:
Thank you, Mr. Chairman, for the opportunity to appear before your committee.
I'm here today to express the concerns of livestock producers in my province, Prince Edward Island, concerning the proposed repayment of the advance payment loans.
First, I'd like to say that the advance payment program has been very beneficial in general to the agriculture sector and has provided much-needed capital to our producers. In P.E.I. alone, over $50 million has been advanced to producers, covering all commodities.
Under the 2008 severe economic hardship advances, P.E.I. has 156 livestock loans totalling more than $17 million. This is about four times more than all the other maritime provinces combined. I guess the reason for that is that we were able to utilize this program more than the other provinces in the region because of our larger cattle and hog feeding industries.
The original market environment that generated the need for the severe economic hardship loans has changed very little since 2008. I would say it has probably worsened since then. During recent short-term price spikes in the hog sector, the regional cost of production has dictated that our producers have not been able to repay all their mounting debt positions. Cattle have not recovered from the BSE crisis in 2003, and during the period of 2008, severe economic hardship loans, the loss of market value, and the increase in feed costs have offset the value per head received under the advance payment program. The ethanol demand and the loss of potato waste to P.E.I. producers have driven up our feed costs a minimum of $100 per head in our cattle industry.
Since 2007, we have lost approximately 80% of our hog producers and 50% of our beef producers. If P.E.I. producers are forced to repay these loans in the timeframes outlined under the latest day of default, we will certainly lose more.
Financial institutions have been removing themselves from exposure in the livestock industry. This position has resulted in lending bodies being unwilling to take second place on securities. Many producers will be unable to get priority agreements signed, even if they still have inventory to roll the old loans into current advances. Producers who are able to only roll a portion of their old loans into new advances will not have the cash to pay out the remaining balance within the required production period, forcing them into default on the entire advance payment program. This applies especially to 2008 hog loans, which were based on annual sales under the severe economic hardship advances, and any new loans taken out now will be based only on inventory. That will amount to about 60% less that they will be allowed to secure under the advance payment program because of the change.
P.E.I. has a percentage of livestock producers who are multi-commodity but depend on advance payment loans for other inventories, such as potatoes and grain. If these producers are put into a default position because of being unable to deal with the outstanding livestock debt, they will be further implicated in their inability to access loans for those other commodities as well. We have a number of producers who finish cattle and hogs on P.E.I. who are also mainly potato growers. If this in fact is what's going to happen to their loan program and they go into default, they are not eligible for any money under the APP program for their other commodities.
Our producers have told us they are willing to repay the loans. When we took the loans out under the advance payment program, we realized they were loans and we would have to pay them back. But we cannot realistically afford to do so within the current proposed timeframe.
I don't know if you realize the timeframe we are talking about. In the livestock severe economic hardship loans, we have to start paying back on June 1, 2011, and in the hogs it is March 2012. They have to be paid back within a 10-month period.
We have asked the government to consider turning out these loans over a longer period of time or to tie the repayment to profitability, so as to not place them in a default position.
Those are all my written comments. Hopefully, I'll be able to answer some of your questions.
Good morning. Thank you for the opportunity to appear before the standing committee to talk about the agricultural disaster relief programs.
My name is Brian Gilroy. I'm an apple farmer located just south of Meaford, Ontario, which is located in your chair's riding. I am also the chair of the Ontario Apple Growers and the Ontario Fruit and Vegetable Growers' Association.
It was August 20, 2009, and the Ontario fruit and vegetable growers had just completed a two-day summer meeting that included an extensive tour of the area, highlighting the unique climate we enjoy in the bay. There had been reports of tornado sightings in the area, and at about 8 p.m. I received a call from a friend saying that another friend's son's farm had just been hit by a tornado. I quickly gathered some food, drink, and flashlights and drove to the scene.
The tornado had gone through the area at around five o'clock, and the damage to the buildings, trees, hydro lines, etc., directly in its path was unbelievable. The fellow's farm that I went to try to help out with...he'd just purchased it that spring. When the tornado touched down there, it was classified as an F2, but when I did some reading on tornadoes, it in fact picked up speed and was at an F3 velocity when it hit his farm.
