FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 16, 2001

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[English]

The Co-Chair (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Colleagues, I'd like to call this meeting to order, if we can get all those disorderly members of the agriculture committee back down there to behave themselves.

The chair of the agriculture committee and myself would like to welcome the witnesses who have come here today to raise with colleagues in Parliament, from both the foreign affairs and the agriculture committees, the issues concerning world food production. I think this is the fifth time we have been able to have this meeting regarding World Food Day. Members are greatly enriched by the wisdom of the community of officials, of agricultural producers, and of NGOs who have come to discuss with us the problems of world food production. Obviously, in today's climate it is even more important to get an understanding of them than ever before, so we're very grateful to you for coming.

We welcome the Canadian public who are watching this on television and who, we hope, will come with us to a better understanding of the problems that are presently facing us in connection with the production of food to feed a hungry planet.

Mr. Hubbard, sir.

The Co-Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Thank you, Bill.

Just to reiterate what you said, it's an annual event here on the Hill. I'm glad to see Bill too. We also have some members of the fisheries committee and people who have served on the fisheries committee in the past, for fish too is a big part of our world supply of protein.

It is my understanding that we have a number of different groups who are here this afternoon and that we have a short presentation from each.

The Co-Chair (Mr. Bill Graham): Right, so can we ask Suzanne Vinet from Agriculture and Agri-Food Canada to lead off? Then we'll go to the witnesses. We find them on the agenda.

Madam Vinet.

Ms. Suzanne Vinet (Chief Agricultural Negotiator, International Trade Policy Directorate, Market and Industry Services Branch, Department of Agriculture and Agri-Food): Thank you, Mr. Chairman. Thank you in particular for this opportunity to speak to you on World Food Day.

Our goal today is to focus attention on the challenges we face and the opportunities we have to make progress and to fight against hunger and malnutrition. My remarks to you today will focus on the efforts of the Department of Agriculture and Agri-Food Canada, particularly in my role as agricultural negotiator.

This year's theme—“Fight hunger to reduce poverty”—is drawn from the fact that increasing food security is an important first step in reducing poverty. To achieve food security we must address the availability of food, the stability of the food supply, and the access to food. This is where increased trade can play an important role.

Most of you already know the following statistics, but they are worth repeating. Right now, 800,000,000 people do not have enough to eat in a world that produces enough food to feed every man, woman, and child. That simple fact is one of the major challenges of our modern-day world.

At the World Food Summit in 1996, Canada and 185 other countries vowed to reduce the number of undernourished people by half no later than the year 2015. This is an ambitious goal and one we must continue to pursue. In order to meet this challenge, Minister Vanclief launched Canada's action plan for food security in 1998. Both government and civil society worked actively on the development of the plan and on reporting Canada's progress on implementation of our commitment to the FAO. Non-governmental organizations are making and continue to make a strong contribution to this process as well.

Canada's first progress report was completed in 1999 and expressed the need for long-term commitments from all stakeholders in order to have an impact on food security. It has become clear that capacity building to reduce hunger and malnutrition is a long-term commitment. The second report, which is currently being prepared, will underline this need.

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Canada's action plan still forms the basis of our approach and calls for extensive activities and initiatives both at home and abroad. It addresses the many aspects of food security, including ensuring a safe and nutritious food supply for all, finding approaches to increasing food production in ways that are both environmentally and economically sustainable, and promoting health and education.

Agriculture and Agri-Food Canada is actively engaged in pursuing these goals by promoting sustainable agriculture, food safety and inspection, rural development, and other initiatives that help support food security. In fact, this summer, federal, provincial, and territorial agriculture ministers agreed in principle to an action plan for an agricultural policy framework. This new framework will increase Canada's ability to meet the goals of Canada's action plan for food security.

The focus of my presentation to you today is on food security outside Canada's borders and on our commitment to improving food security internationally. Many issues need to be addressed to rid the world of hunger and malnutrition. The World Food Summit declaration recommended seven commitments covering all aspects of food security, including the role of trade. Commitment number 4 states that:

We will strive to ensure that food, agricultural trade and overall trade policies are conducive to fostering food security for all through a fair and market-oriented world trade system.

Canada's action plan also emphasizes that one of the ways to resolve food security is through reform of agricultural trade. Canada is seeking to provide leadership in developing and upholding open, fair, and predictable rules governing international agricultural trade. My work is directly related to this objective. Trade is a key element in achieving world food security. Trade generates effective utilization of resources and stimulates economic growth.

Through the World Trade Organization we are building a multilateral, worldwide, rules-based trading system for agriculture and food products. This trading environment can be a powerful tool to drive economic growth and increase prosperity in developing countries. This in the long term will help meet our goal of food security for all people. In this regard Canada is committed to working through the WTO to continue the agricultural trade reform process, to improve market access, to reduce trade- and production-distorting support, and to eliminate export subsidies.

Trade contributes to food security. It improves market access. Improving market access can strengthen the purchasing power of people by generating income through expanded trade. Open markets would provide developing countries with opportunities to export products in which they have an advantage. In many countries income generated by exports is an important source of employment, revenue, and foreign exchange, which in turn enhance the power of people around the world to purchase food.

Agricultural subsidies create distortion in companies' investment decisions. Companies are more likely to invest in countries that offer subsidies. This in turn has an impact on the ability of developing countries to attract foreign investment and new technologies that can contribute to economic development.

Export subsidies also increase food insecurity around the world. Export subsidies work against the advantages of countries that otherwise could produce and export the same products more efficiently. Export subsidies increase uncertainty, making it difficult for non-subsidizing countries to plan, to develop, and to invest in the expansion of agricultural industries. They unfairly squeeze non-subsidized exporters out of markets and deny them the ability to generate income.

The launch of a broader round of negotiations at the WTO will be an important step towards dealing with food security. One of the hurdles to the launch brought forth is the concern from some developing countries that they haven't received all the expected benefits from the last round of negotiations. However, a number of developing countries also realized that they are better off participating in further trade reform in order to obtain improvements in their situation.

Together we are working hard to ensure that trade can contribute to food security.

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Trade liberalization is an essential ingredient, but not the only ingredient in addressing the development needs of developing countries and their enhanced food security.

Part of the food insecurity problems of many developing countries are low and variable food production, a low capacity to import, and poor distribution infrastructure. Trade liberalization, therefore, needs to be implemented in tandem with appropriate domestic initiatives and international assistance.

The development of appropriate infrastructure and other reforms will improve the efficient workings of the domestic market. An allowance for adjustment periods to implement reform and the provision of appropriate technical assistance will be needed to assist with food security programs in developing countries.

These considerations will mean that a well-functioning international agricultural marketplace will contribute to increased food security.

I can tell you that Canada is working very hard to help build a multilateral rules-based trading system for agriculture and food products, which in the long term will reduce world hunger and malnutrition.

Far too many people are undernourished, their health is impaired, their potential is never realized, and their lives are a daily struggle for survival. So Agriculture and Agri-Food Canada is committed to confronting these problems and working toward food security for all.

Thank you, Mr. Chairman.

The Co-Chair (Mr. Bill Graham): Thank you, Madam Vinet.

We now turn to Mr. Singleton from CIDA.

Mr. Bill Singleton (Chief Economist, Policy Branch, Canadian International Development Agency): Thank you, Mr. Chairman.

My name is Bill Singleton. I'm the chief economist at CIDA. I'm here with my colleagues, Mr. Macgillivray and Mr. Laviolette. Thank you for inviting me to speak on behalf of CIDA.

The theme of this year's World Food Day, “Fight hunger to reduce poverty”, speaks to the very heart of the mandate given by Parliament to CIDA in 1995, namely, and I quote:

to support sustainable development in developing countries, in order to reduce poverty and to contribute to a more secure, equitable, and prosperous world.

I'd also like to quote from the definition given in 1996 at the World Food Summit of the term “food security”:

Food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.

I'd like to take the time made available to us today to describe how CIDA is approaching this issue.

[Translation]

Canada has traditionally been a strong supporter of agricultural and rural development in developing countries. It is also the case that, over the past decade, the share of CIDA's programming going to support these sectors has declined. CIDA was not alone in exhibiting this trend: the same phenomenon can be seen among other donors, and in the programming of international financial institutions such as the World Bank. There are several reasons for this decline.

One reason is that over this period a broad international consensus among both developed and developing countries has emerged on a range of development goals to reduce global poverty. The goals highlight the importance for CIDA and the international community to invest in the areas identified, such as the environment, gender equality, education, and health.

[English]

Another very important reason is that CIDA has been giving increasing emphasis to the need for our programming to respond to the expressed needs of developing countries themselves. Therefore, if a partner country for CIDA sets priorities in other areas, whether it be infrastructure service, education, or health, CIDA seeks to respond accordingly, based on our comparative advantage.

We've also found that one of the most useful roles a donor agency can play in promoting development is to work on what we call the enabling environment.

