moved that Bill C-49, an act to amend the Department of Agriculture Act and to amend or repeal certain other acts, be read the second time and referred to a committee.
Mr. Speaker, I am pleased to rise today to begin the debate on Bill C-49, an act to amend the Department of Agriculture Act and to make related amendments to other acts.
In some ways this bill is a reflection of the kinds of changes the Canadian agriculture and agri-food industry has undergone in recent years and can anticipate in future years.
The amendments add the word "agri-food" to the department's name, reflecting a recognition that the department's mandate extends far beyond the farm gate. This change also reflects a recognition that what happens on the farm and beyond the farm gate are intimately linked together. The strength of primary agriculture depends to a great extent on the strength of all those downstream in the food chain who process and use agricultural products.
The bill also defines more precisely the department's responsibilities for research. The existing act only mentions research indirectly through a reference to experimental farm stations. This bill broadens the definition to cover research related to agriculture and products derived from agriculture, including the operation of experimental farm stations.
This clarification of the mandate of the department in no way takes away from this government's commitment to Canadian farmers as primary producers. In fact it strengthens it by ensuring that the importance of maintaining and nurturing the health and prosperity of the entire agriculture and agri-food industry is upheld.
Farmers are and will always be at the centre of the agriculture industry. As such the department will continue to devote a very large amount of its resources to farmers. In addition, there is a growing need to be aware of the products of Canadian agri-food processors. More and more we must be aware that market development is important not just for raw commodities but increasingly for value added products.
There are opportunities for the agriculture industry to provide ingredients for pharmaceuticals, cosmetics, paints and energy products, in addition to food products. More and more we must be assured that the systems are in place to produce those products and to ensure they reach their market destinations.
Before that process even begins we must ensure that the kinds of crops and livestock demanded by these markets are being produced and we must ensure that the research and technology are there to transform those crops and livestock into the processed products in demand worldwide. That is where the department's research function comes into play, both in developing the commodities that form the basis of the industry and in pioneering new uses for them.
The research branch of the department has been conducting research to the benefit of both the primary and secondary agriculture industries for many, many years and with great distinction. The changes in this bill merely reflect that ongoing work in the definition of the department's responsibilities for research.
It is fitting to be talking about the mandate of the Department of Agriculture and Agri-food at this time. As we approach the beginning of a new century it is time to take a look at where we would like Canada's agriculture and agri-food industry to be in the years 2000, 2005 and 2010.
This industry is a very important one to this nation. It represents 8 per cent of Canada's gross domestic product and accounts for 1.8 million Canadian jobs. That is 15 per cent of all of the employment in this country. Agricultural and agri-food exports equal more than $13 billion annually. In 1992 farm inputs valued at $10.5 billion translated into farm products worth $20 billion. That translated into a further $44 billion worth of processed food and beverage products.
The agriculture and agri-food sector enhances the quality of life in both rural and urban Canada. It ensures a safe, high quality food supply. Because of Canada's agriculture and agri-food sector, in comparison to the rest of the world Canadians spend the second lowest proportion of their disposable incomes on food.
It is important to ensure that the success of this industry so vital to all Canadians continues. Canada's agriculture and agri-food industry must be able to compete in a rapidly changing world. A common vision is needed, shared by government and industry, to take the agriculture and agri-food sector into the 21st century. In that way we will together be able to make the kinds of decisions necessary to secure our future.
The world in which Canada's agriculture and agri-food industry does business is not the same today as it was 25 years ago or 10 years ago or even 5 years ago. For example, in the grains and oilseeds sector alone markets for Canadian products have changed dramatically. It was not all that long ago that we depended upon traditional billion dollar bulk grain markets in places like the former Soviet Union and China.
Many of those markets have been replaced by more varied and somewhat smaller and more individual markets. Customers now more and more are buying to exacting specifications. Our U.S. market has grown to almost 60 per cent of agri-food exports so far this year.
By the year 2010 rural population is expected to increase by another two billion people. Over the next five years incomes in regions like Asia and the Pacific are expected to rise by 6 per cent to 12 per cent per year. Incomes are also expected to rise in areas such as Africa, Latin America and the Middle East.
With these increases in income and the changes in the quality of life that it brings, there will be a shift in global consumption patterns to more animal protein products and more highly processed food products than ever before. At the same time, key export markets such as the United States remain crucial to the continued growth and development of our industry here in Canada.
On the domestic side we are also confronted with changing marketplaces and fiscal constraints on federal and provincial budgets. Is the Canadian agriculture and agri-food sector ready to respond to changing demands internationally? Is it ready to respond to changing imperatives on the domestic front?
The industry is strong in a great many ways. The value of agricultural output continues to increase by about 2 per cent annually. Productivity growth rates are high by international standards. Many processing firms are shifting to focus more and more on world markets.
Canada's agriculture and agri-food industry has a solid basis in abundant natural resources and sound environmental practices, is productive in skilled human resources, has a well developed infrastructure and institutions and a reasonably stable operating environment. However, there are areas where we must do better.
Right now Canada has higher processing and marketing costs and less private sector research than many of our major competitors. Although Canada is exporting more of our higher valued agri-food products to the United States, our imports are growing faster than our exports and we are missing opportunities for marketing higher valued agri-food products. There is little growth in our exports of higher valued products to countries other than the United States, in particular to Asian markets where standards of living and demand are growing rapidly.
