[Recorded by Electronic Apparatus]
Wednesday, March 20, 1996
.1536 
[English]
The Chairman: I welcome everyone to the committee.
Go ahead, Mr. Chrétien, on a point of order.
[Translation]
Mr. Chrétien (Frontenac): Mr. Chairman, so that our meeting runs smoothly, I wonder if we shouldn't set a few rules especially on how many times a week we meet and on notice of meetings. As you know, on Thursday night the three members of the Official Opposition leave Ottawa for their riding and it is therefore very difficult for them to be here on Thursday night and even more so on Friday.
My second comment deals with the meeting which the Standing Committee on Agriculture traditionally holds with the Minister after the tabling of the budget. If this meeting is held six months after the budget has been tabled, it is just like bread: it isn't very fresh, it is stale and has lost all its flavour.
If you look at the calendar, you'll see that all we have left is this week and the following week. Then the House will adjourn for two weeks at Easter and we'll only be able to meet after April 15th or 18th. That would be quite late for a meeting with the Minister of Agriculture.
I was wondering if you, Mr. Chairman, couldn't use your influence on your party to insure that we can meet with the Minister of Agriculture as soon as possible, in other words at the beginning of next week. I would appreciate an answer on each one of these points.
[English]
The Chairman: Thank you, Mr. Chrétien. I will do my best to answer them.
If you recall, at the steering committee meeting last week we discussed the necessity of having more than what has become tradition, if I could use the word, of a Tuesday and a Thursday meeting. We decided or discussed at that time that if we had to have a third meeting - at least this was my understanding - it would have to be on Wednesday for the very reasons that you have said, that Thursday night and Friday many members return to their constituencies. It was preferred that if we had a meeting on Wednesday,it would be at this time, about 3:30 p.m.
Tonight's meeting means two meetings today. And as you know, there will be not be a meeting tomorrow because of the logistics of getting the people who were available this evening and who are not available tomorrow nor all next week. This evening's meeting, which is for discussing the pesticide issue, is one of those that is happening because of the availability of the witnesses we wanted to talk to and hear from.
It's my clear understanding from the steering committee that our preference for meetings is Tuesday morning, Wednesday afternoon, and Thursday morning. If at some time there are witnesses who wish to make presentations so the committee might hear their view, then Wednesday night might be available. But we will try to stick to daytime meetings for Tuesday morning, Wednesday afternoon and Thursday morning.
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On the other matter, as I announced yesterday, the minister is coming before the committee next Tuesday evening at 7 p.m. He will be discussing and giving the committee an update on a number of issues, such as the dairy issues, the hopper car issue, and the NAFTA challenge. He has also agreed to come forward to the committee as soon as possible when we come back in April so we can discuss more specific things and issues that we might want to ask him in reference to the estimates that were before us. We had the lesson yesterday on how to read them, etc. So he has agreed to come before the committee two times, starting with Tuesday night of next week to discuss some of the issues, such as the dairy issue, which I'm sure that you want to discuss with him.
[Translation]
Mr. Chrétien: Could you talk about the notice of meetings? You forgot about that.
[English]
The Chairman: Yes, you'd better clarify the deadlines regarding notice of meetings. I don't know what has been the practice there. Sometimes we don't know how quickly we can get people here, but I will promise you, and I'll give you my word, that we will not pull any surprises and we will give everybody as long a notice as we possibly can.
I think we all have to understand that in arranging for people to come, we don't always know whether they are... We ask groups if they are available on Thursday morning of next week, but we will work with the clerk and we will give everybody as much advance notice as we can. I would suggest at the bare minimum that we block out at least Tuesday morning and Thursday morning of each week in our calendar so that we have those set aside. Thank you very much.
I would like to welcome our witnesses here today from the Canadian Pulse Growers' Association...Alberta, Saskatchewan and Manitoba. I guess that's the Canadian Pulse Growers, for the most part.
Just following along the discussion that you've just heard, we received a letter from you recently about wishing to come and the fact that you were going to be in town yesterday and today. The committee did agree on short notice, since you were in town.
This is no reflection on you people as a group, but I want it to go on the record that we are not setting this as a precedent for groups - that if they are here in town for other things, they can get to see the standing committee.
As you can understand just from the discussion we had, committee members like as much advance notice as we can possibly get. As well, if you have a presentation to hand out, that gives you people the opportunity to have it prepared in both official languages, because the committee has agreed that we will not circulate documents presented to the committee until they are in both official languages.
If you have a presentation today, it will be handed to the clerk when you're finished. If you do not have it in both official languages, we will have to get it there before we hand it out to the committee.
So with that, again, I welcome you here. Sometimes on short notice we don't have as many committee members here as we would like to have, but they are still coming to the meeting and we have a good representation here today from all three parties.
I don't know who's going to lead off... Janette? Lyle, okay, go ahead. If you wish, Lyle, introduce yourself and your two colleagues with you today. I understand that at least one of our committee members knows one of your colleagues fairly well from past experiences. She can elaborate on that if she wishes when she gets the microphone. Go ahead.
.1545
Mr. Lyle Minogue (Director, Chair, Market Development, Saskatchewan Pulse Crop Development Board): I think we have more connections than that.
The Chairman: Oh, okay.
Mr. Minogue: First, I apologize for any confusion we may have caused with this short notice. I would like to explain. We try to come to Ottawa at this time of the year and we have to try to work around budget sessions or budget days in the government. It's hard to plan three months ahead for that sort of thing. But after being here and seeing some of the problems, we'll make a better effort next year to give you more advance notice. We really appreciate each member taking the time to hear what we have to say today.
Before I introduce our other people, I'll briefly explain the structure of our organization. We have an organization in the province of Saskatchewan called the Saskatchewan Pulse Growers Association. Manitoba has an organization of their own called the Manitoba Pulse Growers Association. Alberta has their Alberta Pulse Growers Commission. We have an umbrella organization that coordinates the activities of the three provinces and enables us to work together in a lot of areas.
I am chairman of what is called the Western Canada Pulse Growers Association, so I'm giving this presentation today. The two people who are with me represent the other two provinces. Jack Froece from the Manitoba Pulse Growers and Janette McDonald Adams from the Alberta Board are here to answer questions specifically for their province.
