AGRI Committee Meeting

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¿  (0900)  

[English]

    The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Good morning, everybody. Pursuant to Standing Order 108(2), our committee is undertaking a study on the future role of agriculture, and in particular what the government's role in it should be.

    We have been travelling the country. We've all introduced ourselves. Howard, you've met the minister before. We have another group coming at 9:45, so I think we'll just wait until the group comes for that, Ernie.

    We have visited six provinces already. This is our seventh. We've heard over 200 witnesses. We will be in Prince Edward Island tomorrow and then finishing up in New Brunswick on Thursday. Witnesses will be coming from Newfoundland to visit with the committee in Ottawa to make presentations. So we will have all 10 provinces participating in our study.

    We'd like to welcome you this morning. I know provincially you certainly have a lot of things on your agenda. It's that time of year when provinces are doing budgets and getting ready for their activities for the coming year.

    We have about 45 minutes or so. We'll certainly have some questions. We appreciate the fact that the minister came and not an official. I know officials do excellent jobs, but it's certainly good to know that people are here because someone sent them through that ballot box business.

¿  (0935)  

     Welcome, Ernie. We're ready for your presentation. After that we'll be having some round table questions and answers back and forth.

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    Hon. Ernest Fage (Minister of Agriculture and Fisheries, Government of Nova Scotia): Thank you very much, Mr. Hubbard.

    First of all, I want to welcome each and every one of you here this morning to the province of Nova Scotia. The weatherman has cooperated very nicely.

    The Chair: Before you go on, I don't know if anyone needs translation, but if you do, the clerk will see that you get a translation device.

    An hon. member: Is this from Nova Scotian into English?

    Some hon. members: Oh, oh!

    The Chair: Sorry to interrupt. Please continue.

    Mr. Ernest Fage: Mr. Chairman, we do have several brogues here in Nova Scotia, and we're quite proud of them.

    Mr. Chairman and members of the House of Commons Standing Committee on Agriculture and Agri-Food, welcome to the province. I'm pleased to be in Truro to speak to you today.

    Over the past two weeks I've had an opportunity to participate in a number of meetings: first of all, a meeting with the Senate committee on agriculture; secondly, the Canadian Federation of Agriculture meeting held in Halifax, where I had the opportunity to address the assembled group; and thirdly, several meetings with Minister Vanclief.

    In May I will be co-chairing the Canada-U.S.-Mexico Tri-National Agriculture Accord meetings in Arizona. I'm looking forward to the agriculture ministers conference to be held in Halifax in June and, as co-chair with federal minister Lyle Vanclief, anticipate a robust agenda while we're discussing the future of agriculture in Canada. As well, I had the opportunity to appear in Baddeck last summer before the rural caucus on agriculture.

    As an aside, I think that this exposure for the province and the agriculture industry bodes well for everybody, that there is that degree of interest in the future of agriculture. Speaking on behalf of the provincial government and the agriculture industry, in these times and with the direction shifts we're making, these are important efforts that we see taking place here in Nova Scotia.

    Of course, the central focus of the ministers conference will be the work to date on the national action plan or agriculture policy framework, APF, by federal, provincial ,and territorial governments. With that in mind, I believe the national action plan provides an example of what the role of government is and will be in the future for agriculture. I see government as a leader, a manager, and a team member with the agriculture industry and other stakeholders.

    I want to take a few minutes to give you a brief summary of agriculture in Nova Scotia.

    Agriculture is a key element in the provincial economic growth strategy and is considered a foundation industry in the province of Nova Scotia. The agrifood sector now contributes $1 billion annually to Nova Scotia's economy. Agriculture in this province employs nearly 15,000 people in rural communities. Another 56,000 are employed in the food wholesale, retail, and service sectors. The industry generates $418 million in farm receipts at the primary level. The top cash receipts performers are in order: dairy, poultry, horticulture, and the livestock industry. There is a 45% output from the supply management sector of poultry, eggs, and dairy. There was a $42 million capital investment in agriculture in the year just past.

    Nova Scotia has the highest proportion of farmers with an undergraduate degree in agricultural science in the country. The Nova Scotia Agricultural College students enjoy a ratio of three to one with regard to career opportunities upon graduation.

    The amount of $750,000 was invested in research, and it resulted in the awarding of $1.8 million spread over 128 projects in this province.

    We've exported more than $175 million in agrifood products in the past year, and an annual growth rate of 12% has been achieved since 1994. Our top export products are blueberries, fur, frozen carrots, and Christmas trees.

     We continue to expand in this province. Last year, Oxford Frozen Foods undertook a $70 million expansion to their operation with a loan of $38 million from the province. This project was constructed by local controllers and construction companies, and after six months was one day off target on opening. Within three days of opening, this particular plant achieved its production goal of putting one million pounds of blueberries through the freezer unit per day.

    Apple Valley Foods has also built a new plant to make fruit pies in Kentville. As well, the Scotsburn dairy group or Scotsburn Co-op, as it's known to many people, has built a new plant to double their production in ice cream alone.

    There are challenges in the Nova Scotia agriculture industry, and a number of these issues are common among producers across Canada. These challenges include declining farm margins, risk management against weather and markets, and new environmental challenges such as climate change, demand on soils, and water and air quality. The whole question of urban-rural interaction and the right to farm issue, food safety issues, and competitiveness issues are on the agenda and face the farming community and governments constantly.

    An aging farm population and issues involving intergenerational transfer of farms and attracting new people to the industry predominate. New market opportunities such as the organic trend and value adding to our production are also challenges for the industry. Also on that list are new technologies, public awareness and appreciation, technology and research, and extension and application so that it can be used in the field.

    While the agriculture industry is indeed advancing in Nova Scotia, we're not without our own challenges as well. I want to briefly highlight some of the challenges we face in our industry here and what we have done and where the APF fits.

    Agriculture is on a technology treadmill in this province and in this country. Many agricultural technologies are location specific. Our physical and economic conditions are often unique, especially as compared to the major production areas and the centres of research and technology development in this country. Profit margins between production and market price are decreasing.

    Farm labour scarcities are a problem in this province as well. Nova Scotia accounts for 1.5% of Canadian agricultural production, but over 2% of the Canadian agricultural labour force is in this province. An area where governments have a key role to play concerns labour policies. Labour market reforms are needed to reduce disincentives to work and to better reward those willing to put in a hard day's work at harvest.

    The Nova Scotia agricultural commodity composition makes it long on workers for intensive horticulture and livestock production. For example, current EI premiums are set well above the rates required to fund the program, with the surplus going into general revenue. This burden of excessive EI premiums falls heavily upon low wage earners, and this especially affects seasonal harvesters in a province like Nova Scotia.

    Apart from improving the attractiveness of farm employment, there are positive social aspects of correcting the inequities of such payroll taxes for agricultural farm workers. Farm employers and labourers deserve government attention to this matter, and it needs to be timely. Unavailability of seasonal labourers results in economic hardships to producers--i.e., crop loss. Less disposable income and community spending are some of the outflows of this particular problem.

    Rapid technology change combined with highly competitive conditions has driven commodity prices downward.

    As well, farm debt is increasing. In this province, much of the borrowing has been used to enhance, improve, and expand operations. For many farms, a sizeable proportion of the loans in Nova Scotia has been exclusive to the dairy and poultry sectors. It's cheaper to borrow now, no question. Interest rates are lower than they have been in many years.

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     Changing demographics is also a problem in this province as well as Canada. Urbanization of rural areas and environmental and increased nuisance complaints are a symptom of this shift. As well, climatic conditions here in this province--four out of the last five years being successive years of drought conditions--aggravate the problem.

    What have we done to address these challenges in Nova Scotia? In Nova Scotia, where agriculture is an integral and intermixed component of rural society, we're working on reducing the environmental risk and social impact of farming. Some tangible legislation changes of the last two years are as follows.

    The Dairy Industry Act was proclaimed last April, repealing the former Nova Scotia Dairy Commission Act. This act empowers the dairy industry, through the dairy farmers of Nova Scotia, as well as retaining powers beyond the farm gate through the Natural Products Marketing Council, but it puts the dairy industry and dairy farmers in firm control of their own destiny and the operation of their industry and their membership.

    The Farm Practices Act was proclaimed last March. It protects farmers who follow accepted farm practices; it allows the Farm Practices Board to hear appeals and will establish criteria outlining what are normal farm practices in Nova Scotia to help protect and consult for the farming community.

    As well, the Agricultural Marshlands Conservation Act was proclaimed in November 2000. It protects much of our valuable marshlands from non-agricultural development, as well controlling unsuitable development on flood-prone lands. The province has more than 46,000 acres of dike land under its protection.

    As well, we have created a new entrants policy. In order to deal with some of the demographics and transitional change in rural Nova Scotia, especially in agriculture, it has been necessary for the Nova Scotia government to place continued emphasis on programs that allow for new entrants to enter and become successful in the agriculture industry.

    In 2000, a new entrants to agriculture program was instituted at a cost of $600,000. In addition, other programs have been modified to give priority to new entrants in other direct farm development programs. Programs such as these will encourage new farmers to establish or purchase commercial farm operations as well as aid in intergenerational transfers.

    New programs have been developed with new entrants in mind, as well, to assist with business development opportunities, research and demonstration, and also soil and water management as well as farm and public protection. A large percentage of the population in this province as well as in Canada have little or no agricultural background, and we're working toward improving the gap in public awareness and understanding of agriculture.

    Another area that we have moved ahead in is the delivery of agricultural services and expertise. The Agricultural Development Institute was created in the year 2000 in the province of Nova Scotia. We have gone to an alternative service delivery for this expertise in Nova Scotia. It is an arm's length service provider, which responds to industry and which has a significant uptake in this province. The board of directors of this arm's length body is made up of government and industry, with the majority on the board being members of the farm community. To ensure the department is involved directly, the deputy minister is a board member. To ensure that research is tied in directly, the chairman or principal of the Nova Scotia Agricultural College sits on that board as well.

    The model, certainly over the last year, has had significant uptake. It's been examined by a number of other jurisdictions across Canada and the United States as a service provider of the future. Certainly at this point we're encouraged with the response from the farming community and the direction they provide as majority members on the board. It provides timely expertise for all situations, but it allows the unique targeting to specific operations and it operates, in essence, like a triage model for health care.

     The department also created an internal water task force to look at water quality in this province. It deals with such issues as access, quality, and quantity across agriculture, fishing, and the aquaculture sector. The province has acquired the expertise from the federal government, through the PFRA, and $300,000 in the current year to assist in addressing drought situations in Nova Scotia.

    The government in this province is in fiscal restraint. We were elected as a government on a promise to spend responsibly and balance the budget. The outcome has been that hard decisions have had to be made. And this year we, as a government, will present in this province the first balanced budget in forty years.

    The National Framework Agreement is one that certainly this province is involved with. We look forward to working closely with the industry of this province as well as the federal government towards this national policy.

    Drawing from the past, agriculture has always focused on the priorities in the national plan. Farmers have always been stewards of the land, entrepreneurial, innovative, and conscious of food safety and managed risks. These have always been vital to the success of the agriculture industry and continue to be vital to the success we see today.

    I believe the difference in their convergence into an integrated action plan is that government and industry now recognize that these areas are interrelated. They are now being brought together to form a focus and direction for the agriculture industry of the future.

    Environmental farm plans are key to this future. Already here in the province, through the stewardship of the Nova Scotia Federation of Agriculture, one hundred farms have been enrolled in the environmental farm plan program. The Department of Agriculture and Fisheries is also involved in nutrient management planning programs; the development of best-management guidelines for manure storage; and applied research to find environmental solutions on farm, like using artificial wetlands to treat waste.

    Yet at the same time, despite attempts at land use planning for agriculture protection, more and more urban people are moving into the country. This trend puts more public scrutiny from new rural neighbours on farming activities and increases the risk that farming practices may impact on people's lifestyles. The inevitable conflicts are occurring as these new rural residents object to some farming activities and demand that the government do something. The recent development of revised right-to-farm legislation, the Farm Practices Act, is an example of the government attempting to protect good farming practices and establish the norm for the future.

    Renewal: Our farming population is highly educated, as I mentioned earlier. This province has the highest per capita number of farmers with undergraduate degrees in agriculture and other science disciplines. As in many industries, however, this population is aging. Our renewal priority will focus on giving these skilled farmers access to capital, the financing they require for agricultural renewal in the 21st century. Key discussions with our stakeholders will include topics such as access to learning opportunities and information, export advice, succession planning, financial planning, and other concerns related to intergenerational transfer and new entrants.

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     On the food safety front, Nova Scotia farmers produce safe, quality food. They are leaders in progressive farming and are continually working to make food production environmentally friendly. On the farm, in your grocery store, and everywhere in between, the agriculture and agrifood industry in Nova Scotia is continually taking advantage of the latest developments in research and technology to improve food quality, food safety, and freshness. We recognize that a comprehensive approach to food safety, starting at the farm, is needed to compete nationally and internationally. Food safety is both consumer and retail driven. Both groups demand the highest level of food safety, but there are added costs to producers to meet these demands. Government must help industry address this particular obstacle. There is also a human resource challenge to developing and enforcing these programs, and government has to meet this particular challenge, too.

    Agriculture really is a science- and technology-based industry. Science and innovation are not new to agriculture in Nova Scotia. If you compare agriculture regions or sectors around the globe that have advanced with those that have lagged over the past 50 years, science and technology resources will be the one key factor in determining the advancement or lack thereof.

    Agricultural science has delivered a major component of the gains in living standards and quality of life enjoyed by all citizens in Canada today. Scientific investigation, accompanied by the new knowledge it generates and the foundation it lays for the development of new technologies, is a cornerstone of economic development and human progress.

    Here in Nova Scotia, the NSAC--the Nova Scotia Agricultural College--offers a curriculum in the emerging life sciences, environmental engineering, biology, agricultural business, new and value-added product development, organic farming, and aquaculture. NSAC's technical degree in post-graduate programming offers Atlantic Canadians the opportunity to gain expertise in all these emerging fields. The current emphasis is on life science and biotechnology, yet we need to ensure primary agricultural production marketing areas are discussed and developed at the same time

    There's an opportunity for this progress to fit in with the Canadian Agri-Food Research Council's current work on the development of a five-year national agriculture research strategy. Certainly, we intend to be involved.

    As for safety nets, agriculture also faces many challenges with risk management. A national review of safety nets recently has been completed and Nova Scotia has been meeting with members of the industry to ensure we represent their issues at the national level. There are issues.

    As you are aware, the cost of offering safety net programs is high and growing demands for ad hoc payments appear regularly. The response is really to meet the challenge of developing a national program that ensures enough flexibility to meet the needs of farmers in each region of the country and account for the different types of farm mixes and sizes of operations and commodity producers. Also, coordination is an issue. Overlapping between programs occurs and must be addressed. As well, federal funding allocation to regions may be under review. Nova Scotia supports the current formula based on farm cash receipts.

    Conclusions on the national framework: Nova Scotia strongly supports the integrated approach to developing the national policy framework for agriculture and its action plan. It is crucial that this process recognizes the diversity of industry across this nation. It is from such diversity that we draw our strength as an industry. I don't think we can emphasize this enough.

    Members of your committee come from a diversity of agricultural regions and backgrounds across this country. Our diversity in this country is also our strength on the agricultural front. Diversity in size, commodities, and growing regions provide us with opportunities, both in what we can offer to our local constituencies, such as provinces, and to Canada and internationally on our trade balance.

    What is new, and what is most exciting, is that we have national consensus from government and the industry on these issues. Together, we can initiate activities to brand Canada as the premier supplier of safe, innovative, environmentally friendly agrifood products produced in an efficient, sustainable, and profitable way. This has to be our goal.

    This is the future role of government, certainly. There's a movement away from intense involvement to more partnered leadership and collaboration. More emphasis on issues of a regional nature nationally, a convergence of government and industry on issues, and collective work towards addressing and capturing opportunities, has to become our focus.

