Madam Speaker. Excuse me for not following the rules. I apologize.
I am pleased to have an opportunity to debate this supply motion. It gives us an opportunity to have a debate about the issue, particularly in respect of cull animals, but more broadly about BSE and the impact that it has had on the border.
As was mentioned in one of the questions, we have had an opportunity to have a take note debate in the House, which I had an opportunity to participate in. I am pleased that we have a chance to talk about the issue again today.
This is a significant issue for producers. I should make the point that, as important as it is for producers in Quebec, it is a national issue with ramifications for producers in all of the provinces.
It is really critical as we approach this particular set of challenges that we understand the importance of looking for solutions in the short term. We need to deal and address the issues that producers are facing on the ground on a daily basis, as well as looking at medium term solutions, and dealing with some of the longer term solutions.
We need to remember, and it is important to bring this up at this time, that it is not just simply cattle producers. There are other ruminants that are affected by what is taking place with the border closing. It is imperative for all members to know that because we have those types of producers in our ridings as well. We must remember the importance of dealing with their issues as well.
In essence, dealing specifically with cull animals, it is important to exactly understand the scope of the problem and what is occurring here. First of all, obviously, there is the issue of the closed border. That has had a very direct impact because it has impaired the ability, as was happening prior to May 2003, of producers to ship their older cull animals into the United States for slaughter. The border closure has obviously curtailed their ability to do that.
The problem is a little bit more complex than that. In addition to the inability to move live animals and because of the rules that were put in place surrounding the movement of boxed beef into the United States, it has changed the rules in respect of how slaughtering can take place. There is a provision in those rules that does not allow for the commingling of younger and older animals going to slaughter. That in itself has also created additional problems in that the cull animals have less places where they can be processed.
There are two different sets of producers that are affected by this. In both cases it represents a portion of their income. It does not represent all of their income, but it certainly represents a portion of their income.
In respect of dairy producers, the vast majority of their income comes from the production of milk. That income stream continues. However, they do have the necessity of culling their herd. It is those animals and the price they are receiving for those animals that is a challenge and one that needs to be dealt with.
The same thing is true for cow calf operators. Their income is derived in a large part from selling calves, but they also have cull animals. Again, the same situation faces them where a portion of their business and their cow calf operation has also been impacted by BSE.
It is important to remember, and I think all members recognize this, that even though on the cull animal issue we may be only talking about a portion of producers' income, it is an important portion of their income. It is something that is an important part of their overall operation and something that really needs to be addressed.
Specifically, the motion before us suggests that the government has taken inadequate measures. I reject that. The government has aggressively been dealing with the BSE issue and the drop in farm income. The hon. member across asked a question about farm income and he is quite right. The year 2003 has been a very difficult year for farm income.
The point is that the government did not turn its back on producers when they faced that kind of situation. In fact, there have been record payments made by the government to producers, reflecting the types of income situations that they faced. As I have said, considerable payments were made in 2003 and those trends will continue in 2004.
In addition to that, we have had a number of specific initiatives designed to deal with the BSE issue. We have had the BSE recovery program, which was put in place shortly after the border closed. It was there for the specific purpose of getting the market to re-engage, to allow animals to flow through the market and to ensure that the animals were continuing to be slaughtered and brought to market. The program was successful in accomplishing that.
We had a cull animal program which was put in place to deal with the issue of cull animals, and that program delivered support to producers.
We have had the TIS program, the last payments of which just went out last month. That program has disbursed well over $900 million to producers.
Last September 10 we announced the BSE repositioning program which has a multifaceted approach and is designed to assist in repositioning the industry so it can return to profitability with or without a border opening. I should mention that one of the primary objectives of that program was to take measures that would allow producers to gain much more benefit from the marketplace. Through the initiative, particularly in the fed and feeder set-aside programs, we have seen a substantial recovery in the price for fed cattle and for feeder cattle. The prices are still not to the levels that we would like to see them but they are way beyond where they had fallen to in mid-summer when fed cattle was around 65¢. I believe it reached 85¢ last week. It has dropped back a bit since then as it fluctuates with the marketplace, but it is very good progress.
Despite what the hon. leader of the Bloc has said, there has been substantial investments made in Quebec, both through the programs that I enunciated, as well as through our business risk management programs. However that is not to suggest that there is not and continues to be an issue with cull animals for dairy producers. There does. That is true for dairy producers in Quebec, but I should also mention that although the dairy industry is large in Quebec, it is not exclusively contained in Quebec. Other parts of the country have a dairy industry. As we address the issue of cull animals, it is absolutely essential, as the federal Minister of Agriculture, that we take a position and a perspective that will be inclusive of all producers, regardless of where they are operating in Canada, and to ensure we have programs that address all producers. We are certainly about trying to do that.
I should mention that, particularly in our business risk management programming this year under CAISP, some $450 million already has been advanced to producers, a portion of that in respect of the 2003 year and a portion of that both in terms of advances in 2004, as well as our special advance program which we announced as part of September 10. Those advances are very critical because they are designed to put cash into the hands of producers in the current year at the time when the need for that cash is necessary.
