AGRI Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Thursday, March 27, 2003

Á

1110

The Chair (Mr. Paul Steckle (Huron—Bruce, Lib.))

Mr. Laurent Pellerin (President, "Union des producteurs agricoles du Québec")

Á

1115

Á

1120

Á

1125

The Chair

Mr. Mat Menich (President, Ontario Corn Producers' Association)

Mr. Don McCabe (Director, Ontario Corn Producers' Association)

Á

1130

Mr. Brian Doidge (Economist and Market Analyst, Ontario Corn Producers' Association)

Á

1135

The Chair

Mr. Douglas McBain (President, Western Barley Growers Association)

The Chair

Mr. Douglas McBain

The Chair

Mr. Ed Armstrong (Director, Western Barley Growers Association)

Á

1140

Á

1145

The Chair

Mr. Douglas McBain

The Chair

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

Á

1150

Mr. Laurent Pellerin

Mr. Howard Hilstrom

Mr. Brian Doidge

Mr. Howard Hilstrom

Mr. Ed Armstrong

Mr. Howard Hilstrom

Mr. Ed Armstrong

Mr. Howard Hilstrom

Mr. Brian Doidge

Mr. Howard Hilstrom

Mr. Brian Doidge

Á

1155

Mr. Howard Hilstrom

Mr. Brian Doidge

Mr. Howard Hilstrom

The Chair

Mr. Louis Plamondon (Bas-Richelieu—Nicolet—Bécancour, BQ)

Mr. Laurent Pellerin

Â

1200

Mr. Louis Plamondon

Mr. Laurent Pellerin

Mr. Louis Plamondon

Mr. Laurent Pellerin

The Chair

Â

1205

Mr. Laurent Pellerin

The Chair

Mr. Howard Hilstrom

The Chair

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

Mr. Ed Armstrong

Mrs. Rose-Marie Ur

Mr. Ed Armstrong

Mrs. Rose-Marie Ur

Â

1210

Mr. Brian Doidge

Mrs. Rose-Marie Ur

Mr. Douglas McBain

Mrs. Rose-Marie Ur

Mr. Douglas McBain

Mrs. Rose-Marie Ur

Mr. Douglas McBain

Mrs. Rose-Marie Ur

Mr. Don McCabe

The Chair

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

Â

1215

Mr. Don McCabe

Mr. David Anderson

Mr. Brian Doidge

Mr. David Anderson

Mr. Brian Doidge

Mr. David Anderson

Mr. Brian Doidge

Mr. David Anderson

Mr. Brian Doidge

Mr. David Anderson

Mr. Laurent Pellerin

Â

1220

Mr. Douglas McBain

The Chair

Mr. Marcel Gagnon (Champlain, BQ)

Mr. Laurent Pellerin

Mr. Marcel Gagnon

Mr. Laurent Pellerin

Â

1225

The Chair

Mr. Claude Duplain (Portneuf, Lib.)

Â

1230

The Chair

Mr. Claude Duplain

The Chair

Mr. Brian Doidge

The Chair

Mr. Brian Doidge

The Chair

Mr. Howard Hilstrom

Mr. Don McCabe

Â

1235

Mr. Howard Hilstrom

Mr. Douglas McBain

Mr. Howard Hilstrom

Mr. Douglas McBain

The Chair

Mr. Louis Plamondon

Mr. Laurent Pellerin

Â

1240

The Chair

Mr. Ed Armstrong

The Chair

Mrs. Rose-Marie Ur

Â

1245

Mr. Ed Armstrong

Mrs. Rose-Marie Ur

Mr. Ed Armstrong

Mrs. Rose-Marie Ur

Mr. Laurent Pellerin

Mrs. Rose-Marie Ur

Mr. Brian Doidge

The Chair

Mr. David Anderson

Mr. Laurent Pellerin

Â

1250

Mr. Brian Doidge

Mr. Ed Armstrong

The Chair

Mr. Louis Plamondon

Mr. Laurent Pellerin

Mr. Louis Plamondon

Mr. Laurent Pellerin

Â

1255

Mr. Louis Plamondon

Mr. Laurent Pellerin

Mr. Louis Plamondon

The Chair

Mr. Claude Duplain

Mr. Laurent Pellerin

Mr. Claude Duplain

Mr. Laurent Pellerin

Mr. Claude Duplain

Mr. Laurent Pellerin

The Chair

·

1300

Mr. Alan Tonks (York South—Weston, Lib.)

Mr. Marcel Gagnon

The Chair

---

CANADA

Standing Committee on Agriculture and Agri-Food

---

NUMBER 022

l

2nd SESSION

l

37th PARLIAMENT

---

EVIDENCE

Thursday, March 27, 2003

[Recorded by Electronic Apparatus]

Á  (1110)  

[English]

    The Chair (Mr. Paul Steckle (Huron—Bruce, Lib.)): Ladies and gentlemen, I want to bring this meeting to order. I see quorum, and we can begin.

    This morning we want to continue our further studies and inputs into the issue of the agricultural policy framework, APF. We have with us this morning different presenters. The first group comes from Quebec, and we have with us Mr. Laurent Pellerin. He's the president of the union of agricultural producers in Quebec. We welcome you here to the table. We also have with us, from that same group, Mr. Gilbert Lavoie.

    And we have with us, from the Ontario Corn Producers' Association, Mat Menich, who is the president of the corn producers for this year; Mr. Don McCabe, who is a director with the Ontario Corn Producers' Association; and Brian Doidge, who is the economist and market analyst.

    We have with us also this morning, from the Western Barley Growers Association, Mr. Doug McBain, president, and we also have Mr. Ed Armstrong, director of that organization.

    Welcome, each one of you, to the table this morning. We expect in the next few moments to have a few more members at the table. Thursday is always a busy day, with many activities and people getting ready to leave this place. So thank you again.

    Given that this is a pretty large subject, it's been fairly exhaustively discussed over the last number of months, maybe longer than that, but we want to give each one of you adequate time. We also want to remind each one of you, those doing the questioning this morning, to keep our questions and responses as succinct as possible so we can get through as many of the questions as we can and have your responses appropriately done. Thank you very much.

    We will begin with Mr. Laurent Pellerin. Welcome, and you have 10 minutes.

[Translation]

    Mr. Laurent Pellerin (President, "Union des producteurs agricoles du Québec"): Good morning. I would like to thank committee members for taking the time to hear the concerns of farmers, particularly those whom I represent, those from Quebec, but I would also like to remind you that I am the first Vice-President of the Canadian Federation of Agriculture. We have had very intense discussions with the federation in the last few weeks and it would seem that there is widespread unanimity amongst Canadian producers with respect to the issues we are dealing with, in particular the creation of an agricultural policy framework.

    We have tabled a brief which I will not read. Instead, I will speak for about 10 minutes. Then I would be pleased to answer your questions.

    To begin, you may remember that for a long time, beginning with the time Mr. Goodale was minister, and now with Mr. Vanclief, every time I met with the federal Minister of Agriculture, I recommended the creation of the first genuine national agricultural policy. This idea was well received by the Minister of Agriculture, Mr. Vanclief, and it was developed over many years, which finally led to the meeting of provincial ministers of agriculture and the federal minister in Whitehorse, in June 2001.

    The idea was to stop creating Canadian programs hastily conceived in response to a crisis, programs conceived at the last minute without the full knowledge of farmers. The creation of the first genuine Canadian agricultural policy was, in the eyes of farmers, a good thing per se, and I think that this represented an extraordinary achievement on the part of the Minister of Agriculture, because it set a precedent with regard to an integrated Canadian agricultural policy.

    A lot of demands were made in Whitehorse and two words were included in the Whitehorse agreement to respond to the representations made by farmers and provincial ministers. The agreement would be carried out in "partnership"—this is the word that was used—with Canadian farmers and the provinces. Also, the agreement would be "flexible". This meant that the provinces had a certain amount of flexibility to get involved if they so wished. We were pleased to see that these two words were included in the agreement, but believe me, since June 2001, the idea of "partnership" never came about. The minister wants to implement the agricultural policy framework in a few days, but there is still no flexibility.

    Over the last few weeks, I met with dozens, hundreds, thousands of Quebec farmers, and several hundred others from across the country. I always asked them the same question: Do you realize that on March 31 of this year the NISA program will end? Very few Canadian farmers—in fact, none—were aware that the program would cease to exist on March 31. I then asked them whether they knew about the new program which would come into effect on April 1^st. Again, very few producers—in fact, none—knew about the program which will be implemented on April 1 of this year.

    This could be reason enough, may I say, to ask for what is contained in our conclusion, namely that a necessary and reasonable extension be granted to finalize the program in order to make it acceptable to Canadian farmers, and to give them enough time to find out about the new changes.

    Throughout the same period, over the last few years, we basically did the same thing in Quebec. We tried to get the Quebec government to understand that we needed a strategic framework or agricultural policy for Quebec and we finally got what we wanted. The Government of Quebec committed itself for seven years, with the creation of the Financière agricole du Québec, to providing security for farmers' investments for their day-to-day operations. One of the objectives of Quebec's agricultural policy was to bring it in line with federal programs as much as possible. Therefore, we had a very specific objective, specifically with regard to NISA.

Á  (1115)  

    Quebec has developed a program which in French is called the CSRA, the Compte de stabilisation du revenu agricole, which is almost a copy, with a few adjustments, of NISA.

    You will understand that in the context of discussions with the federal government, I knew, as spokesperson for Quebec's farmers, that NISA, which was a model for our program, would cease to exist on April 1^st of this year, and that this would imperil Quebec's own programs. So, last week we asked the Quebec minister to suspend the application of the CSRA in Quebec, since no one knew what lay ahead, because the NISA program had ended, or will disappear next week or on the weekend, that is, on March 31; it will be no more.