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     Government, using its capacity to provide information for good business decisions--that is, government that has a capacity to gather numerical information, analyze and disseminate--is crucial to the future of the industry and the decisions they will make. Governments have economies of scale, certainly, to help bear risk-sharing, particularly as it relates to research, innovation and adoption of new roles and management techniques. As well, the role and protection of public safety, use of regulations and legislation to benefit the constituents of the farming community, as well as citizens at large, is the role of government.

    In closing, I want to thank you for your time this morning. I know you have heard a lot of people from across the country. You'll hear more people today. Certainly, I welcome the opportunity to present a bit of a long thesis here on Nova Scotia agriculture and some of its views, but it's a pretty important foundation industry for this province and I welcome any questions.

    Thank you, Mr. Chairman.

À  (1005)  

    The Chair: Thank you, Mr. Fage. I see you have several staff members here with you.

    One of the problems we've had with our committee work across the country is trying to get a little bit of press coverage, some exposure for agriculture, and I tell you, it's a darned hard task.

    I might challenge you today to get some of your staffers to make out a press release to give to your papers here in Nova Scotia, that you've made a major presentation on behalf of the agricultural community in Nova Scotia and that these are the points you made. Let's see if we can't get some coverage in the Truro paper, in Halifax and across Nova Scotia, because it is a very detailed report you gave and is certainly very well done.

    Howard, would you like to have a few minutes first?

    Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance): Thank you, Mr. Chairman.

    As the chairman said, it was a great presentation. It should make some news, your comments about the EI issue in the whole country and its disincentive for people to work. I mean the recent changes.

    I guess we ought to deal, first of all, with the safety net issue. Minister Vanclief has told us that NISA and CFIP don't work, and while he hasn't said he's going to get rid of them, that's the implication if something isn't working. He says he's going to have a plan where a farmer either takes it or leaves it. You're either in or out.

    Now, you're co-chairing with Minister Vanclief in a national action plan. Are those consultation meetings that he is holding across the country?

    Mr. Ernest Fage: The co-chairing will be at the conference of first ministers and territorial ministers and federal government, here in Halifax this year.

    Mr. Howard Hilstrom: Okay. Do you have any details right now that can be given out? We have no details from the federal minister so I assume you don't have any details either that are releasable, or they are non-existent. What's the situation?

    Mr. Ernest Fage: The situation right now is that we've had a number of preliminary meetings. We've discussed the issue of the right way to proceed forward for a new national agreement with the federal minister at our latest meeting in Toronto. I guess probably the first publications that would start to deal with some of that issue would be this particular one here that has just been released.

    I can assure you that in regard to risk management there has been a huge amount of concern raised in this province on crop insurance, that it was too inflexible from the viewpoint of producers, that NISA, although it worked well for some producers, made it very difficult under the whole-farm approach for a farming community like Nova Scotia's, which has a very mixed orientation instead of monocultures. With regard to CFIP, although it was there as a disaster policy only, producers didn't feel they were receiving the benefits. So we've certainly had a huge amount of input and review here.

    Now it's moving forward. Obviously we want to be front and centre with our industry partners in looking at devising a better method. The federal minister has come forward with a bold new thrust in a particular direction. There's a lot of discussion to take place, I think, before everybody signs on.

    Mr. Howard Hilstrom: Do you buy into the idea that some commodities are hurt a lot more by foreign subsidies, for instance, grains and oilseeds, and, as a result, a general program across the country of “one size fits all” is not likely going to do much good?

    CFIP was that kind of program. Of course, the commodity groups are putting forward this other plan. Do you believe we have to have “one size fits all”? Do we need to have commodity-specific plans of some kind that are still not counter to WTO?

À  (1010)  

    Mr. Ernest Fage: I don't believe there's one plan that fits all. There has to be flexibility in any plan that addresses regional and industry concerns.

    My one observation, though, on distortion or outside subsidies is that it's an extremely difficult one, in my view, to try to address under a risk management program. In my view, we would be better off dealing with distorting trade policies by other nations under a stand-alone plan. It really doesn't fit in with normal market conditions, weather conditions, or other types of peril or risk. I think it needs to be addressed as a stand-alone plan.

    Mr. Howard Hilstrom: Okay. Thank you very much.

    The Chair: I'll move on, if I could.

    Odina.

[Translation]

    Mr. Odina Desrochers (Lotbinière--L'Érable, BQ): How much time do I have, Mr. Chair?

[English]

    How many minutes do I have?

    The Chair: I'll give you four minutes.

    Mr. Odina Desrochers: I have four minutes. Okay. Thank you.

[Translation]

     Mr. Minister, firstly, I'd like to thank you for coming here today to meet the members of the Agriculture Committee and for enabling us to learn more about the state of agriculture in your province. I have a couple of questions on the partnership between your province and the federal government in terms of assistance programs in general and other types of assistance programs to help farmers face both worldwide and more local problems.

    Mr. Minister, what percentage of this assistance is paid by your government and what is the proportion paid by the federal government of Canada under the agreements with the federal government?

[English]

    Mr. Ernest Fage: Thank you very much.

    In all the risk management programs that would be involved in the standard formulas in this province, which is normal for Canada, the federal contribution would be 60% and the provincial contribution would be 40%. It is the standard agreement that has dealt with the programs over the last two or three years. It would be where we're at.

[Translation]

    Mr. Odina Desrochers: Is this agreement in keeping with the state of agriculture in your province?

[English]

    Mr. Ernest Fage: There's no question when we look at percentages for our province for a number of fiscal restraint reasons, from size of agriculture to equalization and transfer payments, it is difficult for us to find our 40%. It's always a decision of trying to balance not only within this department but within all sectors of society, from health care to natural resources, environment, and agriculture, to find the dollars for the program.

    We have put a high priority, as a government, on agriculture in this province. Program expenditures in agriculture is the one area where actual dollars going to the farming community have doubled in Nova Scotia. If there was a lesser percentage to meet the 40%, we could do a lot more.

[Translation]

    Mr. Odina Desrochers: I have one last question. Rather than setting the standard at let's say 60% or 40%, don't you think that the Canadian federal government should set more realistic standards based on the needs of each particular region or province?

[English]

    Mr. Ernest Fage: There are two things from which you get a specific norm: percentage of money and how you divide up the shares. From Nova Scotia's perspective, we certainly felt it was a great step forward when we achieved, two years ago, the partial agreement on going to output or retail shares for the province of Nova Scotia, because it realigned it with the reality of the size of the industries.

    On the dollar portion, there's a split of 60%-40%. We will obviously continue to negotiate with the federal government for them to lower our percentage and take on a larger responsibility. That will always be an ongoing discussion, but I certainly wouldn't turn down 70%-30% or 80%-20%.

À  (1015)  

    The Chair: Thank you.

    Paul.

    Mr. Paul Steckle (Huron--Bruce, Lib.): Thank you first of all, Mr. Minister, for appearing this morning. That was quite a comprehensive story on agriculture in Nova Scotia. I have a lot of questions and a very short time.

    You talked about the aging farming population and intergenerational farm transfers. What would you invite the federal government to do that would make it easier for farmers who are in the retiring mode to transfer farms so tax would be recognized for what it is, whether it's capital gains--an enlargement of that portion... How could that be done to expedite and encourage young farmers to come back into the business? Obviously, we know that if profits are returned to agriculture, we may get young farmers coming back into the business. But in the absence of that, in the short term, how can we do this?

    Mr. Ernest Fage: You've certainly capsulized the toughest problem in agriculture in Canada. In this province the average age is about 55. We could discuss the market issue all day, and I think we'll set that aside. But the federal government has the Farm Credit Corporation, which is very active in Nova Scotia. We have the Nova Scotia Farm Loan Board. Certainly any terms that can spread money out over the long term with less risk are very beneficial to the community.

    In the very short term, Nova Scotia instituted a new young farmers program. In the first year, we allow $10,000 of interest to be forgiven to create cashflow, and in second year we allow another $10,000, for a total of $20,000. If the federal government were so inclined, that would be a good policy for the Farm Credit Corporation to adopt as well. It not only offers choice, but gives some fairness across the country, and gives fairness on choice to both of those institutions.

    The other issue is how taxes are dealt with and giving some guarantee on taking a second mortgage, whether it's to the family or the previous owner. That would put some balance in the situation. We should be exploring opportunities, as a province and as a federal government, to lessen the risk on the group that's getting out of the industry and on the group that's coming in. Being involved in some guarantees on second mortgages would probably be very beneficial and would keep the exposure of the taxpayer to an acceptable limit. Those types of programs we strongly encourage.

    The other thing is the funding of mandatory managerial training under those situations. You have one shot at farming when you come in with those high debt loads. Another suggestion is to finance managerial programs that go along with those policies, so new entrants have the tools to deal with those challenges as best we can outfit them.

    Mr. Paul Steckle: On food security, given the events of September 11, how does your government and you, as Minister of Agriculture, view agriculture in the context of national security? Is food so important in this country that we're prepared as provinces and as a federal government to make it one of our security issues? If so, would your government support a policy that would enshrine the right of security in food for this country. Would you be a willing participant in that kind of discussion?

À  (1020)  

    Mr. Ernest Fage: There's no question we would be part of the discussion, but I don't think you can focus it that finitely. A better example in my mind would be the hoof-and-mouth situation, where you were dealing with security, dealing with food entering and exiting, and live animal shipments, soil--everything from other countries. It probably gave a better insight into what we're dealing with.

    The other reality we have to place on that, in my view, is that we're an exporting nation. We're an exporting province. If our security restrictions are so tight we don't allow anything--

    Mr. Paul Steckle: Well, let me just--

    The Chair: Paul, just a second. You've gone over.

    Mr. Paul Steckle: Well, you were going down another road. I didn't make it clear what I was trying to... I'll come back to it. Thank you very much.

    The Chair: I'm going to have to come back. Sorry about that.

    Dick.

    Mr. Dick Proctor (Palliser, NDP): Thanks very much, Mr. Minister.

    You indicated in your remarks this morning on safety nets that you supported farm cash receipts and the so-called Fredericton formula. I think any fair-minded observer who has travelled with this committee--and we're now on the last legs of it--would have to conclude that most of the hurt we find is in western Canada, particularly on the Prairies, where there's very little supply management and there's a heck of a lot of hurt. The wonder is, from Saskatchewan and Manitoba particularly, that farm cash receipts just drive us further down into the ground. This is speaking on behalf of them.

    I'm just wondering how you rationalize, from Nova Scotia's point of view, the question of the farm cash receipts?

    Mr. Ernest Fage: That's an extremely good question when you look at the national issue. Obviously farm cash receipts, from my perspective and our government's perspective, is a fair basis.

    My response to Howard, in regard to unfair subsidies or trade practices--from my view and from a somewhat eastern view--is to view them as a separate issue. That's why we need to have a separate policy to address that trade distortion issue, rather than putting it in with the whole risk management and safety nets issue, because for all other provinces it distorts the issue of trying to provide risk management.

    It's not to say we don't support--we certainly do support them--the grain industry and the exports, but an adjustment that needs to be made for that support and that would look at those conditions should, I think, be a line item separate and apart from the other risk management factors. I would categorize it that way.

    That's not saying there is not support. There is support, and I certainly would support it, but would want it dealt with as a separate line item that doesn't get involved in all the intricacies of discussions and consultations on risk management. It has to be compensated for and it has to be looked at and adjustments made for it, but if you boil it into what we're trying to achieve in risk management, it distorts it for everybody else.

    Mr. Dick Proctor: The concern is it's not being dealt with in any other way right now, and that's the problem.

    I don't know that I quite understood, when you were talking about alternate service delivery, and I just wondered if you could elaborate on what you're doing there.

    Mr. Ernest Fage: Here in Nova Scotia we were dealing with a situation where we wanted to deal with an industry that is moving forward quickly and be able to timely deliver unique, expert services from any scope of technology, to plant, to animal livestock. ADI has a specific expertise, or can call it in on a very short-term basis, if you have a particular problem.

     If I could use an example, I can identify smut or snowy mildew; so can the county agent and the fertilizer and the chemical dealer. What I need to know is, does it save me more money if I treat it? Or if I let it go untreated, is my gain better economically?

    That's the type of specific expertise in crop and production technology, with economic tie-ins, that this group can deliver, if I can use it as an example.

À  (1025)  

    The Chair: Thank you, Dick, and Mr. Minister.

    Larry.

    Mr. Larry McCormick (Hastings--Frontenac--Lennox and Addington, Lib.): Mr. Chair, thank you.

    I'd like to ask the minister about the fact that all of the provinces have signed on, and whether they're going to have... You know, there's always this perception--the strongest word I've learned in eight and a half years is “perception”--that the federal government has all of this cast in stone. But perhaps the minister can mention whether or not they have an opportunity here, as I believe they do.

    Then, Mr. Chair, I'd like throw my time back to my colleague, Paul, to clarify the issue on food security, if I may.

    Mr. Ernest Fage: Larry, good question. From our perspective, we're into the discussion phase. There's been a framework laid out. Everybody agreed at our last meeting to sit down and discuss, so we're proceeding forward there. And here in this province we're involving the industry very directly in those discussions so that at the end of the day, if we can reach agreement, it will be a better product--and the more responses we have, the better.

    Mr. Larry McCormick: Thank you, Minister.

    Paul, you can....

    Mr. Paul Steckle: My apologies, Mr. Minister. You were responding correctly to my question; it's my question that should have been based on the issue of supply.

    As a committee, we're travelling, and we're going to make some determinations on the future role of government in agriculture. In terms of supply and food security, if we believe that using a domestic supply is the way to feed our people--obviously that's not the only source, but it's first and foremost that--then of course this puts on government some onus to support that agriculture policy and that industry.

    Are you prepared to be part of those discussions? As minister, do you feel that Canada should have a food policy in terms of its domestic supply?

    Mr. Ernest Fage: Yes, certainly we'd be prepared to be involved in those discussions. I believe, as the minister representing this province, that we do believe there should be a food supply policy. As for the terms and definitions, that's what the discussion would be about--percentages, what's acceptable, and those kinds of things.

    But, yes, there's no question; we would want to be involved in those discussions.

    Mr. Paul Steckle: I'm prepared to give the time back to Larry, but he's not here.

    In his absence, I'll ask you, how has the right to farm and farm practices legislation worked in this province, or is it working? Do you have a piece of right to farm legislation that's working?

    Mr. Ernest Fage: Yes, we do. There was previous right to farm legislation. We amended that with the Farm Practices Act, which was a much stronger piece of legislation. Under that legislation the normal Farm Practices Act is defined.

    There is a group made up of the public at large and peers of industry that now... Whether it's citing intensive livestock management or agriculture practice, the complainant, instead of going to court first, would appear before this board with their complaint against an individual operation. The board would make a determination as to the practicality of...

    So this puts in the mandatory first step of consultation, of trying to diffuse it before it ends up in a courtroom situation. I mean, anybody can go to court, obviously.

    Mr. Larry McCormick: Mr. Chair, under the Right to Farm Act, when I hear about Mr. Kennedy being in Alberta yesterday or whatever... and certainly he's a very dynamic speaker; he talked in Ottawa about the rivers on fire in New Jersey a few years ago.

    But here in this province, Minister, when it comes to the licensing of or the allowance of hog farms, for example, of whatever size, does the province or does the municipality have the control? I think perhaps we're going to ask this question across the country.

    Mr. Ernest Fage: In this particular province a number of provincial permits would have to be obtained. Once the proponent obtains them, then they have to go to the county for their ordinary building permit. We've been involved in a couple of them, and the counties have honoured their obligation to the building permit once the other permits were achieved provincially--environment and those types.

    Mr. Larry McCormick: Thank you, Mr. Chair, and Minister.

    The Chair: Thanks, Larry.

    Rick.

    Mr. Rick Borotsik (Brandon--Souris, PC/DR): Thank you, Mr. Chairman.

    Mr. Minister, welcome; always a pleasure. I certainly congratulate you on your involvement, obviously, on the national stage. And that's my first question.

     You talked about the tri-national conference in Arizona. I understand you are the chair?

     Mr. Ernest Fage: I am the co-chair.

