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37th PARLIAMENT, 1st SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Monday, March 11, 2002

0900

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

0905

0910

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

The Chair

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

The Chair

Mr. Proctor

The Chair

Mr. Borotsik

The Chair

Mr. Steckle

The Chair

Mrs. Ur

The Chair

Mr. McCormick

Mr. Abbott

0915

The Chair

Mr. Geofrey Kime (President, Hempline Incorporated)

0920

The Chair

Mr. Stan Eby (Director, Canadian Cattlemen's Association)

0925

The Chair

Mr. Peter Twynstra (President, Great Canadian Bean Co. Ltd.)

0930

The Chair

Mr. Tino Breuer (General Manager, Ontario Bean Producers' Marketing Board)

The Chair

0935

0940

Mr. Jim Wilson (Individual Presentation)

0945

The Chair

Mr. Ken Bee (Vice-President, Grain Growers of Canada)

0950

The Chair

Mr. Ken Bee

The Chair

Mr. Ken Bee

The Chair

Mr. Don McGugan (Past President, Lambton Federation of Agriculture)

1000

The Chair

Mr. Bob Down (Chair, Ontario Agricultural Commodity Council)

1005

The Chair

Mr. Greg Devries (Ontario Field Crop Research Coalition, Ontario Soybean Growers)

1010

The Chair

Mr. Howard Hilstrom

Mr. Peter Twynstra

Mr. Howard Hilstrom

Mr. Peter Twynstra

Mr. Howard Hilstrom

Mr. Peter Twynstra

Mr. Howard Hilstrom

1015

Mr. Don McGugan

Mr. Howard Hilstrom

Mr. Ken Bee

Mr. Howard Hilstrom

Mr. Stan Eby

Mr. Howard Hilstrom

Mr. Stan Eby

The Chair

Mr. Paul Steckle

Mr. Stan Eby

Mr. Steckle

1020

Mr. Peter Twynstra

Mr. Steckle

Mr. Tino Breuer

Mr. Steckle

The Chair

Mr. Steckle

The Chair

Mr. Proctor

Mr. Peter Twynstra

1025

Mr. Dick Proctor

Mr. Don McGugan

Mr. Proctor

Mr. Peter Twynstra

Mr. Proctor

Mr. Peter Twynstra

Mr. Proctor

The Chair

Mrs. Ur

1030

Mr. Peter Twynstra

Mrs. Ur

Mr. Geofrey Kime

Mrs. Ur

Mr. Peter Twynstra

Mrs. Ur

Mr. Ken Bee

The Chair

Mr. Borotsik

Mr. Greg Devries

Mr. Rick Borotsik

Mr. Peter Twynstra

Mr. Larry McCormick

Mrs. Rose-Marie Ur

1035

Mr. Don McGugan

1040

Mrs. Ur

Mr. Borotsik

Mrs. Ur

Mr. Greg Devries

Mrs. Ur

Mr. Bob Down

Mrs. Ur

Mr. Steckle

Mr. Bob Down

The Chair

Mr. David Anderson

1045

Mr. Geofrey Kime

Mr. Anderson

Mr. Peter Twynstra

Mr. Anderson

Mr. Greg Devries

Mr. Anderson

Mr. Bob Down

The Chair

1050

The Chair

1105

Mr. Henry Aukema (Chair, Middlesex County Pork Producers)

The Chair

Mr. Henry Aukema

1110

Mr. Steckle

Mr. Charles Regele (President, Huron County Federation of Agriculture)

1115

Mr. Steckle

1120

Some hon. members

Mr. Steckle

Mr. Wayne Passmore (President, Garlic Growers Association of Ontario)

Mr. Steckle

Mr. Wayne Passmore

Mr. Steckle

Mr. Dave Core (President, Canadian Alliance of Pipeline Landowners Associations)

The Acting Chair (Mr. Paul Steckle)

1125

Mr. Dennis Jack (President, Ontario Corn Producers' Association)

1130

Mr. Abbott

1135

Mr. Steckle

1140

The Chair

Ms. Beatrix Enter (Manager, Great Lakes Organic Inc.)

1145

Ms. Beatrix Enter

Mr. Tony Beernink (Past President, Catholic Rural Life)

1150

Mr. Steckle

Mr. Ben Van Diepenbeek (Warden, County of Huron)

1155

Mr. Steckle

Mr. Rick Borotsik

Mr. Steckle

Mr. Howard Hilstrom

Ms. Beatrix Enter

1200

Mr. Howard Hilstrom

Mr. Henry Aukema

Mr. Howard Hilstrom

Mr. Henry Aukema

Mr. Howard Hilstrom

Mr. Dennis Jack

Mr. Steckle

Mr. Proctor

Ms. Beatrix Enter

Mr. Proctor

Ms. Beatrix Enter

Mr. Proctor

Mr. Charles Regele

1205

Mr. Proctor

Mrs. Ur

1210

Mrs. Ur

Mr. Dennis Jack

Mrs. Ur

Mr. Dennis Jack

Mrs. Ur

Mr. Dennis Jack

Mrs. Ur

Mr. Steckle

Mr. Borotsik

Mr. Don McCabe

Mr. Borotsik

Mr. Don McCabe

Mr. Borotsik

Mr. Don McCabe

Mr. Borotsik

1215

Mr. Dennis Jack

Mr. Borotsik

Mr. Dennis Jack

Mr. Borotsik

Mr. Dennis Jack

Mr. Borotsik

Mr. Dave Core

Mr. Borotsik

Mr. Steckle

The Chair

1225

Mr. Larry Verbeke (Second Vice-President, Ontario Fruit and Vegetable Growers' Association)

The Chair

Mr. Gord Coukell (Dairy Farmers of Ontario)

1230

The Chair

Mr. Jim Grey (President, Casco Inc.)

1235

The Chair

Mr. Bliss Baker (President, Canadian Renewable Fuels Association)

1240

The Chair

1245

Mr. Alistair Neill Stewart (Co-Chair, Kitchener Waterloo Food Action)

The Chair

Ms. Judy Greenwood-Speers (Individual Presentation)

1250

1255

The Chair

Mr. Rod MacRae (Individual Presentation)

1300

The Chair

Mr. Mervyn J. Erb (Independent Crop Consultant, Erb Crop Management Systems Inc.)

1305

The Chair

Mr. Al Hamilton (Chemical Business Manager, Sifto Canada Inc.)

1310

The Chair

Mr. Anderson

Mr. Rod MacRae

Mr. Al Hamilton

Mr. Anderson

Mr. Anderson (Victoria)

1315

Mr. Mervyn Erb

Mr. David Anderson

Mr. Mervyn Erb

Mr. David Anderson

Mr. Mervyn Erb

Mr. David Anderson

The Chair

Mrs. Rose-Marie Ur

Mr. Jim Grey

1320

The Chair

Mr. Borotsik

Mr. Gord Coukell

Mr. Borotsik

Mr. Gord Coukell

Mr. Borotsik

Mr. Bliss Baker

Mr. Borotsik

Mr. Bliss Baker

Mr. Borotsik

Ms. Judy Greenwood-Speers

1325

Mr. Borotsik

Ms. Judy Greenwood-Speers

Mr. Borotsik

Ms. Judy Greenwood-Speers

Mr. Borotsik

Ms. Judy Greenwood-Speers

Mr. Borotsik

Mr. Jim Grey

Mr. Borotsik

Mr. Jim Grey

Mr. Borotsik

Mr. Jim Grey

Mr. Borotsik

Mr. Jim Grey

Mr. Borotsik

Mr. Jim Grey

Mr. Borotsik

Mr. Jim Grey

Mr. Borotsik

Mr. Jim Grey

Mr. Borotsik

The Chair

Mr. Steckle

The Chair

Mr. Steckle

Mr. Alistair Neill Stewart

Mr. Steckle

Mr. Alistair Neill Stewart

Mr. Steckle

Mr. Alistair Neill Stewart

Mr. Borotsik

Ms. Judy Greenwood-Speers

1330

Mr. Steckle

Ms. Judy Greenwood-Speers

Mr. Steckle

Ms. Judy Greenwood-Speers

Mr. Paul Steckle

Mr. Mervyn Erb

Mr. Paul Steckle

Mr. Rod MacRae

Mr. Paul Steckle

Ms. Judy Greenwood-Speers

Mr. Rick Borotsik

Ms. Judy Greenwood-Speers

The Chair

Mr. Larry McCormick

The Chair

Mr. Larry McCormick

The Chair

1335

Ms. Judy Greenwood-Speers

The Chair

The Acting Chair (Mrs. Rose-Marie Ur)

Mr. Elbert van Donkersgoed (Strategic Policy Adviser, Christian Farmers Federation of Ontario)

1340

1345

Mr. Wayne Roberts (Project Coordinator, Toronto Food Policy Council)

1350

Mrs. Ur

Mr. David Linton (Vice-Chair, Independent Ontario Hog Producers Association)

1355

Mrs. Ur

Ms. Mary Lou Garr (Chair, Agricultural Groups Concerned About Resources and the Environment (AGCare))

1400

Mrs. Ur

1405

Mr. Gerald Kolkman (Individual Presentation)

Mrs. Ur

1410

Mr. Gerald Kolkman

Mrs. Ur

Mr. Davis Bryans (Individual Presentation)

1415

Mrs. Ur

Mr. Len Veri (President, Exeter Produce and Storage Company Ltd.)

1420

Mrs. Ur

Mr. Ron Martin (Director, District 3, Ontario Wheat Producers' Marketing Board)

1425

Mrs. Ur

Ms. Pamela Stanley (Spokesperson, Ontario Agri-Food Education)

1430

Mrs. Ur

Mr. David Smith (Individual Presentation)

1435

Mrs. Ur

Mr. Jim Gowland (Director, Ontario Soybean Growers)

1440

Mrs. Ur

1445

Mrs. Ur

Mr. Steve Twynstra

Mrs. Ur

Mr. Terry Laire (Individual Presentation)

1450

Mrs. Ur

1455

Mr. Anderson

Mr. Steve Twynstra

Mr. Anderson

Mr. Steve Twynstra

Mr. Anderson

Mr. Steve Twynstra

Mr. David Anderson

Mr. Elbert van Donkersgoed

Mr. Anderson

1500

Mrs. Ur

Mr. Proctor

Ms. Pamela Stanley

Mr. Proctor

Mr. David Smith

Mr. Proctor

Mrs. Ur

Mr. Proctor

Mr. Peter Twynstra

1505

The Acting Chair (Mrs. Rose-Marie Ur)

Mr. McCormick

Mr. Elbert van Donkersgoed

1510

Mr. McCormick

Mr. Wayne Roberts

Mrs. Ur

Mr. McCormick

Mrs. Ur

Mr. Borotsik

Mr. Jim Gowland

Mr. Borotsik

Ms. Pamela Stanley

1515

Mr. Rick Borotsik

Mr. Steve Twynstra

Mr. Borotsik

The Acting Chair (Mrs. Rose-Marie Ur)

Mr. Howard Hilstrom

Mr. Wayne Roberts

Mr. Howard Hilstrom

Mr. Wayne Roberts

1520

Mr. Howard Hilstrom

Mr. Wayne Roberts

Mrs. Ur

Mr. Tom Prout (General Manager, Ausable Bayfield Conservation Authority)

Mrs. Ur

1525

Mr. McCormick

The Chair

CANADA

Standing Committee on Agriculture and Agri-Food

NUMBER 054

1st SESSION

37th PARLIAMENT

EVIDENCE

Monday, March 11, 2002

[Recorded by Electronic Apparatus]

¿ (0900)

[English]

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

[Translation]

Ladies and gentlemen, I am pleased to be here in Grand Bend today.

[English]

Our meetings today are in both French and English. I would assume most here will speak in English. The materials you've presented here to us... I see most are coming. Theoretically we have a problem with that, but realistically we don't. It means our clerks can eventually translate those and give them to committee members.

With that, pursuant to Standing Order 108(2, the Standing Committee on Agriculture and Agri-Food today is looking at the future role of government in agriculture. In fact, we've been looking at that for some time.

I'll give you just a few explanations. This is the fifth province we've visited. In most provinces, the larger provinces, we're attending in two sites. We've been scheduled here today in Grand Bend and tomorrow in Napanee.

We are here to listen. We are not here to present any program. We're here to listen to your views.

¿ (0905)

After we've done that throughout the ten provinces of this country, we'll go back to Ottawa to listen to further comments and eventually prepare for Parliament, for the House of Commons, a report on the findings of our committee.

Today, the Bloc Québécois is not with us, but we generally represent all parties in the House, so it is a group of many different opinions and many different views, both in terms of policy and views. But we are here working for the good of farmers and agriculturalists across Canada. We want to assure you that your comments will be heard. They'll be worked upon by our committee and by our research staff and clerks, and hopefully we'll get a report to Parliament that will reflect our vision of the future role of government in agriculture.

Before we begin this morning, I'd like the members of our committee to introduce themselves, beginning with Howard Hilstrom, who is our vice chair.

Howard.

¿ (0910)

Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance): My name is Howard Hilstrom. I'm the vice-chair of this committee, as the chair has said. I am the chief critic on agriculture for the Canadian Alliance, the official opposition in Parliament. I come from Manitoba. Selkirk--Interlake is my riding, and I have a cow-calf operation and a background in feedlot operation, running 200 cows in Manitoba.

The Chair: David.

Mr. David Anderson (Cypress Hills--Grasslands, Canadian Alliance): Good morning. My name is David Anderson. I'm the Canadian Alliance member for Cypress Hills--Grasslands. I come from Frontier, Saskatchewan, which is right in the southwest corner of the province. I've been a farmer for 25 years. I've been a politician for only a year and a half, but I've been involved with agriculture ever since I was born.

The Chair: Dick.

Mr. Dick Proctor (Palliser, NDP): Good morning. My name is Dick Proctor. I'm the New Democratic Party's agriculture critic. I represent the riding of Palliser in Saskatchewan,and I was first elected in 1997.

The Chair: Rick.

Mr. Rick Borotsik (Brandon--Souris, PC/DR): My name is Rick Borotsik. I'm the agriculture critic for the Progressive Conservative Party. I come from beautiful Brandon, Manitoba, in which we have a very diverse agricultural base. We're not growing a lot of corn or a lot of soy, but we're working on it, so we're going to be some competitors, I suspect.

The Chair: Paul.

Mr. Paul Steckle (Huron--Bruce, Lib.): I am Paul Steckle, the member for the riding of Huron--Bruce, elected in 1993. Since that time, I have for the most part sat on the agriculture committee. I also sit on the fisheries and oceans committee, and I'm the vice-chair of that committee at the moment. I take great pride in telling you that, as host of this riding, I share that with my colleague from the neighbouring riding and we constantly battle to see who has the greatest riding. We think we both have great ridings. Don McGugan is going to attest to that this morning.

We're certainly very happy to have you come into this part of the country and to celebrate agriculture with us, the future of agriculture as it pertains to the government and our role in that area.

We want to have you come back again some time. The winds have now subsided and the water will calm as the day goes on, but do come back again and see this great part of the country. You're always welcome here. Thank you for coming here today.

The Chair: Rose-Marie.

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.): I'm Rose-Marie Ur, member for Lambton--Kent--Middlesex. I, too, want to join in welcoming all my colleagues to the heart of Canada. I know we'll see each one of you back to test the waters when it's a tad bit warmer and probably check out the golf course.

Paul and I are both very proud to have everyone come to see how important agriculture is to southwestern Ontario and to show the great diversity we have here. I'm really pleased that the powers that be saw fit to bring the agriculture committee to this part of the country, because as Don will attest to in a few minutes, we do generate mega-dollars through agriculture in this community.

A warm welcome, and I look forward to today's presentations. We have a real good cross-section of presenters and I know we'll all gain a lot from it. So welcome.

The Chair: And Larry, the parliamentary secretary to the minister.

Mr. Larry McCormick (Hastings--Frontenac--Lennox and Addington, Lib.): Thank you, Mr. Chair, and good morning, ladies and gentlemen.

It's great to be here. I was elected in 1993 representing the riding of Hastings--Frontenac--Lennox and Addington, a long name, and the riding which officially has the most kilometers of road of any riding in all of Canada, which just means that when they tell me where to go, I've always got someplace to go in a different direction.

We represent different political parties but it is a very unique standing committee of the House of Commons. I want to take a moment to say that I've heard people from other parties say that we do have a reputation of getting along better than any other committee on the Hill. I think that's very important, because each one of us does believe in the importance of agriculture, and that's our challenge to convince others--our colleagues from the urban areas--since we're in the minority.

I'm glad to be here in this great part of the country, and thanks for having us, Mr. Chair.

¿ (0915)

The Chair: Thank you, everybody.

My name is Charles Hubbard. I'm from Miramichi, New Brunswick. I have had some experience with the dairy industry in terms of the processing end of it and also with beef. It's certainly good to be here today. I'm just thinking that around the table we have the west well represented and of course Ontario. Quebec is missing today, but Atlantic Canada will be there next week.

I would just like to mention that with our round table approach we have allowed about five minutes for each participant to present his or her report. We'll try to indicate when you get near that five minutes. I'll give you the old football time-out signal, which means that I don't want to cut you off, so try to get it over with as quickly as you can.

After we've heard all the presenters, then we go through a process of having questions asked by various members of the committee. With that, each committee member of course again is allocated so much time. If they have seven minutes to do their part, then try to be as succinct as you can in giving your answer, because they get a little bit frustrated if they have a second question. So we'll try to work as a team here, all of us.

With that, the first witness is Mr. Kime with Hempline.

Mr. Geofrey Kime (President, Hempline Incorporated): Mr. Chairman and folks, committee members, I appreciate the opportunity to come before you today and share with you my views on the future role of government in agriculture.

By way of introduction, my name is Geof Kime. I'm the president of Hempline Incorporated. We're located near Delaware, Ontario, which is just southwest of London. What we do is we take hemp stocks that are grown locally, we bring them into our facility, extract the fibres from them, refine them, and we're selling these fibres predominantly to replace glass fibre in molded composites.

What I'd like to talk to you about today is the future of the government's need to help in assisting diversification of agriculture and the creation of new value-added processing opportunities. Now this is something that is often talked about. These are buzzwords that are commonly thrown around. It's something I think the government needs to look at in the future and to do more work on.

In our opinion and in our experience, the single largest challenge to diversification and creating new value-added processing opportunities is the access to capital. The simple reality is that most chartered banks and venture capital firms are not interested in investing or financing early-stage or new value-added processing opportunities. As a result, many of these great ideas really never get off the ground.

Now, interestingly, the government has done a good job in supporting research and development in these areas. The unfortunate reality, though, is that when these R and D efforts are attempted to be commercialized, the entrepreneurs in the businesses cannot raise the capital to take it to the next level, and much of this R and D is never really properly realized.

We've seen recently some changes to the Farm Credit Corporation mandate, which is certainly a step in the right direction in that it will allow FCC to lend to agriculture-related processing opportunities and actually invest in these areas. But clearly the amount of money that's going to be needed for full diversification and creation of new opportunities is something that I don't think the FCC can handle alone.

We've also seen that other government agencies such as the BDC and other government programs have essentially ignored some of the agriculture-related activities, assuming that Agriculture Canada is taking care of them or other organizations. So the access to capital is a real problem and it's something that needs to be addressed.

Now, diversification and creation of new value-added processing opportunities is important, because it will allow farmers to have new markets for both existing and new crops and ultimately allow them to get into new business opportunities.

Some of the solutions I think that could be looked at by the government are ultimately trying to create new programs to encourage private sector dollars to flow into these areas. Some of these programs could be as simple as tax credits going for investment into some of these areas from either private individuals or businesses.

There are examples. Labour-sponsored fund programs are in existence, and there's certainly no reason those types of programs couldn't either be targeted to look at specifically agricultural-type businesses. Certainly revamping the FIMCLA is something you could look at, to allow it to give government-backed loans to small businesses rather than just focusing on farmers or farm-based cooperatives.

I think it's very important that the government ensure that fair and equal treatment is given to some of these new value-added processing opportunities from all government agencies, particularly Industry Canada where we've seen, as I've mentioned, BDC. Programs such as Technology Partnerships Canada have made it clear that they're not interested in supporting agriculture, and we've been told that outright.

I think it's also important that Industry Canada and Agriculture Canada cooperate together more. It seems that some of these new business opportunities are really falling through the cracks where, with Agriculture Canada, typically the programs stop at the farm gate, and Industry Canada assumes that Agriculture Canada is supporting these value-added processing opportunities when in fact they're not.

I think it would also be helpful if we could look at discussing agriculture in Canada beyond just the context of food production, that we consider some of these new value-added opportunities, whether it's in ethanol, in fuel, in some of the fibre-based industries like ours, or in some of the new nutraceutical areas. These are all non-food opportunities. They're very exciting, they're growing quickly, and yet they're not really being discussed all that commonly. I don't think it would hurt to have the Minister of Industry and the Minister of Agriculture talk about this.

So what we need is leadership from the top, and we need to see some action. Ultimately, I hope we can see this committee implement some change and not just contemplate it.

Thank you.

¿ (0920)

The Chair: Thank you, Geofrey.

Mr. Stan Eby.

Mr. Stan Eby (Director, Canadian Cattlemen's Association): Thank you, Mr. Chairman. Thanks for the opportunity to visit with you today. The cattle industry in Canada appreciates the working relations we've had with the federal government.

Agriculture needs to be positioned as a contributor to the Canadian economy. The importance of food production must be promoted actively and effectively to all sectors of our society. Food production, processing, and marketing affect all Canadians every day. I question how many consumers really appreciate the safety, quality, and value of their food.

Canada's beef industry remains the largest source of farm cash receipts in Canada at $6.6 billion in 2000, representing 22% of farm cash income. Beef and beef cattle remain Canada's largest agricultural export to the United States at $2.5 billion, and total beef and beef cattle exports set a new record in 2000, exceeding $3 billion.

For food safety, the Canadian industry has been pursuing an aggressive pasture-to-plate beef safety and quality program since 1994. The industry again appreciates the vision and commitment of Agriculture and Agri-Food Canada to initiate the on-farm food safety program. CCA is a major supporter and participant in the program. Future government cooperation, coordination, and financial support will be necessary to build and maintain a viable food safety system.

The Canadian Cattlemen's Association has taken a very cautious approach to safety nets. Any support must be non-countervailable. We recognize that a low-level disaster-based safety net program is necessary, but we advocate allocation of a small portion of these funds to development programs such as the Beef Industry Development Fund to advance competitiveness, food safety, and marketability of Canadian agrifood products. These activities are an important investment and can reduce future dependence on safety nets, and they clearly fit into the green category. I can't overemphasize that too much, that industry development funds are very important to the future of all agrifood products.

On the environment side, our members are proud of their role as stewards of the land. We believe in a cooperative approach to conservation and a science-based approach to soil management. Cooperative approaches will tend to pull the community together, where punitive or imposed actions usually divide communities.

There are a number of initiatives under discussion to subsidize the shift of marginal land from cultivation into permanent cover. We remain concerned about the artificial stimulus this could have on the cattle numbers and future profitability. It's imperative that any program of this nature, if implemented, be accompanied by increased funding to market development activities. This will ensure sustainability by growing markets to meet increased production and providing a reasonable economic return to sustain rural families.

A number of environmental issues of public concern must be managed and financed accordingly. Some of those would be the wetlands projects, the species at risk, and those types of programs.

Canada has an excellent record on animal health and food inspection, but protection from foreign animal diseases, such as BSE and foot-and-mouth disease, are critical. It is also necessary to have an effective plan in place in the event of an outbreak. It is imperative that CFIA have the resources to maintain our status. We can think of what happened in the U.K. and Europe, where it cost many billions of dollars to control outbreaks. We would like to prevent that from happening in this country. CFIA is the main player in that and needs the resources to work in that direction.

A vision for future land use is important. Just recently, Canadian cattlemen held a land use planning workshop. This will be an ongoing project that's very vital to our industry. The federal government may not be directly involved in land planning, but it is important that there be policy guidelines to ensure food production for future generations. These land use programs vary from province to province. We have native claims in some provinces and maybe not as many in other ones. But certainly land use planning is very important to the survival of not just the beef industry but all agrifood production.

On the trade issues, export markets are vital to the survival of our industry, along with many others. The federal government must put in place policies and agreements to enable us to trade effectively in world markets. The government must also be prepared to defend these policies in the event of challenges.

On the financial side, agriculture, and in particular the cattle sector, needs access to affordable credit. We applaud the recent changes to the Farm Credit Act. It is important that we have access to consistent, affordable, long-term credit programs.

Our industry is not an island unto itself, and neither is Agriculture and Agri-Food Canada. We must work together with all groups--health, environment, trade, and tourism--to build a stronger food production industry in Canada. Please help the Canadian beef industry attain its vision. Our vision for a dynamic, profitable, Canadian beef industry is to have Canadian high-quality beef products recognized as the most outstanding by Canadian and world customers.

¿ (0925)

The Chair: Thank you, Stan. He is from the Canadian Cattlemen's Association.

We'll hear next from the Great Canadian Bean Co. Ltd., Peter Twynstra.

Mr. Peter Twynstra (President, Great Canadian Bean Co. Ltd.): Good morning, Mr. Chairman, and members of the standing committee.

Since I presume I'm one of the few people who actually lives in Grand Bend, may I also bid you a warm welcome. I'm glad we changed the weather today, compared to yesterday. I just want you to know that on Saturday afternoon the temperature changed from plus 15 to minus 5 within 12 hours. So it can change here rapidly. Welcome to Canada.

I think the Government of Canada should be complimented on hosting a series of round table discussions across Canada to discuss the future role of government in agriculture.

As an individual involved in both the production and export of agricultural commodities, I'm a little concerned as to the effectiveness of the process. I say that humbly, Mr. Chairman. The days of Eugene Whelan, Bill Stewart, and Ralph Ferguson are gone, as far as receptiveness to government is concerned. I am concerned about that. Let's have a little bit of a reality check.

Ag production and its spinoffs constitute the second largest business in Canada. I'm assuming that is generally known. What are the benefits of that--the jobs that are created, the foreign exchange? Over 50% of gross farm revenue comes from an exported commodity. In our business, it's over 90%. Over 90% of products going to our plant or plants are exported. We have available to our consumers--and that's all of us--the cheapest, the highest quality, the best selection, and the safest food ever of any country in the world. We're an envy to most people in the world. Just ask people other than Canadians how enviable Canada really is.

It's a renewable resource. Let me assure you, with my farmer's cap on, we have farmers in Canada who are second to none. The ability of those farmers to compete in a world environment is nothing short of tremendous. Agriculture, in its primary state, also supports and maintains and builds communities. I think that should be expressed.

But we are witnessing a reduction in political power. Now, less than 2% of Canadians actively call themselves “farmers”. You can interpret that even further as to what percentage really produce most of the food; it is absolutely very small.

A lower and lower portion of the consumer dollar is going to the primary producer. We're witnessing an ever-changing marketing environment. The consolidation going on in our business is incredible--the canning companies. My friend beside me here and I used to go to England, and we'd have 40 or 50 people to a conference every second year. I think, Paul, you've been at them. There are four left. Consolidation: that is putting tremendous pressure on the exporters of commodities.

On the side, I could also express to you that there's a new development taking place that you will not have heard much about. It's buying on the Internet, using essentially a Dutch clock auction system. You'll be hooked in, on line. You don't know who you're bidding against, but if you want the deal, you can go lower. And I'll tell you, it is going to be dynamite--dynamite. It's live on the Internet. You can just punch in your number if you want to go lower. Ultimately, Mr. Chairman, all we can do, as intermediaries, is return what is left over to the grower. And speaking as a grower, the grower needs more.

We have more and more regulations--and we're not opposing most of those regulations--but fewer and fewer opportunities for public participation. Ag Canada, compared with ten years ago, has been decimated and probably will go lower. We have higher debt loads than ever before.

Freer trade, of which I was a great promoter, generally has not worked for the producer. Again, I could show you examples of what has happened. Speaking about this Internet pricing, you could be competing with China, with Ethiopia, with countries where values are totally different, and the buyers will use it to their advantage.

What we're really witnessing, ladies and gentlemen, and this is where we need your help, is a failure of the marketplace. The farmer is not being reimbursed for the value he produces. The government's role should be to enhance the position of agriculture in Canada; it is important to Canada. It has to recognize the uniqueness of agriculture. We're global traders and we're good at it, but we have to have the right tools to do it with.

Statistics are horrific and speak for themselves: 70% or more of farmers have off-farm jobs; the average age in agriculture in primary production is approaching 60; the transfer to the next generation will be a major problem--part of it because of capital value. I don't want to get into why capital values are as high as they are. Time simply will not permit that right now. Quota values: the government must recognize major competitors' actions. What's happening in the U.S.A.? We compete with the U.S.A. We compete with Europe, invariably.

¿ (0930)

The U.S. Farm Bill is talking today about increasing 26%.

I think I'd better quit. I have another page to go, but there's so much to talk about.

Again, thank you for the opportunity to address this commission.

The Chair: Thank you, Peter.

We now have, from the Ontario Bean Producers' Marketing Board, Tino Breuer.

Mr. Tino Breuer (General Manager, Ontario Bean Producers' Marketing Board): Thank you for the opportunity for the white bean growers of the province to have a voice at the table. As general manager for only two years with the board, I've taken it upon myself to try to help craft a new paradigm for our industry. I'd like to read from what I've got.

The white bean industry is a microcosm of what Canadian agriculture is facing today. Until recently, North American overproduction accelerated declining acres, pushing them into lower-cost production zones; margins in profitability were squeezed. It's the same litany we see all around us today in agriculture.

White beans are more a food commodity than other grain commodities but nonetheless are treated and viewed as a commodity. We want and need to differentiate or even brand ourselves. In January 2001, I gave my board of directors a two-page future direction paper that tracks very closely to some of the elements of the recent agricultural policy framework by the APF. For some aspects of the APF, such as risk management and safety nets, we are partnering with other local commodity organizations that are championing these initiatives.

The food safety issues are being industry or buyer and user driven because of the short distance between a dry bean farmer and a consumer in the supply delivery chain. Environmental practices are also being addressed in a similar fashion.

However, our greatest challenge, and of course every challenge has an opportunity, comes in the deployment of research funds in the area that the APF labels bio-products or process area. In our specific case, white beans are a high--and that's relative--value crop, with high risks and small margins for the grower. This spells low acres and small budgets from which this organization can operate and carry out R and D.

Our objective is to root out or perhaps even create a demand pool bean, a bean that the market not only wants but that buyers will pay for so as to give incremental margins and returns to all sectors of the supply chain.

The Ontario Bean Producers' Marketing Board is not interested in just relabelling existing initiatives to target so-called new or emerging markets. The Ontario Bean Producers' Marketing Board will be part of the APF rebalancing of scientific focus. However, our circle of contacts and expertise is rooted in what the APF has called “traditional areas”. As a research funding body, the board uses producers' funds in those areas that give the most visible bang for their buck back to the grower, and that happened to be agronomics.

However, in hindsight, the incremental margins of return for such research went more to growing areas other than Ontario. The board will pursue the bio-products and process area. However, within this redirection and rebalancing, we stand a very high risk of redeploying some meagre resources in non- or low-payback areas. We also face competition from larger, better financed, multi-disciplined agri or agri/bio pharmaceutical concerns, and this can throw up some considerable barriers to entry.

From a practical hands-on level, our challenge will be how can we increase our odds of success while not being fully aware of all the signposts along the way? I doubt the committee can offer some concrete assistance in this sphere. Our purpose here was just to let the committee know that there are organizations out there thinking along the lines of the APF.

Again, thank you for the opportunity to address the panel.

The Chair: Thank you, Tino.

Now we have Mr. Jim Wilson, as an individual.

You could maybe briefly mention what type of agriculture you're involved with.

¿ (0935)

I'll just take this point in our program to mention that if there are others in the audience who want to present and have not made application, the clerk will still take your name. We generally have a round of about two minutes where any individual can come and have a brief say. The registration desk is just outside the hall here, in the other entryway.