Our experience in developing countries is that there is no shortage of imagination or enterprise. What often stands in the way of economic growth and improvements in food security are bad policies. Therefore, it is often as productive to concentrate on the big-picture issues, such as governance, promoting economic growth, or improving environmental practices.

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There is growing recognition within CIDA and other organizations in the global development community that land—who has access to it and how it is used—is a fundamental development issue that cuts across CIDA's development priorities. Not only is secure access to land and other assets a key to reducing hunger and poverty, but land reform can also reduce the pressures that drive the rural poor into hillsides and fragile environments, frequently leading to ecological disasters.

We have seen in countries such as Zimbabwe that conflict over land can have a tremendously negative impact on economic growth in general and food security in particular.

[Translation]

The importance of economic growth should not be underestimated. The developing countries where greater levels of food security have been achieved have also been those which have recorded rapid rates of economic growth. I am thinking here of countries in East and Southeast Asia. One very effective way for some developing countries to achieve greater food security is by exporting non-food products, and importing food. This is especially important in countries where the environment is hostile to self-sufficiency in food.

[English]

So it is fair to say that there is less explicit attention to rural development at CIDA and throughout the donor community, but more attention to broader social and economic development to reduce poverty. Having said all of this, CIDA continues to work to promote, very directly, greater food security for nutritional well-being in developing countries.

In 2000, the Minister for International Cooperation, the Honourable Maria Minna, released CIDA's Social Development Priorities: A Framework for Action.

Within CIDA's existing programming priorities, the framework identified four areas for special attention: health and nutrition, basic education, HIV/AIDS, and child protection. Food security is addressed within the health and nutrition priority area. Funding for health and nutrition will double over the next five years, increasing from just over $152 million a year to $305 million a year, for a total investment of more than $1.2 billion over five years.

CIDA's forthcoming health and nutrition action plan will target household-level food security, along with other factors that have an effect on nutrition, such as access to health care and education, gender inequality, and breastfeeding practices. Experience has shown that programs that simultaneously address all of these factors have the greatest impact in reducing malnutrition.

Relevant multilateral programs that CIDA supports include: breastfeeding promotion, developmental and emergency food aid, programs to eliminate deficiencies in vitamins and minerals, support to the International Fund for Agricultural Development, IFAD, and support for agricultural research through the Consultative Group on International Agriculture, CGIAR.

CIDA has learned that increasing access to not only food but to basic vitamins and minerals is critical for many in developing countries and often has a dramatic effect on their lives. Canada is among the leaders worldwide in addressing this hidden hunger.

UNICEF recently congratulated the Prime Minister for Canada's commitment to providing vitamin A, which has saved the lives of close to one million children worldwide. The term the UNICEF used was “a wonderful example of global leadership”. It's also estimated that seven million children have been born free of mental impairments because of CIDA's contribution as the leading donor to national salt iodization programs.

CIDA's food security program in northern Ghana builds upon a highly successful, long-term relationship in research and extension, as well as sustained support to the water sector and appropriate technologies. It's being developed with strong local participation to support food production.

[Translation]

Among donor countries, Canada has been among the leaders in forgiving the debts owed to it by developing countries in general, and the least-developed countries in particular. Removing the pressure of having to make loan repayments to Canada has meant that a large number of countries have been able to use the resources thereby freed up either for internal development purposes in order to improve food security, or to import food to help meet their food security needs.

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The issues surrounding food security and nutritional well- being are complex, and new food security challenges and opportunities are emerging in this era of globalization and market liberalization, rapid urbanization, HIV/AIDS, conflict and biotechnology.

[English]

We've learned a lot about development in the past 50 years. CIDA has been innovative in how it has used its funds to improve the nutritional well-being of people in developing countries. CIDA's innovation and leadership are facilitated by our close collaboration with a range of different partners, not least of which are Canadian civil society partners. We look forward to our ongoing work with the NGO Working Group on Food Security in our mutual efforts to reduce hunger throughout the world.

Thank you.

The Co-Chair (Mr. Bill Graham): We're next going to Oxfam Canada, Mr. Stuart, is it?

Mr. Stuart Clark (Policy Manager, Canadian Foodgrains Bank): I think, actually, if it's all right with you, Mr. Chairman, we have a different order, because we're actually a group. Would it be all right for us to go ahead? It will be obvious as we speak why we chose to do it that way.

The Co-Chair (Mr. Bill Graham): So Stuart Clark is going to go ahead of Rieky Stuart.

Mr. Stuart Clark: That's right. We're putting Stuart I in front of Stuart II.

The Co-Chair (Mr. Bill Graham): Excellent. Don't start a war of the Stuarts or we'll be in trouble.

Mr. Stuart Clark: First of all, I think the first thing we must say is that for all of us in this room—and certainly we're very mindful—the world is very much not what we would like it to be. We want to express a particular appreciation to our MPs for the heavy burdens you are carrying these days, and I think a strong debt of gratitude to you that you've chosen to take this time to talk about hunger.

I think it's probably well known to you, and certainly to us, that there are five million hungry, weak, impoverished Afghans that continually come before us. Two of the organizations represented here today are involved in getting food through to those people.

I want to briefly say that we are here on behalf of what is called the NGO Food Security Policy Group. I have with me Rieky Stuart, who's the executive director of Oxfam, and Dominique Caouette, who is a project officer with the organization Inter Pares.

We represent nine relief and development organizations in Canada who are a part of this food security policy group. All of us are involved in work that reduces hunger, either by providing food directly, working with others to boost food production and food access for those who are currently hungry, or working for policies that will make it easier for the hungry to feed themselves. And as Suzanne Vinet has referred to, our reference point is Canada's action plan for food security, a document that was drafted jointly by government and civil society. It was one of the first action plans produced after the World Food Summit and still stands, I believe, as the only action plan that had this kind of contribution and format.

The summit goal is to take us from 1 in 8 people in the world currently hungry to 1 in 20 by 2015. It's not a particularly ambitious goal at one level, as it would still leave us with 400 million hungry people—equal to the total population of Canada, the U.S., and Mexico—however, at the time of the World Food Summit and afterwards, we all thought it was possible.

So the organizations we represent have decided to work together to work on the big issues, particularly the big issues of foreign aid and trade policy. We want to recognize very clearly that those aren't the only policy issues. Obviously, domestic policies in developing countries play a very important role. We do this because while we're variously involved in providing food aid and development assistance, we know very well that in the long run, the big structural questions have a tremendous impact on the average hungry person today.

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We enjoy a good government working relationship, and I think we have to identify that and even take a few minutes just to say we have worked with CIDA on practical ideas for sustainable agricultural development, and we have worked with the health and nutrition action plan, which is the current new venue where food security can be discussed. We're pleased to hear that household food security is going to be a part of that priority, as was already acknowledged. Currently there is no other real home for food security within CIDA.

We also work with Agriculture and Agri-Food Canada in an ongoing process of consultation around the World Food Summit and on the question of trade policy, upon which Canadian staff people have been very open—and that's been an important part.

Lastly, I just want to give, by introduction, a bit of context, at least context as we see it.

It's been acknowledged there's been a rapid decline in foreign aid assistance to the farmers of the world, particularly farmers in developing countries. We note that food security programming within CIDA in the last decade has dropped somewhere between 60% and 80%, which is actually double the rate at which overall overseas development assistance has dropped. Food aid is down 70% during the same decade.

As a food power we really wonder what that says. We recognize the quantity of money spent is not everything, and we commend CIDA to work hard to try to make more efficient and effective use of the resources they have, but we do have to raise the flag to you, our representatives, about this situation, the fact that we seem to have stepped away so decisively from food and agriculture programming.

My last comment on context would be to do with the trade and food security nexus.

While it was very much expected the WTO agriculture agreement would result in significant benefits to developing countries, in many ways they gave away other things in order to get things out of the agriculture agreement. A recent FAO study has shown fairly clearly that they did not get the export opportunities. What they did get was a lot of below-cost food imports that have wreaked havoc with local agriculture. This is not the kind of trade liberalization that's going to help the hungry.

I think if you ask what is, I would turn now to our various presenters. I think we go to Rieky Stuart first.

The Co-Chair (Mr. Charles Hubbard): Ms. Stuart.

Ms. Rieky Stuart (Executive Director, Oxfam Canada): Thank you very much, Mr. Hubbard.

Chairs, members of Parliament, it's a great pleasure to be here on World Food Day.

I'm going to speak to the agreement on agriculture and the upcoming negotiations at Doha, in terms of bringing to life the directive that Canada's trade policies should increase food security for all, which Madam Vinet mentioned.

It seems to me there's an opportunity for parliamentarians to provide guidance to Canadian negotiators at Doha on the agreement on agriculture that could make a very positive difference to food security. Let me elaborate.

Canadian members of Parliament and ministers have said that one size does not fit all when it comes to trade negotiations, and this is the point I would particularly like to speak to, because the WTO rules, at least in the current agreement on agriculture, have been made by the most powerful in their own interest. They provide a fair degree of consistency. It is one size that is attempting to fit all, and it is harming the least-developed countries and many other developing countries as well.

