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37th PARLIAMENT, 1st SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Tuesday, April 30, 2002

0905

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

Mr. Douglas Hedley (Assistant Deputy Minister, Farm Financial Programs Branch, Department of Agriculture and Agri-Food)

The Chair

Mr. Douglas Hedley

The Chair

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

Mr. Douglas Hedley

The Chair

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

0910

Mr. Douglas Hedley

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Howard Hilstrom

Mr. Douglas Hedley

Mr. Bob Wettlaufer (Acting Director General, Prairie Farm Rehabilitation Administration, Department of Agriculture and Agri-Food)

0915

Mr. Howard Hilstrom

The Chair

Mr. Howard Hilstrom

The Chair

Mr. Wayne Easter (Malpeque, Lib.)

Ms. Yaprak Baltacioglu (Assistant Deputy Minister, Strategic Policy, Department of Agriculture and Agri-Food)

0920

Mr. Wayne Easter

The Chair

Mr. Dick Proctor (Palliser, NDP)

Mr. Douglas Hedley

Mr. Dick Proctor

The Chair

Mr. Rory McAlpine (Acting Director General, International Trade Policy Directorate, Market and Industry Services Branch, Department of Agriculture and Agri-Food)

0925

Mr. Dick Proctor

Mr. Bob Wettlaufer

Mr. Dick Proctor

Mr. Bob Wettlaufer

Mr. Dick Proctor

Mr. Bob Wettlaufer

Mr. Dick Proctor

Mr. Bob Wettlaufer

The Chair

Mr. Douglas Hedley

0930

The Chair

Mr. Douglas Hedley

The Chair

Mr. Douglas Hedley

The Chair

Mr. Douglas Hedley

The Chair

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

Ms. Yaprak Baltacioglu

Mrs. Rose-Marie Ur

Ms. Yaprak Baltacioglu

Mrs. Rose-Marie Ur

0935

Ms. Yaprak Baltacioglu

Mrs. Rose-Marie Ur

Mr. Douglas Hedley

Mrs. Rose-Marie Ur

Mr. Douglas Hedley

Mrs. Rose-Marie Ur

Mr. Douglas Hedley

Mrs. Rose-Marie Ur

Mr. Douglas Hedley

Mrs. Rose-Marie Ur

The Chair

Mr. Desrochers

0940

Mr. Mark Corey (Assistant Deputy Minister, Market and Industry Services Branch, Department of Agriculture and Agri-Food)

Mr. Odina Desrochers

Mr. Mark Corey

0945

Mr. Odina Desrochers

Mr. Mark Corey

Mr. Odina Desrochers

Mr. Rory McAlpine

Mr. Odina Desrochers

Mr. Mark Corey

The Chair

Mr. Paul Steckle (Huron--Bruce, Lib.)

Mr. Douglas Hedley

0950

Mr. Paul Steckle

Mr. Douglas Hedley

Mr. Paul Steckle

Mr. Douglas Hedley

Mr. Paul Steckle

The Chair

0955

Mr. Howard Hilstrom

The Chair

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

Mr. Mark Corey

Mr. Rick Borotsik

Mr. Mark Corey

Mr. Rick Borotsik

Mr. Douglas Hedley

Mr. Rick Borotsik

Mr. Douglas Hedley

Mr. Rick Borotsik

Mr. Douglas Hedley

Mr. Rick Borotsik

Mr. Douglas Hedley

Mr. Rick Borotsik

Mr. Douglas Hedley

Mr. Rick Borotsik

Mr. Bob Wettlaufer

Mr. Rick Borotsik

Mr. Bob Wettlaufer

Mr. Rick Borotsik

Mr. Bob Wettlaufer

Mr. Rick Borotsik

Mr. Bob Wettlaufer

Mr. Rick Borotsik

Mr. Bob Wettlaufer

1000

Mr. Rick Borotsik

Mr. Bob Wettlaufer

Mr. Rick Borotsik

The Chair

Mr. Rick Borotsik

The Chair

Mr. Rick Laliberte (Churchill River, Lib.)

Mr. Bob Wettlaufer

Mr. Rick Laliberte

Mr. Bob Wettlaufer

Mr. Rick Laliberte

Mr. Bob Wettlaufer

Mr. Rick Laliberte

Mr. Bob Wettlaufer

Mr. Rick Laliberte

The Chair

Mr. Rick Laliberte

The Chair

Mr. Paul Steckle

Ms. Yaprak Baltacioglu

Mr. Paul Steckle

Ms. Yaprak Baltacioglu

The Chair

1005

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

The Chair

Mr. David Anderson

Mr. Douglas Hedley

Mr. David Anderson

Mr. Douglas Hedley

Mr. David Anderson

Mr. Douglas Hedley

1010

Mr. David Anderson

The Chair

Mr. Calder

Mr. Douglas Hedley

Mr. Murray Calder

Mr. Howard Hilstrom

Mr. Odina Desrochers

The Chair

Mr. Murray Calder

Ms. Yaprak Baltacioglu

1015

Mr. Murray Calder

Ms. Yaprak Baltacioglu

Mr. Murray Calder

The Chair

Mr. Odina Desrochers

The Chair

Mr. Odina Desrochers

The Chair

Mr. Bob Speller (Haldimand--Norfolk--Brant, Lib.)

Mr. Douglas Hedley

1020

Mr. Bob Speller

Mr. Douglas Hedley

Mr. Bob Speller

Mr. Douglas Hedley

Mr. Bob Speller

Mr. Douglas Hedley

Mr. Bob Speller

Mr. Douglas Hedley

Mr. Bob Speller

Mr. Douglas Hedley

The Chair

Mr. Howard Hilstrom

Mr. Rory McAlpine

Mr. Howard Hilstrom

Mr. Douglas Hedley

1025

Mr. Howard Migie (Director General, Adaptation and Grain Policy Directorate, Department of Agriculture and Agri-Food)

Mr. Howard Hilstrom

The Chair

Mrs. Rose-Marie Ur

The Chair

Mr. Odina Desrochers

Mr. Mark Corey

Mr. Odina Desrochers

Mr. Mark Corey

The Chair

Mr. Larry McCormick (Hastings--Frontenac--Lennox and Addington, Lib.)

Mr. Douglas Hedley

1030

Mr. Larry McCormick

Mr. Douglas Hedley

The Chair

Mr. Larry McCormick

The Chair

Mr. Dick Proctor

Ms. Yaprak Baltacioglu

Mr. Bob Wettlaufer

Mr. Dick Proctor

Ms. Yaprak Baltacioglu

The Chair

Mr. Rick Laliberte

1035

Mr. Douglas Hedley

The Chair

Mr. Rick Borotsik

Mr. Mark Corey

Mr. Rory McAlpine

The Chair

CANADA

Standing Committee on Agriculture and Agri-Food

NUMBER 064

1st SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, April 30, 2002

[Recorded by Electronic Apparatus]

¿ (0905)

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Good morning, everyone. Again, pursuant to Standing Order 108(2), we're resuming our study on the future role of the government in agriculture.

We're continuing our discussions this morning with officials from the Department of Agriculture and Agri-Food. Mr. Hedley, I understand you're the lead in this--or is it Yaprak?

Mr. Douglas Hedley (Assistant Deputy Minister, Farm Financial Programs Branch, Department of Agriculture and Agri-Food): Mr. Chair, it's either of us or all of us.

The Chair: Okay.

Mr. Douglas Hedley: If you'd like me to introduce them, I will.

The Chair: That sounds good. Probably you have officials in the room as well, and some slides too, so I'll turn the meeting over to you.

It's my understanding you don't have a major presentation, but rather you're here to answer any questions members of the committee might have.

Mr. Douglas Hedley: Mr. Chairman, we have no prepared presentation. If at any time during the questions the slides would help in demonstrating or explaining something, we have them here and can call on them as necessary.

The Chair: Yes. Doug, the floor is yours, then. You introduce your people; then, Howard, if there's no presentation, will you be ready with questions to lead off?

Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance): I'm ready right now.

The Chair: You're ready right now? My gosh!

Mr. Douglas Hedley: Mr. Chair, let me introduce the members. We have Rory McAlpine from the International Trade Policy Directorate; Mark Corey, assistant deputy minister, Market and Industry Services Branch; myself, Doug Hedley, from Farm Financial Programs Branch; Yaprak Baltacioglu, assistant deputy minister, Strategic Policy Branch; Simon Kennedy, from Strategic Policy Branch; and Bob Wettlaufer, from the Prairie Farm Rehabilitation Administration, based in Regina. We have other staff we may need to call to the table from time to time. We'll introduce them at that time.

Thank you, Chairman.

The Chair: Thank you.

Howard.

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

There are many major issues before us in the country concerning agriculture. Mr. Hedley, I guess the first thing we need to discuss is what progress is being made with the request, and where it stands in the department, by the farm organizations from Ontario through to Alberta, including the CFA and two grain companies--Saskatchewan Wheat Pool and the United Grain Growers--concerning the trade injury adjustment program that is being called for, the $1.3 billion.

Mr. Douglas Hedley: Mr. Chair, there are really two parts to that answer.

First of all, we have looked at the proposal very carefully. Let me start with the fact that during this past year we have had all our safety nets in place, as you well know. We put out about $3.7 billion last year, between federal and provincial payments. We continued to spend, throughout this framework agreement period, 1.8 billion federal-provincial dollars on our safety net programs.