Jim, welcome. The floor is yours.

¿ (0940)

Mr. Jim Wilson (Individual Presentation): Thank you, Mr. Chairman. Ladies and gentlemen, thank you again for the opportunity to speak today.

I am primarily a retiring cash grain farmer in Lambton County. It is with deep concern and regret that I look into the future of agriculture in Canada.

We as farmers keep hearing the statement that the government wants the farmers to speak with one voice. Yet our elected farm leaders, namely our commodity boards, spend countless hours and days researching, compiling, and preparing presentations, and presenting the views of a large number of people in agriculture to the Ministry of Agriculture and the present-day government, only to have these government officials and bureaucrats find excuses as to why things cannot proceed in a cohesive fashion. It appears that a speaker at a recent OFA meeting was correct in thinking that the Government of Canada would rather have food imported than be bothered with agriculture at all. I find this extremely sad, since agriculture represents the second largest industry in Canada.

With the spinoffs into the other sectors of the economy in the form of added value for processing, manufacturing, and distributing agriculture products, plus many more industries that depend on agriculture, either as a supplier of raw goods or as a purchaser of their end product, employment numbers are staggering. Add to this the billions of dollars in research and development that have been spent in Canada, paid for by the farmers and taxpayers, then shared with third world countries, having through the years brought the standard of food production to the highest quality and lowest cost to the consumer of any country in the world, as well as making Canada one of the most respected nations of this, God's planet.

Ladies and gentlemen, without assistance from government, this is all at risk if the state and mindset of the Canadian government does not change immediately and start a drastic rethinking about the value of agriculture in our society. In a short ten years from now, should the Canadian government not heed these warnings, agriculture as we know it, quite frankly, will be history in Canada. When the total cost of ignoring pleas of the farmers is tallied in the second decade, which will include the demise of agriculture and all its related dependants, it will become apparent just who was responsible for the destruction of a once proud nation.

Other factors aside from agriculture have been designed, promoted, and implemented. These are beyond the framework of agriculture but have a profound effect on agriculture. The first that comes to mind is the Kyoto agreement, which, as reported by the Canadian Manufacturers and Exporters, would wipe out 450,000 manufacturing jobs in Canada. These figures are taken from the National Post.

Environment Minister David Anderson has acknowledged that the government has yet to assess the economic impact of the treaty, yet before this assessment has been made, Mr. Chrétien is indicating that his government intends to ratify this agreement to reduce greenhouse gas emissions, at a cost estimate of $40 billion in total. These figures and comments are in the Sarnia Observer, February 27 of this year, page B9.

The second point that comes to mind is from a report prepared for the Spicer commission, which was done at a cost in excess of $20 million, then promptly discarded. The International Development Research Centre hands out our tax dollars in the form of foreign aid. The following figures are historical, since they were done for the Spicer commission, with the new figures being much worse: $619,000 for a newsletter about bananas, published in the heart of banana country, the French Riviera; $406,000 to study seaweed in the Philippines; $154,000 to establish a bamboo information centre in China. This list of ludicrous spending totalled in excess of $176 million.

Big business handouts went to General Motors, Quebec Division, $102 million; Krieger Inc., $5.8 million; Falconbridge, $4.5 million; Bombardier, $2 million; Johnson & Johnson, $6.6 million--and the list goes on. This waste of taxpayers' dollars has to stop.

Farmers who do manage to pay income tax are taxed in the 20% bracket, yet banks who make billions in profit are taxed at 2.48%. Insurance companies, again with profits in the billions, are taxed at 4.3%.

The third example I will give you is Agri-eBusiness Group Inc. It started in April 2000, so I understand, and it is just now being talked about and is not yet fully understood by producers. Brian Hughes has commented at two different meetings that the producers asked for this new way of doing business. I have yet to meet one. It appears that it will do far more for the businesses that do business with the producers than for the producers themselves. This leaves a large question mark in my mind.

Having said that, is this new Agri-eBusiness Group Inc. the wedge that will be used for the importation of agricultural products from all over the world to Canada to the detriment of the family farm and ultimately to the nation we all dearly love?

¿ (0945)

The Chair: Thank you, Mr. Wilson. I was trying to signal you. You're up to about six minutes.

Mr. Jim Wilson: I have about six lines yet to read.

The Chair: During the questioning, Mr. Hilstrom or someone else will probably follow up on that.

Next is Mr. Ken Bee from the Grain Growers of Canada.

Mr. Ken Bee (Vice-President, Grain Growers of Canada): Thank you, Mr. Chairman.

Committee members, it's a pleasure to be here. Thank you for the opportunity to speak on behalf of Grain Growers of Canada.

We're a relatively new group. We represent grains and oilseeds producers across the country from B.C., the Prairies, Ontario, Quebec, and the Maritimes.

The grains and oilseeds sector is a major component of the agriculture economy. Consider that over 90,000 farms earned at least 51% of their income from grains and oilseeds. Of the $23 billion in food goods exported last year, over $9 billion of that were grains and oilseeds and related products. Our industry provides feed stock to the oilseed crushing industry, livestock feeders, millers, maltsters, ethanol producers, and others. Our grains and oilseeds producers have diversified their production, with a rise in special crops all across the country.

They also have planned and developed new markets, uses, and strategies. Witness the identity-preserved soybean marketing initiative, where we export higher-value identity-preserved soybeans to our food customers all around the world. Also, witness the industrial uses of corn, ethanol, and corn fructose, and the list goes on.

Grain Growers of Canada is working in a variety of areas that we think are important to our grains and oilseeds producers. Grain marketing is one. Producers in eastern Canada have market flexibility, which has allowed us to take advantage of value-added opportunities in niche markets. We hope our western counterparts can have that same marketing flexibility.

With regard to transportation, we would urge the government to implement the reforms recommended in the Estey report.

We support biotechnology and the novel foods regulations.

We want to develop value-added industrial uses for our products, such as ethanol and biodiesel, but we need the government to have the right regulations and incentives in place so that can happen.

On-farm food safety, environmental farm plans, and international trade are issues we are dealing with.

We also enjoy the relationship we have with our MPs, such as those who are here today, and government officials.

Grain Growers of Canada is also developing a strategic plan initiative to establish objectives and strategies for achieving growth and prosperity in our industry.

Today, Mr. Chair, I'd like to focus on the most pressing issue facing our sector today. Since 1995-96 Canadian grains and oilseeds producers have suffered collateral damage caused by subsidy programs in the United States and the European Union. Ninety-five percent of the direct farm payments to U.S. producers goes to grains and oilseeds.

European Union export subsidies have been applied regularly from 1995 to 2000 and may continue. Both dragged down world prices and effectively dragged down Canadian prices.

What is the impact of the subsidies?

Agriculture and Agri-Food Canada, in their own analysis, has concluded that 25% of the price drop from 1995 to 2000 is a direct result of the subsidies.

Grain Growers of Canada, using Ag Canada's number, has estimated the economic injury is $1.3 billion a year for our growers. It is lost revenue as a result of foreign policies.

Our producers have no means to hedge against this injury. We have no risk management strategies to avoid it. Canadian farm programs are ill-equipped to deal with this long-term injury. Disaster programs are not effective because, in the long term, economic injury tends to eliminate the gross margins that farmers would earn growing grains and oilseeds.

Other programs are negatively affected as well. Crop insurance is forced to offer lower coverage because of the lower price. NISA contributions are undermined because the 3% eligible net sales, our total eligible net sales, is lower.

I do want to issue a thank you to the federal government for the $500 million allocated last year about this time. It's a good start. The U.S. and the EU subsidy injury is not going to go away any time soon.

I had the opportunity to be in the United States a week or two ago to visit and discuss the farm bill. They are going to increase their farm bill spending by nearly 90%, for a total of $168 billion over ten years. It may end up as a seven- or eight-year plan, but they are no doubt going to support their producers.

The EU is going to continue with their export subsidies. They are going to extend direct payments to the East European farmers.

Meanwhile, the WTO agricultural negotiations are not expected to conclude anytime soon. We hope they conclude by 2005 and then will have an implementation period. We're looking at eight to ten years.

The point is the economic injury that Canadian grains and oilseeds producers have faced is not likely to go away in the near future. Therefore, a policy response is required.

Grain Growers of Canada proposes a solution of the trade injury compensation program. This would be a national proposal for a fixed program that would directly compensate Canadian growers for the economic injury foreign subsidies impose.

¿ (0950)

The Chair: Thank you, Ken.

Mr. Ken Bee: Can I have another minute?

The Chair: I'm afraid not. You've had six minutes.

Mr. Ken Bee: Okay. Thank you.

The Chair: We'll try to bring it out in our questioning.

We'll move on to the Lambton Federation of Agriculture. Welcome, Don McGugan.

Mr. Don McGugan (Past President, Lambton Federation of Agriculture): Thank you ever so much, Mr. Chairman. I'm going to ask you to stop me in five minutes. I have trouble with my eyes and I'll go on for hours. I ask you to stop me.

Before I get started, I want to say thank you, Rose-Marie Ur, for bringing the group here. We're in Paul's riding, by a couple of feet. I do say thank you. We say thank you for Rose-Marie's and Paul's interest in southwestern Ontario and for the efforts put forward.

For members who are from other parts of Canada, Paul's riding and Rose-Marie's riding, I believe, are the richest potential agricultural ridings in Canada. I've checked some facts. Gross farm sales from the gate, those that go out the laneway, are over $1 billion. I'll tell you, it's pretty impressive.

I gave you, Mr. Chairman, a copy of my written presentation. There are five copies for your members. I will not be reading it.

I also gave the chairman a copy of the Lambton economic study that was done two years ago.

I also gave him one for Middlesex. I'm also speaking on behalf of the Middlesex Federation of Agriculture. Their report has just been completed.

Kent County's will be out at the end of April. I'm sure Rose-Marie will be really happy.

Paul's was out about a year and a half ago. I know he has the largest riding. It is much larger than Lambton. We do say we represent some of the finest agricultural land in the world.

If you, gentlemen and ladies, will give us the tools to work with, we are innovative. We are creative. We have good soil. We have good weather, usually, between Lake Huron and Lake Erie. This past year did fool us, but we've got aggressive young men.

Talking about young men, a lot of issues have been mentioned here that were in my presentation. I am going to jump around a little bit from my prepared text. If you're following it, I will be moving around, but a lot of issues have been mentioned.

I'd like to say thank you for the NISA program. In my presentation I say it's not 100% effective; I believe there are some glitches in it for the young food producers. For a gentleman my age, it's likely a good deal. I ask you to take a look at it.

I say thank you for the crop insurance and I thank you for MRI. Now, MRI is not the whole answer. The honourable minister did indicate it was for the year 2001 and 2002. Yes, that's a start; it is not enough. Ken said thank you for the $500 million. I appreciate what he said, that it's a great beginning. It's a good start.

We can help you out on other numbers if you are inclined, and I'm sure somebody will have questions. I will not take a lot of time, because I look forward to the questions from the members of Parliament.

I'm going to skip over some of the challenges I have laid out here. I'm going to get to some of the viables. The first one I'm going to talk about is financing. It's been mentioned here that the average age is 59 in the province of Ontario. In the next 15 years, there is $15 billion worth of equity that has to change hands. I had a gentleman show up at my farm last Monday morning who wanted to buy it. He threw a number out. There were two fools who met: one who didn't take it and one who offered it. I still have until next Friday to take advantage of it. I'm not sure what I should do. I'm in that check-out category.

But I'm going to give you a quick example of long-term financing. My daughter lives in North Carolina. She has bought some property. She just refinanced in the last six weeks, saved $36,000 on interest, and has locked in a 25-year mortgage at less than 6%. Now, I'm asking you, men and women, if you can go back and can't do anything else, help the young food producers of tomorrow get a long-term, fixed rate of mortgage money that they know they can pencil out, because it's a challenge for young people to go into that business.

Other opportunities I look forward to here have been mentioned. I'd encourage you to continue to support the ethanol business. I appreciate what you've done on the tax on the ethanol, but there's a tremendous opportunity here, such as the biodiesel. These are opportunities that are coming down the tube. There are all kinds of them. It's renewable. If we get some good weather here, we can produce--and Bob Down is going to tell you about it in a few minutes--200 bushels of corn here, which is great. There are lots of opportunities here, and we just need your help in being able to do better, because we do have a tremendous....

The U.S. program hasn't been mentioned here yet. It's scary. And what are we as a Canadian government, or Canadian food producers, going to do about South America?

I listened to a gentleman at southwest agricultural days at Ridgetown. He was an American food producer and had some pretty scary facts. They can deliver soybeans to the Atlantic Ocean at $3.48. For him to get his soybeans to New Orleans is $6.48. I was scared to figure out what it would be for me to get my beans to Montreal, because I know what it costs me to move my beans from my farm to Hamilton. It's pretty scary.

We are in a world situation. I have been growing specialty crops. Everything on my farm has been special, and it goes all over the world. I have been growing azuki beans. I got a call from my supplier. Maybe Peter can help me out here. He said, “We've lost our contract. China is going to supply them in the year 2002.” That was my best crop. I shopped around and, being innovative and being hard up, I did find someone and was able to grow some in the year 2002.

But we're in a global phase. We need your help. As Ken has mentioned, the U.S. Farm Bill is right now in the House and in the Senate. We have the European Union. We've got South America. We can do a great job here; it's the number two industry. In Ontario if we don't start selling more cars, agriculture is going to be number one. Do you want to have agriculture in a depression and still be considered number one? We need your help.

I don't have a lot more. I know my five minutes must be close. I have more in my written presentation. I ask you to take a look at it.

On behalf of the Middlesex and Lambton federations, it's been a pleasure to have you here to the finest growing area in Canada. There are lots of challenges, but we can turn those challenges into opportunities. We've got a lot of good, young men. I know the average age is 59, but in my community, we have some young men who are running between 3,000 acres and 5,000 acres. They're doing a good job. I ask you to try to help them. Thank you.

À (1000)

The Chair: Thank you, Don.

Bob Down is from the Ontario Agricultural Commodity Council. You have a long list. I guess a lot of these people are....

Mr. Bob Down (Chair, Ontario Agricultural Commodity Council): Thank you very much, Mr. Chairman. Yes, I represent actually 24 commodity groups, which are non-supply commodity groups here in Ontario.

I want to start off by saying thanks to Rick Borotsik here for giving me his glasses, so I can see what I am doing. There is a little bit of blue tinge in them, though.

Some hon. members: Oh, oh!

Mr. Don McGugan: Don't be conservative.

Mr. Bob Down: Anyway, I did give the chairman the brief. I would urge you to read it. I am just going to touch on the various areas in the brief. Because we do cover so many commodities, there are a lot of areas and issues.

Government must develop policies that will encourage the agriculture sector to diversify into new products and take advantage of new export and domestic value-added market opportunities. Ontario farmers have been leaders in the life sciences approach, which is now capturing the imagination of both federal and provincial governments.

The long-term strategy for large-scale life science industrial development in Ontario must feature homegrown production in a manner that allows Ontario growers to compete fairly with their U.S. counterparts. Ontario agriculture is positioned well when it comes to technology, farmer skills, natural resources, and other infrastructure needs, but inadequately when it comes to direct public support. Better collaboration between federal government departments and their provincial counterparts will be required to help ensure that these products reach consumers in a timely manner.

Biotechnology will revolutionize agriculture in the 21st century and will lead to new opportunities for both farmers and industry. Government has a duty to ensure that Canadian agriculture is not subjected to unfair competition in either domestic or export markets. Trade policy should seek to open markets wherever Canada has a competitive advantage.

Harmonization. In order to remain competitive, Canadian growers need access to the same array of effective pest control products as those available to the farmers of the U.S.A. There must be more emphasis on harmonizing the registration of pest control products between Canada and the United States. Programs such as the Canadian Adaptation and Rural Development Fund--that is the CARD fund--and the matching investment initiative--that's the MII--of Agriculture and Agri-Food Canada have been invaluable as a source of matching funds for research. We appreciate those funds very much, although the value of the MII program has diminished with time as the terms of eligibility and available funds have become increasingly restrictive.

The industry is very supportive of food safety initiatives. They must apply to domestic products and imports evenly and equally. The Environmental Farm Plan should become national in scope, comprehensive in nature, and permanently funded, and I underline funded. Commitment by provincial and federal levels of government is needed, and the sooner we get that done, the better. On-farm food safety programs will need specific government assistance, both federal and provincial, for those commodity organizations that do not have the resources to implement such programs.

Standards related to nutrient management will have a significant financial impact on Ontario producers. Only by setting equivalent standards of production--for example, environmental impact for products imported from outside Ontario with those from Ontario--will a level playing field be assured. This is crucial to the survival of a domestic agriculture industry.

Damage to crops by wildlife and losses of livestock to predators are issues of growing concern to producers. While society at large may support the reintroduction of species and the maintenance of endangered species, the negative impact of the financial impact to agriculture must be addressed. Society needs to compensate for these losses.

What do we expect from government? There has been a clear if somewhat silent downloading of government services to commodity organizations. At a time when various branches of government are looking to commodity organizations for increased roles and often financial contributions to issues and programs, many commodity organizations simply do not have the financial resources to comply. The roles of government and industry are evolving and there needs to be a clear direction developed.

Most of all, we expect governments to provide an environment in which Ontario farmers can compete on a level playing field with their counterparts in other countries. In addition to regulatory processes, this also means publicly funded safety net support. Without that support, all of our efforts to diversify, add value to our crops, exploit new market opportunities, improve quality and otherwise benefit from new research, which we are keen and eager and capable of doing, may go for naught.

Thank you very much.

À (1005)

The Chair: Thank you, Bob.

From the Ontario Field Crop Research Coalition, Greg Devries.

Mr. Greg Devries (Ontario Field Crop Research Coalition, Ontario Soybean Growers): Thank you, Mr. Chairman, committee members, for the opportunity to appear before you today and just give a little background.

The Ontario Field Crop Research Coalition is a coalition that represents all of the commodity organizations within Ontario in the grains and oilseeds sector, as well as the Soil and Crop Improvement Association and the group called Innovative Farmers Association of Ontario. Those last two groups do focus on environment issues and innovation in agriculture, but that's not to say only those two groups focus on that. I think the whole grains and oilseeds sector focuses on innovation and environmental issues.

The main responsibility of the group looks after the allocation and approval of the core funding, which is the Ontario Research and Development Challenge Fund. We also look at the issues of the entire research system within the province today. That includes the area of OMAFRA at the University of Guelph, and of course Ag Canada, and how all those research stations and institutions interact together. We help form some of the priorities that are put as a focus for research funding within the province and also give input within the public station operation itself.

Today, I'd like to take the opportunity to touch briefly on two topic areas, the whole area of the bio-based economy--and you've heard that mentioned a couple of times among all the speakers here today--and the whole area of the restructuring that's going on within Ag Canada and the research stations.

Overall, I think the commodity organizations support bio-based economy, life sciences. In fact, we've been working at it for a great length of time. It is nothing new to the producers within Ontario. We have, of course, mentioned before the area of ethanol, renewable fuel, the other one being biodiesel. I think Don mentioned earlier the excise tax that's been removed from ethanol. The same thing needs to be done with biodiesel. It's really a no-brainer; it just needs to be done. It's a good news story.

With that, we also have nutraceuticals that we've been working on within research; functional foods; the whole area of food quality crops, food quality corn, food quality soybeans; the whole area of identity preservation; lots of great things have taken place.

As you all know, the grains/oilseeds sector in Ontario is hurting, probably hurting worse than any other part of the country right now. The reason we've been surviving as long as we have, even though it's been frustrating, is the fact that we're efficient. A lot of the efficiencies are due to the research and to some of the dollars that have been put from producers' pockets into research to help maintain their competitive edge. When we do the analysis of how competitive our grains and oilseeds sector is within Ontario, we can compete with the American farmer, not a problem, right at par. They just get the majority of their income from government support.

But within the bio-based life sciences area...we've been trying to struggle with this area because we're trying to figure out a way to get the benefits of this new technology and these new research areas and new products down to the producer. It's an expensive area of research, and with that is the challenge of the funding that comes with it.

In the past, the A-base funding that Ag Canada has received has been going down. That A-base funding deals primarily with the infrastructure, the buildings, and the researchers. We need to maintain that, increase that, because with that base it gives industry an opportunity to put dollars into actual projects, into actual work, so we don't have to pay for the overhead charges that come with that.

We also have the MII program, which is a wonderful program. But that program, too, has been ratcheted down slowly over time. We have more projects, more good proposals, that could receive funding from this program if there was funding available. Some of the rules have tightened up on some of this funding. This makes it more difficult to take our producer dollars and allocate them to get the most bang for our buck. So we have challenges in that area.

But it seems there's been restructuring within Ag Canada that hasn't had a whole lot of consultation from producer groups. We've been willing and have asked if we could give some consultation, but we've had limited success. There's been a realignment of the powers to be, and I don't know if it's the government or the bureaucrats. They think this is how we're going to do things. We've been in this business for a long time. We know which areas need to be focused on and what has the most potential for success out there.

With that realignment, we also have to focus on the fact that within each province there's provincial government funding, and research is done through OMAFRA, for example, and the University of Guelph. When we do realignment at the federal level, we have to take into account opportunities for some federal-provincial cooperation so we can put all our focus on that, instead of having one government do one aspect and another government do another aspect. Why not join forces and work at that?

We also need to look at where all these dollars come from. Typically and traditionally, we have put money into basic research and applied research. There are some who say we only have so many dollars, and we need to take them out of those areas and put them into these new areas of research. I tend to disagree with that. Even though we can develop perhaps the best variety of soybeans with the neatest traits and components, soybean aphids will still attack that soybean. There are still agronomic concerns out there. There are disease problems and insect problems. So we need to have a balance between applied research and basic research. We need to take into account this new technology and see if we can get all these benefits to the producer.

Thank you for your time.

À (1010)

The Chair: Thank you, Greg.

I'd like to recognize Rex Crawford. I saw Rex in the hall this morning. Thanks for coming, Rex. For many years he was a strong advocate for rural life and agriculture in this area. In fact, some of the first speeches I heard in caucus on ethanol came from Rex. It's good to see a farmer member here.

Howard, would you begin the questioning?

Mr. Howard Hilstrom: Everything that's been presented here has already been forwarded to the agriculture minister, Lyle Vanclief, and the cabinet. So we're getting again what's been presented over the years.

I guess the future role of the federal government in agriculture is directly impacted by our ministers. Peter, you mentioned that Eugene Whelan was a pretty good ag minister. What advice could you give to the current ag minister that Eugene Whelan had a handle on that this minister doesn't? What's wrong with the way the minister and the government are handling agriculture now? What was done so much better in the past?

Mr. Peter Twynstra: Do you want me to be blunt or diplomatic?

Mr. Howard Hilstrom: Talk plainly.

Mr. Peter Twynstra: Eugene Whelan stood up for the people he represented. I have named a few others. That's not happening today.

Mr. Howard Hilstrom: Can we relate that to safety net programs--maybe funding? Are we partially short on funding now?

Mr. Peter Twynstra: Funding is certainly part of it, but it's also recognition of the importance of the industry. Again, you mentioned Eugene Whelan and his fight, in terms of securing quota value or supply management with our feather and milk industries. That would be very difficult to sell in a cabinet today. We don't have an agricultural minister today; we have a representative from cabinet who is responsible for agriculture. There's quite a difference.

Mr. Howard Hilstrom: Okay, that's fine. The farmers have the eternal struggle of trying to get our ag issues up high in cabinet, in order to have them dealt with as a priority, in relation to the dollar value agriculture contributes to this country.

I think Don talked about NISA and how well it was working.

We had the minister come before the committee in Ottawa and say that the NISA and CFIP programs don't work at all. Are you on the safety net advisory committee at all, or do you have any input there?

À (1015)

Mr. Don McGugan: I don't directly. I believe Ron MacDougall, from Ontario, is on that. Is that right, Ken?

Mr. Ken Bee: Yes, Ron is still there.

Mr. Don McGugan: Ron is there. Ron lives very close to me, and I have had some input with him.

Maybe I'm being selfish, but I have been able to participate in it since day one. There are some glitches in it. This past year I should have taken some money out of it--I'm being very blunt here, and maybe some people will not like that--because I had the worst crops I've ever had.

I did not take it out only because I have to take out your money first and I have to pay income tax on it. I wouldn't have got it out in the year 2001; I'd get it out this year. I'm hoping this is a great year. Then, when I do my income tax in 2003, you'll take it all back. I went to the bank and got a little bit to get me over the hump. So I really think there's some time there to take a look at it. I know the minister is--

Mr. Howard Hilstrom: Okay. So on the safety net, you're saying NISA should be kept.

I'd like to approach Ken Bee now to give us the last minute or two of your presentation, a windup comment that I think you missed out on. Certainly on the Canadian Wheat Board...maybe you could touch on what the Ontario Wheat Board is doing. They may be presenting later; I'm not sure. Farmers are having some choice in how they market their wheat, and in our case barley, out west.

Mr. Ken Bee: First of all, on the trade injury compensation program, I want to highlight that it would be consistent with government policy. Government supported the aircraft industry when it was experiencing anti-competitive foreign injury, and we expect that the grains and oilseeds industry should be treated equitably.

The trade injury program is a solution, to target dollars to the grains and oilseeds where the injury is, without negatively impacting the livestock and the processing industries.

Our growers are getting increasingly discouraged, and the pressure is on to go after countervailing duty. That could have a huge negative impact on the livestock industry and on our processing industries. There is a better way. We think the trade injury program is a better way to handle it. Plus, we view this program as being a green program under WTO rules. We would sunset it once we have proper market access, disciplined subsidies, and enforceable mechanisms in place in world trade. The program would sunset.

To answer your question about market flexibility, yes, the Ontario Wheat Board has made some substantial changes to allow market flexibility. You still have the pooling option for those who wish to do it. You also have off-board sales for those who wish to do that. We're going to have discussions with the Canadian Wheat Board to see if we cannot have the same thing for our western producers.

Mr. Howard Hilstrom: My final question is simply to Stan Eby in regard to the cattle business. Are you recommending that there be a greater flow of feeder cattle that you can access in the New England states? I think that's an issue down here. Is it, or is it not?

Mr. Stan Eby: Yes, that is an issue.

Mr. Howard Hilstrom: Could you spend one quick minute on that, or 30 seconds?

Mr. Stan Eby: There's activity with the Canadian cattlemen and the federal government on access to U.S. cattle in this part of Canada. That's an ongoing effort, albeit slow.

Mr. Howard Hilstrom: Is it working, or do you need greater access?

Mr. Stan Eby: We possibly need greater access, but we have some major health concerns in the southern U.S., which is somewhat different from what you have in Montana and the Dakotas and Wyoming in the west. We're working with Ag Canada on that, and we'll be discussing that this week at the Canadian Cattlemen's Association's annual meeting with some of your people.

The Chair: Thanks, Howard.

Paul, for five minutes.

Mr. Paul Steckle: I want to begin with Stan.

Stan, you mentioned this morning the environmental issues, and you and I know it well in this area. The hog industry has certainly captured the imagination of a lot of people in terms of their mismanagement, or at least the perceived mismanagement of their practice.

Given the magnitude of our cattle industry here in Ontario, cattle are rarely mentioned any more in terms of our pollution and the way we handle our effluents. Is it because we've done a better job of it, or is it because the attention has been more clearly focused on hogs? I think that's fairly important, because cattle still do create a lot of waste. We know it's a big industry. I'm just wondering how that has been handled, or has there simply been an escape of the issue here?

Mr. Stan Eby: We certainly think we've done a good job of handling our waste products here. Is there a better way? Likely there is. I believe the hog industry with its odour situation has been flagged, maybe unduly, and one of the major things I see is not enough recognition for why food is being produced the way it is. Peter mentioned the consolidation and the pressures on production. We're seeing that all the way through various commodities, and this is part of the effect in the hog industry that is certainly changing dramatically. I think they've been flagged unduly.

Mr. Paul Steckle: On the issue of white bean production--especially beans also for you, Tino and Peter--this has been known as the white bean capital of Canada. White bean acreage is down considerably, and the markets are very fluid at the moment. I'm just wondering what we can do as government to facilitate marketing boards doing a greater job, because there's the consolidation of buyers, making it more difficult.

You've mentioned the fact that we can buy on the Internet today and we're getting back to a Dutch auction system of buying, which is not conducive to higher prices. What role can we play as government? We think marketing boards have for the most part done a pretty good job in Ontario. How can we effectively be better able to help you?

À (1020)

Mr. Peter Twynstra: My initial answer to that would be, again, to create a framework in which safety nets can be applied, and I almost shudder when I talk about safety nets.

Ladies and gentlemen, as mentioned, what we're witnessing is that there is not a high enough price paid for the commodity for the producer to carry the risk. There is no reimbursement for risk, so we must look to government to create a framework so that in a down year, be it weather related or be it market related, we at least create an environment in which there aren't major losses experienced, which happened last year.

Mr. Paul Steckle: Tino, do you have something to add to that?

Mr. Tino Breuer: No, I'd have to agree with what Peter is saying. It's difficult in the sense that we've lost the liquidity because of the consolidation on the buyers' side, so we have to sit and wait for the buyer to come to us. This new development in regard to a Dutch auction with declining values in a very small timeframe makes it even doubly difficult for those people who are participating in the export market.

Mr. Paul Steckle: There are a lot of factors coming into play in terms of the future of agriculture. We as a group here are attempting to try to put into focus where and how we deal with these issues. It's the aging population of farmers, and it's the transfer of moneys from one generation to another. How can that be done in a better way? That's a big part of how we deal with this issue. Certainly, the foreign money coming in is a factor, as is the appearance of Brazil and Argentina in the world marketplace, becoming not only our competitors but competitors of the United States of America.

We're living in a different world than we did when the Eugene Whelans and the Bill Stewarts--and I quite appreciate the efforts they made for agriculture. That's very important to recall, but we can't go back to that. We're living today. Given that if we can put in place a framework for the future of agriculture, a secure and timely putting in place of programs that will be there when farmers need them, not on an ad hoc basis but with something that's there for the long-term....

If as Canadians we believe in a secure food policy, if that were to become the policy of this report, at the end of the day we're going to ask, how are we going to finance this? Given that our food dollar cost per capita is coming down and coming down...now it has gone from $13 billion to $24 billion in exports, yet the farming community is poorer today than it was 10 years ago. That's a reality.

Consumers are beneficiaries of this. They have to be. If that is the case, then is it not right that we turn the tables on our consumers and say, listen, consumers, for a safe supply and for a supply that's there on a timely basis--you know it's going to be there--are you prepared to pay a little more?

What about a food tax? I know this is a very sensitive question, but we have to ask the question. There has always been resistance in the farm community to dealing with that question. Is the farm community changing its view on what we might be doing in terms of a food tax? One dollar, 1%, two dollars for every $200 worth of groceries.... We pay 15% for the lady to carry the food from the kitchen to the table--or is it 10%? Whatever. That's more than the farmer got for producing the food that goes on our plate. Are we prepared to pay the farmers 1% more? That's a question I'd be prepared to ask of consumers across Canada.

The Chair: I'm sorry, Paul. Your time is up.

Mr. Paul Steckle: Oh, it can't be.

The Chair: We'll probably get back to you.

Dick.

Mr. Dick Proctor: Thanks, Mr. Chair.

Mr. Twynstra, why don't you answer Paul's question? Then we can get that done.

Mr. Peter Twynstra: Ultimately the consumer is going to pay, whether it's through the tax system or at the checkout counter. It would be far healthier if it was at the checkout counter. There's no doubt about that.

You've expressed again that the proportion of families' income that is spent on food is going down and down. What is much worse than that is that with the portion that is being spent at the checkout counter, the residual of that going to the producer is becoming even less. If we gave Nestlé the beans and we gave Kellogg's the corn and we gave Weston the wheat to grind the flour to bake the bread, it wouldn't change the price of the commodity in the store.

What can the government do to change that? It's a tall order. The framework, the environment, has to be talked about because there's an industry at stake here.

