Debates of May 14th, 2009

Agriculture and Agri-food--Main Estimates, 2009-10

[Martha Hall Findlay, Liberal, Willowdale, ON]

Madam Chair, we must have been speaking with a very different group of hog producers, because at that function, I had many conversations with hog producer after hog producer about cost of production challenges and country of origin labelling challenges. Every single hog producer I spoke with that day said that the industry is in very difficult straits.

So I would ask the minister again if he can suggest in what specific ways the hog industry is being well served by the government.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, if the member opposite checked with all the hog farmers in her riding--oh, that is right, there are none--I think she would come to the realization that pork production is very cyclical. It always is and always will be. Certainly there are ups and downs.

We have been trying to develop programming and I think we have done that. We continue to work with our provincial colleagues in the industry itself to develop and deliver programs that get to the farm gate, not big announcements of money as we used to see under APF, but actual targeted funding that served them well.

Overall, that is the message I am getting back from my hog producers, and Canadian hog producers.

[Wayne Easter, Liberal, Malpeque, PE]

Madam Chair, the fact of the matter is that program payments under the government are much less. They were $4.9 billion in 2005, and substantially less than that in the last budget.

Would the minister look at his figures, be honest with us and tell us what the total program payments for Agriculture and Agri-Food Canada were in the current year and what is proposed for next year?

The government goes on with the line, all the time, that it is there for farmers. It is not there for farmers. It has been paying out less money, there are fewer program dollars, and all it has been successful at doing is putting farmers into debt.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

I cannot begin to tell all the good stuff we are doing, Madam Chair, but certainly the member opposite knows full well. He has actually told farmers in Prince Edward Island that we are doing a good job.

Certainly it is not reflected by the numbers. As I said, agriculture is cyclical. Luckily, grains and oilseeds have been doing extremely well. We will continue to flow moneys, and of course, they are always in the best interests of farmers.

[The Deputy Chair, NDP, Denise Savoie]

The hon. Minister of Agriculture.

[Gerry Ritz, Conservative, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board]

Madam Chair, it is a pleasure to be here. It is always exciting to discuss agriculture in this great place.

I know the team around me is very well prepared. They have been serving agriculture and serving the farm gate to the best of their ability. We are blessed to have a great department. I certainly can attest to that. They serve farmers very well, because they and we all agree it is farmers first.

It is always a pleasure and a privilege to bring matters of agriculture before this House, because agriculture, of course, does matter. It matters to the economy, it matters to the job market, and it matters to the health and well-being of all Canadians.

As we know, these main estimates are normally discussed in committee, not this setting of committee of the whole. However, in the current global economy the world needs a strong, profitable agricultural industry now more than ever. So I welcome this debate.

The security and stability of our food supply starts with a strong, vibrant farm gate, and we have one. That is why all our programming puts farmers first. That was the focus of a recent G8 agricultural ministers meeting in Italy. I was proud to be there.

This government is working with producers to overcome the challenges they face, to build a stronger, more profitable agriculture sector in Canada.

As we have heard tonight, the H1N1 situation is a serious challenge for our pork industry. We have made it very clear to domestic consumers, as well as to our trading partners, that Canadian pork is safe and continues to be safe.

The international scientific community, including the World Organisation for Animal Health and the World Health Organization, agrees that H1N1 is not a food safety issue. We will continue to reassure Canadian consumers and our international trading partners of that argument. We will keep working with our trading partners to make sure that trade decisions are based on sound science and the fact that our pork is safe.

We will continue to stand with our pork producers and work with CPC to get our great industry back on track. I was proud to see the great show of support at our pork barbecue on Parliament Hill last week. This government is not afraid to take action at the WTO if the trade decisions made by our trading partners are not firmly rooted in sound science.

We have shown that resolve by launching consultations with the United States over their mandatory idea for country of origin labelling.

Our actions for the Canadian swine industry speak louder than words. We extended the time period covered by the cull breeding swine program, a program developed in conjunction with the industry. We have invested up to $76 million to help hog producers control disease. As part of this investment, in March we announced another $40 million to help producers develop and implement biosecurity best management practices, research projects and long-term disease risk management solutions.