    Please understand that this movement—which explains why we are appearing before the Standing Committee on Agriculture and Agri-food today—or this feeling of uncertainty is the exact opposite of what we wanted to achieve by creating a new Canadian agricultural policy framework. The agricultural policy framework is basically the same thing as the American Farm Bill which American representatives and farmers refer to. It is also the same thing as the CAP (Common Agricultural Policy) in Europe, which garners enthusiastic reactions from farmers every time it is referred to or when improvements are announced. This is important because farming is not an easy way of life.

    In Canada, unfortunately, on April 1^st, the agricultural policy framework will be launched, and it will unfortunately not be greeted with the enthusiasm the first such policy should receive. On the contrary, it has fostered a greater sense of insecurity in the farming community and in the financial community which, today, must guarantee lines of credit for the planting season. People don't know what to think about this new program because they have no idea how it will work.

    Even this week, the minister recognized that it was necessary to conduct neutral third party simulations outside of the Department of Agriculture and Agri-food Canada. So here we are, just a few days from implementation, and we still need to conduct simulations to convince ourselves that the program will be beneficial, or that it will at least not be worse than NISA. i That program was not ideal for us because we felt that NISA needed changes or improvements, since farmers are desperate for help. They need help. The net income of Canadian farmers just isn't there.

    I have appended to our brief, which we have tabled, a graph which clearly illustrates agricultural trends in Canada over the last 10 years. We were told to develop the agricultural sector, processors were asked to grow their business, and we increased the export of agricultural and agrifood products from Canada. That is represented by the upper curve. As you can see, growth in that area is almost exponential, whereas the lower curve tells a different story. Despite our best efforts, the lower curve shows that farmers' net incomes did not follow that trend.

    There is no question that we are willing to work on behalf of all Canadians, but we need to get something in return, and unfortunately farmers' net revenues are disastrously low. We cannot even compare ourselves to Americans or Europeans in terms of support for our farmers.

    Every chance I get, I tell people that Canadian farmers can compete with the best of them throughout the world in terms of yield per hectare, in terms of the size of sows' litters, in terms of food conversion, in terms of the beef gain rate, in terms of the number of hectolitres of milk produced by our dairy cows. But we cannot compete against other governments.

    That's your job and that is why we are here today. We are begging you to waste no time in pushing decision-makers to give us the same tools as those made available to our counterparts in other countries, so that we can compete with them. At the very least, we think it will take another couple of months, at least until next fall, before the finishing touches are put on the new income security program for Canadian farmers. Then, over the next fall and winter, farmers could learn about the new program so that, by April 2004, we end up with a program which, we hope, will garner the enthusiastic support of most Canadian farmers.

Á  (1120)  

    I would be remiss if I did not share with you some of the feedback we received. Some people are in fact claiming that the reason we are asking for a delay or an extension is because we are against the creation of a Canadian agricultural policy. As it now stands, the Canadian agricultural policy has five parts. Four of them are not problematic. They are renewal, research, wholesomeness and the environment. We don't object to the minister going ahead with these four elements of the Canadian agricultural policy framework. But the last element, the fifth one, which deals with the issue of risk management, if that goes ahead—at this point, it seems that will happen, since no one is compromising and we are headed directly into a brick wall— will be a major problem. And there is no question that farmers will not be able to come on board.

    So, we are asking you to revisit the issue and to remind the minister and his officials as well—since we feel they are also important players—that we need an extension to finalize the program by the spring of 2004.

    Thank you.

Á  (1125)  

[English]

    The Chair: Thank you, Mr. Pellerin.

    We'll move to the Ontario Corn Producers' Association. Mr. Mat Menich is going to present on their behalf, I believe. You have 10 minutes.

    Mr. Mat Menich (President, Ontario Corn Producers' Association): Thank you, and I'd just like to say thanks for having us here to make our presentation.

    It will be a two-part presentation. Don McCabe will look after environmental issues, and Brian Doidge will take up the risk management pillar of that. I'll turn it over to Don to do that part of the presentation.

    Mr. Don McCabe (Director, Ontario Corn Producers' Association): Thank you, Mr. Chair. Thank you, committee, for the opportunity.

    It's my job this morning to touch on the other four pillars, other than business risk management.

    First of all, I would like to thank the government for the fact that the other four pillars are major impacts on the agricultural industry, and you have seen fit to make the financial resources to those areas allocation-based--by province, by market receipt--and not demand-driven like business risk management.

    Each of these pillars has targets and indicators. This is very important lingo to hang on to as we move through this.

    Our concern is with the targets and indicators and what levels they're going to be set at, and that they're a separate administration at the provincial and federal levels in the bilateral agreements within all these pillars.

    We would like to know where the cost-benefit analysis is on the programs that are being launched and where the producer is going to end up at the end of the day with regard to some of these other opportunities.

    Some of the comments I have personally received from Agriculture Canada staff at this point are that most of these programs are still in the development stages and they'd really like a little more time to make sure they have them done right.

    Very quickly, to move through food safety, one of the goals and objectives underneath this pillar is an 80% traceability of domestic foods. That is totally understood for meat and hort. I can see how that can move very quickly. For grains and oilseeds, though, it's very much a concern. When corn can end up in 2,500 items in a 10,000-item grocery store, that makes traceability a very large issue for us.

    We're also talking only about a domestic market here. Fifty per cent of our food in Canada now is imported. What measures will be used to ensure we're not trying to brand Canada out of the marketplace for the long term just for food safety?

    In the renewal area, within the Ontario plan we've had access to, we see the federal government and Ontario will jointly set up an agricultural management institute that will be specific to business risk management. The federal aspect will have farm business service, skills development initiatives, and agricultural enterprise programs associated with it.

    I have to question what part of private sector infringement is necessary here when business risk management aspects will already be covered by accountants or other hedging tools that are already available to producers. We don't know enough about this pillar yet to see if there's added value coming here, and again, where the cost-benefit analysis lies.

    Under the science and innovation pillar, we see lots of opportunity to make sure we have the necessary tools for the future, but right now we see a lot of program names and not a lot of details, again. We have to make sure there's research money there to make sure we're going to be able to bring the best global research to Canada to make the impact that's needed for producers.

    Finally, in the environment area, there are a lot of baseline issues here, and this is where the targets and indicators become most important. Within the framework agreement, there are clauses that identify the various indicators the government wants to look at to feed back to a national agricultural health analysis reporting program, which I understand is going to be $50 million. If you are truly cynical, you might believe this is strictly an exercise by bureaucrats to ensure they're going to have the opportunity to feed back to the public domain to ensure the Auditor General doesn't give them another nasty environmental report down the road.

    I do not see where there's enough money within the environment program to ensure we don't have just targeted dollars headed for targeted areas of the provinces, as opposed to making sure that all producers can enrich their opportunities through environmental programs.

    One of those examples is within the green cover program. It was made known to this committee on December 3 of last year that greenhouse gas credits that would be accrued under that program would go to the government because the government will be making a one-time payment of $45 or $100 per acre in the west, depending on whether it's native grasses or not, for a 10-year lease. It's kind of hard to rent land for $10 an acre.

    The programs do not pick up credit for early action. The green plan that was put in place by government in the early nineties was an excellent program that allowed all producers to participate. We do not see those same initiatives coming under the environment pillar, nor where we're going to be able to maximize opportunities here.

Á  (1130)  

    Some of the baselines that have been established within this program are explicitly stated within clauses. There's a zero accumulation of carbon in the year 2000. That is very nerve-racking for folks that may be following Kyoto. You're attempting to take out credit for the action there again, when Environment Canada has proven that we're at 7.3 megatonnes of carbon dioxide emissions alone in the year 1990. We need to make sure we have the appropriate baselines for not only greenhouse gases but all areas.

    We're very concerned about overlap between environment and food safety, and we need to ensure that for the future we have established the baselines in a proper manner right now. We cannot do this on models and assumptions.

    I'd be more than happy to discuss possible solutions to this in the question period. At this point I'd like to turn it over to my colleague, Brian Doidge.

    Mr. Brian Doidge (Economist and Market Analyst, Ontario Corn Producers' Association): Thanks, Don.

    On the business risk management pillar, I will move very quickly. The corn producers have four basic concerns. One is underfunding; the second is the type and level of support provided; the third is the trade implications of the business risk management pillar; and the fourth is the inequity of treatment for the grain and oilseeds sector under the agricultural policy framework.

    Under underfunding, we fully recognize that the driving factor or force behind the government's review of safety nets, and indeed the development of the safety net package as proposed, was not income support but was stabilization. We think the growers look at it from a bigger perspective, which includes stabilization as well as support.

    I would refer you to recommendation 20 of the fifth report of the House of Commons Standing Committee on Agriculture and Agri-food, The Future Role of the Government in Agriculture. It recommended that:

The government provide $1.3 billion a year in bridge funding for the sectors most affected by the agricultural subsidies in other countries--

    --and I emphasize--

--for as long as those subsidies unduly reduce the price of Canadian agricultural commodities.

    I would refer you to recommendation 3 of the Prime Minister's caucus task force on future opportunities in farming. The Speller task force recommended that:

The federal government, at a minimum, maintain farm safety net funding at its current level for the next five years to give certainty to growers. The government must also recognize that--

    --and I emphasize--

--in the short term, bridge funding will be required and in some cases will need to be enhanced to respond to the adverse and unpredictable effects of weather, markets and income fluctuations due to factors beyond the farmer's control.

    Ladies and gentlemen, we operate in a North American trading bloc. The United States is our single largest partner. Agricultural policy in the United States impacts our ability to make an income and indeed a return.

