AGRI Committee Meeting

Notices of Meeting include information about the subject matter to be examined by the committee and date, time and place of the meeting, as well as a list of any witnesses scheduled to appear. The Evidence is the edited and revised transcript of what is said before a committee. The Minutes of Proceedings are the official record of the business conducted by the committee at a sitting.

For an advanced search, use Publication Search tool.

If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.

Previous day publication Next day publication

37th PARLIAMENT, 1st SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Monday, February 18, 2002

1545

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

1550

1555

Mr. Marvin Shauf (2nd Vice-President, Canadian Federation of Agriculture

1600

The Chair

1605

The Chair

1610

Mr. Murray McCallum (Individual Presentation)

1615

The Chair

Mr. Bob Mazer (Individual Presentation)

1620

The Chair

Mr. Walter Findlay ( Individual Presentation)

1625

The Chair

Mr. Jim Green (Individual Presentation)

1630

The Chair

Mr. Jim Green

The Chair

Mr. Don Bromley (Individual Presentation)

1635

The Chair

Mr. Don Bromley

The Chair

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

The Chair

Mr. Rick Borotsik (Brandon--Souris, PC/DR)

1640

Mr. Frank Thomas

Mr. Borotsik

Mr. Bob Mazer

Mr. Borotsik

Mr. Bob Mazer

Mr. Borotsik

The Chair

Mr. Howard Hilstrom

Mr. Hilstrom

1645

Mr. Frank Thomas

Mr. Howard Hilstrom

Mr. Murray McCallum

Mr. Howard Hilstrom

Mr. Murray McCallum

Mr. Howard Hilstrom

Mr. Jim Green

The Chair

Mr. Desrochers

1650

Mr. Frank Thomas

Mr. Desrochers

Mr. Frank Thomas

Mr. Odina Desrochers

Mr. Walter Findlay

The Chair

Mr. Proctor

Mr. Marvin Shauf

Mr. Proctor

Mr. Marvin Shauf

1655

Mr. Dick Proctor

Mr. Don Bromley

The Chair

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.)

Mr. Don Bromley

Mrs. Rose-Marie Ur

Mrs. Ur

Mr. Marvin Shauf

The Chair

Mr. David Anderson (Cypress Hills--Grasslands, Canadian Alliance)

1700

A witness

Mr. David Anderson

Mr. Jim Green

The Chair

Mr. Borotsik

Mr. Frank Thomas

Mr. Borotsik

Mr. Frank Thomas

Mr. Borotsik

Mr. Jim Green

The Chair

1705

Dr. Richard Rounds (Director, Rural Development Institute, Brandon University)

The Chair

Mr. Wayne Drul (Director, Agricore United)

1710

1715

The Chair

Mr. Robert Muir (Manitoba Broiler Hatching Egg Commission)

The Chair

Mr. Art Mainil (Individual Presentation)

1720

1725

The Chair

Mr. Ken Harms (Individual Presentation)

1730

The Chair

Mr. Ken Harms

The Chair

Mr. Ken Harms

The Chair

Mr. Ken Harms

The Chair

Ms. Charlene Rowland (Individual Presentation)

1735

The Chair

Mr. Murray Downing (Individual Presentation)

1745

Mr. Curtis Simms (Individual Presentation)

The Chair

1750

Mr. Stan Yaskiw (Individual Presentation)

1755

The Chair

Ms. Kathleen Patterson (Individual Presentation)

1800

1805

The Chair

Mr. Howard Hilstrom

Mr. Curtis Simms

Mr. Howard Hilstrom

Mr. Hilstrom

Ms. Charlene Rowland

Mr. Howard Hilstrom

Ms. Charlene Rowland

Mr. Howard Hilstrom

1810

Dr. Richard Rounds

Mr. Howard Hilstrom

Dr. Richard Rounds

The Chair

Mr. Desrochers

Dr. Richard Rounds

1815

Mr. Desrochers

Dr. Richard Rounds

Mr. Desrochers

Charlene Rowland

The Chair

Murray Downing

The Chair

Mr. Proctor

Mr. Wayne Drul

Mr. Proctor

Mr. Wayne Drul

The Chair

Mrs. Rose-Marie Ur

Ms. Charlene Rowland

Mrs. Rose-Marie Ur

Ms. Charlene Rowland

1820

The Chair

Mr. Borotsik

Mr. Wayne Drul

Mr. Borotsik

Mr. Wayne Drul

Mr. Borotsik

Ms. Kathleen Patterson

Mr. Borotsik

The Chair

Mr. Al Marshall (Individual Presentation)

1830

1835

The Chair

Mr. Joe Dusik (Individual Presentation)

1840

The Chair

Mr. David Hanlin (Individual Presentation)

1845

The Chair

Mr. Ken Schellenberg (Individual Presentation)

The Chair

Mr. Andrew Dennis (Individual Presentation)

1855

1900

The Chair

Mr. Donald Dewar

1905

The Chair

Mr. Scott Rose (Individual Presentation)

The Chair

Mr. Daryl Knight (Individual Presentation)

1910

1915

The Chair

Mr. Dan Mazier (Individual Presentation)

1920

The Chair

Mr. Jack Peters (Individual Presentation)

1925

The Chair

Mr. Joe Federowich (Individual Presentation)

The Chair

Mr. Tony Riley (Individual Presentation)

The Chair

Mr. Fred Tait (Individual Presentation)

1930

The Chair

1935

Mr. Brad Mazur (Individual Presentation)

The Chair

Mr. Ian Robson (Individual Presentation)

1940

The Chair

Mr. Mark Saterley (Individual Presentation)

The Chair

Mr. Paul Belcheff (Individual Presentation)

1945

The Chair

Mr. Barry Farr (Individual Presentation)

The Chair

Mr. Dale Dornian (Individual Presentation)

The Chair

Mr. Weldon Newton (Individual Presentation)

1950

The Chair

Mr. Anderson

Mr. Weldon Newton

Mr. David Anderson

Mr. Weldon Newton

Mr. Anderson

A witness

1955

Mr. Anderson

The Chair

Mr. Proctor

The Chair

Mrs. Ur

Mr. Donald Dewar

Mrs. Ur

Mr. Donald Dewar

Mrs. Ur

Mr. Daryl Knight

The Chair

Mr. Steckle

Mr. Andrew Dennis

Mr. Paul Steckle

Mr. Andrew Dennis

Mr. Paul Steckle

Mr. Andrew Dennis

The Chair

Mr. Rick Borotsik

The Chair

CANADA

Standing Committee on Agriculture and Agri-Food

NUMBER 045

1st SESSION

37th PARLIAMENT

EVIDENCE

Monday, February 18, 2002

[Recorded by Electronic Apparatus]

¹ (1545)

[English]

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

Pursuant to Standing Order 108(2), the Standing Committee on Agriculture and Agri-Food is meeting today to study the future role of the government in agriculture.

We'd like to welcome you to our meeting. In fact, it's your meeting, not our meeting.

I know we have very good presenters who come to Ottawa to give us many views, but this winter we hope to travel across the country to meet on your turf, in your towns, in your villages, to get your impressions on the future of agriculture in this country, and in particular on the role of the federal government in that.

This morning we were in Stonewall. Your provincial Minister of Agriculture made a presentation, along with a great number of other people.

This afternoon, before we begin, I'd like to introduce myself. My name's Charles Hubbard. I'm from the Miramichi riding in New Brunswick. Our host today is your member of Parliament, Rick, whom you know very well.

From the Canadian Alliance, we have Howard Hilstrom and David Anderson, who will be here in a few minutes. From the Bloc Québécois, we have Monsieur Desrochers from the province of Quebec; and from Ontario, Rose-Marie Ur, who is with the Liberal Party.

¹ (1550)

A voice: What about Dick?

The Chair: From the great province of Saskatchewan, Dick Proctor of the NDP.

Sorry, Dick.

The afternoon will be divided into three sessions with, first of all, a panel. We'd ask a representative of the Canadian Federation of Agriculture, Mr. Shauf; Mr. Thomas from CIBC; and the individuals, Murray McCallum, Bob Mazer, Walter Findlay, Jim Green, and Don Bromley to please come to sit near the table. There are names here for you.

We have translation services for those of you who may want to hear the presentations in your own language. In fact, they're available on channels 1 and 2 in both English and French.

We would remind presenters that they have about five minutes each. Following that, we will be having some questions from members of Parliament. Later this afternoon, of course, we'll be looking for people to give shorter presentations. Those in the hall, also, if you are not on the list, we also would like to give you an opportunity to speak with our committee.

The committee is here to listen. It's not here to give you our version but to listen to you. As we cross the country, we'll eventually be going back to Ottawa. We'll probably be hearing further witnesses and eventually preparing a report that will be tabled in the House of Commons.

Briefly, that is our outline.

Marvin, I'd like to ask you to be the first presenter on behalf of the CFA.

¹ (1555)

Mr. Marvin Shauf (2nd Vice-President, Canadian Federation of Agriculture: Thank you very much for the opportunity to make a presentation.

Much of the current discussion on policy circles surrounds the development of a long-term framework for Canadian agriculture. CFA supports long-term, stable, and adequately funded programming to be implemented in the next memorandum of understanding between federal and provincial ministers. However, it is becoming apparent that there are pressing issues that need to be addressed in the short term if Canadian farmers and the entire industry are to be able to make the transition from the current situation to that envisioned for the long term.

Canadian farmers find themselves in a position of having to compete in a world market against the financial resources of foreign governments. This is a problem not just for producers but for processors and marketers as well as all of the value-adding.

Over the longer term, artificially low prices have had a significant impact on weakening the financial stability of Canadian processing companies. Initiatives such as Brand Canada depend on having a Canadian agrifood industry from production through processing.

Commodity prices are a major and ongoing issue. While a number of factors influence farm income, the fundamental problem in recent years has been the persistently low price for grains and oilseeds, which has had negative repercussions throughout the value-adding chain. It has also had a negative impact on the effectiveness of Canadian safety net programs.

This year drought conditions prevailed in many parts of Canada. The situation for producers varied across the country. Many regions experienced drought conditions this year. The impact of the drought was not the same because of differences in weather conditions and crops. It was also different in the provinces because of differences in programs. In some provinces, crop insurance programs have been adequate in terms of mitigating the impact of drought, and in others they have been shown to be deficient. This drought will have a negative impact on the entire industry again.

There is a clearer need for bridge funding to assist producers to make the transition from today's conditions to the stable, adequately funded, long-term policy framework envisioned in Whitehorse. An obvious place to start is with the rollover of unused CFIP money in order to ensure the money committed to agriculture is in fact spent on agriculture and to allow for a buildup of reserve funding.

CFA has stated its support in principle for the long-term vision outlined by federal and provincial agriculture ministers in Whitehorse last summer. The success of the Whitehorse agreement, though, is contingent on carefully considered, low-planned, and adequately funded programs to meet public policy goals, and to also meet the needs of the industry at both the producer and processor levels. If concepts such as Brand Canada are to work, both the production and processing sectors must be strong, profitable, and located within Canada. This means the Canadian industry must be profitable.

Through initiatives like the Canadian On-Farm Food Safety Program and Environmental Farm Plan, both of which are industry-led initiatives, Canada has the potential to build on a strong record and provide international and domestic consumers with even more confidence in the Canadian farmer's ability to produce high-quality, safe, and environmentally sound products. This will also require the industry to be profitable.

On safety net programs, before making any changes to the current programs, the shortcomings as well as the long-term objectives for safety nets must be identified and agreed to by all the participants in the process. Canadian safety net programs need to be reassessed to ensure they're doing a good job.

Two basic requirements for these programs are that they adequately measure farm gate need and that they accurately measure potential earning ability of the individual farms. Systemic issues, including low world commodity prices due to support policies in other countries, need to be addressed in the context of safety net programming, since they have an effect on price and therefore on the support provided to Canadian farmers.

The problems with current programs are not necessarily due to program design but to distortions in the benchmarks used. The current range of safety net programs is not without flaws, but any redesign or improvements will need to result in programs that do a better job. Safety net programs should mitigate income problems; they should not reinforce them.

It's clear that science has a good deal to offer in the future in terms of increasing the value-adding of agrifood products. We need to ensure that we avail ourselves of all the opportunities the Canadian agrifood industry may have, but also that a fair share of value-adding accrues to the producers. As well, we need to develop strategies to ensure that other countries don't target the product from these initiatives and capture the value for their economies, as the U.S. is currently doing in beef, pork, sugar, grains, and various other commodities presently being produced in Canada.

Renewal programs must concentrate on moving farmers to increased viability and long-term sustainability for new entrants as well as existing farmers, rather than suggesting they exit the industry. We have to ensure we identify the reasons that some farms are struggling with consistently low margins before making judgments on how the programs are going to work in terms of retaining those farmers in the industry. Again, only profitability will attract and retain both people and investment within the industry.

One conclusion that clearly emerges from the variety of challenges facing the ag industry is the need to address a variety of issues at once. Food safety concerns cannot override the need for adequate farm incomes, and the design of long-term programs for agriculture must go hand in hand with the acknowledgment of the struggles of some farmers to meet next month's mortgage payment.

A recurring issue is the impact of trade agreements on Canadian farmers. The results of the Uruguay Round have shown that Canadian trade negotiators must be very careful in what they agree to. They must have a clear understanding of the implications of agreements on Canadian farmers and on global market conditions, including world commodity prices.

We must develop comprehensive strategies to build a successful industry, rather than analyze the cost of stabilizing an industry from genetics to the consumer, an industry that is trying to compete with treasuries rather than just market forces.

Thank you.

º (1600)

The Chair: Thank you, Marvin.

Now from the agri banking section of CIBC, Mr. Thomas.

Mr. Frank Thomas (General Manager, CIBC - Agri Banking): Thank you for the opportunity to present. I'll have to be a little careful. While I'm pleased and proud to represent CIBC in western Manitoba and my comments will be based on my involvement in the western part of this province, sometimes when I carry my corporate flag there might be an inference that all of what I'm going to say is on behalf of the bank, which may not necessarily be true.

But having said that, I do obviously have some thoughts about what the government can do specifically to western Manitoba and possibly the prairie provinces as a whole. I'll speak more in specifics as opposed to generalities, as Marvin did.

One of the specifics that we have in the financial services business is the Farm Improvement Loans Act. There are some obvious limitations in it. The first one is the $250,000 upper limit, which in today's environment almost makes the program useless. You can buy about one tractor with that. So I think if the program is to stay and be used by the lending institutes, that limit has to be readdressed, and likely upwards of $1 million to $3 million would be most realistic in today's environment.

The other issue with the Farm Improvement Loans Act is that it can be used by bankers as an alternative to plans or to opportunities that farmers see that may not fit the traditional lending rules and guidelines, but still have basis in cashflow. So I do believe there's a reason for the farm improvement loan to stay, and I do believe it does have to be revamped with this upper limit.

On that same subject, the registration fee that farmers have to pay to play the game with the farm improvement loan is probably due for review again. At 85 basis points as a registration fee, it gets very onerous for the farmer to pay that over and above the cost of the interest carrying costs themselves. If it were $1 million, what is that, $8,500 as a one-time registration fee? I believe that was put in place when the Farm Improvement Loans Act was undergoing a considerable amount of challenges with losses particularly, but I would suggest that today's environment has changed and probably the loan loss premium that would have to be applied would not require the 85 basis points.

On the other financial impact side, I believe the NISA program is a good one, worthy of being maintained. If, though, there could be tinkering with it.... The problem with it could be, in disaster or in circumstances where we have a significant loss of income--and I know some of my colleagues will probably speak to that a little later--the limitations that are built into it maybe aren't realistic. With a 3% matching piece, the pure mathematics would suggest that if you have a disaster in five years, or two in ten years, you won't have enough saved up with NISA, and if CFIP is limited to its contribution based on an income flow, the opportunities to protect just aren't there yet. So an upper matching limit change might be useful on the NISA side of things.

I want to touch quickly on this--and again, there are people on this panel who would probably speak with much more authority and accuracy on it--but I believe there's a significant part to play with the environment. Last week's Brandon Sun had an article where a local RM has been convinced to dissuade or to discontinue any development in the livestock business. I just feel sorry for the local RM counsellors, who have to live there and have to make these decisions based on a lot of emotion and not a lot of science in some cases.

There's a case to be made. I need to see science there to protect the environment as much as the next person, but I believe the advantage of western Canada, and western Manitoba specifically, is the fact that we have space, and with some of the technology that's out there, the geography information systems and so on and so forth, there's likely some rule that can be set fairly easily from a national basis that would help local RMs make these decisions that right now are bordering on impossible for them to do and still live in the community in which they live.

There are some important opportunities for western Canada in the future with technology, with advances that are being made and changes that are going to happen, things around the carbon credits, that western Canada can help government achieve some of those targets. That one will be important, and it will be important how the government handles that from the perspective of returning the benefit rate to the farm gate. I don't have an answer to that one; I just challenge you to make sure you do consider the best option there.

Technology and education is the last key thing, and I'd like to suggest it could be done. There is a core group of farmers who are in this business because they want to do it better from a financial perspective. There is another group of farmers who do it because of its lifestyle. Both are the right way, by the way. I'm not trying to suggest that one is different from the other, but there is a demand for education in technology, and I think the government can play a lead role in helping, through the agriculture offices, through Ag Canada, to achieve some of that learning that the farmers are going to need.

Again, thank you, and I turn it over to my next colleague.

º (1605)

The Chair: Thank you, Mr. Thomas.

Murray, I think I'll just go along the table. Maybe you can identify your farm, or what you do.

º (1610)

Mr. Murray McCallum (Individual Presentation): Thank you very much. I'm Murray McCallum, representing our family farm. It just happens to be a few miles northeast of Brandon here. My wife, daughter and mother are actively involved in this operation--700 acres--which also includes a growing cattle herd.

I'm pleased to be attending this meeting today in the hope that we can all put our common thoughts together and provide a positive understanding of agriculture in western Manitoba, if not the Prairies.

As noted in Mr. Vanclief's speech of February 6 to the standing committee, he has indicated that agriculture provides a significant contribution to the economy of Canada. I don't think there's a person around this table who would disagree with that comment. However, grouping all these sectors in the same basket and then reciting vague numbers and percentages associated with the net accrued income does nothing to address the fundamental problems associated with grain production on the Prairies.

The rest of the commodity groups that are associated with agriculture appear to be doing quite well and seem to be the major benefactors of the net accrued income. When you look back and see how government involvement has assisted other commodity groups--and dairy and poultry are two that come to mind at the present time--all these entities have become very successful. I wonder why there has been no longer-term commitment to the grain producer on the Prairies in devising the next program.

I think everyone here will agree it is the heavily capitalized, underfunded grain producers who are experiencing tremendous financial stress. I have seen our government withdraw financial support from grain production, and at the same time I have watched foreign countries escalate production and provide their producers with massive government subsidies.

As a producer on the Prairies, I am forced to expect a “survival of the fittest” mentality from our government bureaucracy while competing with the foreign treasuries. This is not what my great-grandfather had in mind when he homesteaded our present farm in 1879. I'm a fourth-generation producer who would like to give some hope to the fifth generation.

Inadequate cost-shared ad hoc government aid programs seem to be the solution to everyone but the producer. This type of assistance does nothing but temporarily fill financial voids left from previous years. Undercapitalized producers are then expected to somehow come up with the perfect diversification plan that will save the government from further ad hoc payments. In most instances diversification is easier, and a lot easier said than done.

The government needs to link all future roles it plays in agriculture with the knowledge and expertise associated with the very competent associations--the commodity groups--that represent agricultural producers across this great country. Presently the government appears concerned and caring, then develops short-term programs based on what the bureaucrats feel are adequate for the producers.

AIDA 1999, which was the revised program from 1998, is a prime example. The initial 1998 program was adjusted to accommodate producer and industry concerns, and when the program was finally beginning to show some promise as a program that could have some longevity, it was immediately replaced.

The government needs to play a role in agriculture in the following areas. Just to highlight this, the government was actively involved with the Canadian Wheat Board and then divested itself of that interest by turning it into a corporation. That corporation today is very essential in marketing a good percentage of the grain that's coming off my farm, and I appreciate their efforts.

Taxation is another role at which governments seem to be quite adequate. This includes not only the taxes they're taking from me, but the taxes they're taking from all the organizations and corporate citizens I have to purchase my products from. Taxation is a major component in my expense structure.

Research is another area where I'm sure there are very competent individuals around here who can address the problem. In western Canada, and particularly in southwestern Manitoba, we're faced with many challenges. One of them just happens to be fusarium head blight in this area, which tends to downgrade the grain and make it less valuable. Research is in progress at the present time, but I understand it will be many years before we'll see the results of it. There is a very significant role for the government to play in the research sector.

Concerning patent review, patents add considerable expense to my bottom line. There are presently patents in place that basically give the corporate citizens the ability to charge me just about anything they want for a product I need.

I'll go a little faster here.

We have NISA--a very important component. Does the government have a role in grain production? I think it does, both in determining what will be produced and how long it will be produced for.

