Mr. Speaker, thank you very much for the opportunity to speak to the bill. Farm Credit Corporation has been very successful across the country and it certainly looks forward to working even more for the benefit of the farmers and the primary producers.
I will take a moment to note that I was very glad to hear that at committee in the past week or two one of my colleagues from the Alliance Party put the fact on the table that the Standing Committee on Agriculture and Agri-Food still has the reputation of getting along better for all the right reasons than any other committee, in support of farmers across the country. I trust that we can work together in future in the same way.
I will speak to Motion No. 1. Farm Credit Corporation's proposed amendment in Bill C-25 is consistent with the current legislation, with the exception of the following add-on:
The primary focus of the activities of the Corporation shall be on farming operations including family farms.
Farm Credit Corporation held consultations on the future role of FCC with over 100 regional and national groups across the country, more than 100 farm and agribusiness organizations and all major financial organizations in each and every province, as well as institutions and provincial governments. Over 400 individuals participated in the consultation meetings across Canada.
Yes, concerns were expressed that Farm Credit Corporation's focus could be diverted from the primary producer. However the Canadian Federation of Agriculture appeared before the House of Commons standing committee in regard to the bill. The CFA represents some 220,000 Canadian family farms, many in your riding, Mr. Speaker. The CFA asked that FCC maintain the focus on the primary producer. That is what the bill would do. The CFA's exact words were:
We believe that primary producers must always have the first priority in accessing FCC financing.
To ensure that the corporation continues to meet the needs of primary producers, FCC formulated the wording of the clause in collaboration with the CFA's board of directors. The wording of the bill expresses the concerns of the CFA word for word. Let me repeat that it is word for word. The wording is:
The primary focus of activities of the Corporation shall be on farming operations including family farms.
FCC recognizes the necessity of serving farm related businesses to benefit producers and rural communities. The corporation's number one focus will continue to be primary production. Currently more than 90% of FCC's financing is directed to farming operations.
According to Statistics Canada, 98% of farms are family owned and operated. This means that the great majority of FCC services is directed to family farms and to farm families. For this reason it is very important that the bill go forward with the wording as proposed by the FCC.
Because of the importance of the family farm for the social and economic fabric of rural Canada, the words family farm were specified in the legislation. The government supports the new legislation as an important contribution to sustainable growth in rural Canada and recommends that Bill C-25 not be changed to remove the words family farms from the legislation.
No one definition exists in common usage that clearly defines the levels of business enterprise. The continued growth of the value added industry means that the definition of small and medium sized enterprises will continue to evolve. FCC's role is to provide an environment for the growth of the agricultural industry to occur by continuing to meet the needs of the industry.
FCC's lending limit established by the board of directors is currently $20 million and has been since 1995. Limits such as these clearly indicate that all FCC loans will be to small and medium sized businesses related to agriculture. It should also be noted that FCC's average mortgage loan size is $106,704 to primary producers and $498,909 to agribusiness clients. The average non-mortgage loan size for personal property loans is $31,000 to primary producers and $42,000 to alliance clients. There are currently no plans to increase this lending limit. In fact our emphasis has shifted over the past few years from doing full proposals on our own to joint financing with other institutions. Therefore, the government supports the legislation.
With regard to Motion No. 2, as introduced by the Canadian Alliance, it is too limiting. I was glad to hear that my colleague from Palliser agreed. More than 100 organizations across Canada also agreed. We cannot agree to Motion No. 2 because farming operations are growing more complex and the marketplace is more competitive. In order to achieve long term success, producers and farm related businesses need access to a broader range of business management services.
Services can be significantly different by geography, making it difficult to serve those who need a particular service not available from other institutions in any given area. As a national organization, the FCC can dedicate its efforts to delivering services where services are required.
During the consultation process, it was identified that there was a gap in business services in rural Canada. Certainly we all agree with that. The Canadian Young Farmers Forum enthusiastically endorsed FCC complimentary services on a fee basis, while several groups noted that the FCC does not provide services already being offered in the private sector. As a result of this input, Bill C-25 states that the FCC's intent is to provide business services and products that complement those available from the public and the private sectors.
The business management services that the FCC proposes would complement existing services, not compete directly with other providers. The FCC would work in partnership with existing service providers to increase access to business services through its network of 100 offices.
One of the strengths of the FCC is that most of the people who work with the farmers and the producers have a farming or a farm related background and do a great job across the country. The FCC only intends to offer business management services where a clear need is identified.
The FCC would work in partnership with public and private sector organizations, wherever possible, to enhance the product and service offerings available to rural Canada. The FCC has a memorandum of understanding with BDC and has 27 partnership agreements with public and private sector organizations.
Over time, financing needs of producers and farm related businesses change quickly. Private institutions respond to providing services based on the profitability of products which can change based on the number of clients in a particular area and the level of competition.
The government will not support Motion No. 2 because it is too limiting. The government and I appreciate the hard work of all our colleagues from all parties.
It is good to be able to say that we will support Motion No. 3 as moved by the Canadian Alliance.