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37th PARLIAMENT, 1st SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Monday, February 18, 2002

0845

The Chair (Mr. Charles Hubbard (Miramichi, Lib.))

0850

0855

Hon. Rosann Wowchuk (Minister of Agriculture and Food, Government of Manitoba)

0900

0905

0910

The Chair

Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance)

Ms. Rosann Wowchuk

Mr. Hilstrom

Ms. Rosann Wowchuk

Mr. Hilstrom

0915

Ms. Rosann Wowchuk

0920

Mr. Hilstrom

The Chair

Mr. Desrochers

Ms. Rosann Wowchuk

Mr. Desrochers

Ms. Rosann Wowchuk

Mr. Desrochers

Ms. Rosann Wowchuk

0925

Mr. Desrochers

The Chair

Mr. Proctor

Ms. Rosann Wowchuk

Mr. Proctor

Ms. Rosann Wowchuk

The Chair

Mr. Borotsik

0930

Ms. Rosann Wowchuk

Mr. Borotsik

Ms. Rosann Wowchuk

Mr. Borotsik

Ms. Rosann Wowchuk

Mr. Borotsik

Ms. Rosann Wowchuk

Mr. Borotsik

The Chair

Mrs. Ur

0935

Ms. Rosann Wowchuk

Mrs. Ur

Ms. Rosann Wowchuk

Mrs. Ur

Ms. Rosann Wowchuk

Mrs. Ur

The Chair

0940

Mr. Anderson

Ms. Rosann Wowchuk

Mr. Anderson

Ms. Rosann Wowchuk

Mr. Anderson

Ms. Rosann Wowchuk

The Chair

0945

Mr. Fred Homann (General Manager, Manitoba Chicken Producers)

0950

The Chair

Mr. William Swan (Chairman, Manitoba Milk Producers)

0955

The Chair

Mr. Marcel Hacault (Chair, Manitoba Pork Council)

1000

The Chair

Mr. Ken Yuill (President, Nu Gen Ag Ventures Inc.)

The Chair

Mr. Glen Tully (President, Canadian Cooperative Association)

1005

1010

The Chair

Ms. Betty Green (Vice-President, Manitoba Cattle Producers Association)

1015

1020

The Chair

Mr. Herb Schultz (Animal Nutrition Association)

1025

The Chair

Mr. Randy Eros (Canadian Sheep Federation)

1030

The Chair

Mr. Gordon Grenkow (President, South Interlake Agricultural Society)

1035

The Chair

Mr. Howard Hilstrom

Mr. Glen Tully

1040

The Chair

Mr. Desrochers

Mr. Marcel Hacault

Mr. Desrochers

Mr. Marcel Hacault

Mr. Desrochers

Mr. Marcel Hacault

Mr. Odina Desrochers

The Chair

Mr. Proctor

1045

Ms. Betty Green

Mr. Proctor

Ms. Betty Green

Mr. Proctor

Ms. Betty Green

Mr. Borotsik

Mr. Herb Schultz

Mr. Borotsik

Mr. Herb Schultz

Mr. Borotsik

1050

Mr. Marcel Hacault

Mr. Borotsik

Mr. Marcel Hacault

Mr. Borotsik

Ms. Betty Green

Mr. Borotsik

Ms. Betty Green

Mr. Borotsik

The Chair

Mrs. Ur

Ms. Betty Green

Mrs. Ur

Ms. Betty Green

Mrs. Ur

The Chair

Mrs. Ur

Mr. Randy Eros

Mrs. Ur

Mr. Randy Eros

1055

The Chair

Mrs. Ur

The Chair

Mrs. Ur

Mr. Randy Eros

Mrs. Ur

The Chair

Mr. Fred Homann

The Chair

1110

Mr. Calvin Vaags (Individual Presentation)

1115

The Chair

1120

Mr. Henry Penner (Individual Presentation)

The Chair

Mr. Dennis Gallant (Individual Presentation)

1125

The Chair

1130

Mr. Stan Fryza (Individual Presentation)

Mr. Bill Matheson (Individual Presentation)

1135

The Chair

Mr. John Morrisson (Individual Presentation)

1140

The Chair

Mr. Bill Ridgeway (Individual Presentation)

The Chair

Mr. Bill Ridgeway

1145

The Chair

1150

Mr. Les Felsch (Individual Presentation)

The Chair

Mr. Les Felsch

1155

The Chair

Mr. Bill Uruski (Vice-Chair, Manitoba Turkey Producers)

1200

The Chair

Mr. Borotsik

The Chair

Mr. Howard Hilstrom

The Chair

Mr. Edgar Scheurer ( Individual Presentation)

1205

1210

The Chair

Mr. Ian Wishart (Individual Presentation)

The Chair

Ms. Rae Trimble (Individual Presentation)

1215

The Chair

Mr. Wilfred Harder (Individual Presentation)

1220

The Chair

Ms. Shirley Galbraith (Individual Presentation)

1225

1230

The Chair

Ms. Shirley Galbraith

The Chair

Ms. Shirley Galbraith

The Chair

Mr. Walter Kolisnyk (Individual Presentation)

The Chair

Mr. Charles Fossay (Individual Presentation)

1235

1240

The Chair

Mr. Marvin Dyck (Individual Presentation)

1245

The Chair

Mr. Eric Thornhill (Individual Presentation)

1250

The Chair

Mr. Jack Penner (Individual Presentation)

1255

The Chair

Mr. Howard Hilstrom

The Chair

Mr. Proctor

Ms. Shirley Galbraith

Mr. Proctor

The Chair

Mr. Borotsik

Mr. Ian Wishart

1300

Mr. Borotsik

Mr. Ian Wishart

Mr. Borotsik

Mr. Henry Penner

Mr. Borotsik

Mr. Henry Penner

The Chair

Mrs. Ur

Mr. Henry Penner

Mrs. Ur

Mr. Wilfred Harder

The Chair

CANADA

Standing Committee on Agriculture and Agri-Food

NUMBER 044

1st SESSION

37th PARLIAMENT

EVIDENCE

Monday, February 18, 2002

[Recorded by Electronic Apparatus]

¾ (0845)

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Order, Good morning everyone.

Pursuant to Standing Order 108(2), our committee welcomes you to the hearings in Stonewall, one of our two stopovers in Manitoba, in our study on the future role of government in agriculture.

¾ (0850)

We would first of all like to mention that we'll be touring the four western provinces this week. As a standing committee we are here to listen more than to speak, and with our listening we hope the various farm leaders and individual farmers here in western Canada will be able to make presentations to us on what they think and believe is the future role of agriculture in terms of our government intervening. As a committee, we listen.

We have with us our clerk, Madam Verville, and we have our researchers. Your presentations will be recorded, and when we go back to Ottawa the committee will look at your presentations. We'll review them in terms of what the researchers have written up and taken as the main points. Eventually the report will be reviewed by the committee, and in the long run we'll have a presentation to Parliament on the recommendations the committee believes in and has heard from the farmers of Canada.

Before we begin, I'd like to introduce someone from the local area who doesn't need an introduction, Howard Hilstrom. Howard is vice-chair of our committee. He and David Anderson, of course, are from the Canadian Alliance. David is from Saskatchewan. From the Bloc Québécois we have Mr. Desrochers, a farmer who was born on a farm and raised with a background in both dairy and general farming. From Saskatchewan we have Mr. Proctor from the NDP, again with a background in agriculture. From the southern part of Manitoba we have Rick Borotsik, and from Ontario, with an agriculture background, Mrs. Ur.

We have been somewhat taken aback here by what has happened in terms of the advertisement of our meetings. In early January we put out to the Canadian wire service the fact that we were coming to various parts of Canada. Since then we've also put out press releases under my own heading as chair of the committee. Perhaps some press organizations didn't pick up on that. However, as we go here I just hope people will understand and know that we have made every effort to have this publicized and hopefully to gain as much information as possible from our agriculture community.

We would also like to point out that you are well represented by your organizations when they come to Ottawa to lobby our government and to make presentations to committees, but our basic understanding in terms of coming to the west is that we'd be more interested in hearing from individual farmers and trying to make sure they're part of this whole process.

Our first witness this morning has done a really good job when coming to Ottawa on other occasions to present the views of the farmers of Manitoba, and today we'd like to welcome her back to this committee. In terms of the Government of Manitoba, we know that agriculture is a big part of your economy, and Mrs. Wowchuk has done a good job before, and continues to do a good job, of presenting to us and to the rest of Canada what agriculture is to Manitoba.

Welcome, Madam. We await your presentation. It's certainly good to have you here this morning.

¾ (0855)

Hon. Rosann Wowchuk (Minister of Agriculture and Food, Government of Manitoba): Thank you for that introduction. On behalf of the Manitoba government, and as Minister of Agriculture and Food, I want to welcome you and your committee to Manitoba. I'm very pleased the committee has accepted the invitation put forward by me and by others encouraging you to visit Manitoba and hear directly from our farm families on the importance of this industry and the challenges we are facing.

I made a presentation to you in Ottawa on June 5 of last year. I'm now going to build on that presentation and outline the challenges facing our families.

Last year in the legislature here in Manitoba we passed a unanimous, all-party resolution calling for the federal government to address the serious market challenges facing our grains and oilseeds producers, including the excessive subsidies provided by government treasuries in other countries.

As part of the resolution, the Manitoba Standing Committee on Agriculture held public hearings. We visited people throughout rural Manitoba, as you are doing. Farm families told us about the devastating impact the financial crisis was having on them and their communities. We heard that most farm families were making considerable effort to provide additional income for themselves. Some were doing this by diversifying their operations, others were taking on additional land in order to become more viable, and many were taking on off-farm employment to supplement their income. We also heard that despite the significant efforts, the situation for many was becoming worse, especially for those in the grains and oilseeds sector.

One of the most common messages presenters had for us was that the income crisis was primarily driven by excessive subsidies by the United States and the European Union. They also told us that diversification efforts were occurring but this required substantial capital, and in many cases it caused additional risk to the operation already under financial stress. They said producers needed a long-term program that provided support adequate to maintain farm viability.

They told us that AIDA was not very effective in dealing with the income crisis. Continually declining margins create a slow burn rather than the big drop that triggers an AIDA payout. They also said that AIDA was too complicated and that payouts came two years after the bills were due.

NISA was considered helpful but not sufficient to deal with the magnitude of the current financial problems. It also does not work for beginning or expanding farmers who have a large cash commitment and are not able to set aside funds.

What we heard then is still relevant. Many of the difficulties we heard about from the presenters are still creating challenges today, and these challenges need to be addressed by the federal and provincial governments in close consultation with producer organizations and farm families.

I want to emphasize that the 1995 reduction in farm safety nets and the elimination of the Crow benefit hit Manitoba and other prairie provinces significantly more than non-prairie provinces. In my October 1999 presentation to this standing committee, I noted that the prairies had endured a $2 billion drop in safety net and transportation support for producers over the 1987-88 to 1998-99 period, compared to a $300 million drop for non-prairie provinces. In Manitoba we lost $350 million over that period. That is equivalent to the drop for all of the other non-prairie provinces combined.

While some of the federal funds have been restored, they were not added back on the basis of the reduction to the provinces. In fact, the size of the industry was the major factor in how much most provinces received, regardless of need. Provinces with more grains than oilseeds received much less than non-prairie provinces, which have the majority of supply management.

We know that recently the federal-provincial working group completed a safety net evaluation mandated by the ministers of agriculture at our June 2001 meeting. I was extremely pleased to see that the safety net evaluation was carried out, as I had pressed for this evaluation on behalf of our producers to determine the effectiveness of our current safety net programs and the extent that a level playing field exists across the country.

The evaluation stated that the current programs were doing a reasonably adequate job but that nevertheless there were clearly gaps and overlaps in coverage. The report also noted that the funding for the allocation of federal safety net dollars contributes to the inequities across Canada.

The evaluation determined that excessive subsidies in the United States and Europe made a significant contribution to the downward slides in prices--for example, $1.12 per bushel of wheat and $1.44 per bushel of soya.

¿ (0900)

If you look at that for the Manitoba economy, our wheat production is about 155 million bushels. So in fact, the drop in prices cost our producers and the Manitoba economy $175 million. Similarly, the drop in soybeans that was identified as $1.44 is equivalent to what we would lose in our canola crop, which is about 75 million bushels of production. This is a loss of $108 million to the Manitoba economy in these two commodities alone. In these commodities alone our producers would have received $283 million more from the marketplace if these excessive subsidies had not been in place. The impact of these commodities can be extrapolated to related commodities, meaning that the real impact is significantly greater.

The evaluation cited several examples of inequities in the current formula for the federal safety net funding to provinces. Manitoba's federal safety nets evaluation enabled our province to only fund basic programs, such as crop insurance, NISA, and fall cash advance. Saskatchewan is in a similar position. Other provinces not only have sufficient funds allocated for base programs, they also have 40% or more of their allocations for fund top-ups or supplementary programs. The resulting inequity has led to a higher level of safety net coverage for producers outside Manitoba, as well as Saskatchewan.

The study also determined that the current cost-share formula places a significant burden on provinces that have a large agriculture sector related to their population. The cost in Manitoba per capita and as a percentage of GDP is five to ten times that of most non-prairie provinces.

The federal government recently put forward one safety net option, namely, a single premium-driven, margin-based program to replace existing programs. This all-encompassing one-program option is alleged to be the only realistic option for addressing the issues raised in Ottawa's assessment of the evaluation. Manitoba is prepared to consider this one-program option and other options. However, I believe we need to consider modifying existing programs to address gaps, overlaps, and issues arising from the evaluation and inequities across the country. Safety nets must be effective in addressing the risks Manitoba farmers are facing, including weather-related problems, that set back production in any single year or multiple of years. Introduced over 40 years ago, our crop insurance program has been a key component for our producers in their risk management. I want you to know that currently, over 8 million acres are insured under the program, representing about 85% of the province's crop land.

Grains and oilseeds producers need a program that helps to deal with the impacts of international subsidies. We look to the federal government to support producers who have had their competitive advantage undermined by other national treasuries. Provincial treasuries simply lack the financial strength to provide this support. This is especially true when the sector with the greatest prosperity in support, that is grains and oilseeds, is primarily in the provinces with a relatively low population and revenue base.

Programs must also recognize that our industry is diversified. Some producers have diversified already, and we have to ensure that we do not bring in programs that disadvantage those who have already taken steps to diversify and that we do not reward single enterprises over diversified ones.

Ultimately, I think it's very important that as we develop these programs, we have a very close consultation with our producers. As proposals are put forward, our farmers should have the opportunity to participate.

¿ (0905)

One of the critical areas that I believe the standing committee must be fully aware of is the fundamental imbalance in Canadian agriculture policy. This imbalance involves how one commodity group is treated versus another. We look at the prairies, where we are predominantly grain producers, and the eastern provinces, which have the majority of supply management, and where our cash receipts come from and how they are supported. For example, about 6% of farm cash receipts on the prairies come from supply management. By contrast, other provinces receive about 34% of their farm cash receipts from supply management. This must be taken into consideration, and this imbalance has to be addressed as we develop new programs.

I have outlined this further in my written presentation, so I'm not going to go through all the comments I have. I do want to say that, as a department and as a province, we look forward to working with Ottawa and our other partners to forge and develop a better support for our farm families and for the industry. We have taken some steps to address some of these challenges, but we cannot do it alone. I again outline in the document some of the steps we have taken, particularly in addressing the aging farm population and encouraging young farmers to get into the business in a program we call Bridging Generations, through our credit corporation.

Through our efforts, we want to continue to consult with the federal government and build on this industry. The biggest issue for us is the inequities and the challenges our producers are facing because of the excessive subsidies provided by other countries. Our grains and oilseeds producers cannot face that challenge alone. They are excellent farmers, they have made many changes, and they have diversified in many ways, but it is impossible for our producers to take on the international treasuries on their own. That's what they are doing right now, if you look at the amount of support provided in other countries and the amount of support provided for our grain producers here in Canada.

In closing, I believe this standing committee has a huge task ahead of it. I encourage committee members to listen closely and carefully to the presentations made by Manitoba farm families. I encourage you to look back at the presentations we gave to you when we came to Ottawa last year with the results of our standing committee.

Thank you for the opportunity to make a presentation to you. I want to thank all members for coming to rural Manitoba to hear first-hand about how important this industry is, how important farm families are to this economy, and what we believe is a basis for a healthy province. We look to work with you to ensure that we can develop the kinds of programs and supports that will help this industry remain viable.

¿ (0910)

The Chair: Thank you very much.

Howard, I'll let you lead off with a few questions. Madam Minister and her officials are here too.

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

Certainly the problems as to what's going wrong in agriculture across the country have been well documented since 1998. The issue, of course, is the solutions. The target date for the WTO talks to conclude is 2005, I believe, and that is where we have some hope of getting these subsidy levels down. In the meantime, we're dealing with the issue you pointed out, Minister. What specific plan is Manitoba advancing? Are you advancing a plan that includes a cost of production component? That's one question.

Secondly, it seems that the minister and Ottawa are saying that we are devising a plan that you will be in essence forced to take. So is Manitoba being adequately consulted, with sufficient input as to the type of plan you want?

Can you answer those two questions, please?

Ms. Rosann Wowchuk: With respect to the issue of consultation, the proposal put forward by the federal government was one we read about in the newspaper. There was no consultation on that. It was not what we talked about at Whitehorse, but we are working on it now. There is a committee looking at it, but I believe very much that we have to look at all other options. Proposals have been put forward by other provinces, and I've indicated that crop insurance is a very important vehicle for us. We don't want to lose that.

The other thing we have to think about is that we have two sectors. We have a grains sector and a livestock sector. If we meld everything together into one program, who is going to benefit? Will there be the immediacy of trying to get money to farmers through crop insurance when they have a crop loss, as we have now, if we go to this program that has everything in one, or will it be similar to AIDA, where it takes almost two years to get your money? We are open to that.

On the cost-of-production formula, there have been a lot of suggestions. That is not something Manitoba can do alone, and I think it would be very difficult and very expensive to introduce. It will have to be looked at, as we look at all options on what the next round of safety net packages will look like.

Mr. Howard Hilstrom: Thank you for that answer.

We know that 2005 is the target date for these WTO talks, and in the interim we're going to be on this unlevel playing field. We know what heavy subsidization does to the amount of grain that's produced. The funding formula that was changed a year ago negatively impacted the amount of money Manitoba and Saskatchewan can get. You've made that point quite clear.

Has a dollar figure been established for what Manitoba and Saskatchewan need, as two unique kinds of provinces, or is that difficult? Is there a dollar figure we should be asking for from the federal government, for their share of the funding formula?

Ms. Rosann Wowchuk: I can't give you an exact number on what's needed, but we know we're short of money. When the formula changed, Manitoba and Saskatchewan were maintained level. All the other provinces received more money. Now we can only provide basic crop insurance, while others are able to offer quite enriched add-on programs. That's a real challenge for us.

