As the chairman indicated, I'm Jim Everson. I'm vice-president of corporate affairs for the Canola Council of Canada. Thank you for the opportunity to update the committee on the priorities for the canola industry value chain.
I'd like to begin by providing a brief overview of our industry, and then outline some of the key factors that affect the competitiveness of the canola value chain.
Of course, it all starts on the farm. Canola is grown by about 43,000 farmers in Canada, mostly in the Prairies, but also in the Peace River area of B.C. and as far east as the Maritimes. Canola acreage and production have been increasing in recent years, as producers have found increasing value and profit in canola.
This year 21.3 million acres were seeded in canola. Statistics Canada has estimated a total 2012 production at 13.36 million tonnes. It's been an incredible story of growth, more than doubling production in the last 10 years.
You may know that canola is Canada's most valuable crop, generating one quarter of all farm receipts and amounting to almost $8.5 billion to producers in 2011.
The confidence that producers have in canola is being matched by the whole value chain as new investments are being made in the industry. Since 2006, investments in new and expanded crushing facilities have close to doubled the crushing capacity. Some of the most recent investments include two plants in Yorkton, Saskatchewan, a new plant in Bécancour, Quebec, expansion of plants in Altona, Manitoba and Fort Saskatchewan, Alberta, and the announcement of a new plant to be built in the Camrose area in Alberta.
The seed developers are also investing in Canada with state-of-the-art breeding facilities and research facilities in Saskatoon and Winnipeg, and of course, producers invest constantly in upgraded machinery and equipment to improve production efficiency.
The canola sector is contributing to jobs and growth. Today the industry contributes more than $15.4 billion to the Canadian economy each year and generates more than 228,000 jobs.
To comment on the value chain, through the Canola Council, seed companies, growers, crushers, and exporters all sit together at the same table to set goals for the industry and strategies to achieve them. The industry is currently working on a strategic plan, which includes a goal of creating a sustained supply and demand for 15 million tonnes of canola by 2015. We are confident we will meet that target.
Producers deliver canola to a network of primary elevators and crushing plants in their area for processing. The vast majority of canola is delivered and shipped to export terminals, mostly off the west coast, by rail, where it is loaded on vessels for export. Canola is processed into oil and meal at crushing facilities and is shipped by rail or by truck to markets overseas and in North America.
Canola is crushed to produce oil for use as a premium quality vegetable oil. After crushing, the remainder of the seed produces canola meal, which is used as an animal feed. Canola oil is also an excellent feedstock for biodiesel production, as well, and can be used to reduce greenhouse gas emissions generated by traditional fossil fuel diesel.
Canola is the healthiest vegetable oil available. It has very low levels of saturated fat, no trans fats, and high levels of the beneficial fats, to help prevent heart attacks and strokes.
Canola meal is another product with a definite advantage over its competitors. It is high in protein, palatable, and has an excellent amino acid profile. Research shows that canola meal in animal feed can increase milk production in dairy cattle by one litre per cow per day.
That, in a nutshell, is the canola industry value chain. Together we provide the world with a superior, healthier product that contributes to economic growth in Canada.
Regardless of whether canola is exported as a whole seed or first processed into oil and meal, over 85% of the crop is headed for markets beyond our borders. We rely on a strong and steady flow of product to customers in the United States, Japan, Mexico, China, and 50 other countries. This reliance on export markets means that our industry needs to constantly innovate and work to remain competitive.
The federal government policy and programs are important to setting the environment for innovation, market access, and growth. Currently, Agriculture and Agri-Food Canada is developing a Growing Forward 2 policy framework and programs, and these will play an important role for canola in the future. As this framework is being developed, there are five priorities that the Canola Council can point to for future success.
The first is innovation. Canola is a product born of innovation. Innovation is what we must pursue to increase our competitive advantage. This is an area where teamwork through a value chain has been a big advantage. Over the past four years, the Canola Council has coordinated the canola and flax science cluster under Growing Forward. This approach has brought industry, government and university researchers together and pooled knowledge and resources to make the most of every research dollar.
