Mr. Speaker, I will be sharing my time this evening with my colleague from Etobicoke—Lakeshore. Later in the evening the House will also be hearing from my colleague from Scarborough East. It is important to note that these two members come from the largest urban centres in Canada and they are as concerned and as anxious about the plight of our farmers as members from rural areas.
The Ontario pork industry is suffering through a severe period of below cost of production pricing. The outlook for the next 6 to 10 months appears most unfavourable.
Many of our nation's pork producers are under financial stress. Some are facing bankruptcy and financial ruin. Last week I met with over 70 representatives of the pork industry from the Haldimand and Niagara regions. I would like to tell this parliament and the people of Canada about the crisis they are facing.
As of last week the price was 62 cents per kilogram. The five year price average is $1.65 per kilogram. Hogs are sold on a dressed weight basis of approximately 84 kilograms. The break-even cost, including feed plus variable and fixed costs, is about $1.50 per kilogram. At 62 cents per kilogram, feed costs for hogs are not being met, yet farmers are obliged to look after the welfare of the hogs plus cover the other variable and fixed costs. Simple mathematics tells the tale.
In the Niagara and Haldimand regions where my riding of Erie—Lincoln is located, pork producers produce upward of 38,000 hogs annually, plus weaner pigs and sows. This production translates into over $4 million directly into the economy of the region. The added value of further processing, transportation, assembly, jobs, et cetera, pushes the economic benefit well beyond the $4 million mark. This is an industry that my riding can ill afford to lose.
In Ontario pork producers pump $668 million directly into the economic activity of their local communities. Agriculture accounts for 13% of the gross domestic product of Ontario. The Ontario pork industry in total accounts for 43,000 jobs and $4.5 billion in the economic activity of our province. One out of every seven jobs in the agricultural sector is provided by the pork industry. As the House can see, the pork sector plays a very significant role in the economic activity of the province of Ontario.
The current depressed prices are taking a whopping $64,000 per week from my region of the economy and an incredible $8 million out of the Ontario economy each week. This not only affects the producers, it also affects the feed suppliers, equipment dealers, utility companies, et cetera.
What brought about the severe price drop? The answer is direct. Oversupply of hogs in the North American market. A rapid vast expansion in the United States and within Canada has pushed hog numbers beyond the capacity to consume, both domestically and in foreign countries.
Growth in Ontario has been somewhat modest, coming at the request of processors and government urging producers to tap into the Asian export markets. These markets have not developed as rapidly as hoped, largely due to the economic crisis in the Asia-Pacific region, an unexpected phenomenon that has occurred through no fault of the pork producers. Fortunately, the quality of pork produced in Ontario is still in demand, but not at the export levels hoped for.
Ontario pork producers are competitive. They have the skills, the genetics, the infrastructure and the land base to continue producing a high quality product recognized the world over. However, they cannot compete against subsidies outside of Ontario, be they in other provinces or the United States.
Pork producers in Ontario have little or no government assistance. The NISA program to which producers and governments contribute only have sufficient funds to cover two to three weeks of losses for the average producer. This is totally inadequate under the current circumstances.
During my meeting with representatives of the pork industry at my Smithville constituency office I was asked to make several requests of the federal government.
At the federal level producers across Canada are represented by the Canada Pork Council. They have asked that federal members of parliament talk with members of cabinet, especially non-rural members, to urge swift acceptance and passage of an all farm disaster relief program in order to get funds into the agricultural community by January 1999. This I have done.
Pork producers are used to and operate within a cyclic market. The present situation, however, is not a normal cycle in the pork industry. The crisis has caught everyone by surprise and is well beyond the disaster stage. It is now a catastrophe.
I believe that this government can and should assist pork producers in this period of unprecedented need. I also urge Canadians everywhere to do their part by including more pork in their diet. It is a truism that every little bit helps.
I have focused on the pork industry; however, this is not the only industry affected. Let me speak about the overall crisis.
For the many Canadians who may be listening to this important debate tonight I want to point out that many connections link rural and urban Canadians and all of us will be affected by the current problems in the agricultural sector.
Canadian farmers produce affordable and healthful food for our tables, along with many non-edible products such as ethanol motor fuel that contribute to a clean, sustainable environment.
Now that this combination of factors, including grain stock surpluses and financial political instability in Asia, Latin America and Russia, have decreased demand for our commodities and pushed prices to their lowest level in 20 years, today some farmers are experiencing a potentially disastrous cash crisis.
The Canadian agriculture and agri-food industry is the third largest employer in Canada. In addition to farmers, there are suppliers, processors, transporters, grocers and restaurant workers. The agriculture and agri-food industry generates about $95 billion in domestic retail and food service sales annually. Grains and oilseeds are among our leading agricultural exports. In 1996, the value of Canada's agricultural food exports was a record $19.9 billion, with half of the exports going to the United States.
The prairies, the bread basket of Canada, have been particularly hard hit by the low prices. Grain producers, especially those in Manitoba and Saskatchewan, are affected—and let us not forget Ontario—as are cattle producers and the hog farmers who I mentioned earlier.
On a national level, farm income is expected to be down 20% from 1997. Farmers in Manitoba are expected to see their incomes drop by 40% compared to the five year average. In Saskatchewan incomes are expected to be almost 70% below the five year average. With problems expected to continue through 1999, the situation requires a short term targeted response, but also demands long term solutions. It is a national problem requiring a national response.
At the request of the Minister of Agriculture and Agri-Food, industry leaders and provincial and federal representatives met in Ottawa on November 4 to look at farm income forecasts and discuss options to address the income crisis.
The Government of Canada is very concerned about the farm financial situation and realizes the sense of urgency and importance. It is indeed very urgent and very important. This is why farm income is currently one of the priorities being considered by cabinet today. I thank the minister and his staff for keeping us apprised of the developments.
I know that the minister has had ongoing discussions with industry and provincial counterparts about the problems Canadian producers are facing. I am confident that this work will continue with all stakeholders to put solutions into place, hopefully very soon.
I hope the minister understands the importance of giving farmers some indication before Christmas, if at all possible, not on whether there will or will not be additional support for farmers, but what the particulars are of this much needed all farm disaster relief program.
When such a program is announced, I urge all of my colleagues in this House to ensure that it receives the support it deserves. I urge this government to hold out a hand to a deserving group in need in Canada, our farmers.