Mr. Speaker, I move that the second report of the Standing Committee on Agriculture and Agri-Food, a report concerning the future role of government in the grains and oilseeds sector, presented to the House on Tuesday, June 12, be concurred in. The member for Athabasca in Alberta, who seconds the motion, also has a real concern about agriculture issues in the House.
The interim report that the standing committee on agriculture put forward was based on the presentations of a number of farm groups and farmers, which set out the point that the safety net programs in place for agriculture at the present time in many of the provinces are not sufficient to take care of the financial problems and the other issues in agriculture that demand and need attention.
We have just heard a debate on a point of order in regard to the authority of parliament to maintain control of spending so that the Prime Minister and the cabinet do not just run off and spend money without the authority of parliament. In regard to agriculture, parliament should also maintain and be involved in this issue over and above what the minister of agriculture and the cabinet feel and deem to be the appropriate actions in regard to safety nets and what they deem to be the appropriate vision of agriculture for the future.
The last position of the minister of agriculture was simply that he would like to wait and see at some point down the road how the safety net programs are working. Then, if he sees that they are not working that well, he would try to take some action or go to cabinet to see if something can be done. That clearly is not sufficient.
In our report from the agriculture committee, just to re-emphasize to the members in the House how important agriculture is to the Canadian economy, we state things very clearly, and when I say we I am talking for all members of the committee on all sides, both government and opposition members, because we put this report through with full agreement. One sentence in that report states:
It is worth noting that the agri-food sector generates $130 billion per year and employs 1.8 million people.
We put that in the report because we wanted to emphasize to the House the importance of agriculture and to put forward to the minister the fact that his vision of the future of agriculture did not seem to be working for those farm families producing the food and in essence really struggling to make a go of it, particularly in the grain and oilseeds sector.
The report also refers to the fact that the farm income safety net has improved in recent years and is helping grain producers in Canada, but the slump in the grain and oilseeds industry seems to require more than one solution. With this in mind. the standing committee held hearings on the future role of the government in the grain and oilseeds sector.
That is the situation we are in right now. It has been exacerbated by the massive drought in Alberta and Saskatchewan in particular and by the extremely dry conditions that stretched from Prince Edward Island, where potatoes of course are one of the main crops, through to the other maritime provinces and Quebec and Ontario and also to British Columbia.
We need to continue to address agriculture in these times of security issues. The House has to spend the majority of its time on the war against terrorism but we cannot forget that we need to bring forward these other issues that are tremendously important to the average Canadian, to the average farmer and the average farmer's spouse and children who have to make a living in this country and who, by doing so, contribute significantly to the well-being of all Canadians. As we all know, food is number one after security.
I believe that to this point the minister of agriculture and the cabinet have not adequately addressed not only the drought issue but the issue of the safety nets. Farmers in every province are telling the minister that the safety nets do not work. They need improvement. Farmers see little or no action from the cabinet and the agriculture minister in making those improvements. Many suggestions have come forward and I will deal with a few of them in my speech.
I mentioned the impact of the drought. The grain and oilseeds sector, primarily based in Ontario, Manitoba, Saskatchewan and Alberta, has been impacted most by this drought situation. The safety net programs were not working for the grain and oilseeds sector before the drought and now we have the drought on top of that.
The minister already knows that the safety net programs are not working and that the time for action is now as opposed to waiting until Christmas or 2002 or 2003 before any action is taken in that regard.
The impact of the drought is of course particularly hard on the cattle producers of western Canada. The pastures have run out of grazing material for livestock. Ranchers have had to bring their cattle back from pasture early and are buying feed at very high prices, at $100 a tonne. That is a very high price for hay and that is what farmers and ranchers are paying now to keep their livestock alive.
With regard to the grain and oilseeds impacts, a Statistics Canada survey of 5,900 Saskatchewan farmers suggests that spring wheat production will fall by over 20% from last year. I think that figure is being revised all the time to show that it will be even worse. Canola production will be down over 38%. Durum wheat will fall by 49%. A lot of these crops are the very crops that are exported outside the country. They earn foreign hard currency which is then brought back into the country and makes us all wealthier. The grain and oilseeds sector is not simply circulating cash inside Canada and not creating any wealth.
The farm family in the grain and oilseeds sector that is trying to make a go of it on a zero net income or a net income of maybe $10,000 or $15,000 a year is creating wealth for the country and making all of us better off. I mentioned the figure of $130 billion a year in economic activity and the large number of jobs that rely on this sector.
In Saskatchewan alone the effect of the drought is estimated to be costing over $770 million. The province of Saskatchewan is asking for additional financing from the federal government. The Saskatchewan party is leading the charge in Saskatchewan to have the federal government shoulder its responsibility and do something that will keep the sector in Saskatchewan viable. There is serious consideration being given to the fact that many farms will go bankrupt.
