Mr. Speaker, in one way, I would like to say that I am pleased to take part in this debate, but in another way I am not. I wish the need were not there to have an emergency debate on the cattle and hog industries, but the reality is the problem is there. I want to start by talking about why the problem is there. There are three or four main reasons.
First, our dollar has increased over the last year by roughly 20%, which means that prices are roughly 20% less. That in itself would cause a crisis in any industry, I would suggest.
Second, the input costs have gone up dramatically, especially feed costs, the reason being that grain prices, finally, have improved. Grain farmers are finally getting a decent price for their grain, but that causes severe problems in the livestock sector. That problem is right around the world, except that in the United States with corn as a feedstock, they can be a lot more competitive and that causes some real competition problems.
Third, this all happens at a time when market prices are particularly low. Why are market prices low? They are low because the number of hogs and the number of cattle, particularly in North America, are simply too high. There are too many of them.
These things together have caused what many cattlemen and hog producers are calling a perfect storm. It is a very difficult situation, indeed. All of this is at a time when our farmers really do not have the opportunity to compete on an equal footing with many other countries because of unfair trade restrictions. Our government has been working hard on that, but we have not solved the problem. It will take time. In fact, it will take a lot of time to fully deal with that issue, but that certainly does add to the difficulty.
All of this is at a time when the cattle industry, for example, went through a serious drought in 2002 in western Canada causing great difficulties. Feed costs went up. There was not enough feed. In 2003 the BSE mess hit. At that time the industry already was in a lot of trouble. Here we are just a few years later, we have not even successfully dealt with the problems from 2002 and 2003, and this other problem has hit. That is the problem.
What are the solutions? I have not heard a lot of solutions from any of the other parties. I have heard some solutions from the government. I want to talk about what are not solutions to this problem. Here is what we cannot do.
We cannot make a per head payment of any kind, as some members, including the Liberal member for Malpeque, have suggested. We cannot do that for two reasons.
The first reason is that we would be breaking trade rules. What would that mean? In Alberta, for example, where over half of our production of hogs and cattle are exported, that would mean we would no longer have a market for that half of our production. What would that do to the industry right across the country? It would be devastating, indeed. We do not need solutions that are going to make the problem worse.
Even without these trade rules; let us say that we had not come to a time when we had signed the free trade agreement or the WTO or any of the other agreements that we have signed since; let us say that we are before that time. If we made a per head payment in a situation like this, where the number of animals on the farm is already too high, what would that do? That would send a signal to farmers to hang on to their hogs and cattle. That would prolong the problem. It is not a solution to the problem.
I started farming in 1974. In 1975 my neighbours and friends were in a real mess in the cattle industry, much like now. What did the government of the day do? It gave a large per head payment, and it was even larger in Quebec making the problem even worse there. The government made a large per head payment for farmers to hang on to their cattle. That was the government's solution.
It was an unbelievably stupid solution because farmers did what these payments encouraged them to do, they held on to the cows. As a result, the number of animals on the farm were not reduced as they had to be to deal with the problem. The problem could only be dealt with by reducing the number of animals on the farm.
That per head payment destroyed the cattle industry right across this country. It took 10 years for the industry to build it back again. By 1985, we had a healthy cattle industry again and the reason is government got out of it.
We had almost free trade with our neighbour to the south, the United States, in cattle. We never had restrictions in cattle. As a result, the cattle industry blossomed and bloomed and improved, and it was a good industry. There were some ups and downs, as there always is in any agriculture sector, but it was a good industry until 2002. Then the drought hit, followed by the BSE mess.
That goes to show what can happen if we allow markets to work in as free a market environment as we can.
That is what we cannot do, and we will not do that. Hog producers and cattle producers do not want us to do that. I have been told that very clearly. So, what can we do? I would suggest there are three things that government can do, along with farmers.
The first is to make loans available, as soon as possible.
The second is to work hard and fast, and this is for a long term solution, not so much for right now, and reduce unfair trade barriers, and to increase and improve markets. We have certainly been doing that.
The third is to do some things which will help drop input prices. Now, in this case I do not think we would want to drop feed prices because it certainly is not good for the grain farmers. So, there is always a problem with that.
However, there are many other things that we can do to reduce prices, such as a deal with harmonizing regulations between Canada and the United States and so on. Our government has worked hard and done a lot to do that.
As well, we can do things like something that I personally have been working on for almost 10 years: return products to farmers or make available to farmers at as reasonable a price as possible products which will either cause them to increase production or reduce costs.
The particular example I am talking about is that which was laughed at by a colleague across the floor earlier, which is to return to farmers an effective means of controlling gophers. In this case, liquid strychnine, which they can mix with their grain on their own and effectively control these pests which in parts of the country have destroyed quarter sections of pasture land and grain land, costing farmers $200 million to $500 million a year.
Those are the types of things we can do and must continue to do. We certainly have done that. I want to give some specifics, though.
Here is what we have done and I think we have done all we can do within the trade restrictions when it comes to actually delivering money to farmers. We are doing that through improved programs, for example, through an agri-invest kickstart program, benefits worth $600 million, and $160 million of that has gone, and will continue to go, to the cattle and hog sectors. As well, hog and cattle farmers can expect to receive about $1.5 billion.