As prices go up, particularly in the NISA portion, it becomes more challenging for us. We have this small pot of money, but the value of the programs is going up. It makes it very difficult for us to meet the needs of our producers. In fact, we are at risk of having to start prorating, while other provinces can offer enhancements.

Mr. Howard Hilstrom: I have a last point, and then we can move along. I have identified ten individual federal ministries that could have a positive impact of who knows how much--$1 billion even--without direct subsidies. I mention things like the health minister, who is in charge of the Pest Management Review Agency, and those kinds of things. There are many things that could be done that would help agriculture that don't require direct subsidy.

Have you forwarded a list of those from the provincial side that may be establishing provincial-intensive livestock regulations that a province, like Alberta, could run? Right now, in the area of St. Laurent, which you know is very close to here, they're not allowing hog operations in that municipality because of local politics. Is that one of the suggestions the province could advance as being a solution to some of these income problems, and to expanding our livestock operations?

¿ (0915)

Ms. Rosann Wowchuk: The livestock industry is very important to us, and we are looking at how we can level off some of those challenges that are there within the municipality. But you talked about areas where the federal government might be able to help. I think one of the areas we have to look at is the number of areas where we have seen off-loading onto provinces. There are many costs that have been passed on to provinces that we can't handle. The issue of pesticides is a big issue as well, one we've been working on very closely with our colleagues across the U.S. border to try to get some of these worked out, and it has been referred to the federal government.

¿ (0920)

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

The Chair: Thank you, Howard.

Monsieur Desrochers.

[Translation]

Mr. Odina Desrochers (Lotbinière--L'Érable, BQ): Thank your, Mr. Chair

Madame Minister, I listened to your presentation very carefully. It seems that you are quite uncomfortable with the attempt by the federal government to establish income stabilization programs with national standards which do not take into account regional conditions such as those in your region. So, instead of creating a program with standards from one sea to the other, do you think the government should take the time to examine the very specific aspects of your needs in Manitoba, taking into account the agricultural profile of your province?

[English]

Ms. Rosann Wowchuk: Thank you.

What we have said is that we want to work with the federal government to have national standards and programs, but we also know there has to be flexibility in those programs to address regional differences. We also want the federal government to recognize the huge impacts that subsidies in other parts of the world are having on Canada, but recognize as well that those subsidies are having a much greater impact on the prairies in the grains- and oilseeds-producing areas than they are having in other parts of the country.

[Translation]

Mr. Odina Desrochers: Do you consider that, at present, the federal government gives you the flexibility you wish to have to apply current programs?

Do you believe, Madame Minister, that the federal government currently gives you the flexibility you want to be able to apply programs which truly correspond to the actual context of your province?

[English]

Ms. Rosann Wowchuk: We believe there is flexibility in the programs that are there now. We have the ability to work. Our challenge in that aspect is the funding. There is flexibility. Other provinces have flexibility right now and can do additional programs, but what we need is the funding that will go with it to be able to provide the supports for our producers.

[Translation]

Mr. Odina Desrochers: Madame Minister, this is my first visit to your province. Do you have what we call an agricultural system based on the family farm, the small farm or are we seeing, as we are in Quebec, the increase of a more industrial-style agriculture? If that is the case and you have a more industrial-style agriculture, is the growth of that agriculture occurring in line with the needs of the rural community?

[English]

Ms. Rosann Wowchuk: I think Manitoba would be no different from other provinces in which we are seeing a move from smaller operations to larger operations. Manitoba has a mixture of small, medium, and large operations, and the family farm continues to be very important to us. That is why our province and my department have made the move to introduce Bridging Generations, a program that will help with the transfer of land from one generation to the next to ensure that the small family farm can remain viable.

So we have small family farms, and we support them through a variety of programs available to all farmers. As with other provinces, however, you are seeing some farms getting much larger.

¿ (0925)

[Translation]

Mr. Odina Desrochers: Do I still have time? That's all? Thank you.

[English]

The Chair: Dick.

Mr. Dick Proctor (Palliser, NDP): Thank you, Mr. Chair.

Thanks very much, Madam Minister. I was really struck by the part of your written presentation that referred to the farm safety net allocation and to the fact that in Manitoba and Saskatchewan you were basically restricted to crop insurance, NISA, and the cash advance program. My question is, how does the federal government respond? Are they basically acknowledging that Manitoba and Saskatchewan seem to be maltreated as a result of this? Is there any indication that they're going to rectify the problem?

Ms. Rosann Wowchuk: To get to the formula we have now there was a lot of negotiation and discussion among provinces. Eight voted for the new formula and two voted against it. The two who voted against it were the ones disadvantaged by the formula. We continue to raise the issue with the federal government.

One of the reasons we said we would sign on to the safety net agreement was if there was a review of the funding formula before the next round of safety nets. Manitoba and Saskatchewan were held level, but if in fact the formula would be allowed to proceed, our amount of money would go down, and as you see, we are in difficulty now trying to provide protection for our farmers.

So the federal government is well aware of it, and we have to continue to make them recognize the importance of this industry. We have to make people recognize the risk our producers are in. There are much greater risks in grain production than in the supply management of commodities.

Those are the challenges we face. We hope this committee will recognize our concerns and take them forward to the federal government so that the funding formula can be changed to create greater equity.

Mr. Dick Proctor: My other question, somewhat related to that, is around the growing concern we're aware of south of the border in terms of more and more subsidies coming in, perhaps even targeting the pulse crops. I'm wondering, are we dealing with yesterday's problem in the sense that we're trying to help our farmers maintain or increase support payments to meet today's problems when the administration south of the border is going to be feeding in many billions of dollars more, according to the projections, putting our farmers at even greater disadvantage while we await any WTO negotiations to reduce subsidies?

Ms. Rosann Wowchuk: Absolutely, and with the level of subsidies being proposed under the U.S. Farm Bill, it's a huge concern. If they go into supporting pulse, it is going to be devastating for us.

I don't know if the committee is aware, but Manitoba is the number one producer of beans in Canada. We are huge. We're number two in potato production. So we are diversifying, but if the U.S. Farm Bill goes ahead and those subsidies come in for pulse, our producers are going to be in much bigger trouble.

The Chair: Thank you, Dick.

Rick.

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

Thank you, Madam Minister. I appreciate your presentation. Certainly we've heard about the subsidies from a number of sources.

You mentioned something very interesting--and you just reconfirmed it--with respect to grains and oilseeds production in Manitoba and Saskatchewan versus the supply managed system. The theme of this meeting is the future role of government in agriculture, where we should be going. Would you suggest that perhaps a larger percentage of the supply managed product should come from Manitoba and Saskatchewan as opposed to some of the other provinces at the present time?

Is that a tough question, Madam Minister?

¿ (0930)

Ms. Rosann Wowchuk: It's not that tough, Rick. Sorry--Mr. Borotsik.

We always look at how we can move into commodities that have less risk for our producers. When you look at it, when the Crow changed, other things did not change along with it. So I think we have to look at all of that.

We know our cost of production in some of those commodities is lower because of the change to the Crow, so we have to look at how we can balance that out to in fact give more opportunity for producers and take away some of the risk. Our producers have made dramatic changes in the crops they're producing. They want to value add. So certainly, if there were an opportunity to have more of those in these provinces, with less risk, we'd appreciate that.

Mr. Rick Borotsik: Are you, from the Province of Manitoba, taking that tack with the federal government? Are you suggesting perhaps that they should be looking at the formulas that are now in place with respect to supply management? Has that ever been broached at the table?

Ms. Rosann Wowchuk: Yes, it has been raised. And when you look at the whole package, about how we can move from risk--

Mr. Rick Borotsik: Exactly.

Ms. Rosann Wowchuk: So, yes, we have raised it. And we have gotten larger allocations in some areas, such as in poultry.

Mr. Rick Borotsik: Perfect. And thank you for the answer.

I have one more question.

You mentioned Bridging Generations through MACC. I'm not terribly familiar with that program, but that's the kind of policy I think we should be dealing with, more so than even the safety nets. We know there's an issue of subsidies in the states and we've been dealing with it. Do you feel that MACC should work closer with FCC at the present time? And are there any policy changes, Madam Minister, that you can see with respect to perhaps tax policy or finance policy that could be put into place currently, right now, to bring younger producers into the industry? Or should MACC fold into FCC?

Ms. Rosann Wowchuk: We do work with the FCC and there is discussion with them on this program. This is a very unique program that we're putting forward through MACC. It will help in the financing of transferring land from one generation to the next, but it doesn't only involve the banks. It's a partnership between the person who is letting the land go and the person who is buying the land, and they arrange what kind of interest they want. There are various phases to it where they can lease some of the land. There's a variety of programs, and I believe it's very good. And FCC and the MACC are talking about it.

But I'm not sure whether you're suggesting that they fold together. This would be something you would have to look at, not the provincial government.

Mr. Rick Borotsik: That was an add-on to my question.

Is there another policy that could be put into place?

The Chair: We'll have to move on now.

Mrs. Ur.

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.): Thank you, Mr. Chair.

I, too, want to thank you, Rosann, for your presentation, once again. It's nice to see you standing up for your people here in Manitoba as you do in Ottawa.

I'll start off with positive comment. With the grains and oilseeds, I'm so pleased that they were able to form the Grain Growers of Canada. I think that's a positive element for the grain growers. Before we were rather fractioned as to representation in Ottawa. I think under these auspices it's proven to be a healthy channel for the grain producers. So that's a positive element.

Where I'm going to come from is.... We've always heard that subsidies from the United States are really one of the most challenging factors to our Canadian producers, and people are always saying this is our first and major problem. But I've never heard from ministers, other than hearsay, as to, okay, we are the Canadians, we're the good farmers, we're the girl guides and boy scouts of Canadian farming when we go to WTO or whatever.

If you were there, what would you say to the EU, what would you say to the United States regarding subsidies? How do you think you can make that voice heard more clearly and more precisely, so that there could be some action on their subsidy rates for farmers?

¿ (0935)

Ms. Rosann Wowchuk: What I would say is that there are rules written, we've all agreed to these rules, and the level of subsidy is supposed to be going down. Canada went ahead and reduced subsidies, acting in good faith, expecting that the others would act in good faith as well and meet their requirements under the trade agreement. If you have trade agreements, they're not of much value if only one side follows the rules. The negotiators do one thing, and then it gets back to the governments, and something different is done. There are heavy pressures from a variety of areas. So I would just ask them to follow the rules. I think Canada has to take a very strong stand and see that other countries reduce their subsidies, or else put in place a safety net that will adequately protect our producers in this environment.

Mrs. Rose-Marie Ur: Basically, those questions have been asked when we've met various officials in Ottawa, and their statement in the past has been that they fall within the yellow box or green box or whatever. They're always denying that they're living outside those boxed areas. Whether that's true or not I'm not totally sure.

In another part of your presentation you mentioned the imbalance in Canadian agricultural policy. Maybe I misunderstood what you meant by that. Do you really think it's the federal government's initiative to say in a province, you should have more supply management, or, you should have more grains and oilseeds? Is that what you are indicating under there? You're saying it's an imbalance, because some provinces have more supply management, and Manitoba perhaps doesn't fall under that category, so you're penalized. It wasn't totally clear in the presentation what you meant by that.

Ms. Rosann Wowchuk: I was just pointing out the fact that some areas have much more supply management and much lower risk. We have less supply management, so we have more risk. We have to develop a program that protects our producers from those risks. But I do point out the imbalance in what it costs the people who live in a province where there is less supply management, lower per capita, how much more they have to pay.

With respect to your previous comment about the negotiations, we have to remember that Canada went far beyond what they had to do in giving up supports for producers. They gave up much more at the world trade talks. Had they kept a little more, they might have had a little more bargaining power as well.

Mrs. Rose-Marie Ur: This will be a quick question. With the presentation of the vision for agriculture you saw, were you in Toronto in January?

Ms. Rosann Wowchuk: Yes, I was.

Mrs. Rose-Marie Ur: What is your half-minute viewpoint on that?

Ms. Rosann Wowchuk: It is a vision. It's a framework of where we can go, how we can work together to bring all those aspects into advancing agriculture in Canada. I think the vision statement is a good statement, but now we have to put the meat on the bones. There are many aspects of it, and for us, one of the most important aspects is the safety net part. If you don't address the safety net part of it and offer that protection, many of those others are a little more difficult. All of those are important issues. I signed on, and I support the framework agreement we signed in Whitehorse and want to continue to work on it, involving producers and developing the best protection for producers we can get.

Mrs. Rose-Marie Ur: Thank you, Madam Minister.

The Chair: Thank you.

David.

¿ (0940)

Mr. David Anderson (Cypress Hills--Grasslands, Canadian Alliance): This is just a short question. Until a year and a half ago, I was a producer. As I've seen this new national program develop, I've had more and more concerns about it. I think it's going to be very expensive for farmers.

I just want to come back to crop insurance. I'm familiar with the Saskatchewan program. Have you done any work on figuring out what the cost would be if you were to add a price component as well as a production component to your crop insurance program in Manitoba? What would it cost you to do that effectively for producers?

Ms. Rosann Wowchuk: Yes, we've done some work on that. We think it would cost about double what it does now.

Mr. David Anderson: I'm wondering why governments haven't pursued that more rigorously, because to me that's an obvious solution to a problem. You can basically take care of some of that problem that safety nets are supposed to solve by giving people an option to buy the insurance and to top it up and do some work with that.

Ms. Rosann Wowchuk: That's why I've said I want any review to look at crop insurance as the vehicle we might be able to use and to look at what the options might be that we could provide producers. Producers have said they would be willing to pay more if they could get further protection. That's why I've said we very much want crop insurance to be looked at as one of the vehicles that might be able to offer additional protection for producers.

Mr. David Anderson: There's one other area you haven't touched on today. In Saskatchewan, DFO seems to have declared themselves kings of the waterways. I'm just wondering if you have any concerns about their program and what they're doing in Manitoba. Some other provinces are telling them to go back to the coast, and I'm just wondering what your suggestion to them would be.

Ms. Rosann Wowchuk: When they first came to Manitoba, there was a lot of concern and a lot of worry about what impact they would have. They've opened the doors and they're a little bit more willing to have discussion with the cattle producers and with others to see how we might work together, but there are areas of serious concern.

If I had a little bit of time, I would explain to you a situation that's happening right in my own constituency. It's costing the municipality a tremendous amount of money to make changes to a stream. People just feel it's not valuable. So there is some tension building about it, but they seem to be working it out. We'll keep an open mind on it, but ultimately there is some concern about some of the ditches where fish don't even go, about DFO being involved in that, so there is some frustration that comes with it.

Mr. David Anderson: Thank you.

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

We took a little bit longer here than we had planned, but we certainly welcome your presentation. I think probably our committee is beginning to understand more the diversity of agriculture itself, the many different sectors. With that, of course, grains and oilseeds are one of the areas of greatest concern right now.

Could I just have some indication, in terms of our audience, of how many here represent grains and oilseeds? Could they just put their hands up? So it is a large number.

Madam Minister, if you want, we certainly would like for you to stay with us for a little while. I know you have a busy schedule, but if you want to join Mrs. Ur here at the table, we certainly would welcome you.

The second component now is looking at various producers. Would they please come to the table? We may want to take some of the area around the table here to look at the Manitoba Chicken Producers, the Manitoba Milk Producers, the Manitoba Pork Council, the Nu Gen Ag Ventures group, the Canadian Cooperative Association, the Manitoba Cattlemen Association, the Canadian Sheep Federation, the Animal Nutrition Association, and the South Interlake Agricultural Society, if they would come and join us at the table.

For this portion of our meeting, we've only allocated about five minutes for each presentation. As chair, I guess I have to be quite strict about that. You could take less, though. In fact, that would be better, but we want to make sure that each of the sectors that are represented is getting its five minutes' worth.

First of all, we have Mr. Fred Homann, general manager of the Manitoba Chicken Producers.

Fred, the floor is yours for five minutes.

¿ (0945)

Mr. Fred Homann (General Manager, Manitoba Chicken Producers): Good morning, committee members and present agriculture community members. My intent this morning is to hopefully give you a better perspective of how supply management fits in with the total agriculture scene that was already raised this morning by the minister's presentation.

We are in chicken broilers. We are part of the supply management of five commodities in Manitoba. I represent 124 producers who produce $57 million worth of gross receipts every year. We produce 26 million chickens a year. In Canada, we're part of the national system that has 2,800 producers, $1.4 million in receipts, and production of about 630 million chickens a year, driven by domestic consumer demand. In Manitoba, for example, we've doubled our chicken production the last ten years, and I believe it's almost the same nationally.

Our industry is managed by the producers themselves, with input from the industry stakeholders. We are responsible for setting a balanced supply and acceptable producer prices. We're financially self-supporting. My budget comes from the levies that producers pay, and from those, we operate our national office in Ottawa, the Chicken Farmers of Canada.

We operate under the federal-provincial agreement. Last year, it was again signed by all ten provinces and the provincial and federal ministers. My concerns are not provincially or nationally in that agreement, because we can operate our business within that agreement. What it does is allow for stability for all stakeholders; for a continued supply of chicken; for a consistent quality for consumers; for a fair return to producers; and for what is sometimes forgotten in those communities where you do have supply management, that being strong local communities.

Yes, we are success stories, so maybe you're wondering at this point possibly just why I'm here. Well, it's because of those trade issues that have been brought up already in the minister's presentation. Trade negotiations began in Doha, Qatar, recently and raised issues of domestic food policy and domestic security as they relate to trade. The trade negotiators need a clear signal from the federal government in order to aggressively defend supply management and other trade initiatives. I'm going to list five, and maybe give some examples of the differences between Canada and other countries in those.

First, there must be equitable domestic support between countries. As an example, in the U.S. farm programs, the differential on wheat is under $35 a tonne, versus $26 in Canada, yet the U.S. will keep challenging us on agricultural imports. They'll keep trying things like their recent talk about country-of-origin labelling on beef, for example. With elimination of export subsidies, we are in favour of that, be it grain or livestock.

Third, trade measures should be based on sound science, not border inspectors' whims, as occasionally happens.

Fourth, we're in agreement that in-quota tariffs be zero for zero. For example, with Canadian chicken, we allow 7.5% imports into Canada, plus supplementals, plus the situation of import control lists, where the 13% rule applies. In the U.S. they only allow 3%, in Europe 1%. Many countries apply tariffs even for their in-quota items. As an example, Australia claims you can import all the chicken you want into Australia. Then they put a qualifier on it that it must be cooked 143 degrees centigrade for 72 minutes--I don't think you want to eat it at that point.

Fifth is the maintenance of over-quota tariffs at current level. This is probably the most important, the foundation of our industry. There's a misconception that only supply management products apply here. That's not so. Canada, in total, has 27, the U.S., I believe, has 53, and worldwide, there are over 1,340. Why? We need predictability on levels of imports, because that is one of the WTO key principles. Rules must be clear, enforceable, and transparent.