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Food and agriculture is an area of prime importance to developing countries. It's far more important to their stability and to their well-being than it is for a country like Canada, where agriculture is important, but it is one among many factors that provide the strength of our economy and society. For Canada, our leadership on trade that enhances food security will not damage Canadian interests but does have the potential to make a real contribution.

I want to give you a couple of measures that indicate why one size fits all in terms of food security is not working. These measures come from some work by Shishir Priyadarshi of the South Centre, who is here with us today from Geneva.

Agriculture continues to be the main employer in low-income countries. It employs over 70% of the labour force in low-income countries, 30% in middle-income countries, and only 4% in high-income countries. Agriculture is a significant contributor to GDP in developing countries. Between 1990 and 1996, agriculture as a proportion of GDP was 34% for low-income countries, 8% for upper-middle-income countries, and 1.5% for the high-income countries of the OECD. Agriculture is an important source of foreign exchange and revenue for developing countries, accounting for 27.3% of developing country and 34% of least-developed country merchandise exports between 1995 and 1997. By contrast, they were only 8.3% of developed country exports over the same period.

These figures give you an indication of why stabilizing and improving food production in poor countries is of vital interest to them and will likely not have nearly as much effect in our country if we adopt measures to build that productivity and maintain that food security.

So what are developing countries asking for? They're asking for something that is called a “development box” in the agreement on agriculture. What's a development box, I asked? A development box is a series of provisions that are clumped together in the agreement on agriculture that would allow the poorest developing countries to maintain or enhance their food security. This would mean that the 800,000 maize producers in Mexico who were thrown out of work by dumping could be protected.

There are three different kinds of measures that are proposed in the development box. We are encouraging you to direct Canada's trade negotiators to support discussion of what might be in a development box in the upcoming negotiations at Doha.

There are these three elements. First is access to developed country markets. For a country like Guyana, which earns a major portion of its foreign exchange from exports like rice and sugar, it's really important to have a market to export to. And so far access to developed country markets is severely circumscribed. So what measures can be introduced into the development box that would increase access?

I was very pleased to hear Madame Vinet say that Canada is open to looking at access issues.

The second cluster of issues is about protection. Protection takes a number of forms, but in particular developing countries need to be able to maintain barriers, tariff barriers and other barriers, that would prevent cheap imports from flooding the country. The cheap imports do not necessarily reduce retail prices, prices for consumers, in developing countries because the markets are distorted. But they do put people off the land, out of work, with even the subsistence means they have for production no longer at their disposal.

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The second cluster of requests for discussion at the agreement on agriculture is around longer-term protection for least-developed countries from dumping.

The third area is support for agriculture. Again, I want to acknowledge and support the position of Canada's negotiators in capping support for northern agriculture, for northern subsidies, in putting that forward as a position.

When the subsidy levels were set, it's very obvious that countries like the U.S. and the EU countries, and to a lesser extent Canada, were in a position to subsidize agriculture, or have been in a position to subsidize agriculture. We have good roads. We support agricultural storage and agricultural processing. We support transport in various ways. Sometimes we support production, and so do other countries.

Poor countries haven't had that money to invest in support for increasing the productivity of their agriculture and they need to. Because of the way the agreement was negotiated, it's at a very uneven level where developed countries have said, all right, we won't increase the subsidies, although in fact they have increased, whereas poor countries are essentially being told, no, you can't support the strengthening of your agriculture base because then it's not a level playing field. This whole set of questions also needs to be addressed in a development box.

One of the questions that has been raised about this, and I'd like to conclude on this note, is how do we decide which countries should have access to this development box and which shouldn't? How do we distinguish between the middle-income countries and the least-developed countries, the potential food exporters and those who are not among the developing countries?

This is a case where, if one size does not fit all, then we need to look at how we adjust the sizes. In terms of the recommendation for adjusting the sizes, there are several ways that have been proposed, and I think all of them merit Canada's consideration and support.

One of them is around per capita income, whereby you could say, in the poorest countries, where the per capita income is lowest, those are countries that should be eligible to use the provisions in the development box. Or you could say, if more than 30% of the population, or 50% of the population, is involved in agriculture, creating instability and volatility is too dangerous, and therefore the percentage of people involved in agriculture could be another criteria.

The final criterion might be the percentage of low-income or resource-poor farmers. That's a term that's in the current agreement on agriculture but it's not defined. It seems to me that there are means that Canada can promote, if parliamentarians give direction to the negotiators, to actually increase the potential of trade for enhancing food security. I hope you will give it your attention.

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My apologies for losing my voice. Thank you.

The Co-Chair (Mr. Charles Hubbard): Thank you, Ms. Stuart.

Mr. Caouette.

[Translation]

Mr. Dominique Caouette (Representative, Inter Pares): I am going to give my presentation in French, to add a little French to the meeting.

My observations will follow upon the ones that were made earlier by my colleagues and by the representatives of CIDA and the Department of Agriculture.

As mentioned by my colleague and also recognized by Mr. Singleton from CIDA, it is worrisome to note to what extent Canada's international development assistance, particularly assistance in achieving food security, has been reduced over the past few years. This is all the more shocking since Canada had made several major commitments at the World Food Summit in 1996, as well as in Canada's Action Plan for Food Security adopted in 1998.

It is in this difficult and worrisome context that we would like to propose a certain number of recommendations concerning Canadian assistance to enhance food security.

I have six concrete recommendations to present. The first is that for we NGOs, it is important that Canadian aid budgets be increased in the areas of sustainable agriculture, rural development and food security, whether through bilateral programs, multilateral programs, or loans by international financial institutions. It is important to remember that in developing countries most of the population still lives in rural areas or depends on agriculture for its livelihood.

This is particularly important in those areas of the developing world where food security is most precarious. Concretely, what we recommend is the creation of a specific budget envelope earmarked for food security, which could incorporate those different initiatives.

What Mr. Singleton presented were a series of different initiatives within CIDA, but there is no envelope or office that is directly responsible for food security, which makes it quite difficult to track progress since 1996, since achievements are scattered among various initiatives.

We also urge the Canadian government to make specific and concrete commitments to food security programs that lead to results and sustainable progress in the area of food production and the nutritional well-being of citizens who live in those countries where the food supply is the least secure.

What we saw in 1996 and 1998 in the documents that were produced, were a lot of statements of principle and good intentions, but very few concrete measures. Here we are five years later, that is to say five years after the Rome Summit. We are looking for evidence of progress, and what we feel now is that if we want to go forward, we have to put in place means of assessment, indicators that will allow us to measure progress over time.

My second recommendation is that CIDA provide greater support to agrarian reform programs. In this regard, I was happy to hear Mr. Singleton state that CIDA will be giving increased emphasis to agrarian reform programs, because such reform programs can ensure access to land and water resources for small producers.

One other thing we would like to see, if possible, is to have these efforts focus especially on women's rights to land access, to credit, and to the right to own land. It is very often men who hold the titles of ownership to the land. There is a great deal of work to be done in developing countries and this could be an interesting and unique contribution by CIDA, that of placing the emphasis on women's rights to own land and on their obtaining access to credit.

My third group of recommendations concerns the fact that we believe it to be essential that Canada provide greater support to the laws and programs that aim to protect agricultural producers' rights to own, conserve and use their own traditional seed. In several countries, farmers keep their seed from one harvest to another. However, the possibility of doing that is increasingly threatened by companies that produce modified seed. We all know the big companies in question, which are increasingly imposing their right to control this seed and privatize it.

My fourth group of recommendations is that Canada, through CIDA, provide greater support for sustainable agriculture, including local and indigenous methods and research. In Bangladesh, for instance, there is a peasant farmer movement which has rediscovered sustainable agriculture through the use of its own seed and indigenous technology, rather than adopting agricultural production based on chemical inputs, pesticides and fertilizers. Rather, they have used their own ecological resources. This type of production would promote ecological and organic production and respect developing countries' often fragile ecosystems.

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My fifth group of recommendations would be that Canada increase by at least 50% its food aid to the most vulnerable developing countries, i.e., the countries that are net importers of food products. There is a group of countries which on an annual basis must import food products in order to be able to feed their population. It would be beneficial to concentrate food aid on those countries.

This could be done through a joint WTO/World Food Programme (WFP) program. In this way Canada would put in place a first series of measures to implement the Marrakesh Agreement. Indeed, it appears essential to us that Canada take the lead in pushing for the immediate implementation of the Marrakesh Agreement, which was signed during the Uruguay Cycle of negotiations and which unfortunately has yet to be implemented.

Canada could play an influential role in the negotiations that will take place at the WTO by asking that this agreement, which developing and developed countries have already signed, be implemented. This agreement could be put in effect within the framework of the WTO.

