That, in the opinion of this House, the government should immediately pursue negotiations with the provinces and agri-food industry in order to reassign jurisdictional responsibilities in agriculture and eliminate overlap and duplication.
Mr. Speaker, today I am pleased to introduce debate on this votable motion. In discussing this motion I would like to share with the House a proposal that I refer to as reconfederating agriculture.
Today I will discuss the proposal in broad terms. Later in the debate I will suggest what the proposal means in practical detail about the policies, programs and budgets for governments, the agri-food industry and farmers.
Let there be no doubt about it, there has to be and there will be significant change in the way we do agriculture in the future. I hope it will be change for the better and that we will have an agriculture sector that is more market oriented, knowledge based and more productive and efficient.
I believe that we are at a time in our history when we must debate very basic ideas. We must ask ourselves, if we had to start all over again at square one knowing what we know now, what kind of agriculture sector would we design?
Someone has said that the difficulty is not in developing new ideas but in escaping from old ones. For too long we have let past ideas about how things have been determine future courses of action. New ideas are important for progress.
My motion is based on the premise that it is time to examine not only how government works but also what government does. At the end of this millennium our priority task is to determine areas where government should be involved and play a role and then seek to improve performance in those areas. In other words, we must be effective and do the right things and then we must be efficient and do the things right.
My proposal today builds on statements and ideas put forward in this House by my colleagues beginning in May of 1994. It also reflects the ideas which are being generated by many farmers, academics and farm leaders across the country. There is a real momentum building to radically alter and redesign how governments and industry function together in agriculture, in other natural resource sectors and in many other sectors of our society. This is an issue on which people are ahead of the governments in their thinking, in their ideas and in their proposals. It is time to bring those ideas and proposals to the legislative table, to look at them honestly and openly, to have the debate and discussion needed and to move forward. I am not suggesting what I will share today is the first or final word but it is a starting point for discussion and dialogue.
I want to ask three basic questions about agriculture in Canada in my remarks today. One, what does it mean to reconfederate agriculture and why do we need to do it now? Two, what should governments do in agriculture? Three, what should the agri-food industry do?
In answering the question of what it means to reconfederate agriculture and why we need to do it now, we are talking about outlining a more effective and efficient division of responsibilities between the federal government, the provincial governments and the agri-food industry.
The federal and provincial governments are both heavily involved in supporting the agri-food industry through expenditures. Because of the concurrent jurisdiction under the constitutions of the two levels of government, both federal and provincial resources tend to be allocated to similar activities. This is the basic reason for overlaps, duplications, excessive red tape and costly bureaucracies. Complicated regulations are confusing and intimidating for many farmers and processors. Confusion creates frustration and mistrust between governments and industry.
By way of current illustration of government involvement, in 1994-95 the 10 Canadian provinces will spend a total of almost $2.2 billion of taxpayers' money in support of agriculture. The federal government will kick in an additional $2.2 billion with the 10 provinces for a total of $4.4 billion. The 10 provinces had just over 10,000 agriculture civil servants employed in their agriculture departments this year, as well as the federal govern-
ment in its department, for a total of over 20,000 full time equivalent people on the public payroll in support of the private sector agriculture and agri-food industry. This translates into one agriculture civil servant for every 14 farms in Canada, or one person on the public payroll for every 19 farm operators.
We must examine the effectiveness and efficiency of these manpower and financial expenditures and what the return on investment is. For example, I have examined each province's current share of agricultural gross domestic product with the public dollars which are being spent supporting the agricultural industry in that particular province. This allows us to see how many public dollars are spent for each 1 per cent of the province's agriculture GDP share. Expressed another way, it shows how effective the agriculture industry is in a particular province by taking that public dollar and multiplying it into a share of GDP.
I have also compared the number of agricultural civil servants in each province with the number of farms and farm operators in that province. I have also compared the departmental organizations of each province with each other and with the federal department of agriculture.
The purpose of these comparisons is to see how we might be more effective and efficient. By honestly looking at these things we can learn from each other and get agriculture done smarter and cheaper. It is time to get past the political turf wars. We must address the spending of our governments in a co-operative and bold way with the vision of a new way of doing agriculture. The legal advice that I have received is that we do not need to open the Constitution. All we need to do is develop a shared vision and the political will.
