Madam Speaker, I am pleased if somewhat surprised to be taking part in the debate today. I welcome the opportunity nonetheless.
As a member of the Standing Committee on Agriculture and Agri-Food I too want to say at the outset that with the exception of recommendation 14 this is a good report. The report was issued after the Standing Committee on Agriculture and Agri-Food had travelled to virtually all the provinces of Canada to hear directly from farmers, consider and weigh their concerns and produce a report. The report became public this past week.
The previous speakers have gone through a lot of the comments. They have pointed out the good things in the report such as its recommendations to enhance crop insurance, improve the net income stabilization account and introduce a trade injury compensation package to offset the negative effects on our primary producers of things like the U.S. farm bill and the common agricultural policy in Europe.
A number of things in the report are worthy of comment. Recommendation 14 has been the focus of debate, as it deserves to be. I will read what it says for the record and then note the objection that has been added at the bottom. It reads:
Whereas additional on-farm activities and local value-added processing are an excellent way to give farmers more influence in pricing, the Committee recommends that the board of directors of the Canadian Wheat Board authorize, on a trial basis, a free market for the sale of wheat and barley, and that it report to this Committee on the subject.
The bracketed comment at the bottom by the critic, myself, says:
I object strongly to any suggestion that the Canadian Wheat Board be asked to authorize use of an open market for the sale of wheat and barley, even on a trial basis. This would undermine the Board’s effectiveness as a single desk seller, it would reduce returns to farmers, and eventually it would destroy the Canadian Wheat Board.
I have a great deal of respect for the hon. member for Malpeque. He is extremely knowledgeable. As a former president of the National Farmers Union he has spent years in the trenches, has met with farmers and understands the Canadian Wheat Board and marketing of grain far better than I. He indicated in his remarks that he was disgusted. That was the word he used.
At the same time I think the hon. member would admit, at least privately, that he is a bit embarrassed about what has happened. What has transpired, unfortunately, is that some members of the Liberal government on the Standing Committee on Agriculture and Agri-Food have been snookered by members of the Canadian Alliance into doing this on a trial basis.
I will provide some background. As Canadians know, there are not a lot of Liberal members from western Canada in this parliament. Despite the Liberals' large majority, there is but one Liberal member from western Canada on the Standing Committee on Agriculture and Agri-Food. I am not native to western Canada. It is not where I grew up. However it is where I have lived for some time and I have come to understand, at least a bit, the importance of the Canadian Wheat Board.
In this instance what transpired is that we had two standing committee treks to western Canada to meet with farmers. We met with them in 1999 and then we went out again in February 2002. There is a crisis on the prairies in agriculture, especially in the grain and oilseeds which is the bulk of what happens in the eastern prairies. Some members of the committee felt that because there was no improvement from 1999 to 2002 it was important to look at doing something different and more radical. When recommendation 14 came along, and before we got to discuss it, some members on the government side were already thinking that the Ontario Wheat Board seemed to be working all right. There was not a lot of criticism.
Yes, we heard criticism of the Canadian Wheat board when we met with farmers. We also heard compliments about the work of the board, the fact that the status quo does not exist with the board and it is prepared to make some changes and to look at changes. Some members on the government side thought it was time to shake the pot and stir things up and do this on a trial basis, as recommendation 14 says, with the assumption that if we did not like what we found out in the trial, we could revert to standard operating procedure.
As the member for Malpeque notes, we cannot put the genie back into the bottle. Once it is out, it is out. As western Canadians know there have been nine attempts by the U.S. government to derail, sidetrack and eliminate the Canadian Wheat Board. It has failed on every one of those occasions. With this recommendation that has now been approved by the Standing Committee on Agriculture and Agri-Food, if the wheat board were foolish enough, which it will not be because it has already indicated that this is a non-starter from its perspective, it would never be able to go back to business as usual after any kind of trial period.
The Canadian Alliance members on that committee, and I have respect for them, have duped some members on the government side on this particular issue. There is no question in my mind that the goal of the Canadian Alliance members is to eliminate the Canadian Wheat Board. That is not what they say. They say they see a role for the Canadian Wheat Board but they also believe in freedom of choice and to do that, they think that there should be dual marketing.
Dual marketing is the thin edge of the wedge because we cannot have orderly marketing with single desk selling at the same time as we have dual marketing. When we open it up on a trial basis it is impossible to reverse the process, particularly when the Americans are as adamant about state trading enterprises such as the Canadian Wheat Board. They would never allow that to happen.
The reality is that on the current composition of the board we do have some regional realities. There are also some tensions within the cabinet itself on this issue. It may be, for example, that the minister responsible for the Canadian Wheat Board was perhaps not informed about this recommendation in time to have an influence with the backbenchers who sit on that committee. The minister of agriculture may not be as opposed to this so called trial period. That is telling and unfortunate in this instance.