Changes to government policy need to be driven by producers and not bureaucrats or the very vocal single-issue minority. Too often burdensome laws or regulations are placed on agriculture as a result of media attention--most times at great expense to the agricultural sector. The cost of regulation then becomes a producer's burden.

In 1879--

The Chair: I'm going to cut you off, Mr. McCallum. I don't mean to do this, but we have five minutes and we have others.

Mr. Murray McCallum: Okay. It's not a problem.

The Chair: I apologize for it. But I can't....

Mr. Murray McCallum: There was only one more paragraph left here. I have a copy here I'll drop off.

º (1615)

The Chair: Very good. If you want to, leave it with our clerk.

As a reminder for everyone, you may see we are not making notes. It's because all of this is being recorded, and we put it in the blues. The blues are the recordings of our meetings. Members will get that when we're back in Ottawa. What you want to put in there is something that....

Mr. Mazer. We'll move on.

I usually get like this when we're getting short of time.

Mr. Bob Mazer (Individual Presentation): I've got my watch out here, so I'll see if I can go right along here, Charles.

My name is Bob Mazer. I've been farming for 34 years. I've been in agribusiness for 33 years. We have dealerships throughout southwestern Manitoba.

My comments are going to be based on my personal opinion. I don't represent any group here particularly, other than in general the ag community of southwestern Manitoba.

To start with, I'm going to make a few points here so I won't take up any more than my five minutes.

I'm particularly not in favour of long-term subsidies, quite frankly. We're living in Canada and in a free enterprise system, yet I believe we need to have our industry on a level playing field with the rest of the world. I don't want to farm the mail box like the Americans and the EU producers. And that's exactly what they're doing.

I'm very proud of the producers of southwestern Manitoba in particular--all of southern Manitoba--in embracing the notion of diversification, intensification, and moving away from the products that absolutely have to be subsidized in world markets. I believe, though, that the government, in the long term, should be supporting agriculture in terms of the general support of an industry it would provide for forestry or any other industry. That general support comes in a lot of different ways.

I guess there are many things. Obviously the list could go on and on, but there are some things in the immediate future I think should be addressed by government. One is, as some of my colleagues have already mentioned, more money for research. We have to address the fusarium problem, the vomitoxin problem. We are in an area where there are intensive livestock operations.

We've got two large feed mills; one has just opened and another one will be opening this year. They are going to use, at full capacity, somewhere around 400,000 acres of grain. But that grain has to be of high quality. We don't have to transport it halfway around the world. It can be used and we can get the value of it right here in Manitoba.

We need other research, including research into disease-resistant potatoes and a whole bunch of other products, that can be advanced for the good of the whole industry and is not producer specific. I'm very cautious about producer-specific subsidies or support. I think a general industry support, again, is what we're looking for.

There are all kinds of low-heat-unit, high-volume products like corn and so on. Then again, we've got our cow-calf operations--our cattle operations--which are coming back to southwestern Manitoba. A massive amount of feed is required, and again the government can support us in research to get to where we need to go.

I guess the government has to be involved with a workable national and provincial water management policy. Again, I can only speak for southwestern Manitoba.

As people in the agriculture industry, we are probably sitting on what is like Alberta oil in water. We have to get our arms around this. Quite frankly, I'm working on a couple of committees looking at the process in place now. No one really has their arms around it. The municipal, provincial, and federal governments do not have their arms around the water.

In Manitoba, water resources are literally our goal for the future. It is probably the biggest issue that will affect agriculture in general in Manitoba in the next two or three decades. We need to get our arms around it. We need the funds from the federal government and the provincial government to move the process forward.

I think, of course, in this process of livestock advancement, our environment is coming up a lot. What are we doing to ourselves? What are we doing to the people of our communities?

My suggestion is that the federal government could easily be involved in the development of regional laboratories to very quickly and effectively help the producers and the people handling waste, and so on, analyze what they're handling with a recording and mapping of what's being put onto the ground in terms of waste management. It's a huge issue. If we were able to have the product analyzed on an ongoing basis, it would enhance the whole process of protecting the environment.

I guess there are about 15 other things I could go into, but I'll leave it at that.

º (1620)

The Chair: Thank you, Mr. Mazer.

Walter Findlay.

Mr. Walter Findlay ( Individual Presentation): Southwest of Brandon, I farm anywhere from 3,000 acres to zero acres, depending on whether it's a wet year or a dry year.

I'd like to thank you for the opportunity to make this presentation. This is my third presentation to the standing committee over the last few years.

I would like to think of this list as a list of constructive criticism on the future role of government in agriculture. I did give copies around.

We need to keep NISA and enhance it, if possible. If the bonus interest is eliminated, put the dollar amount toward accounts. One of the reasons I am still farming after 1999 is because of NISA.

Canadian Wheat Board cash advances are a necessity for a lot of producers, especially the younger ones, but they are a loan that must be paid back. There must be a program put in place to encourage young people to remain or return to the farm, whether it be through low-interest loans, deferred taxes, or capital payments on land as a tax credit or deduction.

Regarding joint running rights on railways in the province, this year CN has moved Canadian Wheat Board grain. CP did not. Some producers have only moved 5% of their production.

We need to eliminate the excise tax on farm fuels. Mr. Martin said he would look at this issue if the province also cut their fuel tax. Manitoba has no fuel tax on farm fuel.

We need to rebate the collective fuel tax back to the province to maintain and upgrade the road system because of the increased traffic caused by branch line and elevator closures.

We must define the role of Fisheries and Oceans Canada and Agriculture in Manitoba. It appears to be another major obstacle to hurdle.

In no way do I want to see a cost of production program implemented. It would eliminate many smaller producers, because some producers' costs would be less. They would be able to bid rent land prices up, putting a lot of other producers at a huge disadvantage and, therefore, out of business. It happened with GRIP.

I could not be here and not readdress the disaster of 1999 in southwestern Manitoba and southeastern Saskatchewan. A policy has to be put in place to cover these scenarios so all Canadians are treated fairly and equally. It was not the case in 1999.

Any new program must be predictable, fair, uncomplicated, bankable, and fast. The big winners out of AIDA and now CFIP are the cities of Winnipeg and Regina because of the administration costs for the program.

Revamping some of the existing programs--and we know the problems they have--may be easier and better than trying to make a completely new one to enhance crop insurance, change the formula for CFIP, etc.

We need to recognize the fact that Canadian producers compete in the international marketplace against some highly subsidized producers and address the issues. Don't penalize producers for the diversification of some of the programs now.

The government must increase its role in research and development in plant and animal development, taking some of the load off the producers' backs.

In closing, I would rather see the status quo on programs than see something implemented in a hurry, without producers' input and acceptance, that may be devastating to agriculture. Agriculture is the backbone of the country. When agriculture is profitable, so is the economy of Canada, both rural and urban.

Some land should not be in grain production. It is becoming more evident every day. Maybe something should be put in place to aid the transition.

Thank you.

º (1625)

The Chair: Thank you, Walter. You were brief, concise, and to the point.

Mr. Jim Green.

Mr. Jim Green (Individual Presentation): Thank you, Mr. Chairman.

Once again, I am over my head and out of my league. I'd be prepared to give my five minutes to the preceding speakers because there's a lot to be learned from hearing their comments, but I won't be doing that. I have some comments I want to bring forward as well.

It's quite remarkable that there are several common themes here today. I've heard them from all of the preceding speakers.

I'm going to offer you an example of what our family farm is. It's not so much what it is, but that it is an example of many other family farms in this country.

We're fourth-generation farmers in the province of Manitoba. My great-great-grandfather actually started out in the Gatineau, north of Ottawa. I farm with my two brothers, Doug and Don. We have 5,000 acres of primarily grain, oilseeds, and pulses. We're partners in a 1,500 sow farrowing barn along with three other family farms. We have a livestock transportation business that delivers cattle to the mid-west in the United States.

One brother has a cow-calf herd. Another brother is an instructor and examiner for first aid and CPR. We have a hail insurance agency. My wife is a pharmacist. I have a sister-in-law who has an administrative job with a livestock production company. My other sister-in-law was a provincial E911 operator and is now in her first year of law school.

We have children. We do not know if they wish to farm. We hope to grow our business so they may have the option should they have the desire.

Farmers will survive. It won't be most of them. It may not be us. Farmers will do whatever they can to farm, but it may not be enough. They will work off the farm. They will diversify. They will change the structure of their farms and their businesses, but it may not be enough. It may be enough to have a few farmers to provide a cheap and secure food source for our country, and to take care of the areas between our urban centres.

In the meantime, those of us in the present will do what we can. Livestock protection will increase, although with great difficulty and many restrictions due in part to the resistance or the fear of change. Environmental issues we can address with science; however, we cannot manage the emotions of others.

Farmers will grow non-traditional crops for non-traditional markets. We'll grow our traditional crops with novel traits for a growing population if science can overcome the fear. We may even take a sabbatical and not grow any crops at all. Farmers will do this and try to stay competitive.

How do we all stay competitive and in business at the same time? I don't know. I think there's an economic theory that states this to be impossible.

I don't believe European and American farmers are as competitive as we are. We have learned to adapt; they have not. They've been isolated and protected. They have a much larger population and a larger treasury. Our problems must be solved at trade talks along with other countries with similar circumstances.

Farmers are also willing to work with our government to help ourselves, but we need the government to tell us its vision for the future of agriculture. Is there a commitment by this country to be a part of it, or are we on our own? Please tell us.

Farmers will do as much as capital and physical energy allows, but both have their limits. A few years ago, we had a program called GRIP. It was formed on the basis of a long-term plan to provide income protection for farmers. The program was not perfect, but it could again provide the framework as an establishment for a new program.

GRIP was not given enough time, in my opinion, to make itself actuarially sound. The program had a life of five years in Manitoba and was to end without a deficit. The premiums were one-third of the coverage. It's like having a $150,000 house with fire insurance at $50,000 a year. The government, both federally and provincially, and farmers couldn't afford it. Let's develop a program we can afford with the long term in mind.

You've heard many comments about NISA today. NISA, I believe and I hope, will form the basis of a very workable program and has worked well over the past.

Am I done?

º (1630)

The Chair: No. You're getting close to the end, though.

Mr. Jim Green: Okay.

There should also be equity built into our natural disaster programs, whether it is an ice storm, flood, or excess moisture. These events are rare. I don't believe they can stand alone as a program.

In closing, Mr. Chairman, and with all due respect to this committee, I would not be fair to this hearing, to many farmers, and to myself if I did not state that we in agriculture view governments as having very little real concern for agriculture.

Where is our minister? There is a standing joke at the Keystone Agricultural Producers' annual meeting. “Guess who's not here again?” I would think with a meeting of that stature, representing many farmers in this province, he would at least make the attempt to come out once in the last five years.

I know this committee will report back to the minister. He will have your input. Why is the minister not with you? If this is such an important issue, why is he not coming to the country? Farmers and farming will continue. We hope we can be a part of putting together a new program with a great deal of consensus and open discussion.

Thank you.

The Chair: Thank you.

Mr. Bromley.

Mr. Don Bromley (Individual Presentation): Thank you for this opportunity to speak today. The previous speakers have touched on many very important topics. I would certainly second their comments.

My time is short. I would like to spend it addressing a few specific points.

My name is Don Bromley. I live on a farm northwest of town. My wife and I have been there for about 30 years. My father and mother moved there in 1930. We grow oilseeds, special crops, and cereals. We have a small cow-calf herd.

I'm very concerned about the Environment Canada and Health Canada initiative and risk analysis of GMO foods produced, and its impact on the registration process in the Canadian Food Inspection Agency. The government must take a lead role in funding agricultural research. The mandate of the research branch was to develop and circulate technology that meets the identified needs of producers, help improve incomes, and maintain competitiveness in the marketplace.

We need to have a better way for producers to become more involved in directing the research agenda and the products with which they come forward. In some cases, the focus has been on developing and releasing technology that provides immediate financial returns for the investor rather than addressing pressing production needs of producers.

The resources used in assisting Monsanto to develop Roundup Ready wheat has huge agronomic risks and threatens our traditional wheat markets. It could be better directed to fusarium leaf disease resistance and adding improved nutritional qualities to make our foods and production more acceptable to the consumer.

The system of requiring matching funds from industry comes with conditions driven by corporate bottom lines and not with the best interests of producers and consumers in mind. Government must ensure there is competition in the seed and crop input delivery. Examination of the process must happen to see if the balance of power is shifting too much in favour of one player and giving the player an unfair advantage.

The goal of the Patent Act and the Plant Breeders Rights Act is to ensure innovation by allowing potential rewards through exclusive rights to the innovator for a twenty-year period after the time of filing. I understand the industry standard for recovery of research and development costs is three to five years. Is the 20-year life span of a patent really necessary?

The goal of the Competition Act is to maintain and encourage competition, efficiency, and adaptability, ensure small businesses are able to compete, and provide the public with competitive prices and product choices. Some events of the past few years have led us to question whether we need to adjust the rules.

We are required to pay a fee and sign a technical use agreement by some seed breeding companies before being allowed to access certain varieties of seed. The added cost increases the risk and more often is not covered by the increase in returns. The technical use agreement stipulates that farmers cannot save seed for next year's production.

Monsanto has recently acquired a patent in the U.S., and has applied for it in Canada, on mixing glyphosate, commonly known as RoundUp, and other existing and new chemistry for the control of glyphosate-resistant volunteers, even though tank mixing is not a new or even unique process.

Farm supply companies are packaging together certain seeds and chemicals for sale. An example is the bag and box program. If you wish to purchase a particular patented technology, you must pay for a certain chemical to go along with it. This restricts the producers from making wise chemical selections to avoid chemical resistance. It reduces pricing competition. It would be like going to a dealer to buy a new air seeder and being obliged to buy another tractor to go along with it.

At what point is it not in the best interests of the public or a company to own naturally occurring genes and commonplace processes and activities? Someone can place a patented gene in a plant that has been on the earth forever. Then the person owns and controls the plant.

This is also true for animals. If for some medical reason a person has a gene placed in the body, does the ownership of the person's body transfer to the research company? It is ludicrous, but under the present regime it could happen.

It is likely that if the seed companies have control of all planted seeds in the interest of profit, they would only grow and process enough seed for the expected market. Many factors can limit the available supply of seeds, such as weather disasters, poor harvest, yield decreasing diseases, and even mistakes in processing. Having only a few controlling the supply of seed is very risky.

º (1635)

The Chair: Mr. Bromley, can you summarize?

Mr. Don Bromley: Okay.

I use Monsanto only as an example. Other companies are doing the same thing.

Research and development of new technologies must continue to ensure a supply of food fibre for society. More public funding must be applied into all sectors of society so they can share in the risks and the benefits. We must balance the risks and benefits on good scientific proof.

The Chair: Thank you very much.

We'll now go to a round of questioning.

I'd like to mention that theoretically and, I guess, legally we shouldn't have the TV. As I've said, I'll take the responsibility for it. We want to get more information on agriculture into the news. For that reason, I hope other committee members will agree with me. The House may fire me when I get back. In any case, we've taken the responsibility and we'll go with it.

Howard, you are a local MP.

Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance): I'd be a part of it.

The Chair: Thank you, Howard.

Rick, do you have a very brief statement for all of us?

Mr. Rick Borotsik (Brandon--Souris, PC/DR): I have questions particularly.

First of all, Charles, we do televise committee meetings in Ottawa. Let's pretend.

A voice: That's CPAC.

Mr. Rick Borotsik: It's all right, this is like CPAC.

I would like to first of all welcome all of the committee here to Brandon, Manitoba. I appreciate that the agriculture committee, in making its western trip, has seen fit to stop here in what I consider to be one of the most vital agricultural regions in the country. I do thank each and every one of you for being here to give us your views as to how agriculture should well be operated in the future.

I have a couple of questions. We'll do it very quickly.

Frank, you indicated that 3% for the NISA contribution, in your opinion, was not enough. How much is enough?

º (1640)

Mr. Frank Thomas: I guess it will depend partly on what backstops are there. I think Walter mentioned it. If it hadn't been there for him in the disaster of 1999, he wouldn't be here today. The only reason I made the comment is, if it is the ultimate backstop, the mathematics suggest if there's 3% matched as 6%, you multiply it by five years. You're going to have 30% of your income protected in five years. It simply isn't enough to protect for disaster.

Mr. Rick Borotsik: You're suggesting it may well be that if we have two out of ten we don't have full production. Therefore, the 30% isn't sufficient to cover off on the NISA program.

You also mentioned education, technology, and training. Are you suggesting the federal government should have more programs available for producers for the new technology, new accounting systems, and new programs that are in place?

Mr. Frank Thomas: In a word, yes.

Mr. Rick Borotsik: I don't have a lot of time to ask questions.

One question is on the federal environmental aspects. You suggested perhaps there could be labs set up regionally. They could look at the effluent being produced by what we consider intensive livestock units. Can it be done through existing programs like the research stations or things of that nature? Do you have an expanded use?

The second question is on the water component. I thought it was fascinating. You said it was going to be Alberta's oil in the future. It's probably Alberta's oil now. Are you suggesting a storage policy or distribution policy developed by federal guidelines, or would it be through provincial guidelines, in your opinion?

Mr. Bob Mazer: I think it has to be all of the above, Rick.

To address the water issue first, right now Alberta is talking about a water diversion program that will literally take water, move it south uphill in the province of Alberta, away from the headwaters that come to Manitoba. We need to understand where the water is coming from. We need to understand the use of the water. We'd have to understand the aquifers. We have to understand all the things that are critical to sustain life in our provinces, obviously.

Walkerton is a huge wake-up call. It's also an economic machine, because, quite frankly, the water flows through us and goes to Hudson's Bay.

If we can understand the water, we're going to try to do some work on it now through the Manitoba Business Council. The province is working on developing a process of watershed management and so on.

Quite frankly, it's helter-skelter and a federal, provincial, and municipal issue. It's very loose.

Mr. Rick Borotsik: What about the effluent? What about intensive livestock operations?

Mr. Bob Mazer: Again, I just happened to be involved in a situation in the regional municipality of Daly, where we will be utilizing a massive amount of effluent from a large hog operation. By the time we get the information back on the analysis of the manure, it's in the ground. I'm suggesting that in the future doing soil and effluent analysis basically on a 24-hour basis will go miles and miles toward protecting our environment for our kids and everyone who is involved. Stakeholders are everyone, including urban people.

Mr. Rick Borotsik: I'm getting the evil eye. Thanks, Bob.

The Chair: Thanks, Rick.

Howard.

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

I'm a cattle rancher up in the Interlake country. Bob Mazer, I'd like to start off by saying how appreciative we were of your corporation buying the implement dealership up in our burg. One of the things we need in our small towns is competition amongst the dealers, availability of parts, and so on. It really is important.

I have a couple of comments.

The Minister of Agriculture has already received suggestions in Ottawa and the province of Manitoba on how they could add, in my opinion, close to $2 billion to farmers without even giving one cheque. It involves school taxes, reducing or eliminating user fees, getting rid of the excise taxes you mentioned, fixing the Pest Management Review Agency, and getting rid of the gun bill. There's $500 million. It's a lot of money. The cruelty to animals legislation, which is going to negatively impact farmers and ranchers, and things like the five-year averaging on income have already been put before Parliament. We're going to be giving a report to the minister again.

I want to deal with one thing that's really been bothering Minister Vanclief. He says those making $100,000 and under are the ones who have most of the financial problems and the question of viability in the future.

Frank, if farmers are making $100,000 gross on a farm, could you tell us how much they could expect to net out of that? I think you have a rule of thumb in the banking industry. Is it 15%?

º (1645)

Mr. Frank Thomas: No, we don't have a good rule of thumb in the banking industry. There are so many variables coming into play here that I don't know if you could. I think a 15% return would probably be on the high side.

Mr. Howard Hilstrom: The minister is looking at which farms to direct these farm safety net programs to so they will help. I wish you'd get Mr. Jim Green and Mr. Murray McCallum to go down to Ottawa and look at your farm operations and say, “Now, can I have a program that will work for someone who is farming 700 acres?”

Murray, do you have off-farm income in regard to your operation or is it...?

Mr. Murray McCallum: Yes, Howard, I do. I have an off-farm business consulting to farmers who are under financial stress.

Mr. Howard Hilstrom: Okay. Would you expect to be able to make a full-time living on 700 acres in Brandon, here in this area? I know this land. Do you think the federal and provincial government programs should enable someone--not you personally, but someone with 700 acres--to make a living for a family? Do you think this is where the program should be going or not?

Mr. Murray McCallum: I didn't really come here today to answer that question; however, I will answer the 700-acre grain farm question. Quite simply, no. There is not a possibility for a 700-acre grain farmer to make a living and service any potential debt on that farm in the environment we're looking at today.

Mr. Howard Hilstrom: Thank you. It's not the acreage, it's the gross that determines farming. We have many small horticultural acres with big incomes.

This is what the minister is trying to determine. We'd like to hear from any of you about how he can have a program to keep whatever kinds of farms going. That's the crucial question because he's designing a one-size-fits-all program .

Jim, do you have any comments on what kind of farm program should be in place and if it should try to keep all farmers on the farm?