Our next generation of farm support programs are delivering more than $1 billion, some $1.3 billion, to livestock producers, including pork producers, for 2007-08. We are getting this money out quickly and effectively, thanks to AgriStability interim payments and targeted advance payments that we have reworked to be as farm friendly as possible.

We have extended emergency cash advances of up to $400,000, with the first $100,000 interest-free, a significant increase since we took office. That has delivered another $500 million in cashflow directly to the farm gate. At the request of livestock producers, I announced a stay of default for up to a year and a half on these loans. This stay covers almost $500 million in advances to the livestock sector. This government will continue to pay the interest on the first $100,000 through that period.

We are expanding slaughterhouse capacity with funding in the neighbourhood of $50 million. The government knows farmers want to make their money in the marketplace, not the mailbox. That is why we are getting out on the world stage to help them sell their great Canadian agricultural products.

We are working with the value chains. We have launched the market access secretariat to aggressively and proactively address market access challenges.

A key component of our trade and market development program is the $88 million AgriMarketing program, which will help promote more of Canada's safe, high-quality, world-class products to a hungry world.

We continue helping producers weather the current economic storm. We are also looking to the future when those clouds clear. According to a recent analysis by the department, average net operating income of Canadian farmers rose by 27% between 1990 and 2006. Moreover, aggregate farm cash income is expected to increase again in the years 2007 to 2009.

Over the past 10 years, the average total farm assets increased 38%, average net worth increased 41%, and the debt-to-asset ratio, as I have already said, has now risen by only three-quarters of 1%.

Producers do not want to stay in the same old rut. We cannot use yesterday's solutions to solve these new and emerging challenges. Farmers want to take advantage of the opportunities that are out there.

Our economic action plan for Canada will make sure businesses, including agriculture, come out of the current global situation stronger than ever. The economic action plan is building on a campaign promise by delivering $500 million through the agricultural flexibility plan. This new program will help farmers by promoting innovation, ensuring environmental sustainability and responding to the market challenges and opportunities. We are getting the job done for Canadian farm families, building stable, bankable, predictable programs, tapping new market opportunities at home and around the world and strengthening Canada's food safety system.

This government is delivering more resources and stronger regulations for that food safety system. We are investing in food safety after years of neglect and cuts. This government has invested another $113 million to enhance the safety and reliability of our systems. We have hired new food safety inspection personnel, an increase of some 14%, and we will hire more as needed.

Budget 2009 allocated $250 million to address maintenance at federal labs, key links in Canada's health and food safety systems. We have initiated an independent investigation into last summer's recalls to find new ways to strengthen the system. We welcome the appointment of Sheila Weatherill, a very qualified lead investigator. We look forward to her recommendations as we continue to strengthen our food safety system. We also welcome the lessons learned introspective by all the other departments involved.

This government continues to take a proactive approach to agricultural programs. We listen to farmers and we develop these programs. We now have a suite of stable, bankable programs to make sure farmers can weather economic storms and continue to help drive this economy. We continue to assess and analyze the impact of these programs and we have shown we will make adjustments when and where required.

We are also looking to the future with industry. This government took action. The Prime Minister announced this government's new legislation to guarantee an estimated $1 billion in new loans over the next five years for Canadian farm families and cooperatives. It will help beginning farmers take over the family farm, a very important point as we see the average age of farmers rise.

As the Prime Minister said, “Farmers remain the backbone of the local economy for hundreds of communities throughout Canada. These farmers deserve to know that they can count on the credit they need to build and grow their operations”.

This government is making sure Canadian farmers have a firm foundation. We are creating the opportunities they need to succeed over the long term. Over the next five years, government is investing over $1 billion in the growing forward programs that are cost shared with the provinces and territories. Growing forward recognizes that every farm in every region is unique. The one size fits all programming is a thing of the past. The new suite of programs allows us to tailor programming to address regional needs. Flexibility is a key element of growing forward because that is the best way to make sure that every investment we make hits the target at the farm gate.