Turning to the request from a number of groups for a trade injury payment, first of all, in looking at how one generates for Canadian agriculture a future that is market-driven and that brands Canada the best there is in the world, it's not clear, quite frankly, that this kind of payment would help us at all.

Mr. Howard Hilstrom: You know very well that AIDA and CFIP did not work for the grains and oilseeds. The Minister of Agriculture has stated to this committee that CFIP and NISA do not work. As a result, we need to know in agriculture where the department is on developing these new programs. Another program based on the CFIP--the whole-farm concept--is going to miss out on the grains and oilseeds again. You've just heard that the new farm bill has come down in the United States. This issue is not going away. So where are you in developing the new safety nets for this coming June meeting?

Mr. Douglas Hedley: First of all, we have been working with the provinces, through the safety net review, throughout last year, finishing it this spring. That report is now available and certainly available to all of the committee members. It's on our website.

Federal and provincial ministers asked us very clearly to look at those programs carefully for clarity, to remove the duplication and overlap. We are working with the provinces now. We have met with industry through the safety nets advisory committee. We will continue to do so.

The minister met with them a week ago to outline some ideas for them. We continue to work with both provinces and industry to get this done.

Mr. Howard Hilstrom: At the June meeting, will there be a plan put forward whose details people can look at? Up to this point no one has any details on this and no reassurance that the grains and oilseed sectors are going to be appropriately covered in a new program.

Can we look forward to this program's details--maybe not finalized, but put forward--in June?

¿ (0910)

Mr. Douglas Hedley: I would certainly hope that when ministers meet next week they would have a long discussion about it, to set the directions for preparing the detail to go into the end of June meeting, yes.

Mr. Howard Hilstrom: Concerning the draws on the crop insurance plan, the federal government claims Saskatchewan drew down on 2002's allotment. Is that correct? Did they use some of 2002's budgeted crop insurance from the federal government to pay claims in 2001?

Mr. Douglas Hedley: It's a longer story than that. First of all, when we set the framework up, Saskatchewan was given a fixed allocation, higher than the other provinces, at $195.4 million. Out of that allocation they have to pay the two big programs, NISA and crop insurance. Any residual then would be for companion programs--research, whatever they wished.

Those two programs consume all their money. When we paid the $500 million last spring, in March, they drew on some of that money to match their share of the $500 million. In doing so, they drew down the amount of money that would be available in subsequent years.

What they have, then, is full use of their $195.4 million in each of the three years. They simply preferred to allocate it in part to the $500 million, leaving less then available for the crop insurance program in 2002.

Mr. Howard Hilstrom: So no matter who is making the decisions, whether federally or provincially, the farmer in Saskatchewan--every year there are crop failures, whether it's widespread or just in a small area, there are going to be crop failures--is not going to have crop insurance money available that may be necessary to cover off the claims this year. What happens as a result? Are the claims pro-rated down, or how does it work?

Mr. Douglas Hedley: In crop insurance it works exactly the same as in any other insurance program: one pays premiums in, and all indemnities are paid from a pool, whether or not there are sufficient premiums in that particular year to pay them. So there would be no pro-rating on claims. What I would point out is that if one looks at the average of the three-year framework agreement on crop insurance, the federal government will have about 35 percent of the overall premiums, the province somewhat less than that.

Mr. Howard Hilstrom: The other subject is this. We know that Cyprus County in Alberta has declared itself a disaster area for drought. We know the Saskatoon, Rosetown, Biggar area is very dry.

Have there been provisions made, or what has your department done to be prepared for another major drought? You know that the amount of moisture from the snows has maybe wet the top inch of ground--two inches at the most--and beneath that it is bone-dry for three feet. What has the department done to prepare for a major drought?

Mr. Douglas Hedley: Chair, I'd like to turn to Bob Wettlaufer for that question, please.

Mr. Bob Wettlaufer (Acting Director General, Prairie Farm Rehabilitation Administration, Department of Agriculture and Agri-Food): Thank you, Doug.

Mr. Chairman, we're well aware of the drought situation, throughout Saskatchewan and Alberta particularly. Our regular updating indicates to us that the precipitation we've received lately leaves us well below normal, particularly in those areas. We are continuing to monitor the situation very closely. We're putting out drought reports weekly now. They're available on our drought watch website.

Our current activities so far have been to provide the best possible information we can to producers. We've been producing a set of fact sheets. Along with the information put out by the Semiarid Prairie Agricultural Research Centre in Swift Current, we're trying to get information to producers on a wide range of issues, such as erosion control, selecting water sources, making cropping decisions, using cereals for feed--things like that.

¿ (0915)

Mr. Howard Hilstrom: What about this thing we heard about the other day, that Alberta's looking at being more careful on how much water they'll let go into Saskatchewan? You're involved in that.

The Chair: I have to come back. You're over by a couple of minutes.

Mr. Howard Hilstrom: Oh, I'm sorry. Well, that's a question that can hang out there, then; it will be ready for me.

The Chair: It will come back to you.

The Bloc aren't here yet.

Wayne.

Mr. Wayne Easter (Malpeque, Lib.): Thank you, Mr. Chair.

I have two unrelated questions. The first one relates to the agriculture policy framework, Doug, as this hearing is basically on where the department is going and the future of agriculture.

I was at one of those sessions. I know several others around the table were, as well. There certainly have been some complaints raised from the farm community that at least in Ontario there are no hearings east of Toronto or west of London, at least at this stage of the game.

At the session I was at, I thought the consulting firm was doing everything they could do with what they had to work with in the five principles. But there were three areas that seemed to me to be missing. They were profitability, income, and how to deal with the international trade issues. The international trade issues at the end of the day relate to income, especially when you look at the American farm bill and where they're at.

In our study in the task force on agriculture we found out that when we start to compare our support in Canada for the farm sector with that of others around the world through OECD figures, we're ranging down there around New Zealand and Australia, while we have to compete with the United States and Europe, because they're our competitors.

Is the department looking at any more aggressive ways to deal with those trade issues? To come to the bottom line, if there's no income out there in the farm community, then we're going to continue to see the kind of erosion we're seeing now.

The way I find it, Canada seems to be the boy scout in the world, abiding by all the rules. For doing that, we're putting our farm community in a difficult situation income-wise. Where are we going in that area?

Ms. Yaprak Baltacioglu (Assistant Deputy Minister, Strategic Policy, Department of Agriculture and Agri-Food): Mr. Easter, let me start with consultations. Then maybe I could turn to Rory McAlpine to outline the international trade issues.

Granted that when we first started the consultation sessions we ran into some logistical problems--and we have heard from some of you in terms of how they could be improved--we're hoping that as the year progresses and as these three weeks progress the process is improved.

Basically we have had three types of consultations going on in the last three weeks. One type is these commodity chain meetings--the ones you were mentioning. As for the other ones, in order to have in-depth discussions, officials from the department--all ADMs, most of the director generals--are going out and talking to industry leaders and others on agriculture policy framework, soliciting their views about the policy framework on a one-on-one basis. We're conducting over 200 one-on-one meetings with various organizations. As well, we have a website that is there for anybody who wishes to provide comments.

It is quite a comprehensive way of starting the consultations, but of course the purpose of the consultations was exactly to hear whether we have the agricultural policy framework components right, what is missing, what has to be changed, what the views are of the producers and others who are interested in agriculture.

This is not the end of the consultations per se. After the ministers meet in May, which is next week, and after the direction we get from the federal-provincial ministers of agriculture, we will hopefully be able to have more detailed discussions.

We have heard that the international issues were not highlighted adequately in the documentation we put out for these consultations, and I think that's correct. Because this was being treated as an overview paper I think we failed to put a lot of the information we had in other documentation into the kit. Hopefully, when we go out the next time we will have a much better sense of how domestic and international issues play together, because they are really not two separate things.

Let me turn to Rory McAlpine in terms of our--

¿ (0920)

Mr. Wayne Easter: Just before Rory comes in, I appreciate your answer, that maybe you're moving to accommodate more what are seen as the farmers' concerns. The difficulty I have with the discussion, as it seemed to me in the meeting I was at--and I'll admit, I was only at one--is that the agenda is being driven by what the ministers provincially and federally have agreed to, rather than being driven by what the farm community sees as its needs and desires.

I think we've got it on its head. I understand the reasons for it, but I think at the end of the day the discussion has to lead us to what the farm communities' needs and desires are and how both federal and provincial governments can accommodate those needs through policies and programs. I guess that's my overall concern on the way the thing is happening.

Maybe you can move towards that, somehow.

The Chair: Thanks, Wayne.

Dick.

Mr. Dick Proctor (Palliser, NDP): Mr. Hedley, in your answer to Mr. Hilstrom you said it's not clear that the trade injury adjustment program would help. Is it clear that a trade injury adjustment program wouldn't help?

Mr. Douglas Hedley: First of all, all the studies out of the U.S. we have looked at, including those by the Economic Research Service of the United States Department of Agriculture, show that continuing high levels of subsidies get capitalized into asset values, which makes it harder for new entrants into agriculture and imposes higher costs on that industry over time. That's a very clear set of studies. If you'd like, we can show you the slides on that study and many others.

Now, in doing that, what you're imposing on your agriculture is a high cost structure. In our view, we have a lot of countries around the world that are going to continue to drive down the cost and price of many of our bulk commodities in the long run, this quite apart from those subsidies that are doing it. Those long-term trends on prices are down. They're going to be driven by very low-cost-producing countries.