    In the United States, agriculture is 1.4% of GDP, but they provide support to 1.07%. In Mexico, agriculture is 4.4% of GDP; support provided is 1.1%. In Canada, agriculture is 2.5% of the GDP, but support provided is 0.78%. We cannot continue to exist on an unlevel playing field. You can resolve that.

    The resolution the OCPA is suggesting is that Canada must provide support for agriculture equivalent to its NAFTA trading partners of approximately 1% of GDP. Our suggestion is therefore to extend the $1.9 billion in annual safety net funding as proposed under the APF and extend the transition programming of $1 billion annually--$600 million federally, and if all the provinces match, it's another $400 million--for companion, counter-cyclical offset programs that would sunset, or discontinue, when the Doha negotiations are successful in reducing agricultural subsidy supports in North America.

    As far as income support, the OCPA maintains that any combination of new safety net programs in the APF must provide more, not less, support than the existing sweep of safety net programs, because the primary cause of dysfunction in our sector is the artificial depression of prices and the resultant financial stress in the grain and oilseeds sector. That will continue unabated until 2007, under the U.S. Farm Bill, yet the agricultural policy framework ignores income support. That's an unsustainable proposition, from our viewpoint.

    The OCPA, therefore, is suggesting our resolution to the issue. In conjunction with the National Safety Net Technical Advisory Committee, the National Safety Net Advisory Committee itself, and the Grain Growers of Canada, we developed an alternative design for NISA that mitigated many of the concerns addressed by the federal review of safety nets in terms of payments not being taken when triggered, the size of the accounts, and so forth.

    We refer to our design for a new NISA as a one, two, three NISA. It consists of three funds. Funds one and two provide income stabilization. Fund three provides disaster coverage or income support.

    Our proposition is that this is far more trade-friendly, maintains some of the good aspects of NISA, and yet resolves some of the issues identified in the safety net review.

    The third issue is trade implications. Since Canada is heavily trade-dependent, and especially dependent on trade with our NAFTA partners, we must be concerned with the application of U.S. trade law. It makes sense, therefore, in our viewpoint, that Canada should adjust and support its domestic support in compliance with U.S. propositions.

Á  (1135)  

    In our resolution, OCPA has enquired of Ag Canada why Canada is unilaterally proposing to eliminate all amber support, whereas our primary NAFTA trading partner is proposing only to reduce amber support to 5% of agriculture production, a proposal that would permit an almost tripling of actual amber support within Canada.

    As far as trade equity or inequity of treatment of the grain and oilseeds sector is concerned, we are very disturbed that Ag Canada in particular seems to be doing away with companion programming. They refer back to the agriculture policy framework disallowing companion programming, but they recognize that supply management constitutes a risk management tool under clause 17.1. They reject companion programming based on clause 16.1, and I would ask you to consider whether supply management qualifies as a companion program under this criteria.

    For example, supply management fails to meet the following criteria, in our view: clause 16.1.1 minimizing countervail risk; clause 16.1.2 minimizing the distortion of farmers' production and marketing decisions; clause 16.1.5 being relatively simple to administer and easily understandable; and clause 16.1.6 minimizing the capitalization of program benefits. Those factors are used to exclude companion programs such as market revenue insurance in Ontario.

    Our resolution is not calling for the dismantling of supply management in Canada; we are supportive of this regulated marketing system, but we think it's unconscionable to deny companion programs for one sector but permit the continuation of supply management for another.

    Thank you.

    The Chair: Thank you very much, Mr. Doidge.

    We now move to the Western Barley Growers Association. I think Mr. McBain is presenting first--or do you have someone else?

    Mr. Douglas McBain (President, Western Barley Growers Association): I'd like to thank the committee for allowing us to make this presentation.

    I have a couple of corrections to make to our presentation. First, could you add appendix 1 to the end of the first paragraph? And then, under the APF process under risk management, the fifth sentence in the fourth paragraph, could you change “gross” to “production”. Where it says, “We agree with the gross margin basis for both premium and trigger”, it should read “production”.

    The Chair: I'm sorry, what page was that, Mr. McBain?

    Mr. Douglas McBain: It's page 3, under 1, where it says “risk management”.

    Mr. Armstrong will be doing a presentation on the risk management process, and then I'll follow up with the other four planks.

    The Chair: Mr. Armstrong, please.

    Mr. Ed Armstrong (Director, Western Barley Growers Association): Thank you, Mr. Chairman. We appreciate the opportunity of being asked to come here today. The Western Barley Growers Association has been involved for over 20 years in this whole safety net complex. We have some strong positions on this, that any safety net program has to be whole farm.

    The whole risk management package has to be voluntary, complementary, and linked as closely as possible, but we must not merge programs. We must allow the farmer the flexibility to put together a program risk management package for his or her farm.

    We believe the government should be involved in monitoring the safety net program on a regular basis.

    We also believe farmers and government have to be fiscally responsible and to achieve a program package that will be effective in addressing need as well as government efficiencies.

    The big issue is, in 1992, the western barley growers who took the initiative after GRIP and NISA were implemented--and I might add that the revenue program Ontario has was a program that we were pushing for in the west but never got--decided that something had to be done with the safety net issue. We developed criteria as outlined in appendix A and appendix 1. We've been very heavy in this thing, which resulted in the FIDP program.

    In the FIDP program, our whole intent was to replace NISA, and really what we did, strictly by default, was actually to end up fixing NISA. Then, in 1998, we had the review process, in which we changed the offsets. We had linkage, the NISA program fund to an FIDP, with the same money, full offsets. We then changed it to only one year of claim. The year of claim was the offset. Really, our intent was at that time--and our position is very strong--that we were actually going to destroy the NISA program, which in fact we have done.

    The western barley growers were very concerned last November at how the process was going, so we got to work. On January 6 and 7, in Nisku, we were able to pull off a workshop--and I refer you to appendix 3--at which we had the Alberta government, the Saskatchewan government, and the B.C. government. The Manitoba government chose not to attend. We also had the federal government and approximately 10 farmers. We put together criteria that basically reinforced the criteria that we originally developed in 1992 to 1994, which criteria, I might add, is also flavoured in the federal-provincial safety net paper of January 2002, from the Whitehorse agreement.

    Therefore, the program design we came up with at Nisku is the one we have on the table today. The only thing is, it's raised to 100% of margin, which we really disagree with. We think it should be put back to 95%--or better yet, it should be back to the 90%, because this is really going to raise conflict, number one, with trade issues; and number two, it is really going to raise havoc with the crop insurance programs, because what we've done here now is to make two programs very hostile, one to the other, and linkage is going to be very, very difficult. So we recommend that the government really look at this 100%. We should back it off to 95%, and better yet, 90%, because of the trade and the crop insurance linkages.

    The other thing is, on delaying the whole process for another year, as far as we're concerned, we've been at this thing for a year, and the Western Barley Growers Association believes, with Lyle Vanclief, it's time to get this thing going and move on. The reason we agree with a deadline is because we're not reinventing a new program; we are really refining the present program.

    The proposed program, as we see it, is basically the same as the program we had in Alberta from 1995 to 1997--NISA, with full offsets, the FIDP. The NISA fund, too, and FIDP were the same. This was changed, as I stated, and we think all we're basically doing is taking double-dipping out of the program to make it more effective. This is the whole name of the game, and if we look through this thing, that's why we say we're in favour of the production margin.

Á  (1140)  

    The other issue that keeps coming up is affordability. We figure that this is a non-issue, if you have a real look at this program. The way it's tied, you can front-load this thing right up to 100%. Therefore, we addressed the beginning farmer situation and the zero account situation.

    We'd like to strongly suggest that with this program we have to use the LIFO method of inventory calculation. There can be no other. If we want to keep this program so that it's as non-farmable as possible, we have to go to LIFO. Also, we're in full agreement with taking the repairs and label out, because we figure this makes the program more neutral for farm operation, and it will basically remove all moral hazard issues.

    I'll now turn it over to Doug.

Á  (1145)  

    The Chair: Mr. McBain, you have three and a half minutes.

    Mr. Douglas McBain: I'll just quickly go over the rest of the programs. With regard to the environment, our biggest issue is that the programs increase the farmer's bottom line. It has to be sustainable. But there has to be some proof that the farmer is actually going to benefit from each program. If we have to address certain issues in the environment, there should be some return to farmers either by tax credits or land tax reductions or approval that there's a cost benefit for each part of the program. We want to identify that the best management practices that are already being used are recognized as part of the environment program.

    On science and food safety, the government requires all farmers to take certain measures. Then the cost of the program is borne by the farmer. We become more soft financially. If this is the case, we get exploited in favour of cheap food. The genetically modified products have to be allowed to be developed under the guidance and guidelines of the Canadian Food Inspection Agency. We don't need new programs to address novel trade's introduction into the environment.

    On renewal, the farmers will demand the level of expertise and knowledge that will be needed. Failing to allow the market price to function on this issue will result in needed information not being available. We don't want to have a program where social engineering will have a tendency to build upon itself. Thus we end up with a large government bureaucracy.

    In conclusion, the ag policy framework has merit and vision, and we commend the government for leadership. However, the detail of each ingredient has to be worked out, and the program has to be checked against established criteria. The Western Barley Growers Association's position on the ag policy framework process is that without the causes being addressed, as shown in appendix B, we will not fully achieve our objectives and benefits. We're committed to trying to ensure that the ag policy framework does not just become another good idea.

    Thank you.

    The Chair: You stayed within your time limit, and I appreciate that.

    We want to move on. As we've already heard, we've had three groups at the table this morning. We have very diverse views on certain issues, and that's why we've come together to try to sort this out. That's our job.

    We're going to begin with the member from the Alliance, Mr. Hilstrom, with seven minutes of questioning.

