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Yes, Mr. Chair. I'll go first.
I think we've distributed our opening remarks, so I won't read them out to you, but I do want to cover some key points.
As you know, the agricultural jurisdiction is shared federally and provincially. In 2003, we established the first sort of national policy framework that brought the federal government together with provincial and territorial governments to align our programming and policies to make sure that we're better serving the agricultural sector.
The agricultural policy framework initially focused on branding Canada as a leader in safe food and environmentally sustainable practices for food and agriculture. The subsequent policy framework, Growing Forward, which began in 2008 and will run out in 2013, extended that ambition, but added a great deal of flexibility for provinces to design programs that are locally relevant and effective. It also invested considerably more money in innovation, recognizing that the international landscape has changed.
We're just at the point now where we're starting our next policy framework. We began with consultations in May and June of this year. After some intense and creative brainstorming, we're naming it “Growing Forward 2”--for now. We've spent a great deal of time talking to leaders in the sector and others about what the world will look like in 2020, about what the opportunities and challenges will be looking out over the next 10 years, and in using that as a basis to design the next policy framework. I just want to talk a little about what we've been hearing.
On the demand side, the world looks like agriculture's oyster, because there is growing demand, both in terms of large population increases--mostly in countries like India, China, Brazil, Russia, and other areas--and in terms of income increases in those countries. For Canada, this means that there's an opportunity literally to feed millions of more people, given their higher disposable income. We know that consumption patterns change when incomes go up: there's a lot more dairy consumed and there's a lot more animal protein consumed. So there are opportunities for us in those areas, both on the growth side and on the income side.
There's also a considerably greater demand today for foods with specific attributes, namely mostly in the health areas, and we've seen major growth in crops like canola to feed a world that is hungry for healthy foods. There's a huge opportunity for foods with specific attributes.
On the supply side, of course, Canada is really well placed with its considerable arable land and water, which isn't the case in many other countries. China, for example, has surface water that in many cases is not even suitable for agricultural irrigation anymore. So Canada is well placed, both in terms of natural resources and technology and innovation.
Our farmers are amongst the most productive in the world and we think we'll be very well placed. Those in the sector are telling us that they're going to be very well placed to take advantage of changing consumption patterns and population growth that will be demanding more food.
The challenge for us, though, is that as populations grow there are competitors on the horizon. In Ukraine, Kazakhstan, and Russia, if they get their act together and improve their yields, they can become significant competitors in grains and oilseeds. Brazil is already an emerging giant in agriculture. So we do have our challenges ahead of us, and our farmers, I think, are up to the challenge.
We do have to become more innovative. We do have to become more productive. Innovation, we think, is going to be key as we go into Growing Forward 2, and innovation in a number of senses. One of those is in the traditional sense of research and development, in providing our farmers new technologies and new crops, with better agronomic characteristics to improve yields, but also with characteristics that will improve the attractiveness of our crops for specific consumer demands, like health attributes.
We also see innovation applying in terms of business models. Globally, what we're seeing is a supply chain that's becoming more sophisticated, with global suppliers demanding greater performance on the environmental side and the food safety side. As those business models change, Canadian farmers will have to adapt to those more sophisticated supply chains, and we think we are ready to do that. So innovation is going to be quite key.
Among the other things we are hearing from the sector is that infrastructure is an important driver, both for innovation and for our attacking domestic and global markets. We look at infrastructure from a traditional point of view; in other words, you do have to move your product to market. You do need to have ports at railways and highways, but you also need to have the infrastructure in place for regulatory policy and the legal framework, and you need the human infrastructure in place, that is, people who are smart and entrepreneurial and ready to move. The sector is telling us that we need to focus on that part in GF2.
We're looking at attacking domestic and global markets. The committee won't be surprised to hear from me that we do see greater interest amongst consumers about where their food is grown and greater interest amongst consumers about getting access to local food and understanding their connection with local agriculture. There's a domestic market opportunity there for our farmers, as well as a global market.
In this day and age, with changing standards, demands from consumers, and demands from supply chain managers for sustainable agriculture, clearly the environmental performance of the sector is going to remain very important. We need a sector that is adaptable, able to respond to new market signals, and able to deliver what consumers and supply chain managers are asking for.
So where we're at right now is that we've done our first phase of consultations and we're going to move into the second phase.