If it's true that those prices are going on down, then we need to look at how we make Canadian agriculture profitable, viable, and vibrant in very different ways: by branding Canada with the best food safety in the world and with the best environmental practices in the world, by giving farmers the tools to get there, and by creating value-added product, new and different products in a very fragmented market. Consumers are demanding a much wider array of things than simply bulk commodities, so let's go to where the consumers want the products and are expressing that desire throughout the market, not only in Canada but worldwide.

Why impose the high costs on our own agriculture? Why not work with it to be profitable in the long run with respect to those long-run conditions we expect in the marketplace?

Mr. Dick Proctor: So taking me back to the position, then, explain to us regarding the U.S. Farm Bill that now targets some pulse crops for the first time, I guess, anywhere in the world, what do we do with those kinds of realities farmers are facing?

The Chair: Rory, go ahead.

Mr. Rory McAlpine (Acting Director General, International Trade Policy Directorate, Market and Industry Services Branch, Department of Agriculture and Agri-Food): Thank you, Chair.

With respect to the farm bill, I can just make a couple of general observations. First, it's certainly the case that the government is very disappointed with the farm bill that now appears to have been agreed on between the House and Senate, and the provisions that appear to be in this bill with respect to pulses are of particular concern.

I do have to emphasize, though, that as of today we still do not have the details of the conference committee report, and the provisions specifically with respect to pulses are unknown at this time. But the government will be examining the farm bill very closely for its trade and policy impacts, and this would include examining provisions on pulses and also perhaps on country of origin labelling with respect to trade obligations.

The government has been very forceful in making those interventions, making their views known, right from the Prime Minister through to the minister and the deputy minister over many months. We will continue to make those views known and, as I say, examine the legal options that are open under trade agreements if these provisions violate U.S. trade obligations.

¿ (0925)

Mr. Dick Proctor: Thank you for that.

Over to Mr. Wettlaufer. I guess we're all delighted to know that we're putting out weekly reports and fact sheets on the extent of the drought, but it would probably be more helpful to know if there is more money in the PFRA account this year to assist. We know what happened last year. So what is the situation with moneys in the account to help farmers in the drought situation?

Mr. Bob Wettlaufer: The situation for the coming year is that we have our usual budget. We don't have any additional funds in the account, but in Saskatchewan--

Mr. Dick Proctor: We have an unusual drought, but we have the usual budget.

Mr. Bob Wettlaufer: Yes. In Saskatchewan last year and going into this year, we spent almost $6 million in actual assistance in building some projects, which probably translated into about $20 million worth of projects. We also provided about $2.5 million worth of technical assistance, and that will continue.

Mr. Dick Proctor: Has money been spent out of that budget already this year?

Mr. Bob Wettlaufer: From our current year's budget? No, we haven't spent it yet, but the projects that were going to be approved have been approved.

Mr. Dick Proctor: Has all the money been allocated, then?

Mr. Bob Wettlaufer: Yes.

The Chair: Thanks, Dick.

Before I go on, Doug, I want to follow up on a little part of a sentence you used with Dick. You talked about “farm asset value on an international perspective”. Could you expand on that a little for the committee, so we can have some concept of what the department means when it talks about asset value and how it can be raised or lowered through subsidies?

Mr. Douglas Hedley: Mr. Chair, may I have the privilege of showing a slide, please, slide 24? Thank you.

This is the study by the Economic Research Service of the USDA. What it was looking at was the impact on the asset values of U.S. farms as a result of the direct subsidies to U.S. agriculture. What it shows here is that there was a growing impact on the overall asset values, an increase from about $70 billion in total asset to over $270 billion.

When you have higher asset values caused by those subsidies, you're essentially asking beginning farmers to pay a good deal higher costs in entering farming because of those higher asset values paid, in turn, by those subsidies. What you're doing is building in a cycle of higher cost and the need for higher subsidy to continue at the same rate.

We can provide these slides to you, if you wish. This was a study done over the past winter by USDA and commented on by the Secretary of Agriculture in the run-up to the U.S. Farm Bill.

¿ (0930)

The Chair: Just in layman's terms, to define assets.... You know, we have criticisms that farm machinery is too expensive. That's an asset that's out there. You can buy it from Belarus or wherever for about half of what it costs from a North American producer. But the other asset, the biggest one that is in most of these values, Doug, would be what?

Mr. Douglas Hedley: It would be land.

The Chair: You say land.

Mr. Douglas Hedley: This is the asset we are referring to here.

The Chair: With that, you are saying to Canadian farmers that maybe some of the assets, right or wrong, should go down and can't go up, because if they do go up, in terms of international trade, Mr. McAlpine, it is creating a distortion of what we can produce for.

Mr. Douglas Hedley: What is happening here, in fact, is that the subsidy rates in the U.S. that we have seen in the last three or four years, particularly, have begun to be capitalized into asset values, particularly land in the United States. That then leads to a higher set of costs in agriculture, not only for entrants but for those buying new or more land. By building in costs, their profit margins in the future are going to be lower, generating a cycle of greater asset values with greater subsidies required to continue those asset values. That is a cycle, where you do have direct production subsidies, quite frankly, that increases the wealth of existing farmers, hurts beginning farmers and creates a treadmill that we would prefer not to be involved with. We would rather have the market set those asset values so that we can compete on world markets.

The Chair: As chair, I don't want to go too much further, because we do have members who want to ask questions.

Rose-Marie, maybe I can follow up at the end with the witness.

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.): You are a member too, Mr. Chair, so we'll permit you to ask questions.

I'm glad you're here today.

Many of my farmers aren't happy farmers, I can tell you, with the weather, with the commodity prices, and with what we're doing as a government regarding dollars and safety net programs for them. When the consultation process for this vision for agriculture--with a budget of $15 million for three weeks--was put in the paper, their hands went up in the air again. They weren't pleased. I hope when these consultations are done, perhaps we can have some kind of information available as to how those dollars were spent so that they will feel more comfortable that their concerns were heard.

Assistant Deputy Minister, you stated you were having 200 in-depth consultations, one-on-one. I hope some of those in-depth consultations are with people in agriculture on the ground.

Ms. Yaprak Baltacioglu: Thank you very much, Mrs. Ur.

First of all, as a correction in terms of the facts and the numbers, the $15 million figure you referred to was not for a three-week period of consultation. That would be quite an amazing--

Mrs. Rose-Marie Ur: Yes, it would be.

Ms. Yaprak Baltacioglu: I think there were a lot of misconceptions around that number. That is a number that is planned for consultation, communication, and other outreach activities that may be required over the next year to build an agriculture policy framework. It's not for three weeks.

Mrs. Rose-Marie Ur: When do you expect a report from all this consultation?

¿ (0935)

Ms. Yaprak Baltacioglu: Right now, we have an overall wrap-up report that we're going to present to the ministers. As well, site-by-site reports are being prepared by the consultants. They're going to be put up on the web the moment all the reports are in. This weekend we looked at a number of them that came in, over 40. What we're trying to do is make sure they all look the same and put them up on the web.

Let me say that--

Mrs. Rose-Marie Ur: Hurry; I have a lot of questions.

Ms. Yaprak Baltacioglu: Okay.

Agriculture is a large industry, and the policy framework is very important. Yes, we are talking to farm leaders. Yes, we are talking to the agriculture industry.

Mrs. Rose-Marie Ur: It's large, but they're slowly dwindling because we haven't got a policy there to sustain them. We're losing our farmers; we lost 26 percent. If we don't get our act together, we're not going to have an agricultural industry to support. It's vital that we move.

Mr. Hedley, do you really believe we can continue in this fashion, without bridge funding, until we get to this vision for our Canadian farmers?

Mr. Douglas Hedley: Chair, what I believe is not relevant.

Mrs. Rose-Marie Ur: I think it is, sir.

Mr. Douglas Hedley: What we have is $1.1 billion allocated annually through the framework program, matched two-thirds by the provinces for the 60-40 allocation. That's $1.8 billion annually that we're putting into our risk management programs.

Last year, because of the way the insurance and other programs work--when things go down, they can draw more money--they drew $3.7 billion out of those programs.

Mrs. Rose-Marie Ur: A lot of those programs, sir, are based on a three-year previous record or whatever. If you keep having a zero-zero base point, at the end you get nothing from your insurance, if you've had a bad two or three or four years in a row. These programs are good if you've had some great years and all of a sudden you go into a downturn, but if you've had some really bad years, they certainly are reflected.

With that being stated, has the department gone to the Department of Finance to get more money for the drought situation out west? Is it in your purview to do that, seek more money?

Mr. Douglas Hedley: Right now we are looking at all the available things we can do, both within existing programs and as to what additional support it might take. We're looking at it from the purview of not only the immediate needs, but also where we're going in the APF through issues like renewal.

I would point out that if we have farmers who are running out of averages, as you point out, in some of these programs--whether that is through drought, which lowers their yields, whether it's through a CFIP-style program where the averages come down fairly quickly--then I think we have to deal with it as a different kind of program, through renewal, looking at skills training or other kinds of programs to help these farmers get back on their feet.

Mrs. Rose-Marie Ur: Do I have any more time?