In 1993 our agricultural private sector, supported by federal and provincial ministers of agriculture, set a target for agriculture and agri-food exports of $20 billion by the year 2000. To achieve that goal, industry and federal and provincial governments will need to work harder to meet the challenges of the global marketplace.
Right now our growth rate in agri-food exports is not sufficient to meet that target of $20 billion by the year 2000. Change is needed if the Canadian agriculture and agri-food industry is to grow and prosper into the next century.
If we look at the grains and oilseeds sector as an example, it is clear that change is beginning to take place. Farmers are beginning to diversify out of traditional crops such as wheat and into more new crops such as mustard seed, canary seed, lentils and especially canola.
Acreage of specialty crops grew almost 130 per cent in the period from 1988 to 1994. At the same time acreage of wheat fell by about 15 per cent. With farmers beginning to diversify out of traditional crops, new demands and challenges are being placed on our grain handling and transportation system as these different crops are moved into export position.
In the last crop year, as we all know, we experienced some very serious problems with moving grains and oilseeds partly due to a rail car shortage and a number of other factors that conspired together at the same time. Those issues, as I have discussed in the House on other occasions, are being dealt with so that the kinds of problems experienced in the last crop year can be avoided to the largest extent humanly possible in the current crop year and into the future.
The whole experience with our grain handling and transportation system brings into focus the question of whether the system in Canada is sufficiently equipped to meet the demands of a rapidly changing international marketplace.
On another front we have to look at technology and we have to ensure that Canada is not being left behind. For example, non-food uses for grains, oilseeds and other agricultural products are expected to rise dramatically in the years immediately ahead. Forecasts in the United States and Europe predict that up to 50 per cent of raw agricultural materials will be used in the future for non-food industrial purposes.
Is Canada investing sufficiently in the kinds of research required to develop new products from our grains, our oilseeds and our other agricultural output?
There are many other issues on the agenda with respect to the renewal of our supply management systems, with respect to our red meat sector, with respect to horticulture issues and with respect to challenges affecting the broad spectrum of Canadian agriculture.
Clearly, as we face all the issues and challenges that provide us at the same time with enormous opportunity, we must develop a common vision to ensure the decisions taken today and the initiatives undertaken in the future are part of a comprehensive long term plan for a progressive, competitive and successful agriculture and agri-food sector.
I believe such a vision for the future must include at least five key elements. First it must be founded on economic reality. If the base is artificial then the plan will soon collapse.
The fundamental reality is the marketplace. We must produce what the world wants to buy. We must do it cost effectively. We must diversify. We must be good managers and world class marketers. We must build strategic alliances internally and internationally. We must ensure that the benefits flow fairly among all our regions and all the players in that complicated food chain.
Second, our vision must recognize that rural Canada is not a backwater. It can in fact be the location of wealth generation, economic growth and new jobs.
Diversification on and off the farm, value added processing, and niche marketing including exports, are all part of the equation for rural Canada, as are research and development and information technology to link the kitchen table in Sedley, Saskatchewan, to Toronto and Vancouver and indeed Osaka and Hong Kong.
A third requirement for our vision is financial security. I have not met a farmer yet who tells me that he or she wants subsidization. What they want is a decent marketplace with a decent return.
Well managed farms should expect a reasonable rate of return even though in some cases it may be supplemented by some amount of off farm income. The weather and other production and marketing risks will always necessitate a farm safety net program, but federal and provincial tax dollars are scarce and support in the form of safety nets must not distort production or marketing signals.
Fourth, we must achieve resource and environmental sustainability. We need a sensitive and sensible balance among social, economic and environmental considerations founded on enhancing our resource base, maintaining surrounding ecosystems, and developing, adapting and marketing new technologies to protect our environment. Our environmental stewardship could become a unique new Canadian export opportunity.
The fifth and final element in this vision that I would mention at the moment is the maintenance of a safe and secure food supply. That is really the foundation upon which everything else rests. Food safety has been and must continue to be a priority in and for Canada. Our reputation for safety and quality is vital to our domestic consumers and is a critical advantage in the international marketplace.
We must reduce our inspection costs while not impairing but rather enhancing our inspection system overall. That can be achieved by a national, non-duplicative system tuned to market requirements and international standards with alternative delivery options.
What I have mentioned in the last few moments is a framework in which I believe we can structure a sound and solid game plan for the Canadian agriculture and agri-food sector. It is not yet all inclusive and it is certainly not cast in stone, but I think it is a basis upon which to begin.
We cannot foretell the future. Neither can we forestall it. What we must do is define our best case scenario, where we really want to get to, and set out the steps needed to make that outcome most likely. I hope we can do it with the largest degree of consensus and teamwork.
I close by saying I am extremely confident about Canada's agri-food sector and I am very ambitious about its future. There are no guarantees but as Wayne Gretzky once said, you will miss 100 per cent of the shots you never take. We need to start shooting the puck at the net and we need to score. That is what this vision for the future of Canadian agriculture is intended to achieve.
With a strong market orientation and the careful use of scarce tax dollars, with diversification, innovation and value added, with thoughtful stewardship of our natural resources, with the enhancement of our human resources, with a sharp focus on rural Canada and local communities, with high international standards and a cohesive team Canada attitude we can meet the objectives outlined in our red book last year about growth, jobs and security. Agriculture and agri-food can play a very large role.