Mr. Jim Green: I usually have an opinion on most anything, but I went around the post on this issue with our provincial Minister of Agriculture and the premier a couple of years ago when they introduced a sort of one-time-only program that capped out at so many acres or a gross revenue. I put the example to them at the time that we were a family farm corporation; I have three or four partners if you count my mother and father. To cap it out on the basis of an acreage or of $50,000 didn't work for those of us who have chosen to work together as family farms and take advantage of the economics of scale.

If you're going to introduce a program, I think it has to be fair and applicable to everyone. I do know that it should not be mandatory for everyone. It should be something you can opt into or opt out of, but you cannot pick and choose--one or the other. In fairness, I don't think you can expect to get ad hoc programs if you choose not to go with a national or federal program.

The Chair: Thank you, Howard.

Monsieur Desrochers will speak in his own language. I hope all of you do have....

You can't hear at the back?

[Translation]

Mr. Odina Desrochers (Lotbinière--L'Érable, BQ) : First of all, I want to thank you for meeting with the committee today as it continues with its cross-country tour.

I have a question for Mr. Frank Thomas who works for a financial institution and has likely encountered a number of problems, considering how slow the federal government has been in setting up programs to support agriculture in Manitoba.

To simplify matters for farmers in their dealings with the federal government, what steps do you suggest the federal government take to modernize its existing aid programs and make them more flexible?

º (1650)

[English]

Mr. Frank Thomas: I guess if there is a quick answer to that, it's less bureaucracy. Somebody else made the comment earlier about the only benefactors being those working in the administration of the programs. I don't know if speed in delivery makes as big a difference as the ultimate use of the money captured by the programs. So less administration, less bureaucracy might be the only answer I could give that might satisfy your question.

[Translation]

Mr. Odina Desrochers: Yet, you're talking about your own institution. Financial institutions have been the ones supporting farmers until federal program funding comes through.

[English]

Mr. Frank Thomas: I guess we can be a conduit. The financial institutions, through programs, can supply money with an end result being out there someplace, and we don't mind doing that. The problem, from the point of view of the farmer, is the cost to carry it, because they're going to end up paying us until the money gets there. That is the only issue I believe might be of benefit.

I didn't mention in my discussion earlier the benefit--which I believe was mentioned by one of my colleagues--of the cash advance program. I believe it is still a big issue, not so much as an extra source of credit, but at least in allowing farms to manage the timing of their sales. I think that's an important one that should also be considered.

[Translation]

Mr. Odina Desrochers: Do I have time for one last question, Mr. Chairman?

It's common knowledge that the current trend in the federal government is toward setting national standards. On the other hand, the provinces and farmers' associations are calling for more flexibility. How would you currently assess federal government aid programs and how could they better meet your needs?

[English]

Mr. Walter Findlay: On NISA, for instance, I believe Frank said if it were up to 5%, or whatever, for an enhancement there would be 10% between the matchable contributions. That would make a difference. It would help a lot of producers out there right now if the net eligible sales cap were taken off. Right now you are looking at a very large investment to put a crop in the ground, take it out, or diversify into livestock.

The Chair: Thank you.

I'm going to move on now to Dick.

Mr. Dick Proctor (Palliser, NDP): Thanks, Mr. Chairman.

Marvin Shauf, with the Canadian Federation of Agriculture, indicated in his remarks there's some unspent CFIP money. Does the CFA know approximately how much is available?

Mr. Marvin Shauf: I'm not certain at this point how much is available. The number has been changing, but I understand there is some money that has not been spent within that program. We're suggesting it become part of future funding and stay within the safety net program and package.

Mr. Dick Proctor: What about overall? You said we need better programs. We know the federal government's currently spending about $1.2 billion on payments to the provinces and to farmers. Do you have a dollar figure you think would perhaps begin to meet what we're faced with from Europe and the United States, in terms of subsidies, to keep our farmers on somewhat of a level playing field, which I think you alluded to in your remarks?

Mr. Marvin Shauf: I think the dollar figure is dependent somewhat on the strategy employed in spending the money. If you look at what the United States is doing with the programs they have in place, they're flowing the benefit through grains and oilseeds into pork production, beef production, milling, and malting. All of the rest of the industry becomes the beneficiary of those grains and oilseeds subsidies. That's why 80% to 90% of their subsidies is targeted directly at grains and oilseeds. They flow it through the grains and oilseeds producers to the rest of the industry, including the companies that do the export marketing.

º (1655)

So how much is necessary for Canada, if you're going to talk about dollar volumes? The United States put almost as much into North Dakota between 1995 and 2000 as Canada did in all of Canada. They use huge dollar volumes.

In Canada, some of the strategy that goes along with that is lacking. There's definitely a need for more dollars, but there's a definite need to be a lot more strategic in how we invest that money. We need to have an attitude of investing for growth, and we need to make sure it isn't just siphoned off into the United States.

Mr. Dick Proctor: I have just a very quick question to Mr. Bromley. You mentioned a sort of wish that Monsanto would get out of worrying about Roundup Ready wheat and concern itself with fusarium and leaf resistance.

Could you put it stronger than that? Since there are no markets for Roundup Ready wheat that anybody can identify, would it perhaps be a lot better for farmers if the government weren't going in that direction at this time?

Mr. Don Bromley: At this time, to put it very bluntly, it would be a disaster to release Roundup Ready wheat. I do not want to leave the message that I am in any way, shape or form against transgenics, GMOs, and those kinds of things. I think life itself is a transition of genes on an ongoing basis, and it's going to continue to be that way. There's a tremendous future for agriculture in that area.

As mentioned previously, the problem that is really in our face right now is fusarium resistance not only for customers--food consumption--but also for the livestock industry. Bringing in fusarium-free grain, in particular, from outside the country for our livestock feeding industry is very expensive and cuts into part of the value-added that should rightly go back to our local grain producers.

The Chair: Thank you, Dick.

Mrs. Ur.

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

A common concern we've heard all day from many of our presenters is the lack of funding for research and development.

Mr. Bromley, there's a matching investment initiative through the federal government. Do you feel there should be more dollars put in by government per se than large corporations such as Monsanto? Do you think there's a breakdown because of this program?

Mr. Don Bromley: When you stipulate matching public money with private money, the public money is for the public good, but when you put private dollars in there, they come with tags and conditions, depending on where they come from, that quite often funnel a lot of the profits, technology and benefits that can be reaped from that back to the investing company. If only public money went into these research efforts, all the benefits and profits would remain within the public domain.

Mrs. Rose-Marie Ur: Thank you.

My next question is to our first presenter, Marvin Shauf, from the CFA.

In your presentation you indicated that at trade negotiations, governments need to make a stronger position on behalf of agriculture. I believe Mr. Friesen was at the last trade negotiations that took place. Are you suggesting there may be a shortfall or shortcoming by the federal government at these trade negotiations, that we seem to have a weaker link in trying to get our concerns across?

Mr. Marvin Shauf: No. The point I wanted to make is that right now we've levelled the playing field as far as trade goes--goods flow in, goods flow out. What we haven't done is find a way for Canada to find the money to buy the equipment to play the game. You're sending people out completely stripped in a world that is wearing full suits of armour just across the border.

It's not just grains and oilseeds. I want to state that very clearly. There is a very large negative impact on anything we would use grains and oilseeds to add value to. It's being stripped out of this country. That is important for the future of agriculture in this country, and it's very important for the agreement the provinces and the federal government want to put together.

The Chair: Thanks.

Mr. Anderson.

Mr. David Anderson (Cypress Hills--Grasslands, Canadian Alliance): Thank you, Mr. Chairman.

Maybe this is going to end up being a comment more than a question, but I was interested in your comment about the water resources. If you're going to be concerned about them, you need to move very quickly. The federal government has made it clear that they want control over natural resources. We have quotes from federal bureaucrats saying we cannot let Newfoundland become another Alberta in terms of the oil. I think they've realized the importance of water. You begin to see some of the restrictions and things they've put on. We see DFO moving very aggressively onto the Prairies.

I'm just wondering if you had anything to do with them. Do you have any comment on their role in western Canada?

» (1700)

A witness: No, I have not. We're just getting together and putting our position paper in place now. It's just from the Manitoba Business Council. I know there's a paper on the table, in the provincial domain, on water management and water resources. It's really helter-skelter. We will move as quickly as we can.

Mr. David Anderson: My second comment is to Mr. Green. You had asked the question, are we on our own? I've been a producer for 25 years and still am. I just got into this political thing a year and a half ago in the election. I'm not so sure it isn't worse than that, and that is that we're on our own, but we're also going to have a lot of interference.

This new farm program is almost a year old. When they said it was going to be a five-year program, we didn't know it would take five years to develop it. We don't have any details. We talked to the minister last week about that. There's no money committed to it. There's no agreement between the provinces. There are a couple of objectives to it, one of which is to regulate. Farmers are going to see a lot of environmental regulation coming out of it. They're going to see a lot of food safety regulation.

The second thing is that I think there's a determination to give us less money than we had before, not more. I know from being down there that NISA is a problem. A couple of you have talked about the fact that they want NISA to be the cornerstone of a program. I think the objective is to shake that money loose from NISA, not to make it the cornerstone of what we're doing.

The second part of my comment is that I would suggest that success is going to be found in our local communities. We heard a lot of people this morning, and we're going to hear people this afternoon, who feel they need that salvation from outside. I'd love to bring that, but having been a producer for 25 years, I've heard these discussions before. I would suggest that if you want to succeed, it's going to have to come from your local community, people getting together, banding together, figuring out what to do with your own money, your own funds, and being successful in those ways.

Jim, I'd ask if you had a comment on that.

Mr. Jim Green: I agree with you that it has to happen in our own communities. Unfortunately--and this maybe is not federal jurisdiction--there were comments made that alluded to provincial problems, municipal problems. At some point, we have to know what the rules are. That's kind of all-encompassing, whether Canada wants a viable agricultural industry or whether they just want caretakers, as I've said, for the areas in between our urban centres.

The best solution is our own solution. Give us the resources. Give us the time to work something out. If it's going to be a national or federal program, I think it has to be done through a lot more consultation than what the Minister of Agriculture is suggesting. I understand we have a fairly short timeframe here. We have a problem that's been developing through generations, and to solve it in a year or two just isn't going to work. It's not going to work for everybody.

I would like to think that we want to keep the yard lights on in agricultural Canada. We can do that, given the resources. I hate to be one of the farmers looking for the mailman to come along, as somebody mentioned earlier, but the reality is that some of us do need those measures to keep us going or to get us out. We need to know what the vision of agriculture is for this country. The sooner we can get it, the sooner we'll devise our own means to either move on or continue to grow.

The Chair: Thanks, Jim.

Rick has a very short one.

Mr. Rick Borotsik: This is a pure policy question to Frank, first of all, and I guess then to the farmers.

We talked about the cash advance of $50,000. Should that be increased? If so, what guidelines should be used with a cash advance? Jim has a large farm and Murray has a smaller farm. Should they be equal in the availability of a cash advance? I'd just like a comment.

Mr. Frank Thomas: My comment wasn't specifically about the Wheat Board cash advance. It was cash advances to everything: the canola growers, the fruit growers, the whole thing right across the board. Is it all $50,000?

Mr. Rick Borotsik: Yes. Should it be more?

Mr. Frank Thomas: Well, what it does, in my eyes, is help market in a fashion that will allow the producer to get the best bang for his buck. I think it can be more. When I say that, I know you're going to ask how much more, and I don't have an answer to that.

Mr. Rick Borotsik: Jim, should it be more?

Mr. Jim Green: I believe it should be, but it has to be based on security, the same as what the banks will do. What's happening now is you go in with your cash advance application and present it to your banker before you get the cheque. I've heard of many cases where operating lines have been reduced. If you're going in for the $50,000 cash advance, your operating line is reduced by $50,000. So you're not really gaining anything other than getting $50,000 interest free. The maximum available is $250,000, I believe, and that excess is at a reasonable rate of interest.

There's another concern. We're seeing organizations like the Farm Credit Corporation aligning with grain companies. I guess my concern is whether the banking industry is going to de-market agriculture. Are we going to be tied in, not only with bags of seed and boxes of chemicals but with who we get our credit from?

The Chair: Thank you, Jim.

With that, we conclude the first round. We have three rounds today, at least. We'd like to thank the presenters who have just come. Without any break, we'd just ask if you would leave the table.

Our clerk has the new names to come, and we'd like to invite them to do their presentation.

» (1705)

We'd like to welcome our second round of presenters. I'm not sure we're stationed around the table the way my lists go, but in any case, I will follow the list.

First of all, from Brandon University, Dr. Richard Rounds.

Dr. Richard Rounds (Director, Rural Development Institute, Brandon University): Thank you for the invitation. I was listening to the producers, and I won't pretend to speak on their behalf; they can bring up the absolute issues.

I guess my perspective is a little different because I deal primarily in economic development in rural communities. Farms don't exist in a vacuum. Part of the diversification options that farmers want to have means doing things outside of agriculture. To allow that option for farm families, we need healthy communities as well as healthy farms. Farms are still getting bigger, so we're still going to have fewer farmers, and the rural kids who want to stay there have to have options other than the farm, as well.

That leads me into the fact that I think the place that Agriculture and Agri-Food Canada can probably help more than they are right now is in value-added industries. But make sure they're rural based. A vast majority of them now are urban based. They don't do a thing for rural communities.

I'll give you a classic study. You could take the Canadian commitment to the Kyoto agreement, and probably solve most of it. You could create markets for agricultural products. You could create six major industries in six major prairie communities, hire 600 people, and all you would have to do is make a 10% ethanol law part of the federal energy policy. And it's good business. But if you build one big plant in Calgary, it doesn't help very many people in the Prairies.

The second point I'd make is one that is maybe a little bit different from what other folks would bring up. I think we have to think longer term as well as shorter term, and it's hard to do, because farmers have to face it year to year. But the longer term to me needs a framework. I think we had a potential framework way back in the sixties, when the whole concept of rural zoning was kicked around for about 10 years. The only thing lasting that came out of that was the farmland protection acts against urban encroachment. But there were a lot of other options there. I think if we were to revisit that, it would begin addressing some of the longer-term problems.

I'm not sure where you stand on climate change. I think it's a reality that's coming; it's just hard to predict how fast and where. But certainly we've had tons of Alberta cattle over here in Manitoba in the last couple of years trying to find something green to eat, with the option of moving north on the prairies to avoid the droughts that seem to be increasing. You also have the option of moving east into Manitoba.

We need a rural zoning framework, not as a mandate but as a policy to look at how you can help producers make the shifts that seem to be coming down the road. It might be something very fruitful to look at in the long term. In other words, it's R and D--not genetics, but R and D in the sense of helping producers manage the inevitable change that I think is coming.

I'll leave it at that.

The Chair: Thank you very much.

From Agricore United, Mr. Wayne Drul.

Mr. Wayne Drul (Director, Agricore United): Thank you, Mr. Chairman.

Agricore United appreciates our first opportunity as a newly merged company to appear before you. We also thank committee members for taking the time to hold these meetings or hearings in Western Canada.

We have provided the committee members with a fairly lengthy submission. We apologize that a French version is not available. We were not able to get it translated on short notice.

» (1710)

Of course I won't read the submission, but I do wish to highlight a few areas within agriculture where we believe the federal government has a key role to play.

The first and foremost of these roles is in the area of food safety. In our view, Canada has a very good record on food safety. Customers in Canada and around the world have a high degree of confidence in the safety and quality of Canadian food products.

That confidence is largely due to the efforts of Canadian farmers and other players in the food supply chain. The Canadian Food Inspection Agency and the Canadian Grain Commission have also played important roles in maintaining that confidence. The Canadian government must ensure this confidence continues. Canada must remain vigilant to ensure that threats to food safety or to the health of plants and animals, such as hoof-and-mouth disease, are minimized.

The second key area I wish to spend a minute or two on is the federal government's role in trade negotiations. Along with food safety, this is the other area where we believe the federal government needs to devote considerable attention.

Recently China's ministry of agriculture released regulations in regards to GMOs that could be implemented by March 20, 2002. These regulations could seriously impact our Canadian canola industry by restricting access to Chinese markets. This action needs to be taken seriously by this committee. It needs to advise the federal government to take immediate action to investigate and ensure that these rules are not used as a non-tariff trade barrier by China, restricting Canadian exports to this important market.

We do not need to remind this committee about the damaging effects of the production- and trade-distorting programs in place in Europe, the U.S., and elsewhere in the world. In our view, these market distortions are the primary reason behind the financial difficulties facing many prairie farmers.

Agricore United is most alarmed by the potential harm to Canadian farmers that may arise from the implementation of the new U.S. Farm Bill later this year. As you may know, last week the U.S. Senate adopted its version of the new bill, and it contains many elements that are potentially quite harmful to Canadian interests. In particular, the proposed increases in loan rates for wheat and corn, and the extension of the loan rates to peas, lentils, and chickpeas, could very well lead to substantially lower returns for these crops in Canada.

We believe this issue is the single most important trade priority for the federal government. Agricore United asks your committee to view this as a priority issue as well.

With respect to safety nets, we understand the federal government is proposing a comprehensive safety net program to replace NISA, CFIP, and perhaps other programs. We approach this proposal with an open mind; however, we do not have enough detail about the proposed program to provide specific comments on the merits of this new direction.

In our submission, we put forward four principles that we believe should be adhered to in the design of any farm support program. We will be judging the merits of the new federal proposal on the basis of these criteria. We do agree that some changes are necessary.

In our view, CFIP has failed to adequately address the needs of farmers. A comprehensive approach is perhaps an improvement. However, a better approach may be to discontinue CFIP and use those dollars to improve the crop insurance programs, cash advances, and NISA. Some of this money could be used to provide trade injury payments to compensate farmers for the consequences of market distortions beyond their control. Our submission provides greater detail on how these trade injury payments might be administered.

Agricore United's submission also provides comments on research and development, transportation policy, fuel taxes, road expenditures, user fees, and regulations. I'd be happy to provide comments on anything in these areas.

Thank you for your attention. I'd be pleased to try to answer any of your questions.

» (1715)

The Chair: Thank you, Wayne.

Now we have Mr. Muir from the Manitoba Broiler Hatching Egg Commission.

Mr. Robert Muir (Manitoba Broiler Hatching Egg Commission): Thank you, Mr. Chairman.

Good afternoon. My name is Robert Muir. I'm a mixed farmer at Russell, Manitoba. I produce grain, beef cattle, and broiler hatching eggs.

Today I'm representing the Manitoba broiler hatching egg producers' association. As I previously stated, I am a farmer. Through the years of ups and downs in the grain and cattle businesses, I've always been able to count on my hatching egg business to help with the cashflow and even out the lows in the grain business.

Although the Manitoba broiler hatching egg business is a small and little-known industry, it has helped keep many farm families on the farm for many years without monetary support from government. The good news is that this profitable industry has great potential to grow. Unfortunately, without intervention from the federal government, that growth will be lost to Manitoba producers.

Let me give you a little bit of history on the industry and on what needs to be done to rectify the problem.

Broiler hatching eggs are a supply-managed product with regulations approved by government through the Natural Products Marketing Act. When the free trade agreement was signed between Canada and the U.S., a historic number of Canada's hatching eggs, approximately 20%, were legally allowed to be imported from the U.S. The majority of the provinces chose to use domestic eggs and to keep their import papers for emergency use. Manitoba was one province with two hatcheries that used as many import eggs as they could.

This situation worked all right. Everyone could live with the fact that when there was a need to increase production in Manitoba, 80% would be produced by Manitoba producers. Then came April 1995, when the Department of Industry, Trade and Commerce revised the act, stating that import papers could be traded between provinces. This enabled hatcheries to buy other provinces' import papers.

Bringing these eggs into Manitoba displaced domestically produced eggs. As a result, import eggs, which numbered 5 million before 1995, went up to 10 million after 1995. Producers were told that their product was no longer needed. Farms were lost, and Manitoba's ability to produce more hatching eggs was very restricted. It's estimated that since that time we have lost $9.5 million in farm gate sales and $37 million in gross domestic product.

Our dilemma today is that when the national agency, the Canadian Broiler Hatching Egg Marketing Agency, allocates quota to Manitoba, we cannot fill it. Any increase in chicken growth, or production, comes from the U.S.

As an example, in 2001 the Manitoba chicken market grew by 6.2%. The total growth in the Manitoba hatching egg market was 8.2%, but only 0.9% of that was produced domestically. We produced only 67% of our total hatching egg production. That means we could have had another 42,000 broiler breeder hens on Manitoba farms.

In order to fix the problem, the Minister for International Trade must revise the act passed in 1995 and amend it to ensure the elimination of serious injury to producers in provinces that abuse the import restrictions. This can be done only with the cooperation of the federal government. If nothing is done, any new allocation for more quota in Manitoba will be taken away from the province, penalties will be levelled against Manitoba producers for underproduction, and more producers will lose their farms.