We keep saying how well we're doing in our export market, and we're hoping to have $40 billion worth of export by 2005. I think that's wonderful, but I'm always going to go back to this factor: do we have any stats as to how much of this wonderful export market we have is actually benefiting our farmers? Our farmers are going on the opposite side--exporting, doing more, selling more products--and are going by the wayside. There's something wrong with this equation.

Mr. Douglas Hedley: Let me look at that in a couple of ways. A number of our fastest-growing exports are in the red meats and the specialty crops. Farmers are moving there at quite a rate. We have seen a huge expansion in our exports there. We continue to expand the production and export of beef and hogs. I am assuming that farmers are willingly entering that industry and going into it as profitable enterprises; otherwise we would not be growing. I presume, then, that profitability underlies those industries.

Mrs. Rose-Marie Ur: Well, we need to see some of the figures. Where does the 26 percent...? They can't all be hobby farms that went under or went out of business last year.

Thank you, Mr. Chair.

The Chair: Thank you, Rose-Marie.

Mr. Desrochers.

[Translation]

Mr. Odina Desrochers (Lotbinière--L'Érable, BQ): First off, Mr. Chairman, I want to apologize for being a little late. I'd also like to thank the officials from the Department of Agriculture and Agri-food for coming here this morning to speak to us about the future role of government in agriculture.

When I hear people talk about the US Farm Bill and when I think about the strategies and behaviour of the Americans on the softwood lumber issue, I'm concerned about how this partner will deal with Canada on the agriculture issue. We find ourselves in somewhat of a bind because of the substantial export subsidies awarded by the US. In fact, we are facing similar problems with all European Community countries.

Speaking of strategies, have you ever considered forming an association with other countries? I'm thinking about MERCOSUR in South America and about other European nations that have faced similar economic injustices.

I've been a member of the Agriculture Committee for five years now and we're still talking about market distortion as a result of US and European practices. However, at the WTO, regardless of what we decide here at this meeting...Of course, Canadian government officials will give it their best shot. However, they will always be dealing with the same market distortion. Hasn't the time come to consider an association with other countries? It's really quite simple. Right now, the issue is softwood lumber. With the Farm Bill, the US will start to tinker with the supply management system, the very cornerstone of Quebec's agricultural industry. Next up will be food safety issues. I can already anticipate what the Americans will be saying. Again, we'll be backed into a corner because we won't be able to subsidize the industry without the US complaining to the WTO. The time has come, in my opinion, for a collaborative effort and for new ways of dealing with the US which hasn't played fairly on the international relations front.

¿ (0940)

Mr. Mark Corey (Assistant Deputy Minister, Market and Industry Services Branch, Department of Agriculture and Agri-Food): Allow me to answer your very timely question. First, I will talk briefly about the US Farm Bill, following which I will touch on current alliances and possible courses of action.

First of all, I am very concerned by what I see happening in the United States. Our staff has been working late into the evenings and on weekends for the past several weeks. I imagine this pattern will repeat itself again this week.

There are three reasons why we are extremely concerned.

[English]

The first reason we're quite concerned is because of the immediate trade impact of the U.S. Farm Bill, namely the possibility that it will be extended to pulses, plus the whole subsidy level question and country of origin labelling. The second is because of the longer-term impact this will have on trade liberalization and where the WTO could go. This may well have an impact on that.

I'll talk first about the actions to date. Our minister, Minister Vanclief, has been very active on this file. He's been to discuss this with Secretary Veneman a number of times. Minister Pettigrew has raised it with Trade Representative Zoellick a number of times. The Prime Minister has raised this with President Bush on at least a couple of occasions, I think. Our embassy in Washington has been working to make Canadian concerns and views known. Our staff have been working very hard with our counterparts in the U.S. to make our concerns known.

We are watching very closely right now to see what details will come out. We will be looking, for example, to see whether we have recourse under either NAFTA or the WTO, looking at possibilities, for example, that the U.S. has exceeded their Uruguay Round commitments. That's a possibility we'll be looking into, to see whether they do have anything--we're not sure yet--on country of origin labelling. We'll be looking into the NAFTA repercussions of that. Again, we will be looking into export subsidies, whether there are any. So again, it's going to be a very long, difficult issue, but we will continue on with that.

The longer term, though, as we know, is with the WTO. We were very successful in Doha in terms of putting Canada's negotiating position and our interests forward. The results of the Doha Round closely mirrored Canada's negotiating position, so we're actually in very good shape on that. We will continue to point out to the Americans that what's happening on their farm bill right now seems to be completely inconsistent with what they've said in the WTO. Again, our minister has made that point with Secretary Veneman a number of times.

Finally, we've had a number of, I would say, fairly difficult WTO disputes we've won. When we look, for example, at the dairy panel right now, where Canada has defended the interests of supply management, we won that last December, and it has gone on to a second round now--

[Translation]

Mr. Odina Desrochers: Let me interrupt you there, Mr. Corey. We're aware of these facts and of your efforts. Otherwise, we wouldn't be here. I'd like to know if you have any partners in other countries who are prepared to back you up. When you talk about the WTO, you're talking about lengthy delays.

The agricultural industry in Quebec and in Canada is facing a crisis. In fact, certain sectors are already in a crisis situation. Diplomacy and negotiations are all well and good, but deadlines are tight. We're familiar with the US response. We need to take urgent action. Do you have any partners who support your efforts? Is there some way for you to exert pressure on the US and to have them comply with the Uruguay agreements, something that they haven't yet done? We're negotiating with people who don't keep their word. How can we get through to them?

Mr. Mark Corey: I agree with you. Let me tell you about the international alliances that we have formed. The first is with the Cairns Group, a group of nations with common export interests. I'll ask Rory to explain to you briefly what this alliance is all about. Rory, would you please?

¿ (0945)

Mr. Odina Desrochers: I'm familiar with the Cairns Group.

Mr. Mark Corey: That's good. We also have other informal alliances or relations with countries with whom we share some common interests.

Mr. Odina Desrochers: Has any concrete action been taken? Have these measures had any impact? In my view, it's time for us to send a very clear message to the Americans. That's what we need to do.

Mr. Rory McAlpine: Mr. Chairman, we're on a very tight negotiation schedule for the upcoming months. Under the circumstances, what matters are these alliances with developing countries because they have a major influence on the negotiation process. Therefore, we're now in the process of firming up our contacts with important players like Egypt and China, which is now a member of the WTO. Obviously, we have formed different alliances, depending on the area involved.

[English]

For some questions we will be very close, in fact. For example, on the issue of food aid and export credit, the European Union is an ally of ours on many of the issues and on concerns we have with respect to the United States. We pursue these alliances, depending on the issue, and will continue to pursue the negotiating objectives with a strong strategy.

[Translation]

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

What should we expect in the way of a strategy for the short term? You've talked about a strategy for the months ahead, but what about the short term? Can you tell the farmers who might be here today what they can expect in terms of an immediate strategy? I'm sure they'd appreciate that information.

Mr. Mark Corey: For instance, with the US Farm Bill...

[English]

First of all, we have to get the details on it, because we don't know what's in it yet. When we find out exactly what's in it, that's when, again, we will be working with the Department of Foreign Affairs, we'll be consulting with the provinces, and we'll be consulting with industry. In the very near future we will be looking at U.S. trade obligations as to whether or not they've in fact respected those obligations.

Again, on a lot of these things, in the short term it tends to hinge on these bilateral issues when we're defending Canada's interest. In the longer term we know that it's in the World Trade Organization; that's where our hopes are that we can achieve a significant kind of trade liberalization and a clarification of the rules. Clarification of the rules is going to be just as important in some areas, and that's where the longer-term strategy has to lie. In the meantime, of course, we have regional and bilateral negotiations on market access that are going on as well.

The Chair: Paul.

Mr. Paul Steckle (Huron--Bruce, Lib.): Well, if may, I'll start with you, Mr. Hedley. You mentioned earlier after a previous question that American studies seem to indicate that subsidization has the effect of actually seeing a great part of that subsidy dollar flow into capitalization, particularly land capitalization. That's an American study. We seem to be applying it...as to how that might apply to Canada. Do the Americans not listen to their own studies? Why are we listening to these studies when in fact the Americans...? If we look at their farm policy, it doesn't seem to reflect the kinds of things they're hearing from those studies.

Mr. Douglas Hedley: I'm not sure I can interpret why the U.S. did not understand that study. It was very clearly put out by the USDA, very clearly put out with the secretary's blessing, because she did comment on the study when it came out and advised Congress, who were looking at the bill, to worry about that. Congress apparently has not seen fit to take that into account.

¿ (0950)

Mr. Paul Steckle: While we travelled, and you, the department, are in the process of doing that now.... Given the fact that agriculture is in a state of chaos today, because farmers really don't see a future, and given the fact that government has less than adequate funds for programs to support these people, what is the alternative to not supporting our farmers? If we don't support them, what is the alternative to Canada, to the rural infrastructure, and the rural communities? What are we going to see happening in this country?

Mr. Douglas Hedley: Let me outline the way we are approaching it through the APF.

First of all, as I indicated in an earlier answer, we feel that we have to find a market-oriented agriculture that has the profitability in value-added diversification, in new products, in responding to consumer interests of increased food safety over time, in increased commitment to food safety, and in increased commitment to environmental friendliness. What that does is it then places Canada above the rest of the world in terms of the best products in the world and the best markets in the world.

There will be some premiums in those markets. Many of them will be transitory. But if we continue to move rapidly and have a flexible, agile agriculture that is profitable, then we can go after those new and changing markets that do have those premiums over time.