À (1025)

Mr. Dick Proctor: Thanks.

Both Mr. McGugan and Mr. Twynstra talked about the need for better tools. Give us the tools and we can finish or do the job. Can you give us some specific examples of things that both of you would like to see? I'll start with Mr. McGugan.

Mr. Don McGugan: When I mentioned the tools.... The government has brought in some bills about the endangered species, the environmental farm plan. I didn't have a chance to mention it; it's in my written presentation. The honourable minister said he wanted to have every farm in Canada have one by the year 2005. There's only funding, I understand, till the spring of 2003.

Where I come from, if we could have a long-term knowledge that there are so many dollars there at the end of the laneway, these farmers, young men and women, will go out and put the capital in there to make it a bigger and better, competitive business. So those are the kinds of tools--infrastructures, in other words, and our roads. I didn't have time to mention it, but small-town rural Ontario is really hurting. It may be in the west and in the east too, I don't know, but in Ontario our small hamlets are really dying.

I don't ask you to solve all our problems. You can't. We as local politicians have to do some of that too.

So those are the tools that are a problem. There's no guarantee, and we need to have it. South America is going to be a big challenge, not only for us but for the United States.

I'm sure I haven't answered your question as well as I should have or could have.

Mr. Dick Proctor: Thank you.

Peter, on the tool question, are there specifics that you can give to the benefit of the committee?

Mr. Peter Twynstra: I think having the willpower, having the guts, if you will, to recognize the importance of the industry, to recognize the major shifts that are taking place.... The consolidation of buying power has been talked about by numerous people this morning. We have built farm organizations at an incredible rate. We have over 300 in Canada. We have over 130 farm organizations in Ontario. When it comes to marketing, I'm sorry to have to say it, but they have virtually all failed.

So we need better access to better marketing to return appropriate equity to the investment, the risk and the capital and the labours.

Mr. Dick Proctor: In our hearings in western Canada a couple of weeks ago, a lot of people who were sitting where you are today were talking about the situation in Quebec, and they perceived that there are a lot of advantages in Quebec. One of the things that happens in Quebec is that there's one farm organization, as I understand it. We're going to go there later this week. Perhaps we'll hear some different news and views on that. The feeling is that farmers are being played off, one group against the other, and the government gets off the hook as a result.

So 300.... Do you think we should therefore be reducing to a lot less and perhaps have just one farm organization speaking, or very few?

Mr. Peter Twynstra: I would just add to that: one effective farm organization.

Mr. Dick Proctor: Yes, right. Thank you.

The Chair: Thank you, Dick.

Rose-Marie.

Mrs. Rose-Marie Ur: I'm going to follow in the same vein. I welcome everyone again with their presentations.

Just to follow up on Dick's question, there are, what, 320 farm organizations? I can say for the Grain Growers of Canada that they've had one major step forward to consolidate and speak with one voice. That has had a really dramatic effect in Ottawa. They come to the table and represent Canada-wide rather than pitting region against region, so it's been an effective voice.

That being said, Peter, the question ended with you. I'll ask you, if there were to be one effective voice speaking on behalf of all farmers, who would that be?

À (1030)

Mr. Peter Twynstra: I'm sorry. I don't think it's there today. I think the will has to be there among the producers themselves to build that organization. We've seen examples of this all around us, in unions, in industry organizations, in consolidation again. That's a method of organizing.

Mrs. Rose-Marie Ur: Right, because as we've travelled west--and we'll be going east--we've heard this before, that whether it's the CFA, OFA, whatever, they don't speak for us. We have different farm groups or individuals come up to us after a meeting and say, they're not speaking on my behalf.

Not to point fingers, because you must remember that when you point a finger there are three coming back at you, but the fact of the matter is we have to come together. There are very few things in life we all share, but food, water, and air are some things we all share and we all have to respect that.

Without our good Canadian farmers, we wouldn't have the same high-quality, and cheap unfortunately, food. Some of our colleagues here were in Ottawa a week before last and made excellent presentations that said the Canadian farmer produces more cost-effectively than our U.S. counterparts and still they're suffering ever so greatly.

As you're well aware, the minister has put together this framework. It's a framework, and it certainly needs a lot of meat to it to be a little bit palatable.

So I'll point my finger to two or three individuals who presented to ask for your suggestions as to how you feel that framework would best operate with dollars. I'll ask Geof, Peter, Ken, and Don. Could you comment quickly? I only have five minutes.

Mr. Geofrey Kime: I think any framework has to take into account the non-food uses, and most of what I'm hearing today is focusing on food. That's certainly a major part of the industry today, but in the future we're going to see a lot of the non-food uses come on--the bio-based products. This is an important thing that has to be factored into the framework. To allow those industries to really get off the ground there's the issue of the access to capital, and I focused on that aspect in my presentation.

It's difficult to raise money when you're a young or an early-stage industry trying to get off the ground. The banks don't want to talk to you. Venture capital groups don't want to talk to you. So you're left trying to find money locally, and sometimes you may be able to get some money but not enough. So I think this is something that also has to be factored into the framework.

Mrs. Rose-Marie Ur: Peter.

Mr. Peter Twynstra: Again, my feeling would be that ultimately there has to be the recognition by government of the importance of the industry. I do not want this gathering to be considered an organization-bashing session. Not at all.

We've built organizations with good forethought, with good people, most of them volunteers, but because of the structure that they're dealing with, with Ottawa--and that's what we're here to talk about--it has not been as effective as it should have been. Sure, inroads have been made. Sure, good things have happened. But when it comes to the final, bottom line, it hasn't been sufficient to suit the reasons and the needs of today.

Let me say again, that risk element is a factor, that consolidation. We must talk about it. Politically we have very little voice, being less than 2% of the population, but when it comes to importance, what is more important than food? We need it every day.

Mrs. Rose-Marie Ur: Ken.

Mr. Ken Bee: There are many good things in the agriculture policy framework that Agriculture Canada has come down with. But I think what you've heard today is that a lot of our producers are already doing many of the things that are in the policy framework. For that policy framework to work for grains and oilseeds, we have to level the playing field. We have to get the government to recognize what the international marketing reality is out there and provide us with the tools so that we can combat the negative influence that foreign policies have on our marketplace.

Once that's done, I think our growers will be able to move forward and gain from the agriculture policy framework.

As far as speaking with one voice is concerned, it's extremely difficult to have all of agriculture speak with one voice because we're so diverse. What may be a positive benefit for grains and oilseeds might be a negative benefit for the livestock industry. I'm not saying it can't be done. It's one tremendous challenge.

The Chair: Thank you, Rose-Marie.

Rick.

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

One of the reoccurring themes that we've heard in our sessions so far has been research and development, and we heard it today from a number of commodity groups, a number of individuals. But I'd like to ask Greg something.

We heard it from Geof, from Tino, from Bob. Now, all of these individuals represent different commodities, as we just heard. Each one in itself is the highest priority.

I have two questions. First of all, how much money should be invested into research and development? Secondly, how do we get all of these commodity groups to work together to identify the best research and development so that we can go forward?

Mr. Greg Devries: That's a good question. First of all, with respect to how many dollars it takes, that's a tough one to put it on. What you need to do is look at a balance all together, and that's where you have to come up with....

Mr. Rick Borotsik: Very good. We're heading in the right direction. Good answer.

Mr. Greg Devries: Well, those are the notes you gave me beforehand, Rick, so....

Some hon. members: Oh, oh!

Mr. Greg Devries: As for working together, you're looking at a whole group of people and we all do work together. We're all wearing different hats. You talked about speaking with one voice. And it's great to work with one voice. But if we're less than 2%, is it better to hear the same thing four or five times from different organizations or hear it once from one voice that perhaps would be easier to pass off in the distance? I'm not quite sure. But the whole area of bio-based--you're right, it's going to impact every sector. You've heard it from so many different people, and all those issues need to be addressed.

I think one big issue to touch on is the whole issue of freedom to operate. That's using technology that has been developed in the private sector to develop products within the public research sector.

Mr. Rick Borotsik: All right, I'm going to cut you off, Greg, because I have a couple more questions and you're going to take my five minutes. But I do thank you for your answer.

Out of that, should priorities be set by government as to the areas that R and D should be diverted to? Should there be an organization somewhere--a panel perhaps--that should have the ability to set those priorities?

Mr. Greg Devries: We've already done it, Rick. It's there. The priorities are there.

Mr. Rick Borotsik: Perfect.

Peter, I'm a little confused. You said you were a fan of free trade. Now obviously it's not working. However, you also told me that 90% of your product is exported, which is free trade. So I'm confused with how it's not working. You now have said that it's not working because of the competition that's out there with China and with the Dutch auction that you mentioned. We also heard South America, Brazil, and Argentina--which by the way we've heard can produce a very low-cost production soybean. It's not that it's being subsidized, but it's low-cost production.

Are you suggesting there should be a closure of our borders for imports, or are you suggesting a supply managed system for your product?

Mr. Peter Twynstra: Well, supply managed systems are practised all around us...

Mr. Rick Borotsik: You're not a fan of free trade, but you export 90% of your product. Are you suggesting a supply managed system?

Mr. Peter Twynstra: What I'm ashamed of, Rick, is in the 90% of the products that I export, I can't generate enough money out of it to adequately reimburse the producers that produced it.

Mr. Rick Borotsik: Peter, we are going to have competition from Argentina. We know that right now. That's a low-cost production product. How are we going to fix that problem for your commodities?

Mr. Peter Twynstra: Well, for one thing, what happened when the U.S. started bringing out big subsidies?

Mr. Rick Borotsik: This is not subsidized in Argentina. This is low-cost production. How do we fix that problem?

Mr. Peter Twynstra: Well, go to Argentina and see what problems they have because of living with unrealistic economic expectations.

Mr. Rick Borotsik: Okay, Peter, I understand that. My question to you is, are you talking supply managed? Are you talking the closure of the import into our country? I don't know what you're asking for.

Mr. Peter Twynstra: No, absolutely not. Because of our vast agricultural resources and, it has been mentioned, the quality of our farmers, our soil, we are export-oriented--

Mr. Rick Borotsik: Free traders.

Mr. Peter Twynstra: --and that generates foreign exchange. So we cannot live in our commodity--talking about beans--in a protected environment.

Mr. Rick Borotsik: Okay, so if you can't compete, then what's the answer? Subsidies?

A voice: Can I answer that question?

Mr. Rick Borotsik: I'd like an answer, yes, please.

The Chair: No, I'm sorry you can't.

Mr. Rick Borotsik: Put your name down...

The Chair: You can come to the table later, but you just can't...

A voice: I put my name up there.

Mr. Rick Borotsik: Perfect. Thank you.

Have I got any other time?

The Chair: It's pretty well used up, Rick, and we are running over a little bit.

Larry, did you want to do something with your time?

Mr. Larry McCormick: I'll share my time. I've certainly got a lot of comments and a lot of questions with Rose-Marie here. We're following your area.

Go right ahead.

Mrs. Rose-Marie Ur: Okay. Well maybe, Don, I'll let you answer the question.

À (1035)

Mr. Don McGugan: It's a good question and a tough question.

It wasn't mentioned that each farmer along this table is feeding approximately 130 fellow Canadians. The minister, and the agriculture minister provincially, agreed to the Whitehorse agreement.

I believe, in the end, subsidies aren't the answer in the long term. Cheap food is politically good. I hope the press doesn't misconstrue what I say. Let me rephrase it.

Someone has to pay the piper. If it isn't going to be the consumer at the checkout, then it has to be society. Society is demanding a better environment. I don't have a problem with a better environment. We have to have good water. We have to have good soil. It's nice to protect endangered species, but someone has to pay for it.

Today, the farmer, the food producer, can't do it. It's just not there. Our fuel costs are up. Our fertilizer and chemical costs are up. We're capped on what we're getting out because of the world situation.

I didn't answer your question, and Rick's question, very well.

Do we want subsidies? It's not the answer. We're into major problems in the world on South America. Brazil is efficient.

I didn't answer well.

À (1040)

Mrs. Rose-Marie Ur: No, you didn't.

Rick, I like you dearly, but you're on my time.

Mr. Rick Borotsik: He didn't answer me, did he?

Mr. Don McGugan: No, I didn't.

Mrs. Rose-Marie Ur: The other question is to Mr. Devries. You were saying MII is becoming more difficult to access. Bob also said the same thing.

What are the problems there? I wasn't aware of it. What do we need to do differently?

Mr. Greg Devries: I think, first of all, the dollars have been reduced overall. We have research proposals going into research stations. You have to choose among the proposals you're going to end up giving funding to. You have good proposals being left out on the roadside. It's being reduced to where it was before.

The other thing goes back a couple of years ago, when there was some concern about granting agencies within the government and the misuse of funds.

They haven't allowed some of the core-three money that, in the past, has been able to be matched with the MII. Now the only dollars you can put into an Ag Canada research project are hard producer dollars that come straight from check-off moneys. Of course, we have a limited budget on what we put in of our own dollars. They are the only dollars you can put into an Ag Canada project that will receive MII funding.

You went from a bigger pool to a limited pool on the number of dollars you can put in. Of course, it limits how many proposals we put forth in those areas.

Mrs. Rose-Marie Ur: Do you have anything to add, Bob?

Mr. Bob Down: I think Greg has answered quite well.

The current money comes through the Agricultural Adaptation Council in Ontario. I think it's important that there's enough flexibility in the programs that we are still able to use the money for the adaptation to the future, which is research in various areas.

My plea would be not to reduce funding in those areas but to in fact enhance it. Maybe do away with some of the restrictions some commodities have difficulty with in topping up their research dollars.

Mrs. Rose-Marie Ur: I'll pass it along to Paul.

Mr. Paul Steckle: I'd like to briefly make a comment. I think we have to shed the mentality that we've had in terms of where we, as the rural community, want to go.

Mr. Kime is trying to develop a new industry. We encourage it. I think it's very important.

We've been beating each other down for generations. If enough people go bankrupt in the industry, it will be better for me. We have to start speaking with one voice for farmers. The industry is getting smaller. It should be easier to do.

Until we do so, we're going to have some difficulty. As we keep prices down, we're also keeping the Argentineans and the Brazilians down. Our objective should not be to keep those people down, but to bring them up, including the Mexicans, to a standard where they can buy some of the other products we produce in this country.

We have a selfish attitude. We have to shed it and get on with what life is all about in the 21st century.

Mr. Bob Down: Yes, Paul, I would agree with you. The WTO talks are long-term issues. We don't know where they're going, but, ultimately, the federal government has responsibility for it. Ultimately, a lot of the solutions, as far as subsidies and so on, have to be done at the WTO.

The Chair: Thanks, Paul.

David, for the final five minutes.

Mr. David Anderson: I have a technical point. A number of you gave your presentations to the clerk. Due to the wisdom of the government, those of us who don't have them handed to us won't get them until they're translated. It could be quite some time before we see them.

If you want to give us a copy, give it to us. We'll be able to look at it right away, instead of a month down the road.

We've talked a bit here about farm presentations. Mr. Wilson brought it out first that you come and make the presentations and they're not heard. One of the frustrations I've had, and it's been mentioned, is that we've had a number of presentations made and the people come asking for different things. It's important for the farm organizations to get organized. I don't think we need only one because, as Ken pointed out, we have a number of different interests, but we definitely as producers need to be represented a lot more consistently than we are.

One of the reasons I'm in this right now is because I've watched for many years and seen a lack of leadership coming from our government. It's fine for farmers to come and make their presentations, but at some point we need to take leadership on this issue. I'd agree with you that we have a cabinet representative about agriculture but not somebody who's representing agriculture.

One of the issues we hear a lot of different positions on is GMOs. I've heard a number of you bring up stats, and I think Geof and Bob and Peter and Greg mentioned that. We have some pressure now on GMOs coming through the labelling issue, and it's not an issue about labelling food for a lot of people as much as it is one of completely getting rid of GMOs from our agricultural system. I'm just wondering if any of you would like to make a comment about GMOs and the importance of them to your industry. Geof, did you have any comments on that? I know hemp isn't considered in that, but how do you see the future in biotech and GMOs?

À (1045)

Mr. Geofrey Kime: It's something we have to look at. Science isn't something to be afraid of. We have to do a good job of communicating issues to the end consumers, at the same time really taking a hard look at the science and at the purpose of it. Is it just to increase profits for corporations, or is it to give farmers new tools? Ongoing dialogue and continued education are important, things we should not be afraid of.

Mr. David Anderson: Okay. Is there anyone else?

Mr. Peter Twynstra: Another element I would add is that, unfortunately, the development of GMOs has been driven by virtually only the private sector, whose credibility is not very high, and not by the public sector. Ag Canada has reduced its investment in what might be perceived as good for the long-term benefit of the food system. It's driven by the Monsantos of the world, and that is not healthy. It would be my belief that there are opportunities in GMOs, but there has to be an extreme amount of diligence. That's the concern of the typical consumer, whether or not that safety element is there.

Mr. David Anderson: Greg, one of the comments we've had from the U.S. people was that the more regulations you get in the field of biotech, the fewer companies you have who are able to actually function in that market. It makes the situation worse, not better. They were just making that point, which is an interesting one.

Mr. Greg Devries: Yes, and I think with GMOs and the labelling situation... not directly involved but aware of it... we need to be looking at a voluntary labelling standard within this country. That will allow the flexibility for it to be what it needs to be.

GMOs... I think that within the industry producers can choose whether to use the technology; they are not forced to use the technology. You brought up an interesting point when you talked about the cost of developing this technology, and therein lies part of the problem. As Peter also mentioned, it's driven by private industry. When you look at producers trying to get in to benefit from biotech and spending our own dollars in this area, first of all it's high cost, second it's risky, and third you have to use technology developed by the private sector. At the end of the day, when you develop a product, you have a lot of legal red tape you have to go through in order to get it commercialized. Those are some issues that need to be addressed in the whole area of research in government-funded public stations.

Mr. David Anderson: Bob, do you...

Mr. Bob Down: I would just like to add that I think we're going through the growing pains. Every new, exciting phase has some growing pains, and I think that's what we're suffering from, because biotech and GMOs, etc., are the future. There are just no ifs, ands, or buts about it.

The other thing as far as labelling goes is that it has to be, as Greg says, voluntary, and producers have to be open and honest with the consumer. We can't be cloaking or veiling it to the consumer. The consumer has to have confidence in it.

The Chair: Thank you, David.

We are hearing a lot of very good information, and as we go from place to place, we certainly have to pick up on some of the key issues you do make. With research, Greg, I think most big industries have an allocation of a percentage of their income to research.

The other area, of course, we haven't heard anything about here is acid rain. I'm not sure what effect it has on your agricultural community, but it is a burden that is placed upon a lot of farm groups from outside sources, and it causes us to have big annual investments in terms of pH.

Just before we adjourn this portion, I'd like to recognize some members of the press. Big firms allocate so much for advertising, but as this committee goes around the country, we find that the press are not often very much interested in what happens at some of these meetings. That's really a drawback, because if you don't have public opinion with you, it's difficult to get across what your objectives are.

Could the press just identify themselves and tell us who is here this morning?

There's John Phair from The Voice of the Farmer; Ralph Pearce from Ontario AgRadio Network and Farm Market; and a representative from the Exeter Times-Advocate.

À (1050)

We're certainly glad to see you here.

As farmers, you have to appreciate their efforts. Maybe you also sometimes have to question what the Post writes.

Jim, you referred to the Post, but I'm not sure how big a supporter the Post is of some of the things you are telling us. Maybe if they had a reporter at one of the meetings, either here or in Napanee, they might hear about what's going on in agriculture. It's disappointing sometimes that they're not here.

We'll adjourn for about five minutes.

À (1050)

Á (1100)

The Chair: In starting our second panel, we'll tap the gavel here to indicate we're coming back to the table.

I hope all of you have heard about the way we work. About five minutes will be allowed for each presentation. I'll try to signal you as you approach five minutes. We have a timetable to follow, and our members have time allocations for asking their questions.

First of all, we'd like to welcome Henry Aukema from the Middlesex County Pork Producers. Did I pronounce your name correctly?

Á (1105)

Mr. Henry Aukema (Chair, Middlesex County Pork Producers): Yes.

The Chair: Henry, the floor is yours. I may give you a little extra time, because we're trying to...

Mr. Henry Aukema: Thank you for giving us the opportunity to meet with you.

I want to start this with a what if scenario. You realize that a year ago Europe was battling with foot-and-mouth disease. Fortunately, it stayed on the other side of the ocean. But what if a sheep in Newfoundland came down with that disease?

In Ontario we have three days' kill space in our freezers. In other words, if we couldn't sell another piece of meat, we could slaughter pigs, cattle, or sheep for another three days, and then we'd have to park them on the farm.

It's a scary scenario when you see how easily people travel back and forth. There was the incident last year in Vancouver where they found some meat from China that was passed off as dried mushrooms. An alert customs inspector wondered why dried mushrooms would be in a refrigerated container, and that's how they found it. Otherwise, it would have ended up in Toronto. It would have gone right through Canada on a truck.

I just want you to consider for a minute what would happen if foot-and-mouth disease appeared in Canada. It would shut down our whole meat industry.

In Europe and the U.S., they have regionalized the country. We can't seem to manage that here. Here, we have a large country with big open spaces. We have to find a way to regionalize it. That's one of the things I want you to remember today when you leave, that food safety is important. It's also important that we keep a healthy livestock sector in Canada. In Middlesex County, we produce about half a million hogs a year, from 250 producers. We represent all sizes and types of farms.

Farming is an important activity in Ontario. It ranks second to the auto industry. Unlike the auto industry, we can't park our inventory if we don't like the price we get for it, so we need some different mechanisms to deal with the ups and downs of our industry. Sometimes that requires a cash infusion. Is that a handout? No, it's an investment, one that pays back in time. Farmers take that money and use it to rejuvenate an industry. The benefits ripple throughout society.

If we talk about the things that are most important to pork producers, I might as well come right out and say it: we've made good use of the NISA program and we really appreciate it. It's been around for ten years, and a lot of us have benefited from it. Some of us even have a little bit of money in our accounts.

We think there can be improvements made to it. First of all, we suggest NISA accounts be allowed to go into a negative position. There would be some limits, of course--probably fairly reasonable limits--and it would be based on past history, but we suggest we allow them to go somewhat into a negative position in order to help producers through a rough spot.

Another idea we would like to propose is that the NISA contribution rates that are presently a percentage of eligible net sales vary depending on what's in your account. If you have nothing in your account, then you can contribute 10% of eligible net sales. That would be matched by the government. If you have between zero and $50,000, the rate would be 8%; between $50,000 and $100,000, 6%; from $100,000 to $150,000, 4%; and from $150,000 to $200,000, a rate of 2%. We're willing to trade the 3% interest bonus for the NISA enhancements we have just talked about.

We would like a self-directed risk management top-up for red meat producers. We think we should be able to implement an interim withdrawal trigger based strictly on commodity prices, so that when pork drops below a dollar per kilo, automatically you can get an interim withdrawal. That would, of course, have to be reconciled by a final filing.

We have the spring credit advance program. Thank you very much for that. But this year the rules aren't decided yet, so needless to say the forms aren't printed. We need those forms fairly quickly. Sensitivity to that certainly will be appreciated.

I see that the chair is--

Á (1110)

The Acting Chair (Mr. Paul Steckle): Your time has expired, Mr. Aukema. Perhaps whatever further you have might be added in the question period. But we do need to stick to a time schedule or we're going to be in trouble.

Next we have the president of the Federation of Agriculture of Huron County, Charles Regele, please.

Mr. Charles Regele (President, Huron County Federation of Agriculture): Thanks, Paul.

I represent 2,200 members across the County of Huron. I'm speaking on behalf of members as well from Bruce County and Perth County, which have about the same number. So we're looking at between 6,000 and 7,000 federation members, who are all farmers of all diversification.

The Huron-Bruce-Perth County Federation of Agriculture would like to thank the House of Commons agricultural committee for undertaking this very critical study.

This isn't the first time your committee has attempted to talk to the farm income problem. Four years ago you reported on the farm income crisis in Canada. In 2000 it was titled “Making the farm income safety net stronger and more responsive to farmers' needs”. In 2001 there was an interim report, “The future role of government in the grain and oilseeds sector”.

Since the signing of the 1996 U.S. “freedom to farm” bill, Canadian grain and oilseed producers have known they were in trouble.

Farmers are thankful for the one-time ad hoc assistance for the year 2000 crop. However, producers are frustrated at the perpetual investigation, the promises, and lack of adequate short-term and long-term government commitment. It is time to walk the talk. This committee must get the attention of senior cabinet members and Agriculture Canada bureaucrats, who seem to be working against us rather than for us.

A case in point: 95% of U.S. farm support is targeted at grain and oilseed and farm-fed-grain producers, versus Canada's support of 42%. I have given all of you the larger version. It can be found on page eight. Statistics Canada verifies that Ontario grain and oilseed farmers have lost $126 million in the 2000-2001 time period, whereas the rest of Ontario agriculture has made a profit of $1.5 billion. I don't know where that is, but that's the fact.

Agriculture Canada studies show that foreign subsidies are costing Canadian grain and oilseed producers $1.25 billion a year. That is nothing you haven't heard before. Yet Agriculture Canada continues to oppose targeted grain and oilseed programs. For example, look at the latest battle to get the standard market revenue insurance program reinstated for 2001-2002. In order to close this gap, many farm families are investing their off-farm income into the farm.

Our short-term recommendation is that the existing surplus standard market revenue funds be permitted to help fund and enhance the market revenue program. We wholeheartedly agree with your interim June 2001 report that stated that Canada's agriculture sector is running at two speeds: livestock production and supply management are moving ahead, yet grain and oilseed is in crisis.

Dr. Larry Martin of the George Morris Centre agrees. The farm income problem is focused on the grain and oilseeds area. It is a problem that is not of the making of Canadian farmers. It is made largely in Washington. The Prime Minister, Paul Martin, and the rural caucus all agree that more must be done.

The Canadian Chamber of Commerce document recommends that the federal government continue to provide financial support to Canadian producers based on a cost of production formula, allowing them to be sustainable until trade-distorting subsidies are reduced over time to a level that more evenly balances the international trading marketplace.

Our first long-term recommendation is a continuation of the current whole-farm programs, NISA and CFIP, with the addition of a national targeted WTO green program to compensate producers for the impact of foreign support programs or a cost of production program until the WTO can reduce and equalize support levels to all countries. For example, the Grain Growers of Canada are proposing a trade injury compensation program. Furthermore, each province should retain the flexibility to design its own programs. For example, “made in Ontario” enhanced market revenue, enhanced with NISA. As a side benefit, a targeted green program would limit both the need and the number of disaster applications.

Can we afford this? On a per capita basis Canadians spend approximately the same amount of disposable income on food as U.S. consumers, yet according to the OECD, Canada spends less than half the dollars per capita in agricultural support. That is a fact.

Our second long-term recommendation would be that the House of Commons agriculture committee follow up on their December 1998 recommendation to inform Canadians of our commitment to food security and stress the importance of farmers to the world food security policy. That report was entitled “The Farm Income Crisis in Canada”, and was tabled in the House of Commons on December 10, 1998. This would be similar to OFA's contract to consumers.

The other area I wanted to touch very briefly on was the need for technology transfer and the continuation of the government's support of supply management commodities. We know that grains and oilseeds have a problem right now. It will soon be supply management's turn.

This is sincerely submitted by Jayne Dietrich, Charles Regele, and Burnell Kipfer.

Á (1115)

The Acting Chair (Mr. Paul Steckle): Thank you very much, Charles, for your promptness and well-placed statements.

We now move to Wayne Passmore. He's with the Garlic Growers Association of Ontario.

It may be a moot point this morning, because we don't have our French member with us, but we do need to find consensus. He would like to table a copy of his document. Do I have unanimous support for that?

Á (1120)

Some hon. members: Agreed.

The Acting Chair (Mr. Paul Steckle): Wayne, you may table that document.

Mr. Wayne Passmore (President, Garlic Growers Association of Ontario): Thanks, Paul. I'll do that afterwards.

The Acting Chair (Mr. Paul Steckle): Okay.

Thanks, gentlemen and lady.

Mr. Wayne Passmore: Thanks very much.

Good morning, everyone. I'm here on behalf of the Ontario garlic industry. I want to introduce garlic and talk a little bit about it. I'm going to give you some very brief background on the Canadian garlic industry. I'm going to tell you a little story about how we think we've helped the federal government and how we're now asking for a little help in return.

We did a census of all the garlic growers across Canada, and one of the things we found is that garlic is grown commercially in all provinces of Canada except Newfoundland. Just under 300 growers responded to that census. Ontario has about 95% of the Canadian acreage. There are approximately 200 growers in Ontario, with the majority being in southwestern Ontario.

To give you a little background, the median farm of garlic is about four acres and the mean is about ten. So there are lots of little guys and a few bigger ones. Last year we had somewhere between 500 and 1,200 acres, depending on the environment of the industry we're looking at. The industry grows up and gets smaller. It responds very quickly to market forces.

In 1986 we pushed for some anti-dumping duties against Chinese garlic that was being dumped into Canada, which we thought was unfairly working against the domestic industry. We saw those duties actually being enforced in the summer part of the year and not in the winter part. Of course, that just switched the period when all those imports were going to come in. They all came in in the wintertime. So in 2000 we as an association pushed for year-round anti-dumping duties against the People's Republic of China and Vietnam. We thought we had it licked, but what we saw in 2001 was that import statistics started to show that countries without historical imports into Canada were now importing significant quantities of garlic, while the PRC quantities declined. We strongly suspect that this is transshipping and simply getting around the duties by false declarations of country of origin.

Looking briefly at what some of our neighbours do with regard to the People's Republic of China garlic, the U.S.A. has an upfront duty of 376% on garlic. Mexico simply bans it, quoting phytosanitary reasons. One of the other alarming things I've seen is that Canada is now being used to transship PRC garlic into the U.S., something we really don't want to be associated with.

To give you a little background on the size of the domestic industry, Canada produced around 2.1 million kilograms of garlic in 2000 and imported about 10.5 million kilograms. The total Canadian market is around 12.5 million kilograms of garlic. Looking at the average yields, that would correspond to somewhere around 7,200 acres if all of that was actually planted in garlic here. Each acre of garlic represents about 100 person-hours of employment and at least $3,000 gross revenue wholesale and up to $7,000 retail. We see a potential for about 1,000 acres in Canada in 2002, and the association is on record at the Canadian International Trade Tribunal as suggesting that we are targeting 3,500 acres by 2007.

Those tariffs I talked about actually raised $5 million, which went into the federal government coffers. That's the garlic that was caught at the border. We estimate that transshipping avoids another $5 million in tariffs per year. We are asking that the Canada Customs and Revenue Agency increase its efforts and stop this transshipping.

The association is completely voluntary, and the financial resources it has are not great. We recently requested that a small portion of the revenue go back to the industry that created it for the government, but that was denied. Simply 1% of those duties going back to the association that put these duties in place would actually fund the industry toward growth and recovery.

Thank you very much for your time.

The Acting Chair (Mr. Paul Steckle): Thank you very much, Wayne.

We'll now move to Dave Core. He's the president of the Canadian Alliance of Pipeline Landowners Associations. Dave, the time is yours.

Mr. Dave Core (President, Canadian Alliance of Pipeline Landowners Associations): I'd like to thank you for inviting me here to speak to you.

I can say quite candidly that I know exactly what we need, what we expect, and what we want you to do for us.

The Canadian Alliance of Pipeline Landowners Associations--the short form is CAPLA--is a national organization we formed approximately two years ago. It's a fledgling organization. It's federally incorporated. We just had a new association join the membership from Vancouver Island in the last month. At the moment, we have seven official member associations from B.C., Manitoba, and Ontario, and we have associate members from New Brunswick and Quebec.