As I mentioned at the start of my presentation, my small hatching egg operation is one of the things that has kept me farming over the past 26 years. If eight or nine more young farmers could have the production of these 42,000 hens we need in Manitoba, it would go a long way toward making their farms profitable.

If the federal government is seriously looking for ways to improve or help agriculture in Canada and Manitoba, this is one small thing that can be done. This bill has to be changed to prevent more serious damage to a potentially excellent industry in this province.

Thank you for allowing me to make my presentation. If you have any questions, I would be glad to try to answer them.

The Chair: Thank you, Mr. Muir.

Mr. Mainil.

Mr. Art Mainil (Individual Presentation): Thank you, Mr. Chairman.

I appreciate the opportunity to bring a brief to this meeting. I farm in southeast Saskatchewan, about 30 miles north of Estevan. I'm a mixed-grain farmer.

My concern is the Canadian Wheat Board. The Canadian Wheat Board is government, the federal government. Contrary to what Ralph Goodale says, the Canadian Wheat Board is government, the federal government.

» (1720)

The Canadian Wheat Board is costing western Canada billions every year. There is a conspiracy between the Canadian Wheat Board and the federal government to confiscate grain production in western Canada on a yearly basis. Value-added product--for instance, pasta--is stonewalled by the federal government and the Canadian Wheat Board. Organic producers are being destroyed by the Canadian Wheat Board and the federal government conspiracy, with different laws for western Canada and the designated area, a designated area of second-class citizens. Second-class citizens in the designated area are denied added value and are subject to confiscation, manipulation, and discrimination.

Milling durum today in North Dakota is bringing between $6.50 and $7 a bushel; in the designated area, $3.90. Quebec farmers last year realized $6.86 for milling durum. I've been in Quebec three or four times and I've never seen any durum grown. I wonder if it was rerouted from western Canada.

Quebec, Ontario, maritime, and B.C. farmers have access to no-cost Canadian Wheat Board licences, no buy-back--different laws for different people.

There's no accountability. In 1997-98, the Canadian Wheat Board borrowed $185 billion to do $4.5 billion worth of business; 90% of it was cash. We'd like answers. Where did they borrow this money? How much interest did they pay? When was it paid back? Who is the financial guru in the Canadian Wheat Board?

Western Canada is treated with complete contempt when you ask questions.

Let's look at why it will continue. We don't have property rights in Canada; there's no law that gives us the right to own property. Endangered species legislation--another conspiracy against western Canada--confiscation without compensation. On gun legislation, somebody prior said $500 million; I've read just recently $700 million cost and still going, another conspiracy aimed at western Canada, confiscation again without compensation. The answer: separation for resource-rich western Canada.

Voices: Hear, hear!

Mr. Art Mainil: In the last federal election, the Canadian Alliance offered a voluntary Canadian Wheat Board if elected. They swept the west. Western Canada separated in the last federal election. All we have to do now is make it official.

We have to have parity in western Canada and a justice system that respects that. Today, our judicial system is an arm of government used to implement and protect immoral and corrupt government policies. Government appoints and pays our judges. Judges have to be elected. The answer is separation. We have to say it, we have to mean it, and we have to do it.

Thank you very much.

» (1725)

The Chair: Ken.

Mr. Ken Harms (Individual Presentation): Thank you, Mr. Chair.

I'll introduce myself. My name is Ken Harms. I come from a little community about a half an hour south of here. I was born and raised on the farm. In 1976 I got into the agricultural input retail sales business. Initially I started off as a custom spray operator and then moved into sales of fertilizer and crop protection products. In 1984 I worked my way up to management of an agricultural retail sales branch for a large independent agricultural retailer. I worked in this capacity for the same organization in Waskada and Killarney until the spring of 1999. I then moved over to a large U.S.-based corporate food company and worked at Nesbitt until December 31 of this past year as manager of the farm input retail sales division.

Currently, as of January of this year, I purchased a Crop Tech franchise. Crop Tech is an organization that acts as an independent consultant for the farmer. We help the farmer purchase his inputs better, help find the highest prices for his crops, and help the farmer, through field scouting, make informed decisions on how to produce crops more profitably. We are not tied to any products or companies, and therefore we can provide unbiased information to help the farmer succeed. Our only agenda is to help the grassroots of agriculture, the farmer, become more profitable.

As a consultant, I have four areas of concern. First of all, buyouts, mergers, and consolidation of the agricultural industry seem to be the normal trend of the times. We see this in the grain industry, fuel business, crop inputs retail sales, farm machinery sales outlets and manufacturers, crop protection product manufacturers, financial lending institutions, and seed suppliers. With this trend, who the customer is has shifted from focusing on the farmer to the shareholders.

With increasing the size of corporations and the number of chiefs, the operation of the organization is often hindered by people on power trips and the lack of understanding by the CEOs and directors of who our customer is. Every person should consider the person working below him or her as their customer rather than the person above them. All that seems to matter is market share and profitability.

Secondly, the average age of the Canadian prairie farmer, if you take a look at the room, is likely in the mid to late fifties. What can be done to get the young people back on the farm? Who'll be farming in 10 years? Do we want to allow corporate farms? Are we willing to pay higher prices for food when the corporate farms take over? Is there any incentive for anybody to start farming?

Thirdly, ad hoc programs are not the answer for the long-term sustainability of agriculture. Prices for the crops that farmers grow are not always high enough to cover all the expenses a farmer incurs to grow that crop. This shortfall in farm income may or may not be in the farmer's ability to control. Weather may play a role, or it may be mismanaged affairs by the farmer.

Political intervention in farm policy in the rest of the world may, and likely will, influence the pricing of grain that our Canadian prairie farmer produces. Sometimes it is very difficult for a farmer to plan for a year when he doesn't know what the prices will be for his crops in the fall. He has crop insurance that he can bank on, but he's still, to a degree, dependent on what the rest of the world will pay in order to determine the value of coverage he has. There needs to be a long-term plan in place to reduce the risk a farmer is exposed to by the global marketplace and the political intervention in agriculture in the rest of the world.

Fourthly, the Canadian Wheat Board has served its time in the way it functions now. The board has in the past tried to work for the farmers so that all farmers were treated equally, and they've done a reasonable job. However, times have changed now, and the board sees itself as a transportation expert. It has tried to negotiate a better freight rate through a tendering process put in front of the CNR and CPR. Unfortunately, not all farmers live beside one another, or live beside one or both of these rail lines. The farmers who have better access to the line that wins the tender have a distinct advantage in opportunities to deliver wheat. There need to be some changes made to the way the Wheat Board functions.

I have four recommendations, again from the perspective of a consultant.

First, I'm not sure what we can do to change the behaviour of the large corporate world; however, one has to ask the question: how would I like to be treated when I make a purchase? I believe the federal government should strongly encourage small business starts and allow these small companies to refocus on the needs of the agricultural farmer, who is the grassroots of agriculture.

The high cost of farm equipment and the size of the equipment are likely the most influencing factors in the survival of the family farm. The big machinery manufacturers have pushed the idea that bigger is better; however, bigger is costlier, and the farmer is forced to farm more land to justify the cost of the large, expensive equipment.

I would like to see the government support new, small farm equipment manufacturers through lower interest rates and/or tax incentives.

Secondly, who will farm the land in the next--

» (1730)

The Chair: Can you make it more concise now, because we're getting over time.

Mr. Ken Harms: Okay.

What kinds of programs, if any, would work to sustain agriculture in Canada? In agriculture there will always be good times and bad times, good crops and bad crops, good prices and bad prices. There will always be good farm managers and there will be farm managers who need some help no matter how good the crops and how good the prices of the grain.

A number of years back, we had a program called GRIP--

The Chair: I'm going to have to cut you off.

Mr. Ken Harms: Okay.

The Chair: I'm going to give you 30 second to summarize.

Mr. Ken Harms: I have copies of this, so I will give every member a copy of the presentation.

In conclusion, we have to be alarmed about the situation that lies out at the grassroots. We need to encourage the growth of small farm supply businesses that can focus on the customers' needs. We want to encourage the development of strategies to help the young farmer get started. We'd like to see a gross revenue insurance program developed, with optional participation. And we need to adjust the way the wheat is handled for our prairie grain producers and allow our producers the freedom of choice to market the wheat as they choose.

Thank you.

The Chair: Ms. Rowland.

Ms. Charlene Rowland (Individual Presentation): Thank you very much, Mr. Chairman.

It seems I'll be expanding a lot on some of the issues you brought up, Ken, with regard to young farmers.

I'll just introduce the program I coordinate, the organic farm mentorship program. It's based out of the town of Clearwater, Manitoba, where I live. Basically, this program links up experienced, successful organic farmers with new farmers in their area of the province. They work together throughout the season to develop food products that the young farmer will then be able to market off of their own farm.

Through this program we're hoping to encourage a regeneration of our rural communities. From facilitating this program and from working within rural Manitoba throughout the last ten years, I have seen an ever-decreasing number of young people, of people my age, who want to stay in the farming area and who want to be based in rural Manitoba. It's a very depressing thing for me. Like many other presenters here, I wonder who the next generation of farmers will be.

The program I coordinate is part of a larger organization that's been newly developed in Manitoba, called the Organic Food Council of Manitoba. It's really just a networking and educational program. We're working towards raising more public awareness of this growing market.

As already mentioned, I've seen a decline in the number of young people in the rural areas. I don't need to tell you about all the schools that are closing. The office that I operate is actually based out of the Clearwater elementary school. There are no more kids to keep the school open, so they gave me office space there. The elevator is closing down. With all of these small towns dying, the rural communities are also suffering, and it's those communities that are really the fabric, or the network, I feel, of the farming industry and of agriculture in Manitoba. That also is a very sad thing for me.

I think it's something we need to look at as communities, but perhaps the government also could focus more on inspiring youth to choose long-term careers in agriculture, to stay on the farm.

The question is, I guess, how can we do this? I'm really impressed with a recent initiative, the Bridging Generations initiative, being administered by the Manitoba Agricultural Credit Corporation. I think this is a really good start in helping with farm succession and the continuance of our rural communities.

A few features of this program I think are a little bit lacking. It does seem to be based on helping young people continue their family farm, but it doesn't really have that much of a focus for youth coming into farming from outside an agricultural background. That is one area that we need to look at, because a lot of young people coming into farming from outside, or coming from universities or colleges, don't have that practical experience.

I see the organics agricultural sector as being a really positive thing, and a way that young people could get into farming. With a very low start-up cost, a young person could take over a couple of acres and see a very quick turnaround and a very quick economic income generated off a small piece of land. Some farmers that I work with produce organic produce, and off less than an acre they can generate $10,000 to $15,000 a year. I think this is a very significant financial opportunity for young people, and it would offer a very easy means for young people to get into farming with a relatively small start-up cost.

I think the promotion of small-scale organic agriculture is a really positive thing. Promoting diversity in farming will attract young people to agriculture. Therefore, again, it will regenerate rural communities and help to inspire young people to stay. We really need to take a look at who our next farming generation will be. We need people to feed the future.

In order to do that, we need to educate the youth. We need to teach them how to do this. Everybody here knows that farming is not just about planting a seed, adding amendments, and then harvesting a crop. We have to be skilled agriculturalists and smart business people, and we also have to have a large amount of marketing savvy. We have to understand the demanding international trade market, which seems to be changing on a daily basis.

» (1735)

Just to summarize what I've been saying, we'd really like to see more promotions toward the transmission of this knowledge. With all these farmers retiring.... I recently read a statistic that within the next decade a total of 120,000 Canadian farmers will be retiring. And my goodness, that's a very large amount. As one person has already mentioned, the average age of producers in the room here seems to be about 55. We really need to be taking a look at who the next farmers are going to be. We need to be educating those kids. I think looking toward alternative farming or organic farming is a really positive step toward inspiring young people to get into farms in a small-cost way.

Thank you very much.

The Chair: Thank you.

Mr. Murray Downing, for five minutes.

Mr. Murray Downing (Individual Presentation): Good afternoon, everyone.

For those of you who do not know me, I am Murray Downing from Reston, Manitoba, which is approximately one hour west of Brandon. Along with my wife, Linda, and my 10-year-old daughter, Lindsay, I farm 2,200 acres. We are now in grains and oilseeds. We also had a 60-cow and calf operation, but the cows had to be sold so we could continue in the business of farming. We felt we could not have another year like the last one, that it could only get better. We were wrong.

Mr. Chairman and members of the Standing Committee on Agriculture and Agri-Food, I welcome you to Brandon, and I thank you for giving me this opportunity to speak to you on the future role of government in agriculture.

It just seems time and time again, when new farm programs are developed, they always seem to miss the objective they were designed to do. Why is that? The Canadian Federation of Agriculture was established in 1935. Numerous other farm organizations have been established through the years. When bureaucrats, government officials, and farm leaders sit down to talk about new programs, what goes wrong? If this process was working, why are we here today?

I feel I have to be here today, as a grassroots farmer, to help an industry that from our point of view is in dire straits.

Programs in the past have been designed to stay within a budget. We need a program designed to meet the needs of the agriculture industry. We need that program now. AIDA and CFIP are examples of programs that were designed to fit a budget, not address a need.

Under the WTO rules, producers could have been paid up to 70% of their loss, not 70% coverage that was used. Producers who receive other government support through crop insurance--CMAP I and II--on seeded acres cannot, by WTO rules, use these to build up their reference margins. But there's no rule stating they have to be put down as income in a claim year.

The impact on my farm in the last three years has been $67,276. I divide that by 2,200 acres, and it's $30.58 an acre. Do you understand where I'm coming from? AIDA and CFIP met the budget, not the need.

I want to refer to a survey that a group of grassroots farmers did in Regina at the agribition, and in Brandon at Ag Days. We had 703 people fill out a survey for us. It represented 1,385,000 acres.

One of the questions we asked was how the farm safety net programs AIDA, CFIP, NISA, crop insurance, and cash injection address their farming financial situations in times of need. In the Regina survey, 22.9% said they were beneficial; 77.1% said they were of no benefit. For Brandon, 30.8% said they were beneficial; 68.1% said no benefit.

Another question we asked was if they had outstanding bills from previous crops. The Manitoba grain farmers said 51.4% of them had bills; 48.3% of the Manitoba mixed farmers did. The Saskatchewan grain farmers said 37.9% did; and 38.2% of the Saskatchewan mixed farmers did. The point I want to make here is if diversification is the answer, why is there not much difference between a mixed farmer and a grain farmer?

Another question we asked was what farm safety net programs would be the most beneficial to their farming operation's viability in future. One of them we asked about was enhanced crop insurance that covered the cost of production. The Brandon results were 45.5% of the people; Regina was 50.6%. The famous CFIP rated at the bottom--in Brandon, 8.2% of the people wanted it; in Regina 4.5%.

As you can see from our survey results, the picture is not pretty.

What do we need? We need a cash injection for the failure of these safety net programs--and we need it now, because a lot of us won't be able to continue. We need a safety net program that covers cost of production, is predictable and bankable, and will encourage youth to return to the industry. That is what is needed. I don't know what more we can do as grassroots farmers to get this message across.

» (1745)

We have proposed a cost-of-production program, which was designed by farmers for farmers and taken to over 40 town hall meetings in Manitoba and Saskatchewan. We have appeared before the National Safety Nets Advisory Committee with this proposal.

Committee review is included in this presentation. We organized and participated in numerous tractor rallies and trips to Ottawa with 35 other concerned grassroots farmers. We rallied at a provincial legislature, slept in the provincial legislature, and met with the Prime Minister's task force in September at a farm near Winnipeg with 12 other grassroots farmers. Over 60 grassroots farmers made a presentation to the provincial Standing Committee on Agriculture. There have been ongoing discussions with federal MPs, including some of you here today. If our message is not getting through, please tell us what we are doing wrong.

In closing , I hope the Standing Committee on Agriculture can take our concerns and make them heard. Be our doctor, not our undertaker. Help us survive; don't bury us. Just remember that we, the people, do not elect bureaucrats, we elect members of Parliament to work for us. Please put some control back into the Sir John Carling Building. Don't let one man's dream become an industry's demise.

Thank you

The Chair: Thank you, Murray.

Mr. Simms.

Mr. Curtis Simms (Individual Presentation): Thank you, Mr. Chair and committee members. It's good to see the interest in western Canada.

My name is Curtis Simms. I come from a grain farm about halfway back to Winnipeg in a little place called MacGregor, for those of you who aren't familiar with the geography.

One way to look at government's role on a financial continuum is that if you look at the upper end, you'll find programs that require a dollar in for a dollar out. We're talking about direct income support programs in general. I have no apology for asking for support under those kinds of programs. The reason the state was invented in the first place was to protect its citizens from outside groups and governments. We most certainly have that in the U.S. subsidy programs we're seeing. Even the Europeans are gradually starting to improve their situation. So I make no apologies for that. That's an example of a direct dollar input.

Slightly below that would be an environmental-type program that involves farmers, a green program, if you will, perhaps in some way affiliated with the direct income support program.

As you go down the continuum, you get into what I'll call leverage dollars. Farm research is one of the best examples, with numbers quoted of an eight-to-one return even in the short term, let alone longer-term benefits.

The government spends lots of money sending people all around the world to conduct trade negotiations. It's a long, difficult, slow process, but it's absolutely critical, and the returns over time can be very substantial.

The last category is what you might call an inverted case, whereby excess regulation and excess government intervention in the economy slow it down. The government removing its undue influence would result in a healthier economy, which would produce tax dollars for the government, so money would be coming back in.

One example of overregulation that bothers me, although I'm not directly involved, is the Department of Fisheries and Oceans. Apparently, they've hired 120 people to run around and try to find every minnow that ever existed in Manitoba in the last 30 years in every ditch you ever saw. It's not about fish; it's about building a bureaucratic empire. Suddenly we don't have a crisis in fish management.

The excess government intervention that bothers me the most is the monopoly provisions of the Canadian Wheat Board. It's time that we as farmers had control of our grain and a chance to sell it as we wish. This would result in continuous long-term input into the western Canadian economy and for farmers and many things you might otherwise imagine.

How do we get there? How do we get started at this? My proposal, which isn't completely new, is that a new program be established with the Canadian Wheat Board whereby we as farmers sign contracts for sales of wheat, as is the case now. However, for 25% of that signed-up grain we would receive an automatic no-cost export permit. This permit would have to be transferrable so that as grain moved forward to brokers of our own choice, volumes could be accumulated for delivery to other markets such as the U.S. and, under WTO agreements, probably internationally as well.

This plan would allow us to move forward in...I hate to say it, but we're virtually following the Ontario example, as much as that might hurt my western ego. In Ontario, as some of you may know, the marketing board has allowed their farmers to sell certain amounts of their own production to whomever they wish, to local producers or into the U.S. I believe the numbers started at 200,000 tonnes. It's now 300,000 tonnes.

The U.S. trade actions add urgency to this discussion. As I mentioned earlier, trade negotiations are a very important function of government. From what I can tell, the U.S. seems to be pretty serious this time around. Americans are not in a good mood, justifiably perhaps after September 11. They might actually do something real this time that could really hurt us as producers.

The plan I have proposed has merit in this field. You will notice that the U.S., to my knowledge, has not made any noise about the Ontario wheat being sold into the U.S. because it's a private sale, whereas here in western Canada, the Wheat Board makes a very large, conspicuous target--and a secretive one. The U.S. feels the Canadian Wheat Board is deliberately subsidizing or undercutting prices on grain going into the U.S. I don't think this is deliberate, but it isn't that efficient. The Wheat Board makes a mistake when it sells grain below its true value. It is not a deliberate policy; but through carelessness and lack of attention, it probably does happen.

However, our position as Canadians is that wheat is going there because the American processors need it. It's a quality thing, and I concur with that as the fundamental reason. As much as I don't like the Wheat Board, I have to be fair to it in a few areas.

Private sales going in become the arbiter. That's the merit of this kind of program. This isn't a discussion between academics and bureaucrats over whether the basket is half full or half empty; it is a true, specific assessment and analysis of what the true value is, whether it is value or quality. This is timely to help accomplish that objective.

Thank you, Mr. Chairman.

The Chair: Thank you, Mr. Simms.

I'm glad you finished on the quality issue. As western farmers, the world recognizes you produce one of the best products available. It just doesn't compare with other places in terms of quality. You know its worth.

Mr. Yaskiw.

» (1750)

Mr. Stan Yaskiw (Individual Presentation): Thank you, Mr. Chairman and committee members, for allowing me the opportunity to speak to you this afternoon. I have had the opportunity several times to make presentations to the standing committee and never took it; maybe I wasn't motivated enough. I'm motivated enough now, partly because of my own situation and partly because of the conclusions several of my friends and peers from my community have come to over the last couple of years.

I come from Borlaug, Manitoba, about 90 miles north and west of here. I farm 2,500 acres. Probably 90% of the grain I grow is either premium or an IP crop. The situation of most of my friends is about the same. We're probably about the same age, most of us, but I don't think that's an important factor. The growth stage of our farms is probably more important.