Mr. Paul Steckle: But in the interim, would you not agree that we need some bridge financing, we need some support to make sure that our farmers are around to be here when that can actually be realized?

We talked about a number of things while we were travelling. One of the issues was the issue of a food tax. It hasn't been a very popular thing. But as you travelled, have you heard that in your discussions with people?

Mr. Douglas Hedley: I have certainly watched it come through in various reports.

Let me make an assumption that the food tax would be a way of generating money that in turn could be given to farmers.

Mr. Paul Steckle: Yes.

Mr. Douglas Hedley: I think that was the intent of it.

First of all, it's more regressive even than many other ways of supporting agriculture. Let me put it this way. At very high incomes you spend a relatively small proportion of your income on food. As a result, the tax is not going to bother those people in the least. When you go to lower-income families in Canada what you find is they spend a relatively high proportion of their income on food. It is a basic necessity; you can't avoid buying food. As a result, you're imposing a much higher tax relatively on the low incomes than you are the high incomes. This is quite different from a tax, say, on stereos or other kinds of products. Food is a basic necessity.

We use income tax now as a means of generating income for support, not those taxes that would be that regressive.

Mr. Paul Steckle: That could be a debate of a morning in itself. But let me take you to one more thing. I think this needs some clarification.

If indeed $15 million is being spent on what you people are in the process of doing, given some of the negative response that we've had from people who said that they haven't been properly notified, given that the government itself doesn't spend $15 million on all of its committee travels throughout the whole budgetary process of all committees of government, not close to $15 million--in fact it's a percentage of that--how can the government possibly spend $15 million in trying to get a message to the people of Canada? Are we taking everybody out for dinner? What's happening here?

There's no money for farmers, but we have $15 million to sell a message to farmers, which they already understand quite clearly. We need some clarification on that. Either it isn't $15 million, or if it is, how is it being spent?

The Chair: Paul, I'm sorry, but you're over your time--

Mr. Paul Steckle: Oh, we deserve it. That was such a wonderful question.

The Chair: --unless the members agree that we hear a reply to it.

An hon. member: Let's hear the answer.

¿ (0955)

Mr. Howard Hilstrom: I don't think so. They can answer it the same as my question that was put over: they'll answer it later on. Let's continue.

The Chair: Okay, we'll remember that, Mr. Hilstrom.

Mr. Howard Hilstrom: Well, that's what we did originally, so let's let them take it back and somebody can deal with it, the same as Dick helped on the PFRA question. That's the way to work.

The Chair: Okay. Rick.

Mr. Rick Borotsik (Brandon--Souris, PC): Thanks, Mr. Chairman. I'll be very quick in my questions, and I know there will be brief answers.

First of all, Mr. Corey, you had mentioned that the Minister of Agriculture had met with the Secretary of Agriculture, Ms. Veneman. When did those meetings take place, and did they discuss the farm bill?

Mr. Mark Corey: I'm sorry, I don't have the dates here.

Mr. Rick Borotsik: You will provide those dates for the committee?

Mr. Mark Corey: Yes, they've spoken on this.

Mr. Rick Borotsik: No, no, not spoken. You said they met--that the Minister of Agriculture met with Secretary Veneman. Would you please supply me with the dates when they met and the discussions that took place there?

Mr. Mark Corey: For example, they did meet in Doha. And they've met in other places. .

Mr. Rick Borotsik: Please tell me where they met. That's all I'm asking.

Mr. Mark Corey: Right.

Mr. Rick Borotsik: Mr. Hedley, you talk--and I appreciate the long-term vision of agriculture--you talk diversification, value added, increased trade; you talk pork and beef. That's all very wonderful, but we are faced now with a very real potential of a serious drought, and you are the director of farm financial programs. If there's a drought, there's no feed; if there's no feed, there's no stock. In fact, Alberta following last year has--and I'm sure Bob can attest to this--changed a lot of their livestock procedures right now, particularly in cattle, because of a lack of feed.

There is a real potential. I've always been one who would like to be more proactive than reactive. Do you have a plan to deal with a potential drought? That's all it is right now--potential--and I appreciate you want to sit back and see if in fact the rains are going to come, and that's very laudable. But if they don't come, do you have a plan in your back pocket, and have you approached the government for additional funding should there be a devastating drought in Saskatchewan and Alberta? It's a simple question.

Mr. Douglas Hedley: First of all, Chair, let me point out that crop insurance has been there for many, many years.

Mr. Rick Borotsik: Let's assume crop insurance is not going to take the full brunt of what is potentially there in Alberta and Saskatchewan. I'm sorry; that was part of my preamble. Let's assume it. Do you have a plan in your back pocket, and have you asked for more money?

Mr. Douglas Hedley: Let me ask, what is it specifically that crop insurance will not take care of?

Mr. Rick Borotsik: Crop insurance covers less than 70 percent of the total inputs, in most cases, going into the ground, and 70 percent of inputs coverage does not give a farmer the ability to go forward for the next crop year. It's simple and plain. Do you have a plan in your pocket? Have you looked at a proactive plan? Yes or no?

Mr. Douglas Hedley: No.

Mr. Rick Borotsik: No. Have you asked for more money from the federal government? Yes or no?

Mr. Douglas Hedley: We have not asked, no.

Mr. Rick Borotsik: You're the financial program, so you're suggesting CFIP and crop insurance is the only thing we are going to have to fall back on right now for any type of major drought in western Canada. Is that correct?

Mr. Douglas Hedley: Yes.

Mr. Rick Borotsik: That's it. Thank you.

Bob, PFRA is wonderful. Your total budget, I understand, this year is $15 million.

Mr. Bob Wettlaufer: Total budget?

Mr. Rick Borotsik: No, your budget for water projects in western Canada: what would the budget be?

Mr. Bob Wettlaufer: It's $5.5 million.

Mr. Rick Borotsik: Just $5.5 million, yet $15 million is being expended on a consultative process. Three times your budget would obviously have a much greater impact, would it, in your opinion, in western Canada than the consultative process?

Mr. Bob Wettlaufer: Let me clarify our budget. It's $5.5 million in contribution expenditures. We also add to that about $6.5 million in staff time for technical--

Mr. Rick Borotsik: No, I'm not talking staff time; I'm talking projects: $5.5 million. We have $15 million in consultative processes--and I'm sorry, I don't want to put you on the spot--but I assume that money could be better spent going into projects, for which I understand you've had a substantial uptake, but you can't fund them because you don't have the money. Is that correct?

Mr. Bob Wettlaufer: We have more projects available than we have money for, yes.

Mr. Rick Borotsik: Thank you so very much.

Here's a question to PFRA. We have a really serious problem, obviously, with droughts. You do an excellent job with the limited resources you have, and I'll put that on the record.

We now have an interprovincial problem facing us with respect to water resources and water storage. Do you have a long-range plan right now for interprovincial water issues that are going to face us not only this year, but probably forever? Because water is going to be the issue, not oil, in the future.

Mr. Bob Wettlaufer: I'll try to answer this slowly, because I--

Mr. Rick Borotsik: No, quickly, because I have one more question.

Mr. Bob Wettlaufer: Fortunately, there were some very wise people in western Canada a number of years ago, and the Prairie Provinces Water Board Apportionment Agreement was signed in 1969. That agreement basically divides up the water among the three prairie provinces. Most of the water in the prairies flows from the mountains eastward to Hudson Bay.

That formula basically dictates that Alberta can use one-half of the natural flow arising in Alberta and must pass half to Saskatchewan. Saskatchewan in turn can use half of what they get from Alberta and must pass the other half to Manitoba. Saskatchewan can use half of the natural flow that arises within its boundaries and the rest must go to Manitoba. That agreement has stood us in very good stead. It is still in effect. The provinces support it fully, and I see no long-term problems in apportioning water. It's going to get scarcer, but everybody will get their share, and everybody is committed.

À (1000)

Mr. Rick Borotsik: And you are confident that you have the ability to enforce those regulations and agreements? You are confident of that?

Mr. Bob Wettlaufer: Yes.

Mr. Rick Borotsik: Thank you. That's on the record. I will come back to you when in fact Alberta decides to make some changes to that, like the Americans do on trade.

The Chair: Thanks, Rick.

Mr. Rick Borotsik: One more question?

The Chair: I'm sorry, you're over. I have to go to the other Rick now. Saskatchewan is here too. So that was Manitoba Rick.

Mr. Laliberte.

Mr. Rick Laliberte (Churchill River, Lib.): I just wanted to follow up on the water management angle.

You mentioned the prairie water agreements. What other federal departments would be involved in dealing with the water issue? There is agriculture and--

Mr. Bob Wettlaufer: Environment Canada.

Mr. Rick Laliberte: And...?

Mr. Bob Wettlaufer: In terms of the management of water, that's pretty much it.

Mr. Rick Laliberte: Isn't Department of Fisheries and Oceans part of that, for navigable waters?

Mr. Bob Wettlaufer: It's not a part of the prairie provinces water board agreement.

Mr. Rick Laliberte: So in terms of a national policy on water basin, you mentioned this prairie provinces water board agreement. Are there other agreements that are available nationally that are transboundary? Or are those the only transboundary river systems in Canada among provinces?

Mr. Bob Wettlaufer: There is the Mackenzie River basin agreement as well. And some of the U.S.-Canada water is managed under the water treaty. For fifty years it's been managed by a guarantee.