Finally, we urge Canada to see to it that Canadian food aid is provided in the form of grants, that it include financial assistance and staple foodstuffs, and that the proportion of products and foodstuffs purchased locally or regionally be increased from 10 to 30%. At this time, there is a limit placed on the percentage of food products that may be purchased locally. We would like to propose that food aid products be purchased in local markets and that the percentage of such purchases, which currently is set at 10%, be increased to 30%.

Moreover, it is important to counter the abuse of the monetization of food aid through the requirement of greater financial efficiency. That is to say that if food aid is monetized, we must ensure that this is administered in a very careful manner, because situations often arise where those who were to receive assistance do not receive it.

These different points we have presented are included in a series of documents our policy group has prepared. We have them here. They are more detailed and more fleshed out. We would be happy to distribute them to those who would like to see them, after our presentation. Thank you.

[English]

The Co-Chair (Mr. Charles Hubbard): Thank you very much for your presentations. Apologies from Mr. Graham. He had to catch a plane this afternoon to Toronto. Ms. Augustine, the vice-chairperson of the foreign affairs committee, has joined us. Welcome, Jean.

If everyone agrees, we'll take five-minute rounds, with the five minutes for each in terms of both the question and the answer.

David, would you like to start off?

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

Food security involves the protection of our food supply. U.S. agriculture officials say that farms and food supply remain one of the most exposed targets. We live in a world where fertilizer can quickly be made into explosives, where pesticides can be made into chemical weapons, and where a small amount of bacteria can taint the food supply for thousands of people.

On April 5, in testimony before the Standing Committee on Agriculture, the executive vice-president of the CFIA, Dr. André Gravel, stated prophetically that bioterrorism is a real threat and clearly a real possibility.

What action do you think the government needs to take in order to ensure the security of our food supply, and what actions do you need to take in your own programs to protect the food supply of the countries you're involved with?

The Co-Chair (Mr. Charles Hubbard): David, would you like to pose that question to any particular witness? It could become quite cumbersome if everyone is to answer.

Mr. Stuart Clark: Let me please try to take at least the first swing at it.

While I understand your concern to be primarily domestic, I would have to speak to the area in which I work—international food aid.

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Very clearly the situation of local production for local consumption shortens the transportation loop and makes the food supply less vulnerable. That's just a principle. However, we're in the business of food aid, so we often are involved in sending food over a long distance, and shipping food over a long distance is inherently vulnerable.

I suppose it's like a lot of other things we face. We would never have imagined anybody in their right mind might consider poisoning a shipload full of grain destined for hungry people. However, it might happen, and I'm not sure we have any method for guarding against this kind of thing. In general, however, we certainly take very good care to make sure that good quality food at the right quantities arrives, but so far we haven't had to deal with the detection of micro-contaminants.

Mr. David Anderson: My next question is to Ms. Vinet.

Food security in Canada is very important. We've heard this afternoon that the developing countries need access, protection, and support for their agriculture programs. But what is this government doing in its trade negotiations to protect the Canadian family farm?

Ms. Suzanne Vinet: In August 1999, Minister Vanclief and Minister Pettigrew put forward Canada's initial negotiating position. This is the same position we've been putting forward in Geneva in the WTO agricultural negotiations.

The premise of this negotiating position is really to improve the world trade system, the rules-based system in which our farmers compete in the world, to create a fairer trading environment for them. The objective obviously is for us to seek the elimination of export subsidies, to reduce drastically the levels of trade-distorting support being provided by a few countries, and to improve market access for all products for our agricultural exporters.

The position we've taken in Geneva is clearly in support of a growing agricultural industry in Canada with the view to benefiting all farmers across the country.

Mr. David Anderson: Thank you.

The Co-Chair (Mr. Charles Hubbard): Mr. Duncan, you have one minute.

Mr. John Duncan (Vancouver Island North, Canadian Alliance): The foreign affairs and international trade group met this morning with members of the European Parliament. Right now one of their major initiatives is on labelling for GMOs, and it's obviously going to be an expensive exercise. Obviously it's going to make some of the exporting from lesser developed countries into Europe that you spoke about more difficult.

I'm wondering why your brief totally avoids discussion on that issue. Do you have some comment to make? Are you concerned about it or do you applaud it? We have no feeling from your brief as to whether you think this is a good move or one that will hurt lesser developed countries.

The Co-Chair (Mr. Charles Hubbard): Ms. Vinet.

Ms. Suzanne Vinet: It was not a question of ignoring the subject. It certainly is a very important subject.

Labelling is an issue, as you well know, even in Canada. We've had some committees looking at all aspects of labelling requirements. But we were being selective as to what we needed to address in terms of the theme of the day more directly. As you know, Agriculture Canada has been closely involved with other departments that have an interest in this very important issue.

But in terms of lesser developed countries, maybe my colleague....

Mr. John Duncan: It's a food security issue, though.

Ms. Suzanne Vinet: Yes.

The Co-Chair (Mr. Charles Hubbard): We'll have to move on. I'll come back to you. I'm trying to give five minutes to each side of the table and I'll give you the full five later.

Murray.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Mr. Chair. I have two questions, one to Madam Vinet.

The capping process that was talked about...right now, the U.S. Congress is discussing the U.S. farm bill 2002. This bill is going to be $260 billion over 10 years—$26 billion a year—which is considerably more than what they're already pumping in. Brazil has already challenged them on a soybean issue.

• 1630

How is this capping process going to address the issue? Will the horse not be out of the barn by the time we get into this situation?

Ms. Suzanne Vinet: In terms of the $260-billion figure being bandied about, this is in relation to a version of the farm bill that had been proposed by the House. Since then the White House and the USDA, the administration, have put forward some principles that make it clear that this proposal by the House for the renewal of the farm bill would certainly not be in the direction the administration would want to take U.S. agricultural policy.

Certainly the events since this House bill was formulated have been such that the U.S. administration does not expect to have the kind of budgetary surplus it considered when these numbers were put forward. So it's highly questionable whether we end up with a farm bill some time in 2002 that actually sits at these levels; it has been repeatedly questioned by the U.S. administration itself.

Now, this doesn't take away the fact that the levels of subsidies provided both by the U.S. and the European communities are certainly disproportionate to the levels of support other countries are able to provide. This is certainly one of the elements Canada shares with a number of countries in the developing world; we both have the objective of levelling the playing field, or allowing at least for our producers to compete fairly with producers from other countries.

Because some countries can afford to give more support than others, our negotiating proposal puts forward the idea of capping the overall levels of support provided by countries as a way to end these disproportionate levels of support amongst the different countries.

Mr. Murray Calder: So is this capping process going to be at existing levels, or are we going to establish lower levels? Currently they're pumping in about $15 billion a year.

Ms. Suzanne Vinet: No. As we're proceeding in the negotiations and moving into the more technical aspects, obviously we're seeking substantial reductions to the level of trade-distorting support being provided, to keep these levels fairly low. The concept would be to cap overall all types of support, but to seek substantial reductions in trade-distorting support.

Mr. Murray Calder: Okay.

Madam Stuart, you made the statement one size fits all. We're talking about this development box. Is there any money available in this development box, and if so, where does it come from ?

Ms. Rieky Stuart: The development box isn't about money, it's about developing rules that—

Mr. Murray Calder: It's always about money.

Ms. Rieky Stuart: Not in the sense that it requires an allocation of aid. In the sense that it would permit developing countries to invest in agriculture if they have the resources, sure. It's about the money in the sense that it would prevent the kind of unfair agricultural subsidies on exports that you're concerned about. But is it about increased grants or aid levels? No.

Mr. Murray Calder: When you did your presentation, you talked about the farmers in a country, for instance, trying to sell rice in a depressed market. If they can't in fact sell rice and make a profit, they're not going to grow it. If they are going to establish a market with rice, obviously, it comes back to my point: there must be money some place to support this production.

Would I be right in saying that?

Ms. Rieky Stuart: If they're growing rice, as they are, for example, in Guyana or Cambodia or Thailand or China, they're growing it partly because it's a traditional crop and for subsistence, and partly because it may be profitable or it may earn foreign exchange to export it—maybe. The question is, are we putting up barriers that prevent Canadians, Europeans, or Americans from importing that rice, to compete with domestic production?

• 1635

Mr. Murray Calder: I think that's a given right now. That's why we're negotiating through the WTO.

Ms. Rieky Stuart: Exactly.

Mr. Murray Calder: Okay.

The Co-Chair (Mr. Charles Hubbard): Thanks, Murray.

Madam Lalonde.

[Translation]

Ms. Francine Lalonde (Mercier, BQ): Thank you to all of the witnesses.

I must say, Mr. Chairman and Madam Chair, that what concerns me the most is that we only have a few minutes remaining to discuss this whole area, which is huge. You have presented two frankly different visions: one from the department which states that the liberalization of trade and the absence of subsidies will solve everything, and yours. You have suggested that development is the avenue to take and recommended some very specific measures for the countries that are in the worst shape. Personally, to speak candidly, I have a more natural affinity for the second vision.

