AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, December 8, 1999

• 0829

[English]

The Chair (Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.)): Members, I want to bring this meeting to order. It's 8:30 on the nose. Being an old farm boy, I want to be punctual.

• 0830

It's an absolute pleasure to be here in Regina, although I wish we were here under different circumstances. Nevertheless, we're glad to be here, especially to meet with primary producers, who put food on our table. This is the beginning of the third day of our tour through the three provinces. We've had very good meetings in Manitoba, and yesterday we started our Saskatchewan tour in Estevan.

Because we have so many people to hear from we have to maintain a schedule, and we will do it. In our first round we are going to hear from the Minister of Agriculture for the Province of Saskatchewan, Dwain Lingenfelter. He has brought along Senator Len Gustafson. We also have with us Gayle Knutson, Greg Lamb, and Stewart Wells.

Good morning to all of you.

Out of respect to the minister, we will start with you, Dwain, and then we will go alphabetically. I understand, though, that Senator Len is sort of part of you this morning.

We have an hour for this. I would hope that we could have these presentations from you done within 30 minutes so that we could have some time for questions.

Thank you for coming. Let's begin.

Hon. Dwain Lingenfelter (Deputy Premier, Minister of Agriculture and Food (Saskatchewan)): Thank you very much, Mr. Chairman. I'm glad you said “out of respect”. I was worried you were going to say “by age”, so I appreciate your kind introduction.

Just let me say, Mr. Chairman, how much we appreciate the opportunity to be here with you. On behalf of those presenting now, I want to thank the committee, because I think it's important to realize that when our standing committees, whether it's finance or the powerful committee of agriculture, come to our province and city, they're not coming here just to listen and go away and say, well, we heard, but we don't need to respond. The fact that you're here means a great deal to the people of the province of Saskatchewan, and I want to tell each and every one of you that your presence here today is hugely important.

I want to get right down to business because I know we don't have much time. I will just say that the reason we are here is the declining farm income as a result of very low commodity prices. When you look at where those commodity prices are low—and hugely low—it's the export grain area.

It's not by accident that you don't see here today cattle producers from Saskatchewan or milk producers or chicken producers or producers from those areas where there are marketing boards and from those other areas where you have a level playing field between Canada and the United States. In fact, in our province these producers are having a very good year. Protected by marketing boards, whereby the subsidies come not from government but directly from the consumer at the shopping malls, they are doing much better. That is absolutely reflected in net farm income, province by province.

I'm not going to go into that, but I'm sure the committee has the numbers for the net farm income in other provinces where farmers are protected—and good for them—by marketing boards. All we're saying is that as farmers we need the same kind of level playing field with our trading partners in other parts of the world.

I just ask the committee members to think about what would happen if the auto industry of today were suddenly told that the U.S. government is putting in a 30% premium subsidy to automobile manufacturers south of the border. Think about what would happen if the Canadian government had to respond to that. I think there would be a flurry of action immediately, whereby there would be massive protests to the U.S. government. protests saying they couldn't do that because they would kill the auto industry in Oshawa, Ontario, and in other parts of Canada—as well our government should protest.

That's why Saskatchewan farmers and Saskatchewan people are absolutely amazed that the reaction of our federal government is silence when we're faced with subsidies that mean farmers just across the border in the United States get a minimum of 30% more for their product—and in Europe, 50% more. We're absolutely amazed that the government tells us we don't have a treasury that's big enough to support our farmers when the governments of Europe and the United States do.

In fact, subsidy paid to agriculture in Canada per capita is only one-third of what it is in the United States. To send that kind of signal—that automobile manufacturers need a level playing field, that IPSCO, in steel, needs a level playing field, along with oil and gas and aerospace, but that when it comes to the narrow margin of grain exports, it's “Become more efficient”... I just tell you that if this message were sent to the auto industry if there were a 30% discrepancy on automobiles, the message from the federal government would not be “Become 30% more efficient, even though all the input costs are exactly the same”.

• 0835

That's why yesterday's debate in the assembly was so important, where all political parties in Saskatchewan and all producer organizations, the chamber of commerce, the association of rural municipalities and urban municipalities, came together with a common message—that is, our grain farmers in Saskatchewan deserve no less than other industries in Canada.

As in my speech last night on the closing of the debate, I think we give credit to the federal government historically for defending other areas of interest in this country. If it's flooding in Manitoba, we as Canadians, through our federal government, come to the table and help. If it's ice storms in Quebec or Ontario, we think we have a responsibility. Even to the extent where the Quebec company Bombardier, which was one of our strongest Canadian companies, had trouble in terms of contracts in South America and Brazil, our federal government went to bat and insisted that the trade and contracts were properly done. That's what a federal government should be, and we're proud of them when they do that.

What we can't understand as Canadian citizens in this province is when we have this unfair playing field created by our federal government and by the federal House of Commons. We're all involved in this. This shouldn't be a matter of blaming one person or the other. We're all in this together. It's the Senate, all members of the House of Commons, all members of the legislature, all industry. We cannot finger one industry out of all of Canada. You can't find another industry that's treated this way. I challenge the committee to go through the list of industries we have and find one that does not have a level playing field in general with the United States. It's only one: it's grain exports. And the signal we are sending by not dealing with this issue is that the people in this province don't matter.

That's why in the world trade talks in Seattle I had a great opportunity to work with you, Mr. Chairman, and other members and legislators in Canada. I thought we had great meetings with members from the European Union. We met with a number of American legislators, and I thought our talks there were productive, although there was no conclusion on the agenda. I want to say that even if we had set an agenda, or even if we do in the future, those results will be so far down the road that it can't possibly help the thousands of farmers.

I might add, these farmers are not inefficient, but it will come too late to help the brightest, the youngest, the university-educated farmers who are on the brink of disaster through no fault of their own—these are the best farmers in the world—only because they choose to farm in a country that has chosen not to defend and protect them. That's why we hear over and over again the words that we don't like to hear from many of our especially farming and rural communities, that they're wondering about Canada and why they're being treated differently.

What I have to tell you is it is not farm families withdrawing their support from the federal government or from Canada. These are historically the most loyal Canadian citizens you will find anywhere in Canada. When it came to supporting the federal government and our Canadian position in the referendum in Montreal a few years ago, many farmers bought tickets to Montreal and went down and were rallying to say to Quebec people how much they loved them and needed them to stay in Canada. They do support that concept, but they're beginning to wonder.

That's why at the Carlyle meeting—and my friend Len Gustafson will know this—a young fellow by the name of Trevor Doty, who I'm quoting because his message is so powerful, said very clearly that the day we went to Ottawa as a coalition was a sad day for his family. I quote him, and he asked me to use this quote when I can if it's helpful. He said:

Indeed, October 28 was a sad day. When I got home from my off-farm job that day, the first thing I did was take down the Canadian flag that has flown over our farm since before I can remember. I will never put it up again.

This is a Canadian who is so proud of being part of Canada that the Canadian flag has been flying over their farm. People shake their heads and wonder, but this is the signal we don't want to hear, that it doesn't matter. It does matter. It's hugely important, and his signal of hope for all of us is that he said “Please give us a reason to put the flag back up again”.

• 0840

They're not leaving. They want to be part of Canada, but they feel that Canada has left them. That's the message I want to leave with the committee, that when it comes to supporting farmers in Ontario and Quebec through marketing boards where people producing milk and butter get 50% more through subsidies at the shopping malls or at the supermarket, we think that's great. We think farmers should be supported. But when it comes to farmers in Saskatchewan getting 30% less, we just expect to be treated equally.

I really want to emphasize again in closing that we appreciate very much your presence today. I'll be taking the message from our legislature to the ministers conference in Toronto. We need your support. Saskatchewan needs your support, and I respect the fact that you're here today to listen to us.

The Chair: Thank you, Mr. Minister. We appreciate those comments.

I want to remind all the witnesses that we have a very tight schedule. We have no more than one hour for this particular segment. I would suggest very strongly that the remaining witnesses in this round keep their remarks to five minutes so that we have some time for questions. If we don't have time for questions, then we'll have to go on to other witnesses. Out of respect to the witnesses who will be heard at 11 o'clock and 11:30, we have to keep to our schedule.

Senator Gustafson, you wanted to add something to the minister's remarks.

Senator Leonard J. Gustafson (Saskatchewan): I have a very short remark.

As you know, I served this area for fourteen years and two days in the House of Commons and going on seven years in the Senate of Canada, and I still farm actively with my three sons. We are fifth generation. In other words, my grandchildren running tractors now are the fifth generation.

My grandfather came from Sweden. I heard him tell stories of the 1930s, when he sold a cow and paid $7 freight to get the cow to Winnipeg and never got anything.

I have not seen it as difficult as it is today. It is very difficult. Any farmer who tells you otherwise has either inherited a lot of money or something has happened. This is very serious.