The science cluster is funding a total of about $20 million of research over a five-year period. It includes over 80 researchers in more than 30 institutions across Canada, and some in the United States. Research is directed to canola oil and meal and to improved production. In the production area, the research amounts to about $10 million and involves over 30 projects.
Because of this cluster approach, our industry now has a greater understanding of how to increase yields and minimize disease, and we have more scientific evidence of canola's health benefits to drive oil promotion. Looking ahead to the new Growing Forward 2 framework, we are very strongly supportive of the continuation of the science cluster approach and continued public investment in innovation.
Another priority is open markets. Our industry thrives in a trading environment that's predictable, competitive and transparent. We support the federal government's ambitious trade agenda in key markets like Europe, South Korea and Japan. Canada's entry into the trans-Pacific partnership is good news for our industry. If Canada can make the most of these trade agreement opportunities and conclude some of these trade deals, producers and the industry will have more opportunity to grow the industry.
Also on our priority list is market development and promotion. This is another area where the federal government is an important partner. Our members and Agriculture Canada cost share a $2.4 million promotion program over four years that spreads the word about canola's health and culinary benefits in key markets around the world. We're looking forward to a continuation of this program in Growing Forward 2.
Intertwined with market development is market access. Both of these priorities demand attention. Our industry is very grateful for the strong support of agriculture Minister Ritz and the federal government in maintaining and building market access. The Market Access Secretariat, which is a cooperative approach of the Canadian Food Inspection Agency and Agriculture Canada, has been instrumental in responding to difficult market access issues, such as China's concerns with blackleg.
In recent years, the industry and government have maintained markets with a value of over $1.6 billion per year by working strategically to resolve issues that threaten market access. Our efforts allow the canola industry the opportunity to earn most from international markets and we hope to build on this progress in Growing Forward 2.
Finally, an important issue is science-based regulation. Transparent and science-based regulations are critical to ensuring predictable trade and food security both in Canada and abroad. Canada needs to set a strong example. We need to build on the understanding this approach works best for all nations. In this regard, we are hopeful that major trading nations will develop policies regarding low-level presence of genetically modified products, an important goal because of a growing number of GM crops in commercial production around the world. We support Minister Ritz's efforts to develop a Canadian LLP policy and to promote the adoption of LLP policies internationally.
To sum up, Canola is one of the most exciting sources of economic development in Canada in the years ahead, and to capitalize on that potential we'd like to stay focused on innovation, open markets, market development, market access, and science-based regulation. The canola industry has enormous potential to create economic growth, jobs and wealth for Canadians if we continue to do things right. The Canola Council brings together the entire value chain, and we look forward to a continued partnership with government toward these goals.
Thank you. I look forward to answering your questions.
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Good morning. My name is Rex Newkirk, and I'm, as mentioned, the director of research and business development at the Canadian International Grains Institute, which is an independent not-for-profit organization that provides ongoing technical support to buyers of Canadian field crops around the world and has done so for 40 years.
Thank you very much for this opportunity to present an understanding of the grain supply chain in Canada. Jim has already done an excellent job of providing information on the canola industry, so I'll focus my attention on other aspects of the grain industry. I will attempt to provide an overview of the grain supply chain with a focus on the issues that affect the system, and in particular, the role of the federal government in addressing these challenges.
Canada has a very efficient and effective supply chain. We have been providing grains to the world for over a century, and it continues to improve and change with globalization. The supply chain includes: plant breeders, who develop varieties that address ongoing needs; a variety registration system that ensures customers' needs are met by the new lines of grain; seed growers, who propagate the seed; farmers, who efficiently produce the grain; primary elevators that collect the grain and transfer it into the rail system; transfer elevators or terminal elevators that move the grain to the end customers; flour milling companies, which convert the grain into food ingredients; and finally bakeries, which produce finished products and deliver them to consumers around the world.