I would like you to help me understand why the first vision may not be helpful to developing countries. What I understand is that when the emphasis is placed solely on increasing production, and even on the purchase of products by the developed countries, what we are encouraging in developing countries is a concentration of control in the hands of a few rich landowners in those countries who purchase the crops before they are produced, often for absurdly low prices paid to the small producers. I know that the World Bank has worked on setting up a program involving insurance that would allow the small producers to not sell their crops at a loss.

I have a very specific question. What part of Canada's assistance—which has been shrinking away remarkably since that aid is now half of what it was in 1990, in proportion to our wealth—should go to agriculture? You spoke of increasing that proportion. To guide us in our decision, what should that proportion be? I would also like to hear again, if you please, the argument according to which it is not true that trade liberalization is the only thing that will help developing countries, to various extents.

Mr. Dominique Caouette: I think that what experience has shown and what CIDA would also recognize is that there is no royal road to development. There isn't just one solution, just one way of doing things to achieve development.

What we have seen with the liberalization of trade is that there has been an increase in the concentration of wealth in developing countries, greater concentration of land ownership, and, thirdly, more dependence on industrial agriculture, which necessitates a lot of inputs, more pesticides, and far greater capital investment.

What we have seen on the one hand in developing countries that developed their markets, is that traditional productions have been displaced. For instance, rice was displaced in the Philippines, and corn in Mexico. Moreover, the land is being used for productions destined to exterior markets, for instance cattle-rearing in Mexico for the American market. What we have also seen is that the wealth that has been created is more concentrated.

Secondly, the poorest countries are not necessarily equipped to compete with large producers such as Canada, the European Community and the United States, where subsidies are much higher and where agricultural research is much more advanced. In addition, those developed countries have much more expertise in free trade and economic integration negotiations. The Bangladesh delegate who goes to the WTO arrives with one or two advisers; the Americans arrive there with thousands of advisers.

We propose two approaches. The first is to strengthen developing countries' capacity to negotiate agreements that will be favourable to them. The second is to tell Canada that it can play a key role. It can within the framework of negotiations ensure certain economic concessions that would not necessarily affect Canadian exports but would provide great advantages to developing countries. I'm referring to “special and differential treatment”, differential treatment that would be guaranteed for longer periods of time. We also suggest that agricultural research be beefed up, research on inexpensive production methods.

Canada signed those agreements. Canada signed the Marrakesh Agreement, which stated that since trade was to be liberalized there would have to be a transition period when certain types of subsidies to research, and to the development of less costly production methods, would be authorized.

• 1640

Several initiatives were put in place—CIDA supports several of these—to improve traditional seed, those that are not made in other countries, as I mentioned, to maximize rural agricultural potential, as well as to train manpower and to increase the wealth of many developing countries.

There is a large population in Bangladesh that can work and make a contribution. Why not devise production methods that will, firstly, make local production possible, and secondly, employ as many people as possible, and, finally, ensure the long-term food supply?

The current tendency is to send vitamins or nutritional supplements to the population while telling people that we will solve their vitamin A deficiency, but this isn't a good long-term solution. If five years from now CIDA's priorities change, or if the donors change theirs, what will happen to those nutritional supplements? If we want to promote long-term sustainable development, we must create a social capital infrastructure that will support agriculture and a progressive penetration into free markets.

Ms. Francine Lalonde: Can you give me a percentage figure?

Mr. Dominique Caouette: A percentage? What has happened is that Canadian aid... We recognize that Canadian aid has decreased in general, but agricultural aid has decreased twice as much, easily. We must, and I think that CIDA realizes this, turn things around and get back to basics. The World Bank showed that it understood this when it stated that we had to get back to agrarian reform.

Likewise in Great Britain, British international aid has once again placed emphasis on the agricultural sector. I think that we have to turn things around and reinvest in agriculture to make it sustainable. This would be a good recommendation, a “credential” for Canada.

Thank you.

[English]

The Co-Chair (Mr. Charles Hubbard): Thank you, Mr. Caouette.

Marlene Jennings.

[Translation]

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): Thank you very much for your presentations.

As Ms. Lalonde mentioned, there seem to be two conflicting visions. As Ms. Lalonde has already questioned you about yours, I would like to hear what Mr. Singleton can tell us about CIDA's vision.

His presentation contained certain statements to the effect that food security would be part of the health and nutrition sector and that within the framework of the Action Plan, investments in this sector would double over the next five years, etc. I would, then, like to hear Mr. Singleton's opinion on the recommendations you are submitting to us that are not in agreement with CIDA's vision, and I would like to know why CIDA has chosen the path it has chosen.

[English]

Mr. Bill Singleton: Thank you.

As I hope I stressed, we still take the issue of food security very seriously. There's no question it has declined. We have taken steps within CIDA, among the officials, to make certain we are first of all doing the best we possibly can with the resources we have in that sector.

My colleague, Mr. Macgillivray, was active in producing programming guidelines on agriculture, food and nutrition, to improve our programming in that regard.

I'm not dodging the issue that was raised, because the client is of concern to all of us, but we seek to respond to the countries with which we are working. Combined with our engagement, one of the key elements of our new thinking in the aid effectiveness exercise, which our minister has been leading over the past couple of months, and also one of the best practices among other donors, is to put developing countries in the driver's seat.

We can engage with them in policy dialogue and try to remind them of the importance of the agricultural sectors. We can put forward good ideas and be innovative, and so on and so forth, but in the end we will try to respond the best we can to a developing country's own priorities. We have some discretion in this area, but that's one of the elements of it.

In terms of percentages of total programming, we've estimated that if you take a relatively narrow definition of food security programming, or agricultural and rural development, it's somewhere around—and I stress the narrow definition—5% of our total programming. However, you can take a wider definition that recognizes that any good program or project in a developing country will probably catch more than one particular area.

• 1645

One of the perpetual problems we face—and this is true of all donor agencies—is how do you actually code your programming, your projects, to capture what you are actually doing. So if you code something as a water project or a gender project, there may be elements of food security attached to that. Whether it is 7.5%, 10%, or 20% in the area of food security generally, I'll be very candid, I don't know. We'd be playing with numbers if we tried to be that specific around that.

I'd also like to touch on some of the issues around the question of liberalization of trade and the role CIDA is playing in that. There was a question earlier that we didn't have a chance to respond to on the issue of labelling of genetically modified organisms and special products, and so on.

We have not been dealing with this as part of our trade-related technical assistance in capacity building in developing countries. But we have been picking up on this in the discussions in Geneva at the WTO. There is now, in the Canadian mission, a position devoted to trade and development issues. That person's full-time job is to report back to the entire Government of Canada, not just to CIDA, what's actually on the minds of developing countries. The person has to be a CIDA person, but that's just because we got there first this time. It could be somebody from another department next time.

Coming to us from the governments of developing countries is a very consistent theme of the importance of trade to them. I've heard stories of ministers from Bangladesh talking about the dreadful unemployment problem they're facing and the need for creating employment for young men and women. In the garment industry in Bangladesh, 20 million women are employed. That is largely for purposes of export. That's not agriculture, but there are analogies here to it.

Therefore, our view is that economic growth will not, in and of itself, resolve the problems of poverty. That's very clear. We thought that was the case in the 1950s, but we were soon disadvised of that notion. It's not as easy as that. It's a long-term exercise. But economic growth is a necessary condition for it. One very effective way for developing countries to go economically is to exports, and exports of agricultural products.

Therefore, at CIDA we try to find the best compromise we can get, in an imperfect world of programming, in food security, as traditionally defined, using food aid as effectively as possible for emergency assistance or development purposes.

An example—I'll stop at this point because I don't want to go on—is our programming around tuberculosis. I'm told by my medical colleagues that in order for a society to address the problem of tuberculosis successfully, you have to have a treatment that lasts for six months. Somebody who is suffering from tuberculosis will begin to feel better after the first month, so the risk is that they will just stop taking the medication. The problem, as most of you already know, is that gives rise to strains of bacteria that are resistant to antibiotics. That's why you're always told by your doctor to take them for the full 14 days. In this case, it's six months.

In that case we're using food as an incentive to keep people coming back for the TB treatments. That's the objective of that project in health. One way to do it—it's perhaps very simple—is to offer them free food or subsidized food. Once the six months are up, do you then say the food should be cut off? That's pretty tough to do, but that's one area where we're trying to do multifaceted programming with food for many purposes at once.

Are we doing as well as we should be? Inevitably, no. We're not satisfied with where we are now, but we're trying to do it in a variety of ways, while listening to developing countries.

• 1650

The Co-Chair (Mr. Charles Hubbard): We went way over five minutes there. Marlene, you owe us.

Ms. Marlene Jennings: My question was very short.

The Co-Chair (Mr. Charles Hubbard): But it was a good answer and I let it go. I'm sure the NDP now will pick up something on this liberalization, globalization, and all of these.

Mr. Dick Proctor (Palliser, NDP): Thanks very much, Mr. Chair.