I won't take a lot of time, but I want to say this. This is a national issue. It's not only a Saskatchewan issue, not only a Manitoba issue, no longer a Peace River or an Alberta issue. When people like three people at Estevan yesterday say they have taken down the flag, it's serious. Canada can't afford to see that kind of thing happen.

We're asking in western Canada—and I as a representative say this—that you give us the same treatment you've given other segments of agriculture. We don't want to take anything from the dairy producers or the chicken producers or the other producers, but let's have a fair deal for western Canada on this situation. If we don't, we have big problems. Our finance minister is saying there's a possibility of $93 billion—I believe that was the number—of surpluses over the next five years. Surely to goodness, if commodity prices don't change, it's going to take a couple of billion dollars a year to give farmers a break.

I'll say one more thing. I chaired 25 meetings in Europe, from the lords of London and the farmers unions to the commissioners of the unions, and they're not going to get off the subsidy. It isn't there. In meetings with the Americans at Seattle we heard this. They're going to stand with their farmers. It's Canada's obligation to stand with her farmers.

We appreciate you being here. I hope you carry that message back, as we will in the Senate.

Thank you.

The Chair: Thank you, Senator.

Now we'll go in alphabetical order, starting with Gayle Knutson. Thank you for coming, Gayle.

Ms. Gayle Knutson (Individual Presentation): Thank you.

Greetings, Chair John Harvard and other members of Parliament.

• 0845

My experience in tracking our AIDA application through the system revealed a major flaw in this program, and this flaw should not appear in any new financial program that will assist farmers. It appears to penalize farmers who are proactive in the management of their businesses. AIDA administration calls it structural download, and will reduce payment if any farmer makes a change in their operation and experiences a subsequent 15% profit loss. I believe this is a major reason the number and amounts of payments to Saskatchewan farmers have been so low.

The clearest example to AIDA's definition of structural download is what happened to us. We farm in southeastern Saskatchewan, in Kipling. Up until 1997, we operated a mixed farm of about 150 cattle and eight quarters of land. We watched the grain prices fall, the cattle prices fall, and our net income or profit margin fall. We could see a bleak future, where we would need off-farm income to put food on the table, pay the bills, and help subsidize the farm.

In June 1997 my husband began driving a vacuum truck that services the oilfields. Thank God for that. With shifts averaging about 14 hours a day, it would have been impossible in the winter for my husband to feed the cattle twice a day. My own circumstances also ruled out my ability to tend the cattle. So we made a sound management decision that the money from the off-farm job would be more than our annual sale of one-year-old calves. We sold the final lot of calves in early December 1997, deferring the income to 1998 for tax reasons.

Then came AIDA. After the eight-week waiting period, I tracked our application every week. In mid-July, a front-line AIDA worker informed my unbelieving ears that our payment was to be over $16,500. “But,” she cautioned, “this hasn't been signed off yet.” In the next two weeks AIDA reps called with new questions about why we sold the cattle, why we deferred, and why we reduced acreage. Then, contrary to existing AIDA rules, we had to give livestock numbers and weights for 1995, 1996, and 1997. I protested that these were new rules, that these other questions were to be applicable only if we had 1998 livestock inventory, which we didn't, but it didn't matter. When our AIDA cheque arrived we received less than 25% of the original estimate that they had given us—only $3,500.

So I wrote a letter to Minister Vanclief requesting a review. And note that at this time there's no formal and independent appeal process for farmers. In my letter I stated that we had to answer new questions regarding livestock that appeared to change the original rules for filling out the schedules.

To summarize, their answer pointed to our sale of cattle and profit loss as an unsound business decision. Even with hindsight, we don't agree with their reply and we still believe our decision was the right one.

To explain structural download, the assistant attached a technical circular, T1C-17. It made us gasp in shock at the implications to prairie farmers. This was in early September. In the circular, “structural download” is defined as:

...changes in ownership, business structure, size of operation, farming practices, type of farming activity, accounting methods or any other practices that alter program margins.

In the first bulletin, the circular also lists acreage change, livestock change, commodity change, and even decrease in input expenses.

Before I give you some concrete examples of these structural downloads, take a look at this 15% profit loss compared to other reference years. According to Statistics Canada, the 1996 net farm operating income was $18,133. At 15%, that gives the farmer just over $2,700 to make changes to his farming operations before AIDA nails them. That actual dollar figure of 15% is even lower now, because farming incomes have dropped below the poverty line.

Let's take a look at what these structural changes mean for farmers with an example of change in ownership. A farmer from Assiniboia changed the corporate structure of his farming operation in 1996. This management decision to set up a separate farming company was an attempt to find a few more dollars of income through tax savings. He said he was hit with an AIDA adjustment.

Here is an example of size of operation and reduced acreage. If a farmer has to sell some land to pay some bills and stay afloat, AIDA will penalize him. If the farmer gives up land he has rented because the rented land no longer makes money, then AIDA will penalize him.

An example of farming practices and/or reduced input costs is that if a farmer decides to move into organic farming, it will take him four years of reduced yields along with reduced input costs before the farm can start to make a decent profit. Of course his income will fall, and of course AIDA will penalize him.

• 0850

Here's another example of farming practices and/or reduced input costs. A farmer has practised minimum till and continuous cropping. In an effort to cut input costs of pesticides and fertilizers, the farmer moves his land back into summer fallow rotation. His income will fall because of the reduced acreage, and AIDA penalizes him.

An example of commodity change is if a farmer decides to go from cereal crops into more specialized crops like pulse, herbs, or spices and experiences an income drop below 15%, AIDA will penalize him.

We have been assured that off-farm income would not be calculated into the AIDA payments, but in order to work off the farm, most farmers have had to make a change that would be classified as structural download. They often need to free up time to work off-farm. Farm income would likely drop by 15% from previous years, but we do have that salary, so in essence AIDA steps in and penalizes the farmer for working off the farm.

The farmers who get decent AIDA payouts will be the older grain farmers who have maintained a farming operation without any structural changes of any kind. They will need the money, because right now they are using their savings to keep their farms afloat, and the end result is pretty dismal for them too. Once their savings are gone and AIDA is gone, their farms will go too.

The two-year AIDA program encourages farmers to maintain their operation without any proactive structural changes. AIDA punishes those farmers who do change. These proactive farmers—like my husband, who has to work an off-farm job and farm at the same time—will work double shifts for only so long before they say “No more. Something has to give. Let's sell the farm.” Well, wait—who will buy, and at what price?

Due to time constraints, I will be unable to present some positive measures that could help prairie farmers, but I'm sure this could come up in question and answer. They also appear in my speaking notes for the committee at a later time. Thank you.

The Chair: Thank you very much, Gayle.

Now we hear from Greg Lamb. Good morning.

Mr. Greg Lamb (Individual Presentation): Good morning.

Farming is an occupation in which you have very little control of input costs or the amount of product you have for sale, and virtually no control over the price you receive for your product. I have farmed for approximately 20 years. My wife and I farm three sections of grain land, and we continuous crop. We own 1,600 acres and rent 320.

By 1990 we saw that if we continued to grow only cereal grain, our farm would not be viable. Diversification is risky and expensive. We grow various crops, including lentils, peas, canola, flax, wheat, durum, etc.

Despite diversification, 1998 was the worst year farming for us ever. 1999 looked like it might turn all right despite 250 acres that were too wet to seed, but canola prices dropped and an early frost hurt grain quality. The prospects for the year 2000 look even worse than 1998.

Crop rotation is necessary for the long-term future of my farm, but money is scarce, and you start to overlook the long term because you must survive the here and now. As a farmer, I grow what I think will be the most profitable on my farm, but spring price forecasts can be and often are vastly different from what actually happens. Our debt is small, yet we cannot make a living, let alone a return on our capital investments.

I have cashed in $30,000 of RRSPs during 1998-99, as well as making substantial NISA withdrawals. My farm can stand financially poor years, but you cannot lose money forever. We have done our best to diversify and make our farm productive, viable, and sustainable. My great-grandfather, my grandfather, and my father all were farmers. With the uncertainty surrounding farming, many of our young people are leaving the farm. My son will be 19 in January, and he's not interested in farming. I have encouraged him to farm.

My reason for being here is to tell the committee that farmers have a need. Farmers are hurting. I've never been involved in a public way with any farm issue before, but I, like many other farmers, think it's time to speak out to let people know what's happening to our rural communities and why. I have neighbours and friends who will not be farming next year. The large majority of them are good managers. Some are leaving with some money in their pockets for their years of hard work, and others are leaving with nothing but frustration. I'm talking about farmers who are in their early forties.

Farmers do appreciate any help given to them, but we would rather just be paid a fair price for our product and charged a fair price for our input. We want an honest day's pay for an honest day's work. Something has to be done, or the majority of farms will be owned by large corporations, banks, and other financial institutions.