To give you a little history of what CAPLA is, our proposed mandate is to educate landowners and help them organize to protect their rights and help them understand what the issues are with pipelines. The other mandate of CAPLA is to promote change of legislation and regulations that affect the National Energy Board and the pipeline industry. Quite seriously, speaking to the agriculture committee is maybe a little different for us, because we deal with NRCan, Natural Resources Canada. They have the mandate to look after the National Energy Board and pipeline companies. So I'm asking for your help as legislators to propose change to legislation.

The National Energy Board Act actually is a follow-up to the original pipeline act, so some of the regulations were changed. I still have pipelines through my property that fall under the regulations of the old pipeline act. There's no indemnity on those pipelines. I'm not protected from liability for environmental or even operational spills.

A lot of people don't understand that we have pipelines through property. When they were laid 30 or 40 years ago, it was supposedly in the national interest. We do not get a yearly fee for having those pipes on our property. At that time the easement agreements allowed for $100 payment or some such thing that went through. Usually it was a member of the local government that went around and helped get these pipelines in the ground.

I want to make it quite clear that we have a lot of issues: safety issues, environmental issues, indemnity issues, liability issues, abandonment... We have no abandonment agreement on any of the pipelines that go through our properties. A lot of people don't believe that, but that's the case.

I'm just talking off the top of my head, Paul, so you'll have to stop me, because I could go on for hours, and I don't want to do that.

To make it quite clear, the regulations and the legislation that we need changed is in regard to the way we are dealt with by the National Energy Board and the pipeline companies.

The National Energy Board states that their mandate is to be impartial. The thing I have to make perfectly clear is that pipeline landowners are termed interveners. We are not interveners. That's what we've been termed for years. When we make proposals in front of hearings of the National Energy Board, we're termed interveners, the same as the Raging Grannies or the David Suzuki Foundation.

We have the pipelines. We live with the pipelines. We have the liability of the pipelines. In Ontario, we have third-party liability if they leak onto our neighbour's property. My property becomes a liability. My retirement is a liability to me because of pipelines.

The National Energy Board has not been able to take us seriously because of their mandate, because NRCan runs it. To make this clear, what we've had to do over the years...1973 was the first year that a case went to court over pipeline issues. Peter Lewington wrote a book called No Right-of-Way. Since then, nothing has changed; the regulations are the same.

You have to understand that if we want to negotiate compensation, there is no negotiation, because of the right to expropriate under the National Energy Board Act. The National Energy Board Act does not allow the National Energy Board to sit down and work on compensation issues with us. We're left to the courts. So as landowners, we have no funding, but we have to go to court to protect our interest.

The other right that we have under the National Energy Board Act is arbitration. Quite clearly, arbitration doesn't work. It can only be done by an individual farmer.

As CAPLA, we tried to get arbitration on a 30-metre control zone that was improperly enacted by the National Energy Board and the federal government. The minister at the time, Ralph Goodale, turned us down. We did not have arbitration. In fact, the 30-metre control zone has been turned down twice. The reality is that at a hearing on Vancouver Island just a month ago, the National Energy Board told the people at the hearing that if they want to do something about compensation for the 30-metre control zone, they can go to arbitration, when already the minister has turned them down.

So what we need is, quite literally, you people to contact Natural Resources Canada and help us update the archaic National Energy Board Act, to protect landowners.

Thank you very much.

The Acting Chair (Mr. Paul Steckle): Thank you very much, Dave. It's certainly something that a few of us are familiar with, but it's a new topic for this group to hear, and it's good for them to understand that.

Dennis Jack is our next presenter. He represents the Ontario Corn Producers' Association.

Á (1125)

Mr. Dennis Jack (President, Ontario Corn Producers' Association): Thanks very much, Mr. Chair. Thank you to the committee for the opportunity to present here. We welcome you. I'll stick to the script because of the timeframe.

The Ontario corn industry has experienced major change over the past 10 years, with a dramatic increase in the portion of corn being used for industrial processing. The tonnage of corn processed industrially in Ontario has increased by 89% over 10 years and 59% over five years, and now represents more than one-third of total usage. This is double the percentage in the U.S. As a result, the amount of Ontario corn exported has dropped, while exports of corn-based products have jumped. This is one reason Ontario is Canada's leading exporter of agri-food based products.

More than $300 million has been invested in new corn processing facilities in Ontario over the past five years. An estimated $300 million to $400 million in additional investment in Ontario corn processing is planned for the next five. However, investors have been clear that this hinges on continued growth in Ontario corn production.

Jim Grey, the president of Casco, Canada's largest corn processor and a partner in much of the recent expansion, has stated:

“Anything which threatens future growth in the supply of Ontario-grown corn also threatens long-term growth potential for Casco and its stakeholders. Further, a stable source of locally produced corn is critical to our future growth.”

Ontario corn growers have been leaders in environmental stewardship. OCPA has played a key role in environmental coalitions such as AGCare and the Ontario Farm Environmental Coalition, and former national ones such as the National Agriculture Environment Committee. Don McCabe is an OCPA vice-president as well, and he chairs the environment committee of the Grain Growers of Canada. Terry Daynard, sitting in the crowd today, is the policy adviser for the Corn Producers Association, and he chairs that group's biotechnology committee.

OCPA is an active member of AGCare, the Ontario Farm Environmental Coalition, the Ontario Agriculture Research Coalition, and many others. Through efforts such as these, we have provided leadership in areas such as pesticide use reduction, reduced tillage, adoption of environmental farm plans in Ontario, reduction in emissions of greenhouse gases, and the use of biotech crops to improve both the environment and food quality. In short, we have been involved for many years in activities now defined as important in Ottawa and the new Canada agri-food policy framework.

We have found that our commitment to change, innovation, quality, and the environment by itself cannot counter the economic devastation on our members being caused by the huge imbalance between Canadian and U.S. grain support programs. Analysis shows that costs of corn production are lower in Ontario than in the U.S., but they are not so low as to permit us to overcome differences in support in the range of $50 to $100 per acre. Ontario grain and oilseed farmers lost $126 million in 2000 and 2001. This compares to a net profit of about $1.5 billion for all other Ontario farmers.

We're pleased that the Government of Canada has recognized this national need in its decision in 2001 to provide additional income support. Most of Ontario's share went to financially strapped grain and oilseed producers, as did equivalent funds provided by the Government of Ontario, but we are most disappointed that there has been no carry-through to 2002. We're disappointed that the need for such has apparently been downplayed in recent statements to the standing committee by the Minister of Agriculture and Agri-food. He did note the need for safety net funds to address injury not covered by existing safety net programs, but it seems strange that he seemed to ignore the obvious need to address the imbalance between the U.S. and Canada in grain and oilseed support.

He also stated a need for negative coverage with disaster assistance programs. This is despite the evidence that disaster assistance programs, which were designed for livestock farmers, have worked very poorly for Canadian grain and oilseed producers. Also, negative margin coverage could destroy crop insurance. The latter is disappointing because crop insurance does work well for grain and oilseed farmers in Ontario, the evidence being the $250 million paid out to Ontario grain and oilseed farmers in 2001-02, with a remarkably small number of complaints.

Grain Growers of Canada has presented an excellent plan called the trade injury compensation program, and I believe my predecessor discussed that with you today. It's designed to compensate Canadian farmers for financial injury caused by U.S. grain and oilseed subsidies.

The USDA states that 95% of its direct income support goes to U.S. grains and oilseed producers, and that this support has more than tripled since 1997.

Á (1130)

Until the program is implemented nationally, the priority program needed for Ontario is an enhanced market revenue insurance program. Market revenue insurance is what remains in Ontario of the GRIP program implemented nationally in 1991 but terminated in other provinces in the mid-1990s. It targets scarce safety net resources to farmers affected most directly by the imbalance between U.S. and Canadian direct subsidy programs.

Á (1135)

The Acting Chair (Mr. Paul Steckle): I think we're going to have to cut you off. I've given you almost a minute more. I didn't want to do that, but I thought you were almost finished. Perhaps you can conclude that in the question period. Perhaps somebody will give you that opportunity.

Now we move to individuals from the County of Lambton. The first one is Don McCabe.

Mr. Don McCabe (Second Vice-President, Ontario Field Crop Research Coalition): Thank you, Mr. Chairman. Welcome to the area. We're very thankful that the standing committee has chosen to take a look at the wonders of Huron and Lambton today. Please come back when it's a lot warmer.

I'd like first of all to step into the agricultural policy framework arena for the purpose of looking at an agreement that's probably going to start in 2003. However, there won't be any 2003 framework to worry about unless the short-term needs that are being brought to this committee's attention today... We don't really need to worry much about a future role of government.

I'd like to address my comments very much to the environmental arena, as that is one arm of the agricultural policy framework. The future role of government starts today. Some of the decisions that are being made in Ottawa behind closed doors indicate a complete ignorance by the level of bureaucracy in there of the need for true science to back up the claims that are being made and a complete use of the word of bureaucracy.

I'd like to highlight, though, by the same token one success story that lies within Ottawa right now. The National Climate Change Secretariat, headed up by Don Strange, is an excellent animal that is promoting and bringing together ministries across the board in Ottawa to move towards the Kyoto agreement. I'd like to stress that the Kyoto agreement is just a target. There's a lot of negative press towards it right now. I'd also like to stress that those decisions coming out that are not negative press were done before the rules were made in Marrakesh recently, and that the Grain Growers of Canada and the Canadian Cattlemen's Association fully supported the use of sinks and the Government of Canada was able to incorporate that in Bonn. We thank you.

We're looking forward to making use of opportunities here. Whether Kyoto goes ahead or not, we're looking at a greenhouse gas, fossil fuel, carbon restraint in the future. Anything that we can do out of a barrel of oil we'll be able to do with the use of corn, soybeans, wheat, and other commodities in the future. That is where we need to go. The job creation that will come from that is going to kill off part of the Canadian manufacturers' role, but if they wish to keep like an ostrich sequestered in the soil looking at the carbon that's there, they're going to have a hard time looking towards the future.

Moving towards other environmental concerns, right now the Species at Risk Act is trying to move through the House. I would highly recommend that it is better to deal with the dog that you've already kicked in the butt than to go take on a bigger one. Therefore, I would ask that the current government take a serious look at reusing the species at risk framework that has come forward, because we can support the framework that is there, provided regulations are brought forth under proper compensation measures for the landowners who are involved. If you happen to have a farm where you find some of these endangered species, then we evidently are doing something right, and society owes us for the opportunity to hang on to that heritage for the future. We can deal with those regulations as they come about through proper consultation.

Another area of environmental concern from Environment Canada is the current listing of ammonia as a toxic substance in the environment. They've had enough times to change the wording on this. It keeps you wondering which variation of the source they're using to back up their current claims, because they're not using science. If you're going to use ammonia, you stick with ammonia. The act clearly states “a compound or a substance.” Ammonia in the aquatic environment, ammonia in waste water effluent, is not a substance or a compound. If you're going to regulate ammonia, it means you're going to regulate the nitrogen cycle, which is atmospheric and global in nature, as well as deal with aquatic and environmental concerns.

There's not enough science for us to move forward here. If the answers are to come forth to make sure that this regulation is properly done, please work with the landowners and the stewards of the land who are currently here to ensure that it is going to work in the best possible manner.

I'll now move into the area of land use policy. We have a wonderful organization, one that uses American dollars, that is veering from the very green roots it began with to now monitor minnows and pursue other opportunities with man-made ditches to enforce so-called proper land use policy. I don't usually like to mention too many names, but in this particular case I think we're all aware of the $106 million Ducks Unlimited is looking for from the government. This is one example of environmentalism gone wrong.

I am glad for the opportunity to make these comments, and I look forward to further discussions with the committee on any of these subjects, including others of environmental concern to the farmers of Lambton.

Thank you.

Á (1140)

The Chair: Thank you, Don.

We'll now move to Beatrix Enter. She's with Great Lakes Organic Incorporated. Beatrix, it's all yours.

Ms. Beatrix Enter (Manager, Great Lakes Organic Inc.): Thank you.

I'd like to thank you for being on the panel, and I'd also like to thank Rose-Marie Ur. She has given really good support to the Lambton-Middlesex farmers. Thank you.

I'll just tell you a bit about Great Lakes Organics. It is a farmer-owned company. We are committed to building processor relationships for value-added product, and we are very much into exporting certified organic commodities. As one such farmer, I would like to represent organic farmers and outline how we too represent a niche market. We currently work with production from over 15,000 acres, and this is all grown by environmentally friendly methods.

I'll give you a bit of background on organics in Canada. In Canada the food sector is worth $300 million to $750 million. Eighty per cent of those products are presently being imported. Currently, the organic food sector is only 1% of total retail sales. Annual growth rate in Canada is 15%. The target market is the baby boomers, 35 to 55, who are becoming health conscious. In the United States it's currently $10 billion with a 20% growth rate.

So what is our dollar value potential for organics? What I'd like to look at is the future for agriculture. The future for agriculture is really going to be in niche markets--it's a reality--with producer groups building their own markets.

I'd like to thank the Agriculture Adaptation Council for supporting new-generation co-ops. But the one thing that would really help would be receiving the funding up front, as opposed to all these young companies having to come up with 100% of the funds up front to compete in a global market and then getting 50% compensation--possibly--in some areas.

The other thing is, 70% of our market is in the export market. When we go to an organic trade show, such as BioFach in Germany or another in Japan, other organic companies get major representation. If you look at their booths, their areas, you know that you're talking about over $100,000 just in representation costs for their country to be there. Many countries don't even know that Canada is able to supply these organic products. Where is Canada's representation at these trade shows?

One of our major marketing advantages is being able to have non-genetically-modified organisms. Where is this going with the new soybean bill that's being implemented?

Also, with the distancing regulations requiring two kilometres or more from GMO crops for non-contamination of organic crops because of wind, will we be able to stay in the organic market? With winds like yesterday, will two kilometres have any bearing whatsoever?

Who will pay for all the extra testing costs for all these GMOs? We must test the seed now before it goes in the ground, and every load has to be tested before the processor accepts it. Who will bear the cost when an organic bean worth $18 or more per bushel is suddenly worth $7 per bushel because it is no longer an organically acceptable product?

Rick, I thought I might throw in there, while we're talking about funding for farmers, that farmers in Canada have the same costs and in many aspects greater costs than our U.S. counterparts. Canada has wonderful safety standards and Canada has to meet them. So minimally farmers should be compensated as well, and given the safety standards, possibly even better than their U.S. counterparts.

Thank you.

The Acting Chair (Mr. Paul Steckle): You have a couple of seconds if you need to conclude.

Á (1145)

Ms. Beatrix Enter: And for new generation co-ops in the U.S. for niche markets they also are coming with substantial funding, and I think that will make job creation unbelievable and it will help our small communities. I believe that the government should be there for the new niche markets. Thank you.

The Acting Chair (Mr. Paul Steckle): Thank you very much, Beatrix.

Now we have one more presenter from the County of Lambton. We have, from the Catholic Rural Life, past president Tony Beernink. You have the last word on Lambton, for now.

Mr. Tony Beernink (Past President, Catholic Rural Life): Thank you. I appreciate that, and I appreciate having an opportunity to present here.

We feel very strongly that there are some changes that need to be made to keep producers on the land and for the young farmers to have a chance to farm if they want to.

A few years ago, on the way to visit my son in Colorado, I stopped in Columbia, Missouri, to visit with Bill Hefferman, a rural sociologist. Dr. Hefferman and I have spoken in Ontario several times, and he has stated that 95% of the farm subsidies in the U.S. go to 20% of the big farm operations. Producers in the U.S. are still having problems because the ones who need the help are not getting it. In our opinion, the same thing is happening in Canada.

We'd like to propose a graduated system of safeguards built into the legislation. This would not just pertain to the grain and oilseed sector, but to the whole agriculture industry. The average farmer in Canada is 59 years of age. Among these farmers, who own about 65% of the farm properties, in the next 20 years we're going to have a big turnover, and who will be financing this? Who can afford to keep up the land and farm it agriculturally?

We want and need all farmers on the land in the rural areas for the sake of the communities, so that business and infrastructure may be maintained as they are presently. For years government and colleges have been saying get big or get out of farming, and to what avail? Big is not better or more efficient. How does a young farmer get started if he wants to farm?

Politically farmers have very little clout; they're only one and a half percent of the population. Canada needs all farmers to secure a safe, nutritious, and self-reliant food supply for its people. The cheap food policy won't work when we get the multinationals like Smithfield, ADM, or Cargill owning or controlling Canada's food production. Would our environment be any better off? Would the water be safe?

It's rather annoying at times when you look at it. I read the other day that Smithfield now controls 85% of their kill either by contract or by ownership.

J.M. Schneider Inc. is owned by Smithfield Foods, Inc. so it affects Canadian production as well. There's not a free market left any more; it's just open.

To prevent control from being taken away from us, and forgetting the sliding scale and the safety nets and efficiency payments, we don't want to give the numbers. That should be left up to the experts and their governments. The basic thing we want is that small and medium-size farmers get a fair share of the deficiency that's being paid out. The present grain and oilseed prices do not cover the cost of production.

Presently we have an unemployment rate of about 7.6%. If reality were taken into account, and how many people are looking for a job, it would probably be close to 10%. When you force more people off the farm, automatically they're going to be looking for another job and forcing somebody else out of a position. It's a chain reaction happening. When people are not working, when they're unemployed, they're not contributing to the economy, so automatically we're going to get more unemployment, and it's not helping things at all.

It has been proven many times over, every dollar of profit by farmers turns over in the economy seven times, like $7 for each $1. Also, every dollar the farmer loses creates a dollar of debt. You can see that agriculture is or should be a very important part of any country, but especially Canada, since we're so diversified.

I'm trying to keep it down to the instructions as to the time limit, and--

Á (1150)

The Acting Chair (Mr. Paul Steckle): That's all the time I have. I've given you a little more time than I really should have. But I think in fairness to all the others, we're running short of time, Tony, if we could cut you off.

Now moving to Huron County, we have the warden, Ben Van Diepenbeek. Would you make your presentation, please.

Mr. Ben Van Diepenbeek (Warden, County of Huron): Thank you, Mr. Chairman, for the opportunity to address you and your staff on agriculture issues of importance to Huron County and rural Ontario.

I'd like to describe Huron County's substantial contribution to agriculture, the recent trends in our production system, some indicators of the health of our environment, and how senior government can assist and support our efforts.

Our goal as a county and as a community is to sustain a balance between agriculture, changes, and a healthy environment, and to hereby meet the needs of all of our residents, including farmers, rural residents, cottagers, visitors, and our urban communities.

Our local economy, like the national economy, is supported by three main pillars: agriculture, manufacturing, and tourism. While we have more than 170 manufacturers, with many exporting to the U.S. and offshore, and while we have a growing tourism industry focusing on 100 kilometres of Lake Huron shoreline and rural culture, Huron County is best known for its outstanding farm communities.

Agriculture in Huron is agriculture in Ontario. Huron is one of the top producing areas in Canada, as highlighted in the following facts. Over 95% of Huron County is prime farmland, at about three quarters of a million acres. Huron is steward to a nationally significant resource. Huron's annual value of production leads all counties and regions in Ontario, now exceeding half a billion dollars per year.

The agricultural output of Huron County is greater than the production totals of each of the maritime provinces. Huron has the highest percentage of the labour force--approximately 20%--engaged in agriculture of any county in Canada east of Winnipeg in Canada.

The county has a proactive and skilled farm community embracing new technology and blending it with successful and conventional farm practices to compete in the global market.

As with all sectors, change is ever present in agriculture. We've been studying these changes to ensure we are ready to address emerging issues. Some of our recent findings are as follows. From 1996 to 2000, a new livestock barn came into production every ten days, on average, in Huron County. These new or expanding barns added housing capacity for 58,000 livestock units, three quarters of which are hogs and the rest cattle and poultry.

As of 1996, Huron had more than 400,000 hogs, 4.5 million chickens, and 165,000 cattle. For each tillable acre in Huron County, there were 0.42 livestock units as of 1996. This figure is expected to rise in the 2001 census information.

The intensity of production is rising, while the number of farmers is dropping. In hogs, for example, recent years have seen a 54% increase in production, with 15% fewer producers. The Maitland River watershed, which covers the north half of the county, has the highest concentration of manure produced in all of Canada, according to Statistics Canada, at 7,600 kilograms per hectare, or ten times higher than the average watershed with livestock in Canada. The Ausable-Bayfield watershed, covering the south half of Huron County, ranks seventh in Canada, with five times more manure production per hectare than the average watershed.

Those facts and trends are not intended to suggest a problem with agriculture but to identify the issues arising from the changing farm economy. The issues relate to farm viability, rural communities, and the health of our environment. Through our focus groups and workshops we have found that Huron residents value a clean environment, rural and small-town living, quality service, and economic opportunity. Farmers, in particular, value hard work and innovation, and only ask for a fair return on their investment and labour.

All sectors acknowledge that nutrient bacteria found in water of wells, tile drains, streams, and beaches have many sources, including livestock manure, commercial inputs, septic systems, and sewage treatment plants. On our farming front, there is widespread agreement among farmers and non-farmers that careful management of cropping and livestock systems is required to protect the environment.

In Huron County we've addressed many of the issues through the following projects.

In partnership with the provincial government, we're investing $2.5 million in the best management practices on farm and rural properties through our Healthy Futures for Huron Agriculture programs.

Last Thursday, county council endorsed a new model manure management bylaw, developing a strong ally in the farm sector that will better produce surface and groundwater.

We will be conducting a pilot project this year to implement well field protection measures to safeguard the municipal water supply, along with studying the groundwater conditions and municipal wells across the county.

A new forest conservation bylaw is being developed and will monitor beaches and groundwater for long-term trends.

Á (1155)

The Acting Chair (Mr. Paul Steckle): Mr. Van Diepenbeek, we've exceed by a few seconds. I know it's a wonderful story and I love for you to tell it, but you won't be able to present the full detail of the text to the committee. I think we need to go now to questions.

We are running really tight on time. I'm going to take the prerogative of the chair to suggest that we allow each party a five-minute period, if that's okay. The Liberals will choose which person they wish to have address the committee.

Rick, do you want to give yours to the Liberals as well today?

Mr. Rick Borotsik: No, not this time.

The Acting Chair (Mr. Paul Steckle): I'll start with the Canadian Alliance--Howard, five minutes.

Mr. Howard Hilstrom: Okay.

First of all, a quick comment: You certainly are blessed down here with good land and good soil. I'll just leave it with the crowd and everybody else: can you imagine what we're going through as farmers in areas where we're not so blessed with good land and soil?

Dennis, I want you to think for just a minute before you answer this question--I'll go to somebody and you can come up with an answer. The federal government has the greater taxing power, so it has the extra money for farm programs. Should the design of the actual programs be left up to the individual provinces, according to what's necessary in their provinces, and the federal government simply have a veto over any program that would be countervailable and against the WTO?

Would that be a better way of designing and delivering farm programs, to have them more provincially oriented, as opposed to coming down from the federal government? We've heard about the one-size-fits-all, take-it-or-leave-it type of proposal that's on the table now with this Whitehorse plan.

I'll leave that with you for just a minute.

My question to the organic grower is, quickly, is GMO corn and the sweetener and products from that no different from the products from non-GMO corn? The GMO corn, of course, has Bt in it, and I understand organics spread the Bt on it to keep pests away, and that sort of thing. Can you quickly tell me why it is that organic producers--and I'm all for organic--have determined that GMOs are not organic?

Ms. Beatrix Enter: My understanding of it is that GMO is not directly what nature intended. It has been altered from its original state.

Â (1200)

Mr. Howard Hilstrom: Okay, so there's no science or food basis, it's not what nature intended. It's more a philosophy than anything else. And that's fine. I agree with that. I know that's not enough time to answer, but I'm on very short time and you can maybe expand later.

On this animal health issues and zoning--and that is very important in regard to containing disease in this country--do you feel that we're in a position now where Canada should be zoned? I'm asking Henry that. Should we be zoned right now? We have a big problem with tuberculosis in elk and deer in our national parks coming out into the livestock. Should we be zoning Canada right now and not be waiting?

Mr. Henry Aukema: I think we should have had zoning done yesterday. There are more diseases. Swine cholera is another one that Europe battles with.

Mr. Howard Hilstrom: The other question concerns hog production. In Europe they had swine fever break out. They had 10,000 hogs being produced in a two-kilometre radius by 30 producers. Are the big hog barns, with 5,000 and 10,000 hogs in them, not a better way to produce pork than by having a whole bunch of little 1,500-head producers?

Mr. Henry Aukema: Yes. Certainly the bigger spaces that you can create between hog operations is better. And if that means clustering them into bigger barns--

Mr. Howard Hilstrom: Okay. Thank you.

Dennis, you have just used my time pretty well.

Mr. Dennis Jack: Do you want the answer to your question?

Mr. Howard Hilstrom: Yes, if you would, please. I gave you a little time.

Mr. Dennis Jack: Some of my colleagues currently are going to a meeting with the provincial government today, working on a safety net program. Should it be a “Made in Ontario”, “Made in Quebec”, “Made in Manitoba”, “Made in Saskatchewan” program? Partially. I believe that the federal and provincial governments have to find a way to work together to develop a safety net program for the producers. It sounds simple. Unfortunately, politics gets in the way. I don't intend being trapped in the middle of that entire discussion, but there is a mandate for the federal government to have a commitment to safety net programs, or to agriculture, and the provincial governments should also have a commitment. In Ontario, there's been a split of 40-60 financially. Is that appropriate? In Quebec, the Quebec government provides more than 40% of the funding for their safety net programs.

We need a program to take care of the injury. Our competition, the U.S., have a predatory program. It's designed to put the competition either out of business or injured severely. It works. So we need a program. We need the two levels of government to work together to develop that. Who does what, I don't care. We need to fix the problem.

The Acting Chair (Mr. Paul Steckle): Thank you very much, Dennis.

I am moving to Dick for the next line of questioning. Five minutes. Perhaps you could keep your questions and your responses as succinct as possible. I realize these are difficult, very complex questions. Dick.

Mr. Dick Proctor: Thanks very much, Mr. Chair.

I'd also like to start with Ms. Enter and give her an opportunity to answer the question she asked us about where Canada's representation is at these international organic shows. Why do you think Canada is not present?

Ms. Beatrix Enter: Our marketers from Great Lakes Organics have been present at various organic shows. I have been in one in California myself. Most countries will have sections in a highly vocal or a highly predominant area, and Canada might have one table as opposed to the other ones having maybe ten. Sometimes Canada isn't even there. Sometimes they are asked if Canada is there. That's how low the representation is.

Mr. Dick Proctor: But what is the reason for that, in your opinion?

Ms. Beatrix Enter: I'm wondering how much support organic agriculture has from the government. I think it's a support issue. Maybe they do not realize, or are just beginning to realize, how fast the organic sector is growing.

Mr. Dick Proctor: Thank you.

Charles, you raised a point about subsidies from the United States and how much that was costing. This has been noted by our own Department of Agriculture and Agri-Food, but then they turn around and say--somewhat bewilderingly, to me, anyway--matching the subsidies is not the answer to the problem. I'd like to know whether you agree with that and what your view is on what we should do about the high subsidies, particularly from the United States.

Mr. Charles Regele: I don't figure I have the answer for that specific question. However, I would like to make a comment on it: that on a per capita basis the Canadian federal government, with its counterpart, the provincial government, can give the Canadian producer the same support as the American producer receives. I strongly believe that, and our federation believes it.

This is a culture. Farming is the oldest profession of all, and here we are today, in 2002, trying to figure out what the problems are. We change and advance so quickly, even in my own sector I find it difficult to keep up. But one of the things you must do is give the dollars to the injured--Dennis brought it forward very well--and then when it's another's turn, rather than the agriculture sector's, to do the same there.

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Mr. Dick Proctor: That's fine.

The Acting Chair (Mr. Paul Steckle): Okay. Let's go to the Liberal side. Rose-Marie, do you want to take it?

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

My first questioning will be to Ms. Enter regarding organic farming. We had many presentations when we were on our western leg of this committee journey. My question to you is, how well received is organic farming in Ontario among the farming community?

Ms. Beatrix Enter: Five years ago that wouldn't have been a nice question to answer. Today it is acceptable. People are able to make the transition, and the farmers have been very instrumental in helping each other learn how to farm organically.

I understand the government is starting to take some action in helping provide information to the farmers in their transition to organic.

Mrs. Rose-Marie Ur: Thank you.

Don, I know you've been very versed regarding ammonia passing through the environment, and I thank you for the information you've brought forth to our office on it. We're looking at whether it's coming from our urban waste treatments or from our agricultural area. How devastating do you see this being down the road for agriculture? Are they basing it on real science, or are they just basing it on where it's coming from?

Mr. Don McCabe: The initial study that was done by Environment Canada was strictly on waste water effluent. The problem is that the waste water treatment plants would say we're sucking water out of the Ausable, the Thames, the Sydenham, and it's already got an ammonia background in it; you're not regulating that, so this is unfair to us.

The whole point of this is that unless you're going to start radioactively labelling the isotopes to decide who's using what fertilizer and who's doing what, some cemetery or golf course or urban lawn could be the problem we're talking about, as opposed to the best management practices that are incorporated for the economic well-being of farmers as a whole. Therefore, any regulation that comes forth right now not based on science is totally destructive to the industry.

Mrs. Rose-Marie Ur: Dave, regarding CAPLA--and you've certainly been a fighter all along, and this has been to Ottawa several times before it was even with CAPLA--my question to you is this. We had an accident, I believe it was out west, last week or the week before, where there was an eruption. That being said, and the way the government has been looking at this, what can you tell us, in a few short minutes, so as parliamentarians we can go back to Mr. Dhaliwal now and say what we have to change? This has been very frustrating for you.

Mr. Dave Core: Very quickly, we've come down to this mandate. CAPLA needs funding. We work out of our back pocket. I pay for all my phone calls and everything else, and this is a national organization. We need NRCan to fund us. We need to be sitting at the table across from the pipeline companies and with the NEB, negotiating changes to regulations to protect landowners, because we are responsible for people's safety. If you get the pamphlets we get from the pipeline companies, we're supposed to watch their pipelines and make sure they're safe for them.

We understand the issues. There's nobody else in the industry. The industry and NEB and NRCan are very incestuous. Employees go from the NEB to the pipeline companies to NRCan. It's all a mandate where everybody's in bed together.

The reality is that landowners really represent what is in the best interests of the public when we try to make sure the pipelines are safe--pipe thickness, that stress, corrosion, and cracking aren't happening. We go to hearings that cost us hundreds of thousands of dollars to present our side of the safety issue. The NEB formulates regulations based on information provided to them by pipeline companies, and that's the reality. There's nobody else providing information. There are no other consultants. And CAPLA has the expertise born of 20 years' experience of the bunch of us hiring the proper consultants to propose safety standards, etc. We need funding from NRCan, and that's it.

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Mrs. Rose-Marie Ur: Dennis, last week you had your convention in London. It was well received, and we spoke with the earlier presenters about the education of our consumers as to what sort of agriculture or what farming the primary producer is all about. At that convention there was a basket made up to demonstrate what corn products there were out there. How many people in the riding of Lambton--Kent--Middlesex do you believe would know the products that are produced? There's our problem, is it not?

Mr. Dennis Jack: A very limited number.

Mrs. Rose-Marie Ur: And how do we get it out?

Mr. Dennis Jack: With consumer education: education of students in schools and education of the consuming public.

Mrs. Rose-Marie Ur: But that basket should be shown; it should be presented. It should be in our great local newspapers, and I can say that, with our local newspapers being represented here. We are very fortunate. We have so many local newspapers, and they pick up information that is sent to them, and not just from the government. Whether it's about the corn producers or anyone else, we should get that message out that corn is not just in your cornflakes; it goes into many...or corn into your fuel.

Mr. Dennis Jack: The value-added processing industry is very significant. People think corn is something you eat. It isn't. It's sweet corn you eat. But all the foodstuffs...there are over 2,500 food products in a grocery store that contain some element of corn. If there isn't a viable grain and oilseed industry in Ontario and Canada, the food products on your store shelf may come from some other place.

Mrs. Rose-Marie Ur: And that's what we have to get out.