[Translation]
The first phase of industry engagement was held in May and June 2010 with a series of national and regional workshops held across the country. Over 400 farm leaders and other key value chain stakeholders engaged with FPT governments on the long-term challenges and opportunities facing the sector. These engagement sessions were very productive and provided valuable insight into stakeholder views.
Phase 2 is scheduled in March 2011 and will be geared towards defining policy options and securing an endorsement on the proposed GF2 framework model. Phase 2 engagement will try to include the general public as well as various associations, opinion experts and issue experts.
Phase 3 will take place after an agreement in principle is announced by FPT ministers in summer 2011 and is tentatively scheduled for winter 2011.
For the last strategic framework component, we worked very closely with the departments and we intend to the same thing this time. We want to secure a very serious commitment from the sector toward the next strategic phase.
[English]
We have made a good start. We do need to undertake some significant engagement to refine the future directions for Growing Forward 2 and we intend to undertake that in the next year or so.
I would like to go through the remarks very quickly. We did distribute them to members. I think they will set a context and give some examples to start the conversation that we're going to have today. Thank you.
As Greg just said, the programs we deliver were developed after significant consultations for Growing Forward. Some also had parameter changes made after that, and there were subsequent consultations with stakeholders in each of those instances as well.
There are currently over 30 different programs aimed at helping the sector grow as a competitive, innovative, and environmentally sustainable sector that proactively manages risk. These programs are delivered by AAFC, sometimes by officials in the department itself, sometimes in partnership with other federal departments, and sometimes by third parties who work on our behalf or with us, but often in partnership with provinces and territories, as Greg mentioned earlier.
These programs are designed based on industry input and are implemented and administered according to legislation, government policy at the federal and provincial levels, and with a view to international trade considerations and obligations. We try to work closely with industry and governments to monitor the delivery and also the ongoing performance of these programs. The depth and breadth of the programming is best illustrated with some key examples.
I'd like to start with the business risk management programming. We have a long history of farm support that has taken many forms over the years. APF Growing Forward business risk management program changes were driven by producer consultations and represented requests that industry had been making for some time.
As you know, the BRM suite is now comprised of AgriInsurance, AgriInvest, AgriStability, and AgriRecovery. The AgriInvest program and the AgriRecovery framework are new approaches to help producers manage risk. Fundamental changes were made to margin-based programming under the AgriStability program. These include: better methods of valuing inventories; improved interim payment mechanisms; the broader criteria for negative margin coverage to allow support for those facing back-to-back losses; targeted advances to get money out quickly when disasters occur; and as well, some administrative streamlining.
Since 2007, the suite of BRM programming has provided significant federal and provincial assistance, with over $6.4 billion going to Canadian producers. A substantial amount of this funding has been in support of the livestock sector. For 2007-08, BRM programs provided over $1.24 billion to cattle and hog producers, and for 2009-10 more than $1.1 billion is projected to flow to livestock producers through these programs.
Individually, the programs are also providing significant coverage, and we have some examples there. Under AgriInvest, for example, $1.1 billion has been contributed into those accounts. As of this month, $670 million remains in those accounts and is available to producers to assist in managing risks. Under AgriStability, $1.9 billion in payments has gone out since the introduction of the suite. For AgriInsurance, for the 2007 to 2010 program years, $2.9 billion in government premiums have been paid and $3.4 billion in indemnities. For AgriRecovery, we've had $773 million committed to provide assistance through 21 initiatives in eight provinces, including $450 million quickly made available to western producers in response to the flood.
Under the loan guarantee programs, we have the advance payments program, a federal loan guarantee program that offers cash advances to producers so they can maximize their marketing opportunities. In 2006 the Agricultural Marketing Programs Act was amended, and program improvements were introduced to the advance payments program.
The cash advance limit was increased to $400,000 from $250,000, and the interest-free portion was increased at that time to $100,000 from $50,000. In addition, more commodities were made eligible, such as livestock and horticulture. This program benefits more than 37,000 producers each year.
In 2009 the Canadian Agricultural Loans Act was passed. It expanded eligibility to beginning farmers and to more agricultural co-operatives and allowed for intergenerational farm transfers. Since the act was passed in June 2009, 3,418 loans have been issued for $184.2 million. Of these, 288 loans have been registered to beginning farmers, for a total of $25.6 million.