I have included with my notes a copy of how AIDA did not help me because of the way my inventory was valued. AIDA officials have told the committee the reason Saskatchewan farmers are not receiving more money is because their gross margin is at the 70% level or higher. Let me assure you that many more farmers have suffered losses, but due to oversight, over-protectiveness, or—in my opinion—inaccurate accounting methods of the policy-makers, many do not qualify.

• 0855

AIDA is also unfair to many farmers who pay their relatives wages for farm work. Due to inaccurate inventory evaluation and the arm's-length salary rule of AIDA, I received $2,500 in 1998, instead of $42,000. I'm not the only farmer experiencing this problem. The first time I looked at AIDA, I saw many loopholes or cracks where people just slipped through.

Crop insurance and NISA are valuable and deeply appreciated programs, but these programs do not make up the huge loss in income due to falling prices. NISA needs to go through some good years before its value can be realized, but for the moment it is only a retirement fund for a few older farmers who have some means. I know some farmers who cannot afford to put money in unless they can trigger the withdrawal. I and many other farmers do not believe that countries that have gone hungry during times of war will ever stop subsidizing their farmers. They want to maintain a guaranteed supply of food in case of war.

Some of you may say Germany is getting tired of supporting agriculture. Others will say the United States is on our side, but look at what they're doing. Some of the experts have told you that you can't help just one sector. But I say if that sector is hurting, help should go there. I believe my self-worth is not determined by how successful my farm is. That is not where my hope lies. But many farmers believe that if their farm isn't successful, they are failures. This is a dangerous situation that is occurring on many farms in Saskatchewan today.

Mr. Robert Friesen said that farmers paid $17 billion in taxes in the last seven years. Farmers would like some of that money returned. Money that goes to farmers would generate many jobs, and the people who work at those jobs pay taxes. The money they spend will generate more jobs, and these people also pay taxes. I wonder how much of the money given to farmers gets returned via taxes. Short-term aid is necessary, and I am in favour of an acreage payment to get grain farmers through the immediate crisis.

If you look to the last page of my notes, you will see that six of the last ten years of my farming have been low-income years. How many businesses with a capital investment of over half a million dollars, with them and their spouses working without a wage, would be happy with these figures? Aid programs have been too year-specific. Many farmers have different income levels for the same years, but most farmers have suffered losses during the last 10 years. An acreage payment would address the losses regardless of the year they were incurred.

My position is that if we are to ensure the agriculture sector and rural communities in Western Canada are to remain sustainable, we must make some changes. One, farmers need to be paid a fair price for their product through a mechanism that guarantees the cost of production for each individual product. I know people here will be thinking we can't do that, that it's too expensive, and it's not green or acceptable by world trade rules. I say it can be done, but it needs someone with courage to do it.

Governments need to remove restrictions that prevent farmers from developing markets of their own, for example, restrictions on grain delivery to pasta or malt plants. Products could be processed or value-added here in Saskatchewan if restrictions were lifted. Farmers need to be involved in the design and implementation of any safety-net program. I mean real farmers, not organizations representing them.

Programs such as NISA need mechanisms within them that would allow people who cannot afford to make the matching deposit to use the program. Some of these alternatives could be matching money allowed to be used as an RRSP, which would be taxable upon withdrawal, or in special cases, the government's portion of the money could be deposited without the matching deposit.

I ask these questions: Does the Government of Canada want or care about rural communities in western Canada? If they do, are they prepared to take action?

Thank you.

The Chair: Thank you, Mr. Lamb. Now we'll hear from Stewart Wells.

Mr. Stewart Wells (Individual Presentation): Thank you, Mr. Chairman. I'd like to thank the committee for coming to Saskatchewan and listening to the views of farmers.

I think what we've heard from the first four speakers has been a very accurate representation of the situation in Saskatchewan. I'm a farmer from close to Swift Current, which is a couple of hours east of here. For the last two years, I've been doing some work with the National Farmers Union. From what we've seen, and from the people we've been talking to, I would say this is a very fair and accurate representation. I'm very pleased the committee is able to be here to hear this.

Now the National Farmers Union actually comes into this situation as one of the only groups that predicted this situation was going to occur. We predicted this was going to happen. I shouldn't say “we”, because I wasn't with the Farmers Union then. But 20 years ago, when the whole push toward deregulation and privatization within the country began to take shape, and we began to see things like the Crow rate for grain transportation and the two-price wheat system fall by the wayside, it was obvious, at least to some people, that this situation was going to occur, and that at some point in time commodity prices would fall to such a point, or some other circumstances would kick in, to leave farmers in a really terrible situation.

• 0900

That's where we are today. The last time farm incomes were at this level, it actually had taken all kinds of factors—stock market crash, worldwide economic depression, dust bowl of the thirties—to force us into this.

In general terms, we haven't had those kinds of problems in Saskatchewan. Some places here in the last five years have had really excellent crops, well above average, and the quality has been above average, but some of those farmers, even in those areas, are in very terrible circumstances. Of course, in places that have had the production problems, those have kicked in, and the situation there is just that much worse.

The programs we have in place aren't adequate, either when you have production problems or when you have these pricing problems that we're seeing in the low commodity prices. They're not adequate to keep a farm afloat. Especially in the last ten years, we've used all this terminology around safety net programs. Even the term “safety net” implies that at some time in the recent past you've been up on the high wire and have had some very good years.

In fact, that's the way the industry operated from the forties up until the mid-eighties. The net farm income fluctuated always in a range between $10,000 and $30,000. Sometimes it was higher and sometimes it was lower, but at least there was that range. Of course, in the last five years we've seen that completely evaporate. All the trends have been continually down, in which case a safety net type of approach just isn't adequate.

So there are many places where the federal government can exercise its responsibility and make directional changes in policy that would really help to address this, and help individual farmers. That is, we have to analyse the situation and figure out why we have this problem and whether the problem is the fact that we have systematically destroyed or dismantled the policy and regulatory framework that made it possible for family farmers to grow grains and oilseeds on the prairies.

In my view, that's what's happened. We picked a little piece here and a little piece there, and each time a little piece was taken away, the theory was, well, that's not very much money; that's not really significant; farmers can still survive. But then a little piece was taken off this end, and we worked both ends against the middle. All of a sudden, especially when the international scene kicks in and we have extremely low commodity prices with really no projections of increases, it's just too much. Each individual straw has added up and now it's breaking the camel's back.

In that regard, I would look at further moves to deregulate as a continuation of programs that don't work. For instance, in the area of transportation and railway deregulation, in my analysis, it really seems as though there's quite an initiative for the railways to get out from underneath the rate cap they've been operating under. There's all this talk of going to a revenue cap and what not.

In my view, that is rewarding the railways for their poor performance in 1996. It was shown by the CTA that they deliberately discriminated against grain movement. The Wheat Board had the nerve, the audacity, to call them to task for that in front of the CTA. Since that time, in fact, grain movement has been very good, and the Canadian Wheat Board has been earning dispatch rather than paying demurrage, but there's every chance that the railways are going to be rewarded for their behaviour by having the rate cap removed.

So it's those kinds of things, as well as looking at the Grain Commission, which would like to reorganize itself and change its function and direction.

In all of the areas of policy, then, we are still continuing down the road that has put us into the jeopardy we're now in.

• 0905

I won't go through the brief, which I believe everyone has, but I will mention that on the last two pages there are some personal numbers from a farm in the Maymont area of Saskatchewan.

In 1949 the taxes on a good quarter of land in the Maymont area came to $65. Today those same taxes are over $666, which is a tenfold increase. Around that same time, diesel fuel cost 18¢ per gallon, and today it's about $1.80 per gallon. Again, that's an increase of about ten times. Number one feed oats in 1948 were about 84¢ a bushel. This fall, the farmer there has gotten several different prices from several different companies, and those same oats are worth about 60¢ to 70¢ per bushel, actually less than they were in 1948.

That just highlights the kinds of problems farmers see themselves as having.

On the very last page, I've attached a graph that gets into the area of international trade and the WTO and that type of thing. This graph shows that despite the dramatic increases we've had in agrifood exports from this country, there's absolutely no link between the increase in exports and the income of farmers. Exports have gone way up and incomes are going down. I thus would question the efficacy of these dramatic increases in trade.

I'll end by saying that we have to start working at building programs that work for farmers down at the farm level rather than looking at other types of issues first.

Voices: Hear, hear!

The Chair: Thank you.

Members, we have just twenty minutes for questions and answers, so I'm forced to limit each party to five minutes.

We'll start with Mr. Breitkreuz.

Mr. Garry Breitkreuz (Yorkton—Melville, Ref.): Thank you very much.

I'd like to thank you all for your presentations. They were excellent.

I'd also like to formally welcome the committee to Regina and my home province. We're very proud of it, and we appreciate very much that you're here. Our only desire is that the Prime Minister would also come and take a closer look. I think it would have a big impact.

Voices: Hear, hear!