I understand we have a certain amount of time allocated. Could you elaborate on the timeframe we're working with?
The Chairman: Could you collectively make your presentation in 15 to 20 minutes? The practice of the committee is to go to each of the parties for one question and comment period. We'll go around again if others have more questions and comments.
Mr. Minogue: Okay. We're clear on the procedure. I will make the presentation on behalf of the Western Canada Pulse Growers.
Our organizations are producer organizations. They're funded by producer check-offs. The pulse growers in western Canada pay one-half of 1% of all their sales into funds that are administered by their respective provinces.
I'll refer to Saskatchewan quite often because I'm more familiar with their figures. In the province of Saskatchewan we raise over $1 million every year out of producer levies. Those levies are used for research activities. We spent close to $400,000 last year on supporting research. Some of it is in conjunction with some of your federal programs, like the MII program. Some of it is in conjunction with provincial governments and other organizations.
A second major activity of our board is extension and communication, where we liaise with other bodies and other organizations, with the federal and provincial governments and in particular with our farmers. We inform them of new developments that would enable them to produce better crops and to determine what products they should grow based on market information.
Our third major activity is in the area of market intelligence and market development. For market intelligence we try to keep in close communication with the trade, with the Department of Foreign Affairs and International Trade and with their embassies overseas so that we know what's happening in other markets and what our competitors are doing.
We like to try to get to some of these countries once in a while and talk to the buyers so that we'll know if our products are too big or too small or the wrong colour or the wrong size or shape and so that we know just what the market is demanding, in order to direct our research so we will be hitting the market.
The second part of our market development activity is the area of market promotion and development where we go out to try to find barriers that may be hindering our market access. We try to make our product known around the world and we try to get the best possible price we can.
Our purpose for being in Ottawa at this time is to familiarize our board members with the available programs. We meet with the different agencies, boards, and other producer groups, with anyone who might have business interests in common with us so we can better do our job when we get back home and and so we know that we've made the best possible use of all the resources available.
.1550
Part of the process, then, is to meet with the people in government both at the civil servant level and at the elective level so that you can be aware of what we're doing and ask us questions you may have. We can share information and try to make our industry better for it. So that's the reason we're meeting with you here right now.
Now, I'll give you some quick facts and figures on our industry. I won't give you detailed figures because that takes a lot of time. What I would like to do is give you an idea of where our industry is now and where it's headed.
The pulse industry in western Canada is relatively new. In case there might be someone here who doesn't know what I mean by pulse crops, I will say that our big crops at the present time are lentils and peas. We have smaller acreages of beans and are developing some other crops such as chickpeas.
If we look at the lentil industry, the first lentils were grown in western Canada in 1970. That acreage has steadily grown, and last year in western Canada there were about 800,000 acres of lentils.
If you look at the pea industry, there have been some peas grown in Canada for a long time, but not in significant amounts. The growth has been phenomenal in the last 10 years. Last year we had close to two million acres of peas in the three prairie provinces.
In the case of beans, I guess I could suggest that we had roughly 20,000 acres of beans 10 years ago, and now we have approximately 100,000 acres of beans.
Chick peas - last year we had 3,000 acres, which sounds like almost nothing, but we feel that chickpeas have a great potential, and 10 or 20 years down the road they could be an acreage similar to or comparable to our lentils. There is a fabulous world market out there for chickpeas and we haven't been a part of it because we didn't have the varieties that would grow well in Canada. We've done a lot of research to try to change that around.
In addition to the actual size of the industry now, there are some other factors that are important, and this is probably the most important thing that we want you to understand. When we say we have an extra acre of peas in the country or an extra acre of beans or lentils, it's a lot different from when we talked about an acre switching from wheat to barley.
The lentil industry and the pea industry are high-input industries. They require more manpower, more equipment, more inputs. It generates more activity in the economy. The returns per acre are higher. So those returns are reflected through not only all of western Canada, but through all of the country as a whole.
In addition, a lot of the land in western Canada used to be in rotations that included summer fallow, so you had a period of one year where there was no income generated. Summer fallowing was to conserve moisture and to accumulate nitrogen in the soil. With the new technologies of farming and the pulse crops that we have today, we now use lentils and peas and hopefully other pulses in rotations to eliminate the summer fallow acreage and get the nitrogen from the pulse crop itself.
This has several advantages, the first one being that it eliminates the need for commercial fertilizers, which not only are very expensive, but there's some resistance in the public's mind to using a lot of commercial inputs when we can use other biological inputs instead.
In addition, we get a yield increase in other crops following a pulse crop, which is commonly referred to now as a rotational benefit. Farmers were aware of this for a long time when they were growing their pulse crops, but we now have research data from Manitoba and Saskatchewan that puts some figures on this. The statistics show that you get a 10% to 11% average increase in yield in wheat in the crop following when you grow wheat on the pulse crop stubble as opposed to growing wheat on wheat stubble or barley stubble.
So there is a real net gain in the production in western Canada, first from the elimination of summer fallow, and second from the increase in yield. Third, we find the protein levels on pulse stubble are higher on our cereal grains than they are when we grow on other crops, even if you use comparable nitrogen inputs into that soil.
.1555
So we have unexplained yield and protein benefits from the pulses, which researchers are saying may be due to the slow release of nitrogen in the soil over the year from residue and furthermore from the breaking of the disease cycle in crops. The rotational benefit breaks up the diseases.
We're excited about the potential for increased value from the pulse crops as opposed to the traditional crops that we grew in the past. In addition to this, pulse crops are processed before they leave the country. If we go back to lentils, which I'm most familiar with, all lentils are cleaned before they leave the country. Most lentils are put into bags of varying sizes and shapes and shipped to specific markets. So we create a lot of jobs.
In the province of Saskatchewan alone we have 960 jobs in the processing industry, and over 600 of those jobs are permanent. The rest are part-time. Manitoba and Alberta would have slightly lesser numbers because their acres are smaller, but I think we could safely say there are 1,600 jobs in western Canada at the moment strictly from the processing of these crops.