I've read through the reports that Inter Pares, Canadian Foodgrains Bank, and Oxfam have submitted today. I have to tell the government officials here that I find it a very disturbing report. We seem to have had concrete goals that we set out and agreed to jointly a number of years ago, and we seem to be nowhere close to meeting them. In fact, we appear to be going, in some cases, in the opposite direction now.

One of those areas is trade, and I assume my question is to Madam Vinet. I'll just read part of the sentence:

...in international trade policy Canada has vigorously pursued its interest as an important food exporter but has failed entirely to keep its promises to assist countries whose food security is negatively affected by WTO rules.

What are we to make of that and, more importantly, what will we do in the future to correct it?

Ms. Suzanne Vinet: I read the report earlier, but I don't have the exact reference with me. My understanding of this reference and the context of it is that it refers to the ministerial declaration in the Marrakesh decision.

Ministers stated they understood there were some special considerations for these developed countries in net food importing into developing countries. In recognition of these special circumstances, they undertook to make sure that certain issues would be addressed or facilitated through the implementation period.

In fact, ministers of member countries have gone forward and implemented the Marrakesh decision—maybe not perfectly, maybe not to the desired levels that some of the developing countries might have wished. But we acknowledge that we have gone forward and implemented the various aspects of the Marrakesh decision.

I'll address, in that context, very briefly, four key elements of that decision. Mr. Singleton spoke about food aid and the Canadian perspective on food aid, but we contributed quite a bit of leadership at the time of the renegotiation of the food aid convention in 1999. We were very attentive to the requirements of net food importing into developing countries in the countries that required food aid. We tried to enhance the food aid convention, reflecting some of these special considerations.

On the level of technical assistance, Mr. Singleton has addressed a number of these issues. Specifically in terms of what we're doing in technical assistance, we're also providing directly, from the department, for example, expert knowledge and expertise in some of the development programs we're doing in a number of developing countries.

One important aspect has been the issue of export credit and the financing at the food import level. On the export credits, we've been a very active participant, and we are trying to address some of the very legitimate concerns that net food importing countries have, in terms of the nature of the food aid and some of the detrimental effects of some of the practices that are currently engaged in by certain countries in their markets. We are trying to bring some rules to that, while clearly delineating what is legitimate food aid and making sure it is provided fully in grant form. We're making a lot of effort in that direction.

In relation to the short-term difficulties in financing normal levels of commercial imports, there has been a lot of discussion in Geneva at the WTO amongst the member countries on how we can address that particular issue. In reality, some of the presumptions that have been put forward have not really been fully proven. A lot of countries are claiming that the food import bill has gone up, when in fact we don't see that as a result of what's happened in the last five or six years, during the course of the implementation.

Nonetheless, we take this issue very seriously. Working in the committee of agriculture, we've now agreed with the vice-chair of the committee of agriculture that we should set up a panel of experts to further discuss ways of addressing concerns that in the future some countries may have difficulty financing their food import bills, although that has not really been a problem so far. We're quite willing to look at practical ways of dealing with these issues should they come up in the future.

• 1655

So I think it's a question of how you look at whether the ministerial decision has been implemented or not. Our view is that it has been implemented, that we have looked at the various aspects contained in the ministerial declaration. We agree that more can be done in certain areas, and we're certainly exploring how to address directly the issues that the developing countries have put forward. We're not saying they don't have legitimate concerns, and we're working very closely with them in trying to find solutions to these concerns.

The Co-Chair (Mr. Charles Hubbard): We're having a little bit of a problem here at both ends, because if we aren't very short and succinct in our answers, others will not get an opportunity.

Dick, are you satisfied?

Mr. Dick Proctor: I'll pass.

The Co-Chair (Mr. Charles Hubbard): Mr. Clark has been sitting there through two questions.

Mr. Stuart Clark: Mr. Chairman, you can quickly rule me out of order and then I won't keep holding up my hand. But what I want to say is that we have somebody here with us today whose full-time job is to listen to developing countries and work with their delegations on issues exactly like those you have raised. Perhaps it's in our relationship in listening to those stories that we used the language we did in our brief.

He's an extremely succinct person, and with the chair's permission...I don't think anybody wants a lot of highly technical talk right now, but he could very briefly give you a glimpse into how it's perceived by developing countries—which seems like a very appropriate intervention on World Food Day. I realize that having a witness from the floor is not necessarily protocol, but I would encourage you to take the opportunity, because we rarely get that. Would that be acceptable?

The Co-Chair (Mr. Charles Hubbard): Yes.

Mr. Rick Borotsik (Brandon—Souris, PC/DR): You've piqued our interest. I want to know which one it is.

Mr. Stuart Clark: Then will the real expert please stand up?

I would like to introduce Shishir Priyadarshi, who is the agricultural trade expert in something called the South Centre.

Mr. Shishir Priyadarshi (Agriculture Trade Specialist, South Centre, Geneva): Thank you, Mr. Chair. Simply being present here has been a privilege for me. To be given the chance to speak is an honour.

We at the South Centre have been working with developing countries very closely over the last two years as part of the agriculture negotiations. Very briefly, all I would like to say to this very august gathering is that for a lot of developing countries, the ongoing agriculture negotiations are not about trade; they're really about the ability to protect the small farmers, to sustain their agriculture, all in an effort to achieve food security as a means of poverty alleviation. So there is a very large number of countries that don't see these negotiations purely as a matter of trade, but they strongly support the thrust towards a fair, liberalized, and rules-based agriculture system such as Canada and other Cairns Group countries are pushing for.

However, the only point they make—and I think this point was well brought out earlier and I needn't expand on it—is that in order to enable them to address their very peculiar characteristic problems of large populations being dependent on agriculture, of the extreme vulnerability and volatility of the sector, all they are asking for is certain carve-outs from the overall rules that will be negotiated. They have put this proposal in the form of a development box.

The development box—I will respond to a question raised earlier—does not require any grant, any money. All it requires is that certain flexibilities be given to these countries, and they can be very targeted flexibilities. They can be given to countries with a per capita income that is below a certain level, a World Bank level, of low- and middle-income groups. They can be given even for food security crops. Flexibility need not be available across the board; it can be there for food security crops.

• 1700

That flexibility can also be geared towards a low-income and resource-poor farmer only. The WTO Agreement on Agriculture establishes that.

It is really to address these kinds of development concerns that this whole proposal has been put forth.

I have nothing much to say, except to add that Canada is really regarded as a friend by many developing countries, and I think the focus of the discussions this afternoon would only strengthen that view. With whatever concerns or built-in reservations it has about a development box, if Canada can support that, it will go a long way in strengthening that relationship.

Thank you so much for giving me this opportunity.

The Co-Chair (Mr. Charles Hubbard): Thank you. Would you remain at the table, please?

John Harvard, you have some questions?

Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.): I have perhaps just one. It's for Rieky Stuart, although it could go to the latest speaker as well.

Ms. Stuart, your remarks conjured up for me images of multinational corporations moving aggressively into developing countries and, with the latest state-of-the-art technologies and latest techniques in sales and marketing, really ruining the agricultural economies. It seems to me what we're facing here is competing values. A company—you say a Canadian company—doing just that, going into a developing country and harming the local agricultural economy, probably would receive accolades in our press, and who knows, maybe the CEO of the company would be given the Order of Canada. I'll leave it up to you what the reaction might be in the third-world country.

So what I would like from you is perhaps a concrete example, especially if that example included a Canadian corporation, to bring home to us how this kind of aggressive trade can be very upsetting to an agricultural economy—which then, of course, leads to your point of view or this suggestion of a development box, which seems to me would be running rather contrary to the whole notion of liberalized trade.

So could you give me a couple of examples, or just one, to bring home this damaging effect you're suggesting?

Mr. Stuart Clark: I'm going to try to take my colleague off the hook a little bit. I hope that's all right.

Mr. John Harvard: It's all right, sir.

Mr. Stuart Clark: One example would be the maize market in Kenya. Kenya is an east African country where people eat, largely, white maize. Until 1985 it was largely self-sufficient in white maize. Sometimes in bad years it had to import a bit, and other years it was able to export a bit, but it was largely self-sufficient. In the last 15 years, Kenya has gone sharply from being maize self-sufficient to having very large imports.

What has caused that to happen? Very clearly—and we're actually doing some trade research on this issue right now—in 1992, as part of a structural adjustment program, Kenya was required to remove all its quantitative restrictions on the import of maize. Maize came in particularly from South Africa, for indeed, the low-cost producer in Africa is South Africa and they're able to produce maize at very low cost. They put maize onto the market, and local maize production dropped.

I visited and spoke with farmers. They simply said, at the price we have for maize now, we can't afford fertilizer. So the production drops further, and eventually they are not able to grow maize.