Mr. Garry Breitkreuz: I'd also like to thank all of those farmers who have come. I think the tremendous support they are showing for the hearings just gives you a good indication of how serious this problem is.

I have only a few minutes, and I'd like to share my time with my colleague, Mr. Kerpan.

The comment was made that we don't have a treasury big enough to support our farmers. Would you not feel that we instead should be asking can we afford not to support our farmers? If our family farms fail, would that impact on Saskatchewan not be much more detrimental to our treasury than if we help them out at this point?

I think that's a point that needs to be made, and I'd like your response on that.

I'll put my other question right away. The premier has stated that the federation isn't working. We heard yesterday, in Estevan, farmers saying they're taking down their flags. Even this morning... and most farmers are loyal Canadian citizens.

In a meeting in Whitewood last Friday, the estimates were as high as 80%, among those farmers present, that we need to go our own way; Canada has left us.

We don't want to use the “s” word here, but doesn't that indicate how serious this is? For those of you in the farming community, how widespread do you think that feeling is among farmers?

I'd like you to respond to those two questions.

The Chair: You have just three minutes to answer these two questions.

Mr. Dwain Lingenfelter: I want to answer the first part, Garry, having to do with the issue of support for farmers and whether we can or can't afford it.

There's no question, in my mind, that although agriculture as a percentage of GDP has gone down, and I hear economists say it is therefore less important, I just want to say that the way Europeans and Americans treat it, it's the foundation of their economies. Whether it's 18% or 14% or 10% doesn't much matter.

For instance, you can't say that this part of the building is only 10% of the building so it doesn't matter what happens to it. If the foundation of the economy collapses, the rest of the economy collapses. That's the definition of our province, of Manitoba, and of many others.

• 0910

But the fact of the matter is, it's not even a question of whether we can or can't. Our federal government has supported agriculture in the past. There's no question that we can afford it. Historically, we have afforded it. It's only in the last three years that these subsidies have been ripped away. You can argue about whether they were the right format for subsidies or not. Maybe they were; maybe they weren't. But the fact of the matter is Saskatchewan grain farmers got $600 million in subsidies through the Crow benefit two-price system for wheat and other areas that have been taken away. Interestingly, the shortage in net farm income this year is exactly what has been taken away.

So this is not an issue where the federal government says they can't afford it. With every other government historically in this country since 1905—some would argue even by treaty or agreement with the Crow rate, which was said to be in perpetuity—these subsidies were in place. These have been taken away.

My point is it's not a question of whether we can afford it as Canadians. The fact of the matter is we always have, and either because of naïveté or because of some sort of mean-spiritedness, we've let them go. I want to believe at this point it was a naïve move by our federal government, and those subsidies will be replaced. We're still willing to give that bit of time.

But I'll tell you, if the money isn't there in the next budget, there will be a sense that this is mean-spirited and targeted to a small province. I just don't want to go there. I want the government to prove that we do matter.

Voices: Hear, hear!

The Chair: Thank you very much.

Mr. McGuire.

Mr. Joe McGuire (Egmont, Lib.): Thank you, Mr. Chairman.

To be fair, Mr. Minister, a year ago we didn't have any money at all in disaster relief. Since then, federally we've put in $1.7 billion, and the provinces put in another $600 million.

Also, you're going to Toronto, tomorrow or today, to discuss the future of safety nets for the country. That will be a battle in itself, with some of the attitudes provinces have towards safety nets and how they're disbursed.

I'd just like to know what the difference is—if you've crunched any numbers—between last year in Saskatchewan and what next year or the following year may look like with people leaving the family farm. Even in good years, across the country, not just in Saskatchewan, people are leaving the farm, farms are getting bigger, and there seems to be no way to stop it. What is the difference between say two years ago in Saskatchewan and this year or next year?

Mr. Dwain Lingenfelter: On the outlook for net farm income historically, let's take 1993 to 1997. The net farm income was about $650 million a year. This year it's projected to be—the number the federal government used in July—minus $48 million. That's down from a $650 million-a-year average over five years to this year's projection, although there are interim numbers that show that might turn up a little bit. But whether it's minus $48 million or plus $48 million, it doesn't much matter; we're talking about a zero net income for 1999.

Projections out don't get much better, because world wheat prices are so depressed, not because of market, but because of huge subsidies that mean other countries can buy their grain for near zero, because European farmers get 56¢ on every dollar of their income from subsidy, Americans 38¢ on every dollar, and Canada 9¢ on every dollar. The OECD numbers I'll provide for the committee show again, when it comes to milk and butter and poultry, the playing field is not that way. It's level between Canada and the United States. It's only on grains and grain exports where you see the discrepancy of 30%.

So the problem is with AIDA, with a national program that tries to be pan-Canadian. AIDA does work for people who get 50% of their income through subsidies through marketing boards. AIDA works very well for them. But to try to say that program is going to work for us in Saskatchewan, where we're missing 30% of our income, can't work.

So the message we'll be taking to Toronto the day of the ministers' meeting is we need three things. One, we need a trade equalization program in place permanently until the Europeans and Americans get rid of theirs. Two, we need an improved NISA. And three, we need improved crop insurance. That would be a program where our farmers here would thrive and be productive.

• 0915

Does that mean then no farmers would ever leave the land? Absolutely not. But we wouldn't be losing 30% of our most efficient, brightest, and most educated farmers, who we stand to lose without a trade equalization program that's deserved, was there, and will have to be there in the future if we are to survive.

Mr. Joe McGuire: Would that trade equalization program be equal to what you're looking for in the short-term payout?

Mr. Dwain Lingenfelter: The trade equalization program that has been defined by the farm organizations would bring the net farm income up to the five-year average.

Mr. Joe McGuire: If there were a payout in the next budget, would that be directed to those who need it, or would it be across the board?

Mr. Dwain Lingenfelter: We understand that the way marketing boards work in eastern Canada, everybody gets the subsidy. It doesn't matter whether your income is high or low; when you sell a pound of butter, the subsidy is 56¢ on every pound of butter you sell. If you sell milk or cheese or ice cream, the subsidy is there at the supermarket on every four-litre pail of ice cream you sell. Nobody checks back to see whether the farmer who produced the milk was making lots of money or was being forced off the farm.

Programs for our farmers should be no different. This should not be a program for those who are losing tonnes of money, because all you do then is drive the efficient farmer down into the category, and we all go to the lowest common denominator.

The reason marketing boards work, in my mind, is they're equal. You don't go out and define whether the farmer needs the money or not. It's just a subsidy they get. This is the message I'm going to take to my colleagues. In Ontario, the reason they're talking about aid programs and why AIDA works is they have another huge layer of subsidy that comes directly at the supermarket, which farmers in our province can't and don't have.

The Chair: Thank you, Mr. Minister.

Mr. Proctor.

Mr. Dick Proctor (Palliser, NDP): Thank you very much.

I appreciate all of the witnesses appearing today.

Minister Lingenfelter, I want to follow up on where Joe left off. Yesterday an unnamed official in Ottawa was quoted as saying it would be hypocritical now of the federal government to turn around and offer subsidies for our farmers in the wake of what happened in Seattle—that having gone to Seattle and argued for the rapid elimination from Europe and the U.S., it would now be hypocritical. It seems to me if that carries any weight, you're going to have a difficult task this week in Toronto. You were in Seattle last week. What is your sense of the fight you have here?

Mr. Dwain Lingenfelter: This is the dilemma we have had for the past year in dealing with our federal government as it relates to standing up for Saskatchewan farmers. When you look at the world trade war that's going on right now in grain, Europe has set their trade policy to subsidize grain farmers very, very high: 56¢ on every dollar. The American response to that is, “We're at the table. There's no way we're going to take away support for our farmers.”

In fact, going into this round of trade talks, the Clinton administration said “We're upping the ante. We're putting another $8 billion into agriculture.” When I met with the legislators in Seattle, that money was in the hands of farmers within thirty days. The $8 billion they announced was in the hands of farmers in thirty days. With our AIDA program of $900 million—not $1 billion, but $900 million—from our federal government, one-third of it has been paid out after one year.

Is our policy right, that we withdraw from our farmers and say we can't do anything for them? Or are the European and American programs right, which say “At any cost, we're going to support our farmers”? My view is that the trade policy of our federal government... What we're asking our people here and our members here today to understand is that going weak into trade talks—and reducing subsidies has put us in a very, very weakened position—is absolutely the wrong position when it comes to getting the subsidies down in the long run. We're leading a charge, but we're there by ourselves, and our farmers are being used as cannon fodder in this international war that's going on.

Mr. Dick Proctor: Hear, hear.

Mr. Wells wanted to add just a couple of words to that.

Mr. Stewart Wells: Yes, thanks.