In conclusion, the consumers in Canada buy their food for less than 10% of their gross dollar. In fact, I believe February 7 was Food-Free Day. It comes a lot sooner than Tax-Free Day, which is the end of June. We need domestic support policies that give balanced support for the grain sector for the livestock sector. In order to have a healthy livestock sector in Manitoba, including chickens, we need a strong grain sector together with that.

Thank you.

¿ (0950)

The Chair: Thank you.

Now, from the Manitoba Milk Producers, Mr. Swan.

Mr. William Swan (Chairman, Manitoba Milk Producers): Thank you, Mr. Chairman. It's certainly a pleasure to be here, and I'm pleased to have the opportunity to speak before you today.

As a quick overview, in Manitoba there are some 600 dairy producers, generating $170 million. Nationally, that's 19,000 dairy farmers and $4 billion, $9 billion at retail level.

I'd like to go through a brief statement, and then focus on a couple of issues that we see as important to us today.

In view of the national concentration and international globalization of agriculture, food processing, and distribution, government has an important role to play in this industry. The importance of the agriculture and food industry in Canada's economy is enormous. Canada's population should never become reliant on other nations, near or far, for food security. A strong domestic agricultural industry, with strategic export activity, will continue to ensure a strong domestic economy and a positive balance of trade. Government must be involved in the following key areas.

Government must provide agricultural producers with the tools they need to develop and maintain a sustainable agricultural industry. Specifically, there is a need for long-term policies that encourage sustainable crop and livestock production. These policies must encompass crop and livestock diversification, crop development, livestock system development, water management, environment management, and technology adaptation.

Second, government must provide timely changes to legislation to ensure that this industry is able to adapt to new market opportunities.

Third, government must negotiate advantageous rules-based trade agreements, especially under the World Trade Organization. The results of the Uruguay Round trade talks were disappointing for producers. This was not a good deal for farmers. It was a good deal for traders. The expansion of trade in agriculture products did not bring adequate gains to the primary producers. The last five years have been almost price disasters for most agriculture commodities, and very little value-added export accrued to farmers. What are needed in future trade agreements are enforceable rules regarding market access, maintenance of tariff-rate quotas, elimination of export subsidies, and limits on domestic subsidies.

Fourth, government must continue to provide supports for domestic supply management in the forms of administered pricing, tariff-rate quota administration, and a domestic production management system based on quotas. These are the three pillars of supply management. The system must have all three to operate.

Fifth, government must provide scientific support to agriculture research.

Sixth, government must be there with an effective safety net program for producers when the need arises.

I'd just like to focus on some key areas that are on the radar screen today.

Food safety after September 11 has become a key issue. Now, we've been negotiating at the national level and provincially with CFIA, the Canadian Food Inspection Agency, but a lot of these costs are going to be passed on to the producers. This is obviously a concern, and I think the consumers need to be bearing a part of that cost, not the producers.

Environment after Walkerton certainly is having a major impact on agriculture. Some farms around Walkerton were identified as part of that problem, and we need to make sure the producers have adequate resources to address those concerns.

I and Mr. Homann talked a little about the new trade agreement. We don't want to be traded off with some of the other commodities. Supply management certainly is very important to Canadians. And I understand the Americans are the biggest protectionists there are--I mean the dairy industry. And we have no access to the American market. So they continue to talk about free trade, but it certainly doesn't happen between Canada and the United States in dairy.

I think I'll stop there. Maybe I can address some of the other concerns. I don't want to be repetitive.

¿ (0955)

The Chair: From the Manitoba Pork Council, we have Mr. Hacault.

Mr. Marcel Hacault (Chair, Manitoba Pork Council): I'll start with a couple of words in French for the bilingual people on the committee.

[Translation]

Hello. My name is Marcel Hacault. Welcome to Manitoba. I hope the members of the committee who arrived yesterday had time to go to the Festival du Voyageur.

I am the Chairman of the Manitoba Pork Council which represents about 1,500 members. The presentation, which I prepared myself, takes into account the comments of the members of the board of directors. There was a bit of uncertainty as to the expectations of your committee, so I am going to share with you the direction of our industry and what we expect from the government in the future.

[English]

Now I'll switch back to English.

My presentation will be available later on, so in the interests of time, I'll keep on going.

The challenges I see for our industry are really the ideological opposition to large-scale farming, the ability to build and expand; the whole issue of open borders--access to markets, price fluctuation and risk management, disease management, surveillance and control; animal rights pressures; and human resources.

The future trend that I see in our industry is farm operations that are probably more diversified as a whole but more specialized within. For example, a large farm will have one manager in charge of swine production and one in charge of crop production, but they'll still be part of one farm. And within that, there will be even more specialized production. The trend seems to be toward three-stage production, rather than farrow to finish.

We have a future trend of traceability of product to farm level; production loops, where groups of farmers are getting together; and price and production contracts. We have environmental management systems coming in. And I see industry self-regulation having a more prominent role.

What I've slotted as senior government's role--the federal government--is to enhance infrastructure support at the local level: roads, water, electrical, and natural gas; to enable exports, both by development of trade pacts and resolution of trade disputes; to promote and maintain access to new and existing markets and suppliers; to maintain strong biosafety protocols; to develop foreign animal disease outbreak measures and policies between trading partners; to endorse and promote the quality assurance program; and to support research in animal care, environment, and food safety. And with all that, to develop, in concert with farmers and provincial governments, production and risk management programs that are not subject to countervail or trade sanctions.

With that, I come with my recommendations: incentives through FCC for operations diversifying into livestock; increased research into crop-disease-related issues to allow feeding of those Manitoba-raised crops, for example, the vomitoxin; ensuring and streamlining border access and crossing for hogs, pork--that's meat--and grains; elimination of the cost-recovery exercise on border inspection fees; cross-compliance with municipal infrastructure money, with livestock acceptance; enhanced federal commitment and support to maintaining a disease-free status in Canada; and in partnership with commodity groups, the establishment and maintenance of a producer database for disease outbreak situations.

We share the government's goal of making agriculture more competitive. Our industry must not be disadvantaged by international agreements, such as the Kyoto Protocol, and must ensure that regulations address real risk and substantive areas of risk.

The Canadian hog industry is in the forefront of many industries with regard to food safety and protection of the environment with the implementation of the national Canadian quality assurance program for food safety, and we are in concert with the Canadian Pork Council in developing an environmental management system standard for Canadian hog farms.

Any new policies must be GATT-greened, or not subject to countervail duties, given our industry's reliance on trade. We must also be mindful of the status of our global competitors, both in terms of regulations and internal support systems.

The hog industry has tremendous potential to add to the rural fabric of Manitoba. All we ask is to have access to the markets and the ability to produce the product that our customers demand. With a stable regulatory framework, our industry will work with government, other industry partners, and rural communities to provide the world with Canada-brand quality food, and this will be done while protecting the natural environment and quality of life for rural Canadians.

I'll make myself or my producers available to you, if you want, on a one-on-one with us; otherwise I'll thank you very much for the time.

À (1000)

The Chair: Thank you, Mr. Hacault.

From the Nu Gen Ag Ventures, we have Mr. Yuill.

Mr. Ken Yuill (President, Nu Gen Ag Ventures Inc.): Thank you, Mr. Chair. We've made available to the committee a copy of a new brochure we've put out and also the four pages here--somebody in your organization has them. I will only try to cover the first two pages.

I'm a practising farmer. I'm practising a little less the last couple of years as I'm on the way out. But as a comment, I want to make it clear that I firmly believe in what we're attempting to do here, so I'll get on with my presentation.

Mr. Chairman, thank you for the opportunity to make this presentation to the House of Commons Standing Committee on Agriculture and Agri-Food.

Nu Gen Ag Ventures Inc. is a group of farmers who have contributed their money to create new opportunity. It is an innovative approach that we have not seen used before. We believe that what we started over a year ago is built upon the same vision that is expressed in several of the key elements announced in the Whitehorse agreement. Nu Gen Ag Ventures Inc. is working on a new, innovative, future-oriented program that will use life sciences technology to develop new products and pursue new markets.

What we are doing is complex and can best be described briefly under a number of headings. Number one is new future. Farmers face subsidized competitors, low commodity prices, and many other challenges. Nu Gen Ag Ventures Inc. believes that the future will only be better if farmers take more control over their future. That is why Nu Gen is owned by farmers and is working on researching and developing new crops and products where farmers have significant control over the crop, the processing, the marketing, and their future.

New crops. Nu Gen Ag Ventures Inc. is exploring opportunities for new crops, ones farmers can own or control. This includes working with world-class international and local researchers on new crops for new products. With the wise application of new life science technologies, opportunities exist that were not possible in the past. The key to success is developing crops and products that meet the strategic objectives listed later.

New products. Many crop commodities used for food face significant subsidized competitors, so Nu Gen is focusing on non-food products. Nu Gen is initially pursuing the development of industrial chemicals processed from the new crop that can be sold profitably into an already established global marketplace. A number of other products are also being considered and will be pursued if the initial industrial chemical-type products do not prove to be sufficiently attractive.

Nu Gen is working to create a new industry with a new crop and new products. It is planned, once research shows that a profitable crop and product can be developed, that a strong business will be formed, owned by farmers, to enter into strategic alliances with other companies to create a competitive processing and marketing business. Thus, by owning the rights to the crop and product and by using strategic alliances to form a coordinated supply chain with others for processing and marketing, farmers can have control over their futures.

Nu Gen's vision is to build a new industry in Manitoba and Canada that will create new opportunities for crop production, processing, and marketing. The vision is based on these strategic objectives.

The objectives and principles that guide the selection of which opportunities to pursue, what research projects to prioritize, and how Nu Gen will maintain focus are summarized as follows: significant farm ownership and control in the production, processing, and marketing activities of the supply chain; a coordinated supply chain that covers the product from research through production, processing, and marketing, right to the end user; ownership and/or control over new products, e.g., the intellectual property rights for the crop, that are not commodities subject to subsidized competitors; forming strategic alliances with researchers, processors, marketers, and others to create new crops and new products for new markets; taking advantage of the agronomic and low-cost production potential of Manitoba and Canada's agriculture industry and the production expertise of the farmers; taking advantage of the Manitoba and Canadian farmers' knowledge and experience with coordinated supply chains.

This is one of Nu Gen's key competitive advantages, to take advantage of the entrepreneurial orientation of farmers to invest in new value-added processing and marketing businesses, if it is profitable and it makes sense, and to have a bold vision, combined with carefully planned and executed steps to control.

The last heading is strategic alliances. We recognize that what we are undertaking is very challenging. We look forward to working together with Agriculture and Agri-Food Canada and other government departments in developing our vision for the future and creating new opportunities. We seek your support in recognizing that farmers are undertaking innovative, future-oriented actions that will use life sciences technology to develop new products and pursue new markets. We hope that as we progress and more detailed information becomes available on the specific R and D requirements for the products, your committee will be supportive of innovative activities such as Nu Gen Ag Ventures Inc.

Thank you very much.

The Chair: Thank you very much.

Now, from the Canadian Cooperative Association, we have Mr. Tully.

Mr. Glen Tully (President, Canadian Cooperative Association): Thank you very much, and good morning.

My name is Glen Tully, and I actually am a grain and oilseeds farmer about 30 minutes straight west of where we are today. I'm president of the Canadian Cooperative Association, CCA, which I'm representing today. Thank you for the opportunity to appear. I am encouraged by the fact that the committee is getting out of Ottawa and travelling across Canada to hear Canadians' views on how to build a better sector and a partnership between the federal government and the agricultural sector.

CCA is the national association representing anglophone cooperatives in Canada. With over 10 million members, we draw from a wide range of sectors, including agriculture, finance, insurance, retail-wholesale, housing, and health, and we work to promote the growth and development of cooperatives at home and internationally. The Canadian Cooperative Association includes agricultural members in grains and oilseeds, such as the Saskatchewan Wheat Pool, and in the dairy industry, such as Gay Lea Foods Co-operative Limited and Scotsburn Co-operative Services Limited.

Foreign policy issues affect not only CCA agricultural members, but also other members, such as credit unions and retail farm supply cooperatives, like Federated Co-operatives and GROWMARK, whose financial success is linked to healthy farm economies. We recognize the close linkages between agricultural policy issues and broader issues of the sustainability of rural communities.

The Canadian Cooperative Association and its members were pleased by the Whitehorse agreement signed in June 2001 by the provincial, territorial, and federal agricultural ministers. This agreement sets out a long-term vision for Canada's agricultural sector and an action plan for agricultural policy framework, to ensure that Canada's agriculture and agrifood sector is prepared for the future. CCA and our members look forward to engaging in consultations on the framework and are eager to see the progress to be announced at their annual meeting in Halifax. Employment and trade statistics illustrate the importance of Canada's agrifood sector, and they support the continued provision of government support for the sector.

À (1005)

The “Agricultural Adaptation: A Co-operative Approach (Phase I)” initiative was carried out jointly by CCA and our francophone counterpart, the Conseil canadien de la coopération, and was funded through Agriculture and Agri-Food Canada's Canadian Adaptation and Rural Development Fund, known as CARD. The rationale for the initiative was to identify ways to strengthen agriculture and agrifood cooperatives and to explore new cooperative models in order to improve the economic prospects of farmer-producers in rural communities in Canada. The CCA-CCC action plan proposal currently before Agriculture and Agri-Food Canada outlines key areas for future partnerships between the agricultural cooperative sector and the federal government.

The long-standing issue that CCA members have identified as a challenge for the agriculture and agrifood industry is that of trade-distorting foreign subsidies. An international trade resolution was ratified at CCA's June 2001 annual general meeting. This resolution urges CCA to encourage the federal government to pursue an aggressive negotiating position for the elimination of export subsidies, for a substantial reduction in trade-distorting domestic subsidies, and for meaningful increases in market access opportunities, during current agricultural negotiations under the WTO. CCA members also support the role of supply marketing systems to regulate supply and demand and to ensure profitability, and the right of Canada to maintain our own marketing systems within the Canadian Wheat Board.

CCA and its members are pleased with the emphasis on food safety and security that is found in the Whitehorse agreement. However, we believe it is important to recognize the key role for provincial and federal governments in supporting industry in the development and implementation of on-farm food safety strategies.

The Canadian Cooperative Association's membership has been supportive of the potential benefits that can accrue through investments in biotechnology. There is an important role for governments to play in evaluating biotechnology products and providing clarity around regulatory requirements.

I thank the committee members for the opportunity to appear. I look forward to taking questions.

À (1010)

The Chair: Thank you, Mr. Tully.

From the Manitoba Cattlemen Association...you might have to change that name, Betty.

Ms. Betty Green (Vice-President, Manitoba Cattle Producers Association): Good morning. I'm presenting on behalf of what is actually called the Manitoba Cattle Producers Association, but I welcome the opportunity to offer to the standing committee our insight into the whole issue of agriculture. I'm a cattle producer and grain producer from the Interlake region, which is just north of Stonewall here, so I have a vested interest in the issue.

MCPA represents 12,000 producers who are involved in a variety of aspects of the beef cattle industry. The value of cattle produced in 2000 within Manitoba was close to $500 million. We account for 12.4% of the cattle herd in Canada, third to Alberta's and Saskatchewan's herds. We have a long-standing reputation of production of top-quality beef, and we're proud of that. We believe we have to maintain our industry in a strong and viable manner.

MCPA believes Canada must prepare a comprehensive national agricultural policy for a sustainable and a competitive industry. The policy, we believe, must be based on some basic principles that address the societal demands for accountability and food safety, and it must include issues relevant to our industry. It must include a commitment to the industry, which provides high-quality food for our country and for world markets. It must include a commitment to ensuring trade access to global markets, as well as a commitment to equitable treatment for all sectors of agriculture. A commitment must be made to develop a national infrastructure that addresses agricultural needs, in conjunction with the needs of other industries and society. A commitment must also be made to allocate natural resources essential for sustainability.

We believe we have to have a comprehensive approach to safety net programs that ensures integration of national and provincial programs and adheres to the market neutrality principle.

We believe we need to consider a clearly articulated disaster program for Canada.

I'll speak to each of those commitments briefly.

A Canadian commitment to agriculture is essential. Currently it seems that public attention is drawn to the farm sector around issues of food safety, environmental issues, or the farm crisis. We have to move much beyond that and recognize that a great deal of work has been put forward to address those issues.

The Canadian cattle industry has been pursuing an aggressive beef safety and quality assurance program since 1994. Our members are also proud to be role models in stewards of land. We believe there must be a cooperative approach to conservation and a science-based approach to things such as soil management. We believe there needs to be government support in all of those areas.

Trade access to international markets is essential. Canada's economic reliance on global export markets is real. It's essential that those markets be kept in mind when government considers income support programs, responses to natural disasters, and political pressure for handouts. Any policy that is not trade neutral must be rejected.

In terms of infrastructure, the need for a national approach to a transportation infrastructure is essential so that we can coordinate the efforts of federal, provincial, and municipal governments. A success story, from our perspective, is the Prairie Farm Rehabilitation Administration, PFRA. It has been working with agricultural people to develop a viable industry and a sustainable rural economy. We believe the staff have worked to develop and conserve the area's soil and water resources, and to encourage diversification, value-added processing, and other opportunities. That role needs to be enhanced.

The Canadian beef industry has taken a leadership role in establishing a national identification program that's been essential for our industry. This program offers to mitigate losses resulting from animal diseases, and further research and development needs to be done to expand that program.

The two greatest threats faced by the cattle industry are foreign animal diseases and trade interruptions. The Canadian Food Inspection Agency must be given the necessary resources to fulfill their role in protecting against disease incursion. The impact of foot and mouth disease in Europe cannot be overstated, and a small investment to prevent that kind of an impact here in Canada is essential.

Natural resources such as water and land are essential to our industry. There are a number of initiatives that would discuss the subsidization of shifting crop land and marginal land into set-aside programs, and we have to be careful to avoid the artificial stimulus that those kinds of programs could result in.

As the demand for natural resources increases from a variety of areas, will it become necessary to allocate resources according to some formula or criteria? If so, we're concerned that our industry must be given the necessary resources to be sustainable.

To speak to the safety net program, we believe that currently the safety net program isn't integrated in a way that avoids the disjointed and ad hoc approach that sometimes results. Safety net programs must be trade neutral and they must encourage producers to respond to market signals. Over half of our production is exported, with 84% of those sales going to the United States. We were subject to one countervail, in 1998, and we won that successfully because we had no direct subsidies.

Safety net support should, we believe, be comprehensive, and it should be a risk management program that would include encouraging farms to mitigate and manage their own risks and reward farmers for that effort. It should be based on a profile of commodities and a facilitation of a longer program, not just a year-by-year program. We believe it needs to ensure risk sharing and pooling, and we would support an integration with the environment and food safety components.