On top of my priorities this year to get a foot in the door with our key customers and build new markets around the world, as well as re-energize some relationships with our long-standing trade partners, I have said before that farmers do not want to farm the mailbox, they want to make their money in the marketplace that is where it is best. Farmers are not standing still and neither are we as a government.

This government is opening and expanding markets so that our farmers can sell more products to more customers around the world. Over the past few months, we have successfully reopened beef access in Hong Kong, Jordan and Saudi Arabia. We have worked to expand pulse markets in India. We are keeping up the pressure with trade missions to Morocco last month and other key markets in the coming weeks and months.

We have signed free trade agreements with the European Free Trade Association, Peru and Colombia. Of course, we continue to build a respectful relationship with our biggest trading partner to the south, the United States, as well as with Mexico and Japan.

Every time we resolve a trade irritant or expand the market, we are adding to the strong bottom line for Canadian farm families. We are making sure our producers can continue to drive the Canadian economy as we all face the current global economic uncertainty.

To close, I want to thank all the portfolio team in agriculture for doing a great job of advancing the sector. On a whole range of issues we are working together to help producers and the whole value chain to proactively capture those new opportunities.

[Garry Breitkreuz, Conservative, Yorkton—Melville, SK]

Madam Chair, I listened with great interest to the minister as he outlined some of the programs and projects that our government is implementing.

I come from a riding that has a strong agricultural base. It is quite diverse; there is everything from cow-calf operations to canola, wheat, and coarse grain operations. There is a wide variety of different farming endeavours.

I was invited by a number of farmers to a meeting a short time ago. I went there with some concern as to what I might hear. I was pleasantly surprised by their remarks about some of the changes that have been made in the last three years to some of the farm programs. In fact, I will not forget one of the comments that was made, which is that the programs have never been this good since the days of John Diefenbaker. I would like to pass that on to the minister.

There is a question that farmers want me to ask the minister. He touched on it in the last part of his remarks, but I would like him to elaborate on it. They are concerned about the protectionist tendencies in the United States. They really do not want to depend on farm programs, even though they have been improved. They would like to know what other endeavours the minister is engaged in and what these mean to the farmers' bottom line.

My question is really twofold. What is being done to continue to ensure we have access to markets in the United States? What is the minister doing other than that to ensure that our farmers can get more returns from the marketplace?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, I know the member for Yorkton—Melville is very much involved with farmers in his riding. I have had the opportunity to attend some of the round tables he has held in Yorkton over the years and they are always great fountains of information.

Certainly there is concern. He said that the last time farmers had access to good programming was under John Diefenbaker. That speaks to the age of farmers out there. It underscores that line.

We are certainly working hard to reinvigorate markets. The United States is our major trading partner. It is the closest one to us and there has been a free flow of information and goods back and forth, which has been especially underscored since NAFTA. That certainly expedited a great deal of income for farmers with that new free trade agreement.

We have to be vigilant. We have to make sure that the free trade is also fair trade, that the rules are embraced and followed. We continue to work with our American counterparts regardless of what political side they are on. I have developed a good relationship with my colleague, Tom Vilsack, the new secretary of agriculture. I know my colleague, the Minister of International Trade, has that same good camaraderie and working relationship with Ron Kirk, the secretary of trade.

We continue to work with them on how to get past this country of origin labelling situation in which they have found themselves. We continue to work with them on ways forward. We put one challenge in place that gave us the rule that we needed changed. The final rule came out in the script that we wanted it. Then the new administration added a little more voluntary and a little more mandatory, which is creating a lot of frustration. We have initiated the second challenge on that one and we will work with our American allies on that.

At the same time that we are working to reinvigorate that trade, we are opening new trade corridors around the world. Of course, we all look with envy at the Pacific Rim and the great job that is done by some countries, like Australia and so on. We have been out of that picture for a number of years. For the last year and a half to two years we have begun to reinvigorate those channels, pulse crops in India, pulse crops in Morocco. There is a lot more grain going into Saudi Arabia than ever we have seen before as it steps back from self-sufficiency and buys the good quality durum wheat from Canada.