The Canadian system also includes a robust grain grading and quality assurance system through the Canadian Grain Commission. Canada provides technical marketing support, which helps ensure customers are informed of the valuable properties of Canadian grain, and this ultimately encourages them to purchase the product. Research is conducted that develops new products from the grains, which creates new opportunities for the crops in food and industrial applications.
The system in Canada is primarily a bulk handling system, as Canada produces a great deal of high-quality grains that are for the most part exported and must be transported in a very cost-effective and efficient manner. The system has been designed to primarily move a homogenous product and maintain purity and the quality of the grain so the customer ultimately receives the product that they purchased in a timely and cost-effective manner.
There have been numerous changes to the grain industry over the last two decades that have resulted in improved efficiencies. There has been a great deal of consolidation, resulting in larger companies that operate very efficiently and in a cost-effective manner. The old wooden grain elevators have been replaced with much more efficient facilities that collect grain from a wide region and efficiently transfer it to the rail system. Recently, as you are aware, the government made changes to the marketing system for wheat and barley, and now the farmers and companies are selling the wheat directly rather than through a monopoly.
The federal government has some key roles in Canada's supply chain, and as such, supports the best interest of the farmer, the Canadian public, and increases trade. This includes research into the customers' needs and ensuring the products that are produced and delivered are addressing these requirements. It includes investment in research and plant breeding, which results in germplasm and new varieties that address customers' and farmers' needs.
It is important that the federal government maintain investment in this area as there is insufficient investment by private companies in the area. Companies often foresee limited potential for return on investment in these crops because unlike genetically modified crops such as canola, where farmers buy seed and license technology from companies each year, farmers typically do not purchase certified seed for non-GM crops such as wheat, barley, and pulses. Therefore, the return to the plant breeder is relatively small and often too little to entice private companies to make this investment. Without a genetic investment, the advances in genetics will not be made and future production efficiencies are lost. Therefore, it is important that governments, in partnership with producers and private companies, make investments in the development of these genetics.
The federal government conducts research to ensure the grain grading system is efficient and meeting customers' needs and therefore maintaining market share. This is a wise investment as it builds customer trust and supports the entire supply chain.
The Government of Canada plays a pivotal role in ensuring food safety through inspection and oversight of pesticide usage. This system has on the whole been very effective, and the grain industry is well respected worldwide as a result. It must be responsive yet predictable, and so far this has been the balance often achieved in Canada.
The government supports market development through its trade commissioners and organizations such as CIGI that work one on one with customers to ensure they are supported and aware of the products that Canada produces. Farmers cost share this activity with government. This has been very effective, and in conjunction with the grain handling and safety roles previously mentioned, has resulted in Canada being well known for producing some of the highest quality and safest grains in the world. Canada is often the preferred supplier for grain, and long-term success of Canadian grains in the world markets relies upon continued investments in this area.
As you are likely aware, during this time of transition of the grain industry, CIGI made a commitment to maintain the level of customer care, knowledge building, and brand maintenance, and in partnership with the federal government, we have been working diligently to keep that promise.
The Canadian government funds research into innovation that can create or support future markets. Typically, basic research is funded that can identify new products and opportunities. Whenever possible, CIGI uses this research to support customers around the world. This is one area where CIGI believes additional attention from the government is required.
Canada has invested heavily in research, but many express frustration that too few of these research projects become commercially relevant. It is CIGI's experience that the issue is not that the research is not of high quality, but that the funding often ends at the discovery stage and does not take the research and development far enough.
For research to become an innovation with commercial successes, it must be demonstrated well beyond the initial discovery stage and be promoted at a commercial level. Commercial customers are not willing to utilize new products unless a long-term continual demonstration of their production and benefits is supported. To ensure Canada reaps benefits from the research, it is critical that new innovations be demonstrated at a commercially relevant scale directly and consistently with potential users.
