a post mortem on the way in which the recent agreements were arrived at, agreements that were achieved with difficulty in the case of the GATT and, of course, the free trade agreement? Will we follow the same model to develop or interest or negotiate with other countries with regard to agri-food?

[Susan Whelan, Liberal, Essex—Windsor, ON]

Mr. Speaker, I thank the hon. member for his comments.

Briefly I mentioned that in my riding we have five wineries. We know we could produce grapes locally. We know that is a market in my area that we need to expand on and should expand on.

I also mentioned that the minister spent two weeks on a trade mission in the Asia Pacific. That is an area that his department is looking into for new opportunities.

I believe that every government learns from past experiences in negotiating future agreements and this government has learned from what has happened in GATT in the last seven years and from the free trade agreement. In the next agreements we negotiate we will take that experience with us.

[Rose-Marie Ur, Liberal, Lambton—Middlesex, ON]

Mr. Speaker, I am delighted to stand in the House today and respond to this government's motion in support of Canadian agriculture. To the extent that this is a wide ranging debate, I hope to touch on a number of issues which are directly impacted by federal agricultural policies.

The primary industry in my riding of Lambton-Middlesex is agriculture. Stats show that nearly three-quarters of a billion dollars worth of farm products are produced in Lambton and Middlesex counties and more than half a billion dollars worth of farm supplies and equipment are purchased.

All of us in this House recognize that the production, sale and trade of agriculture produce is becoming more and more subject to both the constraints and opportunities that exist within the highly competitive nature of international trade.

Over the past couple of years more monumental changes have taken place in the field of international agriculture trade, necessitating some fairly radical adjustments to Canada's domestic structures. To that extent I have to say that the farmers of my riding who sell their products under Canada's supply management system were extremely disappointed that Canada was

unable to secure a strengthening and clarification out of article XI at the recent Uruguay round of GATT negotiations.

Canada's unique system of marketing boards, agencies and commissions is arguably the most sophisticated system in the world, ensuring producers a reasonable income and consumers stable quantities of the highest quality food.

Two years ago Canada had a number of impressive allies in her fight to strengthen and clarify article XI of the GATT. However, due to relentless pressure and threats from the United States, our allies fell by the wayside one by one. Unfortunately by the time the deadline approached Canada stood completely alone at the bargaining table. We were faced with a fundamental decision: Do we leave and scuttle seven years of negotiation involving the interests of 116 nations and our own, or do we examine the factors associated with this most comprehensive round of global trade talks in history and work to implement the measures that would ensure the survival of our unique supply management system?

The Government of Canada chose the second option. I am hopeful that Canada's farmers who operate under our current supply management system comprised chiefly of poultry egg and dairy sectors can successfully retain their system through a well regulated conversion process from the original import quota system to one that is to be characterized by initially high levels of tariffication.

Despite recent threats and posturing by the United States, I am hopeful that the Government of Canada will successfully implement this initial set of tariffs of supply managed produce beginning July 1, 1995. My constituents and I find it disturbing to read in the media accounts outlining the possibility of tradeoffs with the Americans in which some of the tariff levels and supply managed commodities may be significantly lowered in return for greater access of Canadian wheat to U.S. market.

While the Government of Canada is still negotiating with the United States to sort out a number of longstanding bilateral issues, I am gratified to have received assurances from the Minister of Agriculture and Agri-Food that in the process of these bilateral negotiations with our American friends there will be no tradeoffs between agricultural sectors.

The farmers in my riding of Lambton-Middlesex tell me that they do not want subsidies, they just want a decent price for their product. As I see it, we need to develop a farm income stabilization program that is regionally flexible, yet one that is also GATT consistent, market neutral, financially sound, affordable and effective.

One program to be looked at is GRIP. It is true that GRIP plays differently in different provinces. For example, in my province of Ontario it is seen as a very successful program. In others, especially Saskatchewan, people have the opposite opinion. Perhaps what is needed then is a set of more regionally sensitive safety net programs that take into account the various agricultural sectors and their producers.