À (1015)

And I want to speak very briefly on the issue of the disaster program. We believe a national natural disaster program in Canada must be clearly articulated and it is essential. Each year we face the issues of drought, or floods, or the ice storm. We have been fortunate not to deal with a pandemic disease situation such as Europe has, and that kind of disease incursion would have a magnitude that would have a catastrophic impact on the cattle industry.

We suggest that the only equitable response is to establish very clear criteria and to establish a financial commitment to a disaster program that's ongoing, comprehensive, and will deal with all of the issues in a very equitable manner.

Thank you for the opportunity to present.

À (1020)

The Chair: Thank you very much.

Now, from the Animal Nutrition Association, we have Mr. Schultz.

Mr. Herb Schultz (Animal Nutrition Association): Thank you, Mr. Chairman, for this opportunity to speak to you and the members of this committee. I will gloss over some points because I think they've been picked up and my presentation will be available for circulation later on.

The animal feed industry represents a $460 million industry in Manitoba. This is split about 50-50 between the commercial mills and the on-farm mixers. Commercial production, the last time we did a survey, was 1.1 million tonnes and this is rapidly growing. As an illustration, Killarney mill came on stream and that represents about a 200,000 tonne capacity. There's a mill at Souris, south of Brandon, coming on. That will represent a 200,000 tonne capacity, and existing mills are also expanding and doubling their operations here in Manitoba.

What we're saying here is that the livestock industry and the feed industry are experiencing pretty robust times in Manitoba, but that's going to stall because of a number of factors sitting on the horizon, and I think that's the real issue.

I think on a community basis we need to also look at the impact of it. We did a little survey around Hamiota, which is about 50 kilometres northwest of Brandon. Hog production is expanding there and that expansion will represent about a 60,000 tonne grain consumption, and about 100 people will actually receive some income from that expansion alone. So the impacts are there.

I'm going to deal with only those issues that I think the Canadian government can actually deal with. There are problems out there that I think in the global sense are going to be tough nuts to crack.

The first one is infrastructure. I'm talking about roads. It's been mentioned already. The road system is in pretty tough shape in rural Manitoba right now, and this is at at a time when grain is starting to move on the roads, not only as grain but as feed and everything else.

The federal government does provide funds for such things as the Trans-Canada, the Yellowhead, and the 75, and for some prairie grain roads. But there are a number of other needs in there, and what is happening is that the municipalities and the Manitoba government don't have the money to upgrade the roads, and the roads deteriorate and weight restrictions come on. That is the response.

On the other side of the coin, the feed industry says our trucks are being badly damaged and the weight restrictions are a big issue for productivity, and what's happening is that a number of companies are starting to look south of the 49th parallel to locate there.

Investment realignment is another issue here in Manitoba. A lot of people think a lot of offshore investment is coming in there in the livestock expansion. It's in fact the local farmers, veterinarians, and local business people who are investing, and what they're doing is investing in an intensive livestock operation where they can actually sell the grain back to this operation.

The big issue there is that they can continue to grain farm, have a market for their grain, and when they go to sell the business they don't have to sell the farm. They can still stay on their farm or they can still stay on the farm residence.

One thing that's necessary there is to start looking at some of the investment tax credits and the tax incentives that could deal with bringing up a bigger pool of local money and not looking at the offshore investors all the time.

Education and training: I think a strong statement has to be made about training and education supports in agriculture. This is not simply training an on-farm, family farm operator. In our industry there are a number of intensive livestock operations that don't have managers because they're just not available. It's not simply knowing agriculture, although that's important; there are a number of other issues in the skills mix.

I think the universities can probably deliver the education, or develop it. What I think we see happening, and we don't have any statistics on this one, is that there is so much fractiousness about intensive livestock operations and such that people don't want to work in the industry, because there is always tension in the community. Why do it when you're always in trouble with the local neighbours and the local community?

Research on crops: Manitoba has a problem with fusarium-vomitoxin. Hogs don't like that in their feed at all. Cattle can tolerate a bit of it, but not much. But basically we can't grow any of that feed weed or feed barley in the Red River Valley. Yes, we do have some options here. We can grow corn and pulse crops, but we're at the limit of the climate here in Manitoba. We need some research into making these species or these varieties a little more tolerant to some of the downsides of climate.

For example, last year we had a banner year for corn. But that was only because the wet, cool spring was followed by ideal growing conditions. That limit could have gone either way--from nothing to that.

Food safety and environmental stewardship: I think we feel that Canada has a safe food system. We have the industry-led initiatives like the quality assurance, we have the HACCP programs of the various livestock production groups, and we have even government with their rules and regulations in terms of medicated feed regulations and so on. One of the issues there, however, is that human error tends to cause a lot of problems. That's a lot of the media issue. Sometimes it's just inattention to the consequences of that system failing that really causes the big problem in Canada.

Environmental stewardship: We're fully in support of it. But again this comes down to community disputes. Sometimes governments just don't want to deal with that. In other words, there's too much local tension, so they don't do anything. The industry responds to that in a number of ways. One of them is to look somewhere else, mostly south of the 49th parallel, to locate new industries.

Another item is harmonization of roles and responsibilities. There are too many complex requirements in our systems of regulations in the government. An example was StarLink corn. Last year the government actually.... What happened was CFIA put controls on the importation of StarLink corn. It had a major negative impact on Manitoba's industry in terms of imports. What we're saying is look at that--universality of rules doesn't mean uniformity of application.

I think I will call it at that. Then you can read the rest. Thank you for the chance.

À (1025)

The Chair: Thank you very much.

From the Canadian Sheep Federation, then, Mr. Eros.

Mr. Randy Eros (Canadian Sheep Federation): Thank you very much. One of the benefits of going later on in the program is that I can just say, well, what they said, because others have explained much better than I could some of the issues I was going to raise. I think what I'm going to do is focus on a couple of things that are relevant to the sheep industry.

First of all, I'm here representing the Canadian Sheep Federation, but also I wear the hat of a director of the Manitoba Sheep Association. Our industry has grown considerably over the last five or six years. We've seen a doubling of our flock over a three-year period. I've been involved in an industry study, some comparative advantages studies, and I am just finishing up the final draft of the strategic plan that will hopefully help us work with this expansion in our industry.

But I'm going to focus on the issue of food safety, because it is an issue where all the costs end up being carried by the producer. The benefits all go to the consumer. One of the things we need to look at--and I think this is where the federal government can play a key role--is assuming those costs when it's a consumer benefit, the whole issue of food safety. Some of the other programs we've talked about here today--being the on-farm food safety, the national ID program, some of the CFIA initiatives--are basically consumer-driven. If they're not driven by our own Canadian consumers, they're driven by offshore or southern consumers looking for guarantees of what, on the whole, we already do very well.

Canadian producers, certainly of lamb and all our other livestock, are basically producing in a safe, efficient, environmentally sensitive way. It's in our own best interest to market a safe, healthy animal, with only positive impacts on our pasture and hay land. So we're already doing that. Many of these food safety costs are about showing people that we do it, and that's consumer-driven. They want to know that what they're eating is a wonderfully safe product. Quite frankly, yes, the consumer is entitled to get what they pay for, and they need to pay for that.

I think the federal government has a role in assuming the costs of verifying what we already do well. Our responsibility is to do it well, no doubt, but the cost of verifying that and showing people that we do it for the consumer benefit should be borne by the consumer. To suggest that this will show up in the marketplace is not true. The initial producer receives such a small portion of the consumer dollar now, to expect that to be picked up at the marketplace is a fallacy; it just will not happen.

One of the other issues--and it's certainly something we are looking at as our industry expands--is people saying those are operational costs, bigger is better; you just bury it in the idea of “get your farm larger, and it will absorb those costs”. Factory farms, larger farming operations, have the consumer looking at their plate and asking, “Where did this come from? Where did these lamb chops come from? I need to know; I need to be assured that this was raised in an environmentally sensitive way, and when it left the farm, it was a quality food product”. We do that; they just want the reassurance, and they should pay for it. It won't happen in the marketplace; it should happen as a tax-supported program.

So as we look at the government's role, that is something we feel needs to be focused on. It is a health and food safety issue, so let's look at it as we do other inspection programs.

À (1030)

The Chair: Thank you very much.

Our final participant in this part of our program is from the South Interlake Agricultural Society, Mr. Grenkow.

Mr. Gordon Grenkow (President, South Interlake Agricultural Society): Good morning, and thank you for this opportunity. I am a local area producer, as well as president of the area agricultural society. At our meeting just the other week, we were discussing, similarly, what we hear around the table today, and we decided to take it upon ourselves to forward a letter to the concerned people of Agriculture to the effect that we should voice an opinion. With this standing committee coming along, I considered this an opportunity to present it here as well.

This is a letter to the agriculture ministers of Manitoba and Canada to discuss the current status of agriculture in Canada as well as that in the past.

Agriculture has always been maintained as the backbone of the country. The concept of the family farm developed over the generations and led to an assurance of a bountiful, quality product for the Canadian consumer. On-farm efficiencies have resulted in more production from fewer producers than a decade ago, even two decades ago. Such efficiency at the farm gate has placed Canadian agriculture into the export market, a global, subsidized export market. The result is marginal returns to the Canadian producers because of the enhanced markets of the American and European counterparts. Canada does not participate in enhancement.

In today's world of markets and trade, what does the previous statement really mean? According to the current federal government and its agricultural minister, there is no problem or concern. The response for the last couple of years has been “produce and be more competitive”. Input costs for crop production remain high, while the commodity prices are low for the cost of production. This situation has existed for a couple of years now, and it will continue as long as the subsidized global market does. The result is corporate profit for the input suppliers, financial institutions, and the primary and secondary industries that process the commodities for the consumer.

As for the family farm, the actual producers faced with all the risk of production, the result is dramatically opposite. Off-farm income to sustain the farm enterprise is now common. After three generations of making a decent living off the land, it is no longer a viable operation. More borrowed finances are necessary. Equipment is too expensive to replace. The farming population is decreasing and becoming older. Is this a good beginning for a new generation to continue and hope for changes?

Our local agricultural society is a community organization that dates back to 1881. Its mandate is to promote the development of agriculture as well as the education aspect. This is a volunteer non-profit organization that partners with the community it encompasses. A thriving agricultural sector in turn complements this group, while a downturn results in a negative effect.

What is the mandate of the federal government in relation to agriculture and the family farm? If there is one, it is non-effective. Provincial governments realize a problem, and yet are powerless without the federal participation and input.

In conclusion, the South Interlake Agricultural Society, by resolution, calls on the federal government of Canada to support the agriculture sector. After years of non-functional programs that have resulted in lower prices and yet lower returns to producers, it is now imperative to develop a positive approach such as that of the United States. Otherwise the consequences will be an exodus from the land and agriculture, and hence the demise of the family farm.

Thank you for the opportunity here.

À (1035)

The Chair: Thank you, Gordon.

We are running behind schedule. I know that probably each member of the committee has been introduced to a lot of ideas and concepts here and probably has a thousand questions to ask.

Howard, can we be brief, then? If you can, just identify which representative you'd like to address your question to, rather than having everybody answer, okay?

Mr. Howard Hilstrom: Yes. They're all excellent presentations.

On the one point, Randy Eros, that you made in regard to the user fees being charged to farmers when really the benefit is for everybody, certainly the government has to look at applying most of those user fees to the taxpayers in general, because that's who the real beneficiary is.

On one issue in this country, wheat and barley, which makes up export sales of around $4.5 billion besides internal sales, a debate has been raging. It's been raging since I was elected in 1997, and these gentlemen here from this area knew we engaged in it right off the bat in 1997. Glen, you mentioned the Wheat Board and the support for it, but I'd like your comment in regard to this set of facts and whether you really do personally support it.

One way a lot of farmers are saying they could raise their income is if they had the ability to market their own wheat and barley in order to manage their own marketing risks and increase income for their individual farms. The Ontario wheat board has a voluntary system whereby up to 300,000 of the 1 million tonnes are allowed to be sold individually, and they've got resolutions at the next annual meeting to make it totally voluntary. I've never heard of any of the hog producers of Manitoba wanting to go back to a monopoly. You probably produce some oats on your farm at different times. I don't hear anybody asking to have oats go back under the Wheat Board. The Ontario apple producers just recently got rid of their monopoly. I haven't had any farmers, including any here today, ask to have any other grains or oilseeds added to the Canadian Wheat Board.

So can you explain to this committee, because we're going to be reporting to the minister, why it is these changes I've identified are going on and why your association believes the Wheat Board should retain the monopoly on acquiring grain but not have a monopoly on selling to purchasers?

Mr. Glen Tully: I'll attempt to do that, and thank you for your question.

It certainly is the position of the Canadian Cooperative Association that we believe in an orderly marketing system and, as such, support supply management as well as the Wheat Board. I guess I question whether you can support one and not the other. From the standpoint of the globalization of the grain markets--and again I'll indicate that I personally support the Wheat Board--I go back to, I think, a comment Greg Arason made, that just because we're different doesn't mean our approach is wrong.

When I go back to the oilseeds, for example, the basis contracts moved back to the provinces. We were able to lock basis contracts at something like $10 a tonne for the elevation and freight and all that. Now we're back up to $25 a tonne, and we have a lower-priced commodity because the shipping point has moved back. I think that if we work together as farmers, we can compete in the industry a lot more efficiently than trying to do it as individuals.

I would refer to the comment on what's happened in the United States. They're coming out strong against our Wheat Board. They're trying to destroy our Wheat Board for the benefit of American farmers, not for the benefit of Canadian farmers.

À (1040)

The Chair: Thank you, Mr. Tully.

Howard, I don't know.

Mr. Howard Hilstrom: Did you want to give me a little more time? This is a really interesting debate that fits well with the occasion.

Some hon. members: Oh, oh!

The Chair: I do have to move on.

Mr. Desrochers.

[Translation]

Mr. Odina Desrochers: Thank you, Mr. Chair.

You spoke particularly of the rapid development of swine production in Manitoba. I would like to know the statistics on the evolution of production over a five-year period and I would like you tell us if, as in Quebec, the rapid establishment of hog farms has created problems for rural communities and led to some resistance from environmental groups.

Mr. Marcel Hacault: I don't have the statistics here, but over the last five years, we have had growth of about 14 to 15 percent. Today, production is close to six million hogs. Currently, only 58% of this number are slaughtered in Manitoba. Most are exported as piglets to the United States, about 1.4 million, and 600,000 are exported alive to the United States.

As you can see, in Manitoba, farms are in full transition and many farmers are looking for other ways of farming. They are doing it in different ways, but most are turning to raising beef cattle, or raising hogs.

Unfortunately, not everybody in the community shares this vision of the future of farming. Some people only want to retire; others want more support from the government to keep cultivating cereal crops. Still others say that their farm would lend itself well to a hog farm and that is what they would like to do.

Unfortunately, not everybody is in agreement, and we can see that regional politics are preventing this diversification from taking place.

Mr. Odina Desrochers: Do you have pig-factories or small-scale production?

Mr. Marcel Hacault: We have just about everything in Manitoba. Let's just say that, taking into account the limits we have in Manitoba, it is easier to have pig-factories than small-scale hog productions.

Mr. Odina Desrochers: And the people in the area, how do they feel about that?

Mr. Marcel Hacault: As far as they are concerned, we could keep going here for a long time. On our side, we are trying to work with the municipalities, farmers and the government. One role that would be appropriate for the government, in my opinion, deals with infrastructure. You could allocate money for the network of rural roads. To support my point, I would say that municipalities that encourage hog farming should perhaps have priority for such a program.

Mr. Odina Desrochers: Thank you very much.

[English]

The Chair: Thank you, Mr. Desrochers. I'm sorry to make these short, but I do want to....

Mr. Proctor.

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

I have a question for Betty Green. Last week, the United States Department of Agriculture indicated they might go back to, or would prefer to have, a country-of-origin label placed on meat products. How would that affect the industry here in Manitoba?

À (1045)

Ms. Betty Green: Because a significant portion of our export product goes to the States, it would have a devastating effect. The beef industry development fund has been used to explore the potential of developing markets for our Canadian beef, recognizing it's Canadian beef, and we have had some success in that. But quite honestly, that should have been undertaken years in advance of this kind of outcome. We're certainly lobbying to try to ensure that doesn't happen. There's certainly concern, and it's going to have a real impact.

Mr. Dick Proctor: You mentioned market neutrality several times in your presentation, but what should we be doing to make sure this doesn't happen? Should it be the Canadian government or the cattlemen's association? Who exactly should be taking the lead here?

Ms. Betty Green: I think the government has to take the lead in any negotiations to ensure that every opportunity is taken for our industry to maintain the markets we have. Any program or response to demand here in Canada has to be weighed to ensure it won't impact on our market neutrality. That's the role the government must undertake.

Mr. Dick Proctor: Do you have any feedlot operations right on the border with the United States, where cattle are perhaps going back and forth across the line?

Ms. Betty Green: Yes.

Mr. Dick Proctor: Wouldn't it make it very difficult to establish country of origin, under those kinds of situations?

Ms. Betty Green: There's certainly in-depth discussion on how they're going to be able to control that. There is a limit to the number of cattle that come across the border. It has to occur during very strict time lines because of disease potential during vector seasons, so it would make it more difficult. In fact, right now the potential for expanding that movement back and forth across the border is there. If that kind of legislation comes in, it's going to make it even more difficult.

Mr. Dick Proctor: Thanks, Betty.

The Chair: Rick.

Mr. Rick Borotsik: Thank you, Mr. Chair.

First of all, Herb, I want to correct a fallacy or myth you put forward on federal dollars going into Highway 1 to Yellowhead. There are no federal dollars going into that. It's totally provincial, trust me. We feel very strongly there should be federal infrastructure dollars going into the highway system, but I want to correct you on that point. So please don't spread that terrible rumour.

Second, you talked about the environmental issues very briefly. You said if there were going to be a stumbling block here in Canada, there was a possibility of the feed companies moving south of the border. Are you suggesting their environmental requirements and criteria are less than what they seem to be here in Canada?

Mr. Herb Schultz: No. Down there they have a much clearer definition of what is or isn't going to be allowed. In Canada it's in infancy. We're talking about livestock companies or livestock operations. They don't know if they're going to get approval or not; that's the issue. It's too unpredictable, so they say they can't wait. We know of examples of integrated operations actively looking down south.

Mr. Rick Borotsik: I come from an area that is looking very actively at hog operations, and you're right that certain municipalities have different rules from other municipalities. Are you suggesting the federal government should put in an environmental criteria that would then allow municipalities to have a set standard?

Mr. Herb Schultz: There are some things that are actually federal responsibilities. You talk about Fisheries and Oceans and a few other issues. A lot of times aesthetic issues get translated into environmental issues, and that's the problem. We don't know if it's a real environmental issue or not. The federal government sometimes has to say “This is not an environmental issue--there it is".

Mr. Rick Borotsik: I'd like to turn that question over to Marcel. Obviously the hog industry right now has serious implications with respect to the environmental impact of intensified livestock operations.