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

    The provinces and the federal government signed on to the Whitehorse agreement, and then the farm groups followed up shortly thereafter in support of it. Who would have known that you would have been on such a slippery slope and ended up where we are today where not one of the farm groups is willing to accept this? I understand exactly why you're not willing to accept it, because you don't have the details of how this is actually going to work out.

    I want to deal first, Mr. Pellerin, with the issue of the request for a one-year extension. That recommendation to this committee is going to fall on deaf ears because we've already dealt with that. We had a motion in here the other day that the government members voted down. They said they don't support a one-year extension. They said they're with the government, which they should be since they're part of the government. It's going to be brought in on April 1.

    The agriculture minister has made the argument that every one of the farm groups should agree and the provinces should sign on because the farmers do not have to apply for these new 2003 programs until 2004. Do you accept that that is a good enough reason to sign on and work out the details between now and then? The issue, of course, is that farmers need some surety in financing their farming operations for this year.

    I would ask Monsieur Pellerin to reply first and then the Ontario Corn Producers' Association.

Á  (1150)  

    Mr. Laurent Pellerin: No, we didn't recognize that argument. There is no point. We don't want to accept that type of argument.

    Because it's linked with income tax, this program already starts from January 1. Nobody is aware of that. You don't know if you will be in the commodity where the price will crash during the next year. You don't know if you are in a region now where the climate conditions will be a catastrophe, a disaster. You don't know that now.

    The minister is saying it's not a problem. He will choose after the fact, if you want to have the program or not.

    Mr. Howard Hilstrom: Does the Corn Producers' Association believe they will be able to work the details out on the safety net and on the other aspects?

    Mr. McCabe said many times that there was not sufficient detail on the other four pillars, in addition to the safety net pillars.

    Do you think this is the way to go?

    Mr. Brian Doidge: No. We agreed with Mr. Pellerin that not only are there logistical problems, financial problems, and tax year-end implications, but our basic proposition is also that the program, as it's being proposed, is flawed. We do not believe in signing the agreement as it is.

    Mr. Howard Hilstrom: Let's quickly hear from the Barley Growers Association.

    Mr. Ed Armstrong: As we pointed out, we're not inventing a new program. If you go back and look at the FIDP-NISA program, we operated in Alberta for 1995, 1996, and 1997, and we're only just really refining it. What we're actually doing is taking out the error we made in 1998. I think we have the makings of a good program.

    Mr. Howard Hilstrom: Okay. So that's on the safety net side, but you believe you have had enough details on the other four pillars to say that you also believe they're okay.

    Mr. Ed Armstrong: On the environmental one, with my involvement with the Alberta government and with what I get from the Alberta government that they are going to do, it looks like it's going to tie in to the risk management side.

    Mr. Howard Hilstrom: You're accepting a little on blind faith there that the governments are going to do the right thing, which is fine.

    I'd like to talk about this whole issue of the farm groups not being mostly against this program being assigned so quickly. They would like to have the details first.

    I'd like to feel out Mr. Doidge first on this trade business.

    You say that the Ontario Corn Producers' Association supports supply management. Obviously, you then support the Canadian Wheat Board. Is that true?

    Mr. Brian Doidge: The Corn Producers' Association position is that we support those positions that work for the commodities involved. We support supply management. We think it has worked well for those commodity groups involved. As far as the Canadian Wheat Board is concerned, for those farmers interested in pool and agency marketing, we support that. Our position is, we're in favour of market choice. That does not mean the elimination of the Canadian Wheat Board. We're in favour of offering a choice to those farmers who wish to do otherwise.

    Mr. Howard Hilstrom: The reason I ask that question is because Mr. Vanclief says that Canada is not willing to move off its position regarding the Wheat Board and supply management. The other countries in Europe and in other places are saying they don't want to move off their positions.

    Are you saying it would be better that we do nothing to get these trade talks going, by not moving at all on our position? If every country does that, these talks won't get going. It would seem to me that it would be more important for the corn producers to have these trade talks get started, would it not? And that's going to require some compromise, will it not?

    Mr. Brian Doidge: I think a correct compromise is going to be required. However, I would offer up to you that these trade talks are doomed. I do not see or hold out much chance for success. I think the main participants, in particular the EU and the U.S., are maintaining their entrenched position. The developing nations have made it very clear that there's going to be no agreement on any component of the Doha Round WTO negotiations without an agreement on agriculture. And from the perspective of the Ontario Corn Producers' Association, we do not hold out a lot of hope for success at the WTO.

    The proposition, therefore, is this. If we cannot get meaningful reform in domestic subsidies into the United States, if we cannot get meaningful reform and an increase into market access, and if we cannot get meaningful reform into export subsidies, what is the proposition of the current government until we get the--

Á  (1155)  

    Mr. Howard Hilstrom: How much of the Ontario corn production gets exported?

    Mr. Brian Doidge: In bulk grain commodities we export less than 10%. In terms of products produced, we export a lot. We export a lot of corn sweetener. We export a lot of meal and gluten feeds. We are not a bulk commodity exporter--we have never wanted to be. In fact, our primary goal for the last 10 years has been to expand and increase domestic industrial processing of corn to the extent that we now probably lead the world, as a percentage of our crop. About 39% of our crop is processed through industrial processing, compared to 19% in the United States.

    Mr. Howard Hilstrom: Yes, and the trade issues aren't that important then? Is that it?

    The Chair: Mr. Hilstrom, you'll get time in the next round.

    Mr. Plamondon, for seven minutes.

[Translation]

    Mr. Louis Plamondon (Bas-Richelieu—Nicolet—Bécancour, BQ): Thank you, Mr. Chairman.

    My question is for Mr. Pellerin. For a while, on Parliament Hill and also on the committee, people said that the only holdout was Quebec. It was as if all the other provinces had signed on and everyone was happy except for Quebec, and that was because of the way the Financière agricole du Québec managed things, because it just did not fit into the picture and was not in line with national standards. But based on what you said a little earlier, it would seem that you consulted widely across the country and that very few of the associations you consulted were happy with the agreement which will be implemented on April 1.

    I might add that no opposition party on this committee supports it and that the committee chairman sent out a letter last week stating that the six Liberal members of the committee, who represent the farm sector within the Liberal caucus, supported the letter. So, the Liberals are against the immediate implementation of the agreement, which they want to delay for a year. Opposition members also oppose the agreement and you have said that many associations also reject it.

    Do you feel that the federal minister is living on another planet, that he is isolated and is alone in thinking that the agreement should be implemented? In the paper yesterday, he said that he would probably strike an independent committee which would report to him in June. So, he will go ahead with the agreement on April 1 and will receive the report in June or July. Isn't he putting the cart before the horse? What do you think about this?

    Mr. Laurent Pellerin: You are right, there is something wrong with this picture. Twenty-two Canadian producers' associations signed and sent a letter to Mr. Chrétien indicating their unhappiness with the current state of affairs. Further, the current government received the report from the committee chaired by Mr. Speller, which gives a much clearer picture of the concerns of Canada's farmers, but it is as if the government never even received it.

    May I remind you that Quebec has still not signed the general agreement, nor has Prince Edward Island. Saskatchewan signed it about 10 days ago, but that was only the general agreement. No province has signed the implementation agreement for April 1^st, although we are just days away. That is surely symptomatic.

    I know that the Canadian Federation of Agriculture sent you the letter signed by the 22 organizations, which was also sent to Mr. Chrétien. I think you also received Ms. Johns' letter which was addressed to Mr. Vanclief. If Quebec's Minister of Agriculture, Fisheries and Food had spoken to the federal Minister of Agriculture and Agri-food on that tone, I am sure it would have triggered a constitutional crisis, but coming from the Minister of Agriculture and Agri-food of Ontario, it was greatly appreciated. It was clear.

    The National Advisory Committee on Income Protection Programs and the Income Security Committee unanimously recommended that the minister delay by one year the implementation of his new program. The two committees said that the new program would not be manageable by April 1. So, it is not only Quebec nor a small group of producers who share this point of view; it is almost everyone.

    However, I do understand what the barley producers, especially those from Alberta, have said this morning, which is that the program jives fairly well with the one that already exists in Alberta. Good for them, but let me assure you that it does not jive with Ontario's program, nor with Quebec's, nor with any other one in Canada.

  (1200)  

    Mr. Louis Plamondon: Thank you, Mr. Pellerin. What did you think of the Quebec government's decision to suspend the application of the CSRA? Was that a good thing?

    Mr. Laurent Pellerin: It was a good thing. We asked the minister ourselves to delay the implementation of the CSRA. Please understand that after all the work we did and after spending two and a half years in Quebec on the development of a program similar to NISA to meet Canadian requirements, and after having worked hand in hand with the Quebec government for seven years, it is as if the rug had been pulled out from under our feet. Now we are being told that the goal we had been trying to reach, namely NISA, will cease to exist on April 1^st of this year.

    My colleagues here have called it NISA and they use the same name when talking about the new program. But the new program has nothing in common with NISA; rather, it is an emergency program with premiums. That is how it should be designated and that is how it works. It's an emergency program with premiums. There are no more individual accounts, there are no more up-front entry contributions, there are no more gross margin triggers. It's a new program which has nothing to do with NISA. Under the former program, a farmer had to pay $6,000 in premiums to protect a $100,000 margin. But under the new program, the premium will be $24,000 for the same amount.

    Apparently the new program will do more. That's not surprising, if each farmer has to pay $24,000 instead of $6,000. Amounts will increase because of the money paid by farmers; it won't be because of the government contribution, because the government envelope, as the representatives from Ontario said, is too small and, furthermore, its contribution will be made upon request under the new program, which means that it will be even less adequate.