The question of interest free cash advance payments comes to mind. On February 14 of this year I made a statement to the House calling upon the minister of agriculture to reinstate the interest free provisions of the advanced payment for crops act which was removed last June by the previous government.

I would like to take this opportunity to reiterate the same request. While I respect the reality that interest free cash advances have cost about $50 million to $75 million each year and that these moneys would come out of the total budget of $850 million for all income support and safety net programs, I am convinced that it is a well spent investment, especially for our farmers who experience cash flow problems at various times each year. It almost goes without saying that proper stewardship in the form of sustainable agriculture continues to grow in importance.

Canadian agriculture has a proud environmental record and can be attributed to an even greener environment through a greater federal commitment to the development of ethanol as an alternate fuel. As co-chair of the ethanol task force, I have been working with my colleagues diligently over the past number of months in trying to convince cabinet members to take that extra step in providing assurances to the development and flourishing of Canada's fledgling ethanol industry.

Frankly it is an idea whose time is long overdue and I intend to keep advancing this notion at every opportunity. Ethanol as a fuel has come under the microscope more often in the past five years than any other transportation fuel from the standpoint of energy efficiency, environmental and economic benefits, sustainability, farm practices, cost benefit ratio, energy source comparisons and the impact on grain supply.

Can the same be said for the big oil companies that fought changes such as the removal of lead until the public demanded it be removed? Speaking of the public, demand for ethanol is so high in Canada that our small existing ethanol producing facilities have been forced to import ethanol from the United States in order to meet that growing demand. This is nothing short of ludicrous. Canadians have the will, the know-how in the market, both domestic and international, to support a major expansion of our ethanol industry.

The ethanol industry is not looking for an 8.5 per litre federal tax exemption for ethanol blended fuels. It already has its exemption as do alternate fuels. What ethanol manufacturers are seeking is a guarantee of the present commitment by the federal government or a maintenance of the status quo on tax treatment for the next 10 years.

Such a guarantee would ensure private sector investment for potential ethanol manufacturers who would like to create jobs and economic development to benefit the economy through the construction of a $170 million world class ethanol production complex utilizing 20 million bushels of Ontario corn.

The Ontario, Alberta and Saskatchewan governments have all seen fit to help kickstart this renewable industry through long term tax exemptions.

Members of the ethanol tax force and our many supporters both here in the House and in the Canadian agricultural community at large are only asking for similar consideration federally. No subsidies, no loans, no grants, no loan guarantees are requested. If the crude oil increases and/or corn prices decline the ethanol industry is prepared to have a clawback formula.

Ethanol has much to offer Canadians who are environmentally conscious, thirsty for economic recovery and concerned about the sustainability of our agriculture and energy industries.

We do not need any more studies. What we do need is the political will to make the right decision. We all know that Canada produces enough grain to put 10 per cent ethanol in all Canadian gasoline and still be one of the world's top four grain exporters. Moreover, as evidenced by federal and provincial government policy, evaluation of ethanol cannot be assessed only in the context of cost versus gasoline. There are numerous factors that must also be considered.

There is a very positive and undeniable economic benefit to Canada when one thoroughly assesses all the impacts of renewable fuel programs in important areas such as farm income stabilization, rural development, direct Canadian jobs, exports and improved balance of trade, more valuable animal feed stocks, reduction in primary energy use, lower emissions of greenhouse gas. All of these are positive factors which will be the fruits of a courageous and visionary federal ethanol fuel policy.

We have to act and we have to act now or Canada will be left by the wayside. Renewable ethanol is already a large scale business in the United States and it is getting larger as we speak. Over 49 new plants are on the drawing board and 14 existing plants have plans for expansion.

Here in Canada we simply cannot afford to dither any longer. As I said, we simply do not need any more studies by well paid bureaucrats. The beneficial results of the ethanol experiment are already before our eyes south of the border.