Mr. Rick Laliberte: Okay. Thank you.

[Translation]

The Chair: Do you have anything further to add, Rick?

[English]

Mr. Rick Laliberte: That's it.

The Chair: Well, Paul, it's Liberal time. I'll give you the rest of his time to get an answer to your question on the $15 million.

Mr. Paul Steckle: In fact I don't have the next question. But all Canadian farmers and perhaps all Canadians should understand where that money is being spent.

Ms. Yaprak Baltacioglu: Absolutely.

First of all, the money is for two fiscal years--2002 and 2003. It is up to $15 million. This doesn't mean that all $15 million of it will be spent.

Agriculture is a large industry. This is a big policy framework. It is about the future of the sector. What we have heard is the sector wants to be consulted. So far we have engaged approximately 1,000 people in the agriculture policy framework.

This takes money, sir. It's not easy to fly in everybody, take them to the meetings, put them through the whole-day sessions, which is what we are doing.

The first wave of this exercise costs approximately $600,000 to $700,000. We haven't spent more than that. We would be happy, as the year progresses, to give the full accounts as to how this money is being spent.

It's hard to answer whether you can do consultations without spending any money, because engagement takes support. Right now, I don't think we can engage a lot of people if we tell farmers, “Come to our meetings, with your own money; spend your whole day here, and we won't feed you, we won't give you lunch, and we won't pay your way.”

There are two ways of approaching consultations. One, we can do them very narrowly; we can just work with a very narrow list of farm leaders. Or we can actually open up the debate, so we get to hear everybody. That's the whole purpose of this framework.

So we would be very happy to give you the detailed description of all the expenditures.

Mr. Paul Steckle: Well, I think that's good, but I think the farmers feel, at the moment, that they've been over-consulted, perhaps. We had the Speller task force, and we have had our own committee travel across this country to every province, with the exception of Newfoundland. We did that on a budget considerably less than $400,000. The total government budget for travel of committees is less than $3 million.

One has to wonder. I guess we need a full explanation of how this money was spent. If it has done what we wanted it to do, then perhaps it was money well spent. But given the constraints, it just didn't sell very well out in rural Canada.

Ms. Yaprak Baltacioglu: Well, sir--

The Chair: Paul, I'm sorry, I'm going to have to cut you off now.

David.

À (1005)

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

The Chair: We'll have a few short interventions at the end. We'll try to get our five-minute segments for each member first.

David.

Mr. David Anderson: I'm not really sure where to go with this. I thought Rick had some good questions there. I was glad to get an answer to the one Rose-Marie had asked, which Rick had asked as well.

In at least a third of the prairies we're into the second year of a drought, and in the third and fourth year of a drought in other areas in southern Alberta. I think I'd use the word “appalled” to describe how I feel about the fact that you have not set a plan in place to deal with the drought situation.

I spent last week at home. We just started farming, and along with a pile of other people we're putting seed into ground that's absolutely dry. I was sitting on the tractor thinking about the disconnect that we have between this place and what's going on on our farms.

I look at the agricultural farm plan: you have a five-year plan and we're a year into it and it hasn't been put in place yet. You talk about things like environmental standards. Farmers have already put most of those in place in the area I'm from. You talk about food safety. We're already producing safe food. You talk about value added and branding. In the area I come from that's absolutely meaningless, because we have a marketing system that will not allow individual farmers to value add to their product at all, or to brand it. It makes it useless.

We look at the trade war against the United States. You told us this morning that it's going to drive the prices down. We know they're putting trade restrictions on things like labelling, and your government position is you can't help out. The best argument you have against helping farmers is that it won't allow young people to get into farming. You're not going to have to worry about the young people getting in because the older people aren't going to be in it either. It's just ridiculous that the best response to the United States Farm Bill is a USDA study that says young people can't get into farming if we help out our farmers.

How bad is it going to get before you're going to do something for the farmers? The capitalization will happen when things are well. When people are financed to where they can put money into farmland, you'll get it capitalized into those kinds of things. But when you have an emergency situation, that's not where that money is going to go.

We have a serious drought situation. Your response this morning when you were asked about it was to turn to the PFRA. We know they don't have adequate money to deal with the situation they have, never mind to take care of the response for the federal government. I'm wondering whose interests you are protecting. The agriculture department is supposed to be standing up for the farmers, supposed to be defending their interests. Continually the producers come here and they're told that you're defending either the federal government's lack of initiative and lack of interest in financing the farm sector in this province or they just are not interested in protecting that at all.

I was willing to listen to your comments this morning, but I'm really disappointed. I was so angry a few minutes ago I could hardly even speak, and I'm still maybe showing some of that.

The Chair: Two more minutes.

Mr. David Anderson: Go ahead, if you have a comment to make.

Mr. Douglas Hedley: I think some of those comments should be responded to by the minister, but there are two things I'd like to say.

Mr. David Anderson: Can I say one thing?

Mr. Douglas Hedley: Yes.

Mr. David Anderson: I understand that you don't set these policies and there are people above you who do, but you're supposedly the best we have who are working on these things. This is not adequate. It's not even close. And if you could take that message back, maybe somebody will hear it eventually.

Mr. Douglas Hedley: There are two comments I would like to make, one in your reference to your comment on safe food and the other in terms of drought.

Yes, we do have safe food now. But with the openness of markets internationally, more and more food coming in from abroad, the speed with which bugs are changing, we must continue to improve the systems we have just to stay where we are. If we can't do that by getting ahead of it continuously, then we can't hold the kinds of high food standards in safety that we have had in the past. So we must invest more.

Mr. David Anderson: That's basically tinkering with the system that you have already in place. We have fundamental problems with agriculture that you are not dealing with.

Mr. Douglas Hedley: On the drought side, let me repeat, the federal government has a commitment of $1.1 billion. Along with the provinces, that makes up $1.8 billion on an annual basis going into programs to deal with the short-term effects.

On the longer-term effects, we are doing that through the PFRA. It is not a one-year budget that you worry about in PFRA, it is the long term. And we can show very easily that the PFRA, particularly in western Canada, has been able to decrease the variability in yield through drought or the impact of drought. We can show you that diagram right here. It is that long-term effect that we are having through PFRA. And it is a spectacular one.

À (1010)

Mr. David Anderson: The long-term plan is what we don't have. We have no long-term plan. The PFRA has done a good job long term; I'm not arguing with that. But you have no long-term plan, and this AFP thing is not it. You're two or three years away from even putting it in place. There may be nothing left by then. This government has been in power for nine years, and they still have no plan.

The Chair: Thank you, David. Again, we're over the time.

Murray.

Mr. Murray Calder (Dufferin--Peel--Wellington--Grey, Lib.): Thanks, Mr. Chair.

Doug, I guess I want to ask you this question. As you well know, we just finished our interim report for the task force on the future opportunities for agriculture. Have you had a chance to read that report?

Mr. Douglas Hedley: Yes, sir, I have.

Mr. Murray Calder: Okay. One of the things I'm a little bit concerned about--because I see some disadvantages to this--is the fact that the consulting firm you're sending out across Canada right now is working with the five pillars that the ministers have all agreed to, but in essence, they can think only within a box.

Mr. Odina Desrochers: Mr. Chairman, a point of order, please.

[Translation]

What report is Mr. Calder referring to? The report prepared by his committee, or an interim report drawn up by this committee? Is he referring to the PM's task force? Is that in fact the case, Mr. Calder?

[English]

Mr. Murray Calder: Yes.

[Translation]

Mr. Odina Desrochers: Mr. Chairman, we're here to take part in some discussions, not to listen to partisan rhetoric. Mr. Calder has mentioned the PM's task force on several occasions. What are people likely to retain from all of this? The PM's task force or all the work that has been accomplished over the past several months? I'd like to know the answer to that question, Mr. Chairman.

[English]

Mr. Murray Calder: Mr. Chair, I think if Mr. Desrochers were to give me a chance to ask my question, he would understand the direction I'm heading in.

I would give you the same courtesy.

Mr. Howard Hilstrom: On the same point of order, I also object to the internal workings of the Liberal Party being brought to this committee. I think the member can ask his question. If he wants to ask if they're in favour of a rapid response team, he should ask if they're in favour of that. But I don't think he should refer to it in the terms he has.

[Translation]

Mr. Odina Desrochers: Mr. Chairman, I have no objections to our discussing a report. However, if a report is in fact circulating, I think the committee should know about it and read it as well.

[English]

The Chair: I think we've taken an observation.

Murray, could you rephrase your question?

Mr. Murray Calder: I'll just delete the first question and go on with my second question, which is what I wanted the answer to anyway.

Right now you're going out, and there are the five pillars that have been agreed to by the federal and provincial ministers. As I see it, that basically develops a box within which the consulting firm has to work. That, in my opinion, would be a little bit restrictive. I would like your comments on that.

The other aspect of it is in the part III estimates. Within those estimates, there are six points dealt with, and the sixth is trade, which is the basis of all the problems we've been discussing. What I'm curious about right now is why trade does not appear in the five pillars of the APF.

Ms. Yaprak Baltacioglu: Maybe I can answer that, Chairman.

First of all, in terms of what you call the five pillars, the agriculture policy has five elements. They're not exhaustive, and the details of those five elements have not been determined yet. That's why we're consulting.