    Mr. Louis Plamondon: Mr. Pellerin, I would like to know what you think about supply management.

    Several producers are concerned, especially since Mr. Harbinson presented a report to the WTO in Tokyo, which recommended decreasing tariffs by almost half. Canada said it opposed this position, but it has not officially rejected it.

    Would you like the Canadian government to make a very official announcement stating, first, that it rejects Mr. Harbinson's position and, second, that it will never sign an agreement which would in any way weaken supply management?

    Mr. Laurent Pellerin: We have just come from the annual assembly of the Canadian Federation of Agriculture. Not only Quebec farmers, but also farmers across the country, have asked the Canadian government to reject that report and not to use it as the basis for discussions. The report is too far from Canadian farmers' concerns to serve as a starting point.

    We have also asked the federal minister, Mr. Vanclief, to send a signal to farmers whose productions are subject to quotas. A greater number of processed chickens are being let in, as well as higher numbers of hatching eggs, and blends which do not respect the spirit of entry tariffs, as is the case for milk, for instance, and butter oil and sugar blends, whereas the United States has imposed tariffs on our wheat and lumber, though we never initiated any countermeasures.

    So, I hope that one day, the government will send us a signal indicating that it is working on behalf of Canadian farmers.

[English]

    The Chair: Thank you, Mr. Pellerin. Your time has expired. There will be another round.

    Before we go further, I just want to be clear for the record that this committee did forward a letter to the minister a week or a week and a half ago indicating that we wanted an extension of time. So basically we're talking about fiscal year 2003-04. Some are saying one year, but let's hope for an early achievement in finalizing that date, rather than.... Anyhow, we have done that, so it's unfair to say that we've turned this down.

    This is just for the record, basically because it was--

  (1205)  

    Mr. Laurent Pellerin: We saw the letter and appreciate it. We think that half of the work is done by that letter.

    The Chair: Thank you.

    For those who wish to have a copy of the letter, this committee is prepared to give it to you.

    Mr. Howard Hilstrom: I have a point of order, Mr. Chairman. I'd like to apologize for leaving an unclear impression by bringing that up.

    The Chair: We accept the honourable member's apology.

    We will now move on to the member from Lambton--Kent--Middlesex, from the government side, Mrs. Ur, for seven minutes.

    Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): I appreciate that, Mr. Hilstrom. I have to say that this committee works together rather well, even though we come from different political venues. It's nice to get a little jab in every now and then, but we are fairly friendly.

    I found this very interesting this morning--not that I will ever aspire to being a minister. Now I know why I would never want to be a minister of agriculture, after hearing this presentation here this morning. There can be difficulties with various sectors agreeing on the APF--a few agreeing and many more not agreeing--but when we have presenters here who are basically in the same sector yet have different viewpoints, now I know why my hair would be grey, to say the least. But all of that aside, I certainly appreciate your presentations and your various viewpoints.

    I was skimming through the report of the Western Barley Growers Association, where you indicated that farmers were setting up reserves to give bankers some assurance that farmers would be able to meet all of their commitments. Have you discussed this with your banking community and whether or not they like the program? Have you had any interaction on that indicating whether or not they feel this APF is going to be a good tool or safety net for them to rely on?

    Mr. Ed Armstrong: I have checked with my own bank manager.

    But as for getting the APF right out of it.... We, the barley growers, have had a person up from the States, Roy Ferguson, to help with financial management of agriculture, or to help the farm stay in a good financial position. This only makes good common sense. I guess that's why we say that putting this money aside is just plain good, common business sense. I can't see any bank manager, my own included...he said no, we definitely would lend money to the farmer. The difference in the cost of this is really the difference between the money the farmer is going to get on deposit versus the interest. It just makes good sense.

    Mrs. Rose-Marie Ur: Correct me if I'm wrong, but you also stated that you are not in favour of labour being included in machinery repair. You feel it should be left out, bringing it down from 100% to 90%. Can you expand on that?

    Mr. Ed Armstrong: I was very involved in setting up the FIDP program in Alberta. We wanted this program to be as neutral as possible for the whole farm operation; we didn't want to favour one operation over the other operation, but to be as neutral as possible. So, really, this is one area that we erred in. We should have had it out, because what we're doing here is we're favouring the farmer who is running old equipment. The government is helping him with repairs, versus a farmer who is running new equipment. This is why it should be out.

    Labour issues should be out as well. We had deliberately left out the non-arm's length to protect or to benefit the family farm. However, they didn't see it as such. So as far as I'm concerned, labour should be right out as well, because with this can work the program.

    So we're basically taking the moral hazard issue right out of the program. Every farmer is on the same, equal basis.

    Mrs. Rose-Marie Ur: I would like a response on that from the Ontario sector, Mr. Doidge. I've heard different presentations from farm groups in southwestern Ontario, but that is not the feeling presented by those particular groups. What is your response to that?

  (1210)  

    Mr. Brian Doidge: Where we're at is we don't believe the new NISA program, based on a production margin, will provide equivalent support to the existing suite of safety net programs. So in the bigger picture, we don't like what's going on.

    As far as the details of what should be in and out of the production margin, our official position is that we don't think it's right that legitimate expenses accrued in a farm operation should be excluded. From a grain and oilseeds perspective, we're concerned in particular about the exclusion of machinery repair. It does not make a lot of sense to us. Machinery repair is a legitimate expense incurred when, for example, a combine breaks down during harvest time. In the government's proposition, it's a discretionary expenditure, which the grower can or cannot make. This is illogical to us. It's an expense that the grower has incurred, so our position is that it should be included as a legitimate expense of the business.

    I back up to my statement that we're just talking about details of a program that, in the bigger picture, is flawed from the get-go. So we don't waste a lot of time over what's in and what's out. As it's designed, the program will not work.

    Mrs. Rose-Marie Ur: Let's move to the environmental pillar and the carbon credits for our farming community. What is your stand on that, Mr. McBain? You alluded to it a little bit in your presentation, but do you feel agriculture will get a fair break, supposedly, if it goes ahead as they indicate?

    Mr. Douglas McBain: Well, at the time we wrote this, we understood that the federal government claimed the rights to the carbon credits of 2008, but I understand they haven't. It's not a set time yet; they're still negotiating who's going to get what for what.

    I have reservations about the value of the entire Kyoto program in that the benefits to agriculture may be outweighed by the imposition of carbon taxes on other parts of the agricultural program. We've heard various stories of how much carbon can be produced by soil under different conditions, so whatever benefit there is going to be from a carbon credit, if it's even available to be traded or sold, is limited. Again, the whole program is still being developed and is under question.

    Mrs. Rose-Marie Ur: Is there a lot of no-till out in your part of the woods? I'm not familiar with it.

    Mr. Douglas McBain: Yes.

    Mrs. Rose-Marie Ur: If it were part of the program, where would you want it to be most advantageous to the farming community? Where would you want it to start so it would be most beneficial to the producer, and in what year?

    Mr. Douglas McBain: It would be 1990.

    Mrs. Rose-Marie Ur: Mr. McCabe, you're an expert on the environment. Would you like to speak on the carbon credits for the agriculture community?

    Mr. Don McCabe: Thank you for the opportunity.

    I believe the government right now has established a ceiling price of $15 per tonne as carbon credits. Under the green cover program, as one component of that program, they are looking to have marginal cropland converted to permanent grass. Suppose that opportunity were to accrue under model data from Ag Canada given the soil types that are out there. It is possible under model data to get to two tonnes crude an acre per year under that program. Using a very low value, then, of 0.5--because if this is marginal land, maybe it doesn't rain there--0.5 over 10 years makes for 5 tonnes; with 5 tonnes at $15 a tonne, the government may then be able to sell that off to a business that needs it, such as a coal-fired generating plant. They've just got $75 back for an initial investment of $45 in total payment back at the start of the program.

    They've also not allowed for credit for early action on other activities or the 1990 baseline my colleague just referred to as being of the utmost importance, and recognition of the actions it takes to maintain that is also of the utmost importance.

    The Chair: We'll move to Mr. Anderson.

    Mr. David Anderson (Cypress Hills—Grasslands, Canadian Alliance): Mr. McCabe, I just wanted to follow up on that a bit. I saw some material that had been done in Saskatchewan on carbon credits, and they were talking about 1.2 to 1.3 tonnes per year if land is seeded back to forage, diminishing to zero by the seventh or eighth year. It sounds as if your figures are high there in terms of what the farmer's return would be. Do they sound accurate, or do you think yours are?

  (1215)  

    Mr. Don McCabe: What I just gave you, sir, was the government's return, not the farmer's. As to the farmer's return from the marketplace, the low-hanging fruit, as it is being referred to right now for what's being offered out there, is $2 to $3 per tonne on the open domestic trading markets as we know it today. Canada does not have any type of system in place; this all has to be worked out. But it's more important that the farmer be recognized for all commodities on their farm. What they choose to do with them then is their business.

    Mr. David Anderson: I'd like to go back to the trade issue. Howard just started talking about it a bit, and you're of the opinion that the trade talks are going to collapse. It seems that everyone's too comfortable or reasonably satisfied with the situation the way it is now. But one thing is, if they do collapse, our trade situation is not going to improve and it could get far worse. We have things such as the dispute where western Canadian farmers are now paying the price for the challenge to the Canadian Wheat Board, and things are coming up with other trade challenges. Our trade relationship with the United States seems to be deteriorating.

    The supply management group was in here, and they basically said that after the trade challenge New Zealand and the U.S. had launched, they're willing to pull back inside our borders and be content with existing inside Canada. Can your industry do that? Are trade opportunities degrading and diminishing for Canada? I ask all three of you that.