Let us not waste any more time. The time for a real federal commitment to ethanol and the positive impact it will have on our environment, our agricultural communities and our economy is now.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Mr. Speaker, may I extend my congratulations to the member who just spoke on her tireless and courageous support of the ethanol industry. I too support the ethanol industry not only in my own constituency but right across Canada. I congratulate the member for her work and I urge her to continue with what she has been doing.

Second I also congratulate the member for her comments regarding the interest free cash advance. I was in the House earlier this session when the member raised the question with the minister of agriculture and I am pleased that he is in the House again tonight to hear the member's request for an extension, in fact the reintroduction, of the interest free cash advance.

The member who just spoke and the minister of agriculture who comes from Saskatchewan will know that the interest free cash advance is not just a benefit to the farmer but it is a benefit to all of Canada.

Farmers under our current system, a marketing system that I support, cannot sell grains whenever they feel like it. They are subject to quotas. They are subject to elevators that are full. They are subject to a system that is backlogged so that grain can simply not be delivered when the cash is needed to pay for clothing or tuition fees, food or other payments that the bank requires in order to allow for a farm family to remain on the land.

The interest free cash advance is a small price for our nation to pay for an accessible agricultural product and an income at the farm gate when in fact the grain needs to be sold and the system will not allow it to be sold.

I urge the member to continue to call on the minister of agriculture to reintroduce the cash advance. I have a brief question for her. She did ask the question of the minister before. Can she give the House an indication whether the minister is responding favourably to her request?

[Rose-Marie Ur, Liberal, Lambton—Middlesex, ON]

Mr. Speaker, I would like to thank the hon. member for his statement and his question.

Perhaps it is presumptuous of me to answer when the minister is in the House. I have had favourable discussions with the agriculture minister. I had discussions this morning with the corn producers' representatives and I believe they were meeting with the minister today.

I have not been updated on that meeting, but I hope it was favourable. The indications appear to be favourable but I am not psychic. I hope it is.

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Mr. Speaker, I will be sharing my time with my colleague from Champlain.

It gives me great pleasure to take part in the debate on the agricultural sector. However, I cannot agree with the motion presented by the minister of agriculture. The wording of the motion is nothing but self-congratulatory, with praise for a duty that was poorly done.

I represent the constituency of Chicoutimi, and I can tell you that there are roughly 1,700 agricultural producers in the region. The dairy industry is the largest. Many of the farms are owned by individuals. Family farms are still very much a part of our region, but they have undergone numerous changes. With the globalization of markets and its very tangible impact on agriculture, it can be said that this sector is constantly subject to change.

The agricultural sector is active. In February 1991, all players in Quebec with a stake in regional development and the agri-food sector met in Montreal for the États généraux du monde rural , which established a series of benchmarks, including giving the regions control over their future, respecting and promoting local and regional values; having local and regional partners work together, diversifying the regional economic base, protecting and regenerating resources, and restoring a balance in political powers from top to bottom.

At the Trois-Rivières summit, round tables achieved a consensus on the major approaches to be taken to ensure the development of the agri-food sector in Quebec. The Trois-Rivières Summit generated a series of commitments. I will mention a few: first of all, to focus on research and replacing old technologies as part of a strategy to win new markets; to promote and support human resources training; to ensure the continued development and growth of agri-food businesses; to readjust existing income security programs based on production costs; to develop income security programs compatible with the rules of international trade; to promote financing for farm operations and the transfer of same without incurring massive debt; and subsequently, to consider assistance for conversion within the sector of operations that are not viable and help farmers who leave the profession.

The federation of the Union des producteurs agricoles du Saguenay-Lac-Saint-Jean, in its activity report for 1992-93, has also changed its strategy and talks about winning new markets.