    Mr. Rick Borotsik: You are the co-chair.

    For the U.S., Mexico, and Canada, there are a lot of reoccurring themes that come through our meetings. One of the reoccurring themes has been the U.S. Farm Bill. It obviously has some great ramifications, particularly on grains and oilseeds, but in other areas of agriculture in our country as well. Have you had the opportunity in your capacity to discuss the Farm Bill with any of your American counterparts? What would the Nova Scotia position be with respect to the Americans and their Farm Bill?

À  (1030)  

    Mr. Ernest Fage: It's a really good question. My role in assuming the co-chair starts at that meeting. At this point, I'm going through background material and the briefings.

    The observation I would make is that certainly part of the discussion is on the American Farm Bill, labour policy, and food production policy in Mexico in all three jurisdictions. I think I'm enough of a realist. It is quite a long shot as to whether we can influence the American Farm Bill. We're at least discussing and bringing forward recommendations on common jurisdiction.

    Mr. Rick Borotsik: Do the Americans understand what the Farm Bill does to Canadian agriculture, in your opinion, Mr. Minister? Do they care?

    Mr. Ernest Fage: If I was going to be very crass, I'd say most legislatures in one jurisdiction, at the end of the day, are concerned about the constituents who put them there, not the ones in the neighbouring jurisdictions.

    Mr. Rick Borotsik: It's pretty honest. Thank you very much.

    You mentioned something twice in your presentation that I was really interested in. In Nova Scotia, you said, you have the highest percentage of producers with an agricultural degree. You also said at the very end of your presentation that if they were involved in accessing programs for the province or the federal government, there should be a mandatory managerial training program. I'm very interested in it. A lot of the producers in our areas, particularly, perhaps don't have the business backgrounds now necessary in agriculture.

    Do you want to expand on it a little as to not only how it has positively affected Nova Scotia, but how you see the mandatory managerial training taking place?

    Mr. Ernest Fage: Thank you. I guess you should be careful mentioning examples. I think in agriculture it's critical, but it's the same in any business. You need to have the idea or product. You need to have the resources and capital. The most important component is the human component and an ability to manage the components.

    We have many bright people who have chosen to take less return on investment and to be involved in agriculture. We certainly feel strongly that government should be involved in helping in the generational transfer from the financing agencies and the granting policies to help the cashflow in the first two years.

    I think it's important to look at ways. Management certification is one of them. For the people who have chosen to do it, and we, as governments, have chosen to support through lending agencies and granting agencies, it ensures that they have the best opportunity to make it a reality. It's for their own protection, not the government's.

    Mr. Rick Borotsik: Okay. We are talking about the future role of the government. It's very important we set that kind of policy. I really liked your comments.

    I have one very quick comment on NISA. Is Nova Scotia supportive of the NISA program? Do you see any changes to NISA that should be made?

    Mr. Ernest Fage: I think, in the discussions we're into, it's up for debate nationally, with review and the direction we're looking at for a new risk management plan.

    NISA in Nova Scotia has worked very well for some sectors. It has worked very well if you have a monoculture.

    The difficulty with NISA in Nova Scotia is it has been tougher on our livestock sector. They generally are smaller than average and are part-time. To say the benefit is income support is an awfully big stretch. Income support and risk management get tied together. It's the problem with NISA here in this province.

    The Chair: Thanks, Rick.

    Rose-Marie.

    Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.): Thanks, Mr. Chair. I too appreciate your presentation. It has been most informative.

    Going along the same vein as Rick, you indicated this province had the largest number of agricultural graduates. Does it translate into people staying on the farm? Is it productive in that respect?

    Mr. Ernest Fage: I think it's been very productive. With the Nova Scotia Agricultural College here in one of the smaller provinces in Canada, for several generations a majority of people who returned home to operate farms took agricultural training or undergraduate studies at NSAC. It has provided a very sound base for a number of not only production disciplines but management and those types of things. I really feel it's been an absolute bonus to the agriculture industry here in Canada.

    P.E.I., New Brunswick, and Newfoundland have a strong contingent of agriculture graduates who are now involved in agriculture. Those things are extremely positive when the world we face is knowledge- and technology-based.

À  (1035)  

    Mrs. Rose-Marie Ur: I liked your phrase that farming is a foundation industry. Flags went up when you stated that. That's certainly something I hope J-D puts in our report, because I think those two words basically say what agriculture is all about.

    As you had said and as we all know, the provinces agreed on the national framework and now they're going to put the teeth into this framework with their next meeting. With this vision they have and this framework--and I have to admit I'm a little skeptical as to what may or may not happen on that--do you not feel there's a real concern? The vision is there, but there's a concern of surviving until you get to that vision. It's almost like here's where we are today, there's a moat, and there's the vision. How many people will sink before that vision comes about? That's my biggest fear.

    Mr. Ernest Fage: Certainly it's of high concern to the industry here and to us as a provincial government. As we go through these discussions to get to the point over there where everybody wants to be in an improved program, if it takes longer than a number of months or if it's into a year, then obviously part of that construct has to be a transition period. You cannot stop, discuss for a year, and think everything's okay.

    From my perspective, the underlying understanding is certainly that provinces and the federal government, whether it's an extension of the current one or whether it's some type of transition.... That has to be implicit to the industry. If we're going to change directions here, let's get it right. If it can't be accomplished in six months, then so be it, but there has to be that crossover and transition. As minister, I feel that's essential and it's understood that it's the direction we would go if it isn't accomplished in the timeframe set out.

    Mrs. Rose-Marie Ur: How big is the organic industry in Nova Scotia?

    Mr. Ernest Fage: The organic industry is really just in its infancy here. We've started a new organic program over here at the NSAC. I hope you have a chance, while you're here in Truro, to drop in over there. We also have an aquaculture program over there. It's certainly worth seeing both of them and talking to the educators involved.

    We see it as a major opportunity in a smaller province that has mixed, diverse agriculture. Not only are the major retail chains buying in quickly here, but for a province like Nova Scotia, where you're dealing with a smaller land base, it's ideally oriented to export opportunities for us too.

    Our history has always been as traders. We've got off that course over the last 50 years. We're strongly back on that course as a government and a people. Our markets are the 40 million to 60 million U.S. citizens down the eastern seaboard. That's where our traditional markets are, and that's where we see that we can accomplish significant growth and trade balance for the country. We're orienting ourselves very strongly that way.

    Mrs. Rose-Marie Ur: Thank you.

    The Chair: Thank you, Rose-Marie.

    David.

    Mr. David Anderson (Cypress Hills--Grasslands, Canadian Alliance): Thanks for your presentation this morning.

    You mentioned that you have a marshlands conservation act.

    Mr. Ernest Fage: Yes.

    Mr. David Anderson: In my part of the world, we have some organizations that feel obligated or privileged to be able to come into our area. They want to take land out of production and put permanent easements on it, those kinds of things. Do you have any dealings with those organizations? Have you chosen to go the route where the province protects the land? How are you dealing with that?

    Mr. Ernest Fage: Traditionally in this province, municipalities would have issued the permits on flood plains or on marshlands. As a province--and the agriculture industry was extremely concerned--we were starting to see commercial and residential developments on flood plains in this province. The majority of these dikelands go back over 300 years and were first put in by the Acadians in Nova Scotia.

    Obviously, we know they're going to flood at least once every 20 years, and we felt it was the proper role of the provincial government to step in if there was going to be a hodgepodge development on flood plains. The provincial government assumed the role from the federal government ten years ago of maintaining these dike systems. If we're going to invest millions of dollars to keep the sea water out, we need to preserve them for what they are. They're very valuable agricultural lands but not commercial development zones.

À  (1040)  

    Mr. David Anderson: Do you have organizations like Ducks Unlimited and other nature conservancies coming in and trying to buy up chunks of that land, or have you controlled that? What do you do here?

    Mr. Ernest Fage: Probably in Canada I sit in a bit of a unique position. I'm here today as Minister of Agriculture and Fisheries, but I'm also Minister of Natural Resources for the Province of Nova Scotia, so I would deal with all water courses, wetlands, marshes, under various hats.

    We work closely with organizations like Ducks Unlimited, the Nature Conservancy of Canada, the Nature Trust of Nova Scotia, and probably 20 other conservancy societies in this province. Certainly, we would work in cooperation with them and local communities. If an area was identified, it would go through what we call an IRM process here, integrated resource management, for its highest value and then work with the different groups and interests to come up with a solution that hopefully is workable by all.

    I should add we've had no major conflicts in that regard. Our conflicts would be more with forested or wild areas, setting them aside, and the confrontation or the discussion would more be centred with the forest industry or the mining industry versus preservation.

    Mr. David Anderson: Do you think it's a wise idea to allow permanent easements, particularly on agricultural land? That's what we're seeing proposed, particularly in Saskatchewan. I guess some of us are suggesting we may need that land later and that temporary easements would be a far better way, but the provincial government has some control over that.

    Mr. Ernest Fage: Yes. Easements in this province--and as the minister responsible I would sign easements--we've never been involved in on a large scale. We have much more cooperative effort with those organizations, but we would normally sign easements with many individuals or organizations, for various purposes. We always would include a timeframe, and those easements could vary. From 5 to 20 years would be the normal easements. We would rarely get into a situation where it would be in perpetuity in this province.

    Mr. David Anderson: Thank you.

    The Chair: Thank you, David, and thank you, Mr. Minister.

    A few minutes ago you asked our researcher a question. I know that in North America--in fact, my own village borders on a little village called the Indian Gardens--the Mi'kmaqs were involved with agriculture for probably thousands of years. You're going to have that answer from me sometime soon, but unless I'm wrong historically, I think it's about 400 years since they started agriculture here in Nova Scotia and probably the first bit of tillage of the soil by Europeans did happen here. Maybe we can have a little celebration... you know, 400 years of success.

    I want to thank you, Mr. Minister, for your presentation. You showed a great grasp of one of your several portfolios. It's not easy to get a handle on all of these, but we certainly appreciate your effort and the remarks you made this morning. On behalf of the committee, I want to thank you very much for coming, and good luck for farming in Nova Scotia in the future.

    Thank you.

    Mr. Ernest Fage: Thank you very much, Mr. Chairman.

    I want to thank everybody for the opportunity to make the presentation. I appreciate it. Thank you.

    The Chair: With that, we'll adjourn for about five minutes while we recess.

À  (1039)  

À  (1056)  

    The Chair: We would like to call our meeting back to order. Again, pursuant to Standing Order 108(2), we resume our study on the future role of the government in agriculture.

    The committee has been travelling across the country visiting the various provinces. This, in fact, is our seventh province here today in Nova Scotia, and tomorrow we'll be in Prince Edward Island. We are listening to various farm groups, individual farmers, and in fact almost anyone who wants to come and make to the committee a short presentation on what they believe should be the government's role in assisting the agricultural communities.

    A procedure we go through is that the members of the standing committee of the House of Commons hear witnesses. As you come to the table with your briefs--or you could send a submission later--we have our transcription group put into the record all your presentations. Eventually the researchers--one of them is sitting here next to me--will consider those with members.

    We'll write a brief report, we'll diagnose the report and make changes as need be. Sometimes we try to be unanimous in our report; sometimes different parties have different points of view and you get minority reports attached to the majority one. In any case, that report hopefully will be submitted to the House of Commons some time before the end of this winter, probably some time in June. When I say winter, I mean winter in terms of the House sitting.

    As a group we're all geared by certain procedures. We allow presenters to have about five minutes each; sometimes we allow a little bit more when we don't get a lot of people in the hall. As we approach the five minutes, I'll give a sign that you should soon conclude your presentation. Again there's a time allocation for members, in which each of them gets to ask questions and receive the answers. So if you see me getting a little bit itchy here sometimes, it's because the time is getting close to the concluding point.

    We're glad to be here in Nova Scotia today. The province is very close to my own, and I visit it quite often. As members, we would certainly want to introduce ourselves. I'll begin with Howard, who is the vice-chair of our committee, from the Canadian Alliance Party.

    Howard.

Á  (1100)  

    Mr. Howard Hilstrom: Good day, gentlemen. I don't see any ladies there. I was elected in 1997 in Manitoba. I'm a cattle rancher about 60 miles northwest of Winnipeg. It's about a 200-cow cow-calf operation, and we background our cattle.

    I've been the chief agriculture critic for the official opposition since 1998. We're dealing, obviously, with a lot of the challenges and the opportunities in agriculture here, and I look forward to your presentations.

    Mr. David Anderson: My name is David Anderson. I'm a rookie Canadian Alliance MP from Cypress Hills--Grasslands, which is in the southwest corner of Saskatchewan. I spent 25 years as a dry land grain and specialty crops producer. I just got elected in 2000, and so this is a new job for me. I work with Howard on the agriculture committee and I look forward to your presentations.

Á  (1105)  

    Mr. Dick Proctor: Thank you, Mr. Chairman.

    My name is Dick Proctor. I'm the New Democratic Party member from Pallister, which is the Moose Jaw--Regina area in Saskatchewan. I've been a member of this committee since I was first elected in 1997, and it's a hard-working and a well-functioning committee. And I too look forward to your presentation.

    Mr. Rick Borotsik: Thank you, Mr. Chairman. My name is Rick Borotsik and I'm the member of Parliament from Brandon, Manitoba. I'm the Progressive Conservative member on this particular panel.

    Brandon, Manitoba, is in the heartland of western Canadian agriculture, a very diverse agricultural area. Agriculture is certainly very important to my community as it is very important to this community, so I too look forward to your presentations.

    The Chair: I'll come back to Mr. Odina Desrochers, who's with the Bloc Québécois, later. His seat is right there between the two. He'll be right back.

    Rose-Marie.

    Mrs. Rose-Marie Ur: My name is Rose-Marie Ur and I'm the member for Lambton--Kent--Middlesex in southwestern Ontario. For sure, it's an agricultural riding, with great opportunities for supply management and grains and oilseeds. It's a great part of the country.

    I was elected first in 1993 and I'm presently vice-chair of the rural caucus, and I too look forward to the presentations from each of you today.

    Mr. Larry McCormick: Thank you, Mr. Chairman, and good morning. My name is Larry McCormick. I'm from eastern Ontario, and I was elected also in 1993. The name of the riding is Hastings--Frontenac--Lennox and Addington. It's a long name, and it's also the riding that has the most kilometres of road of any riding in all of Canada, more than 8,000 kilometres of road. So when my constituents tell me where to go, I always have some place to go.

    My wife is from much farther east in Canada than where we are now, the farthest eastern province, and so I've been in this great province many times over the last long time.

    For the last two years I've been Parliamentary Secretary to the Minister of Agriculture, Lyle Vanclief.

    We do have an excellent committee, with a reputation of getting along better than any other committee on the Hill, and since I think some of us are often in the minority, that's great, and so that's why I repeat it.

    Thank you, Mr. Chairman.

    Mr. Paul Steckle: I'm Paul Steckle. I represent the riding of Huron--Bruce. I'm a farmer from Ontario, from a western coastal community of Ontario with a large and diversified agricultural base. I have been part of this committee for many years and I look forward to your presentations.

    The Chair: Thank you, Paul.

    Sometimes we get involved with other things on the Hill and I guess that's where Odina is right now. You get phone calls and all that. So he will be joining us shortly.

    We have a number of witnesses, and I think we'll start with those who are sitting across the table.

    Paul Cook, from the Chicken Farmers of Nova Scotia, you have the honour. I pretty nearly said Ontario because we have Murray Calder, and Murray's always talking chickens.

    Anyway, welcome, Paul. You can start with your presentation.

    Mr. Paul Cook (Chair, Chicken Farmers of Nova Scotia): Thank you very much, Mr. Chairman.

    Good morning. My name is Paul Cook and I am the chair of Chicken Farmers of Nova Scotia.

    On behalf of the chicken producers, we thank you for the opportunity to make our presentation to you this morning and welcome you to Nova Scotia.