We've come to the same conclusion. After experiencing three years out of the last four of poor production, we've had a fairly significant hit to our net worth. Probably when we do our numbers, we'll be wondering whether it's worthwhile for us to roll the dice again and gamble some more of our net worth. Furthermore, some of us have children who have already come back to farm. I have one who wants to farm. I'm not sure it's in his best interest or ours to have him proceed along that line.

You know, probably most of us are sitting on $1 million, $2 million or $3 million in assets, and we could probably liquidate those and live fairly comfortably or go into another line. We're in a position now where we're not sure whether it's the right thing to stay in this industry, because we don't know if it's healthy. We're not just bucking the guy next door or producer next door; we're bucking politics and things that we don't have any control over. I firmly believe, if you put us toe to toe with anybody around the world on a level playing field, we can compete, but we're not doing that anymore.

The safety nets that are in place don't seem to have done the trick over the last four years. I'm not saying they weren't appreciated and didn't help, but they did fall short, particularly when you're in a declining gross margin. It's a downhill slide that you can't get out of. We're playing such big-stakes poker here that if you lose big, you lose a lot of dollars, and in a slim-margin industry it's hard to gain that back.

So those safety nets, if they are basically okay, need to be shored up and be a little bit more effective. The triggers have to be a little quicker to execute, and the level of support has to be more for those times that you need them.

I'm going to simplify our reality to revenue and cost. Those two parts of the equation are what makes our business go around.

Prices are not good. They are being affected by global subsidies or subsidies from other nations. There's some contemporary thought that, although those might be a restriction to each other, like between Europe and the United States, more so it might be a restriction for production getting going in Brazil. If that in fact is the case, I'm not sure we should be tinkering with the price side of it.

The other side, which is a bonus for the livestock industry, is that the U.S. government wants to subsidize our livestock industry. Well, I don't know if we should beat that up too much. That's okay, but on the same side, maybe we should be prepared to shore up the grain and oilseeds guy here for that herd.

There's a perfect case in point this year with feed grains. There's no question that we're probably looking at a reduction of 50¢ to a dollar in the value of our feed grain because of the corn-cutting across the U.S. I didn't have a good crop of barley with 65 bushels, but you give me another buck, and it puts me into the black and I don't need to have safety nets. So if I'm the trade-off here, is that fair? I don't think so. I think there should be some addressing of that.

More so, we think there could be a lot more focus put on the cost side. Government can and should try to get rid of any impairment to any cost-reducing factors as far as regulation or red tape governing input costs is concerned.

I'll give you an example. About 15 years ago, probably most of those same guys that I'm talking about, and I, could have made Roundup for $2.50 per litre, but we couldn't because it was illegal. We could have imported it from Venezuela for $4.50, but again we couldn't do it because it was illegal. But on my farm it would have saved probably $20,000. Similarly, this year the FNA, the Farmers of North America, could bring in glyphosate that they could formulate themselves for $4 per litre. The cheapest our buying group, which buys about 20,000 a year, can get so far is $5.90. If I buy 2,500 litres, that's a significant saving, and for what? All the registration work has been done and everything else. I don't understand.

I think there's some opportunity here, because Canadian farmers are looked on as being aggressive and on the cutting edge. Companies come to us with technology or give it to us to prove. We tweak it and make it work, and there's a success. If there's an advantage, we get it for a short period of time, and afterwards we lose that, especially if it's exported to our competing producers around the world. I think there should be mechanisms in place that try to get part of the royalties from that kind of benefit for people who are on the cutting edge.

» (1755)

I'll wrap up. I have a few more things to say, but I guess I won't be saying them.

One very important thing, though, is that anything we do with this industry has to be founded on good information. I don't think we always have good information. We need integrity of information legislation. It's imperative for us to have good figures to work with. Then we can build a solid future for ourselves and generations to come.

Thank you.

The Chair: Thank you, Stan.

Kathleen is last in this round.

Ms. Kathleen Patterson (Individual Presentation): Thank you, Mr. Chairman.

Good afternoon, Mr. Chairman, ladies and gentlemen. My name is Kathleen Patterson from Deloraine in southwest Manitoba. I'm not only a farmer's wife but a farmer. The last time I addressed the provincial standing committee in April, and the federal standing committee in September, I was a farmer; but sad to say, on December last year I sold my farm to get out of debt. The safety net programs AIDA and CFIP did not cover my problems.

We're all here for you to listen to our suggestions, I hope. I think it would be difficult to have one plan that fits all; each province has different farm needs, as does southwestern and eastern Manitoba.

As for safety nets, I would like to see within the next year a short-term assistance program and a long-term investment program. No matter how much money farmers have in NISA, the grain and oil sector is in a bad situation.

In 1999, here in southwestern Manitoba, we had continuous rainfall for a month and a half. What would happen this year if this were to be repeated with hail, drought, frost, flood, and insects? We need a short-term assistance program for those unforeseen disasters.

As for a long-term plan, perhaps will this be Mr. Vanclief's plan. Does it exist? He made an announcement to a tabloid about having a plan, but our own provincial agriculture minister knew nothing of it. How can the federal government plan a program without the help of all the provincial governments? Will our federal government keep up with the grain prices of neighbouring countries to make it fair for us Canadians?

If we were to get a fair price for our grains and oilseeds, I wouldn't be here today--that's a simple solution. Our inputs have risen to the top of the ladder; yet we, the farmers, sometimes sell for less than it has taken to produce the crop. We seem to be the only business that continues to do this. We all need food on our table, but it's at our expense.

Perhaps the government should look into marketing our grains. Perhaps this committee should sit down with the Canadian Wheat Board.

NISA: By not using up our NISA funds once the money has been triggered, we seem to be sending the message to the federal government that all is well in western Canada. That's the wrong message. If the triggered funds were accessed, nearly $1 billion could be in the hands of the farmers.

NISA is there to help farmers stabilize their income. We bank our money when farming is better and withdraw it when triggered by a poorer farming year, but we are not using it as an income stabilizer. We are going to lose this program. I hope somehow we can encourage these farmers to withdraw their money when it is triggered. This is definitely a farmer problem, not a government problem, but I do hope this program stays.

Diversification has become a very popular word in the farming sector. Our federal government is keen to promote it, but I think we have to be very careful. Cooperative diversification can very often destroy the family farm. Diversification floods the market. Diversification needs capital to start with, and often farmers like me who would like to find a new market have no funds at all.

¼ (1800)

I would like to tell you about my part of rural Manitoba. We are closing down the railway lines, closing our elevators. More and more we are shipping our grains out on the roads. Many of these roads were not designed for the weight of these semi trucks and trailers. We need the federal government to put the money they collect on fuel taxes back into our roads. With 10¢ a litre of gas and 4¢ in diesel, Manitoba alone collects about $150 million in fuel tax each year, and putting $150 million back into our Manitoba roads would make a difference.

If more and more farmers like me move off the land, will Deloraine be a ghost town? Will it be cooperative farmers and owners living in the cities, not in rural towns? If so, we will be closing down not only elevators but hospitals and schools. The future farmer will have to travel 70 to 100 miles for parts, hospitals, schools, and maybe even a food store, not like in Ottawa where things are expanding.

I also feel that I would like to invite this committee to come for a few days while farming is in progress in this area. You might then get a better picture. Your visit here today is too short.

Can we change the future? We have the first commercial environment-friendly ethanol plant using fibres from wheat and barley straw, we hope, in the future. But this plant alone has cost $250 million. Ethanol is a word that you've heard a lot about in the last week, but not every community can build a $31 million plant. I hope in the future a group of farmers can build smaller plants and have feedlots incorporated.

Hog barns have had some problems here in Manitoba, I should know. I think it takes common sense to build these hog barns. I do believe that a special committee should be formed for the regulations and it should not be left up to our municipalities.

The more and more grain that we can seed in Manitoba would be a huge benefit to us, but we need government money to help us.

That concludes my speech. I thank you very much.

[Applause from Audience]

¼ (1805)

The Chair: Thank you, Kathleen.

Now for a round of questioning. We'll start first with Howard this time.

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

First of all, we'll clear up this business about the Wheat Board a little bit. Down in Ontario, they also have a resolution going in to make the Wheat Board completely voluntary. That'll be voted on at their next meeting.

The difference between the Wheat Board in Ontario and the Wheat Board out west here is that theirs is producer run and ours is a combination of producer and government, with the government holding sway because the legislation that sets it up doesn't allow for anything but orderly marketing.

Curtis, you've asked that you be able to market your wheat and barley outside the Wheat Board. Is that based on philosophy or is it based on economic considerations for your individual farm?

Mr. Curtis Simms: It's based on economic considerations in that I feel I can achieve a better return to myself. You look at some of the American prices, but it goes beyond that, some of the things about cross-grading through the transportation side....

In the Estey report there were estimates produced from reliable sources that we were wasting $150 million to $300 million.... And the Wheat Board is the biggest single player in the transportation business, partly by legislation and partly by volume of business. So they can't not be part of the problem, in that case. It's my net price that counts, so too much on transportation costs me too much.

We can see examples. For example, when oats came out of the Wheat Board there was a very small commodity boom. All of a sudden we had oats processing plants built in different locations. So I really feel I will get a better net return to me on the farm. And for the customer, remove this extra barrier in the middle. Quality is everything now. Let the miller, whatever, talk to me and tell me what kind of wheat he needs, not go through a middleman all the time.

Mr. Howard Hilstrom: Times have changed, then. I just heard recently that there are two malting plants going out in Idaho. They apparently have rejected coming to Canada, at least one of them.

In any event, the other area we need to look at a little bit.... Has anybody here, in the last two years, loaded a producer car? We have someone in the back and maybe we can deal with that later. It's just we don't have anybody sitting at a table right now.

I'll go to another issue: young farmers, small farmers, new farmers starting out. Revenue Canada right now lets you farm for two or three years and then reviews you. Many farmers are getting told they're not a farmer because they don't meet the guidelines.

Charlene, do you believe there needs to be a definition of a farmer?

Ms. Charlene Rowland: I think that would be a very complicated procedure, actually, especially when looking at organic agriculture. It seems that the smaller farmers are definitely in a different category from somebody who's farming--

Mr. Howard Hilstrom: You said the federal government should promote small farming, promote organic agriculture. I'm in favour of organic agriculture. Could you specify, so that the minister will get this in our report, what you mean by promoting that kind of agriculture you're talking about?

Maybe it's not a fair question, but it's a chance for promotion.

Ms. Charlene Rowland: I don't want to sell my own program and be completely self-serving here, but I definitely am seeing a lot more financial subsidies given to larger corporations that are developing either processing plants or, as we've mentioned in the hog industry.... There seems to be a lot more federal and provincial funding going into those kinds of programs as opposed to, say, working with university programs or community college programs that are doing on-farm education.

Mr. Howard Hilstrom: I don't think any country wants to see eternal subsidies, so that's why a definition may at some point be....

I'd just like to end with Dr. Richard Rounds. Have you recently been doing any consulting or giving advice to the federal government in regard to this five-year plan that came out of Whitehorse? Are you involved in that directly?

¼ (1810)

Dr. Richard Rounds: No, I'm not.

Mr. Howard Hilstrom: In fact, the minister is using $10,000 and under as hobby farmers, $10,000 to $100,000 gross income as being those farmers who are always in kind of a problem, and those over $100,000 as being the ones who have a chance of viability. Do you believe it's necessary for the federal government or anyone to define who is a farmer? It would probably have to have something to do with the gross of that farm.

Dr. Richard Rounds: It's probably not a very useful thing to try to classify a farmer. Stats Canada has used a variety of things over the years as to what a farmer is. I think it's gross sales of $2,500 or more. It's pretty low. I'll let Stan speak, too. He's a good friend.

I was going to say that what you identified there is something real. The hobby farmers tend to be in good shape because basically their family income is from off-farm sources, so the farm is really a hobby or a partial income. The bigger farmers, the ones over $100,000 or whatever the magic number is, don't have enough time to work off-farm because they're so big, or they have so much investment that they have to put their energy there. The guys in the middle are the guys who are trapped, and it's been that way for 20 years. They're too big to have much time to work off-farm, and too small to make the economy of scale. That's why that category between whatever the numbers are is really the danger group.

The Chair: We'll move on now to Mr. Desrochers.

[Translation]

Mr. Odina Desrochers: Thank you.

I have a question for Dr. Richard Rounds. You spoke of protecting rural communities. Do you think the Canadian government was prepared for the changes currently sweeping the agricultural industry? Small farms gave way to larger family farms and these in turn are now being taken over increasingly by industrial farming.

Do you think the federal government was ready for these changes which nevertheless transpired very quickly? This has led to an imbalance of sorts within Canada's agricultural industry.

[English]

Dr. Richard Rounds: That's a very good question. The answer is no, the federal government wasn't at all ready to go after those issues, because they didn't expect the change in Crow rates and stuff to hit as fast and as hard as it did. The increase in size has been ongoing for 50 years. It's just speeded up a little bit.

The way this leaves the community bare is that in the communities that have been ag service centres forever, especially out here in the Prairies, the number of customers is the number of farmers.

As I stated very briefly in my presentation, we have to provide other opportunities for those rural people to stay there--not just farmers, but farm kids and others--and not in agriculture, because it's getting bigger. Every time the tractor gets bigger, it's another person we don't need out there, and that's not going to stop. I'm not saying it's bad; I'm just saying it's difficult to adjust to. So that's why the community cannot be separated from the farm.

Agriculture policy for decades has stood as rural community policy, and it is not the same, so we have to make a clear separation between these two. We have other federal bureaucracies that deal with communities, but I personally don't see a lot of coordination between agriculture and those other bureaucracies.

¼ (1815)

[Translation]

Mr. Odina Desrochers: In your opinion, is there still room for small, traditional farms, given the changes taking place and the growing phenomenon of industrial farming?

I'm thinking here of Ms. Rowland who shared with us her desire to get into organic farming. It seems the federal, and even the provincial, governments have no problem supporting large farms. However, when it comes to specific, more specialized farming operations, there is a gap between the funding available for industrial farming and that provided to small-scale, organic or conventional farming operations.

[English]

Dr. Richard Rounds: There is still room for the small farm, but it shouldn't try to compete in the large commodities in the global markets. That's a lost cause. It has to be a niche market situation. Historically they have been and still are concentrating near large urban centres, where they have a ready market for niche products. One of the biggest problems we face is that the biggest opportunity for smaller farms is in the commodity-controlled areas, so there really is no opportunity.

[Translation]

Mr. Odina Desrochers: Would one of the other witnesses care to answer the question I put to Dr. Rounds, that is share with the committee their view on the future of small farms in light of the overwhelming growth of industrial farming?

[English]

Ms. Charlene Rowland: I would just like to reiterate that with small farms it is inevitable that there will be more people on the land, which is what we all want to see here. We all want to see a rejuvenation of our rural communities. Perhaps the promotion of the niche markets or the small farms will bring more people into rural communities, and the agricultural sector will therefore have a louder voice with the federal and provincial governments.

Thank you.

The Chair: Murray.

Mr. Murray Downing: I'd like to comment on that. I think there's room for everybody. If we go by Stat Canada's numbers, we create one in seven jobs, so for every farmer we keep there, we have seven jobs.

The Chair: Thank you.

Dick.

Mr. Dick Proctor: Thank you.

I have a couple of quick questions for Wayne from Agricore United. I'm really following up on two different statements we heard this morning when we were in Stonewall.

You mentioned food safety, and one of the presenters this morning said that all food safety requirements were paid for by farmers but tend to benefit consumers. In actual fact, more than 70% of the Department of Agriculture and Agri-Food budget goes for food safety.

Do you think food safety belongs where it is now, with Agriculture, or should it be in another line item or department? Perhaps if it does benefit consumers, it would be better off in Health, for example? Do you have a view on that?

Mr. Wayne Drul: There's no doubt, when we're talking about who really benefits from it, that agriculture benefits, because obviously we need the market. On the other hand, who's actually asking for the safety in today's world? I guess it boils down to the fact that consumers are demanding that type of safety or that type of policy. Somehow we need to be able to transfer these costs in a more equitable way.

Mr. Dick Proctor: Thank you.

Shirley Galbraith was very concerned about farmers in small communities getting access to elevators that have closed, and I just wondered what the policy of Agricore United was on elevators that have closed. I preface that simply by pointing out that the Saskatchewan Wheat Pool had a similar policy; they wouldn't sell to farmers, or provide it.

I conducted a round of rural meetings last month and was surprised to find that in four of the communities, farmers have now acquired elevators, in three cases for competitive use and in one case for the storage of grain. The woman this morning was saying they can't get access to the elevator in her community. I'm just asking for clarification.

Mr. Wayne Drul: As far as elevator closures go, basically the state of the farm economy relates all the way up into the grain companies. I mean, rationalization has taken place; we're trying to cut our costs just as well as the farmer is trying to get more, finding that little bit of margin left there. It's the same with the grain companies. So it's leading us to try to make a more efficient system.

On the question of elevator purchases, our policy, absolutely, is to see if we can strike some type of a deal with a producer, a producer group, or even somebody who is going to go into competition, as an example. Obviously, if it's going to go to a company that's going to go into the grain business, likely we're looking at a different kind of a purchase price.

But, yes, absolutely, we are looking to do some options with them instead of demolishing our plants.

Mr. Dick Proctor: That's it.

The Chair: Rose-Marie Ur.

Mrs. Rose-Marie Ur: Thanks, Charles.

My questioning will be directed to Charlene, although I appreciated everyone's presentation.

With regard to organic farming, is this a sector that's being well received within the farming community? Back where I'm from, southwestern Ontario, sometimes there seems to be a mixed reaction, with other farmers inviting organic farming in, with all the stipulations and the easements and whatever to have it determined organic.

Do you have the same concerns here in Manitoba in terms of setting up an organic farming business?

Ms. Charlene Rowland: I actually operated a market garden for a number of years close to the Whiteshell area in Manitoba, and I found there, as well as in Clearwater, that the locals, especially the elders, are so happy that there is a young person who is excited about farming, who wants to be in a rural area, and who doesn't want to take off to the city with all the lights and the attraction of that.

I've also been finding that a lot of elders, the people I'm looking to for wisdom and have been mentoring under, are also organic producers. It's not some savvy niche market. My grandparents were organic producers just because that was the way it was back then. So I'm finding a lot of stories coming from the older farmers. They have their own suggestions, especially with regard to vegetable production, to try this or that. So in Manitoba I'm finding encouragement, I'm finding advice, and I'm finding just open arms, really.

There are some concerns. People always have questions. Personally, though, I've been finding that people are really open-minded. Everybody sees agriculture struggling, and this opportunity for youth is a positive thing.

Mrs. Rose-Marie Ur: The amount of people that one farmer can feed now as compared with the number they could feed 10, 15, 20 years ago has certainly gone up. Do you think in the long term organic farming will be affordable enough for the consumer to be able to embrace organic farming and make it feasible?

Ms. Charlene Rowland: If you look at the long-term effects, I think it is very affordable. I'm not a soil scientist, but from the research I've done and from what I understand, an organic method of farming, or ecological method or what have you, does increase the fertility of the soil, and it therefore increases the ability for future generations of farmers to use the same piece of property, to use the same land. So it is economically sustainable, maybe not in the immediate turnaround but in the future.

¼ (1820)

The Chair: Okay, thanks.

Rick.

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

First of all, Wayne, in your presentation you alluded to the U.S. Farm Bill. It's that grey cloud that's in our sky right now. You also talked about the potential of having the U.S. Farm Bill expand subsidies to the specialty crops, particularly peas, beans, and lentils. This has been brought to the attention of the minister.

Do you have any suggestion as to how that message can get through to the United States, particularly the administration in the Senate, to leave the market alone? The market's working quite well as an unsubsidized market right now, and if you start playing with it, obviously it's going to skew the whole market. Do you have any suggestions how we can get that message through to the U.S.?

Mr. Wayne Drul: You're asking a great question. I wish I had the answer.

Mr. Rick Borotsik: I hope you do.

Mr. Wayne Drul: It's extremely difficult, because as you know, the U.S. is a big player. To turn around and try to get it across to them that western Canada is very reliant on these special crops...that's why I raised the issue, because it has a huge potential to keep our industry alive. How are we going to get this back to them? That's a good question. Obviously, they are very willing to support their farmers in any way they can.

Further to that, I'd like to raise the China issue one more time. In Canada, for example, we talk about forming committees to talk about how we're going to deal with these situations. In the U.S., it's already on the president's “things to do” list. That's the way they seem to operate in comparison to Canada. They're that step ahead.

Mr. Rick Borotsik: Okay. I'm going to have to jump in here, because I have two other questions. One's to Kathleen.

Kathleen, you talked about two programs--a short-term program and a long-term program. The short-term program is close and dear to my heart. I assume you're discussing a natural disaster program. Do you have any thoughts about what should be put into place for that kind of program? I'm thinking specifically about the situation we had here in southwestern Manitoba in 1999, when we had excess moisture. What would you be looking for in a natural disaster program?

Ms. Kathleen Patterson: I suppose I really don't have a full plan made out, but we definitely need coverage. Actually, 1999 finished me in farming. It took me until this year to finish paying my bills. It rained continuously for a month and a half. I didn't have flooding on my ground; I didn't have water lying there. But I couldn't go out and seed. I was fooled into going out to seed five days after they extended the crop insurance program.