Transition programs are another type of program that we offer. We have two examples here. Transition programs such as the hog farm transition program and the orchards and vineyards transition program are helping to reposition sectors for the longer term.
The HFTP was one response to the Canadian Pork Council's objective to rightsize the industry, as set out in its strategic transition plan. The orchards and vineyards transition program is aimed at helping the tree fruit and grape industries in B.C., Ontario, Quebec, New Brunswick, and Nova Scotia adapt to market and industry pressures.
Under the research and innovation banner, the Growing Forward science and innovation initiatives have opened the door to greater opportunities for industry to engage in research activities that will foster competitiveness. The initiatives for developing innovative agri-products in the Canadian agri-science cluster are good examples, with over 100 proposals from the sector.
Another example is the agri-opportunities program. This is a five-year program that supports the commercialization of innovative products. It has approved 27 projects so far. They are expected to result in over $100 million in benefits to primary agriculture and to create 360 jobs over the next five years.
[Translation]
Additional programs have also been developed to respond to specific needs. Through one such program, the Initiative for the Control of Diseases in the Hog Industry, the government supports the Canadian Swine Health Board in its efforts to establish the foundation for a disease risk management framework for the Canadian hog sector.
The Board brings together stakeholders from across the hog value chain and across the country to address important issues that farmers are facing when dealing with disease risks and their impacts on the profitability and the competitiveness of the Canadian hog farms.
AAFC is also investing in the future of the sector by developing Canada's agriculture graduates for a career in the industry. As part of the Government of Canada's Youth Employment Strategy, or YES, the Career Focus Program provides employers with up to $20,000 in matching funds to create internship opportunities for recent graduates from agriculture-related post-secondary programs.
The program offers an economical way for employers to attract talent and provides new graduates with a valuable first job that hopefully will help pave the way to a career in the ever-changing agriculture and agri-food industry. Through an annual budget of $864,000, the program funds about 60 agricultural internships across the country.
The 2010 Budget allocated an additional $30 million for the 12 departments delivering CFP under the YES. AAFC's share of this special one-year additional funding is $726,000, bringing the total 2010-2011 AAFC allocation to $1.6 million. As a result of this additional funding, AAFC will fund 106 agricultural internships this year.
Over the last few years, AAFC has also embarked on a service and program excellence agenda. Based on past earnings and feedback from clients, from program administrators, industry associations and other governments, a number of initiatives have been undertaken to meet sector needs, to improve efficiency in program delivery and to measure program impacts against desired outcomes.
Despite the wide range of programs and the level of assistance available to the sector, we understand that there are some concerns with some programming in some parts of the sector. This feedback will be an integral part of the considerations for future program development to ensure that we continue to meet the sector's evolving needs, as Mr. Meredith stated earlier.
Welcome, folks.
Mr. Meredith, in your remarks you talked about being basically bottom line, more innovative, and more productive. You said that our producers are among the most efficient in the world. I don't disagree with that. They are productive.
But that has been the answer spelled out by governments since 1970, when I started in this racket: just be more productive and things will be all right. Well, that hasn't solved the profitability problem on the farm, for a number of reasons.
In fact, if you do some research, every economic indicator is positive, whether it's production per acre, exports, output per farmer, cost per unit, or whatever, except for one indicator, and that's net farm income. It just isn't there, in many cases.
Ms. Moritz, you threw a lot of numbers out there, but the key is what it means on the farm for the primary producers and their families. Regardless of the money spent on hogs and beef, the numbers sound decent, but they're not.
Canada is not standing up to the rest of the world in terms of our support for our agriculture sector versus the rest of the world. Those are the facts. I'm not blaming the minister. I'm not blaming the department. But I think we have a town here that's run by the Department of Finance, and they don't understand agriculture.
Yesterday, Peter Clark put out a release on American subsidies, and this it what it says. Peter Clark's company found that “U.S. federal, state and local governments continue to subsidize their agriculture industries with a labyrinth of programs that are conservatively estimated at over US $180 billion in 2009”.That means they're somewhere between 200% and 300% higher than they are for Canadian farms.
Yesterday, in The Globe and Mail, we saw that investment companies are buying the land out from under farmers in Canada and in other countries around the world. Farmers are becoming serfs, really, on their own Canadian land.
