International Trade committee  One of the hopes we have for the Market Access Secretariat would be that Canada would have a bit more of a coordinated agenda in dealing with trade access issues. It could be something as simple as an export certificate, the form that is recognized between the two countries as satisfying the importing country's requirement that food safety requirements have been met by the exporting country and recognized by the exporting country's food safety authority.

International Trade committee  May we just confirm, though, that we were willing to give some time, after that final rule was put out in January and before the Secretary of Agriculture indicated that he wanted this additional compliance, these additional steps, to see whether this would have corrected. We are looking for ways to practically change the system so that it reduces or largely eliminates this distortion, this cost discount, that's being applied now to our animals.

International Trade committee  I think traceability, as seen for some time as having more than just animal disease trace-back capabilities, is the thing that I guess is the most topical for livestock producers who depend on foreign market access and depend on the country being able to assure its customers that we can carve out an area that may have a foreign animal disease occurrence.

Agriculture committee  I'll just say a few words in total. We don't really sell pigs; we sell hams and we sell shoulders and bellies. It is all broken up, and the cut that is the most problematic for our industry in the world market is the ham. The European market for hams is the best in the world, particularly in the manufacturers in Italy and in the U.K., and interestingly also the very highest tariff going into the EU is the hams.

Agriculture committee  I will just say that we in Canada need the WTO to get back on the rails, because that's where we can catch up with the U.S. again. The U.S. has achieved a lot of bilateral advantages over the last couple of years, which we need to close.

Agriculture committee  Thank you, Jurgen. This committee certainly is aware of what country of origin labelling is. In terms of U.S. legislation it is something that originates in the 2002 Farm Bill. We were quite content with the final rule that the U.S. administration published in December—that would be the former administration—because it did introduce some additional flexibility.

Industry committee  I certainly wouldn't say you're incorrect, because there are substantial imports and they've increased considerably. Our imports were about 30,000 tonnes, I think, maybe five years ago, and this year they will probably be 170,000 tonnes. Now, I wouldn't say that this is an indicator of....

Industry committee  Thank you.

Industry committee  It would not be specific to exchange rates, but for us to cope with the exchange rate changes and to be able to generate enough revenue and cashflow to keep our farms in business, we definitely need support for the loans that we've asked for from the government to tide us over to where we can see this market recovery, which we expect will take place and begin generating enough revenue to get us out of the hole we're in.

Industry committee  First of all, thank you, Mr. Vincent. The slaughterhouses are primarily Canadian owned and Canadian controlled. That's on the pork side. On the beef side, they are largely U.S. owned. I think we do have a challenge to reach the levels of scale of some of the U.S. companies. At the same time, we are facing some costs that the U.S. don't have.

Industry committee  We are increasing our exports to China, primarily in the products that are not used as much at the consumer level in Canada. These would be primarily the organs of the animal—the heart, lungs, liver, etc. We hope that is going to result in increased pig meat exports. However, China does still maintain some requirements on food safety, which are alleged to be food safety issues but which most other countries would not regard as food safety issues, and these can take a long time to be addressed.

Industry committee  Thank you very much. This pork cycle exists, but it is not nearly as predictable as it once was, primarily because we are more of a global industry. At one time, we really just had cycles that were related to grain price cycles, and they were contained in North America. We are in a cyclical downturn, but it is not a result of a massive increase in production.

Industry committee  Okay, one minute. Another table in here explains the impact on the cost situation. I'll close off with a point about the flexible exchange rates. We wouldn't argue against them as being an important tool for economies to adjust to changes in cost conditions, but we have this huge impact of the Chinese, the Taiwanese, the Hong Kong, and some other Asian economies that are essentially pegged to the U.S. dollar.

Industry committee  Thank you very much. My president, Clare Schlegel, who was scheduled to come, sends his apologies for not being able to make it up from southwestern Ontario. His farm situation required him to be there today. We appreciate this opportunity because the Canadian dollar impact has been, I guess, the single defining characteristic of what separates us from the rest of the world in the pork industry.

Agriculture committee  Only to underline some of what's already been said. We still have an excellent situation here for producing pigs and pork in Canada. At the genetic end of things, we still have a measured advantage over the United States in terms of productivity of our sows; it's 10% to 20% above.