    The Nova Scotia chicken industry is an impressive nest egg. The average chicken farmer creates several direct and a multitude of indirect jobs, thus contributing greatly to the economy of Nova Scotia. The positive spinoff effects of the Nova Scotia chicken industry are wide reaching, and in 2001 chicken producers realized the second largest farm gate value in Nova Scotia, at over $53 million.

    With over 62% of our farmers under the age of 44, we are looking optimistically to the future.

    Today I would like to discuss with you three of the issues we feel are having, or will have, a major impact on this future.

    The first one is access to foreign vessels. The removal of the feed price assistance programs during the mid-1990s placed a significant strain on the chicken industry of this province. To cope, we have focused on farm and production management and have been able to maintain a viable, growing industry, producing some of the best product in the country.

     Relief in the price of grain is essential. We have proposed to the Prime Minister's task force on agriculture that consideration be given to changing the coasting trade exemption regulations to allow for a lessening of restrictions on the use of foreign ships to haul grain between Canadian ports in particular described circumstances. Without improved water competition, the high rail rates for feed grain shipments to Nova Scotia farms and feed mills places our producers at a comparative disadvantage.

    We are not suggesting that the regulation be revised in its entirety. We believe that specific and limited regulatory loosening, such as speeding up the process for obtaining waivers from weeks to hours to facilitate purchasing on the spot market, the elimination or refund of duties when special waivers are issued, and allowing for the consideration of economic factors and circumstances in the granting of such waivers would all maximize the grain elevator's long-term potential in Halifax to ensure the competitive transport of our grain supply.

    A second concern is the consolidation of the retail industry. Given the fact that most major retailers service their consumers from distribution centres, it becomes much easier for out-of-province suppliers to service a Nova Scotia market. With Ontario's and Quebec's advantages with respect to size, volume, and lower input costs, it is understandable why chicken producers in this province feel the viability of the industry may be at stake.

    The Atlantic region is particularly sensitive to the amalgamation of retailers and the movement towards national procurement. We are not as fortunate as central Canada, where there are numerous strong, independent retailers who can moderate the power of the large conglomerates.

    In Nova Scotia there are two dominant players who own stores under a variety of banners and largely control wholesaling and distribution. This puts pressure on our primary processing plants as they are squeezed by fewer buyers while at the same time competing with provinces next door. Our processors' margins are narrowed, which in turn places pressure on the producer.

    The result of this movement toward consolidation and national procurement can be seen in real terms in the substantial decrease in the roaster-size production of birds. In the year 2000, on average, one of our primary processing plants was processing between 25,000 and 30,000 head of roaster-size birds a week. Today that number is 5,000 head. It is anticipated the number will continue to decrease.

    Under central distribution, the retailer can contact one supplier to provide products for all the stores in the Atlantic region instead of negotiating with several suppliers to provide product that is produced and processed locally. The net effect is that central Canada's worst wholesale price becomes our best wholesale price.

    The third and final issue is international trade. The Chicken Farmers of Nova Scotia believe that sustaining our industry for the future depends first and foremost on Canadian trade policy. The Canadian government must pursue international trade policies that support our successful domestic industries.

    The federal government has repeatedly stated its support for our evolving supply management system and has declared it to be a domestic issue, and therefore non-negotiable at the World Trade Organization.

    Although the supply management system continues to evolve and is different today from 10 years ago, a controlled level of market access and the maintenance of over-quota tariffs are essential tools of supply management.

    Our international trade commitments dictate a certain level of market access. This market access is regulated by a tool known as the tariff rate quota, which allows imports of chicken up to 7.5% of domestic production tariff-free. Canada is the eighth largest importer of chicken in the world, about what Atlantic Canada and Saskatchewan produce each year. Since we share a border with the largest poultry producer in the world, the United States, without the tariff rate quota our domestic market would become a safety valve for U.S. surplus production.

    Another significant tool is the over-quota tariff. This is the tariff that is applied to all chicken imports falling outside the agreed 7.5% level of access. Over-quota tariffs must be maintained at an effective level to control the level of market access and ensure a stable market environment. The message must be clear: fair trade and not free trade.

    In closing, I'd like to recap the three issues we feel the government should take a future role in. First, regulatory restrictions on the movement of feed grains within this country must be eased. Second, the rapid pace of consolidation within the retail sector must be addressed. Last, the government's position supporting our domestic industry and system of orderly marketing must continue at the WTO.

    Thank you, Mr. Chairman.

Á  (1110)  

    The Chair: Thank you, Mr. Cook.

    Suzanne must have made a decision on this, because the chicken came first, and then we've got the Nova Scotia Egg Producers.

    Mr. Delong, or Ralph.

    Mr. Ralph DeLong (Chairman, Nova Scotia Egg Producers): Thank you, Mr. Chairman and members of the committee, for hearing us today.

    In making this presentation, I am representing the egg producers of Nova Scotia.

    My brother and I work on a farm in Lunenburg County on the South Shore. It was started by our father in the 1950s. We have egg production, replacement pullets, beef cattle, Christmas trees and a mail order Christmas wreath business that we operate.

    Nova Scotia Egg Producers, formerly the Nova Scotia Egg and Pullet Producers' Marketing Board, represents the egg and pullet producers of Nova Scotia. The industry has a farm gate value of $31 million. The Nova Scotia egg quota is equal to 557,000 laying hens, or approximately 4% of the national quota.

    Agriculture in the Maritimes, as in the rest of Canada and throughout the world, is facing many challenges. Reductions in the involvement of the provincial and federal governments has left agriculture in an impossible situation. On the one hand, governments are reducing their support for agriculture through specialists, research and development. On the other hand, governments are increasing the burden on primary industries by more stringent environmental requirements, food safety assurance, labour standards, reports and record-keeping and by downloading costs. As primary industry faces this changing environment, smaller producers and smaller regions are less able to survive or be sustained in the long term.

    Mr. Chairman, I'd like to speak on a few issues. The first is the importance of maintaining the regulatory structures of supply management and the second is the infrastructure. The third is on the need for research in the area and in poultry nationally, and fourth is on the price of feed in Atlantic region and throughout Canada, and the distribution thereof.

    First, as to the need for the regulatory framework in supply management, the egg industry in Nova Scotia operates under a national supply management system. This system has allowed egg producers to maintain modern farms utilizing world-class technologies. The stability that supply management provides to the egg industry has made it possible for us to be proactive in the areas of food safety and animal welfare.

    Our on-farm food safety program is a world leader. The guidelines and the industry's quota practice set high standards for animal welfare and husbandry that even now are being reviewed as to the possibility for setting them still higher.

    As well, egg producers use supply management as their safety net. This allows us to obtain our income directly from the marketplace rather than looking to government. Very simply, supply management has been good not only for egg producers but also for consumers, the hens and for government. To ensure its continued success, we ask the federal government to remain committed to maintaining the legislative and regulatory framework under which supply management functions.

    The federal government must defend our right to a domestic marketing system and enforce the access rate and tariffs for effective Canadian border controls in the current World Trade Organization discussions.

    Probably the greatest restraint to maritime agriculture is our deteriorating infrastructure. Our road system deteriorates further each year. Power outages appear to be more common for longer periods of time. Air travel to and from the Maritimes has always been expensive. The cost of business travel to and from the Maritimes has to be a deterrent to businesses moving into the region or expanding in the region. We often hear about the growing importance of tourism in our economies. However, tourists will also stop coming if our roads are allowed to deteriorate. We encourage the federal government to make a high priority of repairing the maritime infrastructure, especially road repair and construction.

    The egg producers put a high priority on research in our region for two reasons. The first is the ability to have research respond to local issues, such as utilizing specific feedstuffs or micronutrients, dealing with local pathogens or toxins, responding to husbandry problems such as manure utilizations, downgrading meat birds because of breast blisters, introducing new technologies or developing and improving food products for eggs or poultry.

    The second reason is to have researchers in the region who can serve as educators to students at agricultural college. The provision of up-to-date technical knowledge to future employees, resource and support personnel for poultry and related industries as well as the future for producers is essential if we are to sustain our industry.

    In addition to the students, existing producers are constantly seeking continuing education, the latest technology and production management methods to allow them to remain competitive, to create work with the Atlantic Poultry Research Institute, APRI, and to promote research in our region. We went from zero researchers to having two--one federal with Agriculture and Agri-Food Canada and one provincial with the Nova Scotia Agricultural College. Dr. Rathgeber is a professor there who is jointly funded by the provincial government and by industry.

Á  (1115)  

     Now that these researchers are in place, efforts are focusing on replacing the poultry research facilities at the agriculture college in Truro. The present facilities were built in the sixties and are no longer useful. We are hopeful that with the help of the federal government, these facilities will become a reality.

    The long-term survival of the poultry industry in the Maritimes requires that poultry research continue here. Unless local egg and poultry producers can have their specific problems addressed and can continue to be among the best educated farmers in Canada, one of our important competitive advantages in the region will be lost. The federal government must continue to recognize the importance of regional research and continue to support poultry research in Nova Scotia.

    While we have regained lost ground locally, the state of national agricultural research for livestock is alarming. During the 1999-2001 period, only 10% of Agriculture and Agri-Food Canada's research projects went to animal and poultry research, while 47% went to plant research. Also, the program designed to conserve breeding populations for poultry unique to Canada has ceased. This puts us at risk of losing genes that may be valuable in the future. We urge the government to increase support for poultry research in consultation with the newly formed Canadian Poultry Research Council.

    Finally, a long-term restraint on agriculture in the Maritimes has always been the price of grain compared to the rest of Canada. The price of corn in Truro, Nova Scotia, is consistently $30 per tonne higher than in Quebec. Several years ago, the federal government removed feed freight assistance. They were no longer willing to subsidize livestock agriculture in the outlying regions of Canada. The result has been that livestock production in the Maritimes is slowly dying.

    The red meat sector has suffered most acutely. If this sector deteriorates further, the infrastructure for the entire livestock sector in the Maritimes could ultimately collapse. If the red meat sector is lost, the present cost of feed could have a hefty rise in the remaining livestock industries in the Maritimes. The federal government should re-examine the mechanism for equalizing grain prices in the Maritimes with those in central Canada.

    Mr. Chairman, thanks for allowing me to make a presentation this morning.

Á  (1120)  

    The Chair: Thank you, Mr. DeLong.

    Are there others in the hall who would like to present? Is there anyone else? If you do, just let us know.

    Now from the Nova Scotia Agricultural College, Dr. Bruce Gray.

    Dr. Bruce Gray (Vice-Principal, Academic, Nova Scotia Agricultural College): Thank you, Mr. Chair and committee members. I'm Bruce Gray, the vice-principal, academic of the Nova Scotia Agricultural College.

    NSAC was established in 1905 and for many years offered technical diplomas in agriculture in the first two years of a degree program. Students who completed those first two years then finished off their degree at the University of Guelph or McGill University's Macdonald College or the University of Maine.

    In 1985, in association with Dalhousie University, NSAC awarded Bachelor of Science and Agriculture degrees for the first time. Enrolment at the college was 480 students in 1985. In 1993, again with Dalhousie University, NSAC enrolled four students in the Masters of Science program.

    NSAC is the only faculty of agriculture in Atlantic Canada. Although some of the community colleges in the Atlantic region offer one-year diplomas in agricultural subjects, NSAC serves as the agricultural training institution for the four Atlantic provinces. It is a part of the Nova Scotia Department of Agriculture and Fisheries, which is a major funder of the institution.

    Enrolment at NSAC increased to a maximum of 950 students in 1996-97. This included 31 graduate students. Since that year, enrolment has declined in all programs except the graduate program. Our enrolment this fall was 667 students, which is quite a drop, despite our increased efforts to recruit more students into our programs.

    As Minister Fage told this committee, the career services office at NSAC posted 600 jobs last year for a graduating class of 200 students. So the job market is very good, but we're not getting students who are interested in studying agriculture. We're not attracting them to the college.

     In the fall of 2001, NSAC contracted a marketing firm to study the market for education in agriculture in the Atlantic provinces. The marketing firm concluded that the NSAC was not well known in Atlantic Canada. Many people hadn't heard of it and didn't know what we did. Approximately a third of those interviewed considered NSAC to be farm school. And I think this shows that the public has a poor understanding of what the agriculture industry is. It does include farming, but it includes much more than farming.

    The demand for education in agriculture is not strong, but unfortunately we do not have a benchmark marketing study to compare this with. Enrolments in agriculture have declined in agricultural faculties across Canada, not only at NSAC.

    I think that the image of agriculture is not attractive to students. This morning on the CBC news I woke up to hear yet another story about impending disaster for agriculture in the Prairies because of a dry winter or a snowless winter. In addition to stories such as these, the Canadian public seems to be very concerned about food quality and safety, the impacts of agriculture on the environment, and the way our food is produced. And they generally look at agriculture as being a problem more than a resource for the country.

    I hope the Canadian government can provide information to Canadians so that they have a better and more positive understanding of what agriculture is and a better understanding of the agriculture and food system.

    The NSAC is trying to establish itself as an agricultural research institution. One of our strategies has been to develop a research professor program funded jointly by government and by industry. I think there is some safety net money from the federal government included there, but it's in with the provincial money.

    We currently have research professors doing research on fur animals, wild blueberries, turf grass, dairy genetics, climate change, processing carrots, cropping systems, potato physiology, potato biotechnology, and poultry products.

    Yesterday I was at a grower information day on the campus and I heard one of our industrial sponsors--he pays half this guy's salary--congratulate the research professor on his practical research and tell him that his research is making money for a lot of farmers. And I was pretty proud of that.

    We have benefited from federal government programs that fund research, such as the Canada Foundation for Innovation, the Natural Sciences and Engineering Research Council, and programs at Agriculture and Agri-Food Canada. For example, our faculty have a number of research grants funded by AAFC, NSERC, and industrial partners. We like this program and probably could make better use of it.

    In order to increase graduate student enrolment in agriculture research programs, I think it would be useful for the federal government to reinstate the Agriculture Canada graduate student scholarships.

    Also, on our campus we have two Agriculture and Agri-Food Canada research scientists, one in poultry research and one in dairy research. This is a good arrangement because at a small institution such as ours it allows a build-up of critical mass in research areas. And I hope we can have more of these arrangements.

    Finally, I am very pleased with the establishment of the Organic Agriculture Centre of Canada at NSAC. This centre, which is funded with the CARD money, has as its mission the development of research and extension related to organic agriculture. It is attracting interest from across Canada and also matching funding from the other provinces.

    Thank you.

Á  (1125)  

    The Chair: Thank you, Dr. Gray.

    And from the Nova Scotia Federation of Agriculture we have two presenters, Mr. Hunter, who is the chair of the industry planning committee, and Mr. Laurence Nason, who is the chief executive officer.

    Do you each have presentations?

    Mr. Frazer M. Hunter (Chairman, Industry Planning Committee, Nova Scotia Federation of Agriculture): We have a paper prepared by Laurence and me.

    The Chair: Frazer, the floor is yours.

    Mr. Frazer Hunter: We have a paper that will be passed out to you. Since we only have five minutes, I'll just summarize some of the points in that paper. And also, Ralph, Paul, and Bruce have brought up some of the things that are in the paper as well.

    Good morning, ladies and gentlemen, and welcome to Nova Scotia from the agricultural community of Nova Scotia. We thank you for this opportunity to present to you our balance sheet, our assets and liabilities here in Nova Scotia.

     I'll give a little background on myself. I was an immigrant to Canada in 1978. I landed in Cape Breton. The immigration officer at the Halifax airport wondered why I was even thinking of going to Cape Breton. I ended up there for 20 years. I have now moved to the mainland of Nova Scotia, where my wife milks the cows, and I clean the shit and feed the cows. It's our partnership there.

    With me is Laurence Nason, who is the CEO of the federation. The federation represents some 1,900 farmers in Nova Scotia. About 90% of the gross production is done by the 1,900 farmers.

    The minister this morning gave you lots of facts and figures. I'll keep away from those, you already have them.

    The NSFA's goal is to have profitable, sustainable farms producing products that are respected by the public for quality and safety. It fits into the vision of the new agricultural policy to Canada. The industry is very much challenged at the present time by tough demands for environmental improvements made by the public and government while they want us to compete in the global market.