I make those points because this government and previous governments, in my view, in the past 20 years have never done enough at the primary production level, regardless of the numbers you've mentioned.
I want to go to some of the programs that are in place. The most worrisome at the moment are the repayment conditions for the emergency advances. The repayments had to start June 1, 2011 for cattle and had to be paid back over ten months. For hogs, it starts March 31, 2012. I'm told by industry in my province that 80% of the industry will go into default if those conditions remain in place. Somewhere around 50% of the industry is in Ontario.
Now, are there other options being considered? What can be done here to assist these farmers? The program was announced. They said that when economic conditions improve, repayments will be returned. This will drive more producers out of business, especially in eastern Canada. They don't have the program that was put in place in Alberta. What are the other options to keep farmers in business instead of this fixed timeframe payment?
I want to thank the witnesses for being here.
Mr. Meredith, on the subject of program review, you mentioned some phase one consultations that the department engaged in in May and June of 2010. More consultations are planned. As you surely know, the members of the Standing Committee on Agriculture and Agri-food also consult with the agricultural sector, which in turn consults its own members. These consultations lead to a number of recommendations and possible solutions, as we saw when the committee travelled to different locations recently to consistomder the future of young farmers. During its tour, the committee heard many comments about certain program shortcomings. As I have always said, some programs work well, some are more or less successful, while others do not work at all. I think that is quite normal. It is wise to conduct a program review after a period of a few years, to see what types of improvements can be made.
I just want to make a few specific recommendations about the AgriStability program. I have singled out four recommendations that emerged from the consultations with producers. I am sure you are aware of the producers' demands, but I would like to hear your opinion of each of the changes they are seeking to the AgriStability program.
One of the recommendations that was made is that for the purposes of reference margin calculation in a given year, producers should be allowed to use either the Olympic Average or the average program margin of the last three years. The highest amount would be the one retained. This change would ensure that certain producers who currently do not qualify for the AgriStability program because of the Olympic Average would now receive some payments.
Another recommendation calls for the elimination of the viability test applied to negative margins.
A third recommendation calls for increasing negative margin coverage from 60% to 70%. I believe this particular recommendation was mentioned this week when producers testified before the committee.
Lastly, it was recommended that producers have the option of either taking advantage of the 15% coverage above the reference margin or of participating in the AgriInvest program.
These are just a few of the recommendations we received. These changes to the AgriStability programs have been fully endorsed by the agriculture sector. I would like to hear your comments on each recommendation.
Thank you for being here. I'm going to start with a general question. Then I have some specific ones.
Wayne mentioned that U.S. subsidies are somewhere around $180 billion this last year. We've always known that the Americans tend to pump more money into their farming sector on a per capita basis than we do. I just completed my own tour across the country, based on food sovereignty and food security. A couple of major themes that came out were that there's a tremendous number of local initiatives--some of you referred to that today--and the other thing was the whole idea that in some instances, perhaps, trade has impacted negatively on farmers. We've seen that with the way the dumping that's allowed in Canada has hurt our fruit industry.
This committee a number of years ago made a recommendation, supported by all members of all parties, that we should be encouraging local procurement for federal government institutions. The response we got from the department was that we have to be careful, because of certain trade obligations, about countervail duties. At the same time, I know there are states in the United States that do this. Illinois, for example, has said that by the year 2020, 20% of the procurement for local state institutions will come from local farmers.
I'm wondering in general whether somebody is studying or looking at how the Americans are able to inject this amount of money and still stay within trade agreements. I get the feeling that we're afraid to do some of this because of the trade agreements. Maybe that's just a general question. Are we starting to look at this to see how we can support local producers, do programs such as local procurement for federal institutions, and at the same time somehow keep our trade agreements?
That's the first question.
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Thank you. That's a complex question, but in effect you're right, Mr. Atamanenko. Our trade obligations prevent the federal government from biasing procurement toward a given commodity or Canadian products only.
I think there's a lot of risk in that. You saw the problems we faced with the United States and their Buy American strategies in the post-recession period, when our government had to work very, very hard to try to exclude Canadian firms from that because of the loss of business. It's a difficult trade path to go down if you start to bias toward local procurement.