My response to this unnamed official would be that what is really hypocritical is for the federal government to pay lip service to the problem here in Saskatchewan and the west, but not do anything about it. And along that same line, it's hypocritical for the government to try to pretend that trading away all of our programs for market access, or something else required in WTO, is going to make the situation better, when there's no evidence of that happening. I refer back to the graph.

• 0920

Mr. Dick Proctor: I have one more question to the minister. You indicated in your answer to Mr. McGuire that of the three things you were looking for, two of them included an improved NISA and improved crop insurance. Can you shed any light for us on the specifics of those programs?

Mr. Dwain Lingenfelter: First of all, I think improvements to NISA and crop insurance only work if there's a trade equalization program. The other programs are supported by the farmer, through premiums or contributions. There is no way in the world the producer can donate enough to the programs to make up for the 30% that has been taken away by the federal government through subsidies.

If we are to get an equalization payment that will relate to the issue of export subsidies, then NISA and crop insurance in an improved format will work very well. But to believe that the producer of grain can pay enough premium to make up that difference of 30% is absurd, because you're asking the person who's bleeding to death to give a transfusion to themselves. It just doesn't work.

You need an equal playing field with United States and Europe on the price side, and then the disaster programs that make up for the difference, if you have a flooding or drought. But without that 30% makeup, we can sit around and fiddle with formulas and think about it all we want, but no program can work as long as those subsidies aren't dealt with in a very realistic way.

The Chair: You have a minute if you want it.

Mr. Dick Proctor: No.

The Chair: Okay, we'll go to Mr. Borotsik.

Mr. Rick Borotsik (Brandon—Souris, PC): Thank you, Mr. Chairman.

I echo my colleagues' welcome to all of the people here in Saskatchewan. We've had some wonderful hearings and I've heard some not-so-wonderful stories. We thank you for coming out this morning.

I'm going to ask Gayle a question first, because I know if I ask Dwain first I'll never get Gayle's question in.

Gayle, you've had some deep frustrations with dealing with AIDA in the past. Is it your impression, in dealing with them, that the AIDA verifiers or administrators are trying to find ways not to distribute money to farmers?

Ms. Gayle Knutson: Yes, that's exactly what I said when we started getting all these extra questions. I said to the rep, “You're just trying to find ways to pull out of this $16,000”. He said “You know, I'm just here working”. But that's definitely the impression we got.

Mr. Rick Borotsik: Is that the impression you get from neighbours and other farmers and friends who have applied for AIDA? Is it the same kind of scenario?

Ms. Gayle Knutson: Yes. It's just to save money. At the end of the two years they want to be able to say “Look, we've got this money left. We can give it back to the government to put in your general pool of revenue. I guess the provinces don't really need help.” That's the sort of feeling.

Mr. Rick Borotsik: I guess that's the other question right now because whenever we stand in the House and say there's a really serious problem out there, we get two issues thrown back at us. First, they say there's a lot of NISA money out there that hasn't been withdrawn yet—there's $2 billion in NISA. Second, they say the farmers aren't applying for AIDA in any great numbers, so that obviously means there isn't a problem out there. Do you want to just give me an answer to that?

Mr. Gayle Knutson: I'm very thankful that I used to work for the provincial government, in going through this bureaucratic maze of the application. If it had just been my husband doing it, he wouldn't have filled out the application. He would have just thrown in the towel. I know other farmers too who just looked at these forms and their eyes glazed over. They said it wasn't worthwhile, they just didn't know how to do it, or whatever.

Mr. Rick Borotsik: But it doesn't mean they don't need the money.

Mrs. Gayle Knutson: Oh, they need the money. They definitely do. It's just the maze—

Mr. Rick Borotsik: By the way, I've dealt with dozens of these with the AIDA verifiers, and it happens to us too. It's not just you; they're not treating you unfairly.

Ms. Gayle Knutson: No, no.

Mr. Rick Borotsik: Mr. Lingenfelter, we had an opportunity to travel a little bit last week to Seattle on the EU. You were there when we dealt with the European parliamentarians, and I'd like to hear your impressions as to their willingness to remove the subsidization or the support systems for their farmers. We talked one-on-one with them. What was your impression? We got Senator Gustafson's impression dealing with the Europeans in Europe. How did you feel when you talked to them about their subsidization?

Mr. Dwain Lingenfelter: My sense is that they have no intention, in the short or medium term, of reducing subsidies. That's why I think our presentation in the House yesterday and in our committee today is “Please, please, let's not use that as an excuse to wait for the reduction of subsidies in Europe to save our farmers.”

Mr. Rick Borotsik: I think you were at the meeting when we had the briefing from Minister Vanclief in Seattle. A draft agreement or proposal was put forward, and in there were two comments. One was on the elimination of export subsidies, and the other was on a reduction of domestic subsidies. There was support from the Europeans in that draft agreement.

• 0925

I don't know if you were at the meeting or not, but what I remember Mr. Vanclief saying was that... I asked the question: If we accept that, does it mean there will be no opportunities for future support for Canadian farmers? It's similar to the question that Dick asked, where we would now be hypocritical. I remember the answer as being no, that if we accepted that type of an ongoing first draft agreement, they would still be prepared as a federal government to look at future subsidies and supports for Canadian farmers. Did you hear that, or was I just dreaming?

Mr. Dwain Lingenfelter: I think I heard that, too, but I just want to say that even if we had an agenda set that said something about the elimination of export subsidies, the last draft didn't include the word “elimination”. It had already been watered down, but then the talks collapsed, of course, and there was no agenda at the end of the day.

Mr. Rick Borotsik: But the point I'm trying to make is that this bureaucrat is saying it would be hypocritical if we were to give some supports now, with us going for no supports. I heard the minister say—and I just wanted confirmation—that this was not the case. We would still have room for support systems.

Mr. Dwain Lingenfelter: I think that's right, but the more important thing is what somebody mentioned earlier: the Prime Minister and the Minister of Finance have to pay attention to this issue.

Mr. Rick Borotsik: This is my last question, Mr. Chairman.

I have 30 seconds, so thank you; you're just seguing perfectly into the next question.

I read an article in the paper yesterday that said the priorities for the Liberal government in the next budget are going to be roads and taxes. Can you tell me why agriculture hasn't hit that list? Why is it not a priority?

Mr. Dwain Lingenfelter: I want to make sure that we give the benefit of the doubt to the federal government at this point in time. It's my sense that when the finance committee reports back and the agriculture committee reports back, when you're able to talk to those ministers, and when the budget is performed, there will be money from our federal government.

Maybe I'm just being optimistic, and maybe I'm naive myself, but I believe that at the end of the day we will get the support on the payments we need to make up those different things in trade.

A voice: Hear, hear.

The Chair: We have a very short question from Mr. Calder.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Mr. Chairman.

Minister, as a poultry farmer from Ontario, I'd love to send you some information to help to correct some of your misconceptions about supply management.

One thing we have heard about over and over is the GRIP program, a revenue insurance plan. That was taken away here. We still have it in Ontario, and our farmers in Ontario have about a $350 million cushion they can fall back on. Would your government consider bringing the GRIP program back?

Mr. Dwain Lingenfelter: What I want to say is that on the export equalization program, again we are very willing to support NISA and crop insurance as a joint program with the federal government. But to get into a trade equalization program that in every other nation in the world is paid for by the national government and to say that the one million people in Saskatchewan should pay 40% of that is naive, to say the least. We have no intention of backfilling for the federal government, which has taken $650 million out of this province through the Crow benefit, the two-price system for wheat, and other areas. So if you're saying a GRIP program could be constructed to make up the equalization trade difference, no, we're not interested in doing that.

Voices: Hear, hear!

The Chair: I want to thank the witnesses. I really wish we had more time for this round, but we have many more other witnesses to hear from.

• 0930

I want to call to the front Avery Sahl, Denis Martine, Lorne Sheppard, and Dennis Thompson.

Welcome to all of you. We'll go alphabetically, which means we're going to start with Denis Martine.

As you can understand, please keep your formal presentations down to five to seven minutes at the most if you can, so that there's some time for questions. I just want to remind you that soon after Mr. Martine has begun, I'm going to have to leave for about fifteen minutes in order to meet a commitment, so I'll ask Mr. Calder to take the chair.

Welcome, and please begin, Mr. Martine.

Mr. Denis Martine (Individual Presentation): Thank you.

Welcome, honourable members of the Standing Committee on Agriculture. My name is Denis Martine. My wife Huguette and I farm 3,300 acres near Redvers, Saskatchewan. We grow cereals, oilseeds, and field peas, and have diversified into special crops such as coriander, caraway, and chickpeas.

As you are well aware by now, the farm crisis has escalated to the point where the province of Saskatchewan could lose 40% of its family farms by the spring of 2000. Ours will be one of those. In 1997 we were told that incomes would drop by 60%, and a further drop of 90% has happened in 1999. Our own farm problems deepened in the spring of 1998, shortly after seeding season was finished. It started to rain in mid-June and never stopped until the end of July. Of our total cultivated acres, 33% were flooded, leaving us with disease and insect larvae problems in our cereals and seed grains.

