Mr. Speaker, the motion today deals with two issues over which we are embroiled in a trade dispute with the United States. First, it addresses the issue of softwood lumber. Second, it addresses agricultural subsidies.
I will address primarily the second issue because there is little softwood production in my riding of Lanark--Carleton. We have some hardwood production. A bit of softwood is produced coincidentally to that, particularly pine as the hardwood is collected. Two local producers, Umpherson's in Polland and Lanark Cedar, produce some softwood. However softwood is not a large industry in my neck of the woods whereas agriculture is a substantial product in Lanark--Carleton and all of eastern Ontario. It is one of the pillars of the local economy.
People may not realize it, but the House of Commons is at the centre of the most agricultural city in the entire country, a city I am proud to in part represent in parliament. More than 10,000 jobs in Ottawa alone are tied to the agricultural sector. Total production in rural parts of the city is worth $402 million according to an agricultural impact study produced in December, 2000. That is $402 million from one city alone.
Ottawa is only a fraction of Ontario. Ontario is only a fraction of Canada. This is a major Canadian industry. It is absolutely critical to the success of not merely part of the economy and those directly employed in agriculture. It is critical to the success of all of us. My riding extends into Lanark county. In Lanark and Renfrew counties outside the boundaries of the city of Ottawa there are over 7,000 jobs in the agricultural sector. That represents over 9% of all jobs and $240 million.
Agriculture in Canada faces three problems today. First, there is a long term trend toward mechanization, increased efficiency, increased productiveness and hence agricultural consolidation. There has therefore been a decrease in the number of farms and people employed directly in the agricultural industry. However there has been no decrease in production or productivity which continues to go up.
The decrease in the number of farms is due to increased efficiency. It has had an impact. By far the majority of low efficiency, low productivity farms and farmers have been forced out. Some were forced out decades ago. The people left in the agricultural sector tend to be highly efficient, highly organized and entrepreneurial.
Second, periodic agricultural crises have been caused by weather. Like skiing, entertainment, summer festivals and a number of other industries, agriculture is an industry for which weather is crucial. Sometimes people complain when I raise the legitimate concerns farmers have regarding weather. They say farmers whine a lot. If urban people listened to people in industries and businesses a bit closer to their homes they would realize they complain as much as farmers. However for farmers several years of bad weather in a row or a year of drought followed by a year of very wet weather can be a life or death matter. Something like that has happened in eastern Ontario over the last couple of years.
Third, the artificial crisis caused by the trade war between the European Union and the United States, an enormous international drama in which we are a mere bit player, is driving agricultural prices far below production prices. The devastation this is causing our agriculture industry will get worse. The worldwide crisis existed prior to the latest U.S. farm bill thanks to the unwise agricultural subsidy practices of these two great powers of the agricultural world. However the results of the farm bill will increase the impact dramatically.
Small players like Canada, Australia, New Zealand or Uruguay depend on agricultural industries but are small in comparison to the enormous production of the United States and Europe. They are facing tough times. I will try to give members an idea of how huge the production is. Although we do not think of France as an agricultural country and particularly not as a wheat growing country it nonetheless produces roughly as much wheat as Canada although admittedly not of the same quality. Our farmers have attempted as much as possible to differentiate ourselves from the bulk product produced in France. Nonetheless the huge productivity in France, subsidized by local governments, is having a tremendous impact.
The state of Kansas alone roughly equals and may exceed total Canadian production of wheat. One could find similar results in different sectors. It makes it difficult for our farmers to compete when the two enormous players start greasing up their subsidies.
Notwithstanding these factors Canada has the most efficient farming industry in the world. Although it has been a struggle we have been able to compete despite enormous subsidies elsewhere. I am sure the number has been quoted earlier in the debate but Canadian wheat producers get approximately 17% of their income in the form of government subsidies and protection. For American farmers it is 49%. For wheat farmers in the European Union it is 43%. This goes a long way toward explaining why the French produce so much wheat instead of some other product which is more naturally suited to their high intensity land.
In the face of this kind of competition and subsidy our farmers have tried to be innovative. Many Canadian farmers have changed to pulse crops, abandoning traditional and highly subsidized products in which it was becoming impossible for even the most efficient to compete. This has occurred in wide swaths of the country but particularly in eastern Ontario. To make the point I will quote the agricultural impact study I cited earlier. It states:
Growth associated with the field crop sector [in Ottawa] has been centred around increases in farms producing soybeans. Production in soybeans increased from 3,500 acres in 1986 to 20,000 acres in 1996.
The change does not occur cost free. To make the switch farmers must acquire the appropriate knowledge and supplies and sell to the appropriate persons. Sometimes equipment changes are necessary. Under the new U.S. farm bill they then get hit by an expansion of American subsidies to cover the products they had moved into to sidestep the subsidy war.
I have a background in the retail sector. It is a bit like being the local corner store when Wal-Mart gets into a battle with Loblaws over the price of toothpaste. When the local store tries to move into something else they focus on that. They are not concerned with whether they make a profit in the area. It is about predatory pricing. They are concerned with putting the local store out of the market.
Our farmers do the best they can to move out of the market and become the world's leaders in pulse crops. What happens? They get hit by American subsidies and are devastated. They get hit at a time when it is not possible to change their plans for the upcoming year. Having done everything right and become the world's leading exporters in crops like peas and lentils, some of our most efficient producers find themselves being driven out of business. Our government has been engaging in inadequate efforts to exclude from American subsidies certain Canadian crops and products that are peripheral to the ongoing trade wars. Pulse crops are a key example.
Moving back to softwood, an area I mentioned earlier is red cedar. With more effective lobbying of the United States we could have excluded red cedar from the trade bill. There was discussion of excluding it. A lobby in the United States was allied with us. With more effective efforts on our part we could have worked with our allies in the United States and excluded red cedar. It was not done. It is symptomatic of the failure of the government to be more effective in protecting our lumber producers.