It picked up a 100- by 200-foot pig barn off its footings and dropped it 100 feet further up. It picked up two school buses and twisted them up in the air. One landed where the pig barn used to be and one landed over in the orchard. It was about a kilometre wide where it went through, and it was just like a war zone. Debris was flying about. There was a brand-new stone house. Pieces of apple bins that had been picked up went through every window in the building and tore parts of the roof off. It was just unbelievable. I don't know whether you folks have ever been to a tornado site before, but it's pretty hard to fathom. It picked up a grain bin from one farm and deposited it two kilometres away in the middle of an apple orchard.
Needless to say, the damage was extensive. It destroyed a little over 100 acres of orchard through a number of different growers' places. It affected approximately 15 apple farmers in the area, 12 seriously. About six received devastating damage.
Right away, by August 25, we'd organized a meeting with all the affected growers and some of the political leaders in the area. Jim Wilson, our MPP, and a representative from Helena Guergis' riding came together with the provincial Agricorp people and talked about what kind of help and assistance could be made available to them.
It became clear that there were a number of steps that needed to be taken before AgriRecovery could be applied for. Right away, an Ontario disaster relief assistance program application was made by the affected municipalities. It was a pool application that was applied for. That allowed us to do some fundraising that leveraged provincial money; for every dollar raised from local fundraising, two dollars were matched by the province. That was one of the steps that was required to access AgriRecovery.
The crop insurance people were very helpful, as helpful as they could be. One thing that Ontario has is a tree loss program for orchards. It's offered free, but it also has a 7.5% minimum threshold. You have to lose more than 7.5% of your trees—it's sort of a deductible—before you can make any claim at all. And if you're a grower with more than one site, and this was the only site affected, it could mean that you would absolutely receive nothing for very serious losses.
One of the first things I recommended that we do was to get a hold of the Mennonite disaster relief people, who were there the very next day with close to 50 people, helping and gathering up all the debris and stuff that had flown around. They were an incredible help in allowing people to see the light at the end of the tunnel.
When you're faced with debris and tree limbs and stuff everywhere, it's pretty hard to be hopeful. These people were in a state of shock, and one of our long-time apple growers—we call him “The Thinker”, because he's such a methodical man when it comes to dealing with things—was affected as badly, if not worse, than anyone else. I've never seen him so low, and I mean low and just about out of it.
When I researched what had happened before, when an orchard had been hit by a tornado like this, basically the farmers went out of business. I'm pleased to report that because of the assistance that ODRAP crop insurance and AgriRecovery were able to provide, none of the farmers affected will go out of business because of this event.
When I talked with people, they said they had received their AgriRecovery assistance as of the end of October. So it was about 15 months after the event that they received compensation from AgriRecovery. A lot of people felt that was a long time, but I tried to convince them that when dealing with three levels of government, having the payment in that period of time was a pretty positive thing.
Am I getting close to my 10 minutes?
Severe weather is pretty common. With the degree of damage caused in our area, the actual crop loss for that year was about $1.5 million. The damage to infrastructure and whatnot was again over $1 million. Most of that was insured, as AgriRecovery is designed to cover what no other program will cover. For the most part, it did a reasonable job.
In the Leamington area, this past July, a series of tornadoes seriously affected a number of apple growers. The problem there was that the premier of the province came in and offered the municipalities immediate assistance, which meant that the areas weren't declared a disaster area, which limited their ability to access these other programs. I don't think it was done intentionally, but it actually hurt the agricultural producers in the Leamington area, because they couldn't apply for ODRAP and AgriRecovery. One of the key criteria for AgriRecovery is that a disaster must have had a significant impact on the industry as a whole. The tornado in our area affected over 10% of the apple-producing area.
Even though a lot of trees were affected, it takes time for that to become visible. One suggestion by one of the growers was that the damage was down the road. He figured he had about 20 acres that would have to come out of production because of the effect of the tornado, but it wasn't visible at all until about August of this year.
So it's pretty good, but there's a lot of room for improvement. If tweaking is to take place, please consult with the producers, who know the program and how it has affected them.