In November 1998 our federal Minister of Agriculture, Mr. Vanclief, announced that a disaster assistance program called AIDA was being introduced to help grain farmers who suffered losses due to disasters and low commodity prices. Mr. Vanclief also said money could be available in our hands as early as the spring of 1999.

After making several phone calls regarding the AIDA forms, we finally received them in June. By that time our hearts and hopes had diminished greatly, as grain prices had dropped to record lows. To make matters worse, we had watched rain and more rain pour down, beginning in the month of May and going to June 16, when it finally slowed down enough that we could start preparing the land for seeding. We were only able to seed 38% of our intended seeded acres. My father, who is 69, had never seen anything like this flood in all his years of farming. For my wife and I, it was the most disheartening two months we've had in our 23 years of farming.

After many requests and visits from some of the disaster aid people, Minister Vanclief, and Minister Upshall, we finally got word that $50 an acre would be paid for unseeded acres in Saskatchewan and Manitoba. It was weeks later when we saw that the $50 paid by crop insurance and the federal government would be considerably less because of the formula deductions administered through crop insurance. This was the case for most of the farmers involved with the flood.

Having almost 2,000 acres to clean up for summer fallow, it was weeks before we were able to spray down the weeds. For those acres we mudded in, serious problems were to follow. Because of the late seeding, ours and many other crops froze early in September, causing serious discounts, yields, and quality losses, and the costs of drying our crop were a lot more expensive than normal years.

After filling out our AIDA forms with our accountant, it appeared we would qualify for approximately three dollars an acre, which was well short of our 1998 losses. These forms had to be approved, processed, and reviewed and any final word received from the AIDA office in Winnipeg, which could take up to six weeks or longer.

• 0935

The losses my wife and I suffered on our farm in the past two years have put us on the verge of bankruptcy, leaving us with unpaid bills and loan payments that are past due. We have lost well over $100,000 in the past two years.

I know this is hard to comprehend, but if you compare the income and expenses in 1975, when my dad was farming at the age of 45, with that of 1999, when I'm 45, it is not hard to see why there is a problem. In 1975 my father got paid $4 a bushel for number one wheat. In 1999, for that same bushel of wheat, I will receive $2.08. In 1975 my father received $2.80 for a bushel of barley. In 1999, for that same bushel of barley, I will receive $1.46. My father's expense in 1979 for a litre of farm fuel was 10.3¢ per litre. For that same litre of fuel, I will pay 40.8¢. The 1975 price for municipal and education taxes was $232 for a quarter section. In 1999 the taxes on that same quarter section are $709. In 1975 fertilizer and chemical costs were $9.20 per acre. In 1999 fertilizer and chemical costs were $32, of which 47% are hidden taxes. In 1975 freight and elevator charges were 19.5¢, $4.89 per acre. The 1999 freight and elevator charges are $24.75. In 1975 at $4 a bushel, the income for an average crop in Saskatchewan of 25 bushels an acre was $100. Less expenses, that left him with an income profit before land payments of $73.34. In 1999 that same 25 bushels an acre times $2.08 gave me $52 in total income. Less my expenses and before land payments, I was $52.29 in the hole.

It is no wonder that the existing agricultural safety nets of AIDA, NISA, and crop insurance are not able to respond to the magnitude of today's disasters and low commodity prices.

In November 1999 I phoned the consultation service in Regina to try to resolve and mediate our problems with the credit union and other creditors.

In closing I am pleading with our federal government for programs with incentives for farmers to be paid soon and for cash payments to be made immediately. We Canadian farmers cannot compete against huge subsidies paid to the European and American farmers by their governments.

I thank you for your patience and time to listen to our concerns and needs. It is December 8, and we still have not heard about our AIDA application. Thank you.

The Vice-Chair (Mr. Murray Calder): Thank you very much, Mr. Martine.

Mr. Sahl.

Mr. Avery Sahl (Individual Presentation): Thank you, Mr. Chairman.

First, I want to apologize for not having a written report. I just returned from my brother's funeral, and my remarks are going to be more or less verbal.

I just want to say that in looking at me you'll probably come to the conclusion that I'm a little too long in the tooth to be speaking for farmers, but I can assure you that I spend as much time on the tractor and combine as any farmer in this province.

I want to say also that I haven't had any return from my share of the farm my son lives on at the current time for about three years. I can tell you why, and it is pretty easy to come to that conclusion. He has two boys in university and one going to a special high school that's designed more for his interests. Plus, about three years ago we, like other farmers, bought some more land to try to spread the capital costs over larger acreage. There are land payments to be made and all the rest of it. I know what I'm talking about there.

• 0940

Further to that, gentlemen, I was the vice-president of the Saskatchewan Wheat Pool for a number of years. I also served on the advisory committee of the Canadian Wheat Board and wound up as its chairman. I was elected by my fellow farmers from southern Saskatchewan, and both jurisdictions take in a good part of southern Saskatchewan. During that period I got to know a lot of farmers, and they got to know me. They still contact me.

I can tell you some of the comments I hear both by phone and by letter. One asks, “What's the future of this grain industry? I wish somebody would tell me. And if there isn't any, please tell us so that we can get on with our job.” Another young fellow I know was a carpenter, and he came back to the farm and helped his widowed mother to carry on the farming operations. He said “I have to feed my kids”, and he took off. He's working in the oil patch or someplace else. He was a damned good farmer when I knew him, a doggone good farmer.

There were three young guys in my own town, and the minute the combines stopped, they were gone. They were on the hockey team, and they were part of the community. Whether or not they'll come back after receiving the high wages in other provinces, I just don't know.

I became involved in the grain business quite a number of years ago, and I always heard comments from government people that the grain industry was the biggest foreign exchange earner this country had. I expect it has now moved down the list somewhat, but I still think it's pretty high on the list of foreign exchange earners for this country.

I just want to give you some numbers I got from Agriculture and Agri-Food Canada in 1997. I still pay pretty close attention to what's going on in the grain business and in agriculture. I just want to read you some. The production of grain and oilseeds has doubled since 1950. That's a good indication that farmers are productive. Canada exported $22.3 billion worth of food products. About half of this was grain and oilseeds, at about $10 million. Bulk grain exports were $6.2 billion. Bulk oilseeds were $1.9 billion, and Saskatchewan accounted for about half of the total. We've already surpassed the $20 billion figure set by the government for exports by the year 2000. Ninety-eight percent of all farms in Canada are family-owned farms. They're not corporate farms; they're family-owned farms. These are Statistics Canada numbers.

Agriculture is the third-largest employer in this country. It generates about $91 billion worth of domestic and food services. Agriculture accounts for about 30% of the total trade surplus. The number of farmers continued to decline, which tells me they're productive and are trying to cope with the declining food prices, which have been going on for the last number of years. They've continued to diversify, and that has been the hue and cry: you have to diversify. I can tell you that in southern Saskatchewan, which is subject to drought and all kinds of winds, we're even trying. We're trying to grow rapeseed, which can be almost a disaster if you're subjected to a hot wind during the growing season. There are peas, there are beans, there are some even trying to grow herbs like dill and you name it. So it's not a matter that farmers are not trying to diversify, but the pressure keeps going on.

• 0945

I'm going to now spend the rest of my time, if I may, in transportation. A number of years ago I was part of the group, our so-called lobbyists, and we'd go to Ottawa to plead with Transport Canada about transportation. And at that time the Wheat Pool... We weren't there to say keep the Crow, period; we were there to say look... At that time the Wheat Board had grain ships from China backed up and a whole host of things, and we came to the conclusion that a logjam had to be broken. So we said we're prepared, if we get some things in place, to pay a little bit more, give the railroads a decent return on their investment so that we can get on with the job.

At that time the minister was Jean-Luc Pepin. And incidentally, the deputy was Mr. Arthur Kroeger. I can well recall that you'd almost think Mr. Arthur Kroeger owned the railroads, and the same philosophy and feeling applied throughout the whole of the transport department. So when the last exercise took place, the Estey report, I said to myself, this is a put-up job. And with all due respect to Judge Estey, who didn't know a damn thing about grain marketing and tried to come out here and hold a series of meetings that were a put-up job, I'm convinced, because I was at those meetings, that the final report was written before the meetings concluded.

I went through one meeting, and I've never seen such a charade in my life. About the only thing I heard Judge Estey talk about was the need for roads. In the final Kroeger report there wasn't a damn thing about money being put into roads. The whole report was predicated on the basis of competition. I believe in competition, but I've seen the railroads operate for a number of years. One of the railroad officials who I used to see frequently in my office said “What do the farmers contribute to the political parties?” I said “Look, we have a hell of time making our farms viable, let alone make contributions to political parties.”