    Mr. Brian Doidge: We'll start off with the question of whether the domestic market is big enough to absorb probable production in Canada. The answer we have for corn is, absolutely. If you look at the potential market for grain-based ethanol in Canada and if you take the climate change targets of 10% ethanol blends in 35% of gasoline by 2012, in Canada that would require about 1.6 billion litres of ethanol, about 600 million of that in Ontario. We currently produce 173 million litres in Ontario, and we import another 110 million. The market is there, the potential is there, and the demand is there. There is enough domestic consumption possibility based on bioproducts, biofuels, and biochemicals in Canada to absorb just about all the carbon you can produce in the form of grains and oilseeds. So the market potential domestically is huge.

    Mr. David Anderson: Presuming you have that government involvement, would that make the industry viable then?

    Mr. Brian Doidge: If there is a business environment the government constructs in Canada that is equivalent across all provinces and is harmonious with the North American business environment, I have no reason to believe Canadian industry and enterprise couldn't or wouldn't compete. But the playing field is not level, for example, in support provided for ethanol in the United States vis-à-vis Canada; it's not equivalent to that of our immediate neighbours south of the border. We have to get the business environment right in North America, and then we can compete.

    Mr. David Anderson: The loss of your value-added industry, then, isn't a concern to you if the trade opportunities degrade?

    Mr. Brian Doidge: No, I never said that. You're saying that.

    Mr. David Anderson: I'm asking the question.

    Mr. Brian Doidge: Our value-added processing industries are extremely important to us. What I'm saying is, there are a whole raft of new value-added processing opportunities offered up for what traditionally have been bulk grain producers right across Canada. I think it is myopic to look only at bulk grain exports as the avenue of the future. We have to look at value-added further processing, both on farm and within the provinces.

    We think the trade negotiations are important, very important. What we're saying is we don't think they're going to be successful. Therefore, we think it's wrong for Ag Canada to say we cannot step up to the plate and support income pending successful outcome of the WTO negotiations. You could be a grandfather 10 times over before that is successful.

    Mr. David Anderson: I'd like to give the other two organizations a chance to answer.

[Translation]

    Mr. Laurent Pellerin: With regard to using farm land as carbon sinks, we feel that at the moment we don't have enough clear indications to recommend that farmers lease out or sell these short-term credits. For now, we think it would be very risky to lease land for 10 years. Indeed, farmers will certainly need the credits for their own cattle-raising and farm equipment operations.

    So, before going ahead with any initiative as regards farmers, we will wait for further information, particularly as regards the commercial aspect of carbon credits. The best thing farmers can do now is just sit and wait.

  (1220)  

[English]

    Mr. Douglas McBain: Our biggest market is the domestic cattle feeding industry and the domestic malt industry. A small percentage of barley is exported as barley, malt, or malt barley, but the trade implications for the cattle industry would be huge to the barley industry. Any restriction at all on the movement of cattle to the United States would have serious and immediate impact on the barley industry.

    The Chair: Mr. Gagnon, you have five minutes.

[Translation]

    Mr. Marcel Gagnon (Champlain, BQ): Thank you, Mr. Chairman.

    I would like to especially welcome the representatives from Quebec who travelled to the committee today, and I hope they will be very successful in their endeavours. Discussions have been going on for a while now and we hope that the minister will change his position. However, to this day, he has hardly budged.

    Last fall in Chicoutimi, farm workers held a demonstration. During—or after—this demonstration, it was announced that four ministers would sit on a committee which would study the whole issue of supply management. They would then issue a report.

    Have you heard of or seen the report? We questioned Mr. Pettigrew about it. He said that the report was in the hands of the four ministers in question, but that it had not yet been made public.

    We are constantly hearing that consultations are being held far and wide; this is probably partly true. I find it rather curious that we have not seen this report yet. I would like to know if you are aware of this situation.

    Mr. Laurent Pellerin: We are aware of this committee's existence and of the report. For several weeks now, we have been asking to see the report. I had not heard anything when I left for Abitibi nor have I since my return. I don't know if the report has been presented.

    Last week, we asked again to see the report and its recommendations. We want to find out as soon as possible whether the work has been completed and what the report's conclusions are, as well as any proposed solutions which could be analyzed and pursued. We were never consulted with regard to the recommendations contained in the report.

    Mr. Marcel Gagnon: For your information, I would like to give notice to the chairman and committee members that I will table a motion in committee within the next 48 hours to demand that the report be tabled with the Committee on Agriculture and Agri-food. We should have the right to see it.

    You more or less explained what consultation represents. I have worked closely with the UPA for many years and I can tell you that in Quebec, we regularly consult with the true stakeholders. When you described the consultations which were held in Quebec, I came to the strange conclusion that the ones held by the minister with regard to the strategic framework were consultations in name only. Of all the organizations you mentioned—and this is true for every region in Canada—almost none of them is happy.

    Before implementing such a program, I would like you to know whether you can confirm that genuine consultations on agriculture were held with farmers.

    Mr. Laurent Pellerin: A consulting company travelled across Canada on a budget of $10 million or $15 million; these were the so-called consultations. Farmers and other organizations—processors were also invited to these consultation meetings—all said the same thing, irrespective of where they were, which is that what was said at the meetings was not reflected in the report, that there was a major discrepancy between the two. People could not identify with the report.

    In the last two weeks, Mr. Vanclief traveled across the country and met with producer groups. But he did not meet with any in Quebec. I had supper with him last week. He did not have the opportunity to present his slides to Quebec farmers, but I am sure that if he had done so, he would have gotten the same reception as in the other Canadian provinces.

    Every meeting held in the other provinces concluded with a letter being sent to the minister on behalf of the producer associations of these provinces. The letter stated that the situation was unacceptable and made the same request we are making of you this morning, namely that the program be finalized and made manageable, that it be improved and implemented no earlier than in the spring of 2004.

    I repeat: why is it that we agree with the conclusions of the Speller report, but that they are not contained in the report of a company which was paid $15 million of taxpayers' money to do its job? In fact, that report is completely different from the Speller report, which reflects views from across the country. Once again, I would like to congratulate Mr. Speller and the people who worked on his committee. They did an excellent job. But as for the rest, we have been left wanting.

  (1225)  

[English]

    The Chair: Your time has expired. We're trying to get everybody on, and then we'll come back to you.

    We'll have Mr. Duplain, parliamentary secretary, for five minutes.

[Translation]

    Mr. Claude Duplain (Portneuf, Lib.): Five minutes is not a long time, Mr. Chairman. I could ask many questions today.

    To begin, Mr. Pellerin, I would like to thank you for being here today and I would like to congratulate you for the job you do, because it is not easy to represent Quebec's farmers. However, you do a good job of it.

    I would like to say many things and counter many arguments, as well as ask many questions, but you came today to present a brief and we are here to listen to your concerns. I will ask you a couple of questions to clarify certain issues. Although I am the parliamentary secretary and represent the minister on the committee, I do not want to launch into any in-depth discussions. This may be hard to do, since we have unveiled a new program and are trying to look towards the future.

    You said that the report has nothing in common with the Speller report. But I think that they are based on the same premise, because one of the main objectives of the Speller report is to have a set, multi-year program with its own budget. The Canadian Agricultural Policy Framework represents a partial response to that idea, which is to have a multi-year program with stable funding, instead of coming up with money every time there is a crisis.

    I think you basically agree with this. I think we also basically agree that it is a good idea to have a pan-Canadian program; you said so yourself a little while ago. We can argue about the consultations. Of course, when the opposition claimed that we did not really hold any consultations in Quebec, I hope it was not referring to the consultations on municipal mergers in that province, but rather to other consultations, even though we were not against the mergers.

    There is an issue with regard to information which bothers me a lot. You said that farmers do not really know when the program will end, but I hope that is not exactly true, because I hope that one of the goals of your association is to inform farmers about programs which are ending, and new ones. However, I know that you do that rather well. So I hope that farmers had some information about when the program would end.

    The agricultural policy framework was basically developed as a pan-Canadian program so that all farmers, big or small, would have access to crisis management. According to my figures, there used to be an unbelievably high number of farmers who were not eligible for coverage or who were not able to get it. But today, according to the figures I was given, every farmer will be covered for crisis management, and that is great.

    There is another positive aspect which should be mentioned, because I look towards the future and want to discuss the problem in order to find a solution. You said yourself that you were in agreement with the first four aspects of crop insurance and that there was only a problem with risk management. I agree with you that it is a sticky problem. When we sometimes talk, we get the feeling that we are far apart despite all of our discussions, but I think they are going well and that there is progress every day.

    Mr. Chairman, five minutes is not long enough.

  (1230)  

[English]

    The Chair: You can continue on, but you're winding down.

[Translation]

    Mr. Claude Duplain: The government also wants answers. But I am getting to my questions; I will only ask a few. I will ask the rest during the second round.

    With regard to the issue of compensation, which was addressed a littler earlier, you said that it should be part of the package because it is important in terms of the margin. Did the minister not just ask the federations what they thought about this issue? Should compensation be included or excluded? Have questions not been asked yet, with no answers forthcoming? I am asking you because I would like to know what the situation is. Mr. Brian Doidge, you talked about this a little earlier.

[English]

    The Chair: Mr. Doidge.

    Mr. Brian Doidge: If I understood the question correctly, you're asking, did the minister receive a list of support or companion programs? Is that what the question is?

    The Chair: I think the question goes to the areas of labour and machinery repairs. This issue has been put forward to a number of people, and no one really wants to respond one way or the other because, I believe, there are some who want it and some who don't. What's your position on that?

    Mr. Brian Doidge: As we told Mr. Vanclief in Belleville, and as I answered Mrs. Ur., the position of the Ontario Corn Producers is that the program design is flawed in the big picture. Worrying about details of whether something is in or out is not going to make it workable.