In addition to that we have great potential for value-added. There's some exciting technology coming along using peas, for example, not only as peas but as starch, as protein or as fibre. We have a firm in Saskatoon called Parrheim Foods, for example, that is doing this now. They're working on a process to refine the quality of the starch. If they're successful in this, which we expect they will be, that starch will go into the newsprint industry in a major way and be a tremendous outlet for peas. So we have lots of potential at the moment.
We brought together people from research and from industry to a round table discussion in January and asked just what is the potential in western Canada: how far can this thing go? If you look strictly at the rotations that could be followed... I should explain that you can't grow peas on peas on peas or you will get into trouble. I'm sure you're familiar with that. There is a certain limitation in the amount of the rotation you can use. Some crops are adapted to some areas; some crops are adapted to other areas. If you take in the agronomic factors, we feel there's a potential to increase the total acreage in pulse crops by up to five times.
At the same time, we asked the marketing people what the potential is to market the products from increased production. They went through their set of numbers on what the market could absorb over the next 20 years and came up with a figure that was roughly at that same level.
I'm not convinced that we're going to achieve those levels. A number of factors will play there. The first reason I believe we will not get five times the increase in the acres is that there's going to be a strong demand for land for other purposes. You're all aware that grain prices have increased. There are going to be tremendous increases in demand for things like malting barley, and for some of the new types of wheat such as the extra strong varieties, the Glenlea or prairie spring types of wheat. So we're looking at some attractive markets that will be hard to compete with.
There are some other constraints we are concerned about that we can deal with. One of these constraints in which we feel you people can play a very important role is transportation. I would like to explain a difference in the transportation of pulse crops that many of you will be aware of, but some may not.
When we ship wheat out of the country, a producer delivers that wheat either to a grain elevator or a railcar. It's shipped to a port terminal where it's dumped into the terminal and mixed with other grain. It will be stored in large volumes and drawn out of those storage facilities as needed. The identity is lost on that grain. In our pulse crops, the pulses are taken in, cleaned, bagged, sampled, and sold on a specific sample basis so that the buyer is not buying anybody's lentils, he's buying the lentils from that cleaning plant over there.
There are no storage facilities for that kind of shipment, so arrangements have to be made to get your special crops from the farm onto the rail, to the port, and onto the ship on a schedule. So we have to have access to railcars for the process that the trade would call ship-to-sail as opposed ship-to-store.
.1600
It's an entirely different category of wheat. For regular wheat you can push the sales for two months and then back off for a month. You can't do that with the special crops. The transportation has to meet the requirements of the market. We're hoping that you people can help us in this.
We aren't in the transportation industry, and my colleagues and I haven't studied the transportation industry in enough detail that we can say to you specifically, do this and this and it will work. I would be reluctant to say that here today even if I thought I had the answer, because it's a big picture and you have to fit all the pieces together or it won't work.
What we do ask you to do is in any deliberations you have on transportation and any time you are involved in transportation issues, before the final seal of approval is put on a change ask yourself this question: Will the pulse crop industry in western Canada still function when this change is over? We don't want to lose our industry because of a wrong change in transportation.
A second major issue we're concerned about is research. I'm sure you know that research is important. We have to have ongoing research. There are always new diseases, new problems, new production constraints, and we need that research to keep our industry viable. There are some kinds of research that we can do as producers and that the private trade will do when we get down close to the sale point of the product, but there's some of that very basic research, the generic research, the buzzword of the day, for things that have to be done by government agencies so that our research people at the lower levels can do their job to keep us up with the varieties, the technology and the chemicals and so on that we need.
A third issue that I'll go into if we have time is the issue of chemicals and harmonization of the registration process. We have some concerns that it is very difficult to get chemicals for some of our special crops because the acreage base is small, the volume isn't large, and companies are reluctant to invest the kind of money they need to get through our current registration system. We would like to see the system make more use of research data and testing done in other countries so that it can cut the costs and make the system more efficient and more streamlined.
We're not saying we want to have access to every chemical that every country in the world has, because there are countries that are using chemicals that shouldn't be used. However, there are some systems in the world for which we have confidence in their testing procedures and their research data. Where that's the case we would like to have access to that data, that research and those chemicals so that our industry can proceed in the best possible fashion.
We could go on and on with more minor details, but I'm sure that may be enough to get us started. I'll turn it back to you for questions, if you like.
The Chairman: Do any of your colleagues wish to make a comment, or might they come forward if there are questions and comments from the members? Is that the way you wish to do it?
Mr. Jack Froece (Director, Manitoba Pulse Growers Association): Yes, that's fine.
The Chairman: Okay. I don't want to cut you off.
Mr. Chrétien.
[Translation]
Mr. Chrétien: I really appreciated your presentation, especially the part where you said that members don't necessarily know all the kinds of cultures that exist. I knew a few of them and you named at least four: lentils, peas, beans and chickpeas. I imagine there are many others and perhaps you could list a few of them for me.
I would also like to have more details on exports. What is the percentage of crops from the three Western provinces that is exported? I assume that the rest is produced for the Canadian market.
My other question deals with international markets. Where are your most serious competitors?
I would also like you to tell us about the transition you have to go through after the WGTA was phased out, in case you were affected by this.
Lastly I want to know how many farmers live exclusively on pulse production.
.1605
[English]
Mr. Minogue: I'll answer the question regarding exports first. Pulses are not consumed widely in Canada because Canadians are not used to pulses in their diet. If you go to other countries in the world - the Middle East, Africa, many other parts of the world - pulses are regularly consumed items. Plus, our population base is small to start with.
In the case of lentils, a very small percentage of our lentils go into the domestic market; they're nearly all for export markets. Of our main competitors in the lentil industry, number one is Turkey, which produces enough lentils to export to other countries. Some come out of Australia, some out of North Africa, and the Americans produce some lentils as well. But Canada is the number one exporter of green lentils in the world.
Recently we have been releasing a variety of red lentils, which are only going to be seeded on about 300 acres this year, but once we get into the red lentils, we're hoping we can do the same thing with them. Maybe 10 years from now I'll be here telling you that we're the number one exporter of red lentils in the world as well.