I'm a farmer; I'm a trier. I wasn't looking for a handout. I was hoping, wishing that I would get a crop in the end. As it happened, I seeded on June 18, 19, and 20, and I didn't qualify for the $50 an acre. But $50 an acre doesn't cover it. Our inputs are massive. The inputs in my farm that year worked out to be $64 an acre. I got grade number 3 for my wheat, and I took, from nearly half my farm, less than 11 bushels an acre. Unfortunately, I had seeded early and taken off a fairly good crop, so it cancelled out my crop insurance.

Mr. Rick Borotsik: I don't want to put words in your mouth, but the recovery of lost inputs would be a very important component of that kind of natural disaster program.

The Chair: Thank you, Rick and presenters. We have another group coming up--this is almost like hockey, with round one, round two, round three.

We would ask that the other group come up.

¼ (1824)

¼ (1828)

The Chair: We're ready to start again. Some have asked about making short presentations As I mentioned earlier, if you're not on the list you may give your name to the clerk. We will try to allow a couple of minutes for people in the audience to make statements or offer positions at the conclusion of this round.

This time we will start with Mr. Marshall. Please identify yourself, what you do, or who you represent. You have five minutes.

Mr. Al Marshall (Individual Presentation): Thank you. My name is Al Marshall and I live in Russell, Manitoba. I currently help my parents on their farm. My Dad took a stroke last May and I was already retired from the RCMP, so I ended up helping with the farming. It was the first time I'd ever farmed; the first time I had to do the seeding, spraying, swathing, and combining. It was an interesting challenge, but it taught me some things about farming. I looked at what happened after we'd hauled the grain to the elevator, and I put a few points together.

On freight, I think grain should be sold FOB the farm, and not FOB the destination--Thunder Bay, Vancouver, etc. I don't understand how that ever happened. Transportation is a value-added component and it's not the farmer's responsibility. I don't know another business that runs that way.

¼ (1830)

So there's my first point.

Voices: Hear, hear!

Mr. Al Marshall: Thanks.

My second point is that elevator charges are also a value-added component and should be added to the price of the commodity until it's processed and on the grocery shelf and equally shared by all consumers.

I don't want to tie up a whole lot of time here with numbers, but on February 12 we sold 2,160.5 bushels of wheat. That was number one wheat at 13.5% protein. My gross cheque on that was $10,184, or $4.71 a bushel. For cleaning they charged me 10¢ a bushel, or $218. For handling they charged me $659, or 31¢ a bushel, for a total of 41¢ a bushel. That's not too bad because other places charge for grading as well as for weighing now, I hear. They're starting to charge us to weigh our grain. The freight came to 99¢, close to $1 a bushel, which means I walked away from there with $9,170, or $3.32 a bushel.

On our farming operation, it costs us.... I should explain that we have a section of land, 640 acres. We crop about 300 or so, and we have 500 under cultivation. Our costs are a little less than what you'll find in this crop production guide. This is put out by the Province of Manitoba. I highly recommend it to all farmers. If you open up the page, you'll find inside what it costs to grow wheat, canola, etc. According to their figures, their break-even point is $4.75 a bushel. Ours is $4.54 a bushel. So you can see that I am losing $1.22 a bushel.

Why am I growing cheap food for other people when I can't afford to do it? I can tell you how we're doing it. My dad is 77 years old now and he does it on his pension, or he has been doing it on his pension.

I don't know exactly how this all works. I know there are some guys here who represent the Canadian Wheat Board.

The next point I'll make is that you can't somehow drag out our payment for up to a year. It's like my going to sell your truck and saying, “Okay, I'll take your truck and I'll sell it. It's worth $15,000. I'm going to give you $8,000 for it and then in two months' time I'll give you another $2,000. I've already sold your truck. By the way, here's another $2,000. Sorry, the guy who bought it is in B.C. and he won't come and get it, so you're going to have to pay the transportation on it.” Then I'll feed you another $1,000 a few months later. Finally, a year later, you might see the rest of your money. I know there must be an explanation for that. I don't understand it, but I don't think it should happen that way.

Regarding food subsidies, I would like to think that if we had proper business practices like the ones I talk about above there--no freight, no elevator charges, and immediate payment on our grain--we wouldn't need to have food subsidies. I will go along with those people who say we need a cash injection, because I'll tell you a lot of farmers are really hurting out there. I would dare say that there will be a lot more farmers going under in the next short while than we would like to think.

I think those subsidies need to be separate. You can't put cherry farmers in with potato farmers, with grain and oilseed farmers, with cattle farmers. It's not fair. I see that the guys who have cattle are not getting the CFIP. With the guys who have just grain, some of them are getting CFIP. But it's not fair; you can't lump them together. You have to treat them as separate entities. Any program must be national. It cannot be provincial, because it's not fair across this country.

The cost of production crop insurance program is something we talked about some time ago. We need to do something or there are going to be more disasters, as we're seeing from drought or, as Kathleen talked about, increased moisture. So we need to have a program, either a disaster or crop insurance program, that takes into account our cost of production. In Manitoba they know what our cost of production is. They have it well laid out for us.

We need to encourage young farmers. I like some of the things I've heard there. I don't know how it'll happen. Most of the guys who are farming are soon going to go out of it. You're going to get into corporate farms. Then you're not going to get your bread for $1 a loaf or whatever; you'll be paying a lot more than that for it.

I'm just going to close by saying that this stupid gun control law.... I can tell you I was previously with the RCMP, but I think it's stupid.

Voices: Hear, hear!

Mr. Al Marshall: They could never keep track of my handguns, never mind my long guns. What's happening is that nobody's carrying a gun anymore. We have coyotes and gophers running around wild. They're taking over a lot of the productive land. I think that's a big fear out in western Canada, and I wish somebody would get rid of that.

¼ (1835)

The last thing I'd say is that my observance on the Prime Minister is that he does not appreciate western Canada. He does not understand farming or appreciate farming, and I think we need a new Prime Minister who would be more sympathetic to our cause.

[Applause from Audience]

The Chair: Thank you, Mr. Marshall.

Mr. Dusik.

Mr. Joe Dusik (Individual Presentation): My name is Joe Dusik and I farm with my wife at Oak Bluff. We farm 1,500 acres. I'm not going to go into a long spiel. I think everything has been said today. We caught the meeting this morning in Stonewall.

I'm a little disappointed by what I feel is a very easy problem to solve. We need more money for our grain. I don't care what anybody says; we have to have more money for our grain. That's the bottom line. I don't care what kind of program you come out with. If we were getting $8 or $9 a bushel for our wheat, we wouldn't need CFIP or AIDA or any of these programs that don't do a damn thing. The only thing that paper is good for is to use it when you go to the bathroom. We don't need that stuff.

All the money that's going into administering the programs should be going to the farmers, and it's not. There were 680 people working in Winnipeg on the CFIP, and all that money should have gone to the farmers, but instead it's going to government employees. And that seems to be the case all the way down the line.

There are a lot of things I could say. I'm not going to get into it, because I'm just getting over a death in the family, and I feel very disappointed that there's not more being said about the low prices.

I think it's time our government smartened up. I think it doesn't matter who it is in the western provinces, Chrétien does not know that anybody exists past the Ontario border, let's face it. This is a fact. He's admitted that. Maybe--it was just said here in the last round--we should belong to the United States. All our problems would be solved. We wouldn't be having this problem with the United States. We'd be making money, just like they are.

But the thing is that it's time that the west was recognized for what it is. We produce grain in this part of the country that nobody else can produce. That's why the U.S. wants our grain, because it has better protein than anybody else's. It's a good product, but we're not getting paid for it. That's the bottom line.

I have mentioned this before: why can't Ottawa, when they go to the world trade talks, say to hell with the subsidies to the European Community, let's set a world wheat price? They set a world oil price, so why can't we set a world wheat price? You would eliminate all this subsidy stuff. You would eliminate all the bashing between the countries and everything. Everybody would be on the same playing field and we could say, fine, now we go from there. Just give us a good crop insurance program and cost of production program in case of a bad year, and we can look after ourselves. We don't need all this government help. Just give us what we should be getting for our grain. We're growing grain for nothing, and I just can't do it any more. Nobody can do it any more. This is stupid.

When you really think about what's been going on for the last twenty years, we're talking about 1960 or 1950 grain prices. Look at where our inputs are. And it just doesn't work anymore. Everybody thought here for a few years they could produce their way out of a problem. I don't know how you could produce your way out of a problem by growing more grain.

I know our John Deere dealer in Oak Bluff said, we're getting less for it so let's grow more of it. To me that's ass-backward thinking. And it's got us to where we are today. And I don't for one minute think there is this big glut of grain in the world that everybody is trying to tell us there is. There isn't. I'm sure of it, because there are people starving to this world.

And getting to the subject of population, there was an article in the paper about three weeks ago that said every week there are 2.2 million born in the world and there are a little over 1 million who die every week, so we have a 1.2 million population increase every week in the world. I'm talking about the world.

So why do we have all this grain that nobody wants to eat and people are starving? There's something wrong here. Every country--it's not just Canada but the United States and the European countries--are all working this subsidy thing. Why? I think it's the governments that are playing this whole subsidy thing because they want agriculture for themselves. They milk it for what they can get out of it and to hell with the farmers. Just give them a couple of cents when they get bitchy and they'll keep going.

¼ (1840)

Thank you.

The Chair: Thank you, then, Joe.

Mr. David Hanlin.

Mr. David Hanlin (Individual Presentation): I farm with my wife in Miniota, and I'm an RM counsellor of Miniota as well.

I see you fellows have been sitting here all day. I just got here. We have a two-day convention, so I'm down for that. Some of you look kind of tired.

Anyway, I wasn't going to come today, because I have made some presentations in the past and I can see it as kind of an exercise in futility. You may not, but I do, because I see only black and white here. I can see how the problem should be fixed, and I can't understand why the politicians aren't fixing it. I don't know why; I have no idea.

I have this thing made up, and maybe I should read it and maybe I shouldn't, because there are some things in here that may not come out right.

I feel really strongly about farming. I tried to start my son-in-law and my daughter farming and I pretty nearly lost all my equity because of that. I got caught in the low grain prices. I got caught in thinking with my heart instead of my head, but we all do that when we have children. However, I've recovered, but I haven't forgotten.

Anyway, good evening to the committee members and fellow presenters. For the past week or so, as I've said, I've struggled with whether or not to come tonight to be a part of this discussion. In the last year I have made a few presentations and raised many concerns over the plight of the farmer in Manitoba, and along with other presenters here whom I recognize, I have gotten nowhere with this issue.

It seems to me that you and others, as committee members, hear or see the same thing over and over again, for what reason I'm not sure, and that this too will be an exercise in futility. Time and time again we have given you the tools to fix things, but the government continues to plow ahead with their own will and fix nothing or maybe even make things harder. I'm not sure how many times you need to hear these ideas, but I, for one, am getting tired of it. We need action, and we need it now.

As RM counsellor, I help make decisions for the betterment of the RM. We do not make them complicated, but we do make them swiftly and--I will say it again--for the betterment of all. As I see it, governments, both federal and provincial, tend not to do this. They make them complicated and discourage understanding, and I'll reiterate that with all these programs that have come out, CFIP and whatever, there is a very big discouragement.

In presenting all these times, I have tried to hammer home at the cost of production. A program such as Murray Downing's is the only thing that will fix this problem of shortage of income. Through the years, crop insurance, NISA, CFIP, CMAP, with the exception of GRIP--we let that go and we shouldn't have--these have not worked, and by and large they have made cheats and liars out of honest farmers. This might be hard for you to hear, but it's the truth.

I have become very discouraged with this and government's way of thinking, and I'm thinking more and more that they do not care. We have to stop the exodus of farmers and farmers' sons and daughters from the farm, as well as bankruptcies of urban and rural businesses. You have the power to implement the cost of production. Please use your will and influence to get it done.

Today I heard a little story that stuck in my mind as soon as I heard it. It really hit home as to what is said here today and what we as individuals and farmers want you to do.

The Chair: If it's a short story....

Mr. David Hanlin: You'll like this.

The Chair: We'll like it?

Mr. David Hanlin: In closing, I have a comment that's actually a small story I heard. It reminded me of what I and others here today are trying to get across to you. It starts like this.

¼ (1845)

Visualize yourself on a very big ship in the ocean. There's a heavy fog, and it's hard to see. The captain says to his first mate, “You go down to the deck and watch closely for me, and if you see something, radio me right back.”

So in five minutes he does so. He radios back and says he sees a light in the distance. The captain says, “Is it moving or is it stationary?” He says it's stationary. The captain then turns to his communication officer and says to send a message to that light to alter its course 20 degrees.

A message comes back saying, “You alter your course 20 degrees.” The captain gets mad and says, “Send this message: I am the captain, and you alter your course 20 degrees.”

A message comes back again: “I am a second-class seaman, and you alter your course 20 degrees.” By this time, the captain is frothing at the mouth. He says, “Send this: I am a battleship.”

A few minutes later a reply comes back: “I am a lighthouse.”

So you see where we're coming from.

Thank you.

The Chair: Thank you.

Ken Schellenberg.

Mr. Ken Schellenberg (Individual Presentation): Good evening. I've had some long presentations, but this will be short.

We were in Stonewall, and very little was mentioned about grain prices--the oilseeds and wheat prices. It's just been set on the back shelf. And that's what I understood was the reason for our coming here, because that's the major problem.

You know all those success stories about pigs, cattle, and sheep. They're all doing well. We don't need to hear about that. You have to take this back to town with you: our grain prices are just no good.

The other day I was in the elevator, and the price on the board for open-market wheat was $2.74 a bushel. If I had to sell the wheat that I have at home today, I would get $2.74, because I couldn't take it in to the Wheat Board right now. And there it's only $3.76 a bushel for 15-5 protein, and that's a fairly good-quality wheat, I thought.

So I looked at that, and I said that's discriminating against the farmer. I said it should be against the law to have shit like that on the board. Nobody else has that. Just take a look at how we feel when we're doing this. We're feeding the country for nothing.

I'll just go back to one thing here. There's one thing on our grain board that is a good price, and that's oats. Oats are $3.45 a bushel. It has been going up, and it has stayed up there.

But our grain companies are at fault for a lot of our poor prices. They send out these little sales people--and, Wayne, I hope you're listening. You send your little boys out there, and they say, Ken you better take the $2.25 a bushel for your oats, because if you're going to grow oats without that contract, you're not going to be able to sell them next year. You might only get $1.

That's how vulnerable we are to the market. Am I making this clear to you here? Do you understand what I'm saying?

I could get into detail. I know the grain marketing system very well. I sell on the futures. But right now, our market analysts have made all these predictions. As soon as we buy seed and they see on paper that there are 13 million acres of seed going into the ground, like in 1998.... One market analyst from the grain companies said--I should actually say “quote”, but I don't have it with me here--why would any speculator buy canola for $8.50 and $9 a bushel when next fall you'll be able to buy it for $5, and maybe even less?

That's what we have to deal with. Do you understand where I'm coming from?

This is what happened with our oats. Now, we have one commodity on the board there...and I'm not taking that contract. I'm going to grow oats without it, and I'll probably suffer because of it. Because they're going to get all the oats...in two hours, they sold 100 carloads of oats for $2.25 a bushel, because we're almost forced to do this. But right now, on the board today, the price is $3.45 a bushel.

Going back to another statement about the elevator, you know, Wayne.... I know a man who wanted to buy the elevator. At that time he couldn't buy the elevator. They didn't want the competition. He offered more than $40,000 for this elevator, and last year they said it would cost $40,000 to knock down an elevator. They'd rather knock the damn thing down than sell it to a private individual. That's a fact. Maybe he'll come and explain this, I don't know. But I'm going to have the last word, Wayne.

Thank you.

The Chair: Thank you, Ken.

As we go around the country, we listen to what is presented. In Stonewall, it was a different atmosphere from what it is here today.

Mr. Andrew Dennis.

Mr. Andrew Dennis (Individual Presentation): Hello, members of the committee and all others present. Welcome to Brandon, Manitoba. This is the home of the Brandon Wheat Kings. Like wheat itself, the Wheat Kings have ups and downs but are always quality-assured contenders and a sign of Canadian excellence. My dad always told me that wheat is king. Let's hope the hockey team doesn't have to change its name.

We're here to help give direction to policy-makers as they struggle with the tough questions facing them today. The tragic events that occurred on September 11, 2001, brought into clear focus the fact that economies of the world had been in trouble for some time, and the layoffs that occurred since that date were only an acceleration of layoffs that were occurring months before.

Now more than ever before, money needs to be used wisely. It needs to be funnelled into an industry that has the $1-to-$9 return ratio, and that is found in agriculture. There is no need to put a new state-of-the-art stainless steel roof on a building that is destined to collapse. We'd better start putting some new foundations under this economy before it's too late. The Air Canadas, VIA Rails, and Bombardiers are going to have to wait for now.

Laying the foundation creates jobs, ensures a supply of raw products for the value-added industries, builds infrastructure, and keeps the working middle class happy, productive, and financially healthy. This is the bulk of your tax base. We'd better not screw this one up.

More importantly, it keeps food prices low so that we can protect the lifestyle of all Canadians and not have them erode further to foreign interests and pressures. There are many people having a hard time making ends meet. Let's not make it worse.

Cheap airline tickets are a luxury this country can't afford right now. Now is the time to do the right thing. One hundred per cent of all jobs in Canada are directly related to agriculture. Without food, you're dead.

Size matters--they say size matters. For a producer to net $40,000 a year on a 4% average return on sales, based on 1990 to 1999 statistics that came from Doug Hedley's office, he would need to have $6 million worth of land, machinery, and buildings. To accomplish this from where we are right now, we'd have to get rid of two-thirds of our farmers. We'd have to give--and I mean give--the remainder of them $3 million and lend them another $2.5 million each. Half of them would still need to be supported, and the guys who were left would average age 50 plus. So good luck--most people are talking “freedom 55”. We're not going to educate this....

Finding the magic size of farm is not the answer. Give us good farm policy, and it will find itself. Basically, right now it's approximately 2,000 acres--based on some studies we did--or multiples of that, based on brothers, fathers, and partners. It will change. But the point is we need policy with incentive, not regulation. Regulation is tough to implement and enforce, so we end up enforcing regulation with financial penalties.

We need policy that is simple, not complex. We have a job to do. An example of simple would be crop insurance. You sign up, and it puts a floor under your cost of production. It already contains your personal history as a manager. It's bankable--it provides access to cash. You farm, you pay your premium, you harvest, and you measure your crop. Money flows quickly if you've had a bad year, which is good for you and good for your banker. Please help us raise the bar on this program that actually works. Multiply the individuals covered by 1.2 or 1.3. Do something.

It's pretty simple: give us a policy that works so that we can get to work.

¼ (1855)

Examples of a complex program are AIDA and CFIP. This is pie in the sky programming. It's slow, it's messy, it's unfair. It tantalizes the innovative and hard workers. It discourages agriculture. We have people selling their cattle and taking off-farm jobs so that they can get the subsidy on the grains part. It pits neighbours against each other. Straight grain farmers get a payment for a shortfall, while the mixed farmer works harder, with more equity and more risk, and he gets nothing. It's so flawed, you can't fix it.

If you need to give us this type of program, give yourselves five to ten years to get it right. What's the difference between Lyle Vanclief's policy-makers and a snail? Snails don't go backwards.

Voices: Oh, oh!

Mr. Andrew Dennis: We need better crop insurance. This would take an intelligent person about ten minutes to fix and fund. We're going to need another $60 to get by last year because we lost it. The losses are mounting again this year and there will soon be no one left to hand these policies to anyhow.

This is my perception of the way it's going. This is just going to take a second:

Farmers: “Shout, shout. Who's going to help us out?”

Party of the day: “Shame, shame. Who's to blame?”

Policy-makers: “Sorry, sorry. It's not a good enough story.”

The opposition: “We must stress, stress. This thing is a mess.”

City person: “I can't see, see. How does this affect me?”

Economist: “Study, study. The facts are still muddy.”

Research scientist: “Let's steer, steer. We think the answer is near.”

Wise man: “And I state, state, it's getting late.”

Hockey player: “It's sudden, sudden death. This may be agriculture's last breath.”

Thank you.

Voices: Hear, hear!

½ (1900)

The Chair: Thank you, Andrew. I'm not sure if you're considering a second career, but....

Voices: Oh, oh!

The Chair: Mr. Dewar.

Mr. Donald Dewar (Individual Presentation): Thank you very much, Mr. Chairman and members of the committee. I appreciate the opportunity to speak to you today.

I'll start by saying that the first 90 minutes of my presentation have already been said this afternoon, so I'll just focus on the end of it rather than repeat everything that's been said. It's all on the record and I think it's very pertinent.

I was really wondering what I was going to say, especially being this late in the day, and I saw something interesting this morning. Paul Martin was one of the 50 most influential or most powerful people in Canada. One of his great achievements was that he balanced the budget through increased revenues rather than through cutting costs or reductions. I thought that whoever wrote this hadn't talked to anybody in agriculture.