    I brought along a football as an example. It's a little deflated. It's probably what agriculture is in Nova Scotia at the moment, a little deflated, but we'll bounce back. It's not a dying industry. It only needs to be reborn.

    This football is used in a number of sports. I hadn't seen the sport until I came to Canada. You have American or Canadian football. If you look at Australian-rules football, they also use this ball. Also, rugby football uses this ball. There are a number of sports that use this ball, and it gets tossed around quite a bit.

    What I want to bring out from you is that Canadian agriculture is really in the middle. If you play Australian-rules football, you have short-sleeved shirts and go up in the air, with fists and everything, with no protection at all. Some of you have seen it on television. It's the same with Australian and New Zealand agriculture. There is no protection.

    Then we come to the Americans. You heard about the Farm Bill this morning. The Americans and Europeans have total protection. We're in the middle, like rugby union players, with very little protection. Fair enough, in supply management we have some protection.

    If you think of the ball and take it back to Ottawa, that's us, stuck in the middle, trying to compete globally with the Americans and the Europeans with no protection at all. Yes, in supply management we have some, but in our other commodities, you from the west well know what you're trying to compete against at the present time.

    So that ball will sit in front there, and when you start to ask questions.... We're a little deflated, but we'll bounce back. We're going to become reborn. But Canadian agriculture is right in the middle.

    Outlined in the paper passed out to you are what we consider to be the assets and liabilities of farming in Nova Scotia. If we look at the balance sheet, there are a number of assets. We have changing lifestyles and demographics, and this is an asset. This is a market that's being created.

    I'm a dairy farmer. Dairy farming sometimes leads the world, but other times it doesn't. I picked these drinks up at the store this morning. The bottle of milk is only 250 millilitres and the bottle of water is 500 millilitres. The milk cost 65¢ and a bottle of water costs $1.28. If you had 500 millilitres of milk and 500 millilitres of water, they're virtually costing the same. But the cost to produce tem is completely different. We in the dairy industry don't want the consumer to get into the pack.

    This is the only beverage now produced without a screw top. Even beer is produced with screw tops now. If you were a five-year-old kid, would you expect to drink this in schools? If you were aged, with arthritis, you couldn't get into it.

    We, as an industry, have to get on board, as well as talking to government and the consumer. We have to provide a package suitable to consumers. We have to move forward as an industry. Lifestyle and demographics are changing.

    Milk here in Nova Scotia is sold in plastic bags. Have you ever tried opening a plastic bag? As a new immigrant to Canada, holding a plastic bag with pair of scissors, do you know what happens? It squirts out. Have you ever tried drinking this with the kids or grandkids in the car? You don't want it because it stinks in the car for the next week after they spill it.

Á  (1130)  

     So the industry has to move as well as many other things. But changing lifestyles and demographics are an asset. Technology is an asset. Dr. Gray mentioned it here. Globalization is an asset and a liability. The way we are--Nova Scotia is small, it's unique, we're positioned well geographically, and we're very diverse--these are all assets to the industry.

    We have some liabilities, though, in meeting the expectations of the community. What does the consumer want? Do they want a screw top? I think they do, rather than a thing to open. Do they expect a five-year-old kid going into primary to “push out to open”? What does that mean? Have you ever tried opening? Adapting to new technology can be an awful liability. We've got to move forward with capital support. We need it.

    Competing globally--you mentioned the football--can be a liability as well as an asset.

    Is farm income protection there to sustain what you've got or to help you move forward? I think that wants to be asked in the farm income protection programs we've got. The industry has to move on.

    New entrants: I heard the minister talk about that this morning. We need new entrants. We've got a college producing these gentlemen and ladies with the academic ability, but how do they come in? I'm going through that process. I've a son who wants to come into the dairy farm. If I want to get my share out, I've got to give it to him so he can get in. Is it any different in any other industry? I don't know, but it's a real problem in our situation at the moment.

    I think it was Ralph or Paul who mentioned consolidation in the retail industry, with two players. We can't compete with them. We have to get... not into bed with them, but we have to draw alliances with them. That's the way that industry is going.

    Buy milk at Sobey's or Loblaws or one or those stores. They turn over that product 150 times a year. That's how long milk's on the shelf--two or three days. Every time they turn it over they make 20¢. For a dollar invested, they make 20¢. If you work that all through, for one dollar invested, they get $75 gross. Fair enough. What do I make for a dollar invested? I'm sure you on the agriculture committee know that quite well: nothing, compared with the retail stores.

    Lack of capital is a problem in our industry as it becomes more and more capitalized.

    One of the unique things about Nova Scotia agriculture, though, is our dependence on labour. I think Charles might mention that during the horticultural section. We need seasonal labour here.

    My bill on my 60-cow dairy herd for purchased feed grain is $85,000 a year. That's for heifers, etc., as well.

    We are very much diversified. You heard Ralph talk about his operation. Although he's here representing the poultry industry or the egg industry, he talked about beef and Christmas trees. It is an advantage to us to be highly diversified.

    Charles will mention high concentration in horticulture.

    And we have a high concentration of supply management in the poultry and dairy industries. It gives stability, but I just noticed the new demographics. There are 7,000 fewer people living on Cape Breton. That's the equivalent of 7,000 fewer litres of milk drunk up there. That's the equivalent of 200 fewer dairy cows needed to supply the market in that area. The demographics of that industry might have to move where the market is. We pay for the trucking of milk to the processor; the processor pays the next step. But these demographics are changing. There can be advantages and disadvantages.

    The final thing I wanted to mention is--Laurence hasn't kicked me yet--drought has affected us greatly here in Nova Scotia for the last five years. It has had a big effect on my own farm. It cost us $30,000 last year on 60 dairy cows. Our quota in this province is 17,000 kilograms of butterfat a day. If dairy farmers had the same situation I've got, it's the equivalent of $8 million of capital having to be found to reinvest in the industry, which is a lot of money.

    I might mention also the environment. When we look at manure storage and systems, capital is the thing. To put up storage on our farm is going to cost us $150,000. We don't get any return from that, but it's what the public demands and what the public should have. But we must have support from other sources to raise that capital to reinvest in our farms.

    Thank you for these five minutes, Mr. Hubbard.

    Laurence, do you have anything to add?

Á  (1135)  

    Mr. Laurence Nason (Chief Executive Officer, Nova Scotia Federation of Agriculture): No.

    The Chair: That's a very interesting presentation. I'm not sure about your mathematics with counting time, but other than that it was very well done.

    Where did you come from when you came here 20 years ago?

    Mr. Frazer Hunter: I came from Northumberland, England, where the foot and mouth started.

    The Chair: We were trying to determine that.

    Mr. Frazer Hunter: I was born in Glasgow.

    The Chair: So, Laurence, you're here for support.

Á  (1140)  

    Mr. Laurence Nason: I'm just here, Mr. Chairman, as a resource person.

    The Chair: Thank you.

    Then from Agri-Futures Nova Scotia we have Charles Keddy.

    Mr. Charles Keddy (Chairman, Agri-Futures Nova Scotia): Thank you, Mr. Chairman, and thank you, ladies and gentlemen, for the opportunity to make a presentation here today. Coming into this meeting I wasn't real sure who I was supposed to be representing. I got a call and I was asked if I would make a short presentation, and being involved in the horticultural and beef industries and chairman of the CARD Council of Nova Scotia, I could have approached this from several directions. It certainly helps to be one of the later presenter, because a lot of the material has already been covered by the previous presenters. As I say, I wasn't entirely sure what angle I should come from.

    Just as a way of introduction, I do farm in the Annapolis Valley of Nova Scotia. I have been involved in growing nursery stocks, strawberry plants, raspberry canes, and other crops for the past 25 years. I am a first-generation farmer. We export our nursery stock all over North America. In fact, one of the advantages is that I just spent 10 days in Florida visiting our growers, where we send about 8 million plants a year. So it gives us an opportunity to get away in the wintertime and see what's taking place in other areas.

    It was interesting to hear a question from one of the gentlemen here to the minister with regard to the U.S. Farm Bill. You sit back as individual farmers and you read information that comes across your desk or newspaper articles and you think that some of those things don't have a great impact upon anything you're doing. But we probably don't stay abreast of that information enough, because all of that information, such as the U.S. Farm Bill, can have a tremendous impact on the industry.

    I was meeting with a gentleman in Florida who is head of the Florida Strawberry Growers Association, and he was getting ready at that time to make a presentation on the U.S. Farm Bill to try to get changes to allow them to continue the use of methylbromide as a fumigant in the U.S. As a signatory to the Montreal Protocol and with the Clean Air Act that they have, they're supposed to be entirely out of methylbromide use by 2005. The entire agriculture industry is lobbying very hard to have that extended to at least 2007, and maybe to 2010. Given that happening and knowing the Canadian position, we'll probably still have a complete phase-out by 2005. Things such as that sometimes put us in a very disadvantaged position . So things such as the Farm Bill and so forth have a tremendous impact on our industry.

    I'm going to try to cover a couple of areas that the former presenters haven't covered, one of them being changing consumer expectations in relation to food safety. Certainly, as consumers become more conscious of water and food product contamination, both the government and the retailers are putting more strenuous demands on the primary source issues, such as traceability. On-farm food safety must be implemented at the farm level or the markets will disappear. Other players in the food chain must also be accountable for the traceability from farm to consumers. It is unreasonable for the producer to bear all the food safety requirements as part of his cost of production without a parallel increase in return. The wholesalers and retailers can increase their cost of products in the marketplace to cover food safety initiatives, but this is seldom passed on to the producer.

     Expectations at farm level must also be based on sound scientific practices and not on public perception. We've started to address the food safety issue through seminars on the Canadian Horticultural Council's fruit and vegetable guidelines, but there is far to go. The public believes Canada has the world's safest food that can be achieved.

    We must move forward with an integrated food safety program from farm to consumer, on an industry-wide basis. This being said, the farm community is not in a position to add any significant amount to the cost of production for food safety without reasonable expectations of increased returns.

    Another area Frazer indicated and I would like to cover is the human resource area. It was probably stated earlier that in Nova Scotia the agriculture industry is both directly and indirectly related to 14,000 jobs. The horticulture sector in Nova Scotia is certainly the largest user of labour in this province, both full-time, part-time and seasonal.

    The horticulture sector is Nova Scotia is currently undergoing a labour shortage, particularly short-term, seasonal and harvest labour, for non-mechanized fruit, nursery, and vegetable crops. It is impacting on our ability to produce and market our crops. Opportunities abound for expansion in hand-harvested crops such as strawberries, or hand-packed strawberry nursery plants. Our commodities have been downsized and markets lost because of lack of labour.

    In the context of the Nova Scotia horticultural industry, the recent decline in the availability of harvest workers must be reversed. This decline has largely developed since the changes in the EI legislation in 1997. Canadian workers are refusing to undertake short-term employment unless they are paid cash, since working on payroll leads to a multitude of penalties and clawbacks once T-4s are issued.

    We must aggressively pursue changes to government policies that discourage Canadians from working in short-term, harvest, and seasonal employment. Legislative criteria placed on Canadian workers through the interaction of the EI regulations, the Income Tax Act, and various provincial and municipal statutes work to discourage Canadian workers from participating in the labour force for short-term employment.

    The foreign worker program is of limited use in Nova Scotia's horticulture sector, due to the geographical range of our farm operations, diversity of cropping seasons, volumes, and the lack of critical mass of industry required to provide an employment period of sufficient length for efficient use of imported labour. Foreign workers are important to some fruit, vegetable and nursery operations to allow for the development of core crews. However, the bulk of the labour force is based on Canadian labour. Many Nova Scotia horticultural producers have the production and marketing skills required to increase production for both domestic and export opportunities, but lack reliable access to suitable numbers of harvest workers to allow them to participate in these markets.

    Another area I'd like to address is the regulatory requirements. There is a vast array of regulatory and protocol demands by both the government and the consumer that require compliance actions that the industry has neither the training, time, nor physical resources to carry out. These include, but are not limited to, occupational health and safety, food safety pesticide regulations, environmental farm plans, nutrient farm management plans, and water access approvals. Many producers are becoming completely overwhelmed by these ever-increasing requirements, and are questioning how they can continue to carry out the production and marketing functions and implement these requirements on a timely cost-effective basis without a corresponding increase in revenue potential.

    At the same time, the industry is rapidly losing access to plan protection and crop management products, due to a lack of harmonization between the American and Canadian pesticide regulatory processes and inadequate minor-use regulatory capacities. This has created a non-tariff trade barrier and denies Nova Scotia producers access to modern crop production tools available to other producers selling products in this province.

    Those are just a couple of areas I'd like to cover.

Á  (1145)  

     I had a meeting three weeks ago in Ottawa with all the chairs of the CARD councils, and we were discussing the APF at that time. I think there's certainly willingness within the CARD councils across Canada to work with the different governments on the APF. I think it's been very well demonstrated that the CARD council model within the province is certainly a very effective delivery model for government programs.

    It becomes very disturbing when you read statistics that the farmers in this country now are 1% of the population. I think that at all levels of organizations, governments, and industry, we must work together to make the public aware that agriculture is food and that, if you eat, you have an interest in agriculture in this country.

Á  (1150)  

    The Chair: Thanks, Charles.

    From the New Democratic Party of Nova Scotia, we have its agricultural critic, Mr. John MacDonnell.

    Mr. John MacDonnell (Agriculture Critic, New Democratic Party of Nova Scotia): Thank you very much. It's a pleasure to be here today on behalf of the NDP caucus. I want to welcome you all to the province of Nova Scotia.

    I think the previous presenters would indicate to you that the farming community in Nova Scotia is made up of individuals who are as innovative and entrepreneurial as any group anywhere across the country. For that reason, here in this province I think we have good reason to be optimistic about the future of agriculture. But that future still requires policy, programs, and vision from the federal government in order to secure its future.

    I want to say that there are no other avenues, no better avenues, in agriculture, forestry, or the fishery that can be used to sustain communities in the long term. The resources are renewable and sustainable, and if policy is made based on securing communities, then I think you can sell that quite easily to the Canadian taxpayer.

    They have to realize that not everything should be viewed as a cost, that there is good reason to see dollars as investment dollars and actually dollars that will defer costs in the future. It would be maybe the most cost-effective way to secure those communities. When I say that, I'm talking about keeping young families in rural Nova Scotia. In doing that, you can keep your school open. In doing that, you may be able to attract a doctor, because it's probably going to be a young doctor who wants to start a family. Why would they go somewhere where there's no school?

    All of these conditions are related. People think in terms of the entirety of their needs in life, in the communities in which they live. They think about the income they need to raise their families and secure some element of security in their old age and also what that means in relation to other businesses where they live. Nobody thinks purely in terms of silos in how these communities work. It's a relationship of needs and the ability of governments to support those needs.

    The Nova Scotia agricultural industry involves over 4,000 farms with farm gate receipts of over $400 million. Yet sadly, the latest federal census figures show a rural exodus in our province. That's not a new trend in this increasingly urbanized country, but it's clear that agriculture in Nova Scotia is facing some serious problems.

    As GPI Atlantic stated in its report, Farm Viability and the Economic Capacity in Nova Scotia, while total farm cash receipts have increased 12% over the last 28 years, net farm income has declined 46% in the same time. Return on investment for farmers has dropped and the debt-to-net-income ratio has tripled from 300% to 900%. While incomes dropped, direct government payments to farmers also declined from an average of $17 million in the early 1980s to $11 million in the late 1990s.

     What do these figures mean? GPI warns that “we are likely to see the... demise of several agricultural sectors in Nova Scotia, including apples, vegetables, beef and hogs”. Small wonder, then, that we see a rural exodus, particularly of the young, who seek more fruitful employment elsewhere in other fields.

    To make matters worse, Nova Scotians experienced drought conditions in four of the last five years, which has marginalized many farming operations. Though farm gate receipts have increased, the costs associated with them have made farming less and less attractive.