    The Ontario Corn Producers' position on labour is that it's not a big issue in the production of corn; it is to horticultural crops and things like that. The issue of machinery repairs is a big issue. Our position is that machinery repairs, licensing, and insurance, which are also excluded, are legitimate expenses on a grain and oilseeds farm; therefore, they should be included.

    The Chair: That's the end. In the next round, Mr. Duplain, you will have all the time for questions.

    We'll now move to Mr. Hilstrom, for five minutes.

    Mr. Howard Hilstrom: We've heard plenty of evidence from other presenters that these farm safety net programs aren't going to really keep anybody on the farm, that they may be of some assistance, but the farm has to make money and survive through normal business profit and loss.

    That is why trade is so important. We can't be protectionist. We can't be isolationist. We have to get this WTO on the go.

    Now, my question in regard to the APF pertains to the green cover program. My understanding is it is going to be happening mostly in Saskatchewan, a little bit in Alberta, a little bit in Manitoba, and in some other parts of the country it would be very limited. The millions of acres they intend to sow down to grass and forage is going to be used for the production of cattle, so we'll have a subsidized cattle industry springing up through this green cover program, and the cattle industry is tremendously worried about accusations of being subsidized and the trade implications that would have.

    Mr. McCabe, you're on this environmental thing, this green cover program. I want to know how much concern there is over this trade business and whether or not that subsidy is anything to be worried about.

    Also, could you cover the fact that for those in the designated region where the green cover is going to be done, who will be paid to sow this land down, their production costs are going to be lower than the farmers and ranchers outside the designated region, so we'll have an unfairness arising inside Canada?

    I'd like you to deal with those quickly, Don, and anyone else who sees fit to make a comment, because these are very serious matters. Not everybody can sell inside Canada.

    Mr. Don McCabe: Thank you for the opportunity, sir.

    There's $110 million earmarked for the green cover program over the five-year life of the APF. It will be a national program, with $6 million allotted to B.C.; $15 million to Alberta; $19 million to Saskatchewan; $11 million to Manitoba; $15 million to Ontario; and $9 million to Quebec. The rest is divvied up even into the Northwest Territories. About $30 million of that remains unallocated at this time, and there's another $9 million that I can't account for in the numbers I just recently saw in British Columbia on this program.

    There have been concerns raised by a national environmental advisory committee, which is meeting in the Novatel today on the issues you've raised. Agriculture Canada does say the reason they're giving a one time only payment of either $45 per acre after establishment using whatever species you like or $100 per acre--and I stress these numbers are for the west--if you use native species is that you still have access to the land for hay and grazing.

    I do not know the outcome of any studies that would raise whether there are trade implications or not. The criterion that will be used in the west is that you will require 40 contiguous acres to apply for this type of program, and it will go directly to the landowner. There are also shelter-belt components to this and there will be technical assistance.

    But within a best management practices programming draft document that's been put out, it says funding will not be provided to practices that are considered normal, routine farm practice or if the benefit of the practice is primarily to the producer. They're looking strictly for public sector input to bring this back on all of these particular programs, and there are definite linkages between green cover and best management practices that have yet to be resolved at this time, according to Agriculture Canada officials.

  (1235)  

    Mr. Howard Hilstrom: I'm not worrying about trade internally, inside this country. I'm worried about production distorting government policy and government funding. That is a mammoth problem, because there's no limit to the distortion a government can make.

    My last question in regard to distortions governments make is to the Alberta barley growers. Is Alberta able to get out of the monopoly of the Canadian Wheat Board? Just what do you have to say about that?

    Mr. Douglas McBain: Thank you.

    We'd love to get out of that, but it seems it's to pin down who the responsible party is to address that situation.

    What was the rest of your question?

    Mr. Howard Hilstrom: Are the farmers in Alberta, Saskatchewan, and Manitoba who want to get out of that Wheat Board monopoly making enough progress? Is it going to happen, or are we going to end up with this position of the federal government that we're not going to move ahead on any trade talks because STEs are part of those trade talks? Is it not vital that these talks get going so we can get that STE addressed?

    Mr. Douglas McBain: Absolutely. That's been our position. The grain growers have supported that the WTO move ahead and that Canada accept Harbinson's second modalities report.

    The Chair: Okay, we'll go now to Mr. Plamondon for five minutes.

[Translation]

    Mr. Louis Plamondon: Thank you, Mr. Chairman.

    Mr. Pellerin, just like me, you were probably a bit surprised by what Mr. Duplain said a few moments ago and by his question. Since you did not have the time to answer, I would like to give you a couple of minutes of my time to give you the opportunity to respond to Mr. Duplain.

    Mr. Laurent Pellerin: Thank you very much. Indeed, I reacted a bit to what was said. I would like to say right off that it is not a burden to represent Quebec's farmers; rather, it is a job I love and want. In my eyes, it is a worthwhile thing to do.

    As for passing along information, yes, it is our responsibility to inform producers about any upcoming changes. But if I had told them two or three weeks ago about proposed changes, or if I had to do so today, I would have told them three different things.

    Is 95 per cent of the margin covered or 100 per cent? Three weeks ago, products subjected to quotas were included; 15 days ago, they were not, and last week, they were again. Is farm equipment included or not? Is labour included or not? What do I say to farmers? It would be irresponsible on my part to pass along information at this point when the program has not yet been finalized. There is no way I would have been in a position to tell producers about how the program works. Perhaps there will be no more room for provincial companion programs three years down the road. I know how people will react, so I do not need to attend many meetings.

    With regard to flexibility, I think we have to be cautions in terms of the Alberta barley producers' position. Barley is only one of many types of cereal produced in western Canada. As for their position on the Canadian Wheat Board, western farmers were consulted and their position was very clear. As for their preference that labour not be included, that may be all be very well and good for western farmers, but it does not make any sense at all for a horticultural producer from Quebec or Ontario. And the Prime Minister tells us that that “a farmer is a farmer, a Canadian is a Canadian” from one end of the country to the other.

    It doesn't make sense to have this attitude in the agricultural sector in a country as big as ours. From the very beginning, we asked for flexibility. If Alberta prefers a certain approach, all power to it, that is not a problem. But if another approach is better for Ontario because its climate is different, you need to adapt and build in some flexibility. The same applies for the Maritimes. But under the current program, we don't find that type of flexibility.

    That also is true, as you said, for the environmental aspect, such as when you decide to have land for pasture or for growing hay. Of course, we won't participate in the forage and hay program; we are involved in hay and pasture, whereas it is different in western Canada. Wouldn't it be nice if one day someone realized that farming varies across the country? Further, legally, this is an area of shared jurisdiction and each level has its area of responsibility: the federal government is responsible for food inspection and international trade; extension activities and insurance fall to the provinces. The role of each level of government is clear.

    A few days ago, Ms. Stewart announced that she would transfer a certain sum to Quebec for its daycare program, because it is innovative and at the forefront of what is being done in this area. Why can't we have the same approach for agriculture?

  (1240)  

[English]

    The Chair: Mr. Armstrong wants to respond to your question.

    Mr. Ed Armstrong: Yes, actually to his and to Howard's and also Rose-Marie's.

    I think we're missing the point on this whole APF risk management issue. It is profit margin driven. It is not subsidy driven, it is not stabilization driven; it is profit margin driven. That's the complete mindset change that we have to think about. As Rose-Marie brought in, if it's profit margin driven, the lower expenses you have, the better it is. The higher your profits, the more protection a farmer is going to have if he has the misfortune of a loss.

    Again, with Howard Hilstrom's forage cover program, this is where our argument is. It is that crop insurance is actually pitting against the cattle industry because they're encouraging farmers to rip up land that should be in cattle in the first place. If the whole thing is profit margin driven, then we see these environmental initiatives tying into this thing and the farmer is going to look at his land based on how he can make the best profit.

    I guess if agriculture can't be profitable, then what are we doing around this table? Either we have a profitable industry or we don't.

    The Chair: Thank you very much, Mr. Armstrong.

    Your time is gone. We have to move across the table.

    Mr. Laliberte, do you want to speak to the members? Do you have some questions?

    Mrs. Ur, another round.

    Mrs. Rose-Marie Ur: I hear the word “flexibility” from probably every presenter here this morning, so I'll give each group that has presented here an opportunity. Given that we're not arguing about the amount in the APF--it is $5.2 billion--but if it were landed on your plate and you were told to put together something that would be workable in your part of the country, what improvement would you introduce to make this more saleable? I guess for the barley people, you're okay with it, so maybe you'll share your time with the other two presenters.

    Give us a quick synopsis, because the chair is very succinct in his timing.

  (1245)  

    Mr. Ed Armstrong: I guess, Mr. Chairman, as far as the track record for Alberta is concerned, we've been one of the few provinces that haven't had a farm rally protest. Basically, my advice to the minister back in about 1998 was, before you meet with the farmers, make sure you come in with a complete FIDP program and understand how it works. That was the end of the rallies, because the farmers then understood the program. I think it's a big problem right now: the farmers don't understand it. Once they understand it, they'll be all set.

    Mrs. Rose-Marie Ur: How come they understood in Alberta but there are problems in the other provinces?

    Mr. Ed Armstrong: I think it's because the minister, I guess, listened to the barley growers. He encouraged them, if they wanted to talk to him about it, if they had problems with the program and they wanted to have these protest rallies, they should first come in with a completed application form, properly completed. That was the end of the story, because the farmers found out, “Hey, there is money here; this thing's going to work”.

    Mrs. Rose-Marie Ur: Mr. Pellerin.