At the consultations we heard a number of things, such as how the agriculture policy framework deals with the investment by farmers in terms of value added, and where that fits in. That's a very valid issue that will have to be dealt with. And the consultants who are out there doing the consultations are instructed to hear, not to stay in a box.

In terms of the international trade aspects, for the consultations we chose to go on the domestic policy side. However, the federal and provincial ministers of agriculture last year met in Toronto and had a whole day's discussion on international trade issues, and they will do the same thing in their June ministerial meeting. And as we go forward with the rest of the consultations throughout the year, we will be incorporating the international elements into the consultation documentation.

So I think that saying we're creating a box and limiting the discussions does not do justice to the type of consultation our minister and the provincial ministers are trying to do.

À (1015)

Mr. Murray Calder: Okay. Basically, in answer to that, we already know that there are a number of reports out there, and I won't refer to any titles so I don't offend the opposition over here. But at the same time, you will be going through those to help you move outside of my perception of a box.

Ms. Yaprak Baltacioglu: Sir, we're looking at all the inputs around the agriculture policy framework. I cannot refer to any reports that.... The report you were mentioning should be referred to our minister or the Prime Minister.

Mr. Murray Calder: Okay, thank you.

The Chair: Thank you, Mr. Calder.

For members' information, I didn't make a ruling on this in terms of the legality of it in terms of what you can talk about in committees. I made the ruling in terms of time. I didn't want to spend our time arguing something that wasn't elemental to what we're discussing here this morning.

Mr. Speller hasn't had his five minutes, and we have a number of people with a couple of minutes. And I guess the parliamentary secretary hasn't had his time yet.

Mr. Desrochers, do you have another question?

[Translation]

Mr. Odina Desrochers: With all due respect, Mr. Chairman, I totally disagree with you. I made the comment because I wanted some assurances that the report would reflect the testimony heard by the committee throughout the course of its current hearings, not what was said during previous hearings. It was in this spirit that I sought some clarification from M. Calder. I never called into question your work as committee chair. When I sign off on the report, I want to be certain that it will reflect the comments made by witnesses during the course of our hearings, not the testimony provided during some other series of parallel hearings. Have I made myself clear?

[English]

The Chair: It is clear, but we have a limited time and I'd rather debate the issue at hand rather than something different.

[Translation]

Mr. Odina Desrochers: That's right. I was simply speaking my mind.

[English]

The Chair: Bob.

Mr. Bob Speller (Haldimand--Norfolk--Brant, Lib.): Thank you, Mr. Chair. The task force report speaks for itself.

An hon. member: It's a great work.

Mr. Bob Speller: I do want to ask Mr. Hedley something.

I think you certainly wouldn't get much argument from around the table when you say that Canadian governments need to help out farmers in terms of meeting the challenges of a changing market and about the fact that there are challenges out there. We certainly agree with that.

You were somewhat fuzzy, though, in your answers to the questions around the table on bridge financing. I don't think there's any question that the time between when we can get international trade-distorting subsidies down to a level where our farmers can compete and the time between when we can get an agricultural policy framework in place, which may need to have increased funding to meet some of these needs...there are going to be farmers who can't meet this challenge.

You've done a study here. You have all these facts and figures. You have that 176-page report that talks about future directions. I'm wondering whether you have a study on how many farmers we will lose in the meantime if we don't increase bridge funding.

Mr. Douglas Hedley: The simple answer to that is no, we do not know how many will leave. That's a choice that farmers make. Farmers tend to exit the sector not by being forced out, but rather by making a business decision.

If I look at the approaches to our farm consultation service, they are not up at the present time. If I look at arrears in FCC, they are in fact falling, but that is in part because the FCC is taking a more active role in approaching anyone who may be coming toward a situation of arrears. Our firm debt mediation service is not being pressed into service. It's not rising.

À (1020)

Mr. Bob Speller: Are you suggesting--

Mr. Douglas Hedley: How many will leave? I don't have a study of--

Mr. Bob Speller: We heard that from banks and everything. There was more funding in there. A lot of it's going into equity. This is the question, though. Do you believe that this $73 billion that is going to be coming from the United States won't have an impact on price and in fact won't impact what our farmers are getting for their products and as a result won't affect their income and as a result many of them won't leave?

Mr. Douglas Hedley: Mr. Chair, first of all, the additional money going into the farm bill, as understand it, essentially perpetuates or freezes the level of funding they have done in the last few years by ad hoc bills on an annual basis.

So, yes, there is no question there is an impact on prices. We have demonstrated that and put information out on that in the past. There are studies now going on around the world about the impact of that. We're hoping to get access to them and give that information once we know the details. What we're doing effectively in the U.S. is what we're seeing is freezing all of the ad hoc payments at that level out into the future.

Mr. Bob Speller: But are you suggesting they won't give more ad hoc payments?

Mr. Douglas Hedley: That's a decision the U.S. will make, Mr. Chair.

Mr. Bob Speller: That's right. The question still remains: what are we going to do in the meantime to deal with the impact this will have on the farmers' bottom line? You seem to suggest in your argument that in fact we won't need ad hoc or interim bridge financing. Is that what you believe?

Mr. Douglas Hedley: Mr. Chair, let me repeat again: what I believe is irrelevant. I think this is a question that needs to be taken up with the minister.

Mr. Bob Speller: No, we want the facts. It's not a political decision. What I want to know is what impact that will have on the farmers. I care whether or not you know what impact it will have, whether or not we will lose a number of farmers, and what impact it's going to have across the industry if we don't do anything more in the meantime. We want those studies.

Mr. Douglas Hedley: Mr. Chair, we have put out a study and shown it widely in the sector and the provinces that indicates the impact of U.S. and EU subsidies on Canadian prices, particularly in grains and oilseeds. The conclusion of that study was that about 26 percent of the fall in prices over the 1995 to 1999 period were caused by the EU and the U.S. subsidies--15 percent U.S. and 11 percent EU.

The biggest single impact that we're getting in that late 1990s period is from a drop in demand. That's half of the full drop that we've seen. The other quarter is the increase in supply around the world, occurring in these lower-cost countries that are expanding at a terrific rate--without subsidy, I would point out.

In terms of the current U.S. Farm Bill that is just being passed, we don't have studies on it yet, because we don't know the detail inside it. As soon as we do, we'll certainly make that available.

The Chair: Thank you, Bob.

We have a little bit of time left and we have another duty to do before eleven o'clock. So with that, we probably have about a couple of minutes at the most for each member.

I'll give you about two minutes, Howard.

Mr. Howard Hilstrom: Are pulse crops included in the farm bill--yes or no?

Mr. Rory McAlpine: Mr. Chair, we don't know for sure. The media reports suggest that--

Mr. Howard Hilstrom: We won't talk about the media. I'm sorry to interrupt, Mr. Chair, but my time is short.

Mr. Hedley is referring to market-orientated agriculture. Is a law that makes it mandatory for farmers in Manitoba, Saskatchewan, and Alberta to sell their wheat and barley to the Canadian Wheat Board market-orientated agriculture?

You're saying on one hand that's where you want to go. How can the government say that the Canadian Wheat Board and the laws that set up supply and management are market-orientated agriculture? Are you not getting mixed messages?

Mr. Douglas Hedley: Mr. Chair, if I could, I'd like to turn to Howard Migie, from the strategic policy branch, to respond.

À (1025)

Mr. Howard Migie (Director General, Adaptation and Grain Policy Directorate, Department of Agriculture and Agri-Food): Certainly the legislation that's behind supply management and the Canadian Wheat Board was put in place for marketing reasons at a particular time. A few years ago Parliament did take a look at the Canadian Wheat Board, and there still is a market orientation--a marketing reason--behind the legislation, both for the Canadian Wheat Board and for the Farm Products Agencies Act.

Mr. Howard Hilstrom: I guess we have different definitions, then, of what's market orientated. I think your definition is more the government telling people what to do, as opposed to the marketplace saying so. I agree to disagree on that.

Thank you, Mr. Chairman.

The Chair: Thank you.

Rose-Marie.

Mrs. Rose-Marie Ur: Mr. Hedley, you made the statement a little bit earlier, where you recognized that there's a real concern regarding food safety because of the increased volume of food being imported into Canada. I'm glad you recognize that. That's exactly why this government needs to have an agriculture policy there to support our primary producers, so that we don't have to rely on other countries to feed our people. But with the policy we have now, we're going down the wrong road.

You also made the statement--and I really take exception to this--that farmers aren't being forced out, but it's a business decision. Trust me, they would not be leaving if they could earn a living from the farm.

The Chair: Thanks, Rose-Marie.

Odina.

[Translation]

Mr. Odina Desrochers: I have a brief question.

You're saying that you don't know the details of this famous Farm Bill. Have you put any questions to your partners, such as the Canadian Federation of Agriculture or the UPA, which must surely have contacts with US farmers? After all, the Minister, Lyle Vanclief, expressed some dissatisfaction when he returned from Washington. I would imagine that he had a reason for being dissatisfied. Have any efforts been made in this regard? Have you contacted any of these partners in an effort to find out what the Farm Bill might contain in the way of provisions? This matter requires our immediate attention. The time for consultations is over. We need to take action. The US is busy drafting legislation, and we're still at the consultation stage.

Mr. Mark Corey: If I understand your question, you're wondering what efforts we are making with the provinces and the industry. Indeed, we are consulting with these partners.

Mr. Odina Desrochers: That's not what I'm asking you.