The Acting Chair (Mr. Paul Steckle): Thank you very much.

We'll now move to Rick.

Mr. Rick Borotsik: Thank you.

I have two questions, and they'll be brief. The first one is for Don with respect to SARA. You had indicated that you're prepared to support SARA, the legislation you know as opposed to the legislation you don't. But you also had a caveat in there, that you support it as long as there is regulation as to proper compensation. We have not seen that proper compensation under SARA at this point in time with respect to the ranchers and farmers. Are you prepared to accept this legislation without that compensatory regulation in place?

Mr. Don McCabe: At this point in time it's my understanding that the bill was a framework and that the framework does contain statements of compensatory opportunities. If it does not contain that statement, it needs to be there so the regulations can move forth. This is the third time this bill's been brought forth in eight years. We had better either move on it or give up on it, and from the stewardship side of agriculture, we're prepared to move forward and illustrate the abilities of the landowners.

Mr. Rick Borotsik: Thank you, Don. I don't believe there is compensation built into that particular legislation, but you and I can talk about that later.

As to ammonia, do you believe that Minister Anderson recognizes the ramifications if ammonia is in fact treated as a toxic substance? Maybe you could just expand a bit on how you see the problems there with having ammonia listed as a toxic substance.

Mr. Don McCabe: I do not believe Minister Anderson is aware of this situation. If he were aware, he'd realize that ammonia is also in Windex cleaners. Are we going to start regulating the toilets of the nation?

Mr. Rick Borotsik: I'm more concerned with the agriculture side of it. There are a number of ammonia--

Mr. Don McCabe: If you're going to regulate a compound, sir, you should regulate the entire environment it's going to work in. With ammonia you're looking at the entire thing; agriculturally speaking, you're impacting on every sector of agriculture somehow and somewhere.

Mr. Rick Borotsik: As to the MRI, Dennis, you had indicated that there should be some sort of working arrangement between the provinces and the federal government with respect to safety net programs. Provincially, Ontario has an excellent model with the MRI program. As a matter of fact, the Ontario producers wanted to extend that program beyond 2001 and 2002. I appreciate that. It's a good program.

You also talked about enhanced MRI. Could you just touch on the enhancements you would like to see in the MRI program? Somebody mentioned GRIP. Was it you, Dennis, or someone else who mentioned GRIP as a model for the MRI program?

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Mr. Dennis Jack: In Ontario market revenue is what used to be GRIP.

Mr. Rick Borotsik: It should be everywhere.

Mr. Dennis Jack: We would like to see it continued. The federal government has extended it for two additional years. Thank you very much. There have been some caveats and some problems with that. I understand there is a very good possibility that might be fixed.

Mr. Rick Borotsik: What enhancements do you see?

Mr. Dennis Jack: We see it extended, along with top-ups from the province, and the federal government would allow the moneys that are there to be used in the next two years, rather than have that amount of money stay there. Have new funds matched, and then at the end of two years have that be withdrawn. We hope this is being taken care of. Mr. Martin spoke positively about that on Saturday, as a matter of fact.

Mr. Rick Borotsik: We should use this model across Canada. Perhaps that's the way we should go.

Dave, you talked about dollars flowing from the NRCan. Municipalities, I understand, generate substantial tax dollars from the pipelines that are buried in their municipalities. Have you gone to the municipalities at all to look at any type of funding formula, if you will? As I said, that is where the dollars end up, as municipal tax revenues.

Mr. Dave Core: There are so many cents per so many cubic feet of product that come to CAPLA. This is just a proposal. At this time regulations don't allow us to sit at a table and negotiate anything. Everything is arbitrarily set for us.

The one thing I haven't pointed out, which I'll very quickly state, is that under section 87 of the act, pipeline companies have the right to serve notice that there is going to be a pipeline put in. Then you go through this long process. We have a group in south Lambton here. The millennium pipeline has been withdrawn, but they were served notice. They have spent close to half a million dollars on lawyers and consultants to get the proper easement agreements, etc., and all of a sudden this has been withdrawn. Under the act they are left with dealing with the courts in Ontario to get their money, and the company will not negotiate with them. So they have to raise many more hundreds of thousands of dollars to get their expenses back. It's ridiculous.

What I'm saying is that over the years the industry has had the advantage of regulations that allowed pipelines to be forced through. Expropriation doesn't give us the right to negotiate. If you know you can expropriate, why would you negotiate?

Mr. Rick Borotsik: Expropriation, though, is at market rates.

The Acting Chair (Mr. Paul Steckle): Thank you, gentlemen.

Rick, your time has expired.

Thank you very much for your indulgence. I realize we are running a tight ship here today, because we have elements that make it difficult for us to go beyond the time.

Thank you for coming and presenting. We've had tremendous presentations this morning, along with a good line of questioning. We want to thank you sincerely for coming and continuing the dialogue.

We'll be adjourned for about five minutes, until they place the new name cards, and then we'll come back to the table.

Â (1215)

Â (1220)

The Chair: We'd ask members to return to the table and we'll resume our hearings.

Again, to go over the basic rules on the way we operate, each presenter has five minutes to present his or her position. We'll try to signal from the chair when you get close to five minutes.

You may notice some members are involved in other things around the table. Some of us may be going for a sandwich or lunch while panel three is proceeding. We have not allocated any dinner hour or any time in between. If you see people leaving, you'll know what is happening.

First on our list for panel three would be Larry Verbeke from the Ontario Fruit and Vegetable Growers' Association. We'd like to welcome you and your group. Larry, the floor is yours.

I have another reminder. If you leave your presentations with the clerks, we will see that other committee members get them. Of course all of this is transcribed and the records of the meetings will be in the so-called “blues” of the committee. If a few members are missing from the table, they still have access to them when they get back.

Larry, the floor is yours.

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Mr. Larry Verbeke (Second Vice-President, Ontario Fruit and Vegetable Growers' Association): Mr. Chairman and elected officials, I'd like to thank you for inviting me here today for a chance to state our concerns in the industry of horticulture.

My name is Larry Verbeke. I represent thoughts and concerns on behalf of the 750 members of the Ontario Fruit and Vegetable Growers' Association.

Our organization contributes 35% of the total cash farm receipts for the entire industry of Canada. The Ontario horticultural industry has supported the view that our industry must remain competitive under current global conditions.

The fresh produce industry worldwide has increased substantially over the past years for many reasons, some of which are the increase of overall consumption of fruit and vegetables, the increase of production, the increase of subsidies, and the adaptations of new technologies and production tools. All these factors affect the Ontario industry.

There are specific challenges that the agriculture and agrifood industry is facing. Some of these challenges are research and technology transfer, market and production, crop protection materials, registrations, food safety, integrated pest management, environmental farm plans, nutrient plans, labour policies, water use and water quality enhancements, energy policies, taxation, trade policy, and crop compliance issues.

I'd like to say a little bit about crop protection material. All the fruit and vegetable production in Ontario, except for potatoes, qualifies as a minor crop. Growers are even hampered in their efforts by the current regulatory processes. They are not harmonized with the U.S., despite public assurance to the contrary.

It is important that the government provide resources that will assist the fruit and vegetable and greenhouse industry to be competitive and to have products licensed and scheduled for use in Canada. I would also like to mention a few base foundations to the safety net programs.

The first line of defence is funding and human resources for basic and applied research, marketing and promotional programs, technology transfers, and government policies and frameworks that are agriculturally friendly. The second line of defence is crop insurance and SDRM, NISA and its enhancements, other companion programs, and the third-line disaster-type programs. All the points I've just mentioned require adequate funding and long-term planning in order for the programs to work properly.

Food safety and quality assurance has been at the forefront of our industry over the past few years. We encourage the government to place this issue at the top of its priority list. Currently our industry has adopted a voluntary approach to this issue. Most of our producers are already employing some sort of food safety program at the request of their customers and to maintain the industry of supplying safe food to the customers.

Buy Ontario produce... Food safety initiatives, guidelines, and regulations must be national and fully cross-commodity in scope. They must apply to domestic products and also to imports, evenly and equally.

We are under the anticipation that the ministers of agriculture, both federally and provincially, will come to an agreement on a safety net package to meet our needs. In previous years... 2000 was a wet year. We all know about the extraordinarily dry year in 2001. And yet again, predictions say we're in for a wet 2002. We are looking forward to a stand-alone SDRM and we are looking forward to signing an agreement on safety nets.

Thank you for listening to the concerns of the Ontario Fruit and Vegetable Growers' Association.

The Chair: Thank you, Larry.

From the Dairy Farmers of Ontario, Gord Coukell.

Mr. Gord Coukell (Dairy Farmers of Ontario): Thank you very much, Mr. Chairman. It's our pleasure to be here and meet with you today.

I have provided you with a document. Obviously I can't read that in the time allotted, so I'll just touch on some highlights.

The gross farm-gate value of milk and cream produced in Ontario is just over $1.4 million annually, and the retail value of dairy products in Ontario is more than $4.8 billion to Ontario's economy. A strong, viable agrifood sector contributes significantly to help these sustainable rural communities here in Ontario as well as across Canada.

The supply management system is the marketing system of choice for our industry. In spite of many detractors, it works well and benefits all Canadians. Producers receive fair, stable prices for their products. Processors can count on a steady supply of high-quality milk at stable prices. Consumers have access to a wide variety of safe, nutritious dairy products at reasonable prices. Government support is provided by way of regulatory policy framework without the need for subsidy dollars. The consumer subsidy that did exist was completely phased out as of February 1, 2002. Just as an aside, in the comments heard earlier, the average age of the quota holders in the dairy industry is 44.

The three fundamental pillars of supply management are import controls through effective tariffs; producer price-setting authority; and production planning. These are the frameworks necessary for us to continue a system that works very well in the Canadian context.

We extend our appreciation to the federal government for its support and assistance in dealing with a constant barrage of trade challenges our industry has been facing recently. We look forward to the continuing support of this committee and that of government as the next round of WTO negotiations develops momentum.

Specifically, we are urging the government to develop and implement strategies that ensure that the tools necessary to maintain supply management are incorporated into future trade agreements. Dairy Farmers of Ontario calls on the Standing Committee on Agriculture and Agri-Food to support the introduction and passage of the proposed Dairy Terms Act. This act would specifically deal with the nomenclature of dairy products, not the manufacture of them, and would assist in ensuring that consumers understand what they are buying in the marketplace.

We are supportive of environment-responsible farming and have played a leading role in Ontario through the Farm Environmental Coalition in developing and advancing farm environmental plans. It is imperative that the federal government continue its financial support for this initiative as it takes on increased importance in the future as public awareness and expectations continue to grow on environmental issues. This is particularly important in the interval between now and the implementation of the Whitehorse agreement over the next period of time.

In the area of research, Mr. Chairman, we support government being involved in research programs as they are WTO-agreeing. Industry has been supporting a great deal of applied research. We believe it is the role of government to be supporting the basic infrastructure for research along with the matching funds to assist in the applied research that industry is funding today.

Thank you very much, Mr. Chairman, for the opportunity to be here today.

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The Chair: Thank you, Gord.

From Casco, Jim Grey.

Mr. Jim Grey (President, Casco Inc.): Thank you very much for the invitation to present today. I'm going to do my best to run through a presentation that we've prepared for you, in five minutes or so.

For anyone who doesn't know, Casco—although I understand our name has already been mentioned a couple of times today—has been around for quite a while, 140 years or so. We are basically almost the single corn-processing industry in Canada today, employing about 500 people in three facilities in Ontario and processing roughly, in average years, about 25% of the Ontario corn crop.

I'd like to talk a little bit about some of the influences in our business today and some of the potential for the business and how we're joined at the hip, really, with some of the individuals who presented in the first session from the Ontario Corn Producers' Association.

The first issue to focus on actually comes by way of a thank you to the federal government and relates to trade policy and practices in countries around the world. As our business has grown and our products have grown, our dependence on open borders has grown as well.

As an example of the harm closed borders can do to you, some of the issues in the Mexican economic reform that has occurred in this year have caused considerable impact to our business in Canada. Thanks to members of Parliament like Mr. Steckle and others, that issue has been resolved in very short order.

Another is, because Casco is part of a multinational, we are faced not only with competition within a market--a very tough market--but also internal competition. We compete with our affiliates around the world for capital investment, for new products, and new product development. So if Canada comes up--or Casco comes up--with a great new product from corn, our multinational organization may say, “Well, that's a great idea, Jim, and I think it's an even better idea if we do it in Brazil.”

The third issue we face, operating primarily in rural areas, is the infrastructure our facilities cope with. I'll say it within this room, but when we cope with an organization like Canadian National, which is essentially a monopolistic organization within the country, we find it more and more difficult to transfer our product in and out of our plants and gain access to the market in a competitive fashion.

The last, and certainly not the least, is both the value and the supply of our raw material, which is corn. You may think it puts us at odds with the Ontario Corn Producers' Association. It does just the opposite, in fact. There's nothing we want more than for the Ontario corn producers to flourish, because that is of incredibly important strategic value for this company.

We've worked very hard with the OCPA over the last year or so to encourage the development of corn production in this country--in this province specifically. Both to me and to my colleague here, Mr. Baker from the CRFA, it's very important that we see corn production grow over the next few years, with the very high potential that exists within our company and within our industry to develop new and exciting products from renewable resources.

With that in mind, there are just a couple of points I'd like to leave you with. Certainly I'd like to see the federal government continue with initiatives to help research and development specifically in this area. I would certainly continue to encourage marketing schemes through Agriculture Canada to help us find business partners within our industry to do the exciting things we can do, as you may have heard we're doing in Port Colborne.

I would also encourage that there be a resolution to the producer income support system. We met with Mr. Martin just a couple of weeks ago, with the OCPA, and there is a definite need to level the playing field between the Ontario producer and the U.S. producer of corn.

Last but not least, certainly from an infrastructure perspective, we need to do whatever we can to provide the kind of access to transportation that our facilities in rural Ontario need.

I'll leave you with one last comment. This is what the future is. I know you can't see it from there, but it's a picture of our Port Colborne plant with about a $200 million investment going in next door from a Swiss company called Jungbunzlauer to make citric acid. That company chose Port Colborne, just south of St. Catharines, as the best place to build this plant to make this product in both North and South America. That's the kind of thing we're trying to do for the future.

Thanks very much for your time.

Â (1235)

The Chair: Thank you, Jim.

From the Canadian Renewable Fuels Association, Bliss Baker.

Mr. Bliss Baker (President, Canadian Renewable Fuels Association): Thank you, Mr. Chair.

The Canadian Renewable Fuels Association represents the ethanol and bio-diesel industries in Canada and a number of stakeholders, including agricultural interests, industrial partners, etc.

I want to tell you a little story this morning, a very brief story to highlight what I think is an important mandate for the committee here in defining the role of government in the future of agriculture. It's a story some of you are familiar with, but it's worth repeating. It's a two-part story.

The first part of the story is the Canadian ethanol industry and how it has grown over the last 10 to 15 years. It started in early nineties, with interest from farmers seeing what was happening in the United States and recognizing that there was an opportunity here in Canada, and specifically here in Ontario, to grow an industry north of the border. So the story began with a lobby effort and trying to get some support for ethanol in Canada. That took a few years. It wasn't until a point where several MPs, including two who are here today, decided to raise their concerns in caucus and with the government of the day that we should have some support for ethanol that tax exemptions were introduced in the early nineties for ethanol and a few plants were built.

Time went on and new markets for grain were developed in Ontario and in western Canada for wheat. The mid-nineties came along and there was a new player in town called Commercial Alcohols who wanted to build a plant. They were successful in very short order by Canadian standards in developing a huge Chatham ethanol plant, which now consumes about 15 million bushels of corn a year. So the industry has slowly grown over the last ten years with some lobbying efforts.

Today we find we're at a turning point. The economics of production have changed; the markets have changed. Access to capital is a little more difficult, particularly after September 11. We have bio-diesel production in Canada being non-existent, even though we've developed the world class technology at the University of Toronto and it's ready to be commercialized here in Ontario.

So we're at a turning point. The economics of production, as I said, have changed, and we have an industry that's waiting to see if the federal government will be a player and be a partner in seeing the industry develop. So that's where we're at as an industry today.

The other part of this story of course starts in the U.S., where throughout the eighties farmers developed small ethanol plants, and then in 1990 the federal U.S. government introduced what was called the Clean Air Act, by which it was decided to introduce oxygen standards into gasoline. There are only a couple of ways to oxygenate gasoline, and ethanol is one of them. Since the Clean Air Act was introduced in 1990, over a billion litres of production has been added in the U.S.

In the mid-nineties in the U.S. ethanol production was slowing down because there their economics of production changed. How did the U.S. government respond? They introduced a blender tax credit to encourage oil companies to use ethanol, 23¢ a litre tax exemption, over two times what we have in Canada here today. Since then, ethanol production has exploded. We will see ethanol production reach six billion gallons in the U.S. this year. It now employs tens of thousands of people. There are 58 plants in the U.S., another 13 under construction, and another 13 on the drawing board.

Last week Senator Daschle, the Senate majority leader, introduced the renewable fuel standard in the U.S. because they see the economics of production changing again and the climate changing south of the border. The renewable fuel standard will set a mandatory requirement for renewable fuels and gasoline in the U.S.; it will see 20 billion gallons of ethanol produced in the U.S. by 2010. That's where the U.S. is at today.

We produce 238 million litres in Canada. It's not a terrible story; I'm quite optimistic that we can produce a world class industry here. We have a world class ethanol plant down the road from us in Chatham right now. But it's going to take federal leadership; it's going to take a federal renewable energy strategy. I know we have worked very closely with both Rose-Marie Ur and Paul Steckle on a number of issues, but it's going to take nothing short of the finance minister coming up with a blender tax credit that matches the U.S. support for us to see an industry flourishing in Canada.

I want to leave you with one thought before I finish. If you remember nothing else from what I've said, there was a Professor Michael Evans from the Kellogg School of Management in the U.S. who did a study a couple of years ago that concluded that for every dollar the U.S. federal government invests in the ethanol program, $5.50 is returned to the economy in the form of new revenue, lower farm subsidies, etc. For the researcher and the note-takers in the crowd, I'll repeat that: for every dollar the U.S. federal government spends on the ethanol program, $5.50 is returned to the economy. And for any entrepreneurs and businessmen in the crowd, I think that's a great value proposition for any business.

On that note, I'll pass it over.

Â (1240)

The Chair: Thank you, Bliss.

From the Kitchener Waterloo Food Action group, Alistair Neill Stewart.

Â (1245)

Mr. Alistair Neill Stewart (Co-Chair, Kitchener Waterloo Food Action): Thanks for having me here today.

I'm from a group in Kitchener Waterloo that represents citizen concerns on genetically modified foods. Half of us are probably from the University of Waterloo. I myself am from the environmental studies program there. We also have members from the community. We have run events to raise awareness, and we're trying to work towards getting solutions to figure out how to work around this issue. We're concerned about the health of humans and the environmental costs of having these genes moving around in the environment and causing allergies for humans. There are a lot of broad consequences that can be related to this industry.

We've seen the industry being heavily backed by the Canadian government, being subsidized a lot, and I guess it hasn't been fully understood what the consequences are. It's only been in the last 20 years that they've really been doing research on it. Hybrids are different things, but genetically modifying organisms is another because you have billions of years of evolution and then you're toying with it in the past 20 years.

There are other problems because it's such a heavily backed industry. In Saskatchewan some farmers have had Monsanto bring lawsuits against them because we just don't know that much about it. We're having problems that can't be anticipated. In Saskatchewan, the genetically modified canola crops are getting into those crops that weren't genetically modified--the Roundup Ready, the crops that Monsanto sells to farmers. The farmers who don't want to buy it from Monsanto are being sued by Monsanto for having it on their property. We've seen that in the last court case, they had to pay Monsanto thousands of dollars when they didn't even want to have it.

The other problem is that there isn't mandatory labelling. I've just been to Australia and New Zealand. They have mandatory labelling there. I guess the problem here is that it's so heavily backed by lots of different industries. Loblaws isn't going to sell anything in their stores that has the “genetically modified free” label on it. This is the second time, as far as I know, that it's been brought to Parliament. In October, it was voted down.

The voluntary labelling community isn't enough. The public needs to be able to make a choice. That's why they don't want to support mandatory labelling. If people had a choice, they'd be able to show that they'd possibly prefer a product that doesn't contain genetically modified foods, and the industry wouldn't have as much of a sway in that.

Then there are trade concerns. We're finding that other countries in other regions of the world don't necessarily want genetically modified foods. The Wheat Board of Canada has decided to stop growing wheat that's genetically modified. Well, I don't know if they actually have genetically modified wheat yet, but they don't want to grow it until the whole tension around the world on genetically modified foods has been brought down.

I probably only have a minute left. I just want to say that we'd like to have a moratorium on GMOs until a full risk assessment has been done. Using the precautionary principle, we'd like mandatory labelling and we'd like to promote alternatives like farmer-led plant breeding that doesn't have to rely on Monsanto and other biotech industries.

Thanks.

The Chair: Thank you, Alistair.

Judy Greenwood-Speers.

Ms. Judy Greenwood-Speers (Individual Presentation): Thank you very much for having me here today.

Â (1250)

I am a registered nurse by trade. Our mandate is to promote health and prevent illness, and if no one has made it clear, health should be the primary concern of this commission.

When I spoke to the Walkerton inquiry with Justice O'Connor, I spoke completely from a health perspective. He was shocked to find out just how large the problem really was, a problem they were thinking was very local. The same is true when we look at agriculture. At the Walkerton inquiry I mentioned to them that they should put health, environment, and agriculture under one umbrella. It should be one department. You can't have one without the other. They are intricately linked.

You are what you eat, breathe, and drink. I have given a submission called “Key Points in Submission” to the five members of the panel, and it has my recommendations.

I grew up on a farm on an island in the St. Lawrence. I'll give you an example of how farms can evolve. When my grandparents had it they were pig drovers. My father was a pig drover, went over to corn, then went to hay. My mother is 78 now, and she's in hay and is going into wind energy production. You can make money on being a farmer, you just have to live very lightly on the land and with the land rather than against it.

In nursing and medicine we have a golden rule called “First, do no harm”. That should be the mandate of almost any department that is federal or provincial. When you look at your own reports that have been generated, there's a lovely one called Pesticides, an outstanding committee report. Please read it, because it has great recommendations, including ones on PMRA, our Pest Management Regulatory Agency, which is at one point described as something like a customer service organization. They have a dual mandate--one is to protect health and the other is to make sure pesticides are available for economic advantage--and they're funded 30% by the industry. That's a conflict of interest. Make up your mind and get it straight.

Another report I'd love to have you read--you don't have to reinvent the wheel, you can read the executive summary, and you can get it off the web--is called the “Children's Health Report”, put together by the Ontario College of Family Physicians and the Canadian Environmental Law Association. It reads much the same as the report of the House Standing Committee on Environment and Sustainable Development. It's important.

A precautionary principle should be used as the golden rule in anything regarding the health and well-being of Canadians. It's not the economic rule that should prevail, it's the precautionary principle, to make sure that you do no harm first.

Already many of our crops are being kept out of the European market because they are genetically modified. In Europe they're already taking the necessary steps to protect their food industry, to protect their sustainability. Denmark has just released a landmark large-scale study--from 1995 they've been studying it--on the withdrawal of antibiotics from seed grains for pigs and poultry. They've proved that resistance can change. All the antibiotic-resistant organisms we thought we were going to be stuck with forever, well, guess what--they really can decrease. They can go from 73% to 28% for Enterococcus faecalis. I have that outlined in my brief for you.

Poultry as well...and things they thought were going to be there forever managed to be reversed. This is news, and it's good news, because it shows that Mother Nature will correct herself if we get out of her way. It's not good to try to fool Mother Nature, because she will come back to bite us.

My first recommendation would be follow through on making protection of health the primary mandate of the PMRA, and use precautionary principles as a guide.

My second recommendation is to follow through on taxing pesticides, including GST, and add full cost accounting for the more toxic chemicals. In Sweden they started taxing pesticides more heavily, and they've decreased the use of pesticides by 80%. They aren't starving in Sweden, and they have a safer food supply.

The third recommendation is to obtain and follow the recommendations found in the “Children's Health Report” produced by CELA and the College of Family Physicians of Ontario. Contact them on the web. You can download it, or you can send them $40 and they'll send it to you. They might even give it to you for free.

As I was saying, in Europe, the Denmark study...to give you the hard facts, the gut bacteria Enterococcus faecium in broiler chickens resistant to the antibiotic avoparcin was 6% last year, as compared to 73% in 1995. That's because they banned the use of antibiotics in grain.

The fourth recommendation then is to eliminate antibiotics in animal feed as a prophylactic.

The fifth recommendation is immediate, impartial, and long-term testing of GMOs, using the precautionary principle as the gold bar for testing standards.

Sixth is mandatory labeling of all genetically modified food, and chemically treated with pesticides food, on the grocer's shelf so nobody has to guess. Right now it is the organic farmers who have to pay for their own labelling. That's the wrong way to do it.

Seventh, establish a five-kilometre buffer zone around the organic farms to protect them, and also establish organic certification guidelines so that people who are not organic don't get away with it.

I have two more. The eighth recommendation is to ban intensive livestock operations and set standards for the number of animals per kilometre that is attached to the farm so that they can safely handle the waste products. Don't store them under the barn floor.

Â (1255)

The Chair: I have to cut you off here. You are at six minutes now.

Ms. Judy Greenwood-Speers: Sorry about that.

The Chair: You will have to hopefully get some questions that will do that.

Rod, I am going to move on to you now. Rod MacRae, agricultural project consultant with the WWF. Welcome, Rod.

Mr. Rod MacRae (Individual Presentation): Thanks very much for allowing me to speak to you today. I am happy to report that WWF does not stand for the World Wrestling Federation. In this case, it is the World Wildlife Fund of Canada. I work with the World Wildlife Fund on projects helping farmers make the transition to more environmentally and economically sustainable farming systems.

For the last six years we have been working with apple, potato, and canola growers in every region of the country. This year we are also starting a project with grape growers in Ontario. Our observations on the role of government are directly informed by these partnerships with farmers, and with other players in each of the commodity chains we have been working with.

In these projects, World Wildlife Fund has prepared integrated pest management, or IPM, growing protocols with growers and extension specialists. We then funded market research and developed relations with retailers to bring the products of these farming systems to market. IPM apples and potatoes from our collaborations are this week being brought into Sobeys stores in Ontario, and IPM potatoes are in Sobeys stores in Nova Scotia, New Brunswick, and P.E.I.

The essential lesson of these partnerships is that farmers can enhance their environmental stewardship and benefit financially at the same time. Practising IPM adds biological diversity to farms and reduces pesticide use without compromising crop yields or quality. Apple growers in our project report saving 5% to 10% on input costs, have received a 5% to 10% premium from the domestic retailer involved in the project, and have retained domestic and, particularly importantly, export market share because of their participation in the program. As you know, a lot of markets around the world are increasingly interested in environmental stewardship and are now changing suppliers when proof of environmental stewardship cannot be provided.

Governments are missing the opportunity to help farmers move in this direction because they are not putting in place coherent and comprehensive programs that focus on the transition period. Thousands of farmers across the country are ready to make the transition if the right supports are in place. For example, the Canola Council of Canada, in a project WWF helped steer, found that a third of commercial canola growers in Canada, roughly 10,000 farmers, are ready to adopt IPM if the right supports are in place. As a further example, the apple industry in Canada has already decided it can't wait for governments to provide more than just grant money; it is now attempting to move the entire apple industry to IPM with financial assistance from WWF and a CARD grant. This task will certainly be more difficult in the absence of substantial government initiatives.

Government programs from around the world demonstrate that a coherent package of research, demonstration projects, information and extension, market development support, and in some circumstances payments or transitional crop insurance schemes are in fact the right incentives. The benefits to government are biodiversity, reduced pollution, increased consumer and export market confidence in the Canadian food supply, and reduced dependence on government payments.

In briefs to both the new vision for agriculture process and the Prime Minister's task force on the future opportunities in farming, WWF has identified how a program with such a package of supports, costing $210 million annually for each of ten years, would result in Canada having 50% of farmed acreage in IPM and organic systems by 2012, up from the currently estimated 7%. The money would be provided by the federal and provincial governments and farmers and their organizations.

The associated problem with the current government approach to supporting the agriculture sector is a reliance on legislation and regulations that impede farmers' abilities to adopt integrated pest management. The best example of this is the outdated Pest Control Products Act, or PCPA, and the pesticide registration and evaluation regime practised by the Pest Management Regulatory Agency.

The current system effectively favours older pesticides that harm the environment and the beneficial organisms so essential to integrated pest management over newer products that are much more compatible with IPM and safer for people and the environment. For ten years we've been calling for an overhaul of the PCPA, and we welcome Minister of Health McLellan's commitment to introduce a new PCPA by Easter.

In summary, the role of government in agriculture is broader than stabilizing markets. Governments must provide comprehensive programs and legislative reform that guide the agriculture sector toward farming systems that are environmentally sound, provide safe food, and assure producers a decent livelihood, all at the same time.

Thanks very much for the opportunity to speak to you today.

· (1300)

The Chair: Thank you, Mr. MacRae.

Next is Mervyn Erb from Erb Crop Management Systems Inc.

Mr. Mervyn J. Erb (Independent Crop Consultant, Erb Crop Management Systems Inc.): Thank you.

I'm an independent crop consultant conducting business in the Severn County area here in southwestern Ontario since 1978. Our business has 84 clients, and we represent 35,400 acres of consulting. Our practice includes farmers of small 100-acre Amish farms and large 4,500-acre crop farms. Our average client size is 422 acres.

I've found that 32% of my farm wives work full-time off the farm, and 26% of my male farmers have off-farm jobs, off-farm business incomes, or farm-related business incomes to augment their farm-generated incomes. My farming clients have done very well at taking jobs away from people who live in our local towns.

Of my cash crop clients, 12% of my client base have told me they will have to sell out in two years if things do not improve. They are all under 55 years of age.

We have a large and diversified cash crop and livestock client base, and I have heard the answer and cry from Ottawa telling agriculture to diversify toward specialty crops. I have watched clients of mine go to the wall financially, in an attempt to diversify and grow garlic, only to watch their markets being trashed by cheap Chinese and Vietnamese imports that totally outsmarted our government import tariffs. I have watched my asparagus growers wither and go out of the business because of cheap imported South American asparagus.

I have clients in the Chatham-Dresden-London area that cannot move their corn out of their own storage at this time because of cheap subsidized Michigan corn that is supplying the Chatham ethanol plant and the Casco milling plant in London.

I am presently watching 28 of my 84 clients, or 34% of them, get the short end of the stick and less than their deserved fair market share in contractual arrangements that involve conventional cash crops.

As margins become slimmer and profits become more elusive, the final toss of the dice is thrown. Land rents are bid up, and land values are bid up, all in the hope for the big home run--the good year that is long overdue--so losses of past years can be made up. At the same time, our government welcomes cash-rich farmers from Europe, who bid up land values and cash rents. When I hear the excuse that federal aid will only result in inflated land values, I want to choke.

Our farmers do all this to put cheap food on expensive tables; to knock themselves out and enslave themselves in endless debt; to get a thinner slice of investment, a thinner return for their labour, and a thinner slice of the consumer dollar.

On problems and recommendations, the first problem is corporate concentration. Regardless of any commodity produced, there is a gargantuan trend to consolidate agribusiness. This concentration of power in fewer and fewer hands creates a situation where farmers have less and less control over their financial well-being. Those with the power are dictating the terms. It is paramount that our government plays its fiduciary role and limits multinational corporate takeovers and controls. However, due to vested interests, trade agreements, and protocols, no change is likely possible.

U.S. farm agricultural policy is an extension of the U.S. foreign policy. The only hope for the future of Canadian farmers is if Canadian farm policy mirrors that of the U.S.A. Canada can afford it as easily as the U.S. can; the scale is the same. However, our government's desire to have us competitive seemingly does not exist.