Thank you.
:
Thank you very much for giving me this opportunity to speak today. My name is Linda Oliver, and I'm from Mozart, Saskatchewan, which happens to be one of the soggiest areas in Canada. My husband, Brian, and I operate a 250-cow herd. I speak only as a cow-calf producer, not as a mixed farmer.
There are three issues that I would like to address today. The first issue is that of AgriStability. Everybody—everybody—knows that it has failed the cow-calf producers. Following BSE day, on May 20, 2003, not one politician imagined that the effects of that disease would affect livestock prices for so many years in a row. That was the biggest problem. After that BSE day, there were two factors that came into play.
Number one, historically, cow-calf producers have been able to survive a lot. We've survived the problems on our own. After many calls to bureaucrats and politicians, we gave up and were left to survive on our own. But we have never experienced a year like 2010. That is on top of the BSE years. And AgriStability has given the cow-calf producers no cushion whatsoever to be able to buy hay or grain in this year.
The second thing that came into play is that agriculture ministers refuse to admit that AgriStability is the problem. Regretfully, they had not planned for disastrous incomes for so many years in a row; it's only meant to compensate if there is a disaster for a year or two. Mr. Vanclief established a new insurance program, and it was called CAIS. After his tenure, there were three short-term agriculture ministers: Speller, Mitchell, and Strahl. After many calls to them, none of them knew how to correct the mistake. Mr. Ritz came to the forefront in 2007. By then I believe the government had adopted the policy of “Too expensive, can’t fix it, won’t fix it.” I spoke to Jim Scott--and I spoke to him several times--in Mr. Ritz's Ottawa office. I'll never forget his quote. He said, “Yes, unfortunately, Mrs. Oliver, AgriStability does not work in this situation.” He went on to say that it would be too complicated and too expensive to correct. Mr. Scott has not returned my calls for the last year or more.
A disaster program such as AgriRecovery, to assist farmers in a situation that was beyond their control, should have been balanced right there and then. Governments need to be morally responsible. We should not have to resort to prodding.
I have two BSE examples.
BSE example number one: Sometime in 2004 we sold three cows at auction that were ready for slaughter. That means they are ready to be ground into hamburger. The average price for those three cows was $25.52. At Wendy’s, McDonald’s, or Burger King, the cost of the meat for their quarter-pounders was 2.05¢. They should have had a real hamburger sale.
BSE example number two: On BSE day 2003, we sold a 700-pound steer for $1.56 a pound. That was the top of the market, so I don't expect to get the top all the time. In the fall of 2009, 700-pound steers were selling for 85¢ a pound. I'll transpose that into wages. In 2003 I could earn $1,560 a week. In late 2009 I would only earn $850 a week. That's a huge difference. The difference is that if you and I make those same wages, we both have to get our living expenses out of it, but I still have to get my farming expenses out of that $850 a week. That's a huge difference. Actually, the cattle prices in the first half of this year have been comparable to the prices of 1988; they're within 2¢ to 3¢ to 4¢ of the 1988 prices. There has been a huge problem.
With AgriStability being a bust, AgriInvest becomes a joke, because AgriStability and AgriInvest go hand in hand. Cow-calf producers did not receive anything from AgriInvest either. Is it any wonder that cow-calf producers have no savings account left, no cushion to carry us through this second issue, which is AgriRecovery?
The July 8 announcement made by Mr. Ritz was that $30 per acre for drowned-out acres was to be given to grain producers province-wide. For some producers, maybe that payment was enough. But for those RMs that were declared disaster areas, more was needed. Mr. Ritz and Mr. Bjornerud should have realized that some areas were worse than others. Some of the farmers in our area absolutely mudded in. They had custom sprayers come in. The custom sprayers went in, made ruts, and left, because they couldn't complete the job.
To make matters worse, there was no mention of livestock in that July 8 announcement. Jill Clark and Tim Highmoor of Mr. Bjornerud’s office assured me all summer that they were monitoring the situation. I believed them. But the damage done by Mother Nature, when dealing with excess moisture, is far more complicated to assess when you are dealing with live animals.