In the case of peas, peas have two uses: human consumption and animal feed. The portion used for human consumption in Canada would be relatively small. Some peas are exported to Europe and other parts of the world for human consumption. The biggest part of our exports - probably 70% to 80% of pea exports - are for the animal feed market.
There is also a tremendous potential for feeding peas to livestock in Canada. Until the present time, the major source of feed for hogs and poultry in particular has been a variety of cereals such as barley, wheat and corn, and the primary protein supplement has been soy meal from the United States.
With peas now readily available, we can give you information - production information, feed test trial information - that shows you can achieve savings of $2 to $3 per market hog by using feed peas in hog and poultry rations. Feed peas have about 3500 calories of energy, which is comparable to wheat. The protein level is 20% to 28%, compared to 10% or 12% for wheat, and corn is lower than that.
We have a large pork industry in Canada. We were figuring the other night that in the province of Alberta, they could probably use all the production from half of their acres just feeding the hogs that are in that province. There are a lot of hogs in the rest of the country that could be fed peas shortly. That switch is occurring; every month we're seeing a dramatic increase in the number of peas that are being fed domestically, which will reduce Canada's imports of soy meal.
On the topic of the export market for peas, at the current time 70% of our export peas go into Europe - they're in high demand there, widely accepted. We just had a trade mission over there looking into any problems that may be there. We're a little concerned about being so heavily oriented into the European pea market because if there should be a change in subsidies or trade policy or something of that nature, we would be vulnerable.
So we are directing our efforts this year into opening up markets in the Far East. We currently have feed trials going on in the Philippines. When those results are available, we will be sending people to other countries like South Korea, Taiwan, and so on, to try to promote our product there. We will need some assistance from Agriculture Canada and from the Department of Foreign Affairs and International Trade to remove some of the tariff barriers, but we think we have some real potential there to get these barriers reduced so we can sell into those markets.
In the case of beans, there are many, many types of beans and there are many, many markets in the world. I'm not familiar enough with the beans to talk about that, so I will let Jack Froece answer that question for you in a minute.
I will mention chickpeas here because that's new, and we're excited about chickpeas. There are two markets for chickpeas. The big Kabuli chickpeas that you see in salad bars that are in demand everywhere - we have buyers all the time inquiring when our chickpeas will be ready. The answer we give to them is that in two years we will have a large Kabuli-type chickpea that stands erect, that can be harvested. We've already developed a harvesting technology for them, and we're quite excited that we'll be able to produce those economically within the next few years.
.1610
The smaller Desi chickpea, which is the higher volume market, doesn't go at as high a price, but in the North American market Desi chickpeas do have a high value if they're processed, so we'll be looking at ways to get the hulls off them. At the present time, it's hard to take the hulls off; we've already developed a chickpea that doesn't have the little beak on the end of it, which makes it hard to process. We will be looking at ways to slice them and make flour out of them and so on, so that we'll be ready for that market when the chickpea is readily and widely grown.
On the beans, I'll turn it over to Jack, because he knows more about the bean industry and where it's going.
Mr. Froece: The United States is a competitor of ours in some instances. In other areas, we function as a joint North American market. In the white bean industry especially, most of the beans are exported to Great Britain; it's kind of a joint market. As far as pinto beans, black beans, and those kinds of different beans, South America seems to be our main competitor. The Chinese are also big producers of beans. Depending on prices, generally they'll jump into the market whenever the price is high just to get foreign currency into their country; it's kind of an up and down market as far as China goes.
Ms Janette McDonald Adam (General Manager, Alberta Pulse Growers Commission): As far as the questions about our main competitors in the European feed market, the Ukraine and Australia are our main competitors.
I think your last question was about farmers surviving - our total income from pulses. Am I correct on that question?
The main growth in the pulse industry in the last 10 years has been associated with lower grain prices and cereal prices, and people converting, shifting over to pulses because they were very strong in the rotation. It is unlikely and probably very poor management when we go beyond that type of... It fits very well into a good canola-cereal rotation in the prairies. We will not see where total farms become pulse operations because of the rotational benefits in good farm management.
Mr. Minogue: One more item on that one - the numbers. We have 20,000 members between the three organizations. So we have 20,000 farmers who grow pulses, but their total income doesn't come from pulses.
The Chairman: Mr. Chrétien, a supplementary.
[Translation]
Mr. Chrétien: I'm interested in your point of view. It may not have affected you personally, but has the withdrawal of the WGTA have an effect on your industry?
[English]
Mr. Minogue: The effect of the elimination of the GTA means that we now pay a bigger portion. We pay the entire freight bill now, so our costs are higher. Luckily this has happened at a time when grain prices are up significantly, and grain prices have risen more than the cost of the freight. Had this change come upon us five years ago when the prices were very low, it would have been very difficult.
As far as the advantage of one crop versus the other, that part hasn't changed because the weights of the product are roughly the same - the freight has increased equal amounts for each crop that we grow. One place that it has given us an advantage is that it costs the same amount to... This may not be an advantage, but it has changed the relationship of feed prices in Canada because the freight to bring soy meal in hasn't changed but the freight to take our products out has. So it is now more economical to feed peas in western Canada than it would have been before the change in the freight program.
The Chairman: Thank you, Mr. Chrétien. Mr. Hermanson, and then I'll go to Mr. McKinnon.
Mr. Hermanson (Kindersley - Lloydminster): It's a real pleasure to have the pulse growers here. We had pulse growers before our committee about a year ago, and both times I've been fortunate enough to have a constituent among them. It does reinforce what I have said in this committee and elsewhere - that the specialty crops and the pulse crops are indeed a vital part of our economy. I won't reiterate what you said, Lyle, but I agree with your observations as to how important the special crops and pulse industry is in our area. It was a real salvation during the low wheat prices of the last few years.
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As for the whole issue of segregation of the product different from wheat at a time when we're looking at car allocation and car ownership, I think it's very appropriate that you're before the committee. Why is that segregation needed? You said it is needed because the customer wants the actual product, the same sample that they've seen or dealt on. Why is that necessary for the pulses and not for wheat? Is it not also true that a lot more of the pulses and specialty crops are starting to be shipped bulk, compared to a few years ago?