As for our currency, Canadian agriculture is capital and inputs intensive, most of which is spent in the U.S.A. through American-based agribusiness interests. Canada has very little equipment production or agro-chemical production. Our Canadian farm equipment dealerships that sell for the mainline U.S. manufacturers are not allowed to handle short-line equipment made by Canadian manufacturers. Most of our Canadian-made farm equipment is relegated to the small and dwindling independent dealer. If we can mandate Canadian content on the television and on the radio, then we need to do likewise to combat the U.S. domination of the agriculture equipment business for the sake of our own Canadian manufacturers.

On trade and tariffs, we need to take appropriate action under the so-called safeguard statutes of our trade acts. We are a free-trading nation, and in order to remain a free-trading nation we must enforce the law. We need to decide what imports are having a severe and negative effect on our agricultural industries and implement tariffs to provide temporary relief so the industry can restructure itself. To make sure that this industry restructures, we need to build in an 18-month review process.

As I have been watching the antics and the general non-results of the Pest Management Review Agency since 1992, it is obvious that both the PMRA and the chemical manufacturers have been less than honest, have stretched the truth, and at times have outright lied and given deliberate misconceptions to the farmers in this country, producer groups, and this committee. I recommend that PMRA be dismantled and a new agency, under the direct authority of the Minister of Agriculture, be mandated.

While the experts are labouring in search of a cure and a white paper is followed by an interim report, which is followed by a perpetual investigation, the lack of real government action means that farmers' lives are ruined and their equity is destroyed by events totally out of their hands. All they receive is the continual bafflegab of the spin doctors. The problems in agriculture--especially in the grains and oilseeds sector--are so large, so fraught with gridlock, and so stymied by government inaction that the only way to cure it, I dare say, may be with civil unrest.

I thank you for your attention. I encourage you to move quickly and authoritatively to convince cabinet and the Prime Minister's Office that the grains and oilseeds sector especially is in dire straits and that people's lives and careers are being ruined. Anything less is totally not acceptable.

Thank you.

· (1305)

The Chair: Thank you, Mervyn.

Now we have Mr. Al Hamilton from Sifto Canada Incorporated.

Mr. Al Hamilton (Chemical Business Manager, Sifto Canada Inc.): Thank you for the opportunity to come and talk to you today.

I'm here to talk about the review of road salt under the Canadian Environmental Protection Act. You may wonder what the connection is, but there are a lot of parallels between what's happening with road salt and what is happening and may happen with agricultural commodities.

Ammonia was talked about here today. It's going under a similar review. There are 27,000 substances to be reviewed eventually, many of which will be agricultural substances or those related to agriculture. So I'm bringing road salt forward as an example of what can happen.

Road salts have been under study since 1995. Common salt or sodium chloride, magnesium chloride, calcium chloride, and potash are the four being looked at. Like ammonia, these are being looked at in terms of a single use--de-icing highways. Health Canada is not involved in this study; it's strictly an environmental approach. After seven years we're in a position where Environment Canada and Minister Anderson have recommended that road salts be declared toxic. The final decision is yet to be made by cabinet.

We have to ask ourselves this question: how can common substances like potash, used as a fertilizer, and the road salt that is chemically the same as what you eat, and the road salt that is used for saving lives, how can these substances end up on the same list, potentially, as benzene and PCBs and other substances that can clearly cause harm? This question is particularly apt when the industry and the users of salt have been the leaders in trying to properly manage it from an environmental perspective.

There are really several reasons, but they're all related to the process. First of all, it's a very closed process. We as an industry have tried over and over again to get involved in some meaningful discussion as we've gone through this. We've been told that we can get involved after the next step. It seems it's always the next step. And now the next step is a toxic or non-toxic determination, which is really too late.

In August of 2000, a draft report came out with, I believe, 107 comments. The only way we've been able to get a lot of information is through the Access to Information Act. Of the ones we looked at, all but a handful were against this recommendation. The comments all went back to the same people who did the initial report. The peer review was all done internally and the final recommendation was the same: it's all to be declared toxic.

We talked about science earlier in relation to ammonia. The science has been poor. It started with the definition of the environment at the beginning. Are we talking about the ditches beside the road or about the greater environment? It's gone through the process with old data. Many people have identified problems with the science, including independent toxicologists who were hired by Environment Canda. Nonetheless, here we are.

Someone here asked about understanding, and I don't believe there is a clear understanding of the ramifications of some of these things. Environment Canada's position initially was that the public would understand the difference between CEPA-toxic and toxic. That hasn't proven to be the case.

More recently, when that didn't work, the idea was to not talk about toxic and just talk about listing under CEPA. Again, every call I get from the press is about salt being toxic, or salt being poison, so I don't believe the ramifications are understood. Groups are lobbying now for salt bans in certain areas, which is no good for anyone. It will mean more injuries, it will mean economic problems.

So what's the answer? I believe one of the answers is that CEPA is too black and white: there's toxic and there's non-toxic. There really should be somewhere else to put substances like salt and ammonia that need to be managed properly, but certainly don't fall into the category of some of these other substances that are currently listed.

So our recommendation is to make the process more open; let the stakeholders in, so we can discuss things early in the process. Do something with the legislation to make it better suit some of the substances that will be reviewed, like salt and some of the agricultural substances that are coming up.

Thank you.

· (1310)

The Chair: Thank you, Mr. Hamilton.

I know you have a problem, or someone has a problem, but I can't give any great assurance that our committee has a function to address it. It's outside our mandate to get into road salt. It's on the record anyhow and it's being discussed. Some of the people back in Ottawa are concerned, in terms of their local economies, but as a committee I'm not sure if we're able to respond. We'll see what the members....

David.

Mr. David Anderson: Road salt may not be an issue we can deal with directly in our committee, but I think the issues you bring up here are important, and those are the interference and lack of ability to deal with these situations in the agencies. The PMRA was mentioned before. We continually hear of problems within that agency. It seems to me they're more in terms of philosophy, and that carries through into the practical areas. That's probably what you're talking about here.

I don't know if you have anything to say about PMRA and the broader issues. Do you want to address that?

Rod, do you have anything to say about that?

Mr. Rod MacRae: There are a number of layers to the problems within the PMRA. The first layer, of course, is that the legislative framework isn't right, so that's why we and many other groups, including the farm organizations... There's an interesting case where the farm sector and the environmental sector are much more on the same page than one would often assume, because everybody basically is saying, “Introduce an amended bill, and then we can argue over the merits of the amended act”.

Another layer is regulatory. In other words, the regulations that flow from the act need to be changed. But there's also a series of directives and protocols, and a culture--perhaps this is what you meant when you said philosophy--within the agency that we see as a huge stumbling block. So in our minds, an entire overall needs to take place, starting from the top, in terms of legislation.

There is also a funding issue with that agency. We believe it is underfunded, although apparently funding is not the major reason for it not being introduced. Apparently the money is there, which is good news. But the money won't mean anything unless all these other things happen at the same time.

Mr. Al Hamilton: I don't expect you to solve the road salt issue, but we are based here in the agricultural community of Goderich. There are many parallels between what's happened to us and what could happen to our neighbours. We're really here to express some of those concerns with the process.

Mr. David Anderson: One of the main platforms of the farm plan they've suggested is the environmental regulation. That's what it's going to amount to. We need to figure out how that's going to happen, so the people involved don't get destroyed by it when it happens.

Merv, I had a couple of comments. You said we need Canadian content in ag manufacturing, basically restricting the U.S. manufacturers from coming in here. I just sat with some of my ag manufacturers last week.... That was a quote: “We need Canadian content in our ag manufacturing.”

· (1315)

Mr. Mervyn Erb: Did you get my contact about the dealerships, the mainline dealerships? I'm not saying we should outlaw U.S. importation. The problem is that our dealerships are not allowed to handle anything but John Deere or Case IH or Ford New Holland. What's happening is that small Canadian manufacturers like Flexi-Coil have to go find a third dealer or a small independent dealer, and it's very hard to get good representation.

Mr. David Anderson: That may be a provincial issue. I know Saskatchewan passed legislation to prohibit the dealers from doing that type of thing. Thank you for clearing that up.

I just sat with some of the ag manufacturers, and they were talking about 70% to 80% of their product going into the United States. It's very important for them that it stay open.

I had another question for you. I would just like you to talk a little bit about some of the traditional farming communities you are involved with. You said you have Amish communities involved with your business. We have a lot of Hutterite colonies in western Canada. In some ways, it almost looks like the future has to look somewhat like what they're doing, where they have bigger operations, a number of people working together. I'm just wondering how some of your traditional communities handle what's going on in agriculture.

Mr. Mervyn Erb: The small farmer has a very hard time generating enough cash, enough profit to expand, even to pay for anything. The number of bushels it takes today to buy a tractor or a plow or a cultivator is just unreal. So certainly we have to become larger.

To say they'll have to become larger means we have to lose people. If that's what it takes here for everybody to make some money and to stay profitable.... If you have to farm 4,000 acres or you have to have 10,000 hogs or you have to have 300 milk cows because of deteriorating margins, then that's what it's going to take to be profitable, either one or the other.

Mr. David Anderson: The successes I see in western Canada now are coming in the communities where the few people who are left have gotten together and formed companies, and basically are doing it on their own. There's a lot more population in this part of the world, but I think in our area what's going to make successes or failures is what the local people have decided they're going to do with their community.

Do you have any comment?

Mr. Mervyn Erb: Yes. Of course that will lead us into specialization of certain things. If we specialize, we end up with this one thing. If we diversify and try to do many things, we have some problems with that.

I have some fellows right now who want to diversify into raspberries. Of course raspberries have a terrible problem when you plant them--a root stalk with crown gall. There's no control here for crown gall. The only control is a U.S. fungicide to put on the roots at planting time. So you try to do these things and try to diversify into something niche. All of a sudden we end up with half the root stalk being taken out by crown gall. We allow everybody to plant the stuff, but we won't allow anybody to use a control mechanism for that niche crop.

So we'd like to see new crops, we'd like to see new things, but we always want to have the legislative mechanism to allow that to flourish.

Mr. David Anderson: Once again we hear PMRA, I take it.

The Chair: Thank you, David.

Rose-Marie.

Mrs. Rose-Marie Ur: I just want to go to Mr. Grey to have a question answered. We've had this dialogue quite a few times, but I wanted to go on record through the ag committee.

One of the presenters--it could have been Mr. MacRae--stated that our farmers here are being penalized by the importation of cheap, subsidized Michigan corn. Since you are a purchaser for commercial alcohol in Chatham, I want you to respond to that.

Mr. Jim Grey: I'll try. Thank you, Rose-Marie.

Let me say at the outset, as I said when I presented that strategically for Casco and for commercial alcohol, that the production and increased production of corn in Ontario is exceptionally important to us.

As far as bringing “cheap” corn in from Michigan and the northeast U.S., I would hesitate to call it cheap. I would certainly call it subsidized. If you looked at our P&L, I think you'd recognize the fact that it's not cheap.

Both commercial alcohol and we ourselves are faced with tremendous competition in this market. Unfortunately, in Canada all the competition is U.S.-sourced competition. So they're the ones buying that U.S. corn and shipping U.S. manufactured syrups and starches into Canada with that U.S. corn as their base.

The other issue is that in the last couple of crop seasons it has been either very cold and very wet, or very hot and very dry. We have been forced, from a supply perspective, depending upon which part of Ontario we're talking about because it is variable, to bring in more U.S. corn than we've brought in historically. Back in 1998 or so, I think we were down to bringing in less than 5% of the U.S. corn. Over the last year or so we've had to increase this dramatically just to keep our plants running.

Another quick point I'd like to make--and I know Rose-Marie and Paul and Larry have seen this chart--if you look at our requirements for corn over the last 10 years, you'll see they've grown significantly. If you look at corn availability to the industrial sector in Ontario, you'll see that it has remained flat, if it hasn't actually decreased.

If we're going to be true to our strategic plan from an industrial perspective, from an ethanol perspective, and from an OCPA perspective, where they're looking at the development of the industrial sector as the future of their business, we have to somehow encourage increased production of U.S. corn or our business is just going to stagnate. In fact, it's at risk of stagnating right now.

I'm very concerned. In Port Colborne we're looking at growth through partnerships with Jungbunzlauer; but if you look at corn production in that neck of the woods, as I've said many times, we're planting more houses than we're planting corn. This is becoming more and more of concern to us.

At the recent OCPA meeting, there was some discussion on whether or not countervail duties would help to increase the price of corn domestically. The answer given was yes, in fact, it would; the part of the answer that was missing was that there needs to be a market for the corn. I can tell you if there's a countervail duty imposed to artificially raise the price of corn in Canada, given the fact that we're competing with those U.S. small companies like Cargill and ADM, then there won't be a market; so it really doesn't matter what the price of corn is in Canada.

I hope I've answered your question.

· (1320)

The Chair: Thanks, Rose-Marie.

The chair recognizes Rick.

Mr. Rick Borotsik: Thank you.

I have a couple of very quick questions, first of all to Gord.

We've heard throughout western Canada and also here today that the average age of farmers is 58 or 59; pick a number. You just indicated that on the dairy side the average age is 44.

One of the other things we've heard is about the real difficulty of accessing capital. Dairy industries are probably the most capital intensive. Why is there a lower age in the dairy industry, and how is it that younger people can obviously access the capital to get into it?

Mr. Gord Coukell: It must be the system. The supply management system works so well for us.

I can't really answer this. The average age of 44 is a figure from a survey we did in Ontario last year. Actually, in Ontario this age, 43 to 44, has remained very steady for the last 15 to 20 years.

Mr. Rick Borotsik: And when you speak of the system you mean a guaranteed, if you will, income level throughout the--

Mr. Gord Coukell: Predictable.

Mr. Rick Borotsik: Predictable. I didn't want to put words in your mouth, Gord, but you answered my question.

Bliss, you said that for every dollar invested in ethanol, $5.50 is returned to the economy. And then you also said something to the effect that this includes fewer subsidies. How can you say this when in fact the American Farm Bill right now is anticipating an increase in the subsidy, which by the way also goes to corn production? So how can you say fewer subsidies?

Mr. Bliss Baker: I said that for every dollar invested, $5.50 is returned to the economy in the form of increased revenue, and reduced subsidies are factored into that. I'm not saying they're reducing their subsidies, but their net subsidies were reduced because of the impact--

Mr. Rick Borotsik: Just think what would have happened had they not put that investment in. Their subsidies would have been twice what they are right now in the Farm Bill.

Mr. Bliss Baker: Absolutely. I don't know about twice as high, but they would have been higher.

Mr. Rick Borotsik: Okay.

Judy, you also said that Sweden has a safer food supply. I assume you mean safer than Canada's. Do you have any scientific information on which to base this comment?

Ms. Judy Greenwood-Speers: Sure. The European Union is already barring some of our foods from being imported.

· (1325)

Mr. Rick Borotsik: I asked for scientific-based information. Do you have any scientific-based information?

Ms. Judy Greenwood-Speers: I can give you some URLs, actually, and you can pull it off the Internet. I knew I was limited to five minutes, so yes, I can speak to you afterwards.

Mr. Rick Borotsik: Sweden has a safer food supply than Canada has. That is what you said.

Ms. Judy Greenwood-Speers: They consider it safer and I would, too, because they have a reduction in pesticides. The food they're eating contains less pesticides, if any.

Mr. Rick Borotsik: So you base it on using less pesticides indicating there's a safer food supply.

Ms. Judy Greenwood-Speers: Absolutely.

Mr. Rick Borotsik: Thank you.

I have one other question for Jim, and you touched on this briefly in a reply to Rose-Marie. Casco is buying American corn. You said it's not necessarily cheaper, it's just that it's subsidized. I want to get a handle on this right now. If it's subsidized, are you buying your commodity at a cheaper price coming in from the Americas than is available to you in Canada?

Mr. Jim Grey: No.

Mr. Rick Borotsik: Could you expand on that?

Mr. Jim Grey: The price of corn both here and in--

Mr. Rick Borotsik: It's set at the market.

Mr. Jim Grey: It's set at the CBOT market and--

Mr. Rick Borotsik: They're getting more dollars for their corn from their subsidies. Therefore, they're able to put it at the market rate.

Mr. Jim Grey: That's correct.

Mr. Rick Borotsik: That's what we're talking about with regard to subsidies.

You also suggested that we have less supply here in Canada. Is that because our producers cannot produce at that rate and make any money at it? Is that why we have to look--

Mr. Jim Grey: I would assume that is exactly--

Mr. Rick Borotsik: I believe you said in your presentation it's necessary that we as Canadians match or at least look at the potential of matching the subsidies that are being paid in the United States or reduce the American subsidies

Mr. Jim Grey: I don't know if that's in the cards.

Mr. Rick Borotsik: You snickered at that. By the way, that's good.

Do you think there's the potential to reduce those American subsidies in the near future?

Mr. Jim Grey: To answer your question, I'm not an expert on U.S. farm policy by any stretch of the imagination. Based on what I heard at the OCPA general meeting last week, I would say no.

Mr. Rick Borotsik: Thank you.

The Chair: Thank you, Rick.

Paul.

Mr. Paul Steckle: I should state for the record, through you, Mr. Chairman, that salt is a very important commodity in my area because it's produced here.

Some hon. members: Oh, oh!

Mr. Paul Steckle: Sifto Salt stands among the great leaders of salt manufacturers in the world, including the largest salt mine in the world.

The Chair: Some of the members from this area were making remarks.

Mr. Paul Steckle: Yes, I know that.

We also know that if it weren't for salt, we wouldn't be travelling the roads many times, when otherwise we do travel the roads. Recently, a resolution was put before the rural municipalities, and for the most part they were supportive of the view that we want to continue to see road salt, because we simply don't have an option at this point in time. The liability for not using it would be too great.

The ones that were opposing it are the large urban areas, the GTOs of this world, because of the politics. I think it goes beyond politics.

We're talking about certain things that are political, such as labelling. Alistair, you mentioned the most recent bill that was defeated in the House by members of the party from where that bill came. I'm not sure if you ever did a study to understand properly what the impact would have been in supporting that bill had it gone through the committee work and ultimately become a bill of law. I don't think you understand that.

If you believe that mandatory labelling is a tool that works so well, does it work well in the tobacco industry, given that thousands of people are dying because they use a product that is already labelled as a killer? It's on every package. I don't happen to smoke, but I have seen it on packages. That's a mandatory labelling issue. It's a voluntary habit. Do you think it works well? Do you think it would work better in the food industry than it does in the tobacco industry?

Mr. Alistair Neill Stewart: I'm against smoking because of the health concerns.

Mr. Paul Steckle: I'm not limiting the question to you. But I think it's worth pondering that question.

Mr. Alistair Neill Stewart: It comes down to a health issue. I think it's the right to know, basically.

Mr. Paul Steckle: But does it make a difference?

Mr. Alistair Neill Stewart: I think so.

Mr. Paul Steckle: Judy.

Ms. Judy Greenwood-Speers: It has actually made a bit of a difference. It started with a little bar saying this is not good for you and tobacco kills, and then it has gotten to graphic pictures. If it had the 4,000 chemicals including fungicides, pesticides, insecticides, and herbicides listed on it, it might scare the daylights out of an awful lot of people who are smoking, because they don't realize how many chemicals are involved in the roll of that cigarette.

B.C. almost passed that legislation a while ago. If we did that, we would see a stronger decrease in smoking. It's informed consent. Right now the public does not have an informed consent of what chemicals they get in their food.

· (1330)

Mr. Paul Steckle: In order to push this issue along, I want to speak on another issue which you talked about: Sweden, and the use of chemicals in Europe.

Ms. Judy Greenwood-Speers: I found the URL. I'll even give you the link if you want an e-mail site.

Mr. Paul Steckle: I believe there might be someone at the table this afternoon who can perhaps speak to this issue, so I'm going to put it on the table.

Do in fact the Europeans use fewer chemicals than North Americans? I don't believe they do.

Ms. Judy Greenwood-Speers: Yes, they do.

Mr. Paul Steckle: They do use less? Is there someone here who can speak directly to that? Mr. Erb, perhaps.

Mr. Mervyn Erb: I'm not so sure they use fewer on a per acre basis across the whole of continental Europe.

Certainly Europe has been more conscious of...the present minister of agriculture in Germany is from the Green Party and she wants to mandate fewer pesticides. Sweden did, of course, mandate fewer pesticides. And as for Denmark and Sweden, a study that came out this past year on this hog business showed that of course more hogs died. There were more hog deaths and more poultry deaths with less use of prophylactic antibiotics.

So you can have one or the other. You're either going to have more death loss or you're going to have healthier animals. It's one or the other.

If I'm the farmer who wants to save my livestock, I will want to use antibiotics to save my livestock. If I want to watch them die, then I guess they will die, because that livestock is sick.

Mr. Paul Steckle: Yes, Rod.

Mr. Rod MacRae: There are two things. One is that certain countries in Europe have an absolutely lower level of use than Canada and then there are others that have a dramatically higher level of use. So it's really a mixed story.

Second, I think what's more interesting about the European situation is how different governments are using these combinations of supports, these comprehensive programs to dramatically reduce, in relative terms, the use. So virtually every country in Europe is way ahead of Canada on pesticide reduction, because they've put in place comprehensive programs to do that.

Mr. Paul Steckle: Given that over the last 50 years we have added 20 years to the life expectancy of Canadians, how do we attribute that, given the circumstances outlined by the table this morning?

Ms. Judy Greenwood-Speers: Actually, I'm a gerontologist as well. If you look at the life span of a human it is about 120 years. Our life expectancy has increased. The biggest determining factor is the lower infant mortality rate.

Second to that, we can look at the use of therapeutic antibiotics, and that is not a broad spectrum.

In the hospitals we're dealing with MRSA, VRE, c. diff. We have bigger and better bugs than you have ever dreamt of, and they are related back to the inappropriate use of antibiotics. And the medical profession has finally woken up to this. Alternative methods that are far safer need to be put in place and they need to be put in place now. Putting antibiotics willy-nilly into animal feed is like giving everybody a healthy dose of antibiotics in your apple juice. It's not required and it screws up the immune system.

As for the production of pigs and poultry, it has gone up dramatically in Denmark since 1995, and that's well documented.

The URL that I wanted to give Rick is globeandmail.com...not exactly a lesser site. David Boyd was the author.

Mr. Rick Borotsik: I have it on my bookmark.

Ms. Judy Greenwood-Speers: Very good, and it's easy to find.

The Chair: Thank you, Judy.

Larry, did you have a brief question?

Mr. Larry McCormick: I notice that Mr. Calder isn't here today. The other day with our committee Murray talked about the GMOs, and I found it interesting when I looked at the transcripts. He's a farmer and he's not ready to go there tomorrow. I believe he said that ultimately the consumers will decide.

For these young people like Alistair and Judy and others who are in this room, I do hope they've heard one of the reasons why we voted against the mandatory labelling bill. There are tests available today to tell whether corn or some other product is genetically modified. But, Mr. Chair, if we order in a pizza this evening after we get to Kingston, Ontario, there is no testing in the world today to tell whether that pizza contains genetically modified ingredients or not. So I think we want to recognize that and put it on the table at this time.

Thank you, Mr. Chairman.

The Chair: Thanks, Mr. McCormick.

That's your hometown. You had better have a good pizza for us when we get there.

Mr. Larry McCormick: That's the Speaker of the House. That's his hometown, so he'll look after us.

The Chair: We would like to thank all of you again for making your presentations. I'm amazed at the diversity that we're getting here.

In fact, I didn't realize the WWF were into this, Rod, but they are. We've dealt with them before with other committees.

But in terms of Canada, I think it's recognized generally that we have one of the safest food supplies in the world. No one really can challenge that.

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Ms. Judy Greenwood-Speers: You should read some of your own reports, then.

The Chair: We have people even around this room who helped write some of that report, and I don't think it's that... Mr. Charles Caccia gets very out-front sometimes, and probably for good reason, but by the same token, we need a balance and the balance is what Canadians are looking for.

With that, we'll recess for about five minutes.

· (1336)

· (1338)

The Chair: If the members would now return to their places, we'll start the fourth round table.

Rose-Marie, would you mind chairing for a little while?

The Acting Chair (Mrs. Rose-Marie Ur): Good afternoon, everyone. We're going to start with our fourth segment of our meeting here in Grand Bend.

Representing the Christian Farmers Federation of Ontario, we have Mr. van Donkersgoed.

Mr. Elbert van Donkersgoed (Strategic Policy Adviser, Christian Farmers Federation of Ontario): My apologies that Bob Bedggood, our past-president, is not here this afternoon. He is tied up in a meeting with provincial minister Cockburn.

I'm going to skip through the documents we have prepared, so that there's some chance of staying within the timeframe.

The Christian Farmers Federation of Ontario is a general farm organization supported by 4,500 family farm entrepreneurs across Ontario. We represent about 10% of Ontario's registered farm businesses and are one of two accredited general farm organizations.

Ontario agriculture has both strength and weaknesses. Most of our members have, on balance, found farming to be a good business for their families and our countryside a great place in which to live and raise a family.

Ontario farmers are entrepreneurial. Many families farm with their hearts as well as their heads. Many have been proactive stewards in their care of Creation's land, plants, and animals. But there is also a profound undercurrent of disappointment about the long-term direction of Ontario and Canadian agriculture.

Let me list a few realities that have convinced us that a new policy, new vision, is needed.

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There is the sharply declining number of those who derive their main income from farming. In the last four years, 35,000 Ontario farmers have gone to part-time farming. Other factors are the treadmill of always having to increase production to keep up with ever lower prices; the loss of infrastructure, suppliers, services, extension for small and part-time farmers; and a safety net primarily supporting the production of raw materials to which others add value. A further factor is the concentration of market share and growing marketplace clout among a few large multinationals and food super chains. In this context, CFFO welcomes the federal government's idea that it is time for a new policy direction, even if the content as articulated to date leaves much to be desired.

We welcome, but cautiously, the idea of branding Canada as number one in the world in food safety, environmentally sound production, and innovation. We are encouraged by what this vision does not say. There is no mention of doubling Canadian farm and food exports, no speechifying about driving out costs, no prodding Canadian farmers to be more competitive, no rhetoric about the life sciences creating opportunities for a whole new generation of farm entrepreneurs, and no rationalization about Canada's hands being tied as long as European Union and United States farm policy carry on their multi-billion dollar subsidies.

We are encouraged that these policy directions have faded into the background. There is some possibility of thinking here that Canadian farmers may be able to get off the treadmill of always having to produce more to keep up with ever lower prices.

A key ingredient in this vision is missing. When the Europeans and the Americans talk about a major shift in farm policy, they start by talking money. Consider the Farm Bill recently put forward in the U.S. Senate. It calls for more conservation initiatives on farms. The policy starts with a commitment of $4.3 billion a year over the next ten years for conservation programs, and it will likely cost more, because the U.S. conservation program is an entitlement. If more farmers sign up, it costs their government more.

Consider last month's recommendations by England's Policy Commission on the Future of Farming and Food. The report calls for less emphasis on volume production and more prominence for consumer and environmental concerns. Its recommendations get right to the point, modulate, meaning take a percentage of the money now committed to volume production subsidies and redirect the money to agri-environmental schemes. Start with 3%, increase the modulation to 20% by 2007.

Vague language in last December's budget doesn't cut it. This new vision means little as long as the dollars involved are not spelled out. Is there new money for this new vision, yes or no? Will existing programs be gutted to provide the money, yes or no, and which ones?

CFFO recognizes that farms and farming in Ontario are certainly caught up in a research-technology-competition complex that is driving the industrialization of agriculture and our countryside. We recognize that the present trends in Ontario are sustained by powerful worldwide trends. We are, for example, no longer the low-cost producers. Nevertheless we are confident that a better future is possible for Ontario agriculture,a desirable future.

CFFO is committed to engaging current trends and modifying their impact on Ontario agriculture. Our vision is, in short words, this: Farmers balance family life, food production, and marketing, taking care of Creation and community development in return for satisfying returns from society and the marketplace. Farming in Ontario will be diverse and integrated into a full range of human and natural activities, family life, community culture, economic development, and natural habitat on a scale that enhances countryside and is sustainable.

The merits of CFFO vision is being tested in 18 workshops across the province this year.

The Acting Chair (Mrs. Rose-Marie Ur): Thank you for your presentation. Perhaps if you have some more information you can share that in--

Mr. Elbert van Donkersgoed: I'd love to compare the two visions if there's a chance.

The Acting Chair (Mrs. Rose-Marie Ur): Thank you. Thank you for your presentation.

Now we'll hear from Wayne Roberts, who is with the Toronto Food Policy Council.

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Mr. Wayne Roberts (Project Coordinator, Toronto Food Policy Council): Thank you. I'm the coordinator of the Toronto Food Policy Council, which works on behalf of the Public Health Department to try to find solutions to two problems: the increasing rate of hunger in the city and the increasing rate of problems among local farmers. So we try to solve both problems at the same time.

I want to thank you for inviting me and for making me get up early this morning to get out here. I think it's very important, especially for a commission like this, to give every opportunity to people in rural communities to speak out.

I've found, in my own work in public policy around food, that it's worth taking a little bit of time to make sure we ask the right question because that can help us get the right answer. So if you don't mind, I'd like to just reformulate the question from “What's the role of government in farming?” to “What's the role of government, and how does that apply to farming?” I don't think we want to approach farming as a special interest group or a special problem.

Farming and the food supply affect all Canadians. We all eat. Eating is an agricultural act. Food does not come from a store, it comes from a farm. So the future of farming is very much a question of the role of government; it's not just a special interest problem.

I'd like to focus on one role of government, which is to support programs that promote Canadian public values when neither the actions of individuals and local groups or market forces are able to achieve public values. So the government steps in when neither of those can work.

That's what happens with medicare. Government supports that because the market does not support the right of all people, regardless of income, to have health care. In the case of bilingualism or multiculturalism and the services we have here today, again individuals or markets cannot handle them, so government steps in. In the case of industries or individuals who are in trouble, HRDC steps in and provides transitional assistance.

If we apply that general principle to farming, it will be easier to come up with solutions.

If I could give just one example--and I think I could give many--it would be the case of urban sprawl. Here we have a clear case where market forces work against the right solution. Farmers can become instant millionaires overnight by selling their land, or they can gradually go broke by keeping the land and farming on it. A farmer in Manitoba won a million dollars in the lottery and was asked what he was going to do with it. He said he guessed he would just keep on farming until it was all gone. So left to market forces, this is not going to solve itself.

Here are a couple of issues related to urban sprawl. Today, on the six-month anniversary of September 11, we should have a chilling reminder of the importance of having local self-reliance when it comes to food. All cities in Canada have no more than three days of fresh food at hand, because the market relies on the principle of just-in-time delivery. They buy in bulk from mass producers in Florida and California. There needs to be some action to preserve land so there is access to local food.

Agriculture contributes to the beauty of the countryside. In France, they understand this very well. It's the main reason why they support agriculture. It's not to support agriculture but to support tourism, which is their number one industry.

It contributes to our cultural values. I think there are special cultures and values that come with farm life and with rural life. We want to preserve them as part of our diversity.

It also performs invisible ecosystem functions, which is the term economists give to it. If you look at what it costs for machines or labour to do the same work nature does, you have a sense of the value the ecosystem provides. Farm ecosystems provide clean air and clean water, at least when they're operating at their best. Suburbia, with its pavement, cement and the like, provides us with hot air, which can become a big problem due to the heat island effect, and lots of pollution in both the water and the air. A 2,000-acre spread on the outside of Toronto that's converted to suburbia could cost well over a $100 million in water filtration plants and other equipment. That becomes the real value of the land, not the value a farmer can extract from it with a crop.

One way the government could support this is by providing payment to farmers for their environmental services. That's done in Waterloo here in Ontario, in New York, and in the Washington area around Chesapeake Bay. I believe it is one way we can reimburse farmers for services they provide that the market and price of food alone will not support.

Thank you.

· (1350)

The Acting Chair (Mrs. Rose-Marie Ur): Thank you, Mr. Roberts.