Although we are told that agriculture in Canada suffered the same percentage cut as other departments, we know that western Canada saw a 75% reduction in their spending and support levels to agriculture, whereas the rest of Canada saw about a 25% reduction. If the Prime Minister is asking why we have been putting all this money out--in his mind, all this money--and not getting the desired results, it's because of the impact of these drastic cuts that have been there.

Our federal minister talks about the investment in agriculture in the last 15 years as an expense. Since 1985 we've spent some $30 billion, and he talks about it as if it's a waste of money, as if the one in nine jobs in Canada are a waste of money, as if the contribution to the balance of trade and the GDP is not worthy of investment. As I pointed out earlier this month, it's a matter of choices. We choose to invest in other industries. We invest in AECL, an industry that's 50 years old that was a crown corporation. It was supposed to be self-sufficient after the first 10 years, and we're still giving it an indexed stipend from the federal budget on an ongoing basis.

It's a matter of choices and of where we want to invest. It seems, as someone alluded to earlier, that if 30% of the farmers do 96% of the production, which is what I think the minister was quoted as telling this committee recently, then that almost tells me that 70% have to go. If 70% of the population disappears from rural western Canada, you're going to see the same proportionate reductions--in fact, probably more so--in the communities and cities and towns, because it's there.

I think that's a picture that's difficult to imagine, but unless this government takes some action very soon, as Andrew said, we're going to see some major problems.

I think the biggest grey cloud over us today is not the U.S. Farm Bill but the proposed Canadian farm bill, which has no meat to it, no commitment, and no amount of money, but it's coming like a freight train coming down the track.

I know that last fall the committee saw the fancy pieces of the puzzle come flying across the screen, and safety nets, environment renewal, and food safety are all welded together. I don't have the experience you have in Ottawa, but I know that getting at least five federal departments to work together is going to be next to impossible. Until we see this put together and know what kind of plan we have, we can't be expected to sign on.

The federal government did a review of safety nets, and one of the conclusions they reached is that they have to do something different. They have to have an all-encompassing program that's going to work from British Columbia to Newfoundland for every commodity in between. I'd like to believe that's possible. But by the same token, they won't share the data they've collected with their partners, the producers and provincial governments in Canada. I know that provinces and producers have asked questions. How did you reach that conclusion? Where is the information? Can we see more of it? The answer is no. I think that's completely unfair. That is not consultation. That is just the freight train coming down the track.

You've heard that NISA is the one program that farmers believe works. Andrew talked about crop insurance being bankable. The perceived problems the minister talks about can all be fixed in the existing programs if the will is there to repair them and, more importantly, to fund them. This is about priorities, and in Manitoba and western Canada it's about people.

I'm going to stop there. Ladies and gentlemen, thank you very much for your attention.

½ (1905)

The Chair: Thank you, Donald.

Mr. Rose.

Mr. Scott Rose (Individual Presentation): Thank you, Mr. Chair, and to the members of the standing committee, thank you for this opportunity to make a presentation.

As Don was saying, we hear rumblings about a complete overhaul of our current safety net system. While there is a need to improve our safety nets, a complete change may not necessarily be the right way to go. Let's not make a change just for the sake of making a change.

If changes are to be made to agricultural safety nets, I believe they should not include--and this is something Mr. Borotsik was talking about--natural disaster coverage. Programs already in place outside of agriculture, for example, the DFAA, should be used. Section 25 of the DFAA states that lost input should be covered under natural disasters. In the case of 1999 in southwestern Manitoba, the government of the day chose not to use that mode of taking care of that natural disaster.

I also believe that safety net coverage needs to be adequately funded, and do not design a program to fit the funding. I

It is painfully obvious that the U.S. and the Europeans are not going to give up subsidizing their farmers, at least in the short term. Agriculture and Agri-Food Canada has shown in their own research that from 1995 to 2000 international subsidies have removed 27% of the income farmers would have received from the farm gate had those subsidies not existed. Any changes to safety nets must take into account that 27% decrease in historical margins and then review it on a yearly basis until such time as those subsidies are no more. I agree with what a lot of guys have said today, that if those subsidies didn't exist--and one thing we really have to work on is getting rid of those subsidies--we wouldn't be sitting here today. The program that exists today, CFIP, only covers margins to 70%, putting the subsidy issue squarely on the shoulders of producers.

The entire agricultural industry and all levels of government have to come together to develop a system that ensures long-term viability for agriculture. There needs to be real discussion between governments and national and provincial farm organizations to come up with a long-term plan.

Food safety and environmental concerns need to be addressed for the benefit of not only consumers but producers as well. It is in our best interests to safeguard the environment and our produce for our own long-term viability. However, as was said before, we really have to be careful we don't get over-regulated.

For the most part, primary agriculture, which is the foundation of Canada's $130 billion agrifood industry, has alone taken the burden of international subsidies. Therefore, because current programs do not address that issue, primary agriculture needs--and I hate to use the term “ad hoc” because everybody hates ad hoc--an ad hoc payment to offset the 27% loss in income over the last five to six years due to international subsidies. That will help us sustain our farms until a new agreement is in place in 2003.

Thank you.

The Chair: Thank you, Scott.

Mr. Knight is next.

Mr. Daryl Knight (Individual Presentation): I'd like to thank you for allowing me the opportunity to speak before you.

I had no idea what I was going to talk about, so I didn't make up anything. You're hearing responses and ideas that have been raised by many. I have been to Ottawa and have talked to a lot of you and a lot of the bureaucrats. Many of the facts that have been said here are true, and a lot of them are much more involved.

You know and we know there isn't an easy answer to this, but I hope and pray that when this government decides to put a program together, the program will fit the need, as many people have said before. If the funding is not there, pro-rate us. You guys have already said to let the public know where we are. If we're only going to get 50% of what we need, make sure the public knows that. I know it's no benefit to the government, but it might benefit agriculture.

Another subject I have to talk about today is research. The government talks about research, safe, quality sciences, and all these things. I have great respect for all these individual subjects. On research, a lot of research money is going out from the government. We need research, but make sure research is going to the right areas.

A lot of research is going into areas where there are no markets and no production. If it's not feasible, why are we spending money there? If you spend money on research that's not usable, it's like telling the Canadian ski team they can't use the ski lift. It's not very productive.

Some of our existing programs aren't the worst enemies we have, as a few people before me have told you. There are a lot of good programs there, like our crop insurance, NISA. They're not perfect, but they can be fixed. It won't take legislation or a miracle of life to get them changed. It can be done and it can be done easily.

A program is supposed to be coming in 2003, but we all know it's not going to arrive. So to get us there, we need to do something. I believe the government can use this time, while they're working on other programs, to take some suggestions from producers on how to help these existing programs get us to the next point. You know, we might not need the next program, because if the existing programs ran properly, they might do the job.

An earlier question was: how much safety net money do we need? I believe the aggregate measure of assistance we're allowed by trade rules is about $5.2 billion. We're at 20% of that, so we have a lot of room to move. I'm not saying we need that much money, but if we do, give it to us.

½ (1910)

Every dollar that goes into agriculture, as we've heard before, is multiplied by seven or eight--nobody's sure--but we're the second-biggest industry. Why do we have the least support? Three per cent of the country is your second-biggest industry. I think it's worthwhile looking after.

As a government, it is tough. I don't think we can start playing one government against like the other, like federal versus provincial, but it has to be working together. Our programs today do not serve the need. Grains and oilseeds are the major problem in agriculture right now. The hurt was not addressed by that situation. The money was allocated, spread out, and not directly to grains and oilseeds. The government needs to be a little bit more responsive to the needs and the problems. As I said, I don't think you have to invent a new wheel. We have lots of programs that are in place.

As I've been down before, we have a cost of production program that we put on the table before you. Often we hear it's the only one that's been brought to Ottawa and presented. I can't quite believe that, but if it is, how come we have never had any response or any comeback on what are the new programs or what else is suggested? If we're the only ones who ever brought a solution to the table, why can't we be part of a solution that they're presenting?

I would like to thank you for now, and I would like to pass on the message that I would like a response on why we have never been accounted to about what is going on.

Thank you.

[Applause from Audience]

½ (1915)

The Chair: Thank you, Daryl.

Dan, Mr. Mazier.

Mr. Dan Mazier (Individual Presentation): Good evening. Thank you for this opportunity to speak today. I'm the first time at this thing, so if I start stuttering and all that, please allow me some patience.

I farm 10 miles north of Brandon here in a mixed operation of approximately 1,000 acres. We have grain cattle, sheep, poultry, and I have a winter off-farm job. I consider myself a bit of an optimist and I don't have the battle scars on me, actually, yet. I think there is a bit of room for optimism, but we are at a very critical stage. This is why we're here today.

The future role of government in agriculture, I think that was the original question. That's why you are here today. We know things aren't working and we have to get on with it. I was looking at the throne speech, and the government said it wanted to move beyond crisis management, thus giving us new investments, better land use, all those wonderful things. I think it's about time. But as Don said, the freight train's coming and we don't really have a clue how we're going to get this done.

Since the removal of the Crow, we have seen a big shift in Manitoba agriculture to livestock. We have seen money pouring into different enterprises and farm managers struggling, trying to figure out what to do and where to put limited money. There is talk of going to a one-farm program, which might be okay, but would you consider a program that is enterprise specific--that is, if there's trouble in the grain industry, target it; if there's trouble in the pig industry, target it? This is more so to get the information correct.

We've seen lots of trouble coming from people crossing information and saying one thing when they're talking about another. This way, at least, it would be targeted and you would know what everyone is talking about. I think it would make it easier for everybody to track and have accurate information, both government and farmers. This would hopefully eliminate this cherry- picking that Mr. Vanclief has been talking about.

If there is a new program, set it up and make it clear what you're trying to do with it. I look back at the AIDA program, and what it was set out to do and what the public thought it was to do were very different. Even the people who were hired to do AIDA reviews didn't really grasp what the program was trying to do. I have a couple of examples here that actually were true questions from AIDA reviewers. I don't know if you've heard them or not.

There was one question there wherein one fellow asked us how many bred steers we had. Depending on the way I answered it, I could have got more money or not. I plead the fifth. There was another one about how many bushels are in your bales. And when you're sitting and looking back at 1999, the last thing a farmer needed was to be asked those kinds of questions. I think it really did take a heartbeat away from us and made us think, yes, we are losing touch.

But moving on to food safety and research, as far as I'm concerned, they go hand in hand. We need to put research information back in the researchers' hands. As I understand it, Canada does the research now and then sells the information, getting money back for it. But there's a problem. Whole projects are put into jeopardy because those who paid for the information can put it out or do with it whatever they see fit.

Why couldn't we do research from Canada's point of view? We need research that is going to look after all of agriculture--not sacrifice one product over another, not promote things--research that simply lays the facts out and lets the public and the farmers decide if they want something or not.

Finally, the biggest thing we need in the future--I think Don talked about this--is government sticking up for agriculture. We need a government that talks about agriculture everyday. We need to be at every meeting; we need to be defended; and we need to be consulted every time you give something to us or take something from us.

You can have the position of agriculture minister, but if he or she is given no authority, basically it's a sellout. We do not need our agriculture minister saying to us, “If you don't like it, get out.” That's like the mayor of New York saying after September 11, “We have to give up, we're going to get beaten.” He had the President behind him saying “No, don't give up; we have the money.” We don't have a Prime Minister standing beside us saying that.

We just need the political will to get agriculture back on line in Canada. I do think this time might be different, though. The changes being talked about are quite sweeping, and maybe we will be considered throughout the process. That I'm here today in front of you suggests that things are changing already.

Thank you very much.

½ (1920)

The Chair: Thank you. Your time was perfect.

Jack, just before you begin and if the members would agree, we have eight people who would like to have a two-minute round--a short presentation, in other words. I'd like to do that before we start our round of questioning.

Would the presenters be okay with this?

So, Mr. Peters, we'll begin with you, then. The first presenter afterwards will be Joe Federowich. We'll ask those presenters to use the microphone at the centre of the hall.

Jack, the floor is yours for five minutes.

Mr. Jack Peters (Individual Presentation): Thank you, ladies and gentlemen. I'm thankful to be able to address the committee here. I'm not going to have much to say because I've been listening all afternoon and most of the points I had wanted to make have been addressed.

What I do want to say is that, first of all, the income on the oilseeds and grains as speciality crops does not cover the costs right now, especially if you have a disaster. There are a number of reasons for this. One of them is the costs of production for things such as seed, fertilizer, chemical technology agreements, fuel, machinery, taxes, and freight.

When we look at amalgamation, buyouts, with the technical information and the fertilizer and chemical companies, they have been given the clout to more or less squeeze out the farmers, rather than letting competition give them what they want. They have raised their own costs by outbidding themselves on shares on which shareholders need a return. We're the guys paying for it, and I don't think that's quite right. Our government needs to step in and say that there are only a certain number of amalgamations and buyouts permitted, because we need some competition. I don't think this is happening.

Seed is another thing I was going to mention. We have plant breeders' rights. I have no problem with it, but I believe we need to have more public input there. We need public plant breeding because food and plants belong in the public realm. That's the bottom line.The way I see it, all people benefit from it. We don't necessarily get more bang for our buck all the time with plant Breeders' rights. It's a good thing when it works in competition with the public, but I think we need both.

Another reason we are short on money is that the safety nets aren't working. They are either faulty by design or the people didn't know what they were doing. It's very simple. The bottom line is that crop insurance does not cover the cost of production. CFIP, AIDA, cover 67% of your production after NISA.

Suppose you have a major crop failure. Your crop stands underwater and you lose your inputs. You're in a negative margin. They don't cover negative margins, so then you are covering it on your own.

Suppose you are a little ambitious and diversify. This doesn't work very well because each has to be called a separate entity, and you've just made sure you're always going to show a minimum margin. When the grain prices are any good, you aren't generally making a lot on the cost of feeding your animals. The profit on the animals is generally related to a poor price on grain.

This also affects value-added, where the American subsidies are creating a problem. We have a killing plant in Brandon here, and it's not running to capacity. Our young weaner pigs are going across the line because it's cheaper to feed the pigs there, with American-subsidized corn. Americans are feeding the hogs, they're slaughtering the hogs, and they're keeping the jobs there. We don't put any money out to subsidize grain production so that we can raise more barley. It's kind of like shooting yourself in the foot when you give money to a killing plant and yet don't give money for the grains to produce it here. So it's cheaper to feed them down there, which to me doesn't make sense.

Now, perhaps I'm being a little bit presumptuous here, but if you want to make some changes to the plan, maybe you should get a bunch of farmers to do it rather than civil servants. If we need some civil servants there, the farmers could tell them what needs to be done, how to do it, what the end result is, and how to get it. You don't say it can't be done; you tell them it has to be done.

I don't think we should have our policies set in Brussels or Washington, but if our Canadian government doesn't do anything about it, that's exactly what we're doing. We're doing nothing, and we're letting them do exactly what they want.

In closing, I would just like to say one more thing. There's an old song about Saskatchewan, something along the lines of “The preacher and the cook go strolling by the brook, but it's the farmer who feeds them all”. Well, you know what? My beard's getting grey, and my hair's getting a little greyer too. I'd sure love to take my honey and go strolling by the brook, and be damned; let the preacher feed 'em.

Voices: Hear, hear!

½ (1925)

The Chair: Joseph, are you...? Two minutes, now.

Mr. Joe Federowich (Individual Presentation): I'd like to introduce myself. I'm Joe Federowich, a farmer from the Parkland area. I farm with my wife Delores and my son Chris. I think I'm a bit of a rarity, since not too many sons are coming back to farm. They say that when you keep your son on the farm, it's child abuse. My son went away for three years and he came back. I think that's father abuse.

Voices: Oh, oh!

Mr. Joe Federowich: I feel very strongly that we do have the programs in place that can meet our demands. We do need to restructure them a bit, though, and put more effort into them. The crop insurance program is a very good one. It came very close to meeting our needs until the government turned it into GRIP; if we could have combined the two, it would have worked very well.

I think the future sustainability of farming.... My father started his farm on a half-section of sand. He took it up to about 10 quarters. Then I took it up to about 35 or 40 quarters. If my son is going to farm, does that mean he has to go up to 70 to 80 quarters and 300 head of cows, or bigger? It's getting unmanageable, people. It's very hard for us to keep going on this type of scale.

I would like to suggest that farmers should be left to their own devices, because we can figure out things that work. We'll make things work. In the Parkland area, we have a very good, viable industry going, and we're trying to get it off the ground.

Actually, I'm going to pass out to you guys a little bit of a business plan. Farmers can think up their own ideas, but we need government to support us in our ideas. I think that has been lacking. When we come up with some ideas, for some reason they don't fit government parameters, and they get shot down fairly hard. I think we have viable, long-term, sustainable plans that need to be looked at very hard.

Thank you very much for your time. I'll pass this over.

Voices: Hear, hear!

The Chair: Thank you, Joe.

Mr. Tony Riley, followed by Mr. Fred Tait.

Mr. Tony Riley (Individual Presentation): Thank you for giving me this opportunity.

It is pure folly to blame the present farm financial disaster on European and U.S. subsidy programs. The fault lies strictly and entirely at the door of the federal government. It is most shameful and quite ignorant to try to shove the blame off onto some other country. If the federal government was obeying the supreme law and was creating 100% of Canada's money supply, debt- and interest-free, as they are supposed to do, we would not have this huge inflation that's skyrocketing the price of everything the farmer has to buy.

Under the present monetary system, the private banks illegally create 98% of Canada's money supply as an interest-bearing debt owed to themselves. Because interest money is never created and does not exist, all borrowers of this bank-created money must add the interest cost onto whatever they have to sell. This debt-money interest is killing the farmer, because he has no pricing formula for passing those costs on to his customers, as other businesses do. If the federal government picked up the interest costs that were added onto everything the farmer had to buy, he could manage quite well on the income received from the market price.

Since the bank-created debt-money supply system is quite illegal in the first place, it could hardly be considered a subsidy to the farmer to have the federal government held liable for their crime. So there could be no repercussions from other nations over doing this. When the farmers received their full earned income from the marketplace, Canadian factories would hum again, earning these new dollars farmers were spending back into circulation for their needs.

With employment up, towns and cities would benefit from this new-found prosperity. In order to have a sustainable booming economy, the buck must start with the primary producer, and it must be debt-free.

The Chair: Thank you for your presentation.

If you leave the rest of that with the clerk, she can bring it back to Ottawa with us.

Mr. Tait.

Mr. Fred Tait (Individual Presentation): Thank you, Mr. Chairman.

If there's one thing we've heard here today, and I've learned through my experience of living in rural communities for 60 years this week, it's that the marketplace works. The question is, who does it work for?Obviously it works better for those with market power than those without.

In a perfectly competitive marketplace no one would, on average, make any significant profits. Today, because of previous policies from previous governments, including the one now in office, we have a competitive marketplace where all of Canada's farmers compete with one another--all those outside of supply management. We compete with every farmer in the world. Of course, in a marketplace like that, we shouldn't expect to come out of it with much of a net income.

In comparison, in this change in our economy, this competitiveness, we were promised we would have deregulation, and deregulation would give us competition, and competition would give us lower prices. All those sectors that serve agriculture on both the supply side and the market side have used the deregulation period to consolidate their operations and gain more economic vantage over the farm community.

A recent news release by the current government, commenting on a study by KPMG, said that Canada's food processing sector now had a great advantage because it had the lowest costs in North America. What it didn't say, of course, was that we paid for that lowest cost; our portion gave them that advantage. After all we had to put into this sort of successful boastful news release, it was remiss in not recognizing that we had to sacrifice thousands of farmers to achieve it, and we intend to sacrifice tens of thousands more.

When I look at the news release and see low commodity prices, I recognize that low commodity prices are not an accident. The objective is to transfer profit into the food processing industry. That admission would be painful for a politician, but I think it's probably rather painfully obvious for those of us who have been victims of it.

Thank you.

½ (1930)

The Chair: Thank you, Mr. Tait.

Brad Mazur, followed by Ian Robson.

½ (1935)

Mr. Brad Mazur (Individual Presentation): Hi, my name is Brad Mazur and I'm from the Russell, Manitoba, Angusville, Manitoba, area. I presently farm 2,500 acres with my wife and my young family.

It just blows me away to even think of what's happening in agriculture. My accountant and I got together about a week ago and we discussed how much money I've lost since removal of the Crow. It is about $206,000, I believe, right to the present date. I told him, I believe my account balances perfectly, doesn't it? What I'm overdrawn, I'm exactly short, and it's really showing up.

We have a farm crisis and the fact of the apathy of our federal government. I think the question remains that our government has absolutely no response to the “people component” of this agricultural crisis.

I have a little boy who is two years old and another little boy who is four years old. I find that they have to be institutionalized already at this young age. We send them to daycare and I do a couple of odd jobs on the side. My wife works at a vet clinic.