Mr. Minogue: Feed peas are shipped in bulk. It may not be so important there. You could treat feed peas more like wheat.
In the case of something like lentils or chickpeas or the specialty beans, the lentils, for example, will have specifications like colour, percentage of splits and discolouration due to disease. These products are going to a store shelf in a package. The consumer looks right at them and sees what they look like. When someone buys wheat it's already flour and it's a loaf of bread and you can't tell one loaf of bread from the next.
That buyer wants a lentil that meets his specific needs. We have small Eston lentils, we have layered-type lentils. We're going to have these little red lentils. We have a Spanish type of lentil. We have CDC gold. They are all different and they hit a particular niche market. That buyer wants one product from one processor he knows can supply the thing his customers are used to. I don't think we're going to be able to get around that.
Quite frankly, that's what gives us our money in the pulse industry because we have an industry in western Canada that produces those specialty products. Again, if you preserve them and get them there on time buyers like that and they pay a premium for it.
Mr. Hermanson: You've been shipping your product through boxcars rather than through hopper cars because that's how you keep the bags separate. You don't put bags in hopper cars. That means you've been using cars that have been owned by the railroads rather than using the government cars. Have they been allocated by the GTA in the past? How has the car allocation worked in the past? Has it been effective in meeting the needs of your industry or has there been a problem in getting the cars when you need them?
Mr. Minogue: I'm the wrong person to answer that technical question about transport because I'm not familiar with the process they go through to order the car and get it there.
I do know there are times when shipments are held up because of lack of cars. There's a big concern about that. Furthermore, at the present time a lot of our processors are on low-traffic lines and trains tend to run when there's a big demand for wheat. I don't know the exact procedure for determining when a train goes down a line but I know it doesn't run down to get two carloads of lentils. It will go down to get sixty cars of wheat. If your shipment needs coincide with a wheat shipment you're in luck, but if it doesn't you have a problem.
A lot of the processors - and I can think of one in your constituency in particular - now must have a mobile truck bagging unit so they can go to the line where they can find a boxcar and get their products out.
I can't give you specific solutions. Just bring in experts who know these problems and know the solutions and make sure they're going to meet our needs.
Mr. Hermanson: We always talk about value added and our need for value added on the prairies. We hold up the specialty crops as an example of processing on the prairies, particularly lentils and peas.
I want to know how much room there is for additional processing on the prairies. Really, when we do talk about processing we're primarily talking about cleaning. We don't go much beyond the cleaning and maybe segregating into grades, which is labour intensive. Is there room for more processing that goes further than the cleaning and packaging of the product, or is that as far as we can go on the prairies?
Mr. Minogue: No. There is a lot of potential to go further. Earlier I mentioned a firm in Saskatoon that is now processing 5,000 tonnes per year of peas into protein, starch and fibre. A 10,000-tonne shipment of whole peas went to China just recently. The Chinese will be doing the same thing so obviously they are on to the specific uses for components of the peas.
We believe that if we handle this right in ten years from now we should be shipping starch, protein, fibre and other specific things, such as amino acids or whatever. There are things like protein derivatives or chemicals that you can get out of... We're aware of some of these things that I can't give the details on because they haven't been patented and approved and so on. There are some exciting things out there.
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One of the constraints to use of lentils in some countries is the cooking time. We now have a firm in Montreal that takes our lentils, partially cooks them, freezes them and sells them packaged. That product will be introduced into a major supermarket chain this summer. We're excited about that. We think this will go, and if it does we could then be in the U.S. market. Then we could start looking at European and eastern markets with this package. It's the ultimate in processing when you get it right down to a product in a plastic bag ready to go on the table.
Mr. Hermanson: As for the whole issue of transportation, I gather from what you've said that you're just not sure how well your industry will fit into this new transportation era. I gather you're still looking for more information, that you have people in your industry looking at it. The last time we had the pulse growers here the concern was about the Canada Grain Act and the fact that the industry didn't quite fit into that act the way it should.
We are members of Parliament and we pass and deal with legislation that impacts or could have an impact your industry. I would like an assessment of what you see as the needs of your industry in regard to legislation or regulation and particularly in regard to anything you might want to say on transportation.
Maybe you could focus more on the Canada Grain Act and whether or not the legislation in place is serving your industry, whether there need to be some significant changes and what those changes may be. The Canadian Grain Commission may come into play. Do you see a role for the Wheat Board? Is there anything in that regard?
Mr. Minogue: In the recent discussions on the changes in transportation, there was a committee structured to discuss that and the pulse industry. The special crop industry was not represented on that committee. We have concerns about that because the rest of the grain industry is so large. We have such big players there, their executive officers were on that committee and they made recommendations. I worry. Did they also remember that we've got other crops out there that have to be served? In the future could the pulse industry could have better representation on committees like that so that our views are considered?
I'm not aware of a specific need for legislation at the moment with the exception of ongoing discussions about a new process of licensing and security in the pulse industry that will likely require amendments to the legislation governing the Canadian Grain Commission. I don't think we need to make amendments to the Export Development Corporation but that may be a possibility. There are developments and ongoing discussions in that area.
Mr. Hermanson: Thank you.
The Chairman: Thank you, Mr. Hermanson. Mr. McKinnon.
Mr. McKinnon (Brandon - Souris): I welcome you people from the best part of Canada, namely the west. I thought I'd put that on the record.
My comments were partly covered by Mr. Hermanson. I think there are some producers in western Manitoba who are involved in shipping their product using containerization vehicles. Is that underutilized or is that a mechanism through which we can have less management or utilization involved in the product from the farm gate to the receiving country?
Mr. Minogue: There are several processes there. As we discussed earlier, when the product is bagged sometimes it goes into boxcars. Another alternative is to put it into containers which are then put on a trailer. The trailer is either hauled by truck directly to a port or is put on the train and shipped. I forget the correct term, but the trailer and the containers are taken to the port. Possibly Jack may have something to add. He's more familiar with that part of it.