We are also beginning discussions with the EU. Of course, with 300 million people over there, it is a tremendous opportunity for Canadian producers. I know they look to us to lead the challenge on that, to level the playing field so they can go industry to industry and make the good deals to further the farm gate.

[Brian Storseth, Conservative, Westlock—St. Paul, AB]

Madam Chair, first I would like to thank the minister for appearing today. I have been a member of the standing committee for the last couple of years, and he has been very accessible to us.

I come from a strong agricultural riding. My province's premier has taken a very bold stance when it comes to traceability and age verification. Alberta was way ahead of the country and the world when it came to this. I would like to ask the minister about the importance he sees in age verification, traceability and how important he feels it is in moving forward to open new markets.

The committee is now discussing the issue of competitiveness and many people from industry have come forward to ask us to move forward on this as well.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, that is such a great question because as we do build the volumes going out, we have to address what customers are asking for. The Pacific Rim countries are saying that they are looking for age verification so they can sell that great product in their countries of record.

Having said that, we are a national government. We want to make sure we have national standards. We do not want to see one province moving ahead of others. I certainly welcome the time that Alberta has put into this because it does have some 45% of the beef herd, and so I welcome that intervention.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Madam Chair, I must say that there is one thing I am delighted with tonight. However, I will immediately reassure my colleagues, it is not the contents of the minister's speech. I am delighted because, for once, the minister will have to give me an answer. For quite some time, actually several months, I have been asking him questions in the House about Quebec agriculture and the Minister of State (Agriculture) has been answering for him. I would say to the minister that, in all honesty, Quebec farmers feel that they have been abandoned by the real Minister of Agriculture. This evening, he will have no choice but to give me an answer.

When I stated that I was not delighted with his speech, it is because once again he made an optimistic speech in which he attempted to sell us his policies and vision for agriculture. This is the government approach to most issues: it packages them and attempts to sell them with some marketing. We know that they use negative advertising to attack their opponents. We know that they also use marketing to try to sell their policies.

That is exactly what happened before the budget. The minister will no doubt recall that he made a public announcement before the budget. I did not think that was allowed, but many ministers made announcements concerning their respective portfolios before the budget, completely divulging the contents of the budget and its various aspects. This minster also did the same thing with the program they had the nerve to call AgriFlex.

For some time now, the provinces have been asking for greater flexibility in the programs. Quebec did, as did the Union des producteurs agricoles, of course, and so did all of Canada. The Canadian Federation of Agriculture, and particularly the grain producers of Quebec and Ontario, were asking for this kind of program.

The minister managed to make the front page of certain agricultural newspapers, announcing that there would be a new program, the AgriFlex program. However, as I always say—and as I told journalists after we all saw the budget and of course noticed the major shortfalls in that announcement—the devil is in the details. There were no income security support measures. It was not at all what all the farmers were expecting. What they wanted was a real, flexible program to meet the needs of the provinces.

First of all, can the minister explain to me why his program has been reduced from $500 million over four years, as promised, to $500 million over five years? How is that only $190 million in new money was injected into the program? So the rest will come from the department. Is the minister going to make cuts somewhere? I would like to know, and our farmers would also like to know. Where will he cut in order to find the money needed, that is, the $310 million that is lacking?

Can the minister also tell me why he did not include farm income support? How could he have possibly believed that that would be accepted? Once the marketing is done and something is passed off as “new and improved”, once people buy the product, see what it really is and taste it, in my opinion, whoever produced it could face some problems, because the consumer is not going to be happy. That is exactly what happened with this. Those are my questions for the minister at this time.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, there were a number of issues. I certainly act with respect toward the member opposite. When my colleague the Minister of State for Agriculture, also the Minister of National Revenue, which is a great combination, answers questions in question period, he respects the francophone language and so forth. He does a tremendous job representing agriculture producers in Quebec and the rest of Canada in his role, as I feel I do in my federal role as well.