Your organization talked about self-regulation. Do you have any thoughts that you can put forward right now as to where the federal government should be heading with respect to the environmental issue on hog production?

À (1050)

Mr. Marcel Hacault: I guess I would see it as being very similar to the Canadian quality assurance program that was developed with industry, where on-farm decisions and management plans are made and it's audited by a third party. It's very much on-farm, I guess.

Mr. Rick Borotsik: So your organization does support the concept of on-farm environmental plans that should be brought forward. Is that right?

Mr. Marcel Hacault: Actually, in concert with the Canadian Pork Council. The Canadian Standards Association is actually in the process of developing something as we speak.

Mr. Rick Borotsik: My last question is to the cattle producers. Thank you, Betty, for your presentation.

Something you mentioned that is very close and dear to my heart is a disaster program, more than simply a safety net program but a disaster program. Is your organization in the process of trying to develop the criteria that you talked about and put forward a disaster program?

Ms. Betty Green: We haven't given a lot of thought to that--

Mr. Rick Borotsik: Please do.

Ms. Betty Green: Certainly, in discussions while trying to develop a presentation for today's standing committee, we started to delve into that whole topic. The more we got into it, the more we realized how very necessary it is.

Mr. Rick Borotsik: Thank you so much. I look forward to working with you on that one.

The Chair: Rose-Marie.

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

I want to congratulate all the presenters. It was most interesting.

Ken, I congratulate you on your initiative within your group. I look forward to hearing more as time goes on as to what you're able to come up with within your venture group.

Betty, you said several times the foreign animal disease issue was a real concern to you. Are you suggesting CFIA isn't doing their job, or wasn't sufficiently doing their job?

Ms. Betty Green: I would think they're doing everything they can with the resources provided to them, but our feeling is that those are not adequate. Certainly, currently the surveillance for TB in the province of Manitoba has outlined the limitations that their laboratories and various veterinarian...their human resources can provide. We're suggesting that this is an essential resource for the government.

Mrs. Rose-Marie Ur: More people power, then.

Ms. Betty Green: Yes.

Mrs. Rose-Marie Ur: To Randy, I appreciated your presentation as well. This may be a little controversial, but we've been fairly amicable here this morning, and as you have stated, a lot of consumers' concerns are always relating back to the primary producer. I was a primary producer in my previous life, and it has always been stated that the consumer will buy locally, they'll support locally. It doesn't happen in southwestern Ontario; I don't know how it is here in Manitoba, but the bottom line is price.

That being said, with a lot of the changes--not for the bad, I'm suggesting--consumers are requesting more and more of our primary products, but it always falls back into our lap. What would you--and if other individuals want to comment--

The Chair: Careful, Rose-Marie. I could have eight people commenting.

Mrs. Rose-Marie Ur: I'm the last person to...I get the short end of the stick.

Well, they can say yes or no. My question is, do you think it would be palatable to suggest a 1% tax on food that would go back to the primary producer? Is that saleable?

Mr. Randy Eros: They tell us the producer will spend up to 10% more on food that they know is better. It's a generalization, but those are the numbers that I could quote around, and the given that knowing this lamb chop is guaranteed to be wonderful and had jumped around in a green pasture versus this one that I know nothing about.... I'm sure the consumer will, without a doubt, spend 10% more. The producer will spend 20% more to get it there.

Mrs. Rose-Marie Ur: Yes, exactly!

Mr. Randy Eros: If the question is will they accept it, yes, quite frankly, I think they will.

As I went out the door this morning, my wife and I were talking about this. These discussions always originate around the kitchen table. Let's face it, we probably all floated our presentations by our spouses before we left today. She said....There are no soda pop and no potato chip producers here today, are there? Those are already luxury items.

Yes, the consumer can and should support us through tax dollars. Now, whether it's done on a specific tax on food.... We don't currently tax our food, which is part of why we only spend that 6.5% of our disposable income on food, which is pretty incredible for what we get when you look at what other nations have to spend.

Ms. Rose-Marie Ur: Absolutely.

Mr. Randy Eros: I'm going to jump in here and just support some of the concepts of the CFIA--

À (1055)

The Chair: Just a minute, we want to be sure. Rose-Marie may have some more questions.

Mrs. Rose-Marie Ur: No.

The Chair: Would you like to hear his comments?

Mrs. Rose-Marie Ur: Yes.

Mr. Randy Eros: As a sheep industry, recently in Manitoba and a few years ago in Quebec, we were made aware of some of the issues the CFIA had to deal with, and what they really need is more resources. That is going to become a greater and greater issue. I think the federal government needs to provide more support to the CFIA if they're going to be able to do the job they currently are having a hard time doing. Their role is going to expand, and they will need to have more people on the ground. That's a given. That has to happen.

Mrs. Rose-Marie Ur: Thank you, Randy.

The Chair: Fred, very briefly.

Mr. Fred Homann: I just wish to comment on that. When you go in that direction, you must be very careful.

First of all, it's a consumer perception of what they think may or may not be better food. Secondly, you don't want to create the impression that what the producer produces now is already safe food. Thank you.

The Chair: We'll now take a short break, and then we have another group coming to the table.

We'd like to thank the presenters. I think that as a committee we fully recognize that we need more time. You've introduced a lot of very good concepts. It's a very difficult matter we're looking at. It's not an easy thing, is it, Herb?

In any case, we'll take a five-minute break and then come back for the next portion.

À (1051)

Á (1106)

The Chair: I call the meeting back to order.

As the first presenter, from the Manitoba Turkey Producers, isn't here, I'll move on to Mr. Calvin Vaags. Calvin, would you begin?

Á (1110)

Mr. Calvin Vaags (Individual Presentation): Good morning, everyone.

First, I'd like to thank you for allowing me the chance to speak at this round table. My name is Calvin Vaags, and I'm a farmer in the Dugald area. I farm anywhere from 2,500 to 3,000 acres of land, and I run a feedlot of approximately 1,000 head of cattle. So that's the perspective I'm coming from.

I was asked today to talk a little about the future role of government in agriculture. That's a fairly broad topic, and I could probably speak for a long time on it, so I decided just to hit a few broad points that I think are very important.

First--and this is probably the most important thing I think of--the government needs to have a commitment to agriculture, not just a short-term commitment but a long-term commitment. That commitment needs to be consistent in the programs they deliver. One of the problems over the years with the programs we've had to work with is that they keep changing. As you know, agriculture is a long-term project. When I buy a piece of land, I have to pay for that over 15 to 20 years. When the GRIP program came out, they told us it was going to be around forever, and I actually made decisions to purchase land on that program. That changed, and all of a sudden, my ability to repay loans changed as well. So one of the major things I think the government has to have is a commitment. Is agriculture important to the federal government of Canada? Right now it doesn't seem that way sometimes. So we need a commitment, then we need a consistent approach.

Another example of a not-so-consistent approach is the AIDA program recently. I believe in the first two years it was around it paid out on negative margins. Now, for 2000 and 2001, when we find the grain sector is in need of that program, they're not paying on negative margins. So by somebody's decision-making process, all of a sudden one sector of the agriculture community got paid a lot more money than another sector, and I wonder why.

The second point I'd like to talk about is safety nets. Of course safety nets are extremely important to agriculture. We suffer two main areas of risk. Number one is production risk. Number two is price risk related to market swings.

We have to have a crop insurance system in place and it has to be supported by the federal and provincial governments. And it has to be comparable to what our trading partners to the south have--somewhat comparable, anyway.

We work in a global market. There's no question that agriculture today is in a global market. I sell all of my cattle into the States. I sell a good portion of my crop directly into the States. And I'll sell them anywhere in the world if I have the opportunity. So we are definitely in a global market, and the support programs that we have in place have to reflect what our trading partners have.

The other major safety net we have to have is something for price risk. This is a little harder to deal with, but I believe the tools are there to handle that risk. There are risk management tools in place, but the reason farmers can't access them is that they don't have the financial tools to use them. I'm talking about commodity markets, hedging strategies, that type of thing. These are the types of tools we need to be using. It takes the government out of it, to a certain extent, but we need financial resources to access those tools.

To give you an example, if I wanted to hedge all the cattle in my feedlot today on the Chicago Mercantile Exchange, I could do that. But would I have enough financial resources to handle a big market swing to the upside? Would I be able to pay margin? Probably not. So that limits my ability to manage that risk. If there were some sort of government program in place that would allow me to access margin money, all of a sudden my price risk would be gone on those cattle.

So there are things out there that we understand and know how to use. But we're not in a position to use them, because we don't have the financial resources to do so. And, of course, it's a constant contest with the big multinationals and the companies we're selling to. They have the resources to use these tools. That puts us at a bit of a disadvantage.

The third thing I'd like to talk about, and it's extremely important, is that we have to maintain and seek global markets. We have to realize--and I've said this before--that agriculture is working in a global market. It's extremely important--and we can't do this ourselves, as producers--that the government open up the borders, allow us free access to markets, and maintain them.

This is so especially in my industry. I produce cash crops and cattle. I can tell you that in 1998, when the trade barrier came up on cattle, it was devastating for me. Overnight, I had $100,000 ripped out of my cashflow. Yes, I got it back. And you say "Well, you got it back. You're fine." That's true, I got it back. But the interruption of business--having that money taken out of my cashflow--was devastating. It stopped me from making decisions for the 10 months and on until I got that money back.

It's the same with grain. Here in Canada, if we lose our global markets for our grain sector...you might as well plant a lot of grass out in the prairies, because you won't have to grow much wheat.

The other thing I'd like to talk about respecting global markets--and this really hasn't been touched on yet this morning--is that we tend to measure demand for food in the world by who can afford to pay for it. I think a fundamental change that perhaps the Government of Canada could lead on is that we need to measure demand for food by who needs it, by who's hungry. My feeling is that if we fed all the hungry people in the world, we wouldn't have enough food to go around, and prices would actually rise. What I see happening in the world today is that as our prices get too high, we just let more people starve, so the price of food comes down and the western nations can have a cheap food supply. I really feel that if we fed all the people in the world and we had no hungry people in the world, we might not have the resources to feed them all, and we would have high commodity prices.

Á (1115)

The Chair: Thank you, Mr. Vaags.

Mr. Penner, we're trying to allocate five minutes for each group.

Á (1120)

Mr. Henry Penner (Individual Presentation): Thank you for this opportunity to appear before this panel to present my views on what measures the federal government could take to assist farmers and agriculture in western Canada.

Since I have not been asked to present on behalf of any particular organization, I feel I first must present to you my credentials. I have farmed in southern Manitoba for the past 25 years and have been very involved with many farm organizations throughout that time. My experience ranges from president of the Manitoba Corn Growers Association to vice-president of the United Grain Growers. I served as the chairman of the Canada Grains Council through one of its most challenging times.

I believe I am uniquely qualified to present, because I realize that for this industry to function well in a commercial environment, all the players must work together. My strength has been working with all the participants with a vested interest in the industry. I must tell you that I had to make the gut-wrenching decision to cease my farming operation, and I am now working full time helping other farmers with their estate planning.

It's important for an element of trust and respect to exist between farmers, grain companies, railways, and governments. The welfare of each is reliant on the relative financial help of the other. In this presentation, I don't intend to dwell on the problems of low farm income, since it's been well documented. Instead my focus will be on offering solutions that this committee can use as you determine the future role of government in agriculture.

At the outset, it is important for the federal government to acknowledge its responsibility for the financial difficulties facing many prairie farmers. The reduction in farm income supports, the onerous tax burden, and the failure to protect the interests of western Canadian grain and livestock producers are at the heart of these financial difficulties. The role of government in farming must continue to support a system of safety nets to protect Canadian farmers from factors that are completely out of their control. I also have some comments relating to trade, taxation, road expenditures, and grain transportation reform.

On the issue of safety nets, I believe the Canadian farm safety net should consist of three main components: crop insurance to deal with all types of production risk; a cash advance program to assist farmers with cashflow management; and NISA to provide income support, stabilization, and trade equalization payments. Properly structured and financed, these three programs would be adequate to meet the financial needs of prairie farmers.

With respect to crop insurance, I believe the program should be enhanced so that all possible production risks are adequately insurable at a reasonable cost. A disaster component should be made available for a nominal amount. This would negate the need for ad hoc assistance for any production-related loss.

The cash advance program is very successful and well regarded by farmers. The advance maximum amounts have not kept pace, however, with the increasing farm supply, and should be increased. The per tonne rate should also be increased to more closely align advances with the underlying market value of the crop.

NISA is well received by most farmers and provides an effective way for farmers to stabilize income on their own farms. It has provided an effective and appropriate vehicle for governments to deliver additional income support. I believe the federal government should use NISA to provide farmers with income support payments to offset the market distortions caused by other countries. Negotiating international trade agreements is a federal responsibility. I believe offsetting such distortions is solely a federal government duty.

These payments primarily affect the grain industry, but should not go strictly to grain farmers. Those farmers who have shifted into livestock should not be penalized, nor should other farmers be discouraged from becoming more diversified. The government should double contributions to NISA, as recommended by the federal Safety Net Advisory Committee.

I do not advocate acreage payments at all.

On the issue of fuel taxes and road expenditures, primary industries such as farming are reliant on an efficient road infrastructure. Much of their fuel use is off-road and therefore they pay a high proportion of federal tax. The federal government collects about $4.4 billion annually in transportation-related fuel taxes, but spends less than 5% on road construction. Good roads are essential to farmers, since more grain is being transported by truck than in the case of other commodities.

I urge the federal government to sharply increase their spending on road infrastructure in the Prairies.

The Chair: Thank you, Mr. Penner. I know you could go on, but I have to make sure that everyone gets an opportunity.

Mr. Gallant, I'm going to go to you next.

Mr. Dennis Gallant (Individual Presentation): I farm about 14 miles west of here. We run a mixed operation--cattle, hogs, grain and oilseeds, and a bit of forage crops.

I have a few topics that I'd like to present, and as I go through them, I'll make a short comment on each one.

Subsidization of agriculture: If government in this country--federal and provincial--want an agricultural industry to continue to exist, there have to be substantial increases in export, especially in the sectors that have to contend with cross-border and offshore subsidies.

Removal of school taxes from farmland: During the last election, the position Mr. Doer took was that school taxes should be removed from farmland. To date, he hasn't delivered.

Interest rates: When it comes to financial institutes--banks, the MACC and FCC--their policy should be more flexible. In addition, interest rates should be reduced to reflect a sign of the times in the agricultural industry. A lower rate would be for such things as operating loans, land purchases, and buildings and equipment, etc. A ten-year interest rate at the present time at MACC is 6.75%, and the banks are anywhere from 8% to 8.3%.

GMO wheat: I feel that government, both federal and provincial, should take a leading role in preventing the variety from entering the pipeline. If and when consumers of Canadian wheat are willing to accept this variety, that is when it should be allowed to be grown.

Fusarium head blight: Some of these topics have been touched on and I'm just continuing my approach on them. Agricultural producers continue to hear of the large sums of money that are lost each year due to this disease. I understand that hundreds of thousands of dollars each year are being spent on research. To date, no variety is resistant to this disease. Since this problem has been around for thirty-some years, my concern is whether an all-out effort is being made to develop a resistant variety, or whether there is a strong lobby to delay this research, having their own selfish interests in mind. It is essential that Ag Canada look into this situation.

The Canadian Wheat Board: This is a contentious issue. In my view the Canadian Wheat Board should relinquish its monopoly on the sale of wheat and barley and allow producers to move this commodity across the border so as to take advantage of the exchange, as they do with pigs, cattle, and hay--just to name a few items.

In summary, with regard to the future of agriculture, if there isn't immediate substantial support for the ag industry, there isn't going to be a future.

Thanks.

Á (1125)

The Chair: Mr. Fryza.

Á (1130)

Mr. Stan Fryza (Individual Presentation): My name is Stan Fryza. I farm north of here, and I have 1,700 acres. I'm the third generation. My son in time possibly will take over the farm. He's 26 years old. He's not here today because he's subsidizing the farm.

A lot of topics have been covered here. The last speaker from South Interlake, Gordon.... Let us not forget what sector is in trouble here, the grain industry. The livestock industry is doing very well because of cheap grain prices, but I have nothing against them; both have to work hand in hand.

So let's not forget that when you make decisions when you go back to Ottawa, it's to help the grain industry. Is that clear or not?

Anyway, the new generation in farming of the programs sponsored by MACC, that's fine. A lot of people would get on the bandwagon with that. I'm supposed to guarantee him an interest rate; he's supposed to guarantee me a price return per month, or whatever. You folks guarantee him an income, because he'll go down the same route as we're going down.

As for the Wheat Board, it's been touched on.

When you go back to Ottawa and you diversify your money through the system, treat us like Canadians in the west here, please. Thank you.

The Chair: Mr. Matheson.

Mr. Bill Matheson (Individual Presentation): Good morning. I have a pretty short presentation, it's all in my head. It has to do with one issue only, and that's NISA.

I have to go back a little bit. I'm a fifth-generation farmer, and my kids are the sixth, in this community. We just farm south of town here. I'm sorry I was a little late, because I was still carrying five-gallon pails and cutting twine. So I'm glad to see some of these producers here who are hands on in the front line. There are some more back there who I think have some great ideas, but you don't have a lot of time for them.

But I want to talk to you today about the issue of NISA. I know why it was set up and I know how a lot of us use it. A lot of us look at it as a pension. There's a value to that, and I don't want to lose it.

This particular past year, I drew the maximum I could draw out of that account because we had a bad situation on the farm. It was disappointing to me. I didn't want to touch it. It maybe looks good in some people's books, though, because it's being used as it should be. But here is what I'd like to do.

In 1980 I got married. I have three siblings, brothers and sisters, and before anybody new came into the family, my parents sat us all down and they laid it on the line like this: that no fisherman owns the ocean; what he harvests out of that ocean, no matter what tools he uses, that's his income.

I'm not suggesting for one minute that the state own the land, but the biggest burden we have is when we pass on this land to the next generation. It's a huge debt. I was...I used to say lucky or fortunate, but I'll say blessed. My parents gave the two of us who wanted to farm half of the farm each for a dollar each. That gave me a step up on a lot of people. I don't say that proudly, it say it fortunately.

That's what I want to do with NISA. I need an account that I can save, whereby the government can help me, maybe match it in some form so that when my son or one of my two daughters wants to farm, I can give them a real break. Because that land has no value. If I don't do anything with it, it's of no value, it produces nothing. It's what I want to do with it. I have cattle, I have hay, I have grain fields, I have oilseeds. I have no crop insurance. My insurance is my investments in four different opportunities.

I would like my children to have that same thing. Because of that, I try to put a little in an RRSP every year. I hope CPP will be there some day; whether it will be or not I don't know. But that's where NISA came in; thereby I could provide for my future by saving some amount so I could give that next generation a hand.