I think there are strategies for marrying up consumers to local farmers, and those kinds of initiatives are actually taking place right across the country. We do work in the department to try to help our producers get involved in the value chain so that they can connect with consumers. We have a number of value chain round tables that bring together the producers in the sector with the processors and others to make sure we're responding to consumer demands.
You mentioned dumping and other issues. We actually do have access and have successfully used access to anti-dumping in the tree fruit industry in British Columbia, for example, so trade rules do work for Canada. I'm sure you know that in the WTO one of our major objectives is to limit and reduce as much as possible trade-distorting domestic support of the very kind you're pointing to in the United States.
In terms of the amount of support the U.S. delivers to its sector, it varies on a commodity-by-commodity basis, but overall, the producer measure of support is actually higher in Canada than it is on average in the U.S. I would be pleased to provide that information in detail to the committee. It does seem counterintuitive when you see the numbers that are thrown around. I haven't read Mr. Clark's study, but I know Peter very well, so I will be talking to him about it to see what kind of methodology is behind that. But in OECD estimates, Canada is actually a bit higher than the United States.
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Yes. That's the federal-provincial cost-shared programming.
As an example, the AgriInvest contributions to date are over $566 million. In addition, the federal government topped that up with $563 million as a kick-start to the AgriInvest program, which is a new program that was brought in as of 2007.
AgriStability has paid out $1.9 billion since 2007. On AgriInsurance.... And this is only the government contribution to the premiums. This is not the indemnities that have been paid out, which are much higher. The reason we report on that basis is that indemnities reflect, in part, the producer contribution to the program. AgriInsurance contributions to the premiums are almost $3 billion since 2007. AgriRecovery has actually paid out $457 million. I think you'll recall that Ms. Moritz mentioned the commitment of $773 million in terms of what's been announced. Of that amount, we've actually paid out $457 million to date.
So that's the $6.4 billion. I would also point out that this in essence, reflects two years, two program years. On 2009, aside from the AgriInsurance, we're still very much into the processing of AgriStability for 2009, and AgriInvest, so those numbers will continue to climb for the 2009 program year.
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Going back to the AMPA programs themselves, one of the things I'm hearing about in my riding as I talk to constituents--and some of it has been addressed--is the timeliness of payments. It sounds like moving the offices out to the regional areas--moving them out of Winnipeg to Saskatchewan, for example--seems to be improving that.
One other issue that always comes up, which I think reflects the 21st century, is removal of caps. The reality is that $400,000 on a grain farm now is nothing; it's not even 2,000 acres of inputs. Has the removal of caps been under consideration?
I'm going to keep listing off a few things here, so perhaps you'll want to take a few notes, because I know I'm going to run out of time.
On bankability, again, I know that a couple of years ago there was talk about creating a form that would be similar to income tax so that it was bankable, and so that when it was done you knew roughly how close you were to what you would get or not get when you filled out your forms.
Another thing I'm concerned about on the crop insurance side of things is the ability to purchase enough insurance to cover the inputs. As we look into new crops, new varieties of crops, and crops for non-food purposes, the inputs are going to be substantially higher than we saw in the past. We need to figure out a way for the producer to purchase that type of insurance. If it's through government, that may be one option.
I understand that private industry is also looking at providing those types of insurance. If private industry comes in and provides that type of insurance, are we willing to subsidize that insurance, equivalent to what we do in crop insurance? Again, that's a question I throw out there.
Removable barriers: again, that should come up in any program. We have a big barrier in western Canada in the wheat sector. It shows up in everything we do. I don't even have to mention its name. Again, those types of things should be talked about.
The other thing that I think is really interesting, and that I think you need to be aware of, is that we're seeing corporations now that are getting tremendous margins, especially in southern Saskatchewan with their lentils and peas and stuff like that, and they're capitalizing that margin when they go to sell their business, the same as quota got capitalized.
We're seeing guys who have substantial margins. When somebody new comes and buys their business, buys their shares, they're carrying that margin forward and saying, “Because my margin is higher than David's, I should get x number of dollars more.” That concerns me because I'm not farming it any longer, but somebody else who is now taking over and farming it, and it could lead to an inflation in land values, based more on margin than actual production of crops. I guess I'd throw that out there too.
Perhaps I'll leave it at that. There are a few other things I think we need to look at. Maybe I'll finish off with mixed farms.