I realize that we cannot just analyse organizational and economic facts and figures. Each province also has unique natural endowments such as climatic conditions, proximities to markets and the selling power of products.
It is mother nature who is not bound by geopolitical borders that determine farming activity, productivity and policy. Nevertheless, a comparison of the factors I have suggested can be helpful in determining how to do agriculture better.
Reconfederating agriculture means that we will develop a system of government in which more decisions are made at the local levels and at the farm gate. It means the devolution of some federal government responsibilities to the provincial and local levels, to the agriculture industry and to the farmer.
Why to we need to do it now? For the first time in a long time good economics and good politics are converging. We now live in a global trading environment made accessible by our market oriented, knowledge based, technologically equipped farming industry.
Developing a new system such as this does not mean an absolutely watertight allocation of responsibilities among players. We must try to reconcile competing tendencies. For example, there is a need to be global in outlook but local in application, to be small and big, to be centralized and decentralized, and to be capable of generating both economic freedom and justice for all the players. This process of reconfederating agriculture will therefore be an ongoing process of learning.
This leads to the second question. What should governments do in agriculture? I begin by reiterating what my colleagues and I have said previously in this House when we have proposed a clearer division of jurisdictions between the federal and provincial governments. It is my thinking that the jurisdiction of the provincial governments be in the physical and human resource areas. This is because those are the elements that are most unique to each province or region and are most manageable by them.
I have then proposed that the responsibility of the federal government be in one, trade policy and trade distortion adjustment support; two, whole farm income stabilization programs; three, health and safety standards; four, macrophysical, monetary and taxation policy.
These responsibilities reflect the true nature of the federal government. They assist lower levels of government by taking responsibility for those elements that span provincial boundaries and are common to all farmers and concern the whole farming industry right across the country.
We propose that the federal and provincial governments have more distinct areas of jurisdiction. This will result in public cost savings by reducing overlap and duplication. It will result in industry expansion and competitiveness by reducing the regulatory and tax burden.
Proposing this clear division of responsibilities between levels of government as well as between the public and private sectors is based on some basic assumptions about what government should do in agriculture.
I want to now briefly discuss six functions that government can most appropriately perform in support of agriculture or, for that matter, in support of other industries in the private sector. The first is research and development, an information sharing function. The purpose of basic research is to ensure we have a thing of value before we attempt to add value to it. This is often also called precommercial research and is thus usually done by the public sector.
Basic research deals with Canada's physical resources. Canada's agriculture industry is oriented on an east-west basis and covers three distinct climatic zones. The provinces that span this east-west orientation are thus blessed with different physical
resources. This is why I argue that the provinces should be more directly responsible for the physical resources of our country.
In pre-commercial basic research and development the provinces should work jointly with the federal government. This is where major public dollars should be spent. All the intellectual resources of our country should be harnessed together for pre-commercial R and D. Both government partners would also have a role in the sharing of information about the resources.
Second, governments have a limited commercial function. I assert that if we expect governments to maximize their pre-commercial activity we should also expect them to minimize their commercial functions.
A limited commercial function for governments means that they should provide a good or service that is normally not capturable by the private sector. These are called public goods or services. Their nature is that they are non-rival and non-excludable and thus not capturable for commercial purposes. Usually an entity like government is needed to identify the demand for these public goods and services, make arrangements for their provision and impose a payment on their beneficiaries.
This matter of the appropriate commercial function for government is one of the most salient and important discussions taking place today in countries and economies right around the world.
Many are saying that the obligation to provide a particular good or service should be assigned to the public or private sector based on this differentiation between non-commercial and commercial interests. Debate about which sector should provide the good or service should focus on the complementarity that each sector can bring to the society. The operative word is not compete but complete.
The choice between private and public sectors should not be one of politics but a seeking of balance, cost effectiveness and efficiency. Government should clearly invest mostly in the pre-commercial and non-commercial provision of public goods and services.
The third function that governments have is a regulatory role. All levels of government are needed to provide an appropriate and acceptable minimum level of regulatory policy upon the private sector. They should regulate in their separate areas of jurisdiction so as to minimize overlap and duplication.
One of the immediate improvements we could make in agriculture is to take all legislation that affects the industry directly and indirectly both federally and provincially, rewrite it in simple terms under one set of guidelines and administer it through a highly trained, effective single system of regulation throughout the industry.