On page 7, the report says that this new theme in the agricultural and agri-food sector will guide our planning for the next decade. Some serious thought has been given to these issues. There is a need to promote the autonomy of farm operations and processing plants by supporting their efforts to adjust to new market demands and win new markets, and also increase their competitiveness by reducing production costs. All this to break the cycle of dependency on government assistance. However, a reasonable time frame is needed to provide for harmonious transition. By signing the GATT agreements, the Canadian government has upset farm programs and practices by making the agri-food sector compete directly with foreign countries.

This is not harmonious transition. We must consider farmers as entrepreneurs and support regional entrepreneurship. They should have access to ongoing professional training and to the financing and technologies they need to make their operation a profitable and competitive business.

Quebec is committed to promoting the development of a competitive agricultural sector that is regionally based. The agri-food industry must adjust to the demands of globalization. It cannot, by itself, guarantee the development of rural areas and maintain the social fabric, although it certainly can play a significant role in regional development.

Nevertheless, non-viable companies will have to be supported by the government until their activities are redirected within the agri-food sector or in other sectors of the economy. We have to make the industry aware of the importance of the environment as a means of promoting agriculture.

Finally, the agri-food sector needs a reasonable time to adjust to international competition. The federal government defended only weakly the interests of Canada and Quebec farm producers.

During the last negotiation sessions of the Uruguay round of GATT, and despite repeated assurances by the Liberal government in December, federal negotiators were unable to gather the support of enough countries to defend and keep article XI which protected egg, poultry and milk production, mostly centered in Quebec.

Even though import quotas will be replaced by tariff barriers which will gradually disappear over time, the abandonment of article XI is disrupting Quebec agriculture. Clearly, the federal government did not come back from Geneva, last December 15, with the best of agreements. We would have wished for a larger reduction in export subsidies and a better access to foreign markets.

For Canada and Quebec farmers the biggest threat, at the present time, is the outcome of the current trade negotiations with the U.S.A. in the agricultural sector.

The federal government is now pressured by American negotiators over the issue of restricted sectors like eggs, poultry and milk. Americans claim that pursuant to the agreement, tariff barriers must be completely abolished between the two countries by 1998.

Decision making processes must be decentralized. Stakeholders in the Quebec farming industry did what they had to do. They do not need for the federal government to impose policies that would be contrary to the priorities and positions they developed. They want to control the decision-making levers in the fields that concern them.

[Peter Adams, Liberal, Peterborough, ON]

Mr. Speaker, I listened with great interest to the member from Chicoutimi in his remarks and until the last few minutes I was carried along by his enthusiasm for agriculture in the Chicoutimi area and with his vision of agriculture.

I enjoyed when he was discussing agriculture, talking about research, new technology and market developments and global competition, these things which I think in the stereotype of agriculture we do not hear enough about. Agriculture is a very diverse, very sophisticated part of the economy and the social structure of Canada. In listening to the debate today I think the diversity of agriculture across the country comes out.

In my riding of Peterborough there are 1,100 farms, about half of which are in beef. About a quarter are dairy farms. There are large poultry farms and hog farms. We have a fine buffalo farm which produces breeding stock of buffalo. We have sheep farms, goat farms, we produce bees, we have market gardens and whole variety of crops, soft fruits and things of that type.

I mentioned Peterborough in the same way the member mentioned Chicoutimi, to show that in my riding the diversity of agriculture is extraordinary.

One thing I think the government has to do is continually inform the people of Canada, particularly the people urban areas, of the true nature of agriculture as an industry in this country and as a way of life in this country. It is a diverse, progressive part of our society which, as the member for Chicoutimi mentioned, includes the family farm. It includes 4H and all of those things we associate with our rural communities.

The government has to help farmers reach out to the urban areas and get rid of this stereotype of agriculture which exists there and show them what a vital and interesting and diverse part of our country it is. It also has to reach out and tell Canadians that they receive cheap, high quality, healthy food from their farm sector. We spend 10 per cent or less of our disposable income on food and we get the very best food for that. I think the government should articulate. There are some developed country which spend almost 25 cents on the dollar they earn on food. In developed countries we spend less than 10 cents thanks to our farm communities.