The whole Estey report was predicated on competition. The whole southern part of Saskatchewan is serviced by CPR and the northern part of the province is serviced by CN. And the railroads didn't even want to talk about that aspect in the Kroeger report, as I read it. I wasn't there, but I've read the report. They didn't want to talk about competition at all, or open running rights, as they're called. So Mr. Kroeger did not even address it in the final report. The only way they're going to have competition is if some separate company would all of a sudden buy the railbeds and probably let... But I can tell you that I'll never see the day when CN runs a train down CP tracks in southern Saskatchewan.

The Chair: Mr. Sahl, we have to keep on schedule here. Your time is nearly up.

Mr. Avery Sahl: I'm sorry.

The Chair: Thank you.

Mr. Sheppard.

• 0950

Mr. Lorne Sheppard (Individual Presentation): Thank you.

Good morning, gentlemen. I was relying on your sense of humour when I was writing my comments here. I found I was quickly becoming a politician; I couldn't say anything in seven minutes.

With that in mind, you all have my written report, and I'm going to leave parts of it out because in the interests of time I want to get through it all. Hopefully, if you've scanned it we can get into some questions on that later.

I farm with my wife Valerie at Lucky Lake. We have an incorporated family farm there, which my grandfather homesteaded in 1907. I've been on various United Grain Growers and Saskatchewan Wheat Pool committees, and served two terms as the director with the Western Canadian Wheat Growers from 1987 to 1991. I'm not going to hand out any roses. I'm going to take a go at federal and provincial governments and the railways and the grain companies here. I'd like to start with the federal government's policies.

We went through the Mulroney and Devine years and were unable to resolve the Crow rate issue due to the great resistance from Saskatchewan Wheat Pool and the NFU. Once the Liberals were in power we saw a steady erosion of the value of the Crow rate and ultimately a payout with virtually no plan for the future. So much for in perpetuity.

As you can see in our farm economy today, you cannot strip that much cash out of farming without having an alternate plan in place. At that time when I was on the board the Western Canadian Wheat Growers had a very workable Crow bond proposed, but it was not accepted.

Another severe shortfall is the absence of a national highway program. Health care is another area that has suffered as the federal government had downloaded an increasing percentage of costs on the provinces. Farmers look to federal acts to provide some equity and fairness to all citizens. The Canada Transportation Act, which is now five or six years old, appears pretty much written by the railroads for the railroads, having eliminated all reference to the public good.

Our farm program seemed to limp from one crisis to another. AIDA is the latest offering. It was resisted from the beginning by Saskatchewan, and for good reason. It is complicated, cumbersome, and bureaucratic, and, as Mr. Vanclief has admitted, is a failure.

The federal government stampeded to eliminate subsidies to western farmers at the WTO a number of years ago, but forgot to look back to see if Europe and the U.S. were following. They were not, and we are paying dearly for it now. To continue to suggest that Saskatchewan should participate with a 40% contribution to programs that are required because of the international situation is ludicrous.

International trade and subsidies are the federal government's responsibility, and we deserve some protection. On November 24, when the finance committee was here, it was suggested by one member that not all farmers can be saved and they should be retrained. This is insulting, given the economic tools you've given us to work with. Did we learn nothing from the Maritimes? Bigger is not always better.

As far as the provincial government is concerned, the neglect of rural issues for two mandates has extracted its toll on farmers. Our GRIP contracts were unilaterally torn up. There has been virtually no new highway construction, and even road maintenance cannot keep ahead of the ever-increasing grain traffic. Why this issue was not addressed six years ago, before the federal government, railways, and grain companies started the massive transfer in highway costs to the provincial taxpayers, is still a mystery to me.

I have to wonder where our federal and provincial ministers of the environment have been. We signed an agreement in Kyoto that is likely unachievable. Then we pushed tens of thousands of loads of grain off the rail and onto trucks. In my area alone, if we are ever successful in our negotiations with CN to get a short-line rail we can keep 17,000 truckloads of Canadian Wheat Board grains off the road.

The latest gimmick by Saskatchewan Wheat Pool is trucks equipped with central tire inflation.

Lastly, I will address the pressures farmers are under from the railways and grain companies. CN serves the branch line I'm on. Over the years I have witnessed a wide array of inefficiencies. They have removed bolts from switches to disable the siding just prior to loading a producer car. That happened to me. Cars have been returned from Vancouver and Thunder Bay either full or partly full, or they've been returned flagged for repairs. Engines have broken down, resulting in cars being left behind for weeks at a time.

This July in Lucky Lake they derailed a car by not watching where the switches were set. For those trying to load producer cars it's even worse. The train may not show up at all, and farmers are left sitting with loaded trucks. They may spot the cars at the wrong place—for example, under the Saskatchewan Wheat Pool loading spout—or they may not bring all the cars ordered.

I've personally trucked grain from my farm east of Lucky Lake to Beechy and then back to Lucky Lake, tracking down a producer car. They haven't looked after any snow fence or embankment right-of-way problems for 40 or 50 years. CN 19.01, which is my train run, was chosen for the infamous winter plan.

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In short, I believe CN and CP should only operate on the main lines, as they are not capable of providing an adequate level of service on any branch line. The grain companies have been on a building spree for a number of years. I predict in fact that they are overbuilt in some areas, and with crops diversifying and prices of wheat, barley, and canola so low, there will not be enough grain to utilize the terminals.

There are two terms that have been overused to the point of wearing thin on farmers' nerves the last couple of years; those are “efficiency” and “industry stakeholder”. I ask, efficient for whom? And as far as being a stakeholder is concerned, farmers have by far the majority of the investment in agriculture in western Canada. When is someone going to ask us what we want and what would be efficient for our farms?

So far the terminals have depended on railway money for sidings and discounts on freight for 50- and 100-car spots—which in turn allows for trucking premiums—to gain their market share. Add to this the current zone allocation of rail cars and it is little wonder that even large elevators on any branch line cannot compete. Our rail line, CN 19.01, is an eight-hour loading line, which means they arrive before 8 a.m. and are out of there by 5 p.m. This means that in any 24-hour period we can outperform any terminal, but we need a train biweekly for our grain volumes, and we've only had two for this entire crop year, to handle this year's crop.

The Western Grain Elevator Association can virtually shut down any branch line at any time by allocating cars to the terminals within their zone. This issue has to be addressed immediately to bring some honesty back into the delivery patterns. The branch lines' rehabilitation was paid for by the taxpayers of Canada in the 1970s, and the grain elevators have all been bought by farmer patronage, whether private or farmer-owned.

Who do they think they are, taking away our assets without ever consulting farmers as to what type of system we might like to see? Governments at both levels will have to learn that the cooperative and farmer-owned grain companies are a myth, and they speak primarily for shareholders, not farmers. An exception may be Agricore, which is still a true cooperative.

It was distressing for me to see grain companies involved in the trip to Ottawa asking for assistance for farmers, when I see what they're doing to us in rural Saskatchewan.

Let me summarize my financial situation. In 1999 I grew the largest durum crop I've ever had, but because of elevator congestion and no rail service due to zone allocation of rail cars, I've been unable to sell one single bushel of my 1999 crop. Every bin I have is full. I have grain sitting on four trucks and about 13,000 bushels sitting on piles on the ground. This of course is exposed to damage from weather, deer, and coyotes. I am waiting to load four producer cars with durum, but neither myself nor the smaller grain companies on the line will get a train until the predominant company orders cars. All my machinery and loans are due in December and June. I don't see much optimism for any increase in cashflow this month.

To conclude, let me give you my wish list. Number one, when cabinet ministers and standing committees come to Saskatchewan to get a feel for the rural situation, they must make more effort to travel by car outside of the major centres. Air travel or driving on only the good highways does not give you a feel for the vastness of this province.

This is my invitation to anyone who will take it up. Come to Lucky Lake and I will drive you to the Eston-Eatonia area; it's two and a half to three hours by car through some of the best farmland we have. Soon there will be no grain elevators or railways in this entire area if the powers that be have their way. Has Mr. Collenette ever been to Saskatchewan?

Remove CN and CP from all branch lines. They should be offered to short-line rail companies at net salvage value based prior to the injection of federal rehabilitation money in the mid-1970s.

Joint running rights might also encourage some competition. Immediately revert to allocation of rail cars by train run. Zone allocation is becoming the single greatest weapon the grain companies are using against farmers in rural Saskatchewan, to reshape the grain-gathering network to their vision of efficient.

Paragraph 28(k) of the Canadian Wheat Board Act must remain in place. It is farmers' last hope to get rail cars. And please remember that, because I'm sure that even today they're knocking on the federal government's door to get that clause removed so the board can't give us any trains at all.

Canada desperately needs a national highway network funded by the billions of dollars of fuel taxes taken in.

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Number five, there should be an immediate reduction in freight rates for grain, based on CTA's findings, as requested by Mr. Kroeger this summer. The money going to sidings and premiums for large-car spots should not be considered money spent to assist farmers. Beechy and Lucky Lake, which are near me, can each spot fifty cars. We're lucky to ever see a train, never mind a freight premium.