I don't know that I can name the transnational corporation. No doubt some of them would be involved in moving this maize from South Africa to Kenya. But it is an absolutely classic example of where the dropping of barriers causes the maize to move in at a cost arguably lower than the world cost of production—although in the case of South African maize, it might be right at their cost of production—and undermines the livelihood of large numbers of farmers.

In a perfect world, they could start sewing shirts next year, but unfortunately the import of used clothing destroyed their textile industry. So we have to think of something else, and the problem is that there isn't something else. So there needs to be some sort of carve-out to protect that situation from degenerating into the situation where the Foodgrains Bank has to send food to Kenya forever.

• 1705

Mr. John Harvard: But if we go in that direction, Stuart, to protect the agricultural economy in Kenya, to use your example, don't we just then go back to the old days of non-tariff barriers and resorting to politics? Politics will decide who wins and who loses. Even under the old system, where you didn't have liberalized trade, there were winners but there were a lot of losers too.

Mr. Stuart Clark: Of course, no story really bears up under scrutiny as the whole picture, and indeed the domestic situation in Kenya is such that certainly a lot of important people made a lot of money when there were quantitative restrictions. Certain people make a lot of money now on the imports of maize, so it is a difficult picture.

I'll try to answer the question as to whether we are stepping backwards with things like a food security box. What we're saying is that if countries have that flexibility, which isn't the same as enforcing rules that Kenya do something, Kenya can look very closely at its resources. It can determine what is sustainable over the long haul both environmentally and socially and move in such a way as to make sure they maximize the resources they have.

Right now the flowing in of cheap white maize rules out that as a possibility and leaves small farmers struggling with the question of whether they should move into dairy, grow vegetables, or do other things. Do they grow flowers, and what are the barriers to entry? The options are very few for them, so I think it's a question of providing that flexibility. They may very well decide 20 years from now that 50% of their maize will be imported because they've found other livelihoods for the farmers who are affected.

Mr. John Harvard: Thanks.

The Co-Chair (Mr. Charles Hubbard): Rick.

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

I'm going to go off in a different direction, as this brings up another issue. You could have described just about any farming community in Canada right now with your example of Kenya. In fact, my producers are producing a commodity at a higher cost than the commodity is actually worth on the world market because of unfair subsidization. This is not related simply to developing countries; it is happening in my own country right now, our country.

I'd like to raise a couple of issues. Thank you for being here. I think World Food Day is wonderful. Your goals are laudable. Believe me, I don't think anybody around the table would suggest otherwise.

As I see it, the goal here is to reduce the hungry from 800 million to 400 million by the year 2015. That's as I see it right now. Can anybody on this side of the table tell me right now that you believe that this goal is achievable by 2015?

You say it is achievable by 2015?

Let me give you some examples. Foreign aid in Canada has declined from 0.49% of GDP to 0.25% of GDP. Food aid has been reduced by 70%. As we've just talked about, we have other issues with trade. Putting those on the table, do we still believe that the goal is achievable by 2015? Stuart?

Mr. Stuart Clark: I certainly want to answer that. I think it's very clear that—

Mr. Rick Borotsik: Oh, by the way, I have another question, so be short, okay? You can't be taking all my time here.

Mr. Stuart Clark: With what we've had to work with until now in terms of political will, the answer has been very clear. We're at about 40% of where we ought to be according to the political will we've had up until now. I don't want to play an opportunistic card, but we're all thinking that we're in this boat together in a way we didn't think about before. I think there is real potential to turn that around, and the costs are not high.

The American government has done a budgetary estimate of what it would cost to reach the target, and I think it was less than a dollar per day per American citizen if the U.S. carried its load. This is just to try to put the numbers into some sort of context. It's not terribly expensive, but it takes political will.

Mr. Rick Borotsik: Okay. Let me go to another area that I tried to deal with, and I suppose it goes to Rieky. With respect to this development box you and Shishir Priyadarshi talked about, it's not dollars, and I agree, it's not dollars. Political will is what it is. We talked about the development box as access to markets, closing markets or protectionism in some of those markets, and—here's the kicker—reduction of subsidies on other commodities.

Here's a reality check. As much as you, Suzanne, optimistically believe that the Americans are not going to come across with those subsidies, I don't agree with you. I think the Americans are certainly tied into subsidizing their farm economy. We know from the European Union that they would love to be able to reduce their subsidies, but I've talked to them eyeball to eyeball and they've said their subsidies are going to remain.

What kind of political will is there? You want Canada to take this forward to the WTO? How many other countries are going to support Canada when we take it to that? That's my question right now. I'd love to be able to snap my fingers and say that we live in a perfect world, but I don't think we live in that perfect world. How are we going to convince the other members of the WTO to do that? If you have the answer, we'll make you prime minister.

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Ms. Rieky Stuart: Well, when we talk about political will, this is the right place to bring the question.

Mr. Rick Borotsik: For Canada, yes, but there are other members of the WTO.

Ms. Rieky Stuart: Exactly, but what Canada has is what Shishir was saying. We're not the U.S.A. We have a good reputation as an honest broker, a middleman, a mediator—

Mr. Rick Borotsik: And a boy scout.

Ms. Rieky Stuart: —a boy scout, yes, and maybe even a girl guide.

Some hon. members: Oh, oh!

Mr. Rick Borotsik: Touché.

Ms. Rieky Stuart: Why don't we use it? I think we may be spending our political capital, penny by penny, in places where it doesn't do the most good. This agreement on agriculture is one where spending a little bit of our political capital would do a lot of good. We would have countries from India to Brazil, not to mention Malawi—

Mr. Rick Borotsik: But Canada buying into this development box without the other countries doesn't do anybody any good.

Ms. Rieky Stuart: But we could get support from the Nordic countries, we could get some support from the EU, and we could get southern support.

Mr. Rick Borotsik: Could we get American support?

Ms. Rieky Stuart: It's a—what do you call that—a squeeze?

Mr. Rick Borotsik: Thank you.

The Co-Chair (Mr. Charles Hubbard): How many others have some questions to ask now?

There are Larry and Rose-Marie. David has some more, and there's Marcel.

I'll go to Rose-Marie next.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): I just have a quick question, Mr. Chair.

We're talking about national food aid here today. How much effort does CIDA put into food aid versus teaching countries how to grow their own food? Are the dollars put in not just food dollars but in the form of technology and education so that people in these countries can try to be self-sufficient?

Mr. Bill Singleton: The answer is yes, and I think I'd like to pass this to my colleague, Mr. Macgillivray, who's our agriculture expert.

Mrs. Rose-Marie Ur: Percentage-wise, how is it balanced out?

Mr. Iain Macgillivray (Agriculture Specialist, Policy Branch, Canadian International Development Agency): I'm going to have to defer to my colleague on food aid, but I must tell you one thing. Let me answer that my life at CIDA centres on allowing these countries to do away with food aid. Essentially, what we have at this moment is that a proportion of approximately 5% of our support goes to agriculture, food, and nutrition. All I need is my colleague's figure of what it is specifically for food aid so you can have that answer.

Mrs. Rose-Marie Ur: Okay. While he's giving you that information, my next question...maybe you can deliberate with him and get the answer.

They're saying that by 2020, 1.5 billion additional people will need to be fed, which means 39% more grain will be needed. What is your support? Do you embrace biotechnology such as GMO? How do you look at that within your own groups? Are you supportive?

Mr. Iain Macgillivray: Within the context of development assistance, we are taking a very, very cautious approach to biotechnology. In fact—

Mrs. Rose-Marie Ur: Even if people go hungry?

Mr. Iain Macgillivray: No. Depending on how you define biotechnology, you have your soft side that can include tissue culture and genetic markers. It goes all the way to the other end of the scale, where one may be talking specifically about genetic engineering and the transfer of genes for transgenic crops.

In the kind of support CIDA is providing we are being very careful to make sure that the kinds of concerns that are raised by yourself and other citizens in terms of biotechnology are being addressed. In fact, much of our support that goes to research involves working very closely with developing countries.

I'll try to answer your question, how does one deal with the issue of trade-off. How does one deal with the ethical issue of developing countries who want to develop biotechnology and who want to take that exponential leap, if you like, and gain access to areas they're not currently working in? This is part of the international debate. In about a month and a half we will have a document we're preparing to address specifically the relevance of biotechnology to Canada's development assistance.

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We're working on this, and we're providing considerable support to an international system where we work with other donors—European and non-European donors—and even with members from developing countries to work out ways to determine where we can work with the best of biotechnology yet be very careful about the negative concerns.

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

The Co-Chair (Mr. Charles Hubbard): Mr. Gagnon.

[Translation]

Mr. Marcel Gagnon (Champlain, BQ): In light of World Food Day, I find your comments superbly relevant, but at the same time somewhat depressing.

We did not reach our objectives, even though we have just experienced a period of virtually unprecedented economic prosperity, and other countries have also enjoyed such a period—but we are here to speak about our own case. In light of the fact, then, that the objective is to reduce the number of starving people in the world to 400 million by the year 2015, I can't help but think that a lot more people will die of hunger before we react.