Number one, we did have flooded hay acres. There was no compensation for that.
Number two, we did have flooded tame grass pastures. Cows were eating grass that was loaded with water and sorely lacking in nutrients. If the cows don’t do well, the calves don’t do well. Cows are coming home now in the fall at a lighter weight, which is another loss.
Number three, we did have flooded native pastures, and that is quite different. These are pristine ecosystems and will take seven to ten years to recover. How will we be compensated for that? You don't reseed native pastures.
Number four, mosquitoes were a huge issue this summer. They were unreal. We lost a whole breeding cycle on about 65 cows that we kept at home. Our calves will therefore be born a month later next year, so that's a long-term issue. The cows and bulls simply had things other than sex on their minds. Every day, they trampled a new area of pasture into mud.
Number five, we had to feed cows at home until June 23.
Number six, cows will not suck an udder that's muddy.
Number seven, there were death losses.
There are pockets in Manitoba and Saskatchewan where the conditions are absolutely, unbelievably, worse now. We have had a lot of rain and a lot of snow. We can't get out to the fields to get our hay bales home because we had a lot of rain and about 12 inches of snow that melted and sat there. Two weeks later we got 15 inches of snow. It sits there like an insulation, and we can't get out to the fields to get them. I don't know if there's any kind of helicopter relief or whatever.
I am speaking from one of the wettest pockets of a disaster area, and there are other areas that are just as bad—in the Interlakes in Manitoba, around Hudson's Bay, in Saskatchewan, and a strip in our area. It is absolutely incredible.
Because of the failure of the above two programs, it is impossible for cow-calf producers to make proper business decisions. It was beyond our control—BSE and then the weather of 2010.
Thank you for your time.
Thank you, Ernie, Brian, and Linda for coming here and outlining your concerns in a number of areas, actually.
I might ask you, Mr. Chair, if you could think about the committee finding fairly quickly perhaps half an hour to see if we can discuss some recommendations that we could put forward to the minister to deal with some of the problems we've heard about over the last three meetings. We could draft a motion, but I think it would be preferable if we sat down as a committee to see if we could find some common ground to make some suggestions. Could you think about that?
Ernie, on the targeted advance, one of the concerns I have is that the department basically confirmed for us here on Thursday that under the program, the way it's laid out at the moment, with the minister's announcement, if you can't pay, you're certainly in default. Producers who go into default will be charged interest on the loan, back to the origination of the loan, including the up to $100,000 interest-free amount. Although the interest will be at a low rate, at a quarter of 1%, it's still interest going back to the beginning of the loan. As you mentioned in your remarks, we have a lot of multi-commodity producers in P.E.I., and Ms. Jody Aylard said under questioning that people in those other commodities would lose their rights to advance payments if they defaulted in another commodity—and that's extremely serious.
So my first question is, if we can't find a way to change that aspect, what will the impact be? On the one hand, people going into default is one thing, and it's serious, but second, what would the impact be of losing the advance payments for other commodities?
It's strange. Here we have a situation, at least in P.E.I., where our Atlantic beef plant just received an honour for producing some of the best beef in the country, and now we have beef producers who are not going to be able to produce it because they can't meet their commitments.
Linda, you said there's been no announcement for livestock in western Canada. We've certainly received a lot of e-mails from you on that, which I appreciate because they outline the concerns of producers on the ground.
Has anything been announced for the livestock industry, and if so, how far short does it fall? Obviously, you said there have been announcements for the grain industry for acre payments, but how far short do the measures for the livestock industry fall?
:
Good morning and welcome.Thank you for your testimony.
Mr. Gilroy, this is not the first time we have met. I seem to remember that, last time we saw each other, you brought us Ontario apples. I see that, today, there unfortunately aren't any apples. I'm just kidding.
Your testimonies are very valuable to us when we're reviewing programs. You're in the field, you're directly affected by all the risk management programs.