Also the government has to tell Canadians, particularly urban Canadians, about the agri-food industry which the member for Chicoutimi mentioned and the huge trade surplus we have in that area.

Last, I urge the government to continue with its consultations with farmers and the agri-food industry in making all its decisions.

My question to the member for Chicoutimi is will he help us-I heard his criticisms-give urban folk in Canada an understanding of the true nature of the high quality of agriculture we have in this country?

[Gilbert Fillion, Bloc, Chicoutimi, QC]

Mr. Speaker, to start with, I would like to thank my colleague for his long preamble, which, in spite of my criticism of his government, seemed to support some of my arguments. I would like to get back to his main point which was farm diversification.

I am all for it, except that under the present system, the federal government is funding diversification in western Canada at the expense of Quebec. Which, to some degree, explains why Quebec has been unable to diversify in that area. I could give you many examples and statistics. But I will only talk about lamb production. Quebec has been unable to emulate the west. The sheep population increased by 9 per cent between 1988 and 1991 in Quebec, whereas it went up by 33 per cent in western Canada. Why? Thanks to programs funded by the government at the expense of Quebec.

[Réjean Lefebvre, Bloc, Champlain, QC]

Mr. Speaker, farmers are prepared to meet the challenge of globalization, despite the loss of protection with respect to the marketing of products on which quotas apply and the mandatory elimination of certain government subsidies as a result of the GATT agreement. Like all good entrepreneurs, they want to know what kind of support they can expect to receive from the government.

Producers recall the inertia of the federal government which failed, during the signing of the GATT agreement last November 15, to obtain assurances that the numerous trade disputes pitting Canada against its main trading partner, the United States, would be resolved. Canada therefore finds itself in the position of having to negotiate under pressure in an effort to resolve numerous trade disputes in the agricultural sector. The government has left itself in a tenuous position and must now adopt a defensive posture in order to limit the damage.

The negotiations currently under way with our neighbour to the south are going nowhere. The dispute, you may recall, centres on our main products, that is ice cream, yogurt, Western wheat and the new Canadian tariffs on poultry, milk and eggs. The government must not cave in to pressure from the United

States. It must stand its ground and think first about the future of Quebecers and Canadians.

In addition, the government must reduce the inequities between east and west. If past practices are any indication of what lies ahead and if inequities increase, producers will come to expect a double standard in the case of eastern and western farmers. The competitive position of Quebec farmers is directly affected by this practice.

In the past, producers disciplined themselves and worked together to ensure that production levels were geared to the needs of Canadian consumers.

Quebec farmers fell for it. Take chicken production for example. Each province would have to produce chickens to meet the provincial demand. In 1990, taking advantage of its geographic location and the impending abolition of quotas, British Columbia decided to go it alone to get ahead of the other provinces and increased its production capacity. Now Ontario would be prepared to follow suit and saturate the market in Quebec.

In parallel with this trade liberalization on the Canadian market is the concentration of enterprises within the industry, which unfortunately will take place at the expense of producers. Certain processors also own hatcheries and flour mills, thereby controlling the price of farming inputs as well as prices paid to producers when poultry is sold. Producers are wondering how long this little game will go on and what the government intends to do in its role as partner in this changing environment?

This turmoil created uncertainty among Quebec producers who have seen the share of the federal budget for agriculture allocated to western Canada increase from 42 per cent to 64 per cent since 1980, while Quebec's share dropped from 30 per cent to 10 per cent during the same period. In spite of this inequity, our producers are working enthusiastically and manage to keep agriculture in Quebec profitable and this, even though their indebtedness ratio is the highest in Canada.

The government should do whatever is necessary to stabilize the farmers' economic environment. After all, the agricultural industry accounts for 15 per cent of jobs and over 8 per cent of the GDP in Canada.