If we get rid of NISA today, I would like to replace it with a similar program in which the government matched my contribution. Say the day came that I could sell my farm to whoever. I would like to be able to reduce that principal amount by the amount in this account. That would be a tremendous saving for the farmer who started off, the young fellow who started off, and in turn it wouldn't cost the government very much, because my contribution would still be on taxed dollars. I would put my own dollars in that I paid tax on. You match it, so you would only be subsidizing or matching my portion, so it would be a quarter of the amount that would be matched by the government.

But you see, it's twofold, because I would have something to take home as a pension to retire, to give my son or daughter a break, and my son or daughter would immediately get that portion taken off the capital amount of the farm.

Maybe it's a little more complex than that. You know, some people wake up every morning trying to beat the system, so it's not maybe as simple as I'd like to portray it, but I think that is a massive hurdle to the young farmers of this country. I'm still a young farmer, and I want to tell you something. I like my job. I don't like the pay every day, but I like my job.

I think we must look at some new initiatives to help that transfer, because that is a tremendous hurdle. What good would it have been if my parents had retired with half a million dollars and stuck it in the bank? I would have had to turn around and borrow, with a 4% or 5% spread. Only the bank would have made any money on that. I would have had a huge debt and would have had to wait until they died, or something like that. Then maybe I'd have been fortunate and got a split of the estate.

We have to change this mindset on transferring land. I don't know how everyone else lives in this world. Not everyone can live like me, I can guarantee that, but we put such an emphasis on this huge monetary value, this estate. Look in the newspapers: max your RRSP. Are we not supposed to work? Is everyone supposed to retire at 55? I don't buy that scheme.

We weren't put on this earth to sit on our rear ends for half of it. We have responsibilities. You know, I give this presentation to the cows and the dog every day and no one ever argues with me, so you can have it today.

Some hon. members: Oh, oh!

Á (1135)

The Chair: Thank you. It is a major issue in agriculture, especially for people with quota and all the other investments they have. So it's good to hear another....

John, can we go to you next?

Mr. John Morrisson (Individual Presentation): My name is John Morrisson. I farm in this vicinity. A year ago I was involved in a rally where we were crunching numbers. We were getting $5 an acre, basically, in a subsidy or support program in Manitoba, while in the province of Quebec they were getting $30 an acre.

I didn't hear one farmer in that whole rally complain about a farmer in Quebec getting $30 an acre. What they were looking for was the support from the provincial and federal governments to match those dollars. In fact, in the member of Parliament Mr. Duhamel's offices, the French television network asked him directly what the federal government was doing to protect the Quebec program. The response was, "We're really protecting that program". That was on the French television network.

I was impressed and supportive of the fact that the Quebec farmers had the protection and support of those dollars. But it didn't happen in Manitoba, and now the rules are changing. It's time to do things differently.

I think the role of government must be to understand and support the agricultural sectors in Canada. It must implement programs to maintain environmental sustainability and economic viability in agriculture. It must assist in providing new product opportunities to constantly improve the social and economic base of the rural community. It cannot do so by providing economic benefits that do not reach the agricultural community. It cannot do so by developing new standards or protocols that add to the cost of production and do not provide specific economic benefits that precede these costs.

If you are going to say there is a new program that's going to cost the farmers more money, the bottom line right now is that you need to put the money on the table to get the program going. After it's viable and working, then bring some of those expenses back to the farm--when they're proven.

The government said the farm community must plan for the future together. We're part of a North American market, but on the other side, we're also government, farmers, support industries, and rural communities. We have to take the problem, put it there, and have everybody look at it in the same way. Part of our approach last year at the rally was for all the political parties to give a unanimous message to the federal government that we needed help. I thank them now for their support in doing that.

Most of our inputs are priced in American dollars, and as such, the low Canadian dollar increases our costs. Some six months or one year after the spending of these dollars on input costs, we return to the market to sell our production at American prices less transportation costs. At every turn, our international competitors provide to their producers subsidies and supports that undercut the market value of our products—and I'll give you two examples.

There's a canola crushing plant in Altona, Manitoba. American farmers are receiving an extra dollar per bushel in direct subsidy for the canola they grow on the other side of the border and deliver into Canada. Every one of their trucks that comes in gives them another $800 in their pocket by delivering their canola here. The problem is that now that canola price can be another dollar per bushel lower and that canola crushing plant is still guaranteed the production it needs for the canola oil it needs to produce. The Canadian farmer is saying he won't grow canola because he can't afford it.

In this area in the last ten years, we have suffered from fungal infections in the crops we produce, lowering the value of some of our productions. Our American neighbours have developed ethanol plants and other markets in their areas that have suffered from these same crop issues. The cost of transportation debilitates any economic opportunity for us in those markets. We need our government to develop those same facilities and markets for the home use of those same products. Why our government? The rate of taxation on the consumption of fossil fuels provides the Government of Canada, in conjunction with the provincial governments, with the cash and economic basis to fund and make this work.

The Government of Canada, with the provinces of Canada, must remove the levels of taxation on all farm inputs and taxation on farm lands, and must provide the tools needed to reduce the cost to the agricultural sectors. It must do so to provide economic viability to all sectors of agriculture. Where a reduction in taxation and government costs will not provide that economic viability, subsidies that are directed to the agricultural producer must be set. Why must this be done? We're the poor cousins to the American farmer. We're losing our young farmers. We have absentee landowners. Our farm equity and cashflows have been substantially reduced by the past years of low crop prices and crop difficulties. We are ripe for takeover by our American counterparts. To step back from this edge, we must build and maintain the resources needed to regain the Canadian component in this sector.

In terms of human resources, the current average farmer's age is approaching 60, and that must be reduced. The manufacturing sector must be strengthened. Social and community supports must be maintained. Transportation must be enhanced. Viable economics must be put in place.

Thank you.

Á (1140)

The Chair: Thank you, John.

Bill, are you ready?

Mr. Bill Ridgeway (Individual Presentation): I'm as ready as I'll ever be.

Mr. Chairman, thank you for this opportunity. In my presentation, I'm going to be a little bit different from some of the people who have gone before me in that I am speaking as a producer. I am also president of a straw co-op that supplies straw for additional purposes but not for the livestock industry.

I've been a member of many different farm organizations, boards, etc., but I must say right off the top that, as a producer, I am definitely in support of an insurance-based program of farm supports. In most things they do, we talk about governments being a dollar short and a day late, whether they're federal, provincial, or municipal. But for disaster relief, ladies and gentlemen, they're three dollars short and six days late. That's because by the time somebody figures out it's a disaster, the guy who's suffering through it is already gone. The money that comes into it has to come in such a manner that it's a large figure and so that we get the newspapers, the media, and everybody else climbing on the bandwagon and proclaiming, “Western Farmers Receive X Millions of Dollars in Relief”. I don't like to be in a situation in which I have to have relief. I'd much rather be in an insurance program in which I have support from the federal and provincial governments with regard to helping to pay the premium, and in which I'll pay my share as well.

We all have insurance, or most of us have, on our houses and so on. Why do we have that? It's because we're trying to protect ourselves against a disaster. I want a program that is going to allow me to protect my farming operation against a disaster; not something I have to hope will--six, eight, ten months, or a year following the disaster--give me some money back, but something that will be there to help me on day one.

We talked about subsidies--Canadian subsidies, U.S. subsidies, and so forth. We throw stones at the Europeans most of the time. We don't like throwing stones at the Americans, because they're too close; they can throw stones back. The Europeans are a safe target. The Europeans subsidize their farmers for totally other reasons than the Americans do.

The Europeans support their farmers because they still have 40% of their population in rural areas, and their infrastructure could not stand the shift to urban population. It's therefore cheaper for them to pay the subsidies to keep the farmers out there.

The Americans do it for a totally different reason. They don't pay their farmers. If you take a look at where the American subsidies go, most go into corporate enterprises. The small farmer in the U.S. is suffering the same way as we are here in Canada. But the corporate enterprises--George's friends--are getting all kinds of money out of these programs.

Our minister from Manitoba said crop insurance was a great program. It is, unless you've had a declining average, which most of us in Manitoba have had, either because of weather or disease. As our declining average comes down, our coverage comes down, and it finally gets to a point where it's not worthwhile even taking the program.

I'd therefore much rather have a fully insurance-based program where I knew what I was working at to start with.

I, as a producer, support the Canadian Wheat Board, because I have a hell of a time figuring out how you could have a dual marketing system. That's like being a little bit pregnant: you either is or you isn't--one or the other.

The Wheat Board markets my grain in most cases to other governments. Yes, it might be nice for me to be able to sell directly across the border to the U.S., but how long is it going to take before the U.S. government slaps that border closed? And we say, yes, I'm big; I'm tough; I'm rough; I can ship my.... I've talked to some guys from Alberta who say, “I can ship my barley into Montana and make all kinds of money.” I said yes, until I fire up my truck out of Manitoba and haul it in there and sell it 10¢ cheaper. “Well, you wouldn't do a thing like that, would you?” I said, “Why the hell not? It's free enterprise. It's wide open. Why can't I do it?”

Just to mention a few things down the line, the Canadian Grain Commission, the CGC, appears almost to have left farmers in its support of farms. It's much more supporting corporate enterprise right now. With the Canadian Grain Commission, for example, a situation many producers are concerned about is paying freight on dockage. I'm not going to get into a whole bunch of stuff on that. You guys know what I'm talking about. Get your researcher to check it out for you.

Besides transportation of dockage, there's the issue of licensing of pure producer car loading facilities. If I set up a leg alongside a track and decide I'm going to load Henry Penner's grain for him, and he pays me $3 or $4 to load-run it up my auger and my scales and dump it in a car, I don't pay him for the grain; he still gets paid for it when it's unloaded at port. But now the Grain Commission wants to license me as though I were a primary elevator? No way.

The Chair: Briefly now.

Mr. Bill Ridgeway: Yes, I'll be very brief and wind up here.

Here are two things to wind up on. As a government we have to support diversification. We have to support research. We've gone away from it over the last number of years--not just in immediate past history; for the last number of years we've gone away from government research.

The final thing I want to get on the table here concerns drainage, because it's an area that affects me personally. I have lost approximately 25% of my crop for the last three years--or two years particularly, but it started three years ago--for drainage that doesn't work. It's a provincial infrastructure, but do you know the argument I get, ladies and gentlemen, when I go to the province and say, “Why don't you fix it?” “Well, federal Fisheries and Oceans have declared that man-made drain as fish habitat.” As a farmer, I'm going down the drain to protect a couple of suckers that breed in the end of that ditch.

That's it. Thank you very much.

Á (1145)

The Chair: Thank you, Bill.

Before we hear our next witness, I just want to make a comment. A lot of people in the hall have been very patient this morning. We do have a microphone at the back. If anyone would like to present for two minutes, you can give your name to the clerk and she'll make a list.

We'd also like to mention that we are a standing committee, and the only ideas we can put in our report are the ones that come from you. Oddly enough, Howard can't put an idea in because he's here to listen. So it's very important for us to get information from the farmers of Canada to include in our report.

With that, Les, I'll turn to you now.

Á (1150)

Mr. Les Felsch (Individual Presentation): Thank you, Mr. Chairman.

I see that I'm the last one.

The Chair: No, you're not.

Mr. Les Felsch: Oh, sorry. Hopefully, I won't take up my full five minutes anyway. I have a few concerns, not necessarily all dealing with agriculture, but agriculture would fix a lot of them if the dollars were put into that budget.

Many of our rural residents are sick and tired of being classified as second-class citizens. Necessities such as hospitals or police services continue to move away or are reduced in numbers until they become ineffective. In some rural areas it can take up to eight hours before we can get a police officer to investigate a crime.

People have been walking across the U.S. border, but it was not a concern of the RCMP. They're more concerned with stopping people and collecting money for traffic violations. Maybe that has changed since 9-11.

Our child care services are non-existent. Some that are there are unable to operate under a required timetable for many farms, thus inducing excess pressure on the farming child caregiver.

The cost of accessing rural water systems can be astronomical. Who can afford to cough up $20,000 just for a residential hookup? In the city you take that for granted. With more farmers leaving, that $20,000 all of a sudden becomes $40,000.

In today's knowledge-based business environment, it's very important to have access to the most recent information involving every aspect of your farming operation. It's very difficult if the technology is not available at this time or never will be available in the area where your business is located.

Cell phone service is taken for granted in most North American cities but it is still unavailable where I live.

With regard to Internet service, who wants to sit there and wait for five minutes to get hooked up and then pay long-distance charges on top of it? High-speed Internet probably never will happen unless you want to pay the satellite costs.

These problems I've announced here only help reduce the number of people, not just farmers, in rural communities. This reduction of the rural population continues to increase the financial and physical burden on those remaining. Travel time alone for business, recreation, or shopping can add up to half a labourer's annual plan. I know that between my vehicles we put on up to 60,000 kilometres a year. All this time spent in a vehicle does not add to the productivity of your farming operation. It only adds to the cost of living and working in rural Canada.

With regard to the devalued Canadian dollar, it looks great for the federal government when it comes to exports, but those are in Canadian dollars. They're not in real dollars. They continue to brag about the rise in exports of products from the agricultural sector, but are those in Canadian dollars? When you look at the real value of these exports, you may find that they have not risen at all.

The American dollar value compared to our Canadian dollars also affects us as producers. As long as you're making money or you have a net bottom line, then we benefit from the Canadian dollar being where it is, but as soon as you are under your cost of production, this changes. You're at a total loss.

Á (1155)

The Chair: Thank you, Les.

I'm going to move on to Bill Uruski.

Mr. Bill Uruski (Vice-Chair, Manitoba Turkey Producers): Thank you, Mr. Chairman.

As a fellow Interlaker, I'd like to welcome the committee to the Interlake region of Manitoba and thank them for holding their first meeting here today.

I only want to make comment on two areas of the future role of government in agriculture. As one who has been involved in agricultural policy for some 30-plus years, and as vice-chair of the Manitoba Turkey Producers, I know that the role of supply management in our Canadian environment has been covered quite well by other spokespersons who were here earlier.

I want to highlight two areas on the role of government in agriculture. One deals with our current safety net programs and the other deals with the federal government's role in international trade.

The federal government and its relationship in current safety net programs for grain and oilseed producers points to a very clear inequity as between producers in one area of the country to another.

Current supports under the federal-provincial agreement, as I understand it, are based on the size of agriculture in a province rather than on the basis of risk or need in that province. This issue has been around a long time, I want to tell you. It was raised in the late 1980s by me at federal-provincial meetings.

To highlight that, to point it out, Manitoba has to tax its citizens at a level four times that of Ontario to provide a similar level of support for its producers. If we have to tax our citizens at four times the rate of those in the neighbouring province, there is great inequity.

Additionally, the size of supply management in Ontario and Quebec, which in all commodities is over 60%, is included in the total statistics, and supply management does not require one penny of taxpayers' support to that industry. When those dollars are combined in terms of the size of agriculture, the inequity is compounded.

Government has the responsibility to provide equity between its citizens, and that's the role of government. There has been an absence of leadership in providing equity of supports to producers in our country.

The second area is the role of government in international trade agreements. We all know, those of us in supply management, that the Uruguay Round traded away article 11 and removed the clarification for supply management. They traded away as well supports such as the Crow rate and the Crow supports to the grain industry.

Canada moved at such a level of reduction it left our grain producers primarily vulnerable in two areas. One, our major trading partners such as the U.S. and the EU continue to have supports to agriculture at far higher levels, which have caused and continue to cause market price distortions. The current U.S. Farm Bill has been debated on the commodity of grains and oilseeds--$140 billion over the next 10 years. Can you imagine the impact on the market for grain and oilseed producers across the country and worldwide?

Secondly, the international trade agreements have created an environment that is conducive for multinational corporations and not a sustainable environment for farmers. That's our view.

Canada should not trade away the little bit of market power that farmers have through supply management, through orderly marketing, through the Canadian Wheat Board. And for Howard, orderly marketing is orderly marketing, whether it's the Wheat Board, supply management, the hog board. It's still orderly marketing. So for some other perceived gain, we should not trade away that little bit of market power on behalf of farmers.

If the access that was negotiated in the present agreement--we're talking about 6%--can be achieved internationally, Canada's agricultural industry output could double, just by that amount of access, if it could be guaranteed on a worldwide basis. So our national government--and you will be providing that report to our national government--has the responsibility to provide leadership in treating producers as equitably as possible in our country and as well of not trading away their present instruments of market power in any future agreement that unfolds.

Thank you very much, Mr. Chair.

Â (1200)

The Chair: Thank you very much.

For the members now, we really have no time for questions. We have another large group of seven people.

Mr. Odina Desrochers: There are no questions?

The Chair: Not if we're to keep our schedule.

Howard.

Mr. Howard Hilstrom: I want to know if we can ask a quick question.

The Chair: If we do, the other presenters won't be able to come. I'm sorry about that, but I think it's the only way we can keep our schedule.

We have coming to the table next: Mr. Scheurer, Mr. Wishart, Mr. Trimble, Mr. Galbraith, Mr. Kolisnyk, Mr. Fossay and Mr. Harder. Would Mr. Penner, Mr. Thornhill, and Mr. Dyck also come up.

Mr. Edgar Scheurer ( Individual Presentation): Thank you, members of the committee. It's an honour to be able to speak to you today.

I'm a farmer from just east of Winnipeg near the town of Dugald. I grow grains and oilseeds as well as hogs. I'm also a director of the Manitoba Canola Growers Association and I would like to give my views on the present situation we as growers are facing here in a new millennium.

At this time I think we're all aware of the situation the grains and oilseeds sector is facing. In a nutshell, returns are at the same level we received 20 years ago, but operating costs have doubled. Foreign government agriculture intervention, multinational corporations, and increased use of electronic data transfer have largely caused this.

As a result, margins per acre have dropped. To offset this, farms have become larger and small farms are disappearing. Some say this is a fact of life, but this can only be sustained for so long before it will collapse, and I believe we're almost at this point now.

We're not talking factories, we're talking farms. There are factors involved that cannot be controlled. We are largely dependent on weather and biological factors. In other words, we can only grow so much because risks are too large to keep increasing acreage the way we are. If we keep going like this, we will lose not only farmers, but also the support industry and small rural towns. How will rural Manitoba and Saskatchewan look if we continue at the pace we're at now?

This is only a short summary of what plagues us. Hours could be spent talking about the detailed problems. But for the purpose of this meeting, I would like to go into some examples that could be addressed immediately to help farms with the cash crunch we're currently facing.

First, for the past two years we in the Red River Valley have been extremely wet. Crop insurance coverage at best covers the input costs. How can we ensure that we cover all our costs? Other businesses have the option to insure the commodity at a level that will cover its value. We, on the other hand, have to be content with roughly 60%. As a result, three consecutive crop failures can bankrupt a lot of operations. We need to have a crop insurance program that allows insuring at higher values and individual fields, not just a blanket coverage.