    Last year, the federal government and the provinces, including Nova Scotia and the territories, met at Whitehorse and endorsed a national action plan to make Canada the world leader in food safety, innovation and environmental protection. The plan aims to improve farmers' ability to manage the inherent risks of farming through safety net programming. It also seeks to renew the farming sector through the programming that addresses their unique needs and helps them to adapt to change.

    That's an admirable goal, and I hope we can all work together to achieve it. At the same time, however, Nova Scotia has seemingly moved away from the very purposes of this action plan. The provincial government axed the technology service branch of its agriculture department, strangled funding for the maritime beef testing station, and ended programs such as the Farm Investment Fund and the Agri-Food Industry Development Fund.

    What does this mean? By axing an arm of the agricultural department, this government threw away resources it may need to implement a national action plan. In its place, it created the Agriculture Development Institute, a body this government has taken pains to say is not under its direction. How then will it bring technical expertise to bear on implementing this national action plan?

    The beef industry in the Maritimes depends on the work of the beef testing station to improve its breeding stock. The test station measures the quality of maritime beef, which I must say is on par with beef anywhere in this country. Remove that benchmark by starving it through funding cuts, however, and you cut the legs out from under the industry.

    What's worse, the two axed government programs act with the aims and intent of this national action plan. The Farm Investment Fund was designed to support sustainable growth in the farm businesses by providing public investment in support of projects that enhance economic viability, farm and food safety and promote environmental stewardship.

    The Agri-Food Industry Development Fund encouraged an entrepreneurial and market-driven view of the agriculture and food industry and its role in adaptation, economic growth and rural development. Its objectives were to develop opportunities for viable, long-term domestic and export markets for our agriculture and food products; to introduce new agriculture and food marketing technology and systems; to encourage alliances and cooperation along the marketing chain; to enhance management, organizational leadership, technical skills in the agrifood industry; create an awareness of the value of the agrifood industry to our economic growth; and finally, to provide for self-directed sector development, innovation, and change management through agricultural industry organizations.

    Why has Nova Scotia taken four steps back while saying it wants a national action plan? I'll answer that question, and the rest I'll have to leave for the minister. I make these criticisms because it's clear to me that if the federal government, provinces and territories are serious in their intent to have a national action plan, they must come to an agreement on the standards and programs they require to implement this plan. I can't and won't say what those standards and programs should be, except that they should be developed through a broad process of consultation with stakeholders.

    Do I believe in a national action plan? Fervently. But we all face the spectre of increasing subsidies for agriculture in all areas of the world, particularly in the United States and the European Union.

    The World Trade Organization is supposedly working toward an agreement on subsidies for agriculture, but that may be years away, perhaps not until 2005. In the meantime, those subsidies continue to hurt our export markets and we can only deal with them through a coordinated national approach.

    My real message to the committee is in pointing out that this provincial government is steps away from the programs that complement a national approach and that time is of the essence. We need to get all parties at the table to hammer out a consistent national strategy before any more complementary programs or programs easily adapted to fit the national strategy are axed.

    I want to say that it's not all bleak in this province. As I understand it, the Prairie Farm Rehabilitation Administration part of Agriculture and Agri-Food Canada has been investigating drought problems here in Nova Scotia and will be making a report on the matter, perhaps, later this spring.

Á  (1155)  

     So as I sum up, I do want this committee to take the message that agriculture is worth investing in, and I think taxpayers in Canada should recognize that because it will sustain communities, it will cut costs for the taxpayer, and I think there are variables beyond the control of the agriculture community that make it worth doing. And for enshrining some type of food security for this country, I say yes, it's something that should have been done long ago, and we don't need September 11 to bring that message home to us.

    Thank you.

  (1200)  

    The Chair: Thank you, John.

    Ed Belzer.

    Ed, maybe you should mention what you do and where you're from. We have a lot of different sectors here and it's always interesting to see what...

    Mr. Ed Belzer (Individual Presentation): My name is Ed Belzer. I come from the Musquodoboit Valley. I've lived there and farmed there for 27 years now. I too am an immigrant. I'm a Canadian by choice, and as a matter of fact I'm so happy to be a Canadian by choice that I gave up my dual citizenship a few years ago. I have no need for a citizenship in another country.

    As you people know, and knew even before you began this cross-country tour, this is a vast country with great diversity, and what works and is appropriate for one part of the country isn't necessarily what works and is appropriate for another one. In this part of the country where you are now, the Maritimes in general, and probably some other parts of the country, there are a lot of areas that are suitable for farming only on a small scale, where there's hilly ground, woodlots interspersed with cleared land, and so forth. Because of that, some of the farming techniques that are appropriate out in the Prairies and so forth are not appropriate here, even though I see some farmers trying to use these ten bottom plows and so forth. I wonder where the economics of that lead.

    The supply management system doesn't affect me in any direct way that I'm aware of. I certainly don't participate in that. But as a small-scale mixed livestock producer, I urge you not to allow this country to cave in to forces that would do away with the supply management system.

    I've been farming for a little over 27 years and I've been on my current farm for 27 years, first as a part-time farmer and for the last seven years, since I got a pension from my off-farm income, I've been at it full-time. During that time I've seen the small mixed farms dwindling. The only neighbours I have who are able to make a go of it without off-farm income are those who are in supply management commodities. I'm not jealous of that. I admire that and I admire this country for having come up with that plan. Stick by it.

    The other farms have been becoming fewer and fewer. When I was a lad growing up in Philadelphia, Pennsylvania, I remember hearing something then for the first time that I've heard off and on through the years, and it's bragging about how many people the average farmer supports. I think when I was a kid they'd say something like in the old days it took one farmer to support two people in town and now it's one and thirty. I don't know what it's up to now, but here in the last census we say about 1% of our population are farming. At what point do we decide enough is enough? Maximum is not the same as optimum. It's impossible to maximize for two or more variables in the same equation. Compromises have to be reached, and I think we ought not necessarily to continue pushing on what was at some point something to be proud of and to brag about.

    Our small communities need small farmers as well as those who are able to make their living full-time on the farm. It contributes to the stability of the food supply to have small-time farmers. I used to be a little bit embarrassed that I couldn't make a living full-time on my farm. That farm never supported anybody even when it was full-time. People needed off-farm income.

    About a half a century ago, the tradition ended where the father in the family would go to work in the lumber woods to get off-farm income. The mother and wife in the family would look after the kids and the livestock at home. That was done. But there is still a tradition in this part of the country, where we have a lot of farms with small woodlots, of getting off-farm income. Rather, it's on-farm income, but it's from the woodlot.

     I'm going to mention something here that I think is specific. I may be wrong, but what I understand is that if a woodlot is clear-cut, you pay taxes now with capital gains tax that's only half; you pay taxes on half your income. Compare that with a farmer who decides to work in his own woodlot a little each year to get some sustainable income to supplement his farming income. Why do we have a government that encourages the clear-cutting and militates against sustainable woodlots? I think that change in the Income Tax Act may be something you can help out with.

    The small-scale farmer also produces a stabilization in the marketplace for other farmers. When the Japanese economy went into a nosedive a few years ago, I was hearing on the radio about farmers out west--the big pork factories--gassing their little pigs, and so forth.

    When I had to buy feeder pigs, I bought them from another small-scale local farmer, one whose off-farm income is from both working at the cattle auction on Thursdays and, for the rest, sheep, pork, and so forth. I didn't pay him any less. He had to get what he had to get to make a go of it. I didn't get any less from my customers. They weren't trying to beat me down because they heard people were gassing little pigs. It cost me just as much to raise the feeders to market them. There is a stability built in if we keep small-scale farmers in the game.

    Another thing I want to mention is an example of how policy can hurt us unintentionally. This problem has been rectified, but with the federal NISA program, what farm produce was going to be considered a qualifying item depended on the particular province. In almost all the provinces, the sale of horses was in there, just as though you sold cattle, or pigs, or something like that.

    In Nova Scotia, for whatever reason, the government of the time chose not to include that. Now, if I sold mules, it would count. If I sold--I swear it's true--hedgehogs, that would count. Emus, I believe ferrets--these things would count. But I farm with horses; I use horse power to run my farm. One year before horses counted, I was able to sell three trained, mature work horses. I got $7,000: for two mares, $2,000 each, and for a stallion, $3,000. They were useful, productive animals; we're not talking about race horses here. I wasn't allowed to count it. But the feed I had to put into raising them counted against; it was subtracted for the NISA program. It still is.

    Now if I sell horses, it counts. But there's not much market for work horses, unfortunately. So there's again a problem for some of us who are farming in alternate ways, in that the cost of the fuel of our traction power comes off the eligible sales. If I'm buying petroleum to run my tractor, as I understand it, it doesn't come off. So we're at a disadvantage.

    What do we know about evolution, social evolution as well as biological evolution? The slightest advantage, sustained over a long time, will lead to extinction for the one that's not advantaged. So I urge you to consider what things you do, to see if they are also helping to support small-scale mixed farming and the rural communities.

  (1205)  

    The Chair: Thank you, Ed.

    We've had a great diversity here of information. I think those blueberries... you were probably trying to sell those in Europe, were you? Is that where the blueberries go?

    Mr. Frazer Hunter: Tim Horton's.

    The Chair: Tim Horton's.

    Some hon. members: Oh, oh!

    The Chair: And your Christmas tree wreaths you're shipping down to the States?

    A voice: Right to California.

    The Chair: Right to California.

    You're talking about bringing grain in here by boat, probably from the Mississippi, is it? From where?

    Mr. Paul Cook: Not necessarily anywhere.

    The Chair: No, no. Put it on the table. I'd like that brought out. But it has been considered? There's a cheaper way of getting grain here by water: down the Mississippi to New Orleans and back up to the Atlantic provinces. That's something I want our people here--

    Mr. Ralph DeLong: In addition, when you're bringing in foreign grain as opposed to Canadian, it's easier to move north-south than east-west.

    The Chair: Right. We have some Canadian people here who think only in terms of our Prairies. Some of the prairie grain, in fact, goes through the lakehead and could go down through Duluth to the Mississippi. Some of your grains from the west, Howard, could have arrived here by water.

    Howard, do you want to start the questions?

  (1210)  

    Mr. Howard Hilstrom: I certainly take a little exception, Mr. Chairman.

    The Chair: I knew you would.

    Mr. Howard Hilstrom: You think some MPs only think of a certain region of the country. I consider it to be an unwarranted comment at this time.

    The Chair: I'm sorry, Howard.

    Mr. Howard Hilstrom: Okay, it's fine. These issues are very large.

    I have several points, but we want to get to the feed grain business, definitely, and the railways. There will be questioning about it.

    Ed, you brought up that you didn't think supply management was bothering you. It's true, supply management is not designed to promote small farmers. The supply management farmer in your area is able to outbid anyone else in any other agricultural sector for the land. As a result, the supply management farmer, if the quota is available, will continue to grow and the other farming will move to the side. There is a competitiveness in the agricultural industry in the area.

    I think one of the things is that labour is always a big issue. Charles, you had asked a question, or you thought it didn't make a difference. There are impacts from supply management. Do you want to say a quick comment?

    Mr. Ed Belzer: Yes. I raise some turkeys and am allowed to raise only a few, compared to what I could market. I'm not jealous about it. As I said, I have other income and I'm not jealous about those people.

    I used to live in New Mexico. This was more than 30 years ago. I've seen farms where they milked 23 hours a day. They would shut down once to repair milking machines or whatever, clean up the thing, and keep going. I think they were milking a number of cows. What would it be? Would 1,200 cattle keep you milking 23 hours? They moved. They sold the farm after I left New Mexico and came to Nova Scotia. They moved to another place and increased the size of their herd again.

    With supply management, though, our farmers don't need to do it. I don't want to see them have to do it.

    Mr. Howard Hilstrom: Okay. Thanks very much.

    Charles, you were quite clear that the current employment insurance rules are such that it is negative towards people going into farm labour. Is it a fair characterization?

    Mr. Charles Keddy: Yes. I would say, given some of the changes that have taken place, it certainly has not made it conducive for people to take farm jobs, particularly short-term harvest jobs when you need large numbers of people, because of what we can pay those people.

    Don't get me wrong. I don't start anyone on my farm at minimum wage. I don't have any idea what minimum wage is in the province. We start off anywhere between $6.50 and $7 an hour . I think the minimum wage is $5.85 or something like that. Minimum wage doesn't even play a factor in any calculations on my farm.

    I can't get the people to come out and do the work. There are municipal programs in place that allow them to stay home on welfare or, certainly as single mothers, on child support, and so forth. There's no way I can compete with what those people can get paid. If they do come out and work, every dollar they earn is directly taken off their social supports.

    It's the same way with the changes to the Unemployment Insurance Act. It has almost made it so it's forcing everyone to go and find full-time employment. We cannot create full-time employment for 90 or 100 people on our farm.

    Mr. Howard Hilstrom: It's a strange thing. This is what we're seeing in Ottawa. One ministry has a negative impact on another minister's efforts. In this case, with EI, HRDC has a negative impact on agriculture's efforts. Of course, the health ministry, with the PMRA issues, has a negative impact on agriculture also.

     You need to clarify this feed grain business just a little bit. Does Nova Scotia not produce enough feed grains to maintain the livestock-based supply management allocated by the federal government? Can you not pass those costs along through supply management, which is what supply management is designed to do?

    The Ontario farmer producing these feed grains is making very little money. What kind of system do you want to get that feed grain out of Ontario and the west, so you can have your supply management? Why isn't there some policy in Nova Scotia to grow more feed grains? What's the deal there?

  (1215)  

    Mr. Paul Cook: The federation can probably comment more on the available land base for grain, but there isn't nearly enough available land base for grain production to support the agriculture industry in Nova Scotia.

    On one hand, we have the high cost of getting feed here from central or western Canada. Then you talk about getting the money back out of supply management. We also have to compete with the chicken produced in Ontario, Quebec, or wherever. Supply management doesn't guarantee anyone a living. You have to sit down and negotiate your price for the product. It costs about $30 a tonne by boat and $50 a tonne by rail to get the feed here, but our processed feed down here is costing us $70 to $90 a tonne more than in Ontario. Where's that money? If we had that money we could compete.

    We would like to use western Canadian farmers' grain. The trouble is, grain transported between two Canadian ports has to be transported on a Canadian vessel with a Canadian crew. We're asking that if a foreign boat is available, let us use the foreign boat. We can get it here cheaper.

    Mr. Howard Hilstrom: This whole feed grain business and the movement of grain between provinces brings up an awful lot of issues. Do you want the government to get into subsidizing? We're certainly not going to go back to the old Crow rate, where western Canada shipped its grain all over the country and all over the world and was supposedly subsidized, in order to facilitate the agriculture industry in other areas, to the detriment of western Canada. In the west, we're finally getting a feedlot industry and a hog production industry we never had before, and it's because we quit shipping our feed grain out cheaply.

    So how is this going to be reconciled? What would you specifically recommend the government do to enable Nova Scotia to have feed grains at an affordable price? What specific action should they take? Should it be a straight subsidy or what?

    Mr. Paul Cook: First of all, I don't want to live off a subsidy--I never did and never want to. I want to get my price for my product out of the marketplace, which is what supply management tends to do.

    We're asking for the federal government to relieve the restriction on using Canadian boats between two Canadian ports. We can get U.S. corn out of the Great Lakes on foreign ships as well, but we want to use Canadian grains.

    Mr. Howard Hilstrom: Thank you, Mr. Chairman.

    The Chair: Thank you, Howard.

    Mr. Desrochers.

[Translation]

    Mr. Odina Desrochers: First of all, I would like to say that I'm very pleased to see that opinion in Nova Scotia is so diverse and that, all the various stakeholders share the common goal of improving the state of agriculture in this province and elsewhere in Canada. Our hearings throughout Canada are not designed for us to get information that we already know, but rather so that we can hear suggestions that we can use to advise the incumbent government and to develop possible solutions which could be used to save agriculture.

     Agriculture in Nova Scotia, in the west of Canada and in the other provinces is facing many problems and several areas of agriculture, as we all know, are on the skids.