CIGI, food centres, and other agencies that are capable of demonstrating commercial pilot-scale production and have long-term trusted relationships with companies are well positioned to help move this research to commercial reality. However, this requires a long-term and conscious effort of government investment to be truly effective.
In an attempt to create awareness of the economic possibilities from effective innovation in agriculture, CIGI is planning a two-day event in Winnipeg in January, where four current examples of innovation will be discussed. During this time, the participants will meet with innovators and be able to discuss government's and industry's role in innovation and develop clearer plans to success.
In summary, the grain supply chain in Canada is very efficient and is one that all Canadians should be proud of. The investments that the Canadian government makes into the supply chain, including plant breeding, grading, food safety, technical market support, and market access, have been very effective and will continue to be so in the future.
:
Thank you very much, gentlemen.
Mr. Everson, you mentioned low-level presence. I'd like some clarification on that.
It's my understanding that the canola industry is successful. You've developed markets and you export to certain countries that accept canola, but you cannot export to those that do not accept GM canola, I would imagine. That's the state of the world today.
I don't understand how low-level presence affects canola, because either there's a high-level presence or there's no presence. Are you saying that if there's contamination of other crops, such as wheat or any of our other exports, there should be a certain amount of low-level presence because there's a possible contamination from other genetically modified crops, such as canola?
I'd like clarification on that.
The other thing is there are certain commodity groups and certain people who believe that before any new crops are released—for example, in B.C. we have the Arctic apple that's scheduled to be released, or alfalfa in eastern Canada—we should be looking at the potential of market loss. That should be a criterion in approving any new genetically modified crops, for example such as they use in Argentina. I know that in British Columbia, the Union of British Columbia Municipalities passed a resolution saying it does not want any GM tree fruit product at all in the province.
Both of you, please, if you have any comments on my questions, I'd really appreciate them.
:
Those are a couple of very good questions.
The issue around low-level presence is the possibility of the contamination of shipments that are qualified, that are approved, by low-level presence genetic traits that are not qualified.
If I could define “low-level presence” for this discussion, it is the unintended presence of products, GM traits, that have been approved in the market that's exporting, or in another market, but have not been approved in the market that you're importing into.
Most countries have very specific sets of laws and regulations to ensure that any product that's genetically modified coming into their territory is approved beforehand, and it's approved by a science-based process that uses codex internationally accepted risk-based standards to approve a GM trait.
In the canola industry, we ensure that before a product is introduced to the Canadian farmer, that product is approved in all of our major markets through this kind of science-based process.
The challenge with low-level presence is that there's a large expansion of the number of biotech products being produced around the world by a number of different countries and for different commodities. Acreage is going up, and the number of products is going up. The challenge there is that the process for approving these products is not universal around the world, and in some markets it's very slow. Therefore, you'll end up having some products approved in some territories but not in others. It's called asynchronous approval.
We will ship only products that are approved to our major markets. The concern is that we use conveyance means, railcars, ships, and so on, that are used for all products around the world. You may have a GM trait in a vessel. The vessel is used, and then it empties that commodity. We put canola in that ship and send it over to a market, and there are traces of an unapproved trait in our canola supply.
Canola is a GM crop, but it's not just canola. It's an issue for all Canadian exports, for example, wheat and barley. If you have any kind of unapproved trait found in those kinds of vessels, in those kinds of shipments, that will disrupt trade.
It's important to make the distinction that the products we're talking about are all approved in one or two countries already using a codex-based process, a risk assessment and safety process, at 100% exposure. In every case in which we're talking about LLP, we're talking about a product that has been approved by a competent authority using codex-based regulations of safety assessment. We're not, in any of these circumstances, talking about a product that is not already approved using those standards.
There have been examples. One example would be a vessel shipping soybeans to a market. The vessel had dust in it from biotechnology corn that had not been approved in that market. There was a very low-level presence. The product had been approved under a science-based risk assessment in another country. It's unintentionally there. It's just been picked up because of dust in the air around a port. That stopped a vessel that's worth millions of dollars—some of these vessels are worth $20 million or $25 million—really, in our assessment, for no good reason. The product is not a threat to health or animal safety. It's been approved by a science-based process, and it's not intentionally in that shipment.