Now we have David Linton, vice-chair of the Independent Hog Producers Association.

Thank you, Mr. Linton.

Mr. David Linton (Vice-Chair, Independent Ontario Hog Producers Association): I apologize for the last-minute change. Our chairman has been without hydro for the last day and a half, so he doesn't want to get too far from home. About an hour ago I was in my own barn, and here I am now.

This written brief we've presented to you tells a little bit about who the IOHPA are. We formed during the price crisis, when we were giving our hogs away. We've found that it works out to be a bit of a lobby group and we try to do that.

The IOHPA questions certain things such as the economies of scale, which is an 18th century idea that came along and we don't really agree with. Think-tank people seem to... For years farmers have been told ceaselessly to get big or get out. No attention has ever been paid to the benefits associated with a more owner-operated, hands-on approach.

We have a paper written by John Ikerd accompanying our brief. He says we're moving toward a system of central planning similar to what existed in the USSR, but it will be controlled by corporations rather than government. These corporations are probably all right, but... My brother is in the high-tech industry and he just sold his company. He's 53 years old and he has enough money to retire for the rest of his life right now. It isn't much different from where we are.

The good ideas come from the small companies and the big companies buy out the good ideas. In farming, if you want to know where the inventiveness is coming from, it's not a great big corporation; it's a small farm. They get to make decisions and they don't have to fill out a whole bunch of bureaucratic papers to make a change. It's not just some farmer like me who is saying this. The experts are saying this too, if you catch the right expert.

A recent development in the U.S. hog industry has been the purchase of DEKALB hybrids from the U.S. giant Monsanto. What they're doing there is using their marketing expertise to market this hog as breeding stock. They're charging just market price for the gelds, but then there's a fee for every single hog that goes to market. As far as I know, Monsanto already has the rights to the terminator gene in plants. If they can put that into hogs, they can control the entire food industry and charge a fee for each product that goes to market. This has been done in the chicken industry in the U.S. already. At one time genes gave them a weakness to a certain disease and it was just devastating to the U.S. broiler industry, and it came up into Ontario too.

In Denmark, 80% of the hogs are shipped from producers shipping fewer than 2,000 hogs per year, and that's not a very big hog operation. In our industry, we know Denmark is a world-class competitor.

The spinoff for the agriculture and agrifood industries is to locate in more locations, smaller areas. Even the packers should be in smaller areas. I don't think we need these mega-packers, at least not the way they think they're needed.

At present we feel government must ask itself first and foremost whether it values independent farms or whether it believes the theory of economies of scale should be left to run the course until independent farms no longer exist. That's a question the government has to ask itself. If the federal government does value the independent farms, then we feel the infrastructure that's in place now must be nurtured. There are the genetic suppliers, there's production and research expertise, marketing bodies, feed suppliers. All these things are very important. Once the infrastructure is gone, it's completely gone.

The present age of farmers in Ontario is about 58 years, and that's too high. Somehow the government has to realize that youth has to be entering agriculture and not just working for some big corporation.

I'm not crying for help. I'm an established farmer. I'm not crying, but if my sons want to get into the farming industry, they need a little more than luck to make a go of it, and that's where the government can come into play.

In conclusion, Canadian agriculture is sitting at a pivotal point in time. The right choices could provide a bright future for many. We still possess the infrastructure to choose how the future will unfold. The loss of this infrastructure will lead to a less efficient industry with financial benefits for very few.

Thank you.

· (1355)

The Acting Chair (Mrs. Rose-Marie Ur): Thank you, Mr. Linton.

Next to present is Mary Lou Garr from AGCare.

Ms. Mary Lou Garr (Chair, Agricultural Groups Concerned About Resources and the Environment (AGCare)): Thank you, Madam Chair, and thank you to the committee for this opportunity.

AGCare is a coalition of 16 groups, all field crop and horticultural producers. We represent those growers in the areas of pesticides and biotechnology and try to present to the broader public the farmer's perspective on our use of those technologies. We believe access to those technologies is going to be extremely important for that next generation of farmers, including our own son on our farm, who is struggling to get established.

You've asked today about our vision for agriculture and how we might partner with the government to achieve it. I think there's very little I could say to you that we haven't already had opportunities in other forums to say, and I would wager you've heard almost everything over and over again. In order to be successful and competitive and to succeed, the first thing we have to do is maintain public confidence in that really safe, secure, affordable food supply that I and others in Ontario provide for the broader public.

You heard Judy and her comments about our food supply. I wish I'd been on this panel and on her panel at that point, but there is fear out there, particularly with anything involving genetically modified products and gene transfer, and it's very easy for people to build on that fear. What we need from you is a really strong, transparent regulatory system so that when biotech crops get approvals, people will understand how those approvals were achieved, the stringent process that was gone through.

Government's role, I think, is to let people know how it happens. People very seldom question the safety of drugs, for example, but when it comes to food and the same regulatory system, it's easy for them to challenge it. I think it's government's role to explain how it is done.

You also, I think, have a role in resolving the labelling issue around genetically modified organisms, and I commend those who voted against that mandatory labelling bill. It's necessary, we believe, for consumers who want the choice to be able to have the choice. They would be able to do it under a voluntary labelling system whereby, if you want to produce a non-GMO product and put that claim on there and prove through the regulations and the standards it was non-GMO, then the consumer who wanted non-GMO could have it. But all the rest of us would not have to assume the enormous cost of producing and storing and selling crops in such a way that every product on the shelf could be mandatorily labelled GMO or non-GMO.

We also need public research, I think. One of the things I hear when I speak to public groups, and I do that often, is that companies are funding all the research in GMOs. To some degree they're right, because we know how the university system works: you get a dollar here; you get a dollar somewhere else. The public needs to know there is public research being funded. Publicly funded research, I think, would give them a little higher level of confidence than exists now.

If we are to remain competitive, we need access to these technologies, we need pesticides, we need products of biotechnology. In terms of pesticides, you're well aware we have reduced our pesticide use by 40% since 1983. We still have a major problem getting access to better pesticides that many American growers have, and you know why. This committee--and I will thank you for your actions--has taken a really forward role in looking at PMRA and some of the problems that exist. Thank you very much for taking that initiative.

We feel in the last few months there have been many more steps forward than we've seen in the past. With only four ingredients registered jointly since we thought we had joint registration, there is a serious problem. I don't need to go on at length. I know you're looking seriously at the ombudsman idea--having an independent third party who can look at the grower's perspective and the company's perspective and the PMRA's perspective from a distance and make a decision. I know you're looking at it, and thank you for that.

If we are going to integrate environment into all the elements of an agricultural strategy, as you discussed when you made the Whitehorse agreement, the important thing I think we need is a federal-provincial partnership. The Environmental Farm Plan comes to mind. That's an example where the federal government provided funding for Ontario. We worked with the Ministry of Agriculture in Ontario to develop the program. It was delivered in Ontario and was a federal-provincial partnership. I think many of these environmental initiatives could be done very successfully if the federal agencies were able to cooperate with the provincial agencies.

I could go on longer with that, as the chair lady knows, but I'll stop at that.

¸ (1400)

The Acting Chair (Mrs. Rose-Marie Ur): Thank you very much for your presentation.

Next on our list is Gerald Kolkman, speaking as an individual.

¸ (1405)

Mr. Gerald Kolkman (Individual Presentation): Thank you, Madam Chair.

I'm an independent farmer, a hog producer--I have 300 sows--farrow to finish. I've been farming for about 25 years.

Looking back, the processing industry and the farmers used to be two groups. Six or seven years ago, processors never wanted to get into farming. Now they've taken steps and are actively investing a lot of money in agriculture. They can do this because they already have big resources from the processing side and they do not have to be as efficient with their agricultural investments. As long as they get their cost of production, this will keep our entire sector down. We produce at a lower cost than they do. They have more control over the market than we do. That's our problem. We are low-cost producers.

In the past we have had things like marketing boards, and they still work well, but I'm beginning to question whether marketing boards work effectively in the hog sector anymore. They're still trying to work, but there is so much investment and contracting going on. There are different kinds of contractual arrangements every day. We've already heard about what Monsanto is doing. It just becomes more and more about control of the market. It's not about low-cost producers or the efficiency of production; it's about control of the market. This is one point I wanted to make.

Now, what do we do about it? I fought hard for a strong marketing board, but I'm giving up on it. Now I think that we as primary producers need to step up into processing. It's going to be small at the beginning, but we have to get to this next level.

We should give a big boost to forming cooperatives. As I heard earlier, a lot of groups have banded together and started doing things on their own. I saw recently that Lyle Vanclief announced $1 million for co-ops. This is very welcome news and a step in the right direction, but it's not nearly enough. There has to be a lot more money.

If you give the farmers a hand up by helping them establish co-ops...There are some success stories. The Progressive Pork Producers Co-operative took over Conestoga Meats and now have a branded product. They're just up and running, so it's hard to say how well they will do. But it is a very important milestone and a step in the right direction.

More examples can be found outside the hog industry. Wheat producers could form a co-op, as has been done for other commodities. They could have their own flour mill and then get into bakeries. It wouldn't have to be a megaproject to be a step in the right direction. Government could really assist in this area.

I want to go on to things that are important to the independent producer. Since we don't have the clout or the lawyers or many things at our disposal that the big corporations have, infrastructure is very important to us. And that's where government comes in. We have to maintain the infrastructure. In my industry, we have to maintain the record of performance testing for breeding stock. It's very important that this stands alone and remains neutral and is not controlled by corporations. This is a very important role for government, ensuring that it remains neutral and science based, totally fact based and not skewed.

The Acting Chair (Mrs. Rose-Marie Ur): You have half a minute left.

¸ (1410)

Mr. Gerald Kolkman: There were two more things I had. Safety nets, that is the thing. Why bring up co-ops? Europeans and the Americans are throwing big dollars at primary producers, but what it does is lower the commodity price. And it's being passed directly to the corporations. It benefits the corporations. That's why I'm putting a big push on for co-ops today. I think it's smart money. It's money well spent rather than if there's a problem out there....

I can fight for equality. The Europeans and the U.S. have higher subsidy levels than we do. Quebec has a very good safety net program, and I would welcome anything that would move us closer to being at par with them. But If we're thinking about spending money smartly, I do think we should try as much as we can.

The Acting Chair (Mrs. Rose-Marie Ur): Thank you for your presentation, Mr. Kolkman.

Next we have Davis Bryans to present, as an individual.

Mr. Davis Bryans (Individual Presentation): Thank you. I'm with the beekeeping industry. We are often faced with issues, some beyond our control, that affect the competitiveness of our producers in the marketplace. The following points outline some of the ways the government can assist our industry.

The U.S. pursued successful anti-dumping actions against both China and Argentina. This left the U.S. with a shortfall in supply that has opened up a greater opportunity for export of Canadian honey. It has also resulted in higher prices for bulk producers. However, this spike of imports from these two countries is well below our cost of production. They blend the products together and it has made it difficult for small producers and packers to compete. Also, some of this honey is suspect, as evidenced by the European Union's recent action in banning Chinese honey due to the presence of pesticides.

Over time, this could do irreparable damage to the image of Canadian honey. Canada produces a safe product. It is being encouraged by both levels of government to enhance food safety, yet there is not enough testing done on these cheap imports to meet the standard. It is very difficult to compete against cheaper imports that have cheaper labour costs, year-round production, and no high feed costs.

Also, the Canadian number one white label, required by the federally registered establishments, is misleading to the consumer. It can be used on blended honey that contains, for example, a cheap import from China, and the consumer thinks it's a product of Canada.

There is a disease called American foul brood. For many years we have only had one registered antibiotic, oxytetracycline. Recently in parts of Canada, this disease has developed resistance to the antibiotic. Efforts are being made to have two new antibiotics registered, tylosin and lincomycin. Health Canada is two years behind in drug registration and so the industry does not have an alternative antibiotic in time for fall treatment. We are hopeful that tylosin will be made available on an experimental basis within a shorter timeframe if the politicians and the government can respond to the industry's urgent request.

There is a growing concern in the beekeeping community over the use of systemic insecticides. There have been unexplained losses of bees, both in the Maritimes and in the U.S., that coincide with the introduction of these products. Further widespread use of seeds treated with these insecticides is being advocated. Our concern is that the environment will not be able to sustain this sort of approach. We feel that there are more chemicals released into the environment. Also, there is no damage assessment being done by independent researchers on native pollinators and other insect life.

The bee industry needs to be consulted when seeds are being considered for genetic modification. Honey from plants with GMO pollen is not accepted in some countries, and is less desirable in others, and will limit the sales in these marketplaces. Also, genetically modified plants could cause an effect on honey yields. It is imperative that the effects on beneficial insects in general and honey bees in particular are considered.

Every year bee losses occur due to pesticide spraying. In some years the losses are significant, but in any given year a loss is always significant to the individual, sometimes putting them out of business.

The law states that spraying is not to be done when the plant is in bloom. We know that some aerial applicators are totally ignoring this law. Phone calls to the Ministry of the Environment often do not yield satisfactory results because no one wants to enforce the law. Pesticide laws need to be enforced.

It is often apparent that researchers and big business have the ear of the government. If the bee industry is to remain competitive and economically sustainable for the good of agriculture, then the government needs to consult the grassroots more in the future--and at the beginning, not after the fact.

I'd like to mention a few facts. The total value of honey bee pollination in Canada is estimated at $782 million. This is approximately eight times greater than the annual farm value of honey and wax, which is $93.5 million. Our contribution to Canadian agriculture is significant.

Lastly, I would like to thank the federal government for supporting our industry by closing the border to U.S. imports. Because of this, we've developed winter hardiness in our bees, produced better queens, had better honey production, used fewer chemicals by developing an integrated pest management program, and had no Africanized bees and small-hive beetles.

Thank you.

¸ (1415)

The Acting Chair (Mrs. Rose-Marie Ur): Thank you, Davis.

Our next presenter is Len Veri, president of the Exeter Produce and Storage Company Ltd.

Mr. Len Veri (President, Exeter Produce and Storage Company Ltd.): First of all, I'd like to thank you for the opportunity to come here today.

I'm going to speak on three different subjects that directly concern me and my company. One is chemicals. I know that Mary Lou has already gone down this road. Our company is a large producer of field-grown vegetables, and recently we completed the construction of a 22-acre greenhouse. Chemicals that we are not allowed to use here are being used in the United States. About 75% of our production ends up in the United States, so it creates a bit of a problem. Chemicals that are registered here are not registered in the United States. So we're fighting a battle going both ways. I think the future role of the government should be to standardize chemical usage for both countries. During the winter months when our production is nothing, we bring in from the United States and other countries vegetables with the pesticides and fungicides that we're not allowed to use, and we eat them during six months of the year. I don't feel we should be restricted from using the same kinds of chemicals.

The second subject is farm labour. The offshore labour program has been a great program for approximately 20 years. We've been able to expand our operations from a few hundred acres of vegetables to 3,500 acres. Without the offshore labour we would not be in any position to do anywhere near that. I don't think there's any suggestion that the offshore labour program will be cut out, but a couple of weeks ago there was a meeting and anything that's not approved now will be approved on a year-to-year basis. This does not allow us to make five-year plans going forward. I don't feel this is going to be a good subject for any of us growers. I feel that we should be staying with the program and giving the growers some lead time as to whatever happens.

The perception is that offshore labour is cheap labour. This is not the case. It ends up costing us more than local labour. It's not that local labourers don't want to work or are lazy. That's also a misconception. I don't think that people in this country can afford to live on a part-time basis, and that's the problem here. Our people can't support a family based on three to six months of labour a year. So I think that the offshore program is definitely something the government should get into.

The third subject is crop insurance. I think our crop insurance program in this country stinks, as far as vegetables go. Some vegetables are not even insurable. Others are insurable to the point where you can't afford to buy the insurance because it's based on averages. Our farms stretch from Boswell to Exeter. If the crops we grow in Boswell get wiped out down there, I'm averaged to what I grow up here. So I could go through the whole season, the average would be fine for insurance purposes, and I'd go broke. I'd lose money on the whole crop.

I think the insurance should be based on the particular field. There should be some kind of program where every vegetable is included. We insure peppers at the moment, and we have insured in the past cabbage, potatoes and some other crops we have grown. But once you sustain one loss you virtually can't afford to insure it again, because you'd never be able to collect. You'd have to take about six years of averages to get back up to where you could collect anything.

Replanting costs are another thing. They supply the plants, but they don't pay you anything for your labour, the extra inputs, the chemicals, whatever.

So the government's role in the crop insurance program should be a lot more than it is. We should look at that program. The Americans have a much better program. They worry about their growers. Without growers here, we'll be at the mercy of other producers in other countries.

I guess that's about where I'm at. I hope the government will listen to us here and press forward on it.

¸ (1420)

The Acting Chair (Mrs. Rose-Marie Ur): Thank you for your presentation, Mr. Veri.

Next we'll hear from Mr. Ron Martin. He's with the Ontario Wheat Producers' Marketing Board.

Mr. Ron Martin (Director, District 3, Ontario Wheat Producers' Marketing Board): Thank you very much for letting us have a say this afternoon. First of all, I must commend you on the heavy workload you have placed upon yourselves. Here we are talking about food producers in Canada, and some of you haven't even taken time to enjoy your food. So I must commend you on that.

On a little bit of history about the Ontario wheat industry, wheat is the third most important crop produced in Ontario, with a normal crop size of 1 million tonnes, which equates to about 650,000 to 900,000 acres each year of both the winter and spring varieties.

The Ontario Wheat Producers' Marketing Board is the single-desk seller of all commercially marketed wheat produced in the province, with the exception of the 200,000 metric tonnes sold through the board's direct marketing program.

The board represents over 16,000 producers of wheat and sells this wheat to domestic and export markets... as well as seed and feed. Each year, approximately 47% of the crop is utilized in domestic milling industries within Ontario, which accounts for numerous jobs and value-added products.

Besides the pooling and sale of wheat, the Ontario Wheat Producers' Marketing Board, in connection with public and private industry, spends approximately $650,000 to $700,000 per year on research focused on improving crop quality and quantity through new disease-resistant varieties and varieties with characteristics requested by producers and millers. Globally, wheat grown in Ontario, in the past and currently, has markets that recognize Ontario wheat's superior quality and characteristics regarding milling and processing. This recognition of superior quality has been very favourable in selling Ontario wheat, particularly, to every continent on the globe.

Diversification in the Ontario wheat industry since 1990 has dramatically changed, with new varieties grown from new markets. We've gone from producing predominantly soft white wheat to producing soft red winter wheat, hard red winter wheat, hard red spring wheat, multi-purpose wheat, and feed wheat.

Some of that diversification has resulted in increased milling capacity within this province. We've gone from milling 250,000 metric tonnes up to the neighbourhood of 550,000 metric tonnes within this province. What does that mean? That means within the grains and oilseeds sector $2 billion worth of wheat is being produced in this province. That moves up to $30 billion when it's processed and means in the neighbourhood of 200,000 jobs within this province.

I'd like to say to the government, thank you very much for the 2000 ad hoc payment programs--that $500 million you gave us. It certainly helped us out. Also, thank you very much for the spring credit advance program, the $50,000 that you are making available interest free to producers who wish it.

Why am I here? Well, in the long run, yes, we're members of Grain Growers of Canada, and along with the government those people are working on a long-range program involving safety nets for the producers in this province. But in the short term, we've got a program called MRI, and we're asking at the present time an enhancement to that program to carry us over for the 2001 and the 2002 crop, because at present we don't have any program protecting us.

Just to touch on a couple of other points, sure, at the present time we've got safety net programs that involve NISA, crop insurance, market revenue, and AIDA. But those are in the past. I understand, concerning market revenue, the government has gone ahead, saying it will extend it for two more years, but the province hasn't come on side. It's something like what Dennis alluded to; there's politics. We have to get together on it.

I could go on. Someone suggested this morning we should give the same message, get together with it. We're saying the same message the soya bean and corn producers gave: we need enhancements.

Thank you very much. I guess my time is up.

¸ (1425)

The Acting Chair (Mrs. Rose-Marie Ur): Thank you, Mr. Martin.

Next we have Pamela Stanley from the Ontario Agri-Food Education group.

Ms. Pamela Stanley (Spokesperson, Ontario Agri-Food Education): Thank you, Madam Chair and committee members, for the opportunity to talk to you today about Ontario agrifood education--and in fact, if we leave Ontario off that, just agrifood education in general.

I would hope today I would be the only ray of hope in the room, because you've heard an awful lot of negative stuff. I wish I weren't the only ray of hope. But as far as education and the future of agriculture is concerned, since the mandate of this committee includes the role of the future of agriculture, I think the future is through education.

As an introduction to Ontario Agri-Food Education, you should know we are the folks who produce and distribute curriculum links, documents, and resources to the educators of the province of Ontario. We're a not-for-profit, volunteer-board-driven organization in part funded by OMAFRA, but in part only. We work with commodities and other sponsors to help us produce those particular documents for use in the classroom.

We have a very strong future vision that the federal government needs to know about. We need to make agricultural careers in farming, and in production and processing, a desired reality. From the educational perspective, in agriculture--in our particular world in business--our growth crop would be future farmers. We need to be able to educate people from a very early stage, from the beginning of their lives in Canada, to understand what food and food value is in this whole country.

From Ontario Agri-Food Education's perspective, we are considering--and acting upon, in fact--collaborative efforts to assist educators with instructional, effective, and appropriate resources. The development of those resources is a challenge, because we have to consider the balance required in every classroom for every teacher to be able to perform a fair look at what agriculture really is and what food, for those urban folks who don't understand farms, really is about.

I say that tongue in cheek, but in fact when we distribute resources and have consultant workshops in the urban centres, we really do talk to the kids in the cities about food, whereas we talk to the children in rural schools about farms and agriculture. There's a distinct difference there. Thank you to Toronto for being at this table.

We are working towards educating the educators, and that's a huge situation that needs to be looked at from the federal perspective. Inherently, education is a provincial matter across this country, but in order to have a more consistent impact concerning the future of agriculture and the future of learning about food and the value of food, we need some input from the federal perspective about how to uniformly educate the educators. We need your assistance in that direction.

At Ontario Agri-Food Education, we are currently starting at an early age. I'm letting the cat out of the bag a little bit by telling you we're proposing right now to work with some early years funding opportunities by application. Early years funding would allow us to start at age zero. Right now we're working on resources from JK through what has, as of this year, still been OAC. For you folks from out of the province, that's grade 13, which is about to go away. So from junior kindergarten to grade 12, we currently do produce resources, but right now we're looking at early years opportunities. We're looking at addressing education about food and agriculture right from day one, from birth.

I am a proud resident of Huron County. I am from the heart of Huron. I do represent what is the largest agricultural community, I like to think, being very much a part of southwestern Ontario, in my ability to represent various workshops and panels across this country with regard to rural economic development and the issue of how important education is to the future of the life of agriculture.

In Huron County, in conjunction with OAFE and partners, we have been able to pilot a program called Bridges to Agriculture. This is a high school credit, and we are going to actually extend the offer of this pilot not just across the province but across the country. Our goal is to teach the real value of food in a made-in-Canada setting.

What we want from you, at the federal level, is to make us a part of the cross-Canada process of saving agriculture and agribusiness, and let us help you to get better access to the rural and urban educators. We need the federal people, the federal government, to be on board in that education process.

Thank you.

¸ (1430)

The Acting Chair (Mrs. Rose-Marie Ur): Thank you very much.

Next, presenting as an individual, is David Smith. He's a farmer and former MPP.

Mr. David Smith (Individual Presentation): Thank you. I didn't know I was going to make a presentation here today, but as I listened I wanted to make some comments on trends I see.

I'm not the average-age farmer; I'm a bit older than that. I started working 42 years ago as a technician for artificial insemination. In my county of Lambton, I think we had over 1,100 dairy producers at that time.

Through time, I've seen how the industry has been changing, and maybe there was need to change. But we have come to a point now in history where if we don't stop this treadmill effect, we are going to lose and lose badly. I say to people that if you think there's a problem out there and you don't understand it, if you do not fund the smaller farmer, you are going to have problems. You think your problems now are great, but they're going to be very small compared to the very near future. I'm talking only a few years down the road.

We talk about competition. I happen to be a grain farmer. I've had other jobs, mainly to survive. In grain farming it's an open border thing. If we were the same as supply management, we would only produce very little more than what we could actually sell domestically. That is why our supply-managed businesses are surviving. I have to say they are the backbone of our community. If you lose them, you will lose far more of our rural community than you have today.

There's another issue I wanted to mention, and it is the biotech industry. I speak only as an individual. I have sat on some different boards, but I speak as an individual.

I got into quite an argument three years ago at one of our board meetings. I came back from the table after making my comments, and the guy said to me, “I don't know why you're worried about it. It's no different from my tattooing my cattle.” And I thought, boy oh boy, if you think biotech is just tattooing your cattle, then I've got news for you. So it was all downhill from there. It was the worst meeting as far as vocal goes, but we did have a good day. I enjoyed it thoroughly because I do like a little debate.

But that's where I see biotech being more favourable to the companies than it is to the producers. Biotech has given us great production increases, but every time we increase production we lose on the price, so it's a no-win situation. So I'm a little negative towards this GMO thing.

We rely an awful lot on the U.S. programs, because I maintained when I was in Queen's Park that we didn't do anything until they decided on their policy. That's only maybe a myth in my mind, but I think the longer I live, the more truth there is to it.

As this trend developed, the corporations have become so huge that I don't know how to describe them any more, and if this is not stopped then I believe--and I've studied this for a long time in my own way--we will be under the corporate control of this new world, whatever it's supposed to be. But we'll have one corporation running almost every sector of society, and I don't think that's competition, that's control. It's control beyond anybody's imagination.

Somebody asked what we should do, and I want to leave you with a response to that, if I could. You have to fund the majority of producers we have left today, because if you lose 10% more of them you are going to lose more businesses along the line, and I think that is bad for our rural community. In case you didn't know it, I'm a very rural proponent. I do not want to see our communities die. I'm at the age where I want my sons, one of whom is well over 30, to begin farming, but I can't start them in farming, and I feel bad.

Thank you.

¸ (1435)

The Acting Chair (Mrs. Rose-Marie Ur): Thank you, David.

Next, from the Ontario Soybean Growers, we have Jim Gowland.

Mr. Jim Gowland (Director, Ontario Soybean Growers): Thanks, Madam Chair.

I am a director of Ontario Soybean Growers, and my wife and I farm approximately 1,400 acres of cash crops besides.

First of all, the soybean crop annually in Ontario represents about 20,000 acres and about $600 million in primary economic production, and most of that goes into the livestock and processing industries for further value. As soybean growers we have met the advancements of technology; a lot of us participate in no-till, genetically enhanced crop improvements, and with the GPS, global positioning satellite, technology.

As far as markets are concerned, a large percentage of Ontario's grain and oilseed exports are in the form of value-added products, and of high-quality, identity-preserved specialty produce. The percentage of crops used for the direct manufacturer, industrial, as well as food products continues to grow.

We are very focused on life sciences. Ontario grain and oilseed farmers are leaders in the life sciences approach that is now capturing attention federally and provincially. Life sciences, the use of agriculture crops to produce new products such as renewable automotive fuels, petrochemicals, bioplastics, and new food and consumer products, dominated the marketing strategies of some Ontario grain and oilseed groups long before the term became popular in government circles.

Our board is very active in biodiesel promotion and are still actively working with our counterparts federally and provincially to look at tax reductions there to make it very viable. Our biggest challenge, though, is unfair competition from U.S. subsidies.

Ontario soybean producers operate in an open international market. There are no tariffs or other trade restrictions on imports and exports between Canada and the U.S. Efforts by soybean growers to increase their competitiveness using technology, quality, and market exploitation are at risk of being derailed by recent and dramatic increases in the U.S. subsidy support for competing American farmers.

U.S. data show that farm subsidy support has tripled since 1997, with 95% of that going to the farmers in the grain and oilseeds sectors, even though they only represent 20% of U.S. farm receipts. The effect has been to stimulate U.S. production and depress global grain and oilseed prices. Depressed prices in the United States mean depressed prices in farm incomes in Ontario, and we have no support from the U.S. treasury. Proposals put forward by the U.S. House and the Senate for the next U.S. Farm Bill both recommend increasing spending on farm programs by nearly double.

Soybean growers expect the government to ensure a level playing field. Given a level playing field, we believe that Canadian grain and oilseed producers can compete against any growers in any part of the world in terms of producing high-quality crops in a cost-effective manner. To achieve that level playing field, short-term and long-term action is required by government in two key areas: trade liberalization and domestic support.

In the short term. we need increased support to Canadian grains and oilseeds. It is necessary for the federal and provincial governments to increase the support for Canadian oilseed and grain producers to the same level as our competition in the U.S. for short-term survival. Longer term, though, we look at the reduction in WTO permissible spending on trade-distorting support.

Over this longer term, the Government of Canada must negotiate a sharp reduction in the allowable trade-distorting domestic subsidies through a new agriculture trade agreement at the WTO. Once that has been achieved, our goal of equity in support will be easier to maintain as the United States and the European Union are forced to reduce their domestic support. In the next WTO agreement we are seeking a sharp reduction in permissible spending on trade-distorting domestic support, the elimination of all tariff and non-tariff barriers, and the elimination of all export subsidies.

Some additional roles of the federal government that we look forward to are these.

First, support the development of new technology. The government must continue to invest in research to maintain Canada's technological advantages. Our growers and our organization do this by spending at least a quarter of a million dollars of their own money each year in Ontario.

Second, regulate biotechnology based on sound science. Regulatory decisions must continue to be based on sound science, and market forces should determine the commercial success or failure of biotech products.

Third, ensure competitive access to new technologies. Canadian regulatory requirements should be re-examined to find ways to stop the unnecessary duplication of efforts and put more emphasize on harmonizing the registration of pest control products between Canada and the United States.

Fourth, increase interdepartmental collaboration for the bio-based economy. Untapped opportunities exist for new industrial, pharmaceutical, and neutraceutical products, such as biodiesel fuel and biodegradable lubricants made from soybean oil, soybean protein-based plastics, adhesives, and yet many undiscovered products that will be made possible through biotech.

Canada's grain and oilseeds production sector faces a major dilemma. We're optimistic about the future, but at the present time, because of highly subsidized competition, many producers are facing extreme economic hardship. Market signals are not being allowed to work; prices for grains and oilseeds do not reflect the current relationship between supply and demand, because of the U.S. and its new agriculture policies.

This is personally brought home in our own operation when we are looking at how we can use the market better. We subscribe to many periodicals and articles and newswires and find that the message from the U.S.--most of them are based from the U.S.--is: do all these things, but in the end just allow your loan deficiency payments to pick up the balance and the amount that's not there for you.

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The Acting Chair (Mrs. Rose-Marie Ur): Your time has expired.

Mr. Jim Gowland: I thank the committee for our opportunity to speak.

The Acting Chair (Mrs. Rose-Marie Ur): Thank you for your presentation.

Next, speaking as an individual, is Steve Twynstra.

Mr. Steve Twynstra (Individual Presentation): Thank you, Madam Chair. Welcome to southern Ontario, committee members.

First of all, I just want to mention that I've been sitting in the background most of the day and I felt there were a few loose ends. Many points we have already heard today, but I wanted to draw it together from another perspective, that of a 38-year-old cash cropper in Middlesex County, as I mentioned. I consider myself somewhat well travelled and well educated. I spent two years in the U.S. doing a postgraduate degree in agriculture and finance. I'm involved in managing an incorporated, diversified, third-generation family farm. We have been innovators. We've diversified into specialty crops, vegetables, and seed production--anything where we could catch an edge, basically. I think we're considered a model farm, I guess you would say, for the area, if not for the country, judging by the amount of tours and questions that get asked of me.

At 38 years old I consider myself in transition. I'm too young to retire from production agriculture, after seeing the signals on the wall, and especially coming back from a week in Washington, D.C. last month. And yet I'm too old to invest in supply management, which has also been a saviour for a lot of producers. I have looked at getting into broiler production. Dairy is not an option; I've got a $10-million investment, and as a 38 year old with a 20-plus-year payback, is there a relative advantage or not? Maybe for my 16-month-old son there's an opportunity there, but at this point I wouldn't want to wish that upon him.