Again, regional politics creeps into this. The minister responsible for the Canadian Wheat Board does hail from one of the great grain growing areas in western Canada. The current minister of agriculture comes from the province of Ontario and he feels that perhaps the Ontario Wheat Board, with the freedom of choice, is more palatable and worthy of a trial basis.
If we check with farmers on the Ontario Wheat Board, and the member for Malpeque was correct, they are not achieving the premium pricing. Yes, they do have flexibility but if we were to check with them, when they are selling on the spot market, they would not be receiving a premium price for the product. The Richard Gray study is accurate on this, $160 million comes in value added to the Canadian Wheat Board and flows through the Canadian Wheat Board to our farmers.
Shortly after I was first elected I had the opportunity to visit Chile. The member for Cypress Hills--Grasslands made reference to it. It was at the time when some of our farmers had been put in jail for violating and crossing the border to sell their product in the United States. I got into a discussion with an adviser to the Chilean minister of agriculture.
We were talking about grain and selling Canadian Wheat Board grain. He made two comments. His first comment was that he did not agree at all that Canadian farmers should be jailed for attempting to cross into the United States to sell their product. He felt that was wrong and I concur with that.
The other thing he said was of great interest. He had gone to various millers in Santiago and asked them why they would pay a premium price to buy wheat for milling purposes from the Canadian Wheat Board when they could buy it cheaper from the Cargills, the ADMs and the Louis Dreyfus companies. The answer he received was because they could sleep better at night as business people.
The millers know exactly what they are getting when they buy through the Canadian Wheat Board. If the wheat board says the product is x % protein, x % gluten and all the other ingredients, that is what it is. Whereas when they buy an American product it is less certain about what it is that they will receive. They are interested in satisfying their consumers on this front. It is important they get the product they want in order to bake goods to the best of their ability. That for me, as someone who does not hail from the prairies originally, was an important piece of news and one that I carry around with me.
The other reason there will be Liberal members who will be unhappy with this recommendation is that it is the opposite of what is in the interim report of the Prime Minister's task force. Recommendation eight in the report favours orderly marketing and single desk selling. Obviously recommendation 14, which calls for a free market on a trial basis on the sale of wheat and barley, is not orderly marketing. Given that the Prime Minister's task force only came out with its report a month ago and there are members on the Standing Committee on Agriculture and Agri-Food who are also members of the advisory task force, it is hard to fathom how they managed to be on both sides of this issue in two separate reports.
I feel the cat is among the pigeons as a result of recommendation 14. I mentioned the nine trade disputes that the Americans have launched against state trading enterprises and I have spoken of the $160 million in benefits.
There are a couple of conflicting principles. The member for Cypress Hills--Grasslands who brings a lot of credibility to the standing committee because of his experience as a grain farmer talked about the need for value added. We can all identify and agree with it.
The problem we have when it comes to the board is that the other principle the board has is to maximize the return for farmers. As the member for Malpeque indicated we cannot sell lower to an individual or a group of individuals to make it attractive for value added and at the same time maximize the returns for everyone else. Those two principles are in conflict. We have been aware for several years that prairie pasta plants have been trying to get started in western Canada to ship more product out as value added rather than to ship bulk to Thunder Bay or to Vancouver.
The wheat board is working on that issue. It has not resolved it. It is a work in progress. It would have to be conceded by everyone that there are two conflicting principles and it is tough to square that circle.
The concern is that to some extent we have thrown the baby out with the bath water with this trial period. It will be used against the Canadian Wheat Board. There is no question that the opponents of the wheat board, and there are many, not just the Canadian Alliance but the Western Canadian Wheat Growers Association and a number of others groups, will use this report. They will waive it around and say that this is the way of the future.
We cannot have an open market on a trial basis. NAFTA chapter 11 is clear. If we turn over wheat and barley marketing, and the profits that go with it, to transnational grain companies we cannot reverse that decision unless we pay hundreds of millions of dollars in compensation to those companies for lost future profits. The open market is not a path that Canadian grain farmers can go down and look around. It is more like a cliff that they can jump off. It will either be the Canadian Wheat Board or it will be Cargill, ConAgra, Archer Daniels Midland and there is no going back.
All the evidence we have shows that the wheat board does not decrease prices paid to farmers, it increases prices. The recent benchmark study by the board, the auditor general's report, the Kraft, Furtan and Tyrchniewicz study of a few years ago on wheat marketing, and the more recent grain report on barley marketing, every credible independent study demonstrates that the board increases the incomes of farmers.
Furthermore, the vast majority of farmers consistently vote for a strong, effective wheat board with its single desk selling power. That is an extremely important point.
The board has elections every two years on a regional basis. There will be elections coming up, for example, again this fall. It will be up to the farmers themselves to vote. If they vote for an open market system then that is what Canadian grain farmers will get. So far they have continued to vote by a majority for single desk, orderly marketing. That is the current law. That is where it should be. It should be with the farmers and not with politicians as to what happens in that regard.