Another part of the story is that some countries are developing new biotechnology products, and they expect that they will be used only in their domestic territory. They're creating that biotechnology product to be used in their country only, and they're not seeking approvals from export markets, but if that product were to end up in one of our shipments, it could contaminate the shipment and cause some trade disruption.
:
That's an excellent question.
As you mentioned previously, the Wheat Board was our primary source of direction as to which customers to deal with. As of March 31 of this year, the Wheat Board stopped funding market development and therefore providing that direct support to us. Now, in place of that, we have two committees of a group of farmers that are represented across the Prairies.
We also have representation from the grain industry through the Western Grain Elevator Association.
We look at what markets we should be addressing, what the customers' needs are, and then we take those things before the committees. Our last meeting was last week. We ask whether these are customers they feel we should support. We have carried on and we are probably busier now than we have ever been, because customers are looking for that support.
They want to know if we still have the same quality assurance system, whether we still have access to the grain, and who they can buy it from.
We're in there and we're doing that. Our team just came back from Southeast Asia. It gave out the new crop information. They will be heading out again in about a week to carry on in another region of the world.
That was the primary change to our model: whom we work with. These committees have been providing that change. We're hoping that in the not-too-distant future, although we recognize that it takes a while for it to come around, we will have an organization like the Canola Council in the grains industry that will provide that direction and be that organization we can work with. In the meantime we are diligently out there working and using the knowledge we can obtain and using those committees to direct us.
:
One of the key experiences I have had being at CIGI, and then doing some stuff before CIGI, is that we often assume the industry companies are able to take up a technology as soon as it has been developed in a university or at a research institute and an initial application has been shown. We see we have this neat and novel thing. We have made a cupful of it and assume that now it's ready to go commercial. Often, this is not the case, particularly in agriculture where although the return may not be as risky in the long-term, the companies are not able to absorb any risk because there are very low margins when you go into these markets.
I will give you an example. When I was working on my Ph.D, I developed a technology from canola to make protein concentrates for the aquaculture industry. We saw an opportunity where we could take canola meal and add a great deal of value to it by processing it differently. It could address a market need where fish meal is becoming in short supply.
We developed this technology. We got some patents. We went out to the industry and said, “You guys should do this. This makes a great deal of sense.” They said, “This is great, but have you ever made 2,000 tonnes per day? Have you ever sold 2,000 tonnes per day? What scale have you done this at?” I said, “We made a bucketful of it in the lab and we fed it to some fish.” At that point, the research funding available to do that kind of research is gone because we have already demonstrated it. What it really needed was a continual push into the market. That's what we did.
We had a decision to make. Do we just publish it as we normally would, or do we personally put our effort into it and do it? We started a company. Over the last 10 years, we perfected the process, which took a few years. Then it was a matter of continually being in front of the processing companies that could do this work. We said, “Here's an opportunity for you. We fed it to animals. Here are your customers. Keep in front of them.”
Canada has some infrastructure to do that kind of work. In the case of MCN, my company, we did sell it. Bunge has bought it. They are going to build very large plants. They are going to develop new products from canola. The engineering is under way for that right now. It could have easily stayed in the textbook and had very little economic impact. The investment needed is to keep doing the discovery work, but recognize that we need to take those discoveries to the next stage into the commercial pilot scale into helping, holding the hands of, and courting companies that can take this forward.
A past example of that would be pulses, where we worked with companies in China to produce vermicelli noodles from yellow peas. They were making vermicelli from mung beans. They wanted to grow their industry, but the mung beans available were limited. We thought that we could make it from yellow peas. We did some research and discovered that yes, we could make it. Working hand-in-hand with the government, trade commissioners, and Pulse Canada, we were able to stay in front of the customer and show them that yes, it can be done. Finally, they took it up. Now, it is an annual market turning about 350,000 to 400,000 tonnes of yellow peas into vermicelli noodles in China.