We meet constantly with farm groups from Quebec. I had a meeting a short time ago with Christian Lacasse, the leader of the UPA in Quebec. I met a few days ago with Laurent Pellerin, who is with the Canadian Federation of Agriculture. I meet all the time with the province's minister, Laurent Lessard, who was reinstated in his position after the election in Quebec. It was a tremendous opportunity to work with him again. He is a solid man and very much onside with Quebec agriculture.

I am not sure what the member opposite is talking about. Various members of our government have hosted a number of round tables in Quebec. We are fortunate to have tremendously strong representation from rural Canada. We have the numbers and we have the background. We have producers in this place who make the necessary changes to ensure the farm gate is secure.

We do not see provincial lines maybe the same as the Bloc does. We try to develop programs that are fair and reasonable and work well across the country.

The member specifically talked about agricultural flexibility and the budget. It should have come as no surprise to him or anyone else because that was a campaign pledge. This government is nothing if not solid and secure in following through on what we say we are going to do.

We said we were going to discount the GST, and we have done that. I had a schedule. It is down two points. When we talk about tax cuts, that is great news for farmers because they pay taxes too.

It should come as no surprise for the member opposite that we followed through on agricultural flexibility. We had some discussions with industry groups. There are certain ones that want to see that dumped in on top of the business risk suite, but there is no need to do that. We have a tremendous suite of programs, under business risk, that will trigger in when farmers need it the most. We have seen that happen.

We needed a proactive pillar, and that is what agricultural flexibility is. It will commercialize good ideas, find new ways to push innovation and cut input costs, all those great things that farmers have asked us to do but were never able to fund under the old suite of programs, which were so narrowly focused under the APF.

Under growing forward, we have the reactive programming. Under agricultural flexibility, we will have the proactive programming to help farmers move forward.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Madam Chair, I am stunned to hear the minister say that he does not know what I am talking about. What I am saying is very clear. I am simply saying that his government did not keep its promises.

I do not know where he was during the election campaign. The Prime Minister's office had likely asked him not to show his face too much because of the listeriosis crisis. But his party, the Conservative Party, had promised to introduced a real, flexible program for Quebec and the provinces, which the Canadian Federation of Agriculture and the UPA had called for.

He can meet with Christian Lacasse. I meet with him as well, and I am certain that my colleagues in the other parties meet with him too, just as we meet with representatives of farm producers everywhere, in all sectors. What did Christian Lacasse say after the budget was passed? What did he say when the government failed to keep its promise to introduce a flexible program, which the minister dared call AgriFlex in his budget? He said:

By excluding income support measures, where the need is greatest, the government is completely changing a program that was supposed to be flexible. A program that each province can adapt to its own particular agricultural reality is obviously a good thing, but it must be properly funded and targeted.

Christian Lacasse said that not long ago, on January 27, 2009. The minister can meet with him. Even though I will not be at the meeting, I am sure that Mr. Lacasse will remind him that he did not keep his promise.

My question is as follows. I will repeat it, because he says he does not know what I am talking about. When will there be a real, flexible program that includes risk management? It should not be excluded, which is what the minister did. Why did he exclude it? He did not tell me that either. When will the Conservatives keep the promise they made during the election campaign, just before they brought down the budget? When the budget was brought down, it no longer included the necessary measures.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, the member opposite made a comment about me disappearing during the election, but I remember being part of a debate. The Canadian Federation of Agriculture put on a tremendous debate every election. We had that down the street at the Chateau. I was on the panel for some two, two and a half, hours, but I do not remember the Bloc having a representative there at all. The member should be careful to whom he points his finger.

Talking about the future of agriculture, as the member opposite did, there are two different ways to approach it. The one way is to keep farmers reliant on the mailbox. That is not what they want. What they want is a full blown, market access type of situation. They want to access that and they want to do it in a proactive way, with the new innovative ways with which farmers come up.

Farmers are nothing, if not good stewards of the land. They produce the safest, most secure food supply in the world, bar none. We will all agree on that. I think all of us support agriculture in our own way.