    I'd like to ask a question of Mr. Hunter and Mr. Nason. Many federal programs have been put in place to support agriculture. These programs have not been exactly stable and have been amended several times over the past five or six years. One of these programs was even dubbed a disaster program, which is a very positive move in getting Canadian agriculture back on its feet.

    I would like to know whether what has been done met your expectations and I'd like to also know what you would like the Canadian government to do to turn the current stagnated state of Canadian agriculture around?

  (1220)  

[English]

    Mr. Frazer Hunter: I'm sorry Mr. Hilstrom has left the meeting at this stage. Later I want to address something he said on supply management.

    But let's get back to your point, Mr. Desrochers. Canada's supply management system has been very good to me. Why I came to Canada was the opportunity, which I didn't have in Europe. Probably the only other place was New Zealand. When I said to my parents that I was emigrating, they said, “Well, at least you're 3,000 miles nearer in Nova Scotia than you would be there.”

    So Canadian agriculture...we've had tremendous opportunities. But the federal government must help us to be on the same playing field as our American and European counterparts. We're not on that level playing field. Even within the provinces here, we have provincial restrictions that don't allow us to be on a level playing field when we come to market.

    When you talk about what the federal government can do for the future, the APF--and I hadn't realized that was the acronym for it--is a good start. But to move my operation from where it is now to where it has to be to benefit from the APF is a major, major capital change. Up to now I've put my milk in my bulk tank, the truck has come in, and I've said goodbye. We as an agricultural industry have moved away from the consumer. There's very little relationship between me as a farmer and the consumer. Traceability is important. But I'm just thankful, and 90% of my fellow milk farmers are thankful, when that truck comes in and picks it up, because we don't have any more responsibility. We as farmers have to start taking responsibility for our actions.

    The proposal by the federal government and the provincial governments, what they're looking for, is right. We must provide the consumer, as our vision says, with the capital, the availability of capital, or some interest buy-downs to get from that stage to where they want us to go. That is what we need in agriculture, to move from where we are to where we have to be.

    As I said in the beginning, our industry is dying at present. What we need is to be reborn. We have to act through partnerships. The consumer is a partner, as are the governments, provincial, federal, and municipal, because they have a lot of the environmental regulations in there. We all have to sit down in a partnership, an equal partnership. We are producers.

    I'll speak from the dairy viewpoint because that's where I come from. Originally I was a beef and sheep farmer in the U.K.; then I came here, and the only way I could survive was with dairy. We got 1.4¢ a litre. The processors then put another 2.6¢ on, so it ended up with the consumer at 4¢. Of that 4¢, we got 1.4¢, the retailer got 20% of that, and the processor got the rest. We have been screwed, so the system is not right. The government must look at the system and change it.

    We need capital, not given as free grants but as something we can survive on and move forward with.

    I don't know if that helps.

    Laurence, do you want to add something?

    Mr. Laurence Nason: I guess your question alluded to federal programs, and in the same breath you used terms like “not stable”, “altered”, and so on. I think one of the things we've seen in the past couple of years here is that many federal programs are designed to suit the Canadian situation. However, our agricultural economy is almost totally different from most agricultural economies in the rest of the country. It's probably more similar to the agricultural economy in Quebec than it is to any other. The programs often appear to penalize us because, as was mentioned before, we're diversifying. In order to protect our incomes here, farmers have diversified their operations.

     I think that one of the things we've been very interested in for the past year is the concept of risk management. We've had an industry-government committee working on that concept for the past year. I think the best way the government can help the industry is to help us deal with the risks that are associated with farming before we get into a position where we have to deal with a crisis. Most of those risks have been alluded to here already this morning. There's the food safety issue, the environmental issues, the things farmers have to do now, I guess, to farm in the community with the other 99% of the population who don't farm anymore.

  (1225)  

    The Chair: Thank you.

    Frazer, the milk you brought in, what brand was that?

    Mr. Frazer Hunter: That's my brand, Scotsburn Co-op.

    The Chair: Who owns that, Mr. Hunter?

    Mr. Frazer Hunter: We, as producers, own it but have very little influence in the management of it. Co-ops have to get back to their roots, where they came from. That co-op should be adding value to the product I produce. I get a patronage dividend if we make money, but no actual money flows from the consumer to me through that co-op.

    When the price went up, I got what CDC gave us. I didn't get anything from what the co-op got directly in their hands.

    The Chair: Not directly, but you have a...

    I'm going to have to move on, I guess. As chair, I shouldn't be asking questions, but I will a little later.

    Rose-Marie.

    Mrs. Rose-Marie Ur: Thank you.

    Mr. Frazer Hunter: We've lost control.

    The Chair: It's a long history. I've read your report. You've done very well as a dairy in terms of Scotsburn, but maybe you differ.

    Rose-Marie, you have a question.

    Mrs. Rose-Marie Ur: Yes. Thank you, Mr. Chair.

    I want to thank you for your presentations. Such a diversity. I'm very impressed with the presentations. From Christmas wreaths to small farming, you surely can step up to the challenge. Your presentations certainly indicated that.

    To Mr. Hunter, everyone presented well but I think you get the extra star. You certainly were able to put it across very eloquently and I congratulate you on that. I'm not a football person, but it was good.

    Mr. Frazer Hunter: I'd like to pass the ball.

    Mrs. Rose-Marie Ur: I'd love to pass it on, too, trust me.

    As to some of the statements that were made here this morning about consolidation of retailers, I guess it was pretty well indicated in our drive in from the airport to the hotel: 71.9¢ for gas. Back home, my constituents start complaining when it hits 61¢. So when I go back I'll have a little bit of ammunition to show what happens when we have consolidation. I knew that before I came here, but it was certainly brought to my attention.

    As to Mr. Keddy with the seasonal workers, I represent an area with orchards, strawberries, asparagus and so on. I was in asparagus and cauliflower and so on. We had the same situation. We had constituents complaining that farmers in Canada don't hire local people. Well, we don't hire them because they're not there to stay. They say we're subsidizing by taking away farm labour from our local people, but it's costing us when we have to fly in people from offshore. It costs the farmer for accommodations. It's a cost to the farmer, and it's really sad, when we have the unemployment rates we have, that we can't get the local labour pool to work on our behalf. So I understand that.

    As was indicated earlier, we have the vision federally but we need to have bridge funding or many of us will sink before we get to that vision.

    That being said, a lot of the presentations this morning indicated what the consumer wants, the consumer wants, the consumer wants. In your own farming you're a consumer as well, but it always hits us, the primary producer, and doesn't seem to be passed along to the consumer. As I was telling my colleague during one of the presentations, 1% of the population, as one of the presenters has said, was in agriculture. We're almost at endangered species risk here in Canada

     That being said, I think we have a real education dilemma on our hands, and--I'll speak on behalf of the federal government--we are poor communicators. We need to educate the consumer as to what will happen when this 1% dwindles even more. There are such high demands on every one of the presenters here with what you need to do, whether in terms of environment, food safety, and all the rest. Well, we'll have that same demand, if we lose the ability to feed our own people, from another nation. Would they be able to produce the high-quality, safe food that we in Canada are able to produce? Maybe Mr. Hunter and Mr. MacDonnell, if you'd like, could respond to that. It's a statement more than a question, I realize that.

  (1230)  

    Mr. Frazer Hunter: Well, you know, food safety is important, and we must supply the consumer, but we as agriculturalists have done a very poor job of communicating to the consumer as well. We talk about awareness, and now we're trying to teach people where the milk comes from and this type of thing, but we've done nothing. I mean, we've been very placid as a community over the last 50 or 60 years. We were set in stone, one of the founding blocks of just about every economy. But agriculture has to move on, and we must get links with the consumer.

    If you look at some of the major supermarket chains in the U.K., they're really getting links back, because the consumer wants “eatatainment”. The modern consumer wants something other than food out of their food. They want to know where it comes from. They want to pass a farm and say, “We can get it there”--the modern consumer.

    We still have a lot of boom and bust out there, but we've got to get into this “eatatainment” business. You just have to look at your McDonald's or Wendy's or any of these. But we us farmers have sat back--and the government--and we've let the processors and the retailers take command of the food industry. We've got to get it back and we've got to get those links. Once we've got it back, the consumer will want us and we won't be an endangered species.

    I always remember, when I first came to Canada--and I apologize if I'm a little bit derogatory to the west; I don't mean it that way--there was one year we gave the west a billion dollars because they grew too little, and the next year they got a billion dollars because they grew too much. We can't survive on subsidies. We've got to change. The marketplace is changing. We've got to move on.

    We're lucky in Nova Scotia because we can be very diversified. We've got the climate--when it rains now, just like the west--but we can be diversified. You just listen to producers along here; they're all diversified.

    The Vice-Chair (Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance)): Excuse me, is that the last person you wanted to question?

    Mrs. Rose-Marie Ur: There's Mr. MacDonnell, but maybe we can get him at the end.

    The Vice-Chair (Mr. Howard Hilstrom): Do you wish to make a quick comment?

    Mrs. Rose-Marie Ur: Thanks, Howard.

    Mr. John MacDonnell: I just want to say, for sure, I think it would be dollars well invested if Canada was to entertain food security. The notion that some other country would really meet our needs in our supply of food is a ridiculous one. I've only been doing this for four years. I do have a small farm operation, a few purebred Suffolk ewes, and do my work with French-Canadian horses--although I'm working harder than they are, believe me. I have to say there's so much positive and so much potential for what this industry can do for the country.

    I think as politicians we don't do a very good job. I think if you represent a more urban constituency you're not really getting the message out about how important it should be to the people you represent. We know that because of dwindling numbers, people in rural Nova Scotia and in the agricultural community don't have a lot of political clout. It takes the people who represent those constituencies to really be the voice for those people.

    I think Canadians value rural Nova Scotia. We have all kinds of reasons we should attract people to come through our communities in the summer and the winter. We are getting to the stage now, I think, where “there once was a time” when people in urban areas had an uncle or a grandfather or whomever from the farm, but we're losing it now. But there are lots of positives, and food security is one we definitely should be entertaining.

    The Vice-Chair (Mr. Howard Hilstrom): Thanks very much, John. Now we'll go over to Dick Proctor, please.

    Mr. Dick Proctor: Thank you very much, Mr. Chair.

    Mr. Hunter, last week when the committee was in Quebec we heard one of the witnesses there saying, wouldn't it be good if we had a milk program in schools? I was reminded of that when you were talking about a five-year-old trying to figure out how to push out to drink the product.

    But I'm assuming that we don't have that in Nova Scotia either.

  (1235)  

    Mr. Frazer Hunter: We do have a milk program.

    Mr. Dick Proctor: How does it work?

    Mr. Frazer Hunter: Sales are going down continually because, if you look at the psyche of a child, they love machines, and coke and orange juice are in machines and you press a button. It's not drinking the product they get a kick out of, it's pressing the button, because most of it is left in the can. There are machines available for milk to keep it fresh, and we have to move on to that.

    Also, in this province, not so much in Newfoundland but in this province, the health people do not want us to put chocolate milk in.

    Mr. Dick Proctor: Why not?

    Mr. Frazer Hunter: Because they reckon it's going to be bad for you, for teeth, etc., but it's been shown not to be so.

    It's going down mainly because of what we've got it in. It's not in machines, and oftentimes it's the school teacher who's asked to keep it fresh and they have other demands on them. So it's a problem. The program is there and it's been successful, but consumption is going down for many demographic reasons.

    Mr. Dick Proctor: Thanks for that.

    Mr. MacDonnell, in the earlier presentation the Minister of Agriculture talked about the right to farm legislation here in Nova Scotia, and as the official opposition, I wondered what your party's views are on that.

    Mr. John MacDonnell: We definitely feel that there should be some mechanism in place to ensure farmers' ability to carry out what they do on a day-to-day basis and not have impediments placed before them. We talked about all the demands placed on them around environmental concerns, etc., and these are the things they have to deal with. And why we had a problem with the existing legislation on right to farm was simply because the investigation we had done indicated that there's a board established in this legislation and they complained it would go to the board.

    Mr. Dick Proctor: Is it the arm's length board that we talked about as well or is this something else?

    Mr. John MacDonnell: I believe it would be, but they have to decide whether they'll even hear the complaint. But the problem we found was that the board has the power of an adjudicator, or of a judge, and under the Constitution we don't think that's legal. We were afraid that the community would feel they had protection under this legislation that they actually may not have if it was challenged. So that was the worry we had. If you were going to make investment in your farming operation based on the fact that you had protection and found out that you didn't, that was troublesome to us.

    Mr. Dick Proctor: Thanks, Charles.

    The Chair: Thanks, Mr. Proctor.

    Paul.

    Mr. Paul Steckle: I'd like to make a few observations before I have my question.

    On supply management, I think the people here are quite aware that the Government of Canada today stands firmly behind and in support of supply management.You may hear other things, but I believe we do. As for what comes of the next agreement, I can't guarantee that, but I think we have stood with you and we will continue to stand with you.

    There was something about land and who's buying land. People with supply management don't buy a lot of land. It's the grain growers who buy more of the land, basically. I come from an area where there is a high concentration of supply management, and they don't need the land because they're not large operations where they'd require it.

    But I want to ask you something. We talked about food security. If we come as an all-party committee and we agree that we need a food security policy in this country where supply is the security that we're talking about, we will have to find programs to deliver to the farmers some sort of assurance that they're in for the long haul. Once we make that commitment, first to the policy and then to the assurance that we will be there to support you, then this begs the further question of how do we support it; where does the money come from?

    For many years there have been rumours of, and discussion about, a food tax. Before you say, listen, we're advocating a food tax, that's not what I'm suggesting to you. I'm saying, if that were a possibility, and as a 1% tax, say, it could raise $5 billion, and somewhere there would be a ceiling placed of $15 billion or $20 billion, whatever, and once that was reached then we'd sunset it and the money is there so we don't go constantly ad hocing on programs, what would your view be of that kind of thing? What would be the perception of the public?

     I've said this in every province and I need to say it here. We pay 10% for the lady or man to carry the food from the kitchen to the table in the restaurant, but you find it objectionable to pay 1% to know that your food is safe, secure, and plentiful. I know we could have a two-day debate on this, but I think we need to hear your views on that issue.

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    Mr. John MacDonnell: I would say that you could probably sell this quite easily to the Canadian taxpayers. I think you can target it, actually, because there are those areas where we're already self-sufficient. So that shouldn't be a problem, unless it's just to secure our self-sufficiency there. In those areas where we're not, that's where you're going to have to make investments. If what you're talking about is an additional fund and you think the federal government doesn't already have that, then I would say that if it were reasonable, the taxpayers would feel that in this present climate that would be an appropriate mechanism to help secure our food supply.

    Mr. Frazer Hunter: For recycling there's 10¢ on that bottle in this province, and nobody objects.

    A voice: And all of a sudden we have milk cartons.

    Mr. Frazer Hunter: Well, that's a different story.

    The producers have put money into a sustainable fund, and we paid for the recycling of that. I think that when it was put on these, it should have been on everything. There's 10¢ on that. The consumer gets 5¢ back if she drops it off somewhere. So from that point of view I don't think it's a problem.

    But I think that even before you get to that point, we have to do what I say, which is get ownership back. The consumer has to have ownership of agriculture and know what it's all about.

    Mr. Paul Steckle: If I might make a quick comment, it's ironic that farmers have dwindled to 1%. In every other industry in Canada and maybe in the world, when numbers dwindle to that kind of percentage, they get control of a market. You can go wherever you like in this world and you will find that in all industries, including the food industry and the money industry, when it becomes concentrated, those people become very powerful. Farmers have lost their power at 1%.

    Mr. Frazer Hunter: We produced. We didn't market.

    Mr. Paul Steckle: You're producers, but not marketers. You're right.

    The Chair: Larry.

    Mr. Larry McCormick: Thank you very much, Mr. Chair.

    Again, I should thank each of you for your presentation.

    An hon. member: What about Rick?

    The Chair: Oh, I'm sorry.

    Mr. Larry McCormick: Okay. We'll turn this over to my colleague from the pork capital, Rick.