We're seeing guys being driven out of mixed farms because of the way the program is structured, because of the cross-subsidization of grain in your whole farm approach. If there's a way that we can structure it so that we don't do this...because I feel it actually creates more risk in the long term. If the farmer is willing to offset losses from grain for cattle and vice versa, he shouldn't be penalized for doing that. But the way the program is structured right now, he is actually being penalized.
I'm not sure I have the answer to that, but in the same breath, I think it's something we need to be discussing. What happens is that we're seeing people specialize. For example, in the hog sector, when that sector goes down, their only insurance and their only saving grace is the BRMs--it's government and that's it. In the old days, which weren't always the best, if the grain was no good, the cattle came up, or vice versa. Well, we're actually encouraging guys to do the opposite of that.
I'll leave it at that.
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I'll try to whip through these in terms of responses.
In terms of delivery, as you mentioned, we have devolved the delivery of AgriStability to Saskatchewan now, in addition to B.C. The federal government is delivering the AgriStability program in four provinces: Manitoba and three of the maritime provinces. The handover of the delivery has gone very well and hopefully it helps.
What we're hearing, too, is that having people on the ground working through the program with producers, to deal with some of the issues you've raised about bankability, is probably part of the solution. When I talk to producers, they say that once you walk through the program and understand it, it isn't as complicated as you think. I think moving it to the provinces is the right direction for delivery. Then you can deal with the whole package, including your AgriInsurance as well as your AgriStability.
On the issue around caps, you mentioned two caps. There is a cap of $400,000 on the federal advance payment program. That was raised I think just a few years ago, when we added livestock to the eligibility for APP. We haven't heard a lot about raising that cap.
We have heard a lot about raising the cap for the AgriStability program, which is currently sitting at $3 million. Going back to Mr. Bellavance's point, that's one of the issues the industry has also asked us to look at for some of the larger livestock and horticulture operations. I'm glad to hear that now the grain operations are bumping up against that cap as well. Again, this is something that would have to be part of the package going forward, which ministers would have to consider in terms of any possible changes to programs.
You mentioned bankability. Bankability, diversified farms, and long-term margin declines are the three key issues we hear about from industry in terms of needed improvements and issues that we need to address.
The long-term margin decline is an issue, but the program is not intended to address long-term margin declines; it's intended to address short-term income volatility. This is something that again will have to be part of the deliberations of ministers when they look at the next Growing Forward framework.
I think I'll pass it over to Greg, who can talk to the insurance issue.
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Thank you for the question. It is important to understand the situation surrounding Article XXVIII which originates in part with the WTO. This mechanism is part of our rules. Canada follows the WTO rules.
[English]
I'll switch to English for countervail. The distinction is that we're using a facility of the WTO to protect our milk industry--section 28 safeguards--as part of our right to use, versus countervail, which is everybody else's right and ours to use in situations where sectors are unfairly subsidized.
In the case of countervail and provincial risk management programs, the risk is very high. We've had several countervails against the hog sector, against cattle, and against wheat, hogs most recently in 2004. ASRA was under a countervail threat from 1985-99 and only came out from under that burden because most of its products, most of the Quebec products that were being subsidized, were not being exported in large quantities.
So many in the industry implore the minister not to put their industry at risk. Remember that it's the individual producer who ends up paying for a countervail. For example, if we were to subsidize the risk management program in Ontario that covers grains and oilseeds, included in the countervail action would be all of the western producers and all the producers in Quebec who deal with grains and oilseeds, so they would in effect be paying for the subsidy in Ontario.
The rules for the WTO actually do work. Section 28 is a good example. The recent work in COOL has some fairly positive results so far. The trade dispute panel on COOL, our taking Korea to the WTO for a dispute settlement panel over beef, and the recent market access we gained with the EU with 20,000 tonnes of quota beef are all examples of where the WTO is working. Unfortunately, it also works in reverse with countervail. The risk is very high and the minister has indicated that he won't go in that direction.
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Just as a reminder, the reference margin under the current AgriStability program is based on five years. What we use is called an Olympic average. We look at the previous five years, drop the high and low, and average the remaining three years. That becomes the producer support level going forward.