That's the type of effort it takes. It takes organizations. CIGI is one of those. We have the relationship with the customer. We are able to keep demonstrating and pushing. There are food technology centres. There are other organizations able to stay in front of the customer and take it to a scale and a place they can understand. There needs to be a greater partnership between the research and the commercialization activity.
Canada has always been an exporting nation. We have a great deal of resources and not too many people to feed, and as a result, we are able to produce a surplus of material, which is great for our economy as we are able to export that, to attract value from it. The canola industry has been a tremendous example of how a crop can be grown and further processed.
The fact that we have to export so much of our material has really changed the structure, or has created a direction for the grain supply chain. We know we need to be very efficient if we're going to compete with the world, when we grow most of our grain in the middle of the continent. If we're going to compete with somebody who is right next door to the customer and doesn't have to move the grain very far, we have to be very efficient.
That is really why we've seen so many changes. Although I grew up on a farm, I've only been directly in this part of the grain industry for nine years, and the changes I've seen over the last nine years are amazing. At the time it seemed overwhelming, but looking back, one recognizes that if we hadn't made those changes to create those efficiencies so that we could move the product in large volumes in a very consistent and transparent manner with the quality assurance, we would never be able to compete.
Of course, I would love to see further processing applied to our other crops as we are seeing on the canola side. Again, we have to be able to compete with large processors around the world that have heavy investment in infrastructure, for example, Turkey, where they have flour mills all over the place.
Certainly our industry has been designed around the ability to move and transport.
Of course, our domestic industry is still very important. We do have 30 million people to feed. We cannot ignore them. We need to keep an eye on them. It is important that the government recognize that we don't just export everything, that we do have a healthy domestic industry as well.
Good morning, and thank you for allowing me this opportunity to introduce you to Canada's first all-wheat provincial producer commission and how we intend to participate in and help shape the wheat supply chain here in Canada.
My name is Rick Istead and I'm the general manager of the Alberta Wheat Commission. This is also a very special day for me as 40 years ago today I began my career in agriculture. Over that period of time my passion for agriculture, and in particular Canadian agriculture, has grown exponentially, largely as a result of working with farmers across the country and numerous stakeholders in our industry.
Farmers are also passionate about their chosen livelihood. I have found them to be a resilient bunch, extremely innovative and always willing to try new things. And they are fully prepared to accept the challenge that lies ahead of them to feed a growing and hungry world. If we provide them with innovative tools and allow them unhindered access to world markets, they can compete with the best of the best.
Today I'm here to share with you one aspect of an agricultural and agrifood products supply chain, how the Alberta Wheat Commission intends to play a role in helping advance Canada's wheat industry, and what I see as the next steps in developing a wheat value chain.
First off, I will provide some points on the significance of wheat to Alberta.
Some 30% of western Canada's wheat, 6.6 million tonnes, is grown in Alberta. Wheat is the province's largest crop by area within the province and annual production is normally in the range of 7.5 million tonnes. Alberta's wheat producers grow all nine registered western wheat classes with Canadian western red spring and durum wheat accounting for approximately 90% of the total acreage.
It is predicted that by 2050 world wheat production will need to increase from the current 660 million tonnes a year, to 880 million tonnes to meet the demand from a world population of 9.1 billion. Production capacity and the province's relative closeness to port, and in turn Asian markets, gives Alberta a competitive advantage to participate in this predicted market and trade growth over the next four decades.
Alberta producers need our support to not just maintain but to meet this growing demand, and to grow the competitiveness and profitability of Alberta wheat.
After almost four years of planning and consultations, the Alberta Wheat Commission, AWC, formally established under the Marketing of Agricultural Products Act here in Alberta was launched on August 1, 2012. This is the first time not only in the history of Alberta, but also in the history of any of the western provinces, that all types of wheat are being represented by one group. The organization is producer focused, producer funded, and producer governed.