Second, rail freight of grain to port is so out of line. The Estey report has not been adopted, largely due to the lobbying of rail companies, which want to keep grain freight high because they know they will get it anyway, and keep other commodities at a competitive rate. I believe we need to get the same freight rate as the other commodities.

Third, seed costs have gone through the roof in recent years. I believe this is largely due to the fact that public plant breeding has been reduced too far. Private companies dominate the markets and will charge what the market will bear. We need to increase funding to universities and other public plant breeding organizations. Otherwise we're going to be left with two or three seed companies that are associated with chemical companies, and they're going to dictate what we grow, how we'll grow it, and at what price.

Fourth, changes to the CFIP need to be implemented immediately. It is nearly impossible to qualify for support under the present rules. For example, if a farmer has two different enterprises due to diversification, which was strongly advocated by our governments, it's almost impossible to qualify. Why should a hog barn support the grain farm on one operation when a neighbour without that investment at work, as well as the risk involved, can qualify for that program? We need to combine the two somehow.

Fifth, farm fuel should be tax exempt. The way I see it, we are subsidizing the consumer by providing them with cheap food. Less than 10% of disposable income is spent on food in Canada.

Sixth, we need to establish a bio fuels industry in Canada by using canola oil to make diesel, using grain to make ethanol, and so on. Not only is this an environmentally friendly solution, but it will also stimulate the market and provide another opportunity for farmers to market their grain. But we need tax concessions from our government to accomplish this. Why do we continue to lag behind Europe in this respect?

Seventh, in the U.S., LDP payments are proposed to be enhanced again. If this happens, we can stop growing canola in Canada. We cannot compete with them. What will we grow then? Wheat has been a rotational crop for years. We are only growing it because we have to keep the rotation on our fields. It has been losing money for years. If we are to survive in grains and cereal growing, either we need foreign subsidies to be cut or we have to adopt the same practices. Give us an LDP program.

Â (1205)

At this point, there's a lot of resentment between farmers and townspeople because of increased livestock production. The government must adopt rules that determine where we can grow and build hog barns, or any barns, for that matter. Otherwise we are going to be faced with councillors who are only seeking votes and will determine what will be built or not.

I guess I will cover it off here.

Â (1210)

The Chair: I apologize for the time, but I don't make time.

Ian.

Mr. Ian Wishart (Individual Presentation): Thank you very much, Mr. Chairman. My name is Ian Wishart. I am a farmer from the Portage la Prairie area, but I am also chair of the Keystone Agricultural Producers Rural Development Committee. This committee has put together a proposal called “Alternate Land Use Services”, and I will provide copies here, if you would not mind passing them down.

Before I get into it, I would like to make the offer that if you are interested in a follow-up on this, we would be more than happy to travel to Ottawa and present to you when you have more time. Obviously time is of the essence today.

What “Alternate Land Use Services” is, or ALUS, is a method by which producers would be compensated for the things they produce on the farm other than food and fibre. That includes the whole group of environmental benefits. It also is novel in that it involves non-farm policy groups. We have been working with Delta Waterfall Foundation, which is a wildlife habitat group. They have had quite a bit of input into this, and we think that makes it quite a significantly different approach.

It also provides an opportunity to bridge the gap between agricultural producers and other Canadians, particularly consumers who have very great concerns about our environmental treatment and seem to be wanting to get more and more involved with land use practices in terms of dictating what would happen in the rural landscape. This is a more farmer-friendly method of doing this sort of thing and can be built on top of existing safety net programs, in terms of a delivery mechanism.

It is built on top of crop insurance as a delivery mechanism, so it wouldn't become very intrusive at the farm gate. Most producers already participate in crop insurance, particularly in the west, and this, built on top of that, would not require a whole lot of additional paperwork. Of course, because crop insurance is auditable, it would provide the government with a mechanism for actually measuring a lot of the impacts of this, something that is very difficult to do when it comes to environmental impacts.

It fits into your general policy framework very well. I should note this particular proposal pre-dates the Whitehorse document by about six months. So you can find that farmers are actually out there thinking about these things; we are not being led by government, necessarily. We hope you reflect where we are going.

It also deals with issues of renewal.

Food safety is part of branding in Canada, and part of this particular proposal...and I encourage you to read through it. It deals with some of the issues that have been ongoing for a long time in rural Canada, things like soil conservation issues. Water quality issues can be handled very nicely through something like this. It would help the government meet its commitment regarding greenhouse gases, and carbon credits could be structured through a program like this. In fact, they could be one of the possible funding sources, because certainly as individual producers we are never going to achieve very much for what our carbon credits are worth in the marketplace. It can deal with some of the fish and wildlife issues and can also help the government deal with the species-at-risk situation to a high degree.

Here are some general principles on this program.

It is a voluntary program. Farmers are not required to participate in it, but they do it on an incentive base. It is capped at a 20% participation level for individual farmers, so that any particular area isn't decimated by a major change in land use practices, as has been the case in some other countries when these things have been put in place.

It is an integrated delivery, as I talked about earlier. It can be built on top of crop insurance and therefore could be administered for a lot fewer dollars than most programs out there right now. It is targeted towards environmentally sensitive areas--each individual farm--in that regard. Most producers will tell you quite honestly they have some land on their farm that is a particular problem to them, and that could be put to other use. These uses usually will generate environmental services.

It is flexible. It is a proposed nine-year program in three-year blocks and provides producers with a level of flexibility such that they can respond to messages in the marketplace. It is also trade- and commodity-neutral; it does not favour any one particular commodity over another. In fact, we believe it is very neutral for the livestock industry, which has often been a problem, and you heard that concern expressed earlier today.

It also deals in the development of the environmental farm plans. That is something we have been told we all should have. We believe that in the process of developing this idea you will develop an environmental farm plan.

Thank you very much. I appreciate it.

The Chair: Rae, I am going to go to you next. Ms. Trimble.

Ms. Rae Trimble (Individual Presentation): I'd like to thank you for inviting me today, Mr. Chairman and panel.

I was going to take a slightly different viewpoint. I was going to talk about safety nets and some of the other topics that have been covered today. I was going to focus my talk more on some of the comments that have been made, specifically looking at a recent speech by Minister Vanclief and discussing one of his five aspects, that of renewal and change.

He divides farmers into the different demographic groups of beginning farmers, retiring farmers, and mid-career farmers. So I ask you, which of these groups is the smallest? If the beginning farmer is the smallest, is that indicative of a healthy industry? I would say no.

He talks about the 21st century and the leaders for the 21st century. Who are these leaders? Are they leaders who are going to be retiring in 10 or 20 years, when they're in the retiring group? Why is this an industry in which, as long as you're under 40, or probably more likely under 50, you're considered a young and upcoming entrepreneur? It's because there is no “Freedom 55”--or probably even “Freedom 65”--in this industry. And that's supposed to attract young people to get into agriculture.

To give you some background, I am trying to get into agriculture. I went to university, as Mr. Vanclief suggested I do. I have two university degrees. I work full-time, at least 50 hours a week, in the summer while I'm trying to farm. Thank God I don't have a family.

So how am I supposed to get into agriculture full-time? Do I just work and continue to farm on the side? Do I sacrifice my parents' retirement--maybe they'll give me money--or do I just wait until they die and hope I inherit the farm?

I could work two jobs for numerous years. This so far works fairly well for me. I'm starting to build some equity, buy some equipment, and work on things. However, it looks like I might get shot in the foot due to the fact that taxation might consider me a hobby farmer, depending on whether I ship enough grain in a particular year. If I don't watch everything, and don't get an advance in time for December 31, then maybe I don't make enough money, and suddenly I'm a hobby farmer. I'd suggest there are a lot cheaper hobbies out there that I could amuse myself with.

Do we just jump straight in, both feet, and hope we don't drown? At least I'll still be young enough to start over. After I go bankrupt or something, I could probably get into politics. Or do we try to start, rely on some of the programs that hopefully will be there for assistance whenever necessary? But is that going to work?

Currently, a lot of the programs aren't available to me. I haven't been in farming long enough. My NISA account said I could contribute $300 to it this year. The only reason I put any money in there is because my accountant keeps telling me “It's free money. Put some money in there”.

I just wanted to say that I think your agriculture policy needs to be formulated with some incentive for our young farmers to get into agriculture. It's very expensive. If I can't at least write off most of my expenses, just because I have to work off-farm to support myself, then I don't think you're going to find anybody. I don't think it's fair for us to have to rely on our parents to support us to get into farming. I mean, in how many other industries do you have to have your parents carry you until you're 45?

That's all I have to say. Thank you.

Â (1215)

The Chair: Thank you, Rae.

Wilfred.

Mr. Wilfred Harder (Individual Presentation): Thank you very much, Mr. Chairman. My name is Wilfred Harder. I'm a grain farmer, an oilseed farmer, and I'm a director of the Canadian Wheat Board. I farm in the Lowe Farm area, which is about 25 miles from the U.S. border, and we also farm some land around the Winnipeg-Headingley area.

I looked at your resumé and what this is all about, and your vision statement. What caught my attention in coming here is that it talks about food safety and competitiveness. I guess from what I've heard from the farmers around this table is that most of them are much more concerned about price. Yes, as farmers we're always concerned about food safety and all those things, but the old expression that it's hard to think of draining your swamp when you're up to your ass in alligators really applies in this particular case, because traditionally, to farmers, competitiveness also means producing something for less. That's why we sometimes really object to those phrases being used.

I sympathize with the committee, and I do appreciate your coming out and listening to the farmers' views. But the problem is that no matter what solution we come up with in this country--and if tomorrow as a result of these meetings and other things we come up with the perfect solution--I would think that immediately the United States government would put a trade challenge on us. No matter what we do here, anything that benefits Canadian farmers, as I think history has proven over and over again, the Americans will challenge and challenge vigorously.

I would suggest to you that a perfect example of this is the recent U.S. trade challenge on Canadian wheat going into the United States, the 301 challenge. Of course the assertion by the U.S. was that the Canadian Wheat Board was exporting wheat into the United States and to gain market share we were underselling. Lo and behold now, an independent trade commission has had a study, and 59 out of 60 times the Canadian Wheat Board was getting more money for their farm producers than the United States' farmers were getting.

Of course, the reason for that I don't think is all that complex. Although the committee doesn't cite this, the reason is that we are able to deliver a quality product and a consistent product, and on time. This is the ninth trade challenge that has been successful, but the U.S. response to this trade challenge is a little more serious. They still say that the reason we are successful is that somehow we are really subsidized much more than U.S. farmers.

At the same time, they have the gall to say this when, as Mr. Urusky and others here have pointed out, with the U.S. Farm Bill--and the numbers vary and I'm listening with interest--they're asking for $75 billion. The numbers at this table have been different. When I was at a meeting in North Dakota last fall they were asking for $75 billion over five years. Now it's over 10 years, but no matter what, it's a lot of money.

Sometimes our politicians tend to pick at our own little marketing systems and try to find out what's wrong with them. I think as politicians you all owe it to yourselves to work together to try to prevent trade practices from other countries that will hurt our farmers. I think that would be much more productive.

How often do we hear the Prime Minister of Canada during election time or otherwise spend about five or ten minutes talking about farmers and how important they are to the economy? How often do we hear the Minister of Finance, in his address to the nation, spend two or three, or four or five, minutes just talking about agriculture? In that way, while I may be critical about the American system, when I go to an American farm meeting, their U.S. politicians come out and tell them things like how farmers make their country great; if farmers are successful, their country is successful.

It seems to me--and this is referring to no one in particular, although you may assume that--the criteria for being a good Minister of Agriculture these days is that if you can keep your problems off the Prime Minister's desk, you'll get the appointment.

I note that in your vision statement you talk a lot about life sciences and how this provides opportunities, and certainly to some extent that is correct. But I think we need to be a little cautious about life science that could give us market harm, and we have had some excellent examples of that recently. By “excellent” I don't mean good, but they are examples.

I think the canola market is one where we have been virtually shut out of the European market because of GMO canola. I believe--and I haven't heard it directly--China has now done the same thing. If the government is serious about wanting to maintain food quality and assist farmers--and it's been mentioned, Mr. Scheurer mentioned it and a bunch of others mentioned it--I think they should put their money where their mouth is and put some more funding into research. I think we can all agree on that.

The present research funding process favours corporate research. Really, their goal is to increase their bottom line, and that's only after--

Â (1220)

The Chair: Mr. Harder, I have to move on now.

Shirley, would you be ready?

Ms. Shirley Galbraith (Individual Presentation): Yes, I'm ready.

My name is Shirley Galbraith, and my husband and I farm in the Carman-Homewood-Sperling area. We come from four- and five-generation farms, so our families have been farming a long time. We also custom seed and custom combine and I substitute teach. Our 18-year-old son is right now out in the bush somewhere in Alberta working on an oil rig. He has always helped us in our operation, but this year he has indicated some interest in farming, so I appreciate Rae's comments on the problems a beginning farmer has.

We have all been waiting a long time to see how the federal government would handle the farm crisis. From what I understand, the government wants a new integrated policy to be negotiated with the provinces, in consultation with the industry. He states existing safety net programs should be changed to discourage passive income support and encourage farmer innovation, self-reliance, and risk management. He is promoting one interconnected national program combining safety nets, research, training, food safety, and environmental incentives.

I think one of the Liberal members from P.E.I. made the suggestion that the department's analysis of the problem starts from the premise that farmers are suffering income woes because of their own poor management practices. I think the federal government still thinks it is our fault. He went on to say the real reason is that markets are returning too little and other governments are more generous in their support of farmers. I don't think I could have stated any plainer than that why grains and oilseeds farming is in this crisis today . Markets are returning too little, and other governments are more generous in their support of their farmers.

All we ask is that we get a fair price for our grain, but we are still receiving the same price farmers received in the 1960s for their wheat. I think the Canadian Wheat Board has made it clear it doesn't want us to grow wheat. We can't grow $3 to $4 wheat with $8 expenses. In our operation this year, we are cutting at least half our wheat production, if not more. We farm, I'd say, 1,200 acres and we might be down 200 acres of wheat, if not less than that.

We want a level playing field when it comes to subsidies offered to other farmers of other countries. The U.S. Department of Agriculture recently reported that in 2001, 43% of the net farm income arrived in the form of direct government payments. We want safety nets that work.

Somebody mentioned that very few people got any money at all from AIDA. We certainly didn't. It was stated that we got everything out of the hen's ass but the egg. We had to pay the accountants, look over the program, pay for it all going through, and got nothing. That goes for a lot of the other programs out there.

We want a good crop insurance program with better coverage that reflects the cost of production. The pulse growers have been trying to get different categories for the beans we grow. We have three or four categories and then all others, so you can be growing black beans and red ones and they're all covered under the same category. So if you happen to hit it good and get a good crop of black ones but a poor crop of red ones, they're all lumped together so you don't receive anything for one or the other.

We feel that the government should have dropped or at least lowered the taxes on fuel, chemicals, and fertilizer. There are a lot of built-in taxes there that could have given us a break. The federal government should step in and allow us access to our grain elevators. The government allowed the recent merger of UGG and Pool; they both overspent in the race to have the biggest and best, and now they are closing smaller elevators. They should be forced to return those elevators to the communities that have supported them.

Â (1225)

In our area there are two elevators. There is one at Graysville, which has a siding that can hold 25 cars. I think that is quite adequate to be shipping grain, and they are closing it. It is a new elevator. It's not old. In elevator years it's maybe 30 years old. That is not an old elevator.The only way we can get hold of that is as long as we're not going to use it to ship grain. That's ridiculous.

In many instances the grain elevators were turned over to a company. They didn't put them up; a community put them up, and then they were turned over to them to look after or whatever. So we have supported them all these years and now they are expecting us to travel 30 or 40 miles so that we can still ship to them. There are two elevators involved, the Homewood one and the Graysville one.

We sincerely hope that government is tuned into weather reports. The forecast for the upcoming crop season has most of us watching the sky. I know it was a nice warm day when we were coming here, but I think most of us farmers were sure hoping it would either be storming, raining, or getting us moisture somehow, because it's going to be quite a year for us all.

It would be at least somewhat comforting to know that the government is supporting us, for another year has gone by and nothing has been accomplished. We have lost our Crow rate, so it costs us more to ship grain. No one has taken the school taxes off the land, as has been suggested. We are now dependent on cash advances. But all it really does is guarantee we grow another crop for nothing, because we still have low prices.

Â (1230)

The Chair: Thank you, Shirley. Perhaps you could conclude.

Ms. Shirley Galbraith: I'm done.

The Chair: We did give you two or three extra minutes, because you had a good report there from right at the farm level.

Ms. Shirley Galbraith: That's okay.

The Chair: Walter.

Mr. Walter Kolisnyk (Individual Presentation): Thanks, Mr. Chairman.

My name is Walter Kolisnyk. I operate a family farm in the Swan River Valley, about 300 miles northwest of here. We have about 2,000 acres of grain land and about 100 beef cows.

I'd like to first of all thank you for this opportunity to express my opinion on this very important issue, the future role of government in agriculture.

Recently, we've heard that the federal government wants to make wholesale changes to the safety net programs. Whenever farmers hear this kind of talk from government, we all become very concerned. Currently, we have three basic programs: crop insurance, NISA, and CFIP.

The question we ask ourselves is this: what is wrong with agriculture today? I think one of the biggest challenges farmers face today is low grain and oilseeds prices, along with high costs of production. As we all know, these low prices are a direct result of American and European export subsidies. It is a known fact that world prices are depressed by about 25% because of these subsidies. Is Canada prepared to step up to the plate and support our farmers to the extent that is needed until these subsidies are discontinued by the United States and the European Community?

I believe the federal government is looking for ways to back away from their financial responsibilities in this regard. The current programs do not meet the needs of farmers in terms of prices.

The federal government is considering throwing out all of the current programs and replacing them with what they call a whole farm program. It would be designed along the same lines as the current CFIP program, with the farmer premium attached to it.

The current CFIP program is a disaster for grain farmers. Whenever farmers experience low prices for a prolonged period of time, such as we are now, the program cannot trigger a payout.

The CFIP program works quite well for hog operations. A sudden and substantial drop in hog prices triggers a payout to hog farmers.

A CFIP-style program does not encourage diversification on the farm. For example, if grain prices go down but cattle prices go up slightly, then the farmer would receive nothing even though he or she lost money in grain. If the farmer is involved in only one enterprise, he or she would stand a much greater chance of receiving a program payment.

All government programs should be designed to encourage good farming practices, diversification, and an incentive to be good producers instead of farming the program. In other words, if a farmer can produce a product, that farmer must get paid for that product either from the marketplace or from a combination of the marketplace and a subsidy. If the farmer cannot grow the commodity because of natural perils, then that farmer would receive a crop insurance payment.

The NISA program has its pros and cons. The program works well as a long-term savings plan but does not compensate farmers for long periods of low commodity prices. If farmers are losing money, they cannot afford to put anything in their NISA accounts.