Mr. Froece: It's used a lot in the bean industry. Most of the beans are processed on the farms or in the processing plants, put into containers and piggybacked to port. It's even more critical for the beans. It's shipment to sale. When you make a sale, it's a direct hit to the port and that container has to go because the timeframe is such that you're shipping to meet a certain market. There are a lot of specially beans being grown. They're meeting specific needs in special niche markets throughout the world.
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Mr. McKinnon: What about the lentils market? Is there much utilization of containerization there?
Mr. Froece: There is some utilization but not as much as possibly in beans. But when you're looking at the quality aspect of things, as Lyle was saying before, the buyer comes to the processor and he buys a specific product. It needn't necessarily go through a process where you're going to put a grade on it. You see the sample and that's what you buy.
Mr. McKinnon: If I could change gears a little bit, Mr. Chairman, I'd like to talk about the research changes in our last couple of budgets vis-à-vis the agricultural industry.
How have the research funding changes that have occurred impacted on your industry per se? And I'm talking about the federal moneys and the institutions that have been put in place.
Mr. Minogue: The research cuts were fairly significant. If I could summarize my perception of what happened there, Agriculture Canada consolidated research into fewer locations so that they could get some more cost efficiencies. We just met with them today about that.
One of our concerns is that if you're going to let a place like Morden be the centre for developing beans, we have so many different climatic conditions around the country that we want to make sure that those beans are tested at a very early stage in all areas of western Canada before they go too far down the developmental stage. So we're assured that this will take place.
I should also add that private industry is now putting more money into the research. I guess we're still getting by, but we're worried that any more research cuts are going to get right to the part where you can't substitute for that, and we're going to start having some real losses.
Mr. McKinnon: Have you reached a point in the industrial development where you maybe can't meet some niche markets, as your colleague mentioned, because of not quite meeting the competition in terms of the strain or the type of product we're producing, as opposed to other producers in other parts of the world?
Mr. Minogue: Let me give you a specific example. In the case of lentils, the main lentil that we grew when we started was an American variety that wasn't particularly adapted to our needs. The Laird lentil variety came out in 1978, and we are just going to have our next Laird lentil with the new disease resistance two years from now, and that is too long, because for the last five years we've been fighting disease problems. There's been downgrading, producers dropping out of it in certain areas because they can't grow it without disease. We've had a tremendous economic loss because of that gap. So we're fighting to get the process more efficient and new varieties coming onstream every year or two to keep ahead of the new diseases and insects and other problems that are there.
Mr. McKinnon: My last question involves the high technology involved in genetic engineering. Are you up and running in that area of research development with your industry, or is that something that is further along in your agenda?
Mr. Minogue: There has just been a very exciting breakthrough in Saskatoon at the National Research Council, where they have make a breakthrough on the process necessary to get a specific gene into a specific plant. They've done that with peas. We're hopeful that if the funding continues and we get the support we can do things in the pea industry, as has occurred in the canola industry in the last 10 years, and as the Americans are doing in some of their crops.
Mr. McKinnon: Thank you.
Mr. Froece: I just have one comment that we need to see the basic research done on newer types of crops. If we look at the pulse industry in western Canada, 10 years ago we were at 675,000 acres. Last year we were at 3 million acres. If the research isn't done into the new crops, this is one example of what can happen when you do that kind of research.
The Chairman: Mr. Lefebvre, and then Mr. Calder.
[Translation]
Mr. Lefebvre (Champlain): First of all I want to congratulate you; it is the first time I see such beautiful white beans. I am not used to see white beans of that size.
I was very surprised to hear that you've already created 1,600 jobs in the production sector. You say that it's only a start, but I did not hear over how many years this is. You will probably tell me. Are you already thinking about pulse processing?
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[English]
Mr. Minogue: Yes.
The Chairman: It might need clarification. The 1,600 you mentioned were people who were cleaning and processing the beans after they left the farm. That did not include the people on the farm. I thought you might wish to...
Mr. Minogue: Right. Yes, that's true. The processing is 1,600 jobs, after it leaves the farm, at the present time. In Saskatchewan we have a consultant working with us whose primary responsibility is to work with what we call the ``value-added industry''.
We do things like constituent analysis so we can give you the exact amount of each nutrient and each micro-nutrient in our products. They're looking constantly at needs for further research in that area. We work with the firms like the one I mentioned in Montreal that's been doing the processing. We will be providing a label for a pamphlet in the stores to advertise these products so they're widely understood by the consumers.
I think the answer is that we are doing things in that area, but we should be doing more. We need more effort and more people on staff. We're trying to grow as fast as the industry is, but it's hard to keep up.
Ms Adam: Also, we now have now three plants across the prairies who are producing a pea meal and a pea canned meal for our livestock and that's a significant value added. It isn't for human consumption, but it is a significant value adding from the basic product.
An interesting thing has happened in the Alberta bean industry. Just in the last year there's been significant research and testing of a refried bean product that is planned for export to the American refried bean market. We're making some inroads there.
In fact we just came from a meeting with your research people, Dr. Dorrell and Dr. Brian Morrissey. They were talking about some of the work that Canada is doing in terms of peas as an insect control agent in stored grain. There's really a lot of fascinating, very interesting, value-added research going on. The potential is very big in western Canada.
The Chairman: Mr. Calder.
Mr. Calder (Wellington - Grey - Dufferin - Simcoe): Janette, I want to take a little bit of a look into the future. You're here now and I would like to get an answer from you about where you think your industry will be by the year 2020. I use that date for a reason.
Vision 2020 last year in Washington dealt with this issue. By that time we're going to have seven billion to eight billion people on the face of the earth. Four to five years ago seafood production maxed out at 100 million tonnes. Since then it has fallen by 4% and it's still falling, so all food production is going to come from the land mass.
You have three million acres in production right now. For instance, on a per acreage yield, how does that compare with other crops? It's going to be imperative for us by the year 2020 to get the most production per acre that we possibly can. And that's without degrading the land.
Your industry is here now. I know you're in research and everything. Where do you think you're going to be by the year 2020?
Mr. Minogue: I mentioned earlier that we have the potential with our land base and our cultivated land base to increase our production of pulses by roughly five times if we get the market opportunities and if we don't get into constraints with transportation, research and that sort of thing.