The majority of the AWC's revenue is generated by a mandatory, refundable provincial service charge or check-off of 70¢ per tonne for all wheat classes grown, regardless of end use. The organization's membership is comprised of producers who grow and market wheat in Alberta and who contribute a service charge or check-off to the commission when they sell their wheat. That's currently estimated to be 11,000 producers in the province.
The AWC is comprised of five regions, and each region is served by two elected directors and three regional representatives. The AWC is currently being governed by an interim board of directors, but with inaugural regional elections currently under way, the AWC will have their first ever producer-elected board of directors and regional representatives in place by the end of January. The commission is operated by a general manager, who reports to the board of directors, and who is responsible for executing the commission's strategic and annual business plans and overseeing AWC staff.
The AWC will play a critical role in advancing Alberta's wheat industry by: representing the interests of and helping to increase the profitability of Alberta's wheat producers; providing leadership that improves the demand, agronomic competitiveness, and profitability of Alberta-produced wheat; and contributing to wheat-related policy development initiatives that will help not only build capacity, but encourage investment in the wheat industry.
We plan to deliver value to Alberta's wheat producers and Alberta's wheat industry by investing in research and development initiatives targeted at genetic and agronomic improvements and in market development initiatives focused on end-use demand; by identifying opportunities and developing policy and advocacy initiatives that encourage investments in Alberta's wheat industry; by communicating and sharing knowledge with our members and stakeholder partners; by developing future farm leaders; and by collaborating and partnering with like-minded organizations.
While we will continue to move forward in our strategic priority areas, as a brand new organization our primary focus in our first full year of operations will be the following. We intend: to take part in a planning and strategic plan development; to hold regional elections, which are currently under way; to develop a solid organizational foundation upon which to begin operations; to establish clear operational policies and procedures; to hire core staff necessary to carry out the work of the organization; to secure office space; to demonstrate value through networking and regular communications; to establish and grow strategic relationships; and perhaps most importantly, to encourage producer engagement.
Even though we are a brand new organization, we are already being recognized and being asked for our advice and our position on certain policy matters and certain issues and opportunities currently facing Canada's wheat industry.
One such matter is the creation of a national organization to represent the interests of Canada's wheat value chain. We know that our provincial neighbours, Manitoba and Saskatchewan, are currently engaging their producers in a dialogue on the value of creating their own wheat and barley commissions in their provinces. They are both looking at setting up their own wheat and barley commissions by August 1, 2013.
This foundation is certainly needed before we can move to the next step of creating a national council, perhaps one structured and governed similarly to the Canola Council of Canada, which we have to say has been an incredible success story for Canada's canola industry.
There are some who say we should have a national cereals council and others who say no, that we should start with separate wheat and barley councils to give those commodities the focus and support they deserve and need.
The Alberta Wheat Commission, along with a number of other producer organizations, is endorsing separate councils. In fact, the barley industry has recently announced and has moved forward with the Barley Council of Canada, which we believe makes sense. We applaud them for taking this initiative.
Once Manitoba and Saskatchewan get their provincial wheat and barley commissions up and running, we will need to bring all of the wheat value chain partners and wheat industry stakeholders together around the table to debate and develop our road map for the future. The Alberta Wheat Commission intends to take a leadership role in this journey to advance Canada's wheat industry.
Thank you.
:
I apologize for being late. Yes, I've had a good tour of this part of Calgary this morning in the dark. It's been a bit difficult to find this place. Garmin is a great thing for GPS, but it doesn't always get you to where you want to be.
Anyway, thank you, Mr. Chairman
Good morning, committee members. Thank you for inviting me here today to speak about the barley supply chain as well as opportunities and challenges facing the barley industry.
Today I am here in my capacity as chairman of the Barley Council of Canada Working Group, but I am also a farmer and I have been actively involved with a wide range of agricultural organizations, including the Western Barley Growers Association, of which I was president until a year ago. I also served six years on the board of directors of the Alberta Barley Commission.