I know that of the 22 countries that provide aid to developing countries, there are 19 that give more than Canada, as a proportion of GDP. And yet, we are told that we are an example; I don't see why.

I would like to hear your response to that. Personally, I do hope that we have reduced the number of starving people to 400 million by 2015. I do find it somewhat scandalous, however, that we, that is to say Canada, the United States and other countries, should satisfy ourselves with this. Nevertheless, I doubt that we will attain that objective in light of our past performances. I would like to hear your reaction to that.

And, since I don't think I will have time to intervene again, I would like to put a question to Mr. Caouette, who expressed some concern, I believe, with regard to seeds, a concern I fully share. I would like him to explain to us to what extent it can be dangerous not to use indigenous seed in developing countries, locally produced seed.

What we can see dawning on the horizon with GMOs—we will in fact be speaking about this later on in Parliament—is the day where a few companies will own all of the seed grain, all of the seed, grains, bulbs or other such things throughout the world. I wonder how developing countries are going to be able to cope with that then.

Mr. Dominique Caouette: That is an excellent comment. These are questions that are difficult to respond to simply, but I will try to do so.

It is clear that GMOs are a major concern for our southern partners. It is also clear that conservation, preservation, the right to keep seed for the next crop are essential rights.

It is also clear that GMOs have been encouraged and supported by the green revolution and it is obvious that we are in a situation where the land has deteriorated rapidly, where seed continues to be very expensive, and where pesticides and insecticides, although safer now, are also more expensive. There are better pesticides, better fertilizers, but they are also much more expensive. The massive use of modified seed requires more and more inputs. It is a serious problem.

Here is my second point: a partner from Bangladesh who was here recently, for a conference in Toronto on food security, made some comments that were along the same lines of the comments made by Mr. Borotsik, ie that the situation of farmers in Bangladesh is increasingly similar to that of Canadian farmers in Saskatchewan. They are faced with increasingly similar challenges and as a result there is greater and greater solidarity among them.

What he explained was that with indigenous seed and ecological agriculture, that is to say agriculture that uses all the resources of the natural environment, a mix of crops, one calorie of energy produces four. Whereas, according to their experience, with the green revolution seed, you need four calories of energy to produce a single one for consumption. So things are quite clear, and we don't need to worry about that.

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This means that with the privatization of seed, and GMOs, genetically modified organisms, encouraging the use traditional seed is our major problem. It is one of the major issues in the WTO negotiations. The agreement on intellectual property, the privatization of seed and patenting are big issues, and it is important to be aware that they will be discussed in the negotiations.

In exercising pressure to have the agriculture agreement amended, we are saying that Canada must seriously study the issue and be very cautious when it says that it supports privatization of seed and the trips, which are also part of the negotiations with the WTO, because of the risk of concentrating seed ownership. Actually, seed for products such as wheat, corn, and others, are concentrated in the hands of five big companies that own the genetic makeup of those seeds.

That is an excellent question, because our counterparts who work in the field are faced with it every day, as are those who work daily in their fields. The stakes today are no longer only those that are discussed by governments, but are also the issues faced on a daily basis by farmers themselves in their work.

Mr. Marcel Gagnon: Thank you.

[English]

The Co-Chair (Mr. Charles Hubbard): Larry, do you have something?

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you very much, Mr. Chair. It's great to see these people back again. I'm not sure whether we saw you at the joint committee last year or two years ago.

I felt good for a few moments today in the House when Jean Augustine and I, amongst others, spoke about World Food Day, but we certainly must do much more than speak about it.

I have a comment to Mr. Clark.

I felt good the other day again when I noticed a photo in a national paper in Afghanistan of Canada on the one bag of grain and the Foodgrains Bank on the other bag. It looked great. In fact, in eastern Ontario, near Kingston, in my little riding and in Napanee, I think they may be combining beans today because the sun is out. Almost everybody here from the agriculture committee has people in their riding taking part in this great program, but we have to do a lot more.

The focus right now, of course, is on the five million hungry people, as it should be, but I'm hoping we don't lose sight of the other countries and their needs. I know it costs money, but we in Canada must do more now to help feed these people. There's a lot we could do. Here we are, with the price of grain on the world commodity markets near historic lows. I know it's better now. But we have to cooperate; we have to act together. We have grain today that should be going out tomorrow, in my opinion.

But what can we do more without...? And I don't think it has to cost a lot of money. I just want to give you an opportunity to hit us as we're closing here to tell us that we must work together to do a better job. What small things can we do now?

Mr. Stuart Clark: One of the issues we referred to in our brief was the issue of untying or the increased flexibility for the local purchase or regional purchase of our food aid. Of course, we would like to see more money in the food aid budget, and I think the arguments for that have been made clearly. But a small thing that really will make a big difference is the increased flexibility where food aid is required, to be able to procure that food when it's available in the region or locale where the food aid is needed.

This is not every situation by any means. There are many places we send food where it's entirely appropriate to send Canadian food. In places like North Korea, which have extreme shortages of food and are not agricultural countries, or places where there are emergencies and agriculture production has been knocked out, it makes good sense to use Canadian commodities. But there are equally places where there is food available, if not right amongst the people who are hungry, then nearby, and right now we're highly constrained. That's a small change that could make a big difference.

Mr. Larry McCormick: Mr. Chair, again on the comments on biotechnology, I was glad to hear one of our witnesses talking about the differences in the genetically modified food. We're all concerned; we all want safe food. I think it's partly education. But I come back to the example of canola. I think canola can be found in the cupboards of many of our kitchens across this country. Our canola and beans can help a lot of people.

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So I think we have to work together to educate our people on both sides of the waters. There has to be room for us to look at some of that technology, because the advancements that could be made, and are being made, in the amount of production are vast and very promising. I wondered if anybody else had a comment.

I hate to hide all that if we can make a difference in the food people eat.

Mr. Iain Macgillivray: If I may, I think you're spot-on. I think one of the things that happens to us all is that when we don't understand something, we fear it and we don't make decisions. I'm totally convinced that, the same as we did with many other technologies in the past, we have to look at this with an open mind.

I think the whole purpose of the kind of initiative we've taken in CIDA, one in which in fact next week we're already having an internal consultation on and then we will be consulting with our partners, all deals with trying to spread the understanding, for people to have a better understanding of what we're dealing with.

I mentioned the point about the soft side of biotechnology, and unfortunately everything is lumped in in terms of where their concerns can be. I know that in Europe it's hard to give credibility to science, but if we look at this carefully I think it has a lot of opportunity.

The Co-Chair (Mr. Charles Hubbard): Thank you, Mr. Macgillivray.

I did promise you before, David, either you or John, a minute or two.

Mr. David Anderson: I wanted to come back to the biotech thing, as Larry did.

I'm a producer as well, and I'm one of those people who has been caught in the situation where other people are able to produce their product for less, or we can't sell it for what it's costing us to produce it.

One of the problems with organic has been that traditionally you take a drop in yield if you want to be organic rather than what we would call our regular style of farming. We need to take a serious look I think at the fact that people can only change their economic situation in two ways, and that's by either raising your production or lowering your cost per unit. In most of these countries they're not going to be able to lower their cost per unit at all.

It is a way to provide more food to people. I would disagree with Mr. Caouette when he talked about the fact that it is more efficient to raise organic food than it is to raise other food. I don't see that on my own operation, or those around me.

I do, however, agree with him on the patenting of seed problem. It's a problem in Canada as well as other places, in that we put public funding into the production of seed and then we turn around and sell it to private companies. That is a problem. I would imagine it's a much bigger problem in developing countries than it is here.

I was going to ask that question Larry asked, but I would like to know if anybody has a comment about those two issues.

The Co-Chair (Mr. Charles Hubbard): I see the bells are ringing.

With that, I'd like to conclude our meeting this afternoon. It's a very complex issue, and I think overall we only really scratched the surface of what's going on out there in agricultural communities around the globe. For example, I think someone alluded to the fact that in some countries people can't keep what they produce; they have to use it to pay off some of those foreign debts. We hear about other countries where people are destroying the rain forests and expanding their agricultural communities and creating jeopardy for the future of their environments.

But above all, as I think Larry mentioned, many Canadian producers look on World Food Day as an opportunity for them to give some of our food to other people who are less fortunate than most Canadians.

With that, we'd like to conclude today. I want to thank you for coming. Hopefully you've not only been able to stimulate us as parliamentarians, but also through the TV media, through CPAC, you'll be able to bring to Canadians the tremendous problem the world faces. I wouldn't be all negative in terms of what happened in 1995-96, with the goals or visions that were made. They've certainly made some progress there, and if we can look after that other 800 million, then we've really achieved something.

I think we have to go back to the old saying in the Bible, that we always have people who are in need. You remember what Christ said in terms of that. It's part of our overall religious background in terms of being a good, generous, and humanitarian people that we try to look after those who are less fortunate.

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Thank you, and with that we'll conclude our meeting and go to the House.