That is not just a shallow statement. I was speaking with credit union officials in my riding. While we did not discuss individual farmers, we did discuss the overall situation on the farm. Massive numbers of farmers are having to go to their financial institutions to ask for restructuring of their lines of credit and mortgages on which they are no longer able to make payments. What they are doing is extending them over longer periods of time and trying to lower the amount of the payments.
Even the Farm Credit Corporation is having to collect back only interest in some cases and is not even trying to get the principal repayment. This is the situation in the grains and oilseeds sector in particular. That is why the standing committee on agriculture put forward this interim report to try to get attention from the minister at an earlier point than when we finish our hearings.
In regard to the hearings, the chairman of the committee came to the House and asked for moneys to be appropriated in order to travel and get input from farmers across the country.
At this point it is still quite up in the air as to whether we will get any funding to hold the hearings. The hearings are necessary to bring farm issues to the House. We need to hear evidence from presentations in the cities or on the surrounding farms and bring the evidence back to the House for the benefit of the minister and cabinet.
I can only encourage the House and all members of parliament to make it known that the agriculture committee is important enough to receive funding to do the necessary work.
In regard to what must be done, we do not always need large amounts of money put into the agriculture sector in the area of subsidies. There are many things that could be done.
I will start with a provincial issue although we do not have any authority in the House to do anything directly about it. I will point out and provide moral support to the issue of taxes on farm land, the prairies in particular because I am the most familiar with them, but also across the country where education taxes are falling on the farmland bases.
The individual farm family is paying an awful lot more in property taxes in regard to the education tax portion than the family living in a town or a city. That is because farmers have had to have a larger land base and there are fewer of them. This unfairness is something I hope provincial governments across the country are looking at. I hope they can find a better way to finance education by doing it more on the idea that those who are able to pay should pay. That of course has to do with net income.
I have already pointed out that many farm families have a low or negative net income. Still, the burden of these taxes are on these families and they have no choice but to pay. If they do not pay their property and education taxes their land will be seized and disposed of and they will be totally out of business.
We must improve our existing safety net programs to ensure they meet the needs of farmers. Here are some examples of the needed changes.
The crop insurance program needs to be improved to ensure it covers all the costs producers incur in seeding their crops. Regulations surrounding natural disasters must be amended to ensure farmers can receive compensation for inputs lost due to natural disasters.
We saw what happened in southwest Manitoba and southeast Saskatchewan a couple of years ago when the massive rains came throughout the spring. The farmers were not able to seed any crops. They lost all the inputs they had put into getting ready to produce a crop that year. They received no compensation whatsoever under the natural disaster provisions of the federal government because their losses were not considered to be infrastructure. However they were every bit as costly as if a building had been torn down by a flood.
If a better system had been in place farmers in southeast Saskatchewan and southwest Manitoba would have received disaster assistance for their flooded farmland back in 1998.
The net income stabilization account must be made more accessible to farmers in need. For example, instead of requiring the government's contribution to be brought out when farmers first accesses NISA, why can they not take out the portion they contributed and already paid taxes on? The money is theirs. Farmers could take it back out and leave in the government portion that is taxable.
People may ask why that would matter if a farmer is not making any net income on the farm. Individual farmers are subsidizing their farms by working off farm. Many farmers and/or their spouses work off farm and use the money to support the farm. They therefore have a taxable income although the farm portion is in a loss position. That is one change that could be made.
In regard to NISA, the minister has been well aware for some time that the expenses farmers pay for grain handling and transportation costs, which they pay from the farm gate right to the export point, are not eligible expenses for the calculation of NISA contributions.
This is a thing the government could change. Up to this point the government has been arguing that it cannot allow those expenses because the farmer is not the shipper and the wheat board is not the shipper. That was cleared up in the last agreement among the wheat board, the grain companies and the railways. They agreed that the wheat board is the shipper of grains and that as a result there should be no impediment whatsoever to having these as an allowable expense under the NISA program. There needs to be a modernization of the grain handling and transportation system.
Representatives of the wheat board appeared before the committee today and we were discussing the issue of GM crops and how to produce them. GM crops have tremendous potential to be a boon to humanity and mankind. The question of how we modernize the systems of grain handling and production is being resisted by groups like Greenpeace and other NGOs that feel progress should literally be stopped in regard to GM crops.
As I have said, wheat board representatives are here talking about these issues and trying to find solutions. I give them all the credit in the world for that. However the government and the Minister of Transport sit there and continue to rely on big regulation and big government instead of having a modern transportation system. We know from past experience when the government owned CN Rail that big government regulation does not work.
It is time the agriculture minister, the transport minister, the minister responsible for the wheat board and the entire cabinet get their acts together and put agriculture in the priorities of the government where it should be.