I've heard the 10-year comment. In fact, the five years was something requested by industry. The industry said that if they had their druthers they would prefer a five-year reference margin, because if you go to 10 years it's not reflective of the current operation. You get too far from where the operation is today. Certainly, the grain producers of today would not want a 10-year average reference margin. They would much prefer an Olympic average margin.
Anyway, industry asked for five years. But we also have to meet our WTO commitments, and a five-year reference margin would not allow us to report AgriStability payments in a disaster tier as green, so we had the option of using the Olympic average or the previous three years. We did an extensive analysis and found that the Olympic average tracks closest with the five-year average, and that's how we ended up with the AgriStability program.
So the 10-year average is something that would depend on the sector. Some sectors would say, “Yes, that's better because I had stronger years 10 years ago or seven years ago”. But others would be saying, “No, I'd rather be going with my last three or four years, because they're my best”. When we consulted with industry, they felt that five years was best.
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It is a concern for us as well. As I mentioned earlier, one of the reasons we moved to a national joint federal-provincial-territorial framework was because of the very points you're making, Mr. Eyking.
At the time, risk management programs were very different. There was a lot of inequity across commodity groups and across individual producers and provinces. The effort to construct the policy framework was to pull together, in one common framework, the business risk management programs and to make them as equitable as possible across the country. There has been drift and a number of provinces have built their own programs to top up. However, the federal government has refused to participate in those because it just exacerbates the inequity.
I want to make one distinction, though. In the context of business risk management programming, we really do try to keep them national and equitable. In the construct of the current framework, Growing Forward, the provinces asked, and quite rightly, I believe, that the proactive programming designed for promoting food safety, environmental sustainability, or innovation.... They said they knew better what that particular commodity group in that region needed. They wanted flexibility to design programs that would advance those goals and that would keep the outcomes national in focus, but then for the “how”, they wanted to implement them on a regional or provincial basis.
That seems to have worked very well, because it means that programs are more responsive to the needs of the local producer. But that applies to the proactive programming. We really do want a common national program in terms of business risk management.
Thank you, witnesses.
I have to tell you that many of the producers in Ontario are very optimistic about agriculture. I think it's actually one of the industries that has some the biggest opportunities in Canada, recognizing that in some of the programs we have some issues.
First, I would like to know what the agriculture budget was before 2006.
Second, I have specific issues when I talk about programs. On AgriInvest, some producers have been calling because they are not getting, are just getting, or haven't got their 2008 AgriInvest apps. Mostly these are corporations, but not 100% of them, and they can't get their 2009 until this is complete. It seems that if the form is not 100% right, it gets put into a non-compliant file. Rather than somebody picking up the phone and having it fixed, it drags out.
We also work with Agricorp in Ontario. Can you help me understand whether they have all of the hardware capacity needed to deal with the situation?
Next, can you tell me a little about where we are on traceability for pork and beef?
Finally, there is the importance of education. I'm so glad to see the uptake in terms of the youth employment program. But when we were meeting with young producers and looking at the future of farming, there was a key point with these producers. Some of them are the ones who--and I often sit down and talk to producer groups--never even talk about programs because they are focusing on the significant issues we want to deal with: research, sustainability of our industry, and how we are going to partner with them, because they believe in partnerships. That may be more of a comment, but on education, do you see that portfolio growing?
I'm sorry. That was about four questions, but I'll leave it at that.
:
Yes. There were a couple of other questions on youth and traceability.
On traceability, the pieces of the system that have to come into play are animal identification premises--identification and movement. The federal, provincial, and territorial ministers agreed, with the exception of one minister, that we should move to a mandatory system. They set priorities for cattle, hogs, poultry, and sheep.
We're actually very advanced in some areas towards a mandatory system; Quebec and Alberta have been very ahead of the game and have implemented mandatory traceability. We already have mandatory identification of sheep, cattle, and bison.
We do have to work on movement. In part, what needs to occur is that a regulatory and legislative framework needs to be put in place. Ministers asked for that and CFIA is working towards it, with the goal of having mandatory systems in place by 2011.
I think the two main institutions or governance mechanisms that are working towards full traceability systems include the traceability task team, made up of federal, provincial and territorial officials, and another body that works very closely with industry and is called the industry-government advisory committee, IGAC.
We think we're well on track with pork and will be able to implement full and mandatory traceability within the other sectors over the course of 2011, and hopefully before the end of 2011, as ministers requested.