    Mr. Rick Borotsik: Thank you very much, gentlemen.

    Mr. Keddy, to get back to the labour components that we do or do not have in agriculture, you suggest that there are some difficulties with the social programs we have or the EI programs. That happens in a lot of industries, not just in agriculture. Are you suggesting that there should be special rules for seasonal work in agriculture, where those clawbacks shouldn't be put into place so that there would be better access to labour?

    Mr. Charles Keddy: One of the things that the horticultural sector has been a strong supporter of over the years is a tax credit to allow people to use their vacation. A lot of people would enjoy going out in the fall and harvesting apples. In fact, a lot of them used to take two weeks of their vacation and help harvest the crop. But it has to be such a disincentive for them to go out and do that to earn a few dollars when it's taking--

    Mr. Rick Borotsik: But you're referring specifically to agriculture. There are other industries, as I've said, that could take advantage of that type of seasonal labour. You're talking about a policy specifically for horticulture and agriculture that would allow that through a tax incentive, a tax credit, or a non-clawback.

    Mr. Charles Keddy: I think we have presented a case to allow for a horticultural tax credit. That is all documented in the report on the seasonal labour issues and how the EI reform affected it, which we would be pleased to circulate to the committee.

    Mr. Rick Borotsik: I would appreciate that, if you wouldn't mind, Mr. Keddy.

    On that same topic, should there be a federal policy whereby foreign labour could be more easily accessible for the agricultural industry?

    Mr. Charles Keddy: Foreign labour is easily accessible now. It is the most expensive labour we have in Canada, but it is the most reliable labour we have in Canada. Because of its easy access, a lot of backroom work has been done to keep these disincentives to hire Canadians in place, in federal policy.

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    Mr. Rick Borotsik: One thing we haven't heard about, Mr. Keddy--I do want to get to Dr. Gray eventually--and I'm surprised you didn't mention it, is the relationship between the horticultural industry and the PMRA. Do you have any comments on the PMRA and whether there should be any changes to it?

    Mr. Charles Keddy: I think we've looked at the PMRA over the years and wished we had the same type of arrangement in eastern Canada. Last year we were able to begin accessing some of the expertise within PMRA, to study the water and irrigation problems we were having, and help set up irrigation possibilities in the province.

    Mr. Rick Borotsik: Now, this is the Pest Management Regulatory Agency, not the PFRA.

    Mr. Charles Keddy: Oh, sorry, I was thinking of PFRA. Too many acronyms.

    Mr. Rick Borotsik: On the Pest Management Regulatory Agency, we've heard in this committee in the past, particularly from the fruit growers and the horticulturists, that they've had some difficulty with minority application. Do you have a problem with that here in Nova Scotia as well?

    Mr. Charles Keddy: The concern is that the minor use of chemicals in this horticultural sector, which allows us to grow a crop, is very restrictive. It's hard to get minor-use registration. We're losing those chemicals. But there are chemicals that are being used in the U.S. and Mexico on the identical crops that we're--

    Mr. Rick Borotsik: I'm going to cut you off, Mr. Keddy. I appreciate that comment, but I just wanted to make sure you were on the same song sheet as the other people.

    Dr. Gray, the minister was here just before you and said something rather interesting. He felt that farmers who accessed provincial-federal programs should take a mandatory managerial training program; the producers should have better access to management skills. Do you agree with that? If you don't, you should be in another industry, I suspect.

    Dr. Bruce Gray: Well, then I do.

    Mr. Rick Borotsik: The mandatory part--maybe not. I'd like to have your views on it.

    Dr. Bruce Gray: We provide business management and farm management training. Our other point of view is that all of our graduates should have some of that.

    Mr. Rick Borotsik: This goes beyond students, though. This means that producers who access programs would have to have mandatory management skills training. I'd like to hear your comments.

    Dr. Bruce Gray: I guess my only comment is that we could provide that training. It's difficult for me to say that everyone should have it.

    Mr. Rick Borotsik: Nova Scotia Federation of Agriculture, what are your views on that?

    Mr. Frazer Hunter: In any other industry in Canada, is there that mandatory aspect to get governments funds or have them available? I don't think it has to be mandatory. I think it's very necessary. It might boost students numbers to...

    Mr. Rick Borotsik: How would you convince the producers it was necessary?

    Mr. Frazer Hunter: We have programs on farm debt mediation and farm consultation services, and I think many producers who get into financial trouble suddenly see that they need this expertise. A farmer can't be expert in everything--or a producer, marketer, or businessman. I think there have to be team efforts on our farms now; that's what we have to convince farmers to do. If they don't know, get the expertise. They might be hiring it, not necessarily learning it themselves.

    The Chair: Thank you, Rick.

    Larry and David, you're next.

    Mr. Larry McCormick: Dr. Gray, I was privileged to enjoy an evening at the graduation this year at your great college, when I was representing Minister Vanclief. You mentioned there were 600 job opportunities in the industry. We all want the producers to be part of this successful industry, but it has to be a partnership, and there were only 200 students.

     I want to mention, as I have in some provinces, a program that we, the taxpayers, invested in last year. It was announced a year ago or so. Very soon, within almost days, in every high school in Canada there will be information on programs and careers available in the agrifood and agriculture industry. We're doing it with some money from HRDC. I think it will help in some small way. We're targeting high school students so they'll be aware of some of this.

    My question is to you, Dr. Gray. People from Ontario or elsewhere are going to say, wow, we invested $900,000 plus with your wonderful college for organic agriculture. I want to get it on the record. Will you be sharing this information and research across the country with other groups from other jurisdictions besides Nova Scotia?

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    Dr. Bruce Gray: Yes, definitely. Right now, we're working on four or five distance education courses. We will be offering the courses all across the country.

    As I mentioned, we're trying to get partners across the country in organic agriculture, mostly through each of the provincial departments of agriculture. We've been quite successful. We have found people in each province to do it.

    Mr. Larry McCormick: Thank you very much.

    I have one other thing on the linkage we need to make of producers with consumers. I'd like to spend a whole session on it.

    You were talking about your European roots, Mr. Hunter. In Canada we sometime stand back. Perhaps some people even shake their heads when they hear about multifunctionality. It's one of the models in Europe. Does the link tie in with multifunctionality and what's happening there? Do we stand back because we don't understand it? I think there are some real opportunities there.

    Mr. Frazer Hunter: There are definitely opportunities. We have to remember Canada is a vast country. There are 30 million people. In Europe the population is close together and that type of thing. In Nova Scotia we have 900,000 people. We have to get the links and multifunctionality in groups so consumers know where the food is coming from.

    I noticed in the minister's presentation he mentioned that my dairy invested $8 million in ice cream. The capital was raised on the market but is guaranteed by the producers. We didn't get involved with a Sobey's or Loblaws to put some money in there to get the link. We should have done it because we are at risk.

    The ice cream plant is going to have to survive on butter oil, another pet peeve on mine that is moving me out of the market. It is my own co-op. Every other dairy in Canada now is using butter oil in their ice cream; Scotsburn doesn't yet. When you're competing across the country, it saves the co-op money, but it uses less of my product.

    Mr. Larry McCormick: Thank you, Mr. Chair. I have a short question to Mr. Keddy.

    You mentioned you're president, or whatever, of the CARD council. I thought perhaps you could tell us what the CARD council is. What do you mainly do here in Nova Scotia? Just briefly answer.

    Mr. Charles Keddy: When the first CARD became available, we set our council up with representations from both the industry and agribusiness. We have to date delivered 100% of the dollars that have been granted to Nova Scotia through the CARD money. It's a grant, as opposed to a contribution, so we've been able to invest some of the dollars, as we've been using them, to support projects. The interest off the investment has more than covered the operating cost of our council to date. We have delivered 100% of the CARD dollars.

    I think if the federal government was to look at the CARD model that has been set up with agriculture across this country, and applied it to some of the other areas the federal government is involved in, it could work very well for different areas in delivering federal dollars to the provincial level to meet the provincial needs.

    Mr. Larry McCormick: Thank you very much, Mr Chair.

    The Chair: Thanks, Larry.

    David or Howard.

    Mr. Howard Hilstrom: Is the CARD more efficient than the federal government simply dumping $2 million into Nova Scotia and letting the provincial government decide how to spend it?

    Mr. Charles Keddy: I think it's been much more efficient because, first, it's the producers who are making the decisions on how those dollars will be spent within the industry, so the money is going directly to what is necessary in the industry. Second, because the administrative costs of running the councils and... although we have to be accountable to the federal government, in all aspects the CARD councils in Canada have had an excellent report card in their dealings with the federal government. To my mind, it's the only way to deliver federal dollars.

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    Mr. Howard Hilstrom: That's great. Thank you.

    Ralph, you've been sitting there quietly, and that's fine. You're into evergreen production for Christmas trees and the like, I believe. The federal government has different options on the table for marketing, market enhancement, and having the producers more in control. Would you, along with the rest of the evergreen Christmas tree producers in Nova Scotia, be in favour of having a single marketing agency, a monopoly, that would give you marketing power for those Christmas trees? Would you be in favour of that?

    Mr. Ralph DeLong: Well, with Christmas trees we're not producing for a domestic market, we're producing for an export market. It's different from eggs and other industries such as dairy, so a marketing board's supply and management would not work for Christmas trees as it does for other agricultural products. No, I would not be in favour of that for Christmas trees.

    Mr. Howard Hilstrom: It was a loaded question, because we're exporting our wheat and barley out of this country too. Of course, we're ordered in western Canada as late as...I guess the last amendments to the Canadian Wheat Board Act were in 1998. The government of the day told us that we had no option to market except through a single agency, and there's a lot of dispute about that out west. I just wanted to get the Nova Scotia perspective as to whether they thought any commodity here should all be put under a single marketing agency like that.

    Mr. Ralph DeLong: I can't really comment on the Wheat Board, but certainly we have no tradition of centralized selling of Christmas trees. It's always been a case of individuals wholesaling to wholesalers or suppliers, customers in the States and the Bahamas.

    Mr. Howard Hilstrom: Thank you very much.

    There'll be one question from my friend here, and that'll be it.

    Mr. David Anderson: There's another interesting parallel there as well, and that is the food security issue. We're talking about a food security plan or whatever, and the Wheat Board was brought in and made mandatory because they wanted a food security plan for giving cheaper wheat to Europe after World War II. Western producers have paid the price for that ever since because we're not allowed to process.

    You talk about losing control. Individuals and groups locally cannot get together and process that wheat. We can only move it out as a raw product, and it looks as if we're facing some of the same problems. My suggested solution in our part of the world is that local people need to begin to be able to process those raw products and sell them. The problem is that mandatory markets do not give local producers control.

    Mr. Frazer Hunter: You have to add value to the raw product at home.

    The Chair: Thank you.

    Dick, you had a question?

    Mr. Dick Proctor: Yes. I think what I heard here today about the cost of grain was for feed grains, and the last time I checked, the Canadian Wheat Board didn't have anything to do with feed grain.

    Really, what I wanted to inquire about is the fact that with the exception of Ed, everybody else here is a witness for an organization. I'm just curious to know whether our committee did a poor job of marketing or, given the fact that we are meeting in Truro today, whether the farmers here are fairly well satisfied with life. I look at the back, and there's virtually nobody here in the audience. It's a genuine question. I'm just curious to know why there aren't more folks out. I'm just throwing the question open. I don't know who might want to respond.

    Mr. Frazer Hunter: I didn't know about it until Friday, when I got a call from the federation office, and I haven't seen anything in public notices in the local newspapers. So it might be the common fault of agriculture in Canada: poor marketing.

·  (1300)  

    Mr. Dick Proctor: Ed, how did you get here?

    Mr. Ed Belzer: I wish I could tell you. I was at a meeting and somebody--and I don't remember who it was--came up to me and asked if I would like to go to a meeting. I had the idea it was going to be a round table discussion, so I said, “Listen, I'm interested in this topic you're talking about, government and agriculture, but I don't have a lot of authority in this. I'd like to go and listen and I'll give my honest feedback.” That's what I thought I was getting into until I got a call from Ottawa last week or so that made my presentation sound very official. But then he assured me I didn't need to have a written brief, although I could have produced one, I guess.

    So I didn't know about it otherwise, and I don't know who it was invited me. I don't know who sent my name in. I didn't.

    Mr. Dick Proctor: What did you have to do, Mr. Nason?

    Mr. Laurence Nason: The federation didn't know about it until last week either, so there's obviously a problem. You know, we'd certainly work with the committee and make arrangements for every commodity group--all 23 of them in the province--to be here to provide you with their thoughts and their ideas about the future of agriculture, but we didn't have that opportunity.

    The Chair: This is a problem we encounter, and it's very perplexing. I don't know what the solution is. The clerk here sent out to the Canadian wire service--we talked in early January--and somebody billed us a fair amount of money to do this. It was sent out, I understand, to over 500 newspapers, radio stations, and TV networks, and in most provinces it received very little attention.

    In fact, I said to the minister this morning, “Mr. Minister, you should put out a press release on your presentation to see if the papers will carry it”, because we have a major problem in agriculture with getting some writings in the papers.

    I'm really sorry, and Dick, you bring out a very good point.

    Frazer, I saw you objected a little bit to what I said about Scotsburn. It's my understanding, maybe just for the record, you have three major dairies putting milk on the shelves here in those two or three big grocery chains in Nova Scotia, and you as a member of Scotsburn probably get an annual report. Maybe you even sit on the board of directors; I'm not sure. Mr. McConnell, I think, is your general manager. As a producer, do you know how much Scotsburn pays to that chain to put its product into and onto its shelves?

    Mr. Frazer Hunter: It's 20%--20 cents--on every litre of milk; well, 19%, sorry.

    Mr. Rick Borotsik: Are you talking about buying shelf space?

    Mr. Frazer Hunter: No, we're not buying shelf space.

    The Chair: I'd like to put that on the record, because it really burns my hide.

    Mr. Rick Borotsik: No, just for the record, though--

    The Chair: Let the witness now tell us. He's a member of a co-op--

    Mr. Rick Borotsik: But are you talking about margin--

    The Chair: I'm talking about what the big chains are doing. Let me just have my minute here for questions. I want that put on the record, Mr. Hunter, how much it costs your dairy to put that on the shelf.

    Mr. Frazer Hunter: It's approximately 19¢--19%--on fluid milk. We have a minimum wholesale price in Nova Scotia, and there's 19¢.

    Mr. Rick Borotsik: Yes, but those are margins; that's not buying shelf space, correct? Those are margins.

    The Chair: Let him talk about how it works.

    Mr. Frazer Hunter: For every dollar they spend on milk--and they turn that dollar over 150 times a year--they make 19¢.

    The Chair: At the end of the month, I believe your dairy sends to that chain approximately 20% of what the sales are.

    Mr. Frazer Hunter: Yes, 18% to 20%--on fluid milk; we're not talking about ice cream or cheese.

    A voice: What does McCain charge?

    The Chair: So with that--

    Mr. Rick Borotsik: That's not shelf space. The store is getting to sell it; that's their margin--

    A voice: No, no.

    Mr. Frazer Hunter: They'll price it after that. Oh, yes, some of them do. It depends on source; some do. But if I, for a dollar invested for two days, could get 19¢--

    The Chair: It's called rebates, I believe, rebates.

    It is a very heavy burden on your dairy. I see they aren't making as much money as they did, or might have done.

    Mr. Frazer Hunter: Still, our dairy made $2.8 million or something on $200 million in sales, but it's gone from the producer. It's now big business. There's no tie-in between the consumer and the producer. On our web site...and I'm not criticizing my dairy, but in one sense I am. We don't even have a farm on our web site.

    The Chair: Thank you very much, everyone, for coming this morning.

    We sometimes have to realize that quantity is sometimes very valuable, but we had a very good quality of presentations. I think you represent your industry quite well. Eventually, when our report is written, the clerk will see that your names and addresses are in the system, and we'll hopefully get copies sent out to you.

    On behalf of the committee, thank you for your presentations. Hopefully some of our suggestions and solutions will meet some of your needs. Thank you.

    The meeting is adjourned.