The reality is that over the next while, and this is particularly true in terms of the dairy industry, there will be some changes taking place that will have an impact on the processes and the way that we want to move forward.
Some time in December, taking effect at the beginning of the next year, the Canadian Dairy Commission will be establishing a new price for milk. That is important, particularly in the cull animal situation, because part of the calculation that the commission has to undertake in establishing the price is to evaluate what it calls the salvage value of the cows and to determine that value. If the value has decreased, and certainly it has decreased, that is to be factored into any price increase that may be considered. That is an important variable and we will have an opportunity to see how that plays out over the next short while.
However that is not to suggest that, in and by itself, is the whole solution to the problem, but it is an important ingredient. I believe it is critical that we understand that and, as we move forward with our medium and long term solutions, we take it into account.
We also need to understand how changes in the status of the border may affect cull animals. It is not just the issue of what age of live animals may be permitted with a rule change in the United States. It also has to do with the issue of allowing for the commingling of slaughter. If that rule is changed it will certainly add to the capacity to process older animals. If there is an increased capacity to slaughter older animals, that will certainly lend itself to a more competitive environment and allow for a price recovery. That is important for us to take a look at.
However, even with those things, and I have said this in the House on many occasions, a number of ways are being considered to see what, in addition, may need to be done in terms of assisting producers, both dairy and beef, with respect to the cull animals. We have been in vigorous discussions with the producers and with our provincial colleagues in Quebec to determine the best approach that we would want to take. In this respect I do agree with the motion that states that we should be taking additional actions and we should be doing it as quickly as possible. However I reject categorically that no action has been taken to date.
It is also important to understand what the long term solution needs to be in terms of cull animals. Quite frankly, that is to make sure there is sufficient slaughter capacity for the number of animals that exist in a competitive environment. It is the marketplace, when it is able to operate in a rational way, that will set the price of animals. The challenge right now, because of the distortions being caused by the closed border and by the rule that does not allow for the commingling within slaughter plants, the marketplace is not operating in a rational way.
When we made our announcement on September 10 and put forward initiatives to help increase slaughter capacity, both in terms of providing increased resources to our regulatory agency, as well as providing a low loss reserve, that has to be a long term solution. It is something we need to pursue and work on. That is one way of bringing the increased slaughter capacity on line. The rule change, as I said, may bring additional slaughter capacity on line. We need to take a look at exactly what that may be.
What should not be forgotten is the importance of expanding our markets so they go beyond the United States.
It is disappointing to listen to the leader of the Bloc because he continually talks about closing in, isolating, moving and pushing everything away, when what we ought to be doing is increasing our marketplace, making it more international and ensuring we have additional markets, which is what we have been doing in Japan, for instance, and we were pleased to see the changes that it was making in its domestic policy which will allow it to change its import policy.
We are hosting technicians from Taiwan who are taking a serious look at and making recommendations on our ability to export there. Specifically on the dairy side, we signed an agreement with China that will allow us to export genetic material, both embryos and semen, into that market. Just this past week I was pleased to hear that Japan would be reopening its market to meat from animals under 30 months.
The member from the Bloc says that there has been no progress. Well this is progress. In terms of the United States, the While House's office of management and budget now has the rule change up for review with a specific timeline that is placed on it. It must complete that review within 90 days.
When the President of the United States was here yesterday and the day before he said that it was his intention and desire to have his officials move that as expeditiously as possible. That is progress and that is progress which we will continue to urge the Americans to move on expeditiously.
We should not for a second have any doubt that our producers have faced a very difficult and challenging time. They have been dealing with this BSE crisis for almost 20 months and have done so through a great deal of hard work and with fortitude. We must remember that our producers, both on the beef side and on the dairy side, have built strong industries in this country, second to none in the world. Our job, as a government and what we have been undertaking in those 19 months, is to support those producers in terms of financial support. I have mentioned the programs that we have set up because it is essential that we work in partnership with our producers. At the same time we must also deal with some of the structural issues, such as working to build increased slaughter capacity and to increase the markets that we have.
We should not forget, and this applies to the dairy industry as well, that there are other issues other than cull animals that we need to deal with. There is the whole issue of how we deal with the heifers. That has been a loss of a market for our producers as well. It is important that, as we try to find an overall solution, we remember that particular component.
We have to make sure that we protect the genetics of our herds. We are the best in the world and, therefore, in looking for solutions and at a way forward, we cannot allow ourselves to forget that.
We also have to look at the over-inventory and the oversize of the herd. That is why we have had to deal with something like having and putting forward a managing older animals program as part of our September 10 announcement.
All these programs are important. All of these issues are critical. Our work with the industry has been important. In fact, the events of September 10 and the program that we put in place was built working in conjunction with the industry and the provinces. I can say that we are working and will continue to work with producers in Quebec and in the rest of the country. We will continue to look for the solutions, both specifically for cull animals and in the broader issue, in respect of all of the impacts of BSE.