The more important aspect to think about is that, first of all, we get net gains when we go into pulses as opposed to other grains. I mentioned eliminating the summer fallow cycle. I mentioned increase in yield in protein which is important.
Even more importantly, if you look at the figures for demand for grains in the year 2020, we cannot produce enough grains to give people the kind of protein diet they want based on livestock or on fish. There will not be enough livestock or fish produced because we will not be able to produce enough cereal grains to feed the livestock.
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If you look at countries where there now are problems in getting enough protein, how do they do that? In Africa they eat corn and beans, or teff and beans, or rice and beans, or cassava and beans, but it always includes beans.
The pulse crops have been a long-standing, traditional source of protein for people, and I think that in the year 2020 the pulse industry will be supplying a much higher percentage of the human population's protein needs than it is now, simply because we will not be able to afford the luxury of feeding seven pounds of grain to a beef animal to get one pound of beef, or five pounds of grain to a hog to get a pound of pork, or three pounds of grain to a chicken to get a pound of chicken meat, or two pounds of grain to a fish to get a pound of fish. I think you'll see more consumption of pulses.
This is where we think our pulse industry will grow and gain and give us better value as the demand for a limited agricultural land base gets greater.
Mr. Calder: As a chicken grower, I will contradict you on your feed conversion for chickens. It's 1.8.
Mr. Minogue: We don't have very good chickens in western Canada.
Ms Adam: Tied in with that point and your comment about doing it for health and in terms of the environment and the sustainability of our land and soil, another very strong point for pulses is that they fit very nicely into rotation for soil health, soil nutrition. So, because of the lower fertilizer inputs, we can do the same amount of production of nutrition at a lower cost. That's a fairly significant contribution that pulses will make to rotations in western Canada.
The Chairman: I know they vary a bit, but could you give, on average, the percentage of protein in pulse crops?
Mr. Minogue: Peas would be 20% to 26%. It probably averages 22% to 23%. Lentils would be in the same range.
The Chairman: So in pulse crops it's between, let's say, 20% and 25%, whereas wheat is 12% or 13%, and corn, I believe, is 9% or 10%.
Mr. Minogue: Right.
The Chairman: So your comments about the protein that can be produced per acre... That would be an interesting figure too, because, naturally, you have to bring into concern the yield per acre. I think I've seen those comparisons on the amount of protein that's produced per acre on pulse crops versus cereal crops versus corn, for example.
Maybe you people have a comment on that. I'm not trying to put you on the spot. It's just something that comes forward. We know that on a weight basis the percentage is much higher.
Mr. Minogue: One further comment on that is that we probably have sixty varieties of peas available to grow now. Most of them came from Europe and from the private firms that develop seed varieties. The criterion has always been yield, because people weren't conscious of protein ten years ago, five years ago. You wanted lots of peas. You wanted a big yield. But now protein has become an element.
Look at what's happened in the wheat industry. We now have protein segregation every half percent up the chain, with big protein premiums. That will trigger the same thing in the pea industry, protein premiums on peas.
New research is needed to get the varieties that are high in protein and high in protein types that are best suited to human consumption.
Mr. Froece: In the case of beans, the raw material is actually a direct source of food. It provides you with fibre, with protein. It's a single entity if you're putting a meal on the table.
The Chairman: Right, which you've demonstrated in this package you sent around for us to see this afternoon.
Mr. Hoeppner (Lisgar - Marquette): Mr. Hermanson isn't the only lucky guy here today. I also have a constituent here. We call him Mr. Froese in that area. Is that correct, or is the other one correct?
It's a pleasure to meet you people and welcome you here.
We often hear that other special crops are dependent on a special crops act. Do you also long for a special crops act that would identify some of your problems or solutions to your problems?
Mr. Froece: I think everything can be encompassed under the current Grain Act. I don't specifically see that we need a special crops act. I'm not aware that we have any specific problems at the moment that require legislation in that area.
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Ms Adam: That returns us to Mr. Hermanson's question about the Canada Grain Act and some of the negotiations we've been having under that in the lincensing and security area. There has been an attempt to deal with some of that. The optimistic view was to bring something before Parliament by this year. We found that this would be impossible.
The changes that we have been negotiating with the Canadian Grain Commission, from our point of view, can be handled within the existing act through small revisions to account for some discrepancies between the crops. I don't think we're looking at major changes to the act.
Mr. Hoeppner: I was wondering, because a lot of your processing is cleaning and bagging. I hear a lot of complaints from some of the special crops people that they can't afford some of the licensing and bonding. They need some special attention if they are supposed to survive.
Ms Adam: We are negotiating that entire process within the existing act. We will be looking at small changes within the existing act. We are talking with both the Canadian Grain Commission and the trade. Many people are involved in that entire negotiation, but I think it can be done easily within the existing act. We are all hoping to have it in place in the next crop year, not this one coming up; the timeframe is too short to get to you people.
Mr. Hoeppner: That brings me to the other question, on your grading system. Do you have a standards committee, or does the Grain Commission set your standards for lentils? I know there is a lot of different grading going on.
Ms Adam: We report to a special subcommittee of the CGC on grades. Lyle referred to a group of producers, the Canadian Grain Commission and the trade who had recently come back from Europe. One of the main struggles we are having in the pea industry is looking at the foreign material content that we are exporting around the world. That's one of the main issues in front of our group and the special subcommittee on grain standards. Again, I think it's a matter of working within the industry. It's not a question of major changes to any legislative bodies, but just looking within the industry, negotiating and cooperating to find out what standard we would like to be putting on the world market, and what is feasible for our traders and grain handlers to be able to process at a reasonable cost.
Mr. Hoeppner: So you can work within the Grain Commission.
Ms Adam: Yes.
Mr. Hoeppner: My other question, and it comes up in regard to other special crops, is what kind of harmonization do we need where chemicals are concerned? How many chemicals are available today that you would like to use and are not able to use?
Mr. Froece: The problem here, especially in the case of beans, is that we have relatively small areas: southern Alberta has 35,000 acres and Manitoba has 50,000 acres. The chemical companies don't want to invest the millions of dollars it takes to put a product to the farmers that will be used within the parameters of 30,000 acres. The cost-effectiveness is just not there.
