AGRI Committee Report

THE FUTURE ROLE OF THE GOVERNMENT IN

THE GRAIN AND OILSEEDS SECTOR

(interim report)

INTRODUCTION

     During the first session of the 37^th Parliament, the Standing Committee on Agriculture and Agri-Food met with numerous stakeholders from the agri-food sector.  Early in the session, the Committee conducted hearings on the marketing problems of Prince Edward Island potatoes, and the serious concerns with the outbreak of foot and mouth disease in Europe.  The Committee also had a meeting on the implications for agriculture of the Free Trade Area of the Americas. It is worth noting that the agri-food sector generates $130 billion per year and employs 1.8 million people.  In subsequent meetings, one theme emerged from the discussions.  It quickly became obvious that Canada’s agriculture sector is running at two speeds: on the one hand, many industries, such as livestock production and industries that benefit from supply management, have been able to take advantage of market opportunities in recent years; and on the other hand, there is the grain and oilseeds industry, which seems to face chronic unfavourable conditions.

     Many factors have contributed to this situation, among them the subsidies paid to grain producers by the United States and the European Union, natural disasters such as the flooding in Manitoba and Saskatchewan, and frequent increases in input costs. But irrespective of the causes, the result is the same: grain prices and net income remain low.  Moreover, when the market for some grains shows signs that prices are on the rise, the cycle is usually too short to allow farmers to get back on their feet. The farm income safety net has improved in recent years and is helping grain producers in Canada, but the slump in the grain and oilseeds industry seems to require more than one solution.  With this in mind, the Standing Committee held hearings on the future role of the government in the grain and oilseeds sector.