Madam Speaker, it is my pleasure to rise in the House today to discuss Bill C-50, an act to amend the Canadian Wheat Board Act.
The purpose of the bill is to allow for a voluntary check-off on board sales of wheat in four western provinces and the sales of barley in Saskatchewan, Manitoba and British Columbia. The funds collected, an amount estimated to be $4.7 million a year,
would be administered by the Western Grains Research Foundation and would be used for plant breeding research.
The research moneys would be directed toward improving farm income through two main mechanisms: by improving the field performance of barley and wheat through varieties with increased disease and pest resistance, and by developing varieties with specific qualities required by the marketplace.
The CWB act is specific in the terms of the deductions that can be made from final payments. The bill would amend the CWB act to allow voluntary research check-offs to be made. There are a number of key provisions in the bill which are worth taking note of.
The CWB would now be legally empowered to make voluntary deductions from final payments to producers of wheat and barley for the purpose of plant breeding and research. We are really talking about responsible legislation from the government that in essence is helping western Canadian grain farmers ensure the future and viability of the industry.
The program is voluntary but I believe that participation will be high as most farmers, including myself, realize the importance of research and development. The program has the potential to bring in $4.7 million in additional plant breeding research. This figure is significant in light of the fact that Agriculture and Agri-Food Canada research centres spent $18.7 million on wheat research in 1991-92 and a further $10.5 million for barley.
Plant researchers have expressed the belief that a well co-ordinated and adequately funded research program over 10 to 15 years in all western wheat classes could lead to the development of varieties that are 15 per cent higher yielding and equal in protein to current varieties.
Based on a current price of $125 per tonne for wheat, the preceding implies that the gross total return for the research levy is projected to be worth approximately $400 million to the prairie farmers annually.
Producer funded research programs are not new. This type of initiative is well established and conforms to our GATT obligations, as producer funded programs are not subject to any restrictions. Over 15 U.S. states have check-off programs on wheat. These are made at the state level and are deducted at first point of sale.
The levy can be refunded by request within 60 days. The check-offs are generally voluntary and have a high level of participation. In general most funds are used for market development activities and domestic production. Research also receives a small portion of the levy fund.
There is also an Australian example. The Australian wheat board has a wheat industry fund levy that has been in place since the 1989-90 crop year. In this case a non-voluntary levy is used in part to fund plant breeding research. It is set at approximately 1.5 per cent of the return price. As all hon. members can see, Canada is not breaking new ground here; we are simply catching up.
Another key aspect of the bill is the provision made by way of order in council for fixing the rate of deductions and for excluding from deductions certain grains and/or classes of grains for certain regions within Canada. A study of the needs for enhanced plant breeding programs in wheat and barley has shown the need for an additional $3 million annually in wheat and $1 million in barley.
The business plan of the WGRF proposes a check-off of 20 cents per tonne or a half cent per bushel of wheat, and 40 cents per tonne or about one cent a bushel for barley.
I believe this is a small price to pay. The world grain industry today has a high dependence on export markets. Consumers demand both stability of supply and the quality of the product for their end use requirements. The ability to meet these demands provides a competitive advantage for Canada.
Satisfaction of both these demands depends to a large extent on the genetic make-up and the varieties grown by barley and wheat producers in Canada. It is expected that there will be significant growth in demand, not only in the heavily populated Pacific rim nations but around the world, particularly for the quality and quantities of grain that western Canada has so far been unable to supply.
Canada must be able to respond rapidly to new demands for the varieties of wheat suitable for specific end use such as frozen bread dough and noodles. Meeting this challenge could mean significant new market opportunities for western producers.
The bill also provides for the deposit of the amount of deductions from the final payments into a special account, by way of order in council providing for the ultimate distribution of those amounts to the account through the WGRF to the various organizations where needed.
These would include governments, organizations, corporations, foundations, educational institutions and other bodies having among their objectives the support of scientific research to develop and improve wheat and barley varieties.
The WGRF is made up of 12 major prairie farm organizations, including the United Grain Growers, the Manitoba Pool Elevators and the Saskatchewan Wheat Pool. The board of directors is made up of these 12 organizations as well as one representative from the research branch of Agriculture and Agri-Food Canada which will collectively set their priorities.
The program has been designed with its own checks and balances. There is accountability at the individual producer level since a person can flag their support or disapproval by opting out of the program. There is accountability at the institutional level since the WGRF is made up of such a broad base of farm groups.
The WGRF which will be overseeing the research also represents the interests of its member organizations. There are costs associated with the program. The CWB has estimated a one-time setup cost of $56,800 and the annual costs of approximately $55,700. The WGRF has estimated its total costs at $50,000.
The total administrative costs are estimated to be less than 2 per cent of the research funds generated and will be deducted from the levy funds. The proposed bill obliges the WGRF to provide annual reports to both the producers and the federal government of their activities.
What we have finally is a recognition that producers have an important role to play in an activity that is directly related to their livelihood.
Producer funding is increasingly important because plant breeding of wheat and barley has been eroded by so many years of inflation. By allowing producers to have such a direct role in this process they can contribute directly to ensuring the future and viability of their industry.