I believe the problems we have in this country are based on the fact that the money system is wrong. I think I can expand on Tony Riley's comment there. The international monetary system is probably the biggest seduction to the western world, and whoever is in control of it.

Not only are we bankrupt as a nation, but I think we're spiritually bankrupt as well. What happened on September 11 is just the beginning, I can promise you that. It's just the beginning of many things to come because of this spiritual void we have in our country.

I'd like to actually dictate this question over to Howard Hilstrom and the cute guy over there.

Some hon. members: Oh, oh!

Mr. Brad Mazur: I watch the CPAC channel occasionally and I find that when you guys are in opposition to whatever bill is being passed, you almost have absolutely no power to dictate any course of change to whatever the Liberal government passes. Are they talking about any type of structural change to try to represent more of an American system? Nothing at all?

The Chair: Brad, that's a good question, probably, but we're not here to answer questions. We're here to hear. You made a point and we'll certainly take that point under consideration.

Mr. Brad Mazur: I'll just expand on Don--

The Chair: No, no, your time is up now. We want to be fair to everybody.

Following you we have Ian Robson and then Mark Saterley. Would Ian please come up.

Mr. Ian Robson (Individual Presentation): Good evening, ladies and gentlemen.

My name is Ian Robson. I recently read in the Western Producer there was a Food Freedom Day event held on Parliament Hill at the beginning of February. Vanclief's response to that day was, look, it shows how efficient farmers are and that consumers are happy.

Farmers are now less than 2% of the population. We know our value to society. Society does not know our value, as you have heard today from frustrated farmers. You have heard from a machinery dealer-farmer earlier today who does not like subsidies. Ask that man how he got to own eight or nine dealerships if it was not for past farm subsidies, which farmers used to buy equipment?

[Applause from Audience]

Mr. Ian Robson: Both the equipment and the farmers have depreciated over the years. How is this depreciation accomplished? Machinery wears out, but people, farmers, we all try to be successful at earning for retirement. When the prices are so low for our crops, as you've heard, then we expect an appropriate response from government.

The government has a role to play in the ag economy, which is to provide the necessary funding to farmers who suffer from low crop prices. The problem is identified as low prices. Fix it. Call a judicial inquiry into why farmers are not receiving their fair share of the consumer dollars, and then implement real farmer power into the ability of farmers, as a group, to set our prices. We need that market economy power, and that can be granted only by what people like to call the wisdom of government--and we all wonder if there's any wisdom in government sometimes.

You are the government. We, the citizens, demand that you act on our behalf to empower us through proper regulations to rebalance how the present economy distributes its wealth. We farmers need our share of the wealth.

½ (1940)

The Chair: Thank you.

Mark, followed by Paul Belcheff.

Mr. Mark Saterley (Individual Presentation): Just while I'm speaking, Jack, if you want to run off and get five loaves of bread, I'll see what I can do.

I'm Mark Saterley. I'm the United Church minister down in Cornerstone Pastoral Charge, which runs west of Deloraine to the Saskatchewan border.

I've heard some really interesting comments today. One of the things I would like to send back to the panel is that I think we need to broaden these discussions somewhat.

An issue that is very dear to my heart is certainly the lack of younger families, younger people, living in rural Canada. I'm a city kid. I moved out to Waskada about three years ago, when the church sent me. I didn't have a clue where I was going. In that time, I've fallen in love with the place in which I live, and I hope the people will continue to let me minister with them for a good many years to come.

I'm also fortunate in that I don't have a family, so I don't need schools. And my health is good so far, so I don't really need hospitals. But if we are going to attract young families into these communities, we are going to have to invest in the infrastructure. We're going to have to provide schooling. We're going to have to provide hospitals, and they're going to have to be within a reasonable distance of where people live. If we don't do that, then young families are not going to be attracted to living in our rural communities. We have to create positive attitudes and positive images of rural Canada in people's minds, even in our own minds, I think.

As I say, young people have been an issue dear to my heart since I moved down to Waskada. Pierson's one of my eight communities, and we started a youth group there two years ago. Right now, I get between 20 and 25 preteens who come out to that youth group. Very few of them play hockey or any sport. They wanted a social group to go to. We're trying to create a positive image of what rural life can offer these young people, a life that maybe kicks against the grain for many of their peers. If they don't have that quality of life, when they grow up they're going to move, because they're going to want to raise their kids elsewhere.

Thank you.

The Chair: Thank you.

Paul, followed by Barry Farr.

Mr. Paul Belcheff (Individual Presentation): I'm Paul Belcheff. I farm in the Margo area. I grow barley. I want to thank you for giving me the privilege of speaking today. I'm not a polished speaker like some of these people, but I'll do my best.

First of all, I want the panel here to pass along a big “Hi” when they get back to the Prime Minister of Eastern Canada. And when you go back, take a map of western Canada and tell him that Canada does not consist of only Ontario and Quebec. There's more.

I'd like you to ask the Prime Minister where the fairness is when the Americans can ship unit trains of subsidized corn into Canada and he doesn't say anything about it; yet if I load up a truck and haul it across the border, I'm punished by a fine and possibly jail.

My dog came from the Soviet Union. I think we should invite Mr. Putin down to Canada and teach him a lesson on communism.

Where I come from, I think they're going to run a separatist candidate in the next election. I'm serious. People are fed up. Where does our oil go, where does our gas go, where does our lumber go, where does our grain go, where does our potash go, where does our cattle go? The U.S. If we can't get any response from eastern Canada, let's join them.

I thank you very kindly.

½ (1945)

The Chair: Thank you, Paul.

Barry, followed by Dale Dornian.

Mr. Barry Farr (Individual Presentation): Thank you for allowing us to speak. I'm another one of these Saskatchewanites.

I've enjoyed the input here today. At the Western Canadian Wheat Growers Association meetings, they say it's very important that we keep dialoguing. I guess that's what we're doing here; we're dialoguing. I was asked to give a brief in Regina here a year or so ago, and we dialogued, but while we dialogue, we have Kathys and Barrys and Joes and Howards and who else knows going down the tubes.

I think maybe some of you people are pretty good people, but the problem we have here is the federal government, and they're from the east. I ask you--and you may not want to answer because I'm just giving you talk--how you're going to fix this thing. We're going to dialogue it until we're out of business, guys.

We are a very rich resource country in the west. I think we need to really ask ourselves how we will fix this thing. If we don't keep our money at home in western Canada, we're always going to have this hand out, please, please. When you have the breakup of the vote that is down in Ontario compared to here, we're never going to make a change here. Some of the former Reform people have said that. They quit.

What I'm suggesting is.... I'm not going to read this thing. We see the taxes go on in the rural and urban areas, property taxes. We've seen everything go up, up, up and whereas, whereas, whereas. I think our only answer to this thing....

If I'm wrong, give me a better solution, but let's not wait two or three or four or five years. There are people here who can't make it half that long. Let's say, “Thank you, Jean, and you have a hell of a good day. We're going to make western Canada work on its own.” If one of you people wants to be a leader and show courage and be the most sought-after individual in western Canada who could do something for this country, put your hand up.

Thank you.

The Chair: Thank you, Barry.

Dale, followed by Weldon Newton.

Mr. Dale Dornian (Individual Presentation): At the risk of sounding like a loyal Canadian, I'm going to take this gentleman's idea and change it just a bit.

We've been talking rural issues for a long time, whether it's rural British Columbia or New Brunswick or Newfoundland or Manitoba or wherever, and we can't seem to get anything done. We're continually being hijacked.

It's a big country and there are a lot of constituencies and there are a lot of MPs who represent rural areas. Why are we continually letting party lines divide us? Why are we continually letting pro-Wheat Board, anti-Wheat Board, pro-livestock, pro-grain...? Why all these divisions? Why can't we stand up and speak like rural Canadians and get something accomplished?

If the backbenchers would resign en masse and force an election on rural issues that couldn't be hijacked, so we could bring these things out to the public and not in little tiny rooms, and let the whole country talk about us, that we want to belong to their country too and that we're a big part of their country, maybe then some of these ideas would have glue and stick together instead of being cast to the wind. We have to work as a nation and we have to work against party lines as rural people standing up for our country.

The Chair: Thank you, Dale.

Our final presenter is Mr. Newton.

Mr. Weldon Newton (Individual Presentation): Thank you very much for the opportunity to speak to you this afternoon. I guess I will make my presentation short. Everything has pretty well been said on the specific issues.

We need to look at the broader picture. Canada needs a vision for agriculture, and especially a vision for agriculture in western Canada. I believe every producer who has talked to you today has their vision of where they think agriculture will go, and until we know what the Government of Canada's vision is, they will unfortunately never come together. We will have to wait until at least the fall before we see something, and unfortunately that will be too late for many people--if we see something.

Agriculture, in the past, has been the basis for our communities and has created jobs in our communities. It has also been the reason why, over the last 20 years, jobs have left our communities. Somehow we have to turn this around and make agriculture part of the solution for our rural communities, and not just part of the problem.

If we look at the international scene, we have to recognize in Canada that we have to export. The Americans and the Europeans are not going to quit subsidizing. Somehow we have to come to a recognition that if we're going to continue to compete in that market in value-added products, we need some support here as well. We don't need as much as the Americans are getting, but we certainly need something if we're going to continue to support our communities here.

Finally, with anything we do, we must unfortunately abide by the rules we have signed on to in the World Trade Organization and the U.S. countervail legislation. We have to be cognizant of them and be able to meet those thresholds. On the other side, in order to do that, we need to learn to be as creative as the Americans and the Europeans in seeing how much support we can lever underneath those trade rules and support our farmers instead of saying we're going to do nothing and be boy scouts.

So we all have a challenge ahead of us. Producers are waiting for some answers from the federal government on where we can go in the future and how we can work together.

Thank you very much.

½ (1950)

The Chair: Thank you, Weldon.

Now we'll go for a round of questions. David, would you like to start?

Mr. David Anderson: Thank you. Just a couple comments.

Daryl, you asked earlier why your proposal hasn't received a response--I think it fits into some of the things Don said--and that's because I don't think there is a will or an interest in spending any more money. I don't think there's an interest in spending $1.5 billion, never mind $5.2 billion. It doesn't matter what we say and how far we push that, the will is not there.

That's one of the reasons I've been concerned about that farm program right from the very beginning. This is about reducing subsidization and getting control of our operations more than providing a stable long-term farm program in the interests of producers. So when you hear about developments in that program, I have the concerns you do--and I've had them since last July--that we need to be very wary of that program.

A comment was made about Lyle Vanclief, Food Freedom Day, and how he said that just proves how efficient the farmers really are. Our response was in a statement in the House, when we reminded them you should never ever cuss farmers when your mouth is full. That's something we need to remember.

Does anyone here have a concern about tuberculosis, and want to make some comments on the record about the situation you may or may not have in this province on that? I'd like to give any of the panel members here an opportunity to comment on that situation. Do you have suggestions on what you would like to see done and what needs to be done in that situation?

Mr. Weldon Newton: I think one of the biggest concerns is the TB in the wild population that belong to the Crown, and whether or not there's a willingness to control or try to manage that. They're talking of eliminating the bison herd at Riding Mountain National Park. What about all the elk that come wandering out and eat all the forage around the park? How do we put a control on that? They've been doing a lot of monitoring and sampling, but it's a loose cannon. It's an accident waiting to happen.

Mr. David Anderson: This is one of the issues. You get Heritage Canada, Environment, and Health often overriding agricultural concerns. I think we need to be aware of that.

Mr. Weldon Newton: Again that's...how do you get the departments? The national parks service is very narrowly focused. They're destroying the park by not leaving it natural.

Mr. David Anderson: Howard asked whether anyone in this group loads producer cars now. That's an issue we'll probably run into more in Saskatchewan, but I just want to know if anyone has any opinions about loading facilities and how they should be treated, licensed, and those kinds of things.

A witness: Recently I've heard a lot of guys talking about it, so I think there's a bit of a buzz going on right now. Guys have backed away from it, but there's a lot more talk about it just recently.

½ (1955)

Mr. David Anderson: Okay. It's important that producers realize that there are some future issues here because of what the Grain Commission is allowed to rule or rules over the next few months. It's going to affect all of us as producers and what we can do with our grain in shipping that.

The Chair: Thank you, David.

Dick, do you have any questions?

Mr. Dick Proctor: Thank you very much, Charles. No, I don't have any specific questions. I think we've heard a tremendous amount here this afternoon and this evening. There have been some very heart-felt presentations. I guess I was here in 1999 when the agriculture committee was last in Brandon, and it's obvious from the presenters today that the situation has only grown worse over the last three years.

So the remark I would make would be to pick up on one of the last presenters about the need for us as a committee not only to work together to write the best report that's possible for the Minister of Agriculture when this tour is completed, but also to work together to make sure something is implemented that fundamentally changes agriculture here in western Canada.

Voices: Hear, hear!

The Chair: Rose-Marie, any comments?

Mrs. Rose-Marie Ur: I have a question maybe to Mr. Dewar and to Mr. Knight.

Both of you indicated in your presentations that the programs that are presently there and the safety net programs are okay and would run properly with just a little fixing. Other than money, what other “little fixing” are you suggesting?

Mr. Donald Dewar: I don't know what else we could do, because anything we do to the programs to make them work better means money.

Crop insurance--

Mrs. Rose-Marie Ur: So the bottom line is money only. This is the thing that works.

Mr. Donald Dewar: Strategically spent, I think. By its own admission, the Department of Agriculture has said that 25% of the decrease in the price of wheat and 18% in oilseeds is because of foreign subsidies. If we replace that, crop insurance would work a lot better, because the price would be 18% to 25% higher in the crop insurance and then would probably come closer to covering the cost of production.

I don't know what the numbers are; they can vary from $1 billion to $1.5 billion that would probably give that part of it back, additionally, which would still be less than when this government was elected in 1993.

Mrs. Rose-Marie Ur: Mr. Knight.

Mr. Daryl Knight: I have to sort of agree with Don here. It does come down to the fact that, if you change something, it doesn't matter if it's your car or your socks, it costs money. But if you take some of the programs that we're doing now and utilize that money, whether it goes into crop insurance or NISA or whatever, there's a lot of wasted money out there that can be utilized better. It won't take a lot more money to make the programs that are in place work a whole lot better. Crop insurance, enhanced with a premium to producers, will work.

Mrs. Rose-Marie Ur: Thank you.

The Chair: Paul.

Mr. Paul Steckle (Huron--Bruce, Lib.): Thank you, Mr. Chair. I apologize for not having been with the committee earlier today, but other commitments didn't allow me to travel yesterday when others left.

My question would be, how could you determine cost of production? I'm not saying that in a cynical way. Your problems are not very different from the problems of those farmers in Ontario who are in the grain seeds and oilseeds business--obviously there's more diversification in Ontario.

But how do you establish a cost of production? When farmers profit on what they produce, they tend to go out and enlarge their operations. Land prices escalate. How do you define a cost of production that would suit everybody's needs? Or do you cut someone off at 1,000 acres and at that point nothing else matters?

There are a lot of things I'd like to say to you, but I want you to think about that for a moment. Given that 10 years ago we were exporting $13 billion worth, today we're exporting $24 billion worth and farmers have never been so poor. Therefore, producing all this product, value-adding and all that goes with it, hasn't made our farming enterprises profitable, or more profitable.

So what do we do? We look at the supply-managed sectors, those people who virtually don't export, and they do quite well, thank you.

Let's take some lessons. Let's look at what we've done right and what we're doing wrong. The cost of production is something I would like someone to answer and give me some direction on.

Mr. Andrew Dennis: I don't know if I can say this right, but when I look at my crop insurance sheet, if my area says 28 bushels an acre for wheat and if I go to the elevator and sell this for $3.74 a bushel and it costs me $160 an acre to grow it, then you can pretty well figure it out there.

Mr. Paul Steckle: But your land costs may be different from some other person's.

Mr. Andrew Dennis: Yes, but as I said, I'm on my own.

Mr. Paul Steckle: Then cost of production should not vary from one farm to another. There should be a constant cost of production.

Mr. Andrew Dennis: Well, it's like crop insurance. You have an area and it can be one township. It could almost be the same. I don't know if that's how they could base it, but it's something to go by. That's the only thing I can say. I don't know; Dennis here can probably answer that one too.

Since I started hanging around with Murray Downing, I've hardly been home in the last year. I've been down to Ottawa a few times. One thing I'm finding about government is there's something very mystical about it. It's a bit like being in a Harry Potter movie. It takes a little while to figure out just what's going on.

On the question you just asked, when we went to the trade department, we basically asked how important wheat is. Wheat in Canada, if it's not the most important product we produce, is second best. It has a huge impact on the economy, with fertilizer and herbicide and jobs. You can go on and on about it. How do we determine how important that is? That's a question I can throw back to you guys, because it's really hard to figure out. Do we need the 25% or 30% we consume internally, or is the other part that we export more important? We asked them the question, and they said it was. In fact, they said it was very important.

So we have to decide as a government. Is it important or isn't it? It's really tough to find out what exactly is going on. You talk to government, and they keep talking about diversification on the plains, specialization, value-added wheat. There's ethanol, hogs, sheep, goats, straw plants, wind, solar, and water. One thing I haven't heard yet is anything about raising snails. Mr. Vanclief's people should look into that, because maybe there's some work to be done in that area and we could address the poverty on the plains.

That brings up another point. Poverty Plainsmen are coming to the Keystone Centre in the UCT Pavilion March 8. It's at 8 o'clock and tickets are through Ticketmaster. I want to see everybody there, because it's a fundraiser so we can keep going down and pushing buttons in Ottawa.

Thank you.

The Chair: Thanks, Andrew.

Paul, I can't go further with that, because we have to....

Rick, are you ready?

Mr. Rick Borotsik: You betcha. I haven't had a chance to ask a question at all today, have I? Well, I won't even ask my question. You can ask the question. I just want a couple of comments.

First of all, I'd like to recognize that Larry Maguire is here, the member of the legislative assembly from Arthur-Virden. He's been here most of the afternoon. Thank you, Larry. He understands agriculture in southwestern Manitoba certainly as well as anyone.

I'd also like to thank Don Dewar. I think publicly Don has passed on the torch of the president of KAP. From this committee, I know Don has come forward before the committee on rather numerous occasions. I would like the people in the audience to recognize that Don has worked for them very diligently in the past. I'd like to thank him for giving us as much input on Manitoba agriculture as he possibly could.

I'd also like to thank Weldon for taking over that torch. He's here. Congratulations, Weldon. We expect that you're going to do as admirable a job as Don Dewar did.

I have just a couple of comments. I know some people here have questioned what the long-term vision of agriculture is in Canada. I should tell you that each and every one of the members around this table has questioned the same vision of agriculture. We were privy to a demonstration of that vision over the last couple of weeks, and I don't think I'm telling you any tales out of school--although it was probably more like stool--when I say I don't think any one of us really had a good confidence as to where the department was heading with respect to agriculture.

You talk about a safety net program to be developed within the next 18 months to two years. I don't see that happening. I don't see that the warm, fuzzy, bureaucratic BS that was thrown on the table is really going to assist you. What I can tell you is that what this committee hears over the next week and the next two weeks after that will go back, I can assure you of that, and it's going to go back with a lot of underlines as to what's necessary for agriculture, not only in the long term but in the short term.

All of your input is very valuable, and I'd like to thank each and every one of you for showing up and giving us your understanding as to where we should be heading with agriculture in the next number of years. Thank you.

Charles, you get my question.

The Chair: Thanks, Rick. I don't plan to ask a question, but we do have a lot of thoughts. Certainly it was good today for us to come here and to be able to see from your hearts what you were saying about the future of farming or agriculture in this area.

As a government and probably as a nation, we are faced with some very difficult decisions to make with agriculture. More importantly, probably, you have some very important decisions to make.

We said before today that Canadian grains are at the top of the list in terms of the international communities that buy them, which is a long-standing tradition the Canadian producers have had. But we also have to recognize that the world is changing. In terms of protein needs, a lot of countries today are looking for other commodities, whether it be rice or whatever. In many areas this has become.... In fact, even in our homes, we probably eat less bread than we did 40 years ago.

We also are faced with other countries around the world, especially in South America and Australia, that have their own ways of doing agriculture, in many cases putting in commodities that lower input costs from what we have here in Canada.

We heard about Monsanto, about some of these costs you have. The machinery dealers.... In fact, some people feel the manufacturers simply set their prices in order to gobble up any money you might get in terms of your extra incomes. So it's a very difficult issue. I think in terms of what you're doing, it's amazing that you can produce at what the price is today or even a little bit better than what the price is today. If you take the figures in terms of our production and figure how much it would cost to bring it up to the cost of production you mention, it will take a goll-darned lot of money.

Today we've heard from people all the way from Stonewall down here to Brandon, and probably we could spend many more days. You have come and we hope to be able to present your views when we get back to Ottawa. We want to thank you on behalf of all our members for your patience, for your endurance. We regret the shortness of the time you had to make your presentations, but they were well done and we certainly appreciate your efforts. Eventually we'll try to get back to you with a copy of the report that will come from our hearings throughout Canada this winter.

Thank you very much. With that, we'll adjourn our meeting.