I want to emphasize minimum level of regulatory burden. Farmers and agricultural players up and down the food chain want governments off their backs as much as possible.
The fourth function that governments perform is service. Service to the agri-food industry and general public is the sole reason for the governmental departments of agriculture and agri-food. The system of government should be of the people, by the people and for the people. Government is simply the chosen way that citizens have determined to manage their collective affairs.
The services provided by governments can be varied, however the basic role of government is to facilitate the private sector. In recent times this has come to be known as third party government, that is, an effort by elected representatives to raise resources and set social priorities through a democratic political process while leaving the private sector to do what it does best: organize for the production of goods and services.
It is not government's obligation to provide all services but rather to see that they are provided. To provide their service, governments have a taxation role, a corporate organizational role, and a spending role.
Governments should establish as low a level of taxation regime as possible. Taxation policies should not create dependency on the public sector but rather facilitate private sector entrepreneurs. Tax policy should ease the intergenerational transfer of assets. Tax money should be used primarily as investments in pre-commercial productivity and marketing enhancing programs like research and development and physical infrastructure.
In providing their services governments must efficiently and effectively organize themselves. There is lots of room for improvement in that area. The spending of public funds must be done effectively and efficiently. Public servants are stewards of funds entrusted to them by private citizens.
It is absolutely essential that taxation, spending and regulatory policy be set democratically, be clear and simple and be fair and equal for all the players. Governments should develop a taxation, spending and regulatory climate in which a free market system can flourish with justice. Governments should act as the referee who adjudicates a fair set of rules binding upon all.
The fifth function that governments have is a mediation role. Democratic governments are needed to mediate and attempt to reconcile specialized and sometimes competing interests among the sector players.
Sixth and finally, governments have an education and training function which I have already indicated is most appropriately handled by the provinces.
These then are some proposals about what governments should do in agriculture.
Finally, the third question I ask is: What should the agri-food industry do? I reiterate that we are proposing a clearer division of responsibility for the agri-food industry than what exists now. Government is too involved in the commercial business aspects of agriculture.
The basic responsibility of private industry stakeholders is to supply the demand for private goods. The industry has a commercial interest in providing a private good or service for exchange and profit. The entire life cycle of a private good or service from its envisagement through its development to its sale provides opportunities during which and from which financial benefit can occur to the provider of that good or service.
The vast majority of these private sector responsibilities and decisions should be made by the industry with minimum involvement by the government. At the commercial research and development stage private industry could profitably research and develop all material and non-material goods and services related to agriculture, including foods, animals, plants, genetics, biotechnologies, non-food products, machinery, equipment, and climate and weather forecasting, et cetera.
At the production stage private industry could profitably provide for the acquisition, preparation, planting, feeding, controlling and harvesting of livestock, plants and lands. This includes value-added initiatives.
At the processing stage the private industry could manage all matters related to goods or service, storage, inspection, grading, packing, assembly, pricing, marking and labelling.
At the transportation stage the private sector can profitably provide for the orderly process of an agri-food good or service from farm or processing gate to point of sale or export.
At the marketing stage the private sector can profitably provide for the advertising, promoting and selling of an agri-food good or service. This includes the concept of individual and/or group marketing.
Last, farm financing and insurance could profitably be done by the private sector. This includes all matters relating to securing, managing and the accounting of funds needed for the agri-food good or service life cycle and the ensuring of the material assets of the farm, including crops and livestock in the food processing industry.
There may be small niche roles for public financial services. However, the vast majority of these private sector, commercially profitable responsibilities should be handled by the private sector with minimal involvement by the government.
As I mentioned, later in the debate I will propose how we need to transfer specific policies, programs and involvements that governments now have to the industry.
The private sector is better suited to performing the six business functions than government is. These functions include the commercial function which is the provision of goods and services that are capturable by an entrepreneur and can provide him or her with the profit upon provision and sale. In other words, we want to have a free and just market system. This again is one of the most salient issues occupying the attention of economists and politicians around the world today.
That is why my colleagues and I insist on the importance of direct farmer and businessman involvement in developing agricultural policy. We must work from the bottom to the top. Business and governments alike are realizing that the more democratic they are, the more economically and socially successful they are.
Industry stakeholders should be able to democratically organize, carry out their activities-