To give you some background information about the Barley Council of Canada, the Barley Council of Canada Working Group was formed in 2011. As you can see from our brief, it includes a great cross-section of the barley industry in Canada from coast to coast. Besides bringing together farmers and industry leaders, the working group has also taken the time to conduct research in order to understand what its role can and should be within the barley value chain. We are currently finalizing our bylaws and business plan and hope to incorporate the Barley Council of Canada, or as we like to refer to it, BCC, by the end of this calendar year.
Before I address the challenges and opportunities facing our industry, I’d like to talk to you about barley as a crop. Barley is a great crop for Canada. It is well suited to grow in our climate. It makes an excellent rotational crop. It has a wide variety of potential end uses. It can be used for the feed industry for livestock, for malt for the brewing industry, and to make healthy food for consumers. Despite this variety of uses, we have yet to truly maximize the potential for Canada’s barley crop.
Our industry has conducted research into why this has happened. In the past year, two major studies have been completed on the Canadian barley industry. The “Business Case Assessment of the Western Canadian Barley Sector: In Search of the Optimal Marketing Structure” was initiated by the Western Barley Growers Association with support from the Alberta Barley Commission and was completed in March 2012. The Barley Council of Canada Working Group report on research, stakeholder consultation, and analysis was carried out by Synthesis Agri-Food Network and was completed in early November.
Both of these studies examined the opportunities and challenges facing the barley industry. Both identify a great need to form a national barley council and for it to take a leadership role. The Barley Council of Canada Working Group, through its consultation with the barley industry, as well as by using these studies, has also identified four priority areas for our value chain. These will also be key priorities for the Barley Council of Canada going forward.
The first priority we discovered is support of varietal development and innovation through quality research and breeding programs. The Barley Council of Canada will support varietal development research to improve yield and quality. It will provide a unified voice for barley research and help attract research and innovation funding without duplicating existing efforts or mandates of other organizations. We will take on a coordinating role for research and, working with farmers, industry members, researchers, and various levels of government, we will develop a national research strategy to encourage innovation and efficiency in our industry.
The second priority we identified was crop production and a commitment to grower profitability and best practices. The Barley Council of Canada will support and collaborate with agronomic researchers to develop best practices to manage production issues. The Barley Council of Canada will also educate growers on the customer requirements for Canadian barley and how best to achieve these requirements. It's important that the needs of barley end users are met and equally important that these needs are communicated to barley farmers so that they can grow exactly what the industry wants and so that they can achieve greater success in their own farming operations.
The third priority is to develop markets and improve market access in a manner that complements the existing initiatives. The Barley Council of Canada will expand domestic and international markets by providing a unified voice for the barley industry with government and by working to develop new international and domestic marketing opportunities, such as barley food.
The Barley Council of Canada will take on the role of providing a focus and a voice for the barley industry by communicating and collaborating with existing industry groups, as well as other commodity councils and associations on general trade and market access issues that affect all commodities.
The fourth priority that we identified is improvement in the understanding of the barley industry throughout the value chain and with government stakeholders. The Barley Council of Canada will ensure that all levels of the barley value chain and government have a solid understanding of the issues and opportunities facing the barley sector in order to ensure the industry’s long-term success. In acting as a conduit between barley farmers, researchers, industry stakeholders, and government, the Barley Council of Canada will take on an important role in improving value chain communication, and will provide a unified voice to encourage further investment in processing, research, and innovation.
As you can see, the Barley Council of Canada has big plans to grow Canada's barley industry. In having a dedicated, commodity-specific council, we believe barley will achieve the same success as such other crops as canola and pulse.
When the Barley Council of Canada takes on the leadership role our industry has so clearly identified as a need, it will work collaboratively with barley farmers, members of industry, and various levels of government. The Barley Council of Canada will develop and implement a common vision that will enable long-term profitability and sustainable growth of the Canadian barley industry through value chain collaboration.
I thank you for your time, and I look forward to your questions.