I'm asking if you have consulted with partners at the UPA or the Canadian Federation of Agriculture since they too have contacts with the US agricultural industry. If you don't know what's in the Farm Bill, perhaps they could feed that information to you, so to speak. Because, while we're busy consulting, they're drafting legislation.

Mr. Mark Corey: It's not just a matter of holding consultations. In fact, we're working closely with the industry and the provinces to counter these effects. There's no question about that.

[English]

The Chair: Mr. McCormick.

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

I appreciate the officials being here, and I would ask my colleagues to bear with me and maybe even let me finish a sentence, which I don't always do so well.

Mr. Hedley, wow for me to defend a bureaucrat, but I think we should also put on the record that I believe the majority of our bureaucrats are hard-working people and do the best with the resources they have. We asked you whether you had a plan to implement if we have a full-blown drought, which it sure looks like we could have.

But I want to ask you, sir, if we the politicians.... I understood it was us who had to find money for you to invest in agriculture. I think we're perhaps aiming at the wrong people. We should be aiming at ourselves. We need to come up with the money.

So, sir, if we found x amount of money to invest because of a major drought in this country, pray tell, can you take that money and do you have the resources to deliver that money to where it's most needed?

Mr. Douglas Hedley: Certainly if money were given for a particular purpose, we would work to deliver that program, there is no question of that. But let me point out that there are really two kinds of things you would be talking about; one would be short run, and one would be the long run.

À (1030)

Mr. Larry McCormick: I understand that. Bridge financing may be most important for people to survive this year, and I understood that was up to us to achieve, not up to these people. But I have much to learn here.

I didn't have any time earlier, so can I have a clarification on that? Is it your job to go and get this money? You can make recommendations, but is it not our responsibility to deliver this money?

Mr. Douglas Hedley: Chair, as you know, the laws of Canada say that money spent by the Government of Canada has to be appropriated by Parliament.

The Chair: Thanks, Mr. Hedley.

I am perplexed by that question and also by the answer.

Mr. Larry McCormick: Then let's clarify it, Mr. Chair. We have time now.

The Chair: I would assume that in most government departments officials come to the minister with a problem, perceived or otherwise, and say “Mr. Minister, if we don't do a certain thing, this will be the outcome, and these are the different decisions we can make”. The minister and his group would then present that to cabinet, who would have to deal with the issue. I can't see this as a top-down thing. But Mr. Hedley seems to be implying that around this table....

In any organization I've ever worked with in the private sector, the guy at the bottom was the one who brought the issue up to the top, and somebody, somewhere said these are the roads we can take: to shut down 100,000 farms in this country, or to develop this program that would keep 300,000 or 400,000 farmers on the land. We'll get back to that later.

Dick?

Mr. Dick Proctor: Thanks.

I just want to talk about two different areas. One is that we've heard from a number of heads of veterinary schools that we have problems here. What is the department doing to make sure that our schools are up to U.S. standards for accreditation?

We talked a bit about good agreements on water between provinces in the prairies when we were on our tour. Subsequently, we've heard about a lot of problems with the Department of Fisheries and Oceans and what they're doing and not doing on the prairies. What I would like to know is do the departments talk to each other about who's doing what in terms of covert operations and all kinds of things that go on in agriculture? All of a sudden DFO seems to have inserted itself and said that what they've done in the past they can't do any more, or it's going to cost six times as much as it always has. There's a tremendous amount of frustration occurring out there in rural municipalities in the province I come from.

Ms. Yaprak Baltacioglu: Maybe I'll ask Bob Wettlaufer to add to this, but in terms of conversations with the Department of Fisheries and Oceans, we are engaged at the most senior levels in discussing exactly that particular issue, because it's under the Fisheries Act. The habitat provisions are pretty far-reaching, and it does have an impact on the agriculture industry. We are aware of the issue you're referring to, and we're working at the officials level.

Do you have anything else to add, Bob?

Mr. Bob Wettlaufer: Yes. Maybe I'll just add that while discussions are going on at the highest levels, they're also continuing on the ground with the fisheries officials, particularly those who are present in the three prairie provinces. Yes, they came into town and decided to change things. I think we're making progress and getting into cooperative arrangements, but it's slow.

Mr. Dick Proctor: I haven't had an answer on my vet question.

Ms. Yaprak Baltacioglu: My only answer would be that we are working with the veterinary colleges and we are aware of the issue around accreditation. They have been talking to us for the past few months, and right now we're working on it. I don't have a definitive answer as to which way that's going to go.

The Chair: Rick Laliberte.

Mr. Rick Laliberte: This letter was brought up here after a few comments were made on water and PFRA, and it states that environmental risks are improving. But that would be the bottom graph; the top graph would not be the risks, it would be the benefits. If you have droughts and it impacts on the bottom graph, we have normal water. It would be a reflection of our land providing yields.

When is the top graph going to slow down? Is it going to keep going? What's our intention here? To me, this graph could be very disturbing, because in a non-drought year, if our yields are still coming down, does that mean our soil is incapable of producing the yields we had in 1917?

What's the future of farming? You didn't talk about the future of farming. Let's talk about soil productivity and water availability and not only about services and programs. You have to talk about what we're going to produce and grow in the future. What legacy are we leaving our children? Let's talk about this graph. The way I interpret it, the soil can't produce the yields it once did.

À (1035)

Mr. Douglas Hedley: The line down the middle of the graph is essentially the average yield for most of the last century. If you look at it in terms of bushels per acre, that line is rising very substantially. We've simply drawn it straight to try to get a look at the variability.

If you look at the variability in the yields we have watched over that same period, they have come down very substantially. That's partly because of the work of the PFRA and partly because of the varieties we have made available to farmers over that period. Management, varieties, lower till, no till, to conserve moisture--that's the impact.

The red line down the middle is essentially average yield taken every year. If you look at it in bushels per acre, it rises fairly steeply throughout that period. This is simply a representation of our ability to handle that variation in climate.

The Chair: Thanks, Rick.

The other Rick.

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

If the goal set out by the department was to lose the confidence of all the producers in the agricultural constituents, I think the department has really achieved that goal. If they were here today and saw what was going on, that would be reconfirmed.

The question, Mr. Corey, I think Mr. Desrochers was trying to get across was that the most important aspect of what's going to happen in agricultural trade is the U.S. Farm Bill. We know it's gone through the House and the Senate. I've heard today, from both you and Mr. McAlpine, that we don't know what it contains; we don't know how to deal with it.

As Mr. Desrochers said, others know what's in that farm bill, so why doesn't our department have that information? Do you not have any spies down there? Do you not have anybody? Go to the media. They seem to know more than we do right now about the U.S. Farm Bill. It's the most important thing we have to deal with. Why don't you know?

Mr. Mark Corey: I will start, and then I'll turn it over to Rory.

We don't know because it hasn't been released yet; the results have not been released. We're working very closely. We have staff on standby. We are trying to get the details. Right now we're dealing with reports coming out of the media, but you can't base public policy on that.

Rory, can you just fill in some of the details on what exactly we know and don't know? We're watching it very closely.

Mr. Rory McAlpine: We certainly have the House and Senate versions of the bill that went into the conference committee. The final document will be several hundred pages long. It's now going through a process of budget scoring, to determine the budget implications and whether what has been drafted fits within the budget envelope that's been approved by Congress.

Until we get that final document, we will not have the details. That could in fact be out as early as today. There are some media reports suggesting that it could become available as early as today.

The Chair: Thank you, Rick.

I'm trying to make a decision here in terms of the 18 minutes we have left. First of all, we'd like to thank the people in the department for coming to meet with us this morning. I don't think I have to say that there are great concerns around the table about what's going on. Probably the biggest concerns are for somebody sitting behind a tractor this month and trying to put in a crop.

I think somehow we have to come up with a long-term plan. I kind of heard this morning that the farm bill is a big factor in this, but the longer factor is the international community. I guess we have to make some decisions on what Canadians are going to do for their agricultural groups in terms of that farm bill, in terms of the future of agriculture in this country.

Doug, you mentioned assets. A lot of grain farmers in the west are sitting on at least 3,000 acres of cropland, in other words about $3 million worth of assets. Future generations have to consider all these factors in terms of rejuvenating the industry. If we assume that we're not going to subsidize, if we're going to compete with Uruguay and Brazil and Australia and all these countries, the big concern right now is what's going to happen in the next five years or ten years, as long as the Americans and the EU keep this approach to subsidies. Somehow, I think, in terms of the department.... We can say it's the minister, but really it's the people who work in that department, because ministers change. In fact, often they change too quickly in many departments--

A voice: Or not quickly enough.

The Chair: --not by party, but often within parties, too, Howard. We would hope that somebody back there is trying to develop and to offer to our people....

I ask myself why Mr. Anderson would be out seeding a couple thousand acres of crop in an area where there's no moisture. It's like the 6/49 that he's involved with. The little bit of money in the Prairie Farm Rehabilitation Act would hardly put salt on your porridge. Well, you wouldn't want salt on your porridge, but it's a very small bit in terms of drought.

So there are some big decisions to be made, and our members certainly will be doing a report. Hopefully we can work with the department and with all the officials and the minister to come up with some vision for what we can do to help agriculture.

With that, we'll adjourn this part of our meeting. We're going in camera to look at the PMRA.

Thank you, Doug, and your staff.

[Editor's Note: Proceedings continue in camera]