What about crop insurance? First of all, it is production insurance; it's not price insurance. I think farmers in Manitoba are basically very pleased with crop insurance. The fact is that 83% of agricultural acres in Manitoba are covered under a crop insurance program. More than 8.7 million acres are insured by the Manitoba Crop Insurance Corporation. Forty-four crops are insured against drought, excess moisture, flood, frost, hail, fire, excess heat, wind, wildlife, and disease.

This program has become an integral risk management tool for farmers in Manitoba. In order for farmers to participate in the spring cash advance program, we have to be enrolled in crop insurance. In most cases, banks require farmers to be enrolled in crop insurance to qualify for operating loans.

Through consultation meetings with farmers, farm organizations, and commodity groups, the Crop Insurance Corporation has developed and delivered a very comprehensive program that seems to be quite well received by farmers.

In conclusion, I would suggest the federal and provincial governments enhance existing programs that work well and develop a revenue or price insurance program that works for grain farmers and oilseed producers. I also would suggest that the federal government pick up a larger share of the safety net funding, instead of a 60-40 split.

It's clearly time for this federal government to step up to the plate, support Canadian farmers financially, and send the message to other exporting nations that Canada will not sit back and allow other countries to sink our Canadian farmers through export subsidies. Canadian farmers are the most productive and efficient farmers in the world. We cannot continue to take on other federal treasuries on our own.

Thank you for listening.

The Chair: Thanks, Walter.

Charles.

Mr. Charles Fossay (Individual Presentation): Thank you very much, Mr. Chairman.

It's rather difficult being one of the last presenters, because I think everything has been said already, but I will concentrate my remarks on two or three areas.

Just to introduce myself, my name is Charles Fossay. I farm with three brothers about 20 miles west of Winnipeg, in the Red River Valley. We have grains and oilseeds, and we have a small hog finishing operation as well as a small cow-calf operation.

I'm also the vice-president of the Keystone Agricultural Producers, but my comments today are as a producer and not as a representative of that organization.

I believe there are many opportunities in agriculture that will allow farmers to prosper in the future, but we need help from government in making the transition from today's tough economic environment to one that is much less dependent on government assistance.

There are things government can do to help us. I believe, first, the government needs a long-term vision of primary agriculture that is known and understood by producer and policy people. I have been attending farm meetings for many years now and have never yet heard anybody from the federal government state what their vision of primary agriculture is in Canada. They always talk about wanting to export more or increase our development of food processing, but they never talk about what they want to see happen to primary agriculture and the farm rural society.

We also need some short-term funding to assist us in making this transition. We have been suffering very tough economic times for the last three to five years, depending on where you are in the country, and we have lost a lot of equity just trying to maintain where we are. We aren't able to move forward, so we need help in that area.

Adequate funding must be guaranteed for safety net programs. If we go to a new program, the design of that program must be to deal with problems, and the government must provide the dollars that will solve those problems. Don't design a program around a set amount of dollars. If you need $100 and you're only going to put $50 in the pot, you're not solving the problem.

Â (1235)

People have talked about subsidies in foreign countries. They exist, and we keep saying the next round of WTO talks is going to help there. We were told that in 1995, when the Uruguay Round was done. Government subsidy programs were to be phased out, and in five to seven years it was going to be an open market. That hasn't happened.

Canada removed most of the subsidy programs for the grain and oilseed producers--that was basically the Crow--and other governments have changed their programs but haven't reduced their spending. They're just supporting their domestic production. They're not putting it into the export area. In Canada, we basically did away with any kind of support program, leaving farmers to fight the foreign treasuries on their own. And we have been losing that battle.

Current safety nets do have flaws, but in most cases they are well understood and generally accepted. Here I'm talking about crop insurance and NISA. Perhaps producers would be better served if these programs could be tweaked to better respond to current conditions and demands. Many of my neighbours are concerned that if the old programs of crop insurance and NISA are removed for a new all-farm program, and if that program doesn't work, then under the existing NAFTA rules we could not go back to a program that we understand and like. So we're very much afraid about throwing out the baby with the bath water if we go to a new program.

I will shorten up my presentation because of the time constraints here. I would say that farmers are doing many of the things that the government is asking us to do. Environmental programs, food safety, quality assurance programs, many of these things are already underway or have been developed.

Unfortunately, farmers are price takers. We're not price setters. We need the help of the government in acting as a broker between society and producers, and giving us some payment for the things we do to improve the environment, improve the air and the water quality.

Ian talked earlier about endangered species, about the fact that we provide safe, nutritious, very affordable food. We have never had any problems for consumers in the grains and oilseeds sector. We can't get any recovery on these costs and these investments that we make out of the marketplace. It quickly becomes just a cost of doing business, and we can't get that cost back. That's where I see the government acting as broker between society and producers.

I'll leave it at that.

Â (1240)

The Chair: Thanks, Charles.

Now we have three two-minute presentations and then a few questions.

Mr. Dyck, Marvin, would you like to begin?

Mr. Marvin Dyck (Individual Presentation): Thank you. I appreciate being allowed to address the committee on some of my concerns.

My name is Marvin Dyck. I work with Kroeker Farms in southern Manitoba. We work in the horticulture area. We grow potatoes and onions. Those are our main crops.

The horticulture sector is one of the bright spots in the agriculture industry. We believe there should be more things done to support this industry. The horticulture industry is well situated to be in line with some of the things we talked about today in terms of encouraging value-added crops and diversification. I think the horticulture industry fits well into these kinds of areas.

One of the concerns for us at this point is minor-use registrations in Canada. We need to see a greater effort being made in this area. Because of the low number of acres in the horticulture industry relative to grains and oilseeds, we rely heavily on the minor-use program.

In the United States in the last year, 2001, there were 1,200 new registrations, 500 of which were food-based registrations. In Canada, in the same period, there were 25, 18 of which were used in the food industry.

I guess the main thing I need to stress is that we are competing against American fruit and vegetables. American fruit and vegetables come into the country, their producers have access to pesticides, and these fruits and vegetables are deemed safe for the Canadian consumer. Yet we here in Canada do not have access to these same tools. I believe, biologically speaking, the Canadian consumer is fairly similar to the American consumer. We need to have access to these tools.

We are not looking for subsidies. We are not looking for negotiation at WTO. This is something that can be done through our federal government. It is an internal issue and should certainly be GATT-friendly. We need to have some movement on these issues. We need to have the tools to be able to encourage domestically.

Â (1245)

The Chair: Many thanks.

I am going to move on now.

Mr. Eric Thornhill (Individual Presentation): Thank you, Mr. Chairman, for allowing me a couple of minutes. I could probably take 25 minutes. I don't know how these guys from the select committee are going to ever sort out all the problems.

I will start by saying that I am Eric Thornhill. One of the hats I wear at the moment is as president of the Manitoba Sheep Association. I come from a long line of farmers, of which most were in Great Britain--I'm only 12 years in Canada--mixed farmers, who were on one farm at any one time. They would be milking cows, and there would be beef, and sheep, and pigs, and chickens, and they would grow oats, wheat, barley, potatoes, and beets, and do custom work as well--old-fashioned and very proud of it.

I say at this stage too that I am also very proud to be a member of a great people--farmers--and a great industry, the greatest industry in the world: agriculture. What I hate to see is farmers begging to be able to stay in the industry.

When I came to Canada 12 years ago, within two months almost all of the agricultural select committee of Great Britain came to see me, just southeast of Winnipeg--not specifically to see me, but they knew, I don't know how, that I had immigrated to Canada. They wanted to know why.

I said I was fed up with having a lifetime.... I had been 30 years in Britain, farming on my own account. By the way, we have been farming for 400 years we know of for sure--non-stop, full-time farming; no part-time, no hobby: for a living. Most of that, of course, as you all know, would be without any subsidization at all. I was there at the beginning when subsidies started.

Anyway, to move on, why had I immigrated with my family? I said I was fed up with begging--and that is how it had been in Great Britain for years--government to give this great industry that I am very proud of money to keep us going. I am fed up with red tape; I am fed up with regulation. We wanted to be farmers; we didn't want to be office people. You can't farm a farm in the flipping office. You have to get out, no matter whether you are animal or crop people, and do the job--and know how to do the job and how to tell other people to do the job. They didn't listen to me very well, because they went back to Britain and added more regulation, and more red tape, and more subsidies.

What do I find here? After twelve years, a lot of the things I said I came to Canada for no longer apply, because our governments have done the same. They followed. What has happened, with more subsidization and more regulation and following high technology and all that? There's more production and less and less money for the producer. In fact, rounded down, agriculture, they tell me now in Canada, with a return on equity of 0.7%, is bankrupt--the industry is. So I don't know who is proud of this great industry, or who is regulating it, or what the next number of years will devise, but it needs to change or else it won't be here in ten years' time.

I've just said how I hate subsidies, and I do. I hate them for other reasons. I have always tried to have agriculture, as big as it is, not the only thing on my mind, so for 27 years I have been a member of Rotary Clubs. You will all know--and I am not going to explain--what Rotary Clubs are. I am currently, and have been for these last nine years, the only agricultural representative of 1,000 Rotarians in Winnipeg. So I act as a spokesperson, a farming public-relations person, in which I have had quite a lot of experience in Britain.

And what is it? It's that you farmers have been granted all these subsidies. I won't accept any of this, and I do my best to explain to the other side that the subsidies aren't farmers' subsidies; they're consumers' subsidies--cheap food for the public. I tell them, and they take it. These are highly educated people who know what the truth is.

I wonder why governments don't explain this to the public, or why this industry doesn't have public relations to tell people why they get the food. There are plenty of statistics that tell us that food to the public has gone up far less than inflation. And food to the producer is really off the court altogether. We've never even tried to get inflation money. If we had, we shouldn't be here today asking for more.

Anyway, I could go on, and I know the red light will be flashing. There are other ways. I hate this, always coming for subsidization and asking for more and more for this great industry. It shouldn't happen. We're very important, and we mustn't forget that.

Â (1250)

The Chair: Thank you, Eric.

Mr. Eric Thornhill: Okay, fine.

The Chair: I'll send you the bill for the two extra minutes later.

Jack, you have about 10 minutes.

Mr. Jack Penner (Individual Presentation): Thank you very much, Mr. Chairman and committee members.

It's certainly a pleasure to have you in Manitoba. The invitation was sent out last spring, I believe, when we came to Ottawa to appear before you, and we are certainly glad you accepted.

There are three points I would like to make.

First of all, I was in Germany three years ago, and I met for two weeks with government officials, politicians mostly. They have designed a socio-economic program that has very little to do with agriculture. It's designed to keep nine million people in rural Europe, and it's successful.

Frankly, from discussions I've had now over the last number of years with the Americans, they are doing exactly the same thing. Let's not kid ourselves. The American farm size, contrary to some statements I have heard here today, is half the size on average of our Canadian farms. The success of their programs is evident in the size of the farms.

Secondly, I live six miles north of the U.S. border. My next-door neighbours are Americans. The paint on their tractors is new. The paint on our tractors is 20 years old. We've farmed away our equity, ladies and gentlemen, over the last half-dozen or dozen years. Whether we like it or not, we gave away our equity based on an agreement that we had to strike under the FTA in 1993, and we did it again in 1995 under the WTO. Our programs need to reflect the American programs, because we, as farmers, compete in large part on the North American market, including Mexico.

I just got back from Mexico. I had long discussions with Mexican farmers and businessmen. We sell our beans to Mexico directly. We export them directly off our farm. We believe that in order to stop the migration of the two million weanlings we produced in this province this past year.... Of the five million we produced, two million went to the United States. Why? Because their feed grain is cheaper than ours. The reason the Americans are bringing their canola into Canada is they don't get $6 or $6.50 a bushel like we do. They get $9 Canadian or better--$9.50 Canadian--for their canola. And it's based on the formula that soybeans are priced at under the LDP. Soybeans are priced at $5.54 under the LDP. Check the Internet.

The second thing is their corn prices are set at $2.18 U.S., which brings them to $3.50 Canadian. Our feeders, in large part, import U.S. corn, and we are feeding the livestock herds in our country highly subsidized feed grains. We are no longer able to produce enough feed grains in this province, Mr. Chairman, to feed our livestock herd. I'm sorry to say that, because it's not fair play for western Canada, but that's where we are. Our NISA program has not been a good program for our young farmers. Our young farmers, based on the net income level of the NISA contribution, cannot contribute to NISA.

With regard to our crop insurance program, our agriculture minister last year announced that she was going to reduce the crop insurance premiums to farmers by 75¢ an acre. Do you know why she did it? It had nothing to do with saving farmers money. The reason she did it is that the federal government and the provincial government saved $15 million in their contributions into the program. That's why it was done. Unfair. They should have increased the coverage levels under crop insurance in order to take care of the surpluses, and they should have given us a better program. It was done to save money, and I believe our minister and her government used that money to support the universities. That's where the $30 million finally came from.

I'm sorry to say that, Mr. Chairman, but I believe we have a great opportunity, and you have a great opportunity, to write a report that will truly say what needs to happen. In three words or less, you have to be competitive with your U.S. counterpart. That's the only way western Canadian agriculture will survive.

Â (1255)

The Chair: Thank you, Jack.

We have about six or seven minutes for questions.

Howard, do you have a question?

Mr. Howard Hilstrom: I think the presentations have been very good, and they've all been from farmers. I don't know too many of them at this table, but at the previous table I knew every one of those family farms. They're struggling with the transition to the next generation, and there are several messages that are going to go back. We've heard about all the issues dealt with, and all the pros and cons. I raised the Wheat Board in particular so that we could have this committee understand that in fact there are farmers on both sides of the issue, neither one entirely right. There is no perfect system. So that issue is raised up so that it can find its way into the report.

I don't think we need to actually ask any questions here. The presentations were all very good and self-explanatory. If the Minister of Agriculture takes serious note of them and implements even half of what suggestions you've made, I think that will improve agriculture.

I'll just make that comment.

The Chair: Would you like to make a few comments as well, Dick?

Mr. Dick Proctor: I'd rather ask a question, actually, of Shirley Galbraith.

Shirley, it's clear that you've read Mr. Vanclief's comments at the standing committee from a couple of weeks ago, when he was questioning this business of passive income support versus risk management. I guess the specific question that I would ask of you in return is, what would you like this report that's coming out of these hearings to say back to the Minister of Agriculture on this issue?

Ms. Shirley Galbraith: That we have to be on the same playing field as everybody else. As an industry, we're in trouble right now and we need direct input right now. We need a solution. We even need our crop insurance programs beefed up so that our cost of production is taken care of. I mentioned our growing $3 to $4 wheat when it costs us $8 to produce it.

We're trying to be as efficient as we possibly can, but if all the other countries are getting support, then we need support as well.

Mr. Dick Proctor: To me the agriculture department seems to be suggesting that if you're of low income, if you're not producing very much money, somehow that passive income support should be eliminated and it should be transferred, or the money should be channelled into the people who they believe are taking the risks. So the concern I see is that a lot of these folks are simply going to be pushed aside while we all of a sudden chase after the so-called risk-takers, and that's....

The Chair: I'm going to go to Rick now for a short comment or question.

Mr. Rick Borotsik: Yes, I have two questions, the first to Ian.

On this program that's being proposed here from the CAP, where does the money come from? I asked you that question before, and I'd like to have you answer it again. You talked about $35 to $40 per acre on this particular set-aside, if that's what we want to call it. Where does the money come from?

Mr. Ian Wishart: The money comes from other government departments. If you total up all the various government departments that spend money on resource-based land—five natural resources departments federally and about an equal number provincially—you actually get a total exceeding what we think it will cost to deliver this. We're not talking about new dollars. We're talking about you putting your money in the right places.

· (1300)

Mr. Rick Borotsik: Does that mean getting rid of DFO and using those dollars for your...?

Mr. Ian Wishart: No, it doesn't mean getting rid of it, but I think money spent on enforcement is usually very poorly spent, frankly.

Mr. Rick Borotsik: It might be easier for us to get rid of it, though.

Thanks, Ian.

I have one that will take another 30 seconds, and it's for Mr. Penner.

Mr. Penner, you talked about the socio-economic programs that they have in Europe. I couldn't agree with you more. The term that comes up constantly is “multi-functionality”. Are you proposing that we, as Canadians, should have that same concept of multi-functionality when it comes to dealing with producers like Shirley Galbraith?

Mr. Henry Penner: I think we're moving in that direction, Mr. Borotsik.

Mr. Rick Borotsik: Are we? Should we be?

Mr. Henry Penner: All the rhetoric that I've heard from the minister's office so far would lead me to believe that's where we're going. I believe some aspects of this multi-functionality of the socio-economic programs that have been put in place seem to be working well, especially in Europe. I believe they're also working in the U.S., because I believe farm sizes in the U.S. are actually not growing to the extent that our farm sizes are forced to grow in western Canada in order to maintain the lifestyle of a given family.

The Chair: Thank you.

Rose-Marie, do you have a comment?

Mrs. Rose-Marie Ur: It's just a quick comment for Mr. Penner as well.

Do you really believe the German plan that has been viewed or looked at can be a viable plan for Canada, given the size of this country? We can travel across two, three, or four countries in Europe, versus what you would travel in Canada, so I just wonder whether that's a concept that would be feasible within our borders.

Mr. Henry Penner: That's a good question.

The last map I saw was in a magazine published just this last week. When I look at that western Canadian map, I see how the green area that was indicated on that map is being depopulated. The growth of that depopulation scares me, so anything we could do to shrink that area of depopulation in western Canada and adopt some of those programs that they use in Europe—and I think they used them very effectively—could, I believe, encourage young people to stay in our rural communities, not only in agriculture, but in the development of the food processing industry. I believe that could be made to happen if we were serious about it.

Mrs. Rose-Marie Ur: I'm a strong advocate of reforming the PMRA, so I want you to know we met with the people in Ottawa last week at committee. The group as a whole—it wasn't struck down on political boundaries—certainly understands where you're coming from. I'm speaking for myself, but I can tell you that it appears the consensus was that we should get on with it. There appears to be more positive movement on that, so I totally understand where you're coming from on minor use. I was in horticulture earlier, too, so I know it is certainly a hindrance in your sector. So we're working on that.

Mr. Wilfred Harder: Mr. Chairman, I'd like to enter the new numbers for the record. A recent study showed that U.S. farmers get $135 Canadian per tonne in subsidy, Europeans get $113, and Canadians get $26.

The Chair: Wilfrid, I have to chair this thing and we have to be fair to everybody. If you'd like to give those to our researcher or clerk, that's okay.

In any case, we'd like to thank all the presenters who were here this morning. For those who came to listen, eventually we will write a report, so if you'd like to leave your name or a brief message on the chart at the back of the hall, we'll see that you do get a copy of the report eventually.

We've had an interesting morning. We're dealing with a very difficult issue, and I know we've gained a good insight into some of the problems in this area of Manitoba. Again, thank you very much. We only wish we could spend more time here, but time is something we can neither buy or sell, because somebody else gave it to us.

Thank you. We're adjourned.