Mr. Speaker, I would like to thank the members opposite for keeping the agriculture sector at the forefront of discussion because that is where it belongs.
I had the pleasure in the last few months, after taking on this job, of getting out to the west. I met with farm groups in Regina. I also met with quite a few farmers; I think there were 1,000 at a meeting in Edmonton. It is a great area out there for growing crops.
We had a take note debate three weeks ago and I am pleased that we are concentrating on agriculture once again this morning. Agriculture should be in the headlines every day because it is one of Canada's most important economic drivers. It generates more than 8% of Canada's GDP. It creates jobs for thousands of Canadians and it puts food on our tables. It is vital to the health and well-being of Canadians.
Over the last two and a half months the minister has been making every effort to visit with farmers across this country to hear their concerns and discuss with them the best way to meet the immediate and long term challenges. In fact this morning he is meeting with the Canadian Federation of Agriculture, which represents 200,000 farm families across this country. As he will tell them, the government is committed to agriculture. The government is committed to getting agriculture through its current difficulties, to seize the opportunities that are out there.
There is no question that agriculture is under a lot of pressure right now. In 2003 the Canadian farm income was at its lowest level ever. Commodity prices for beef, of course, as well as for pork and potatoes are down. There are a number of factors to blame on this situation. BSE is first and foremost. There is the strong Canadian dollar, the ongoing effects of the drought situation, and our import costs which have become higher.
The federal and provincial governments responded to the income drop of 2003. We had record payouts of up to $5 billion. This included $3 billion for crop insurance. We have NISA and CFIP, and an additional $800 million for the BSE recovery program.
Despite these record payouts, the situation still is not good. Many farm families continue to suffer serious cash flow difficulties. The government has brought forward some specific measures to address this situation but we still have to do more.
First and foremost, the Canadian agricultural income stabilization program is now operational. It is also known as the CAIS program and this year it is expected to make significant payouts. There is also the cull cow program which is going to be rolling out soon. I will talk a little more about some ways we are working with the industry to make these programs as responsive as possible to the financial pressures that are on farm families. The government is working on a number of fronts to secure a strong future in this industry.
The minister just returned from Costa Rica and he was not laying in the sun. He was meeting with the Cairns Group, which is comprised of trading nations like Canada that share the same common interests. We are exporting nations of agricultural products and we are trying to improve the trading conditions for our export products on which our sectors rely for growth.
Canadian farms can compete with the best. All they need is a level playing field for the minister to build broader support for fair and more market driven agricultural trade. While he was there he also talked to the CFA and the Dairy Farmers of Canada. He took advantage of the opportunity to meet with other ministers, update them on the BSE situation, and press for the reopening of markets for cattle and beef.
At Cairns he had productive discussions on the WTO process. He met with WTO officials. The minister stressed to them Canada's position that a balanced, rules based approach to negotiations is the best way to move forward. He also pressed for more movement on the question of cuts to trade-distorting domestic subsidies. He insisted that the United States and the European Union need to send clearer signals that they are willing to move forward on this front.
Canada is committed to working with Canadian farm leadership to achieve a deal that is in the best interests of our farmers. At this time Canada continues to stand four square behind supply management sectors and the right of producers to choose how they market their products. This includes the Canadian Wheat Board which was just raised.
The Government of Canada has consistently defended practices of the Wheat Board and will continue to do so. I was delighted earlier this month that the WTO panel ruled that the board in fact does conduct its business in accordance with WTO rules.
The most pressing trade issue facing the industry is BSE. The focus of government and industry efforts has been, and remains, to open borders to cattle and other affected animals. This affects more than cattle. It affects sheep. It also affects deer, llamas, alpacas and many other different animals in the same category.
Our efforts are bearing fruit. I have to commend some of the opposition members for helping us with that, going on trade missions and whatnot. Since last May a number of countries have moved to rescind some or all of the temporary measures. Clearly, more must be done and we are committed to getting there.
As to getting cattle moving into the United States, the rule for live animals is expected to be opened up for a 30 day public comment period. We will push for trade of all live cattle regardless of age, including breeding cattle and cattle over 30 months old, as well as products derived from them. We are also pressing for a full resumption of trade in other ruminants, as I said before, sheep, goats and others.