Mr. Mutch, if you don't mind, I would like to ask you a question about the Advance Payments Program. I just want to know whether, in Prince Edward Island, you were faced with the same situation as we were in Quebec. On August 6, the minister announced that a stay of default would be applied to the Advanced Payments Program. During the discussions with the Department of Agriculture, Quebec producers understood that no retroactive penalties would be applied to producers. Prior to the August 6 announcement, and even once the announcement had been made, the producers were under this impression. Afterwards, we learned that a retroactive penalty would apply to producers who sign a repayment agreement.
On November 18, the minister appeared before the committee. I asked him about this matter, and he told us that there was a penalty, but that it was not very high. It was set at one-quarter of 1%. I agree that it's not a very high penalty. However, I was wondering whether producers from the rest of Canada also thought there would be no penalty, until it was suddenly announced that there would be one.
I would like to hear your opinion on this subject.
:
Ms. Oliver, I will move on to you now.
Your testimony basically echoes many of the comments we have heard, not only during the study—because we have not really held that many meetings on the issue—but also in the past. We also organized tours, such as our tour concerning young farmers, during which we met many people.
I was saying that your testimony is very interesting, since it has many points in common with testimonies we received during a tour that we recently went on regarding young farmers and also testimonies we received since the committee began studying the program reviews.
The sad thing about livestock producers is that they currently find themselves in the most difficult situation of all members of the agricultural community, whether in Quebec or in Canada, especially in your region of the country.
I got a lot of my information from a cross-Canada survey conducted by the Canadian Federation of Independent Business. This survey of over 1,000 farmers compiled some very interesting statistics.
The study indicates that, when it comes to AgriStability, livestock producers benefited the least from the program. There is a problem there, since 70% of livestock producers participated in the program. That doesn't mean that they received any compensation, even though the program does, in fact, apply to them. Livestock producers feel that it's not really worthwhile to try to get assistance through the AgriStability program.
In your opinion, how can the program be modified to really meet the livestock producers' needs?
:
Who says AgriStability doesn't work? After I e-mailed my speech in here, I got a cheque on my 2003 AgriStability program year--$146, and another one for $778. It was a mistake that they had made on the 2003...and I got it on Friday.
We have been in a disaster year for so many years because of BSE, and the prices were.... Those negative margins are sitting in there now. If my reference margin is a negative $2,000, and in a certain year my margin is negative $3,000, if you take a negative two minus a negative three, it gives you a positive one, which means you don't need any money.
The problem that BSE has left us with is those negative margins, and if you have three negative margins in there, you just don't qualify. You have to have two positive margins in there. I can see why they would do that, because if you are an inefficient farmer and year after year after year you are not making any money, you should be gone. But year after year after year we were in a negative margin position because the prices were so low and it was absolutely beyond our control. We couldn't do anything about it. We just sat there and vegetated. We could not make proper business decisions. We could not do things the way we wanted to do them. For instance, instead of cleaning out the corrals, we had to pile it in the corrals and just leave it to sit. That's not a good thing, because for one thing, water collects in there, there's extra disease.
When you're dealing with live animals and you don't make good business decisions, there are always problems that come back to bite you. That's the problem that cow-calf producers have had.
:
No, which is why I am a long way away from my comfortable element.
After AgriStability did not work, and we had a year like this, I started looking around, and I couldn't believe that cow-calf producers could be left out in the cold.
Our organizations, for one thing, should be taking care of the whole livestock sector. I don't understand why they didn't look at the cow-calf producers and say, “Wow, those guys at the bottom are in a lot of trouble; we'd better do something.” I was told, and I stand by whatever I say, that they cannot go into the agriculture minister's office and criticize, or they cannot criticize publicly or openly, because if they do, the door will be closed to them. They have a silent agreement that if the agriculture minister's office does something good, they praise him, and if they do something bad, they don't praise him; they don't say anything.
For every animal we sell at auction, there are $2 deducted from that cheque for each animal. One dollar goes to our local organization, which is the Saskatchewan Cattlemen's Association, and one dollar goes to the Canadian Cattlemen's Association. I can't apply to have that $2 not taken off my cheque. Really, the organization has done nothing for me.
There is a fairly large cry from cow-calf producers, saying, what's the sense of letting them have that $2 off every animal we sell when they don't do anything? They will not speak, and they say they can't. They say their hands are tied. They say they're in caca up to here if they say anything. The agriculture ministers just won't let them back in.