The government should start by reducing the number of assistance programs. Agriculture Canada is administering approximately fourty, another 22 are co-managed with the provinces and 286 more are administered by the provinces alone.

In the area of agricultural finance, the federal government intervenes through the Farm Credit Corporation and the Quebec government through the Société du financement agricole. The terms of reference of these two organizations are amazingly similar, yet both are maintained. In terms of visibility in Quebec, it is in the interest of the government to maintain an organization of its own, but in terms of customer service, it will prefer a single-window approach to agricultural financing. You can be sure this would be the approach preferred by Quebec producers.

Meanwhile, the Quebec government is contributing 20 times more than the federal government to agricultural financing. Furthermore, only 16.7 per cent of the Farm Credit Corporation has gone to farms in Quebec, as compared to 35 per cent in Western Canada.

In their agriculture policy statement, the Liberals promised to create for farmers a long-term mortgage, with two thirds of the interest sheltered from fluctuating rates, a guarantee plan for farmers whereby the government would guarantee the loan made by a farmer selling his farm, thus ensuring a stable retirement for sellers and helping established farmers and newcomers obtain capital at reasonable rates, and thirdly, a farm leasing plan whereby farmers whose property had been seized or who were starting out could rent land under long term leases from the FCC, with the rent credited toward possible future purchase.

But what has become of these good intentions? Is it only pious wishes? We may well ask, the farmers are still waiting.

I am not calling for the abolition of standards but for an adjustment to the new agri-food environment where companies will have two choices: to compete on international markets or to serve specific niches in local and regional markets. Our small businesses must be allowed to develop and our entrepreneurs must be given an opportunity to carry out their business ideas and thus develop our regions, all this without threatening food quality.

However, we find on our grocery shelves beef from Nicaragua with no identification of origin on the package. As a result, consumers cannot encourage our own producers and buy a better quality product.

Although the government says in its agricultural policy that it intends to apply Canadian standards to imported food, it has no control over sanitary conditions where the food is produced and processed and over environmental standards on foreign farms.

Quebec has developed a seal of quality, "Qualité Québec", that is placed on products to encourage people to buy local products.

I therefore call for the strict application of present regulations on the identification of the origin of agricultural products; this is another measure that could maintain and even create jobs at no great cost.

Our farmers and processors must not only adjust to the various standards but above all meet consumers' needs and requirements. Again, through its policy statement on agriculture, the government wants to promote and reinforce our marketing strategies under GATT and any other trade agreement in order to preserve a system beneficial to consumers and producers alike.

Producers are still waiting for these great principles to be applied and in the meantime most of them, especially in Quebec, must deal with a crumbling quota system and the opening-up of our markets to foreigners knocking on our door.

Along with the many changes occurring in the Canadian and Quebec agricultural environment, the profile of consumers is evolving. Families are smaller. People are looking for more refined products with less fat and added value whose quality sets them apart from the competition. All businesses are based on consumption and Agriculture Canada seems to spend a great deal of energy on applying standards and not enough on advertising and marketing.

If the government is a partner of the agri-food sector players, it must do its job by adjusting quickly to the new realities and making its presence felt instead of keeping a very low profile as it does now.

Producers must face another reality: the protection of natural resources that has become necessary because resources are not inexhaustible and because of their apparent degradation. Producers are determined to promote and adopt sustainable agricultural practices combining resource preservation with farm performance.

It is up to all the stakeholders in the agricultural sector to take the necessary measures to pursue sustainable development while minimizing output losses for producers. The government's role in the quest for a sustainable agriculture should be to support the changes decided by producers, and not impose such changes through regulations.

Although the Canada-Quebec subsidiary agreement on sustainable agricultural development provides for the implementation of several research and technical innovation projects over the next four years, the results do not benefit those who are primarily concerned. The government must ensure that research conducted by the Department of Agriculture in Canada is shown to producers and-