Once the review of the comments received is complete--and this is a process which has to take place; we have no choice--the Americans will look at that information. I am confident, as this is scientific based, that they will move toward opening the borders to live animals as they have already done with the beef cuts. It is hoped that a growing number of trading partners will follow suit.
Why am I optimistic? Because there is a strong argument that Canada has put forward in favour of opening the border to live animals; because the BSE risk in Canada is exactly the same as in the United States; and finally, because both countries have taken equivalent measures to mitigate the risk for human and animal health. It is a transparent border.
When will it be? As I have said, I hope it is sooner rather than later. We have cattle on our farms ourselves and we are waiting for that day to come. One thing I do know is that the Government of Canada takes this very seriously. The minister is working tirelessly on this issue, as is the Deputy Prime Minister. The Prime Minister is deeply engaged in this issue as well. It was the top issue he brought up with President Bush. Both the Prime Minister and I have been out, as I said before, to western Canada to discuss the situation with producers. The minister has raised this matter with the U.S. ambassador to Canada, Paul Cellucci. He is also in regular contact with American Secretary of Agriculture Veneman and with Secretary Thompson on the health side.
While work continues on the trade front, the government is fully aware of the pressures on Canadian farm families. Governments have responded to these pressures above and beyond existing safety net programs, with $520 million in the BSE recovery program and up to $200 million going out to the cull animal program.
In response to concerns from industry, we have removed the sale for slaughter requirement from the cull program. This will allow producers to access funds even sooner. It will ensure equal access across Canada and it will help with feed costs until more slaughter space is available. This will help a lot of dairy farmers also. Often people think that only the beef farmers are hit, but it is the dairy producers also. This is a good program for them. A comparable program is being offered to producers of other ruminants affected by the border closure.
Farmers are also receiving money through the second portion of the $1.2 billion in transition funding. Already cheques for more than $450 million have gone out. As I mentioned, Canadian agricultural income stabilization is now operational and payments are expected to start flowing within weeks. I think $15 million already went out in January.
With CAIS, for the first time ever, Canadian farmers will have permanent funding for disaster coverage. Without going into too much detail, the program protects a producer's margin, which is the average of revenues over the last many years minus variable expenses such as farm inputs. When the producer's current year margin drops below the reference margin, money kicks in for him.
The key point is that the coverage will be based on need. In other words, as the loss gets bigger, the government supports it more. This allows farmers to know in advance what the support will be to better plan for the future.
CAIS is a good program but at the same time we are working with the industry to make it better. A few weeks ago the minister announced the government was giving some breathing room for producers in rolling back the deposit deadline to December 31 of this year. Farmers also have until April 30 to select a protection level for both the 2003 and 2004 production years.
These changes apply only to those provisions where CAIS is delivered federally. Some provinces deliver their own program. They are made on the expectation that the remaining provinces will sign on with new features that we are going to be proposing to CAIS, namely, and which many are looking for, coverage of negative margins--if a producer goes below that margin, it will kick in--as well as higher caps and a more simplified deposit.
Beyond the intermediate term the minister is fully committed to ensuring that CAIS and all programs under our policy framework continue to fulfill the needs of farmers. To that end we are in the process of putting together the structure of an annual review to look at the business risk management program with all facets of the APF. We are constantly working with the industry, revising the program, revisiting it, but I think right now we have a good one in the process. Apart from business risk management, work continues around the other chapters of the APF.
In closing, I want to assure the House that we are committed heart and soul to do what it takes to help this industry get through this difficult time so we can capture the opportunities that are out there.
There are opportunities such as ethanol. Two weeks ago the minister joined with the Minister of Natural Resources to announce approval of seven new ethanol projects across Canada under the ethanol expansion program. These projects will allow Canadian ethanol production to grow roughly one billion litres of fuel ethanol within two years. That means adding value to farm crops. It means new markets for farmers, new jobs for rural Canada and it means a cleaner and greener future for all Canadians.
That is the kind of opportunity that is out there for Canadian agriculture. That is why it is so urgent that we get this sector back on track right where it was and right where it belongs.