First of all, I want to thank the witnesses for coming. I know it's always awkward to come out of the comfort of your home back in Saskatchewan or P.E.I. or Ontario and look at these weird guys in suits and ties and try to explain what's going on. So I really appreciate your doing that. I also really appreciate your testimony. It's always good to hear from the farm groups, and I'd rather hear from farmers than farm groups, because in a lot of ways farmers are the guys on the ground getting their hands dirty and doing the work. It's always a breath of fresh air in some ways.
It's really hard in this committee to start to filter or separate the wheat from the chaff in a lot of situations. We have to balance the needs of farmers, and the needs of taxpayers in a lot of cases too. That's why programs are developed in such a way that they're not meant to be long-term support programs or long-term social programs. They're meant to be bridging programs, where if something should happen, there's the ability to help the guy out so he can see the light at the end of the tunnel and get through that low spot and move forward.
Where I get a little concerned is when bridging programs become social programs, because that tells me something else has to change. That tells me the industry has changed or something else has changed structurally in your situation that forces you to make a decision you may not like to make. It's awkward. What's really awkward for legislators is, when is that period? Is it five years, seven years, ten years? When the industry has changed, how much should the taxpayers support you and for how long? That would be one of my first questions. The taxpayer can't justify supporting somebody forever; it just doesn't work that way in our society. If you can't change, or if you can't structurally change, then it's time to look at other things.
Brian, you talked about what you're seeing in the fruit industry, and that's exactly what is going on, it looks to me. It's sad to see in a lot of ways, because the old way always seems to be the best way, but the reality is that things change and we have to move forward.
I'll start with you, Ernie. In your situation—and not just in your situation, but the situation of P.E.I farmers—you took out an advance and had security on that advance. You did a priority agreement. Then you needed more cashflow. What did the government do? They said they'd give you the ability to have more money without a priority agreement—no security. How do you bridge back to a situation now where you start to pay it back? What's a reasonable timeframe?
:
In the EU and the United States, the farmers make a good living from the mailbox. The cheques come in the mailbox and they make a good living. Farmers are not sitting home wanting to make a living out of the mailbox. If the weather was right and the cost of production wasn't going up so high.... The share of the consumer dollar seems to be going down all the time. So these are various things that the farmer has no control over.
Since the spring, we've been hearing from a lot of farmers, and we hear the programs are not working. You guys alluded to that strongly here today. There's a lot of questioning about why it's not working. Now the numbers are out. I think overall in Canada agriculture programs total $8 billion, federally and provincially. For some reason, a lot of that money is not getting into farmers' hands. You guys mentioned the reasons why.
So let's look at how we could change the programs. You alluded to some. One of the things we have heard, for example, is that this Olympic average has got to go, because you have these various years in a row on the margins. So I'd like to hear some suggestions on that.
The other thing that bothers a lot of farmers is that the programs aren't uniform across this country. You might see immigrants, young farmers, going to one part of the country because they have better programs than others. So what can we do to change the programs? Should they be more uniform? Should we change the years? If you people were sitting down starting from scratch, and you knew you had $8 billion to go into agriculture across Canada, where should it be going and how should it be changed?
:
That's a good question, and one that we've thought about quite a bit.
Before CAIS and AgriStability and the suite of programs, we had a program called NISA, the net income stabilization account. There were challenges with NISA. Growers, farmers, would have huge account balances and still be saying, “We can't access that money, but we're hurting here.” There were a lot of ad hoc payments taking place at the same time. To me, the simple fix was to adjust those triggers so that the money could be accessed when it was needed. The approval rating among farmers for net income stabilization was extremely high, and the cost of administration was extremely low. Something is needed, and that seemed to do a pretty good job.
Now before that, there was Tripartite, which was a price stabilization system that was extremely effective. It was one-third, one-third, one-third, producer-province-federal. The program was slow in paying because you had to get all your numbers in. It was two years lagging, but it allowed people to access the funds they needed to cover their cost of production, plus a reasonable profit.
:
Thank you very much, Chair.
Thank you for being here.