:
Thank you very much for coming in today. It was very educational.
One of the things I would ask is that since a lot of numbers have been given out today, could you guys summarize some of these numbers and give them to us? Being on the committee, oftentimes we learn about the vast amount of money that's going out and the streams it's going out in. It's important that the committee members have a summary of this, so if you guys could commit to doing that, I'd appreciate it.
The second thing I would like to say is that there are a lot of numbers being used on all sides, and it's very important when we start talking about this that we're accurate and we're not just trying to scare farmers off. Today we heard talking about 80%, and certainly we would like to get some numbers verifying that. These are huge numbers.
Technology is amazing. I have the blues here from a couple of meetings ago, when Mr. Easter said: “There are several extremely important issues. I'd love to deal with biotech, but biotech is not going to do anything, as I mentioned earlier this morning, for the 30 people who are now going through farm debt review in my particular province. It's not going to do anything for some of the ones who can't cashflow their operations because of the announcement by the minister on emergency advance programs”.
Thirty people in farm debt review in P.E.I. would be a substantial number of farms. Do you guys have the number of producers in farm debt review in P.E.I. at this point in time?
:
Yes. You're quite right. There is a farm under quarantine right now in Manitoba. I must say that my colleagues in CFIA have moved very quickly on this. They have a protocol in place that allows them to act very quickly, which they've done. So the quarantine is contained and they've already started the trace-out and trace-back of animals and equipment that may have entered or left the farm.
There is a lot of collaboration with the Manitoba government and the industry in that kind of case. The initial examination of the strain suggests that it's going to be low pathenogenic, which implies that the infection intensity is relatively low, and we hope that pans out. It will be a day or two before there's a final determination of what strain of H and N it is.
There's a protocol in place with the United States that manages to contain and regionalize any border closure. We've already triggered that. We've informed the OIE, the international animal health organization, as well as all our trading partners, of the situation. We do have an understanding with Europe and we think we'll minimize any trade disruptions. But trade impacts are on a country-by-country basis and what CFIA does is suspend certificates for sensitive food products in some cases, mostly for animals. They'll suspend export certificates so that there's no product moving.
In the past in situations like this, CFIA has managed to reopen all borders within a two- to four-week period, and that's what they will aim for in this case. They've enlisted our missions abroad to have close contact with our trading partners. The level of exports of this particular industry is relatively low, so the short-term economic impact will be relatively contained, we hope.
Once we know the strain and we've done the trace, we'll be able to contain the quarantine period or the quarantine area. Right now, it's three kilometres around the indexed farm. For next steps, they'll be working with the farmer and the Health of Animals Act to look at compensation. A compensation mechanism is built into the act that allows for money to flow relatively quickly to the producer.
That's where we are at this stage. I think my colleagues in CFIA would be able to add considerably more detail.
:
It has been moved by Mr. Easter. Is there any discussion?
(Motion agreed to)
The Chair: I believe the motion carries.
Also, we have another motion here, but before I read it out, we had some discussion earlier. In fact, the committee has adopted a steering committee report to do a study on the biotech industry, starting at the end of December, or before we break here.
As part of that discussion with a number of you, it was suggested that we travel, so I had the clerk prepare a motion for today, the basic intent of which would allow her to prepare a budget between now and Tuesday so that we could hopefully pass it on Tuesday, if everybody is in agreement. It would allow us to travel and visit some I'll just say research facilities or something related. Of course, I want to hear some input and some suggestions. We'll try to do all regions of the country. That's the long and short of it. I'm going to read it. Then we'll open it up for discussion and questions. It says:
That the Standing Committee on Agriculture and Agri-Food authorize certain members of the Committee to travel across Canada during the month of February 2011 as part of the Committee’s study on the status of the Canadian biotechnology sector; and that the clerk of the Committee, in consultation with the Chair--
I should add “and members”
--be instructed to prepare a draft budget for consideration by the Committee as soon as possible.
What I meant by “and members” was that I would like suggestions from you for facilities we should visit. Is there any discussion?
Oh, there's one other thing. It would be nice to have this passed by Tuesday. The clerk found out that there will be a Liaison Committee meeting on Thursday, so we could have this considered at that point.
Mr. Valeriote.