We need some kind of a minor use registration for a lot of these products. We're not asking for something they have in every country, but only for industrialized nations where we could use that kind of data, such as the European Union, the United States, etc. If they have all the data and have done all the work necessary, and they are registering those products, then we should have access to that.
Mr. Hoeppner: So you're making your problem known to government and suggesting remedies for your problems whereby we can see something in black and white that you would ask us to promote?
The Chairman: There is a group, I believe it is centred around the Canadian Federation of Agriculture and some other organizations, that gets together periodically to go over the requests of industry on minor use. I am sure you are aware of that group, or can make yourself aware, so the appropriate people are dealing with as many of them as they can. As a matter of fact, committee members, tonight that topic will be available for discussion. Mrs. Ur has some questions.
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Mrs. Ur (Lambton - Middlesex): Since time is limited I'll keep it to two questions.
What are you doing to familiarize Canadians with your product, to promote your pulse crops so that consumption will increase within Canada? Also, are you looking at any methods of moving product other than rail that would be profitable?
Mr. Minogue: In regard to your first question, what are we doing to familiarize Canadians, we have a firm that works for us that regularly goes to food shows around the country and promotes our product. We give information out to organizations that have specific needs. Pulses are a functional food, so they are useful for people with certain diseases such as celiac disease, spina bifada, and the list goes on. We brought some copies of publications that go out here. I understand we have a problem here because of the language thing, but we could certainly send these to you if you want to receive some of them.
I think the awareness is coming. I find now that when you go to places and say that you grow lentils, people ask what kind, red or green. Ten years ago, people asked what a lentil was.
As far as the shipping is concerned, and what are the alternatives to rail, there are no alternatives other than trucks. The cost would be tremendous if we had to ship all the product from three million acres to the ports on trucks. You wouldn't be able to get on the road with your car and the cost would be prohibitive.
The Chairman: Mr. Hermanson.
Mr. Hermanson: The issue of pesticides has come up. The only thing I would add is that I would expect you are aware that you have a lot of allies in this area, particularly in Ontario, where there is real concern that there be some harmonization and lowering of prices of chemicals needed to control pests in your crops.
The only issue we really haven't touched on too much - we've mentioned it but not delved into - is the whole business of security. When a farmer delivers his product, is he sure that he is going to be paid depending on who he delivers it to? I know it's an issue that is more real to the special crops industry simply because it's an emerging industry and we haven't got it all sorted out.
Of course there's the infamous Klemmer case in Rosetown, which you are aware of, which was not helpful for the industry. I just want to know whether the industry feels that self-regulation is the best way for the special crops, pulses, to deal with ensuring that when a farmer delivers his lentils to the local processor he is going to end up getting paid in the long run, or do you see following a similar situation to wheat, which is under the Canadian Grain Commission? We have some guarantees under that.
In the Klemmer case, Klemmer wasn't covered and there was a real mess. It went right into the Department of Justice and we could talk about it forever. I've heard both. I've heard from producers who say that their industry isn't the same as the wheat industry; they want the tools to ensure credibility and they will look after that and make sure there are no foul-ups. Others say that they would rather see the Canadian Grain Commission handle it and have it be on the same basis as wheat and barley. I'd like to get your opinion.
Mr. Minogue: Our position on the security issue is clear. As pulse growers of western Canada we agreed a couple of years ago that there was a need for security and that it should be on a voluntary not a compulsory basis, so that if a producer wanted security he could pay a premium and be insured in the event the processor or the buyer went out of business.
A committee was struck to meet with the Canadian Grain Commission and the government to try and come up with a proposal. In regard to the proposal that is now being discussed, I don't think I'm telling any tales out of school here if I give you a brief summary of where it stands now.
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The Export Development Corporation has said they can insure those losses for us for a premium. They are proposing what we think is a reasonable fee - 0.2%, or 20¢ on $100. They are suggesting they would need an agent to handle this, which in all likelihood would be the Canadian Grain Commission.
In the event that the Canadian Grain Commission cannot handle this, or chooses not to, or there are problems, the Western Canada Pulse Growers would step in and handle it. If that was the only drawback, we could do that. We are hopeful that the details will be worked out.
There are some questions. Who will decide whether a person is eligible, as a processor or a buyer, to get insurance? We can't just guarantee every person who walks in off the street. We want to keep it open and easy, so as not to restrict entry to the processing industry. We don't want high capital requirements, lengthy procedures to get in, onerous bonding and so on.
If we get the right entrance requirements into the processing and if the fee is reasonable, we expect there will be a proposal coming to the government within the next year, which will likely require an amendment to the Canadian Grain Commission legislation, whatever act regulates that. If there are other options where our pulse boards have to step in and actually collect a fee and submit it to the Export Development Corporation, we may need amendments to our provincial plans. We're not sure where it will go, but we're getting close to this and I think the producers will end up with a program they will be happy with.
For the current year I think we're stuck with the old system, where you have to be licensed and bonded by the Canadian Grain Commission. Not all people are licensed and bonded. Producers who deal with someone who isn't licensed and bonded do so at their own risk.
The Chairman: Thank you very much. I don't want to rush the meeting, but I know you do have a 6 o'clock flight. Unless there are further comments you wish to make, I want to say thank you to Janette and Jack and Lyle for your presentation. I know I found it very interesting and worth while, and we hope it has served a purpose for you as well. Thank you very much again.
Ms Adam: I would just like to add something. The people we've been working with in the last three days who have helped us down here... We've had very good meetings. The people have been very attentive. They're interested in what we're doing. They're suggesting answers to our problems. It's been a very good interaction. The attitude of the people working in the departments is excellent. You come up with an idea, and instead of saying no, that can't be done, people are coming up with creative suggestions about how we can do it even better. We've appreciated it. I think it's an important thing that's happening with your staff here in Ottawa, and we really recognize it.
The Chairman: Thank you very much. That's good news for all of us. Safe journey.
Ms Adam: Thank you very much.
The Chairman: The meeting is adjourned.