I guess when we're talking about disaster relief programs, it's important to understand that it's the provinces that have to identify that a disaster has struck a particular area. It wouldn't be appropriate for the federal government to reach inside a province and say, “You have a disaster there”, and for the province to say, “No, we don't”. So I understand that there is frustration in terms of how you have to work with the provincial government first and then they have to approach us.
I've given great thought to this, and I have a hard time seeing it working any other way, because it just seems to be that it would be inappropriate for the federal government to be going up and down the different provinces, saying, “There's a disaster. How come you're not doing anything about it? There's another disaster over here.” It really does have to start with the provinces.
I think as well the idea is that the AgriRecovery addresses those extraordinary circumstances that arise. It's not meant to be a long-term solution or a long-term payment process; it's meant to address a discrete event. Something happened, and there's a payment that goes out based on it.
I think we saw that, for example, out west, with the flooding. That was a massive AgriRecovery payment, when one stops to think about it: $450 million, and it reaches over three provinces. So three provinces and the federal government were involved in it. It's one of the largest payments or payouts ever made in Canadian history, and it was done faster than ever before.
So I think there are some success stories, but I don't argue that everything's fine everywhere. I'm just pointing out that it's a system that does work, even though there are times when it doesn't seem to work well in certain circumstances.
I just wanted to follow up on the discussion about NISA versus AgriInvest, which to me is similar to NISA in that farmers themselves put away money. It's matched by the federal government, and the federal government in fact put in $600 million right up front to kick-start AgriInvest. Farmers have tremendous latitude in drawing from their AgriInvest accounts to support their first 15% in losses.
Perhaps, Ernie, you could comment on this: do you see AgriInvest as a valuable program? Are farmers making use of it? How do you see it being different from NISA?
I really do appreciate, as my colleague has said, your taking the time to come and be part of this forum as witnesses.
I've been listening when we talk about the former programs—Brian, you talked about the Tripartite—and I can never get away from my colleagues across the table who keep criticizing our government for not fixing something that they created.
Two members over there have “honourable” in front of their names, meaning they sat at the cabinet table and allowed the change from NISA to go to a margin-based program.
We have to understand that NISA would have still been here. It didn't have to go. Politically, somebody made a decision to get rid of it to save money, rather than fixing it.
I totally agree that AgriStability is not fair. It doesn't pay out in a fair manner across the country. But under the policy that came forward with it...unilateral decisions by the federal government are not there anymore. The province has its say in it.
Mr. Mutch, I know you said P.E.I. is a have-not province. Actually, Ontario was the top province and is now at the bottom. They make priorities. When you talk to my colleagues across the way from Quebec, you will find that their province actually makes a priority choice on agriculture because we've now increased the transfers to the provinces by 25%. They make choices in which dollars are made out.
Mr. Mutch, just to tip away from that, you talked about the advance payment program being very good. Then you sort of went away and said it's really not going to work because you can't get it paid back. I understand those concerns. We're seven months away from the deadline. Do you see your organizations making another plea at that time, with good background on that, if there's an extension needed?
Secondly, those agreements were signed by people. Was it the intention, do you think, that some of them would not ever be able to pay away? You talked about how the cattle are likely sometimes gone, so I'm wondering how they expect to pay that back.
Next I would like to go to Brian.
Thank you again, Brian. When we were up visiting in your area earlier on, we talked about tornadoes. I can tell you, when I was growing up I learned what it is like to have straw sticking in the wall after your barn has partly disappeared. That's the force that tornadoes have. We had that in our house. The consistent thing is that when we walked shoulder to shoulder with our neighbours and everybody else, it was the Mennonites who came in and walked with us to help clean up.
There was a farm about a mile away, which I ended up buying. About half of it ended up at our place, including the house and the barn. The ferocity of those tornadoes is incredible.
The problems with AgriStability in terms of years, working with the provinces—what sort of reaction have you had from the provinces in terms of being able to make the changes, the Olympic changes, to extend it out if it needs to be longer than the five years, taking the three best of it? How are those discussions going?
I wonder if you could talk about that, and then Mr. Mutch, if you could answer those other two....