[Translation]

    Mr. Laurent Pellerin: I have no doubt that if we were given the choice of deciding how to best use the money we would ask for block funding, province by province. That would give the kind of flexibility we want. I know that the minister is not interested in that approach, but if you ask me the question, that would be my answer.

    Even Alberta's barley producers have said at this committee that it is a completely new program; they warned you of that, but the minister and the department would still have us believe that it is like an extension of NISA. But it's a completely new approach. The least we would expect under the circumstances is to have enough time to discuss the program with producers and to explain it to them but, most of all, to finalize it. Alberta's barley producers may think it's a good thing, but I am sure that this view is not shared by the farmers in Quebec, Ontario, Manitoba or elsewhere in Canada.

    I'll give you an example of a fundamental change which will take place on March 31. As it now stands, a farmer who has a NISA account will, in his farm's financial statement, have an asset called the NISA account. In some cases, the account will contain $10,000, $20,000, $100,000 or $200,000. This is a business asset which banks take as a guarantee. But on March 31, farmers will have to empty this account. But no one knows how this is going to be done. It won't be a business asset anymore. It will disappear and the new account will not be a business asset, but rather an insurance.

    If that is not a change which will cause the destabilization of Canadian farms, then tell me what is. We have a problem. You can't bring in such a fundamental change overnight, and that is exactly what is going to happen by April 1st of this year.

[English]

    Mrs. Rose-Marie Ur: Thank you.

    Mr. Brian Doidge: Our position has been very clear from the beginning. We're of the opinion that the existing suite of safety net programs should be continued. You need to work on some of the deficiencies, as identified by the National Safety Nets Review Committee about two years ago now, affecting NISA in particular. But address only those particular issues. Don't throw the baby out with the bathwater. It is our position that crop insurance works very well. NISA needs to be adjusted and corrected but not thrown out. We do need companion programs in Ontario, particularly like the market revenue one. Our suggestion to the minister has been consistent all along: extend the existing set of safety net programs and tweak them to respond to those problems that have been identified.

    The Chair: The time has pretty much expired.

    Let's move to this side again. Let's keep it real short. Then we can get both parties in.

    Mr. Anderson.

    Mr. David Anderson: I'd like to go back to the APF as it's sitting now and talk a little bit about the trade implications. We've had governments say that with the way it's set up now, there are none. We've heard presentations this morning that have concerns. We've heard them on other days as well. I'd like to get your input as to whether you think we're going to run afoul of trade regulations with the program the way it's being suggested.

    Go ahead, Mr. Pellerin.

    Mr. Laurent Pellerin: We think, and our lawyer and the people we spoke to think, that grouping together the NISA program and the disaster program increases the risk of trade problems. CFIP was a good occasion to put money aside without a big problem with trade. Linking those things is not a good move. We need at least two or three programs to flow the same money. We need more money, but I'm not talking about more money. I'm talking about the same money. If you flow through one channel, it's more of a problem than if you flow the money through two or three channels.

    On top of that, if you let the provinces flow the money the way they want, you have regional flexibility, and for trade it's very hard to find out what the problem is when B.C. decides that they support, for example, eggs because there is no egg production in that province and Quebec decides to support something else. I will tell you that the U.S. will have a lot of problems following what we are doing. We're supposed to have this flexibility in the Canadian confederation. We are not using our legal structure.

  (1250)  

    Mr. Brian Doidge: I agree that there are some trade implication issues around the way the program is designed. As Mr. Pellerin put it, they're merging two programs, one of which is essentially green, and the other is essentially amber. We now have a mishmash. I have some very serious reservations about Ag Canada's insistence that the new program will be green. I don't think it will be. There has been no challenge at the WTO level to a program that is both amber and green at the same time. There are a couple of examples. In Japan there's a program that is amber and green, but bear in mind that Japan is a net importer, not an exporter. I have severe reservations about how WTO-friendly this new NISA program is as it's being proposed.

    Mr. Ed Armstrong: As far as we're concerned, this is no longer NISA. I think it might be wise if they changed the name and actually wound NISA down. As far as the change that was just made up to 100% of margin is concerned, we think this is a real red flag, and we'd like to see this backed off. Otherwise, as far as we're concerned, this is a green program.

    The Chair: We'll now move to Mr. Plamondon.

[Translation]

    Mr. Louis Plamondon: Mr. Pellerin, the union representing Quebec's hatching egg producers has asked that the bilateral agreement with the United States be abolished. Can you briefly tell us why and whether it is legally possible to do so?

    Mr. Laurent Pellerin: Since the WTO agreement was signed, Canada and Canadian producers have repeatedly said that the WTO agreements should have precedence over bilateral agreements.

    We have a bilateral agreement with the United States which involved a percentage of the Canadian market for hatching eggs. Under GATT, we have an agreement on the maximum quota, which is 95 million eggs. Of course, it would take a certain amount of courage to withdraw from the agreement signed with the United States, but doing so would enable us to considerably increase our domestic production.

    Please understand that as we increase our chicken production in Canada, a proportion of hatching eggs automatically comes in from the United States. It is time that this be stopped.

    But if you don't want to do that for hatching eggs, do it for milk or poultry. Canada has just authorized additional poultry imports and the same goes for egg products. But these are things we can produce at home.

    It is high time that the Canadian government address and solve one of these issues and that it state clearly that we can do as we like at home, that we have our own farmers and a market to protect, and that we also have rights. It is not illegal to withdraw from these agreements; it is completely legal, but to do so requires a certain amount of courage. We are still waiting for a sign.

    Mr. Louis Plamondon: I think there is a provision under which you can give several months notice before withdrawing from an agreement.

    Mr. Laurent Pellerin: You can do so if you give a notice of 180 days.

  (1255)  

    Mr. Louis Plamondon: In other words, you can revoke it. Can you tell us a bit about the Canadian Dairy Commission? Dairy producers are a bit disappointed with that organization.

    Mr. Laurent Pellerin: I think I am beginning to get old. At the time, when Mr. Goodale was Minister of Agriculture, I was president of the UPA. Many people and officials with Agriculture Canada seem to have forgotten—and if they haven't, they surely did not tell Mr. Vanclief or the Canadian Dairy Commission—that when the Canadian dairy subsidy was cancelled for five years, it was agreed that the market price would be increased to compensate for the loss of the subsidy.

    Since the price of milk is regulated by a federal organization, producers expected the dairy subsidy to be compensated through the market, but that did not happen. Of course, Canadian and Quebec dairy producers were extremely disappointed by the fact that the commitment had not been respected. Why does everyone seem to have forgotten about this commitment?

    Mr. Louis Plamondon: Thank you, Mr. Chairman.

[English]

    The Chair: As I said, Mr. Plamondon, we're going to move to a final question from Mr. Duplain.

    This time, use your time for a question. You've made your statement.

    Some hon. members: Oh, oh!

[Translation]

    Mr. Claude Duplain: Thank you, Mr. Plamondon, for giving Mr. Pellerin a couple of minutes to answer my questions. A few moments ago, I did not mean to imply that your job was a burden to you. In fact, I think that working on behalf of the agricultural sector is a very good thing.

    I would like to thank you for coming here and just want to say that the best way to influence our party and to help the minister is to present your arguments. It might be good for these arguments to be illustrated with figures and concrete examples. That way, the message gets across clearly.

    I said earlier that some farmers were previously not eligible but that now they are. If you don't agree with this statement, please let me know.

    Mr. Laurent Pellerin: On Tuesday at noon, we were on a conference call with the executive members of the Canadian Federation of Agriculture, Mr. Vanclief, and some of his officials. We submitted graphs to him which show how the new program would work based on what we know about it. We compared it with NISA. I think the minister was so shaken by what we showed him that he decided to call on a consultant to carry out a simulation. Our figures were not the same as the ones that officials had presented him with.

    I just want to say once more that the Speller report is an excellent reference. You worked on it as well. Why is it that you did such good work then, whereas now...

    Mr. Claude Duplain: I am working so badly?

    Mr. Laurent Pellerin: ...it is so hard for us to get our point of view across or to get anyone to take our concerns seriously. We think that things are going much too fast and that they are not heading in the direction we would like.

    When we voiced our opinion about the Speller report, some people thought we were asking for the minister's resignation. But if the minister could be as sensitive to ours concerns as were the members of the Speller committee, that won't be necessary.

    Mr. Claude Duplain: I really like this table, which shows...

    Mr. Laurent Pellerin: Basically, the question comes down to this:

[English]

What is the problem for farmers in this country?

[Translation]

    There is a fundamental problem.

[English]

That is the problem. The net income is not there.

    The Chair: Thank you very much, Mr. Duplain.

    If there was one document brought to the table this morning that basically says it all, it's this document right here. This is where agriculture is at.

    Some hon. members: Hear, hear!

    The Chair: Thank you very much, Mr. Armstrong, Mr. McBain, Mr. Lavoie, Mr. Pellerin, Mr. Menich, Mr. McCabe, and Mr. Doidge. You have been most interesting. As you can see, it's diverse. You can only wish that you never become the Minister of Agriculture.

    Thank you for appearing.

    Committee members, please stay at the table. We need you for just a moment. On Tuesday of this week we circulated a letter that I had wanted the committee to send to the Minister of Heritage. The letter was circulated 48 hours ago. I am seeking your support to send the letter.

    Could someone please move the sending of this letter?

·  (1300)  

    Mr. Alan Tonks (York South—Weston, Lib.): I so move.

    Mr. Marcel Gagnon: I second the motion.

    (Motion agreed to)

    The Chair: Just to let you know, on Tuesday of next week we will be meeting with the CFIA, the Canadian Food Inspection Agency, in regard to food labelling, particularly of dairy ingredients.

    Thank you for coming this morning.

    The meeting is adjourned.