That is the great thing about democracy. There is always divergence of opinions, but there is a convergence of what needs to be done.

I take what the member opposite said, but I know when he talks directly to farmers in Quebec, as do many of my colleagues who represent farmers in Quebec, he will also hear the other side of the coin. They are happy to see a government get past the old ideas of sending them a cheque to keep them in mediocrity, allowing them, in our programming, to break the mould and get out in the world with some new innovative ideas. We are constantly doing that. We are helping farmers get their feet under themselves, not forcing them to take that cheque from the mailbox and holding them back.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Madam Chair, the assistance program for slaughterhouses for ruminants is another unkept promise. I have a couple of very precise and very simple questions for the minister. When will there be a decision on the parameters for the $50 million program announced in the 2009 budget?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, we are busy working on that now. We have had a number of applications. We are working on those types of situations and we will roll it out very shortly.

There is a process that is required to move money from a government with due diligence. The unfortunate part is the Bloc constantly blocks or does not support those types of programs. Therefore, I am not sure how the member has any kind of credibility when he stands and asks us where his money is from that program. All he has done to date is vote against it.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Madam Chair, I would remind the minister that, in many cases, the Bloc Québécois does support government measures or ones from the other opposition parties. Very recently, we passed Bill C-29, which is so dear to the heart of the Prime Minister that once again he made an announcement before it was passed by the House. That is funny, because in committee today the Conservative members sabotaged the clause by clause study; it did not even take place. The minister will have to explain that to the farmers. The Prime Minister himself was singing the praises of this bill to them and I would point out again that the Bloc Québécois was absolutely in favour of it.

The same thing happened when it came time to help the swine producers and livestock producers in general. A week after the minister introduced Bill C-44, not only did the Bloc Québécois vote in favour of it, but we initiated an emergency debate in the House to help those people out. A week after that, the minister came along with Bill C-44. I even had the opportunity to speak with him about it and we were in agreement.

It is wrong to say that the Bloc is always opposed to everything and that it blocks every bill. The Conservatives can do what they did in the last election campaign, travel around in a bus and badmouth the Bloc, but we saw the election results.

I have one more question, and it concerns Levinoff-Colbex. Will the minister make sure that this company receives its fair share of the $50 million they announced for the slaughter industry?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, the member opposite brings up Bill C-29 and he makes a good point that it was Shanghaied at committee. I can assure members that we are very serious about getting this through, ensuring that $1 billion in new credit, especially for new, beginning farmers, gets out there. We have been told that some new farmers in Quebec want to take advantage of this.

I am not sure what bus the member opposite is talking about. I do not remember being on a bus during the election at all, let alone being on a bus in Quebec. However, the point I made about the Bloc is that those members run hot and cold on certain issues, but at the end of the day, they have not supported the budget which would flow the money and make it accessible to Levinoff-Colbex and everybody else across the country.

Certainly we are aware of the situation at Levinoff-Colbex and we are working with it. It would have been a lot easier to get that job done earlier if members of the Bloc would have supported the budget, got it to committee, got the job done, instead of always being an anchor. I wish they would get out in front and help us every once in a while.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Madam Chair, he cannot say that the budget was not passed and the Bloc Québécois is to blame for everything. It is unfortunate, but the budget did pass, as I recall.

It is completely ridiculous to say that the $50 million is not yet in place and in force. Furthermore, the minister did not keep his promises. When he announced the $50 million for the slaughter industry, it was definitely not a question of loans. Now farmers in Quebec, who just put $30 million into their slaughterhouses, are being told that, actually, it will be a loan and not a subsidy. Many slaughterhouses across Canada managed to get subsidies, but Levinoff-Colbex never received a single red cent.

Can the minister stand up and tell us here this evening that the criteria will finally be defined and that Levinoff-Colbex will get its fair share of the pie?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, the member opposite is certainly mixing a lot of different issues. Personally I am not aware of any slaughter house that received a subsidy. Under the former Liberal government program, it would have to go broke in order to trigger some money. That is what the Liberals put forward during the BSE crisis, which was not helpful to anyone. It did back stop the banks, which maybe was the intention of the Liberals all along. I do not know.

