Mr. Speaker, my colleagues have spoken at some length on the big agricultural picture. Others will probably do so. I will address a very specific problem which the government could solve quickly with a few strokes of the pen at no cost to the general public.
If the government would remove some of the obstacles it has created to value added activity, there would be immediate measurable benefits to prairie agriculture. I am not referring only to the onerous payroll taxes. These are not specific to agriculture when they are the bane of all entrepreneurs, not just farmers or farm enterprises.
I am referring to the requirement that grain used in production of food for export out of its province of origin is subject to the same freight and elevation charges as grain shipped to port position. This bizarre situation is actively hindering economic diversification and benefiting overseas processors of our grains.
Excessive freight and handling charges are the largest single component of a grain farmer's production costs. With the Crow benefit gone the prairie grain industry's best hope for long term survival is to get away from the century old mentality of exporting, to process more grain at home and to export more finished product.
Paying $30 or $35 a tonne to move a lesser quantity of high value finished product makes a lot more economic sense than shipping raw material to port position. The federal government does not force mining companies to ship unmilled ore or logging companies to ship only logs, although I would say that with the abysmally stupid softwood lumber agreement they are not allowed to add value beyond sawn lumber for the U.S. market. Sometimes I wonder whose side the government is on, but that is another debate for another day.
After a producer has paid the cost of trucking grain to a miller or maltster, which in some instances may be 200 or 300 kilometres from the farm, there is no logic or justification for hitting him with freight, elevation and terminal charges. Where is the incentive to deliver to a domestic facility when merely delivering the grain to the local elevator through the CWB for export, as is, gives the same net return?
The government rationalizes that the price received, for example, at the malting facilities at Biggar, Saskatchewan, has all the freight and handling charges built in and that the deduction is therefore only a bookkeeping exercise.
That is utter nonsense. To be sure, without government intervention through the board the market price in Biggar would probably, as the minister loves to reiterate, be lower than the Vancouver price including freight and elevation. Would it be $45 a tonne less? The maltsters' freight costs for exports are based on the quantity of product, not on the quantity of raw barley used in the process.
By the way did you know, Mr. Speaker, that a farmer receives six-tenths of one cent for the barley used to produce a bottle of beer? I thought I would just throw that in for your information. The minister himself stated three years ago:
As the cost of shipping raw unprocessed grain increases, the wisdom of shipping possibly lower volume but higher value processed grain product also increases. By further processing on the prairies the proportion of the value of the commodity which is spent on transportation is reduced, thereby improving returns to the local economy.
I could not have said it better. If the minister really believes what he said, why has he not initiated changes to the constipating regulations and enabled producers to benefit from that exercise? Obviously it would be nearly impossible to market all our export grain as pasta, flour or malt, but any significant increase would help to move us away from being hewers of wood and drawers of water.
Three years ago the minister's grain marketing panel recommended that organically produced grain be removed from board control. Polls have shown that the majority of board supporters would support that. Neither the board nor grain companies provide any service to organic farmers who must personally market and arrange shipment of bagged grain or flour, mostly for the yuppie market in the United States. Nevertheless their production is subject to the board's buyback provisions.
For example, Arnold Schmidt of Fox Valley, Saskatchewan, has been producing exceptionally high quality organically grown wheat for more than 10 years. There is a high demand for the raw grain and the flour milled on his farm. By the way, he employs five people in his operation to upgrade his product. There is high demand for his product not only in Canada but in the United States where it sells at a very good premium price. He never gets to see one penny of the premium because it is forcibly extracted from him for services that he does not receive.
To consummate a sale into the U.S., Mr. Schmidt is first required to go through the charade of selling to the wheat board. The grain does not actually pass through a grain elevator because even the slightest contamination by other grain would destroy its premium value. Nevertheless he has to pay the grain company about $200 for doing the government paperwork on a 20 tonne shipment. Then he pays the board a buyback premium of $2 a bushel.
Levying a huge charge for which the farmer receives absolutely nothing can only be described as extortion. When organized crime engages in activities of this nature the perpetrators sometimes go to prison, but for organic farmers the situation is reversed. Confiscation of the fruits of their labour by busy little bureaucrats is protected and enforced by the majesty of the law, but a producer who resists is subject to heavy fines. It is no wonder that the business of supplying certified organically grown wheat to the U.S. specialty market is stagnating when it could and should be the bright spot in our otherwise dismal agricultural picture.
Our trade competitors are giving their farmers multibillion dollar subsidies, and we are not asking for that. We know that Canada with its feeble economy could not possibly sustain a trade war with the economic giants with whom we have to compete. Only the Minister of Canadian Heritage is silly enough to think that we could do that. We are asking that the government stop beating up on the agricultural industry through its discriminatory regulations.
Farmers cannot fight on two fronts. They cannot simultaneously fight their foreign competitors and resist the encroachment of their own government into their operations.