I also employ a number of individuals, being on a diversified, large, cash crop farm. Most of these individuals are in their early twenties and come from farm backgrounds. It's becoming a very big and critical issue for us to find qualified people, with the technology that's involved today and the care and the intuition that are required to know when to work a piece of ground, or when to be planting, or the planting depth--that sort of thing. Those skills you can't pick up in college or university. They're built on the farm. These people are harder and harder to find.

The second thing that really bothers me is, when I do hire them, I have to hear day in and day out how they want to be the one owning the piece of ground or farming the piece of ground directly, and yet the opportunity is just not there.

My parents were able to take advantage of low-interest junior farmer loans. That opportunity is not there for them today. And this is what was raised earlier today. I think there has to be an opportunity there.

I will give you eight key points at the end of my presentation that I think need to be addressed immediately.

The other point I'd like to raise is that in our own farming operations we are innovators. I have travelled the world. We've invested in technology from South America, Europe and across North America. We have looked at using hedging techniques, so I have been involved in hedging our crops, in forward contrasting, all the tools that are available there.

I'm a fiend for information, for subscribing to newsletters from around the world. I'm constantly on the Internet looking for an edge to get ahead. Lately, it seems that edge, because we're in a global economy, just isn't good enough.

We're taking advantage of joint ventures with livestock operations to cut down on our fertilizer bills through manure. We are trying to do things in a responsible manner. We have invested in GPS. I think we're leaders in that field, in applying our nutrients. We invest in outside independent crop consultants to do the soil testing, to give us recommendations on fertility and wheat management strategies, all lowering our economic costs. We're not out there to support chemical companies, but if they have a tool we can use, we're going to use it at the most economical rates, any way we can.

Again, I think this comes back to having record-keeping that's second to none. That was trained into me in my first university class and it was still there when I graduated with my post-graduate degree.

We have all heard the story here today about how difficult it is for production croppers, especially the grains and oilseeds sector. We've heard the statistics that 95% of the money in the U.S. is going to 20% of the people, who really don't need it, from our perspective. From their perspective, they do. They're competing against Brazil, they're competing against Argentina and other production areas of the world, as we are. And yet, in the U.S. they've caught themselves up, from my perspective, in a vicious circle that they cannot get out of. They've realized that a dollar spent in agriculture filters predominantly seven times to the economy, nine times in other areas. They've used that to revitalize their rural communities.

I came back in January from Saskatoon. I heard the horror stories out there about how dry the weather was. I talked to producers who were losing their third-generation, fourth-generation farms. It was a sad story out there.

How do we solve these problems? I have a few ideas coming up later.

Most people of my generation or my age are working on a farm. They can't be here today. I appreciate all the work, the effort, and the support that we're getting from the people in the crowd and from the people in front of the committee who have been involved throughout their lifetimes and who are now looking to pass on...or who are retiring.

Again, I'm still in transition. I'm caught between a rock and a hard place, in my mind. However, these guys or women are working off-farm or else they're home today feeding the hogs, feeding the cattle, because they can't afford to get away. So I feel I'm speaking a little on their behalf.

Today, not tomorrow, I can survive if... and here's part of my eight points.

Number one, the bottom line is we need to level the playing field with the U.S. We do have an open border for grains and oilseeds. We're lined up at Casco plants with corn trucks from Michigan or Ohio right behind us. And it's no different from being a wheat producer in North Dakota, with Saskatchewan or Manitoba trucks lined up at the wheat elevators. It's the same issue again. That goes across the border. We either have to match their subsidies--and the money is there, just not the will, and I think we need to get that will in place--or we need to look at that food tax, which was mentioned earlier. That tax would be paid to producers, not to another bureaucracy, not to be filtered through, but to producers directly and immediately. The systems are in place, the apparatus is there, it needs the will-power to do it.

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The Acting Chair (Mrs. Rose-Marie Ur): Your time has surpassed a minute. I've given you more than the rest of the presenters. If possible, would you mind presenting your eight points to the committee, and we'll certainly see that they are submitted through our presentation or written up in the documentation.

Mr. Steve Twynstra: I'd be prepared to do that, Rose-Marie.

The Acting Chair (Mrs. Rose-Marie Ur): Thank you very much for your presentation.

Is Mr. Laire in the audience?

Mr. Laire is here.

We await your presentation, sir.

Mr. Terry Laire (Individual Presentation): Thank you for the opportunity today. I don't have the expertise of many of the people sitting here, but I concur with many of the comments made here.

As an organic farmer for at least 20 years in Lambton County, I'm very concerned about a number of situations taking place. In regard to our organic standards, we have an audit trail on all our organic products.

There is the fallout zone, as I call it, in our area from the chemical valley of Sarnia. Our acreage is a fallout zone. When I cut my alfalfa hay--and I'm talking about green hay--brown dust comes off the crop. Clouds of brown dust come out of the crop at baling time.

Also, in 2001 my garden was burned brown. Sweet corn looked very weathered, with cobs stunted. Many of the pods of garden peas were half-black, also beans, and there were very few flowers. Over a number of years, the white bean growing area of Essex-Hampton-Middlesex... is almost in the past. What has caused this damage to agriculture? We can no longer attain the yields of oats and barley we had 20 years ago. Genetic engineering is putting a great burden on organic farmers regarding Bt corn, etc.

On pollen drift, it's already been mentioned today about the winds of yesterday with regard to pollen, which take my products out of the organic market. It's not too hard for us as organic growers to receive at least $4 a bushel, but that's being interfered with by neighbouring Bt technology. It's much the same with soybeans.

Why did the Government of Canada allow this technology into Canada without long-term testing regarding the possible damage to human and animal health? Many other things are tested before proven to be so-called “safe”.

Our ash trees are dying at about 4 inches to 6 inches in diameter. Also, fruit and vegetables come in from other countries that use chemicals we are not permitted to use.

Agriculture is being labelled as a polluter. One paper article said diesel fumes from farm equipment is causing part of the problem with the ozone and the greenhouse effect. But does anyone have figures on the amount of fumes put in our air by jet diesel, trucks, traffic and that type of thing on our roads, airports, etc.?

I'm very concerned that agriculture is being labelled as bad by the media, regarding the Walkerton situation. The news lately has been talking about cleaning some of the chemical-laden residue out of the St. Clair River. What is going to be done with this material? Is it going to cause more problems for agriculture? There is much being said about water quality. Our creeks used to run clear. You could drink out of them.

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The Acting Chair (Mrs. Rose-Marie Ur): Your time has expired. Thank you for your presentation.

Mr. Terry Laire: Thank you.

The Acting Chair (Mrs. Rose-Marie Ur: That takes care of the complete list of presenters.

We were scheduled to finish at 3 o'clock. Colleagues, do I have your permission to extend it to 3:15, allowing five minutes so that we can get a sufficient number of questions answered?

Some hon. members: Agreed.

The Acting Chair (Mrs. Rose-Marie Ur): That being said, we'll turn to David for five minutes.

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Mr. David Anderson: Thank you.

Thank you for the presentations. This was one of the most interesting groups of presentations I've been part of.

Steve, I have a question for you. Do you market your wheat outside of the Ontario wheat board?

Mr. Steve Twynstra: No, we do not.

Mr. David Anderson: Just to clarify, we do not have open borders for grains in western Canada. Friends and neighbours of mine have been thrown in jail and strip searched for trying to get their wheat across the border.

Mr. Steve Twynstra: I think that's one thing that has to be resolved in a hurry to get innovation across the Prairies. It had a role when the Wheat Board was developed, but I think it has outlived its usefulness in the global economy.

Mr. David Anderson: We have absolutely no way of developing processing in our entire rural area of western Canada.

Mr. Steve Twynstra: The processing is a perfect example of that, and it's a bloody shame for the growers out there.

Mr. David Anderson: Mr. van Donkersgoed, you said you wanted to compare the two visions. I'd like to give you a few minutes, if you're ready to do that.

Mr. Elbert van Donkersgoed: First, the federal vision, in our sense of things, lacks a couple of essential ingredients. One is that agriculture succeeds best as an integral part of a dynamic and integrated countryside. It's important for us to think about agriculture and the countryside together. The way that vision is written right now, it sounds as if it's agriculture all on its own. Those of us in Ontario are saying it doesn't work. It has to be agriculture and the countryside.

Second, the CFFO vision emphasizes the need for agriculture to be much more than the production of bulk, anonymous, undifferentiated, raw products. We've been on a binge of having technology work replacing people work, and that doesn't create jobs. Unless we learn how to hang onto our products longer than we are now, we won't really build a strong agricultural economy. So we're solidly on the side of saying don't give us all kinds of safety nets that would help us to produce yet more raw product; help us to hang onto the product and do more with it.

For us in Ontario there's a third key factor, and that is that we have an opportunity in Ontario to replace imports. We have $11 billion worth coming in here at a time when the dollar is low, and there's a huge opportunity in Ontario to focus on import replacement. There's an interesting export market, but we are missing out on pouring a lot of energy into import replacement.

The countryside, in our view, needs to be dynamic and integrated, and that means agriculture has to be done in a style that fits into our countryside. Many of our members have become very urban. That means we need to do it at scale and to function effectively, and we should not assume we're going to follow the technology path of the Americans, especially in our livestock sector.

Mr. David Anderson: Ms. Stanley, do you tie that element into your educational curricula? One of the things that has frustrated me, coming from rural Saskatchewan, is that my kids have come home and explained to me how bad farming is and how some of our practices are evil, that type of thing. It really burns me, because some of those people who are teaching it are married to farmers and this is the off-farm income that's keeping their farms going. How do you deal with that kind of environmental lobby or propaganda machine, which we run into often when we're trying to talk about agriculture?

Ms. Pamela Stanley: I think I spoke briefly about educating the educators, and I think what you're looking for is who's teaching the kids what.

We have to be really careful about a fair balance when we're dealing with young minds. I'm speaking for Ontario Agri-Food Education. There is a national agriculture-in-the-classroom group as well, and we are part of that. From our perspective we need to be really careful about the balance we present.

When you're dealing with the kids at the elementary level, they need to know mostly about where their food comes from and how it gets to the table. When we're dealing with the folks at the secondary education level, the high school kids, they need to have something to think about. So we need to present a very fair balance, both ends of the yardstick, if you will. We need the teachers or the educators in a general sense, because these days it's not always just a teacher in a classroom, to present a balanced and fair vision.

I hear exactly what you are saying. What the kids are getting is what has not been developed as an educational resource. I would like to see Ontario Agri-Food Education take the lead for the country on this, making sure we start educating in the early years and go right through to the secondary level.

Quite frankly, as I look at it, the opportunity exists for southwestern Ontario to have a global impact on training and educating about food and food production--and when I say “global”, tongue-in-cheek, people smile at me and say “Pam, you're dreaming”. But the truth is we are a small global village. We already have Ridgetown College at the University of Guelph. We have viticulture bar none in North America right here. We have all of these educational resources here in southwestern Ontario. All we have to do is extend our work from the little kids right through the high schools.

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The Acting Chair (Mrs. Rose-Marie Ur): You are a great advocate for the program. Thank you.

Dick, you're next.

Mr. Dick Proctor: Thank you, Madam Chair. I have a quick follow-up question.

You indicated in your presentation, Ms. Stanley, that you needed the federal government to help in this education work. Could you tell us how?

Ms. Pamela Stanley: Sure, here's an example.

We were very much a part of the Tomatosphere Project. This project involved the Canadian Space Agency and NASA working in conjunction to take a couple hundred thousand tomato seeds--some treated with red light, some not--out into space. We had grade 5 kids all across this country actually planting those seeds and comparing them. We really had a low profile in the media. We didn't have a lot of funding to get this information out.

We would want our results from this particular project to be that the children from grade 5 who had a chance to follow up on a scientific development by growing those seeds would make decisions in that grade that later on they're going to be farmers or processors or production development specialists, maybe even scientists or astronauts.

This is where we need help. We need a bigger package to promote awareness about food--not the issues of food quality, but the basics of where it comes from and how important it is--in all of our schools so that all of our children and educators understand this inherently. Then we can help put to bed the problem of finding new farmers for the future.

Mr. Dick Proctor: Thank you.

I also wanted to ask Mr. Smith a question. You said something to the effect that if government is not going to help the small farmers in this country, then we've got real problems. Recent statements by the Minister of Agriculture about the shrinkage in the numbers of farmers we have show that this is coming to pass and I don't see any rapid change in philosophy.

When he was before the committee last month, Mr. Vanclief talked about rewarding risk takers; people who needed what he called passive income support were history, or would soon be history.

What are the real problems you see on the horizon if this trend continues?

Mr. David Smith: Well, our rural communities will deteriorate more. I don't know who will replace this base.

I hear people who do a little travelling say that they like to see a pretty countryside, and if you don't have the little farmer out there, the people, the bodies, then I say you're not going to have a very interesting countryside. I don't think the huge corporate farm is the answer to our problems. Some of them will be so big that their head offices will not be here. They will be somewhere else, and don't ask me where it might be.

But when our forefathers put things together, I remember one of the criteria of being in business here was that a headquarters had to be maintained in this country. This merging phenomenon we've seen of late really bothers me. In the last ten years the word for it would be exponential. It's just gone bananas. I don't what other word I can use. And I say this is bad and sad for our smaller communities in the long run.

I don't know how you're going to stop it, but if you don't support the majority of the farmers left there now, then it's just going to expand on a much faster basis. That's why I say the next three years are very critical.

Mr. Dick Proctor: Thanks.

Do I have any time left?

The Acting Chair (Mrs. Rose-Marie Ur): Yes. You have about a minute and a half.

Mr. Dick Proctor: Mr. Twynstra, you had an eight-point program. You were able to get one of them out. Do you want to start on the next few until I run out of time?

Mr. Peter Twynstra: I'll try to make it brief.

The second point I had was a low-interest, long-term loan, as was mentioned earlier, for established farmers, along the lines of a junior farmer's loan. It could be based on a sound business plan. The tools are already in place to administer it. Also a possible university or college degree, or some sort of grandfathering... The tools are in place. The details can be worked out.

Third, as Len mentioned, we need crop insurance that reflects the reality of today's farms. These farms are often based across broad geographic areas and different counties, not just within a farmer's local township or concession. The current plan in Ontario does not satisfy this need. We do not need surcharges for multi-units. Premiums need to reflect the management abilities of the producer involved and the equipment base versus the area being produced. Their systems are in place; they just need to be fine-tuned, and this can be done immediately.

Fourth, Agriculture and Agri-Food Canada has to become an equal player at the cabinet table, with an enhanced, positive role. It needs to speak proactively, not in the reactive way it does now. If Health Canada and Environment Canada can have ads on TV, why can't AAFC have ads in all media promoting agriculture, the health aspects of our food production, industry, the jobs, environmental farm plans in Canada, and what are farmers doing today?

There are a lot of success stories out there. They are highly leveraged in many cases. Some of them are very successful on their own. The reality is we need to promote them rather than have all this bad press. Let's get out there and be proactive. It's only a few million dollars; that's nothing.

All of this information has to be science based. No more innuendo--the science is there; let's take advantage of it. GMO will happen. As long as we have open borders, it will happen. We cannot fight it. So much breath has been spent talking about it, so much paper used up on writing about it. It's the future; let's embrace it. We can't stop it. The cat is out of the bag.

Point number five is on PMRA and was mentioned earlier. Why can I buy food in supermarkets with residues of pesticides that contain compounds I'm not allowed to use in Canada? We want to innovate and be world leaders, so let's be fair about this.

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The Acting Chair (Mrs. Rose-Marie Ur): Thanks. Sorry, I hate to do this to you. I gave Dick an extra minute so he owes me dearly.

Larry.

Mr. Larry McCormick: Thank you very much. Certainly we could all enjoy a few hours here.

Democracy is great. But one of the first things I heard today from individuals when I came in here is that we have to be careful about the agricultural policy framework because crop insurance is so good in Ontario; yet, it is not there for the organic farmers at all. Now, as for GMOs, on our way home--we only do eight days a week now on this job--let's all think about how organic farming is growing at very close to 20% and how there is every sign that it is going to keep growing this way. It has just started.

Not many issues are black and white. If the public could see us here... There's no reason for us all to agree. This has been one of the challenges of farmers' groups, not being able to agree. Education is part of it. But one group asks for GMOs, one doesn't. Life science--someone is for it, someone against it. If we had enough money to subsidize at the same rate as the United States--and we haven't, and we've been told we're not going there, and we have many farmers saying not to go there--all it would do is add to the problem.

I wonder how many years we would have to go on increasing subsidies in the four areas of the world, just to grow more grain on more marginal land, the price of which would keep going down. That's what this is all about.

As for the Christian Farmers, are we talking about a European, multi-functionality type of thing?

The other question I'll put out for the Toronto presence, which has been great. But we all want the same thing. We all want good family farms. The average dairy herd is still less than 55. More than 90% of the farms are family farms. How do we educate the public so we can offer more and better support to the farmers of today?

Mr. Elbert van Donkersgoed: We have a multi-functional countryside in Ontario. It's high time the policy followed where farmers have already gone.

The past four years have seen 35% of farmers switching from full-time farming to part-time farming. This is one of the best demonstrations of where farmers themselves are already seeing their future. The problem is that policy hasn't gone there. It hasn't recognized the fact that there are going to be a lot of people in Ontario who are going to be small farmers. They're not going to be full-time, but they need the opportunity to build that multi-functional countryside you spoke of, a really enjoyable place to live and for other folks to come and visit, not just a place for production.

One of the things we want to say is we're willing to see environmental payments significantly increased in the future. We're thinking that environmental action and activities by farmers should actually not be of the kind we have had in the past, where we get a 40% to 60% grant because we've done the project. It should be a profit centre for a farmer. It should be an activity, a significant part of our function in the countryside, and it should be possible for it to be a profit centre. That's where policy needs to go.

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Mr. Larry McCormick: I appreciate that.

Wayne, do you have any comments on where we can get this money out of GTA? Because there's lots of it there.

Mr. Wayne Roberts: I'll try to give you three examples. One is, I believe we should have a Buy Canada policy that's operated by government. The government of Toronto, for instance, buys $300 million a year worth of food. That's a lot of food and could support a lot of farmers, and there's no effort made by the City of Toronto, by provincial hospitals, or anybody else to deliberately buy. It would be very simple to do.

Second, I think farmers have to get out of the production of just food. I hear many people saying they have to go into processing, but I think direct marketing is also a form of adding value, and we need to get something going in the field of farmers' markets.

Third, and this may sound unusual, one of the best treatments for street kids is to work on a farm. That's where they learn that life is not a bunch of angles but involves some work, and that if you put some work into it you get something back. I've seen many, many street kids leave after a day on a farm with their faces beaming like six-year-old kids.

We need to get a sense of the cultural importance of farming out to the public--and the fact that it can help to heal some of society's wounds.

The Acting Chair (Mrs. Rose-Marie Ur): Thank you.

Larry.

Mr. Larry McCormick: Just one comment to Ms. Stanley. It makes me think about Industry Canada when they come out with a catalogue of programs, and one top bureaucrat would say to the other, “Gee, we didn't know we had all this”. We didn't come here to get thanked for the $50,000 interest-free spring loan to the fall advance. But there are so many programs, and we don't communicate well.

For example, a little over a year ago, HRDC and Agriculture Canada put $800,000 into one pool. That's just going to come out now to all the high schools in Canada. We're going to show and educate our young people about the careers that are available in this great business.

Thank you, Madam Chair.

The Acting Chair (Mrs. Rose-Marie Ur): Rick.

Mr. Rick Borotsik: I have two very quick questions and I know the answers will be equally as quick.

First of all to Jim, I've used the term myself many times when I've talked about the unfair subsidization of the Americans and the EU, and you used the term “level playing field”. You spoke about “low-cost production and the best product in the world, given a level playing field”. I had said earlier today to the other panel, we are told the Argentinians and Brazilians can produce lower-cost product than we can here in Canada--and non-subsidized, by the way: it's just low-cost production. How do you deal with that as a Canadian producer, and how do we deal with it in terms of government involvement in agriculture in the future?

Mr. Jim Gowland: I think as Canadian producers we've been up to the challenge of seeking out value-added markets. I think that's been a really key factor for us, that we've been able to do that. We have the reputation to be able to put up a product that is demanded by the world.

As far as the input side is concerned, over the years on the cost of production side I think we've been working very hard, without subsidies, trying to beat out these costs of production. It doesn't matter what it is, whether it's labour, machinery, equipment, capital costs and that type of thing, I think we've really worked hard at it to do that. With that combination of beating the costs out of the capital part--the expenses part--and seeking out these value-added markets, the Canadian farmers have been really doing an excellent job.

Mr. Rick Borotsik: Pam, education is a provincial jurisdiction. I assume your organization is tied in more to the Ontario educational process than it is to the national educational process.

Ms. Pamela Stanley: Interestingly enough, Ontario Agri-Food Education has two seats on the board of directors--ex officio seats--one for the Ministry of Agriculture at the provincial level and the other one for the Ministry of Education. We've never had anyone sit in the Ministry of Education's seat voluntarily on our board, or assigned to sit in it from the Ministry of Education. That's a piece I really feel we're lacking.

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Thanks, Larry. I do want to say, yes, I do know about that particular pocket of money, but from the provincial perspective, we need help in education from the federal government more than ever before, for a lot of reasons.

Mr. Rick Borotsik: Okay, last thing. Steve, you have three left. Quickly, six, seven, and eight.

Mr. Steve Twynstra: Okay. Just to finish off, PMRA's minor use registration should be immediate.

Number six, stand up to the Yanks. They need our lumber. They need our winter hogs. They use crop insurance as a subsidy, so why can't we? They need our segregated wheat. Let's just shake them up. We can work with the Australians. They're having the same battles around the same tables. So are the Europeans, so are other countries in the world--been there. Let's stand up to them for a change.

Number seven, analysis and statistics. I participate regularly in Stats Can surveys in agriculture. They're crap. They're outdated. They don't qualify for statistics, as far as I'm concerned, and I've studied them for six years.

Number eight, enhance infrastructure, research and development. We've cut back so far that there's nothing left. I feel sorry for our extension people. This is provincial, but they just don't get the data there. We need to invest back in R and D. CDC in Saskatchewan is doing a good job in pulse crop production. We need to go back to Ontario and look at vegetable crops and innovative things there.

Transportation needs to be addressed. We talked about CN being a monopoly. It's true. The lakes are being run down. I think we can do more work there, with railroads and also our roadways.

Simplify the bureaucracy by reporting less paperwork between the province and the feds. There needs to be more sharing of information across Canada, west versus east. I do a lot of travelling in the west. There is still an east-west problem there. I think that needs to be addressed. Agriculturalists are not fighting Saskatchewan or Alberta or Quebec or the east coast. We're all in it together. I think there needs to be more work, and AAFC has a role to play in that.

I did it. Thank you.

Mr. Rick Borotsik: Thank you. That's good.

The Acting Chair (Mrs. Rose-Marie Ur): Howard wanted one last question.

Mr. Howard Hilstrom: I guess it would just be a 30-second issue here.

Wayne, my riding is right off the edge of Winnipeg. I have 10 Indian reserves and I have a lot of poverty in my riding of Selkirk--Interlake, including the problems you know about in the city of Winnipeg. I'm well aware of all the social issues around food and whatever.

You mention supplanting imports and using Ontario only, etc. What's going to happen to our farmers if the United States and the other countries we export to say the same thing? “We don't want Canadian product, we just want to use our own.” What's going to happen? What's the net effect on our economy of that kind of philosophy?

Mr. Wayne Roberts: I think too much of the discussion around levelling the playing field is on us matching the U.S. for subsidies. What we need to look at is how the various governments in Canada subsidize imports at a whole set of levels.

For instance, immediately after September 11, the federal government threw $500 million into easy border passage. What's our vested interest in getting fast passage for U.S. vegetable producers? We're building a major freeway from Niagara Falls to Toronto to speed the way of the U.S. vegetable producers so our farmers can wave goodbye to them as they go along the road. When they come into the city, they lift all their wheels except for four, which quadruples the damage done to the roads. They pay no fee for that, yet we charge a fee for trains. Traffic jams in Toronto are estimated to cost $6 billion a year in lost productivity. A good chunk of that is traffic from trucks.

So there's a whole series of subsidies that we provide to importers. I believe we don't even have to get at the question of matching the U.S. subsidies. We have to get rid of our subsidies to them.

Mr. Howard Hilstrom: That wasn't my question. What about our exports leaving this country? We export 90% of some crops, and 50% of livestock. You can't draw a wall around Canada and say we're going to be self-sufficient and live inside Canada, and we're going to have high prices for this and that. That's the real question, is it not?

Mr. Wayne Roberts: I think that's possible, but I guess what I'm trying to argue is that if we eliminate the subsidies to imports and other countries do the same, things will follow the logic of the market. There are certain economies to our growing some crops in Canada and exporting them to Europe, and those will continue.

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Mr. Howard Hilstrom: The general point is that throughout the last 3,000 to 4,000 years, every nation that has been a big trading nation has always become wealthier because of trade. Canada is a big trading nation and we have to continue to trade. The idea of not emphasizing trade with our global partners around the world doesn't seem like a good policy. But you're advocating something in between, I'm sure. Thank you.

Mr. Wayne Roberts: If you don't mind my just clarifying, on the question of economic history--and I have a PhD in economic history--the key to economic development in Europe is the development of internal domestic markets. Trade has never been key until they've developed that domestic capacity. Britain didn't support free trade until they'd had over 75 years of their development. So we should never put down domestic markets.

The Acting Chair (Mrs. Rose-Marie Ur): Thank you, Mr. Roberts.

We have one last presenter, Tom Prout, and he's the general manager of the Ausable Bayfield Conservation Authority.

Tom, the floor is yours.

Mr. Tom Prout (General Manager, Ausable Bayfield Conservation Authority): Thank you very much for the late addition here. I like the way you people keep time.

I am here, really, to just remind you of something you already know. The history of agriculture in this country and this province has included conservation and environmental issues. The future of agriculture in Ontario and Canada will include conservation and environmental issues. As a conservation authority...and I know some provinces have similar agencies such as conservation districts. In Ontario conservation authorities are watershed-based and place-based delivery agencies. We've been around for 55 years and we've been working as conservationists. We're not necessarily preservationists, but we're conservationists. We've been working with farmers for 55 years.

Some of the earlier programs included constructing farm ponds that provided water for cattle but at the same time provided water for wildlife. In the early eighties, some of you may know Don Lobb and the early work with no-till and conservation-till in Ontario. We worked for 10 years with the farmers to move conservation tillage to the level it should have been at years ago. It's now a commonplace practice in this part of Ontario.

We've worked with landowners on many best management practices from tree planting to wildlife habitat to a number of other activities.

We currently work with the federal Department of Fisheries and Oceans on the delivery of some of those programs, and we're there as a local agency. That's one of the key things about conservation authorities. They're a local delivery agency. So whether you're the federal government or another level of government, there needs to be a delivery mechanism for conservation and environmental-type programs. We have 55 years of experience doing that.

We also know from our experience in the delivery of incentive programs that rural landowners in this part of the country respond very well to incentive programs. You can be guaranteed that if you invest $1 as a government, you're going to get $2 more to go with that $1 to help the local economy, while you're certainly helping out the local environment and that landowner. And we know that from our experience in delivering programs in Ontario such as CURB, Clean-Up Rural Beaches, and the current Healthy Futures for Ontario Agriculture program.

The problem with the programs historically has been that they're not consistent across the province or across the country. Again, I'm talking about environmental programs here. They've been more of a shotgun approach--do a little bit here and do a little bit there, some in this county, some in that watershed. They have not been consistent across the province.

The other thing is they have not been long term. They've been one year, two years, maybe three at the most. We heard earlier today about young farmers and the problems they have, and I can relate to that. Up until a couple of years ago, I farmed. I had a small hog operation and cash crop operation.

If incentive programs were more consistent across the province or across the country, and they were long term, then a young farmer could invest in those best management practices knowing that the program was going to be around. They don't have to buy into a program this year, because it's going to be there next year. But the historical record with incentive programs is that if you don't cash in today, you're out of luck, because it won't be around six months from now or a year from now.

My message is really just that we know, as conservation agencies working with farmers, they're interested in the environment and they want to do their best. They need financial help. All of society benefits from the work of farmers, so there's no reason why society shouldn't help them implement best management practices, but there needs to be some consistency and a long-term nature to the programs.

With that, I'll thank you very much.

The Acting Chair (Mrs. Rose-Marie Ur): Thank you, Mr. Prout.

David, Howard, Dick, Larry, Rick, do you have any questions?

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Mr. Rick Borotsik: I have maybe just one.

Are you familiar with the Ducks Unlimited proposal--the conservation proposal with respect to the riparian areas? Are you familiar at all with the western Canadian proposed program from Ducks Unlimited?

Mr. Tom Prout: No, I'm not.

Mr. Rick Borotsik: Okay, I won't get involved, then.

The Chair: Thank you, then, Rick.

To all the presenters, we'd like to express our gratitude.

Some of you may be wondering, where does it go from here? We probably have almost the same type of question. You might compare it to making a cake somewhere. It doesn't look like much when you go from one place to another and you put a few more ingredients in, but hopefully by the time we have an opportunity to analyze all these different presentations we'll hear across the country, we can make a cake somebody would like to eat. It's not going to be an easy job to put all these together, Dick, is it?

We have to worry in Canada about the future of other generations coming into the industry; the size of the units; how much government can help, one way or another. We have the conglomerates we're dealing with: four or five big food companies that control nearly all the food industry in Canada. It's a very diverse problem we have in terms of the future of agriculture.

It's impossible, in fact, to believe, when you consider the economists here--Mr. Roberts--that we can talk about price being determined by supply and demand. Somehow the agricultural community especially, in a lot of our areas, have never been able to escalate their price over the generation we've had in the last 25 to 50 years. We could still buy a new car for $2,500 in 1958 or 1960. But the price of your wheat is still, almost in real dollars, at that same level. Why can't agricultural groups...?

We talk in terms of production. Very little was said today about the cost of inputs. But look at your farm machinery: the tractor you bought 25 or 30 years ago was about $100 a horsepower. Today we're talking about $1,000 a horsepower. Someone else has laid on your industry a price structure that doesn't match up with what we've done as a farm group.

All I can say is we have some good researchers and good clerks, and we will go back to Ottawa and try to analyze your submissions, and sit down as a committee to work through a report and eventually get it to Parliament, hopefully sometime in June.

We hope our clerks have taken your names and addresses and that you will be sent back a copy of the report. Hopefully it will be a positive one that will reflect our concern as a committee for your industry.

But in the House we have people who say that New Zealand did away with all subsidies. They flattened their agriculture and now they're beginning to build up a new system. There are people who advocate that in the House. I wonder why some of those people from New Zealand moved to Canada. But they did come here and they speak in the House of Commons about how great a system they made down there.

We also have to remember that in terms of the basic ingredients we have, with the grains and the soybeans and the corn and so on, there are other factors besides the United States and the European Union. I think you as farmers have to ask: what are those other factors; what is realistic in terms of price; and what are we doing as agricultural groups around the world to keep the price so low in Uruguay, Brazil--and someone mentioned Argentina--and Australia? In fact, the protein levels they're producing even in China today and in India are meeting the needs of their population. So I wonder just what direction we're going in by trying to provide more for the world market.

Thank you very much for coming. Hopefully you can reflect on your industry. My main concern, and I think the concern of all this committee, is that it will continue as a very viable industry and that your children and my children will see it as a way of earning a successful living.

And I hope, Ms. Stanley, that somehow we can bring up our bottom lip and say it is a viable industry, it's a good place to earn a living, it's a good way of life, and the future generation will accept it as our people did and as they're forefathers did.

With that, we'll adjourn our meeting and head off to Kingston and Napanee. This meeting is adjourned.