We are looking very seriously at slaughter capacity across our great country. We will work hand in hand with Levinoff-Colbex to make sure it stays alive. It serves a tremendous area in Quebec and eastern Canada. It deserves every chance to maintain what it is doing.

There is a little side issue that happened when we, as a government, worked hard to get Rule 2 into the United States. That means cattle over 30 months had access to the border south and that drove the price up, and this is affecting it.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Madam Chair, could the minister talk a little about the cattle industry? We have had some questions on that and I will continue. Hopefully I will be quick and precise and we can get some precise answers.

Many people have tried to analyze why there is a crisis in the cattle industry. We have many reports and many people meeting at committee. A report by the National Farmer Union contained a number of recommendations, and I personally handed it to the minister .

One of the recommendations is we should probably look at doing away with it captive supply, which is apparently happening in the United States. Is there consideration for this?

According to the report, although exports have tripled in the last 20 years, the money that cattle producers are making is less than half of what they made 20 years ago, yet we are exporting more and we are opening up more markets. I will give the minister and the department credit for that. We need to open up more markets, but there is obviously something else happening as to why producers are not making money. Is the minister looking at other alternatives?

My next question is this. We keep talking about the COOL and the regulations the Americans are enforcing. We are doing our best to try to resolve that situation. I often ask, what if? Do we have a plan B if ultimately at the end of the day the Americans do not budge on their COOL regulations? We need to have some kind of other plan.

Tied in with this are the slaughter houses, the money available and the programs that happen in provinces. In my province of British Columbia a lot of small producers have been hit hard because of the standardization and the pressure they perceive comes from CFIA and the federal government. Is there any thought at looking at some flexibility for small producers, which we can pass on to the provinces?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, what the member means by captive supply is that cattle are owned by the facility that ultimately is going to slaughter and sell them.

They do have a situation in the U.S. that they are addressing at this time. We do not have that situation in Canada. With the dissolution of Tyson at Brooks, Alberta, which had a 75,000-head feedlot that it filled or did not fill depending upon volumes and accessibility, this was very much checked, audited , looking at where the money went and so forth, after BSE, and it was found that it did not use that in a captive supply way.

Having said that, I know Cargill does offer a bonus. It contracts with farmers to get certain marbling, size and so forth, and that gives those farmers a premium. That is the good thing that happens when a processor works with producers.

In Alberta and some of the industry in western Canada, they are working to have better records from the slaughter facility that will redirect producers to grow better beef. I think that is a holistic approach to what is required.

I did read the NFU report, and I had the same feeling about that report as the Canadian Cattlemen's Association. The end result might have been workable, but how they got there is not. It requires a rationalization of the industry that would take out every small town that has a beef operation anywhere near it. It would take out all the farm machinery dealerships. There would be collateral damage that was not in the report. We will not go there. This is a market-driven industry.

The member is right to point out the problems, the trials and tribulations that country of origin labelling is giving, especially in our livestock sector. This is not for the processed beef; this is directed at the live beef that goes south.

It is a huge problem for the American industry as well, because they rely on a good percentage of solid Canadian product going there to give them a solid bottom line. They are as upset as we are. We are working on the American administration, from both sides, to make positive change.

[The Deputy Chair, NDP, Denise Savoie]

I am sorry to interrupt the minister, but I have said that the duration of the answer must correspond approximately to that of the question. I appreciate that the member has been doing a great job.

The hon. member for British Columbia Southern Interior.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Madam Chair, although we are working toward resolving this, is there a plan B if that program does not get resolved?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Chair, plan B is to open other markets, and we have been doing that.

With Hong Kong, it is about the offcuts we do not eat here. We love our T-bones and our rump roasts, but we do not do much with the stomachs, the tongues, the livers and so on. The idea of getting into these other markets is to bring value back into that Canadian carcass.

One other question was what we are doing with the CFIA to ensure it is a parallel to what the USDA and other markets around the world do. Last year we identified $20 million for where we could make some changes, and we have done that.