If we don't see some of these things change, where are we headed? You will see an increasing level of despair amongst farmers as the bills come due and there continues to be no cash to pay them. The reasonable protests of highway traffic disruptions and lobby trips to Ottawa may turn to blocking CN and CP main lines and vandalism and violence of varying degrees. Nothing would get Toronto and Ottawa's attention faster than to have their containers with Christmas goodies held up in the prairies for a time.

There is a rapidly growing sense that Confederation is not working for western Canada and perhaps we'd be better off on our own, with the four western provinces and the Yukon, or even looking at joining the U.S. It is shameful on Ottawa's part that it has come to this, but the Prime Minister's rebuke of the Ottawa lobby trip brought everything to the forefront. It was Mr. Trudeau who said “Why should I sell your wheat?” We certainly are slow learners out here.

Thank you for you attention. I look forward to some questions and discussion.

I have an addendum on the back, which is a sample of a cash ticket of durum. It is actually wheat I sold this fall, but it's not this year's production. It was 120 bushels of seed wheat from last spring to free up a truck.

I have a bill in there for recent repairs on a vehicle, $586, to completely redo the front end after driving on Saskatchewan's roads for 120,000 kilometres.

It also shows our train run, 19.01, with the towns on it. We've had two trains now to carry this year's crop away.

And I thought Rob Lobdell's comments in “An Inside Look at the Kroeger Process” might be of interest. He farms in the Eston-Eatonia area, and he's the chair of West Central Road and Rail. I know him personally and I can assure you that his comments come from the heart and that's the way it was.

Also, I've included a newspaper article. The railway representatives were in Ottawa on November 4 pushing for tax relief, and this is quite interesting. I'll just read the quote by the chairman at the time, concerning trucking:

“It's a socially and economically desirable goal to carry more goods on railways and less on highways,” he explained. “People in major urban areas are increasingly becoming victims of road congestion and air pollution that can be relieved by carrying more goods by train. Big trucks not only cause congestion and wear and tear on road surfaces, but they also produce almost six times as much greenhouse gas emissions and are only one-third as fuel-efficient as locomotives.”

I guess it's do as I say and don't do as I do.

Thank you.

Voices: Hear, hear!

The Chair: Thank you, Mr. Sheppard.

I just want to remind everyone that we're going way over on this segment, so there's not going to be much time for questions. I doubt whether we'll get in one question from each party at that. But if that's the way it's going, that's the way it's going.

Mr. Thompson.

Mr. Dennis Thompson (Individual Presentation): Good morning, members of Parliament. My name is Dennis Thompson. My wife and I farm about 75 miles southeast of Regina at the small village of Creelman, Saskatchewan.

Yes, I'm having a crisis on my farm. I will soon be going broke. So God give me the strength to carry on and the courage to know when to quit. It sounds like the beginning of an addiction meeting, eh? Well, farming is a habit that a lot of people will soon be forced into giving up.

I'm not good at public speaking, so when I have to speak to you today, do not expect me to sound like the federal agriculture minister. Mr. Vanclief often tells the media that farmers simply need to find another job. Well, he should know better than anyone. He's a failed farmer too. Yet this is the man representing farmers now. But when all of us are broke and off the land, we won't be so lucky to be a federal cabinet minister.

When I attend many town hall meetings, the stories are always the same. Through no fault of their own, farmers here in the west face an impossible situation. We are being forced off the land. Are all these farmers bad managers? No. We are the best at what we do. We simply cannot compete against U.S. and European subsidies. Why is this so difficult to understand?

The U.S. and Europeans value their farmers. Does this mean Canada does not value its own? Are we not worthy of the support our agriculture industry needs to survive? We are pleading with Ottawa for our future, and no one seems to hear us.

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I'm not going to stand here today and give you a lot of statistics. Statistics Canada has these figures, and the Prime Minister simply pulls out a different set from his desk drawer anyway.

I do know this. If the commodity we grow on our farm is priced at below production costs, it means we will not be able to survive. This is not hard to figure out. Governments may be able to run at a deficit year after year, but any other business, including farms, simply cannot operate this way.

Vanclief says farmers in the west must be willing to change, to diversify, but diversification comes with a huge price tag. Looking at the ostrich and emu industries, there are a lot of shortfalls there. The elk industry seems to have caught the Asian flu. Alpaca wool is being stockpiled because of poor sales. These are some of the changes that were supposed to keep us on the family farm. Diversifying into the cattle industry is also very costly; you need another line of specialized equipment. You need barns, sheds, corrals; you must buy bred cows and hope for a successful calving season. If there is a surplus of cattle on the market, you know where the prices will be.

The hog industry is another type of diversification; we heard a lot about starting up huge hog barns. The price of hogs fell so low that farmers were either selling at a huge loss per animal, or they were disposing of the hogs because they could no longer afford to feed them.

If you diversify into growing more oilseeds this year, you've once again found out you made a bad choice. Last year the canola price was around $8.50 per bushel; this year you were lucky to get $5.50. Last year flax was around $8 per bushel; this year it's priced under $5 per bushel. On my own farm, using last year's prices compared to this year's prices, I have lost $32,000 on these two crops alone.

Vanclief says that farmers should pre-price their crops. Last spring the lock-in price was 50¢ more than what you are getting now. So why would you pre-price? You naturally think it is better to hold off and hope the price is going up, not down.

In most industries the prices rise every year because of inflation, but on my farm I get paid less for a bushel of wheat now than I did in 1979.

I would like you to do the math with me on this. I'll go slowly. In my personal situation, I rent most of my land. In the last few years I gave the landlord one-third, I gave the freight and elevation one-third, and the other expenses required two-thirds. This comes out to four-thirds. I must be efficient, or stupid. Maybe it is time people in the urban centres realized this math could soon apply to them also. Urban people might soon need one-third for their homes, one-third for their car, and then two-thirds for their expenses like food.

If the cheap food policy ends with the family farm, then instead of 10% of your income going to food, 50% will have to go to food.

What would make more sense—keep the small farmer on the land, efficiently producing food, or pay out huge social programs so the masses can afford to eat? This will be what happens if corporations take over our family farms.

Our son is in grade 12 this year. He would love to be a farmer. This will never happen; the family farm will not be there for him to take over.

Ottawa is refusing to think far enough ahead to see there will not be another generation of farmers. The federal government has abandoned the family farm and we're losing our industry. If things don't change very soon, will I be offered a fair price for my land and my machinery by the government? My neighbours can't afford to buy me out; they're in the same situation as I am. This is a whole industry going broke here, not just one or two farmers—I repeat, a whole industry.

Is retraining a 50-year-old farmer really the best answer? I don't think so. You may believe this country is strong and solid. Think again. There are thoughts of separation on many people's minds, and why not? The Prime Minister does not believe we are in a crisis, not like in Turkey. When the ground hadn't even stopped shaking, Mr. Chrétien was there to stroke a cheque, while here in Saskatchewan, honourable members, we have farmers that are shaking in their boots. Where's our cheque?

Our grandparents came west in the 1800s. They built a bigger and stronger Canada. I think we should work together, east and west, to keep it that way, don't you?

I hope today the members of this standing committee hear this message. Please take our fight back to Ottawa and understand this is a real farm crisis. We're running out of strength and we don't have much fight left. Please help us.

Thank you for your time.

The Chair: Thank you very much, Mr. Thompson; I appreciate that.

Members, we have about four minutes for each party, and we'll begin with Mr. Kerpan.

Mr. Allan Kerpan (Blackstrap, Ref.): Thank you, Mr. Chairman.

I want to say to all four of you that I applaud you for what you came here today to say. You are the heart and soul of this province and the industry part of it, and it's a shame we don't have days and weeks to talk about this issue and have many more people here who are in charge of those programs in Ottawa, such as the Prime Minister and the Minister of Agriculture.

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I want to ask a question of Mr. Sheppard. Yesterday in the legislature the Western Canadian Wheat Growers Association talked, and others have talked, about the possibility of a privately run income insurance program. Having some history with that organization and as a farmer, I wonder if you could give us your thoughts on that kind of a program.

Mr. Lorne Sheppard: Well, as you noted in my notes, I was director for two terms, 1987 and 1991, and in all honesty our paths have been going wider over the last number of years.

You know, I think they're sincere in what they're trying to push as far as efficiencies and so on are concerned, but as the question in my brief asks, efficient for whom? My first response is to survive as a farmer, and my neighbours' farms need to survive and my community needs to survive. So I guess you might say I'm not really in tune with recent policies they're proposing.

The Chair: Thank you, Mr. Kerpan.

We're going to go to the government side now, and Mr. McCormick.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you, Mr. Chair.

Thank you, gentlemen, for being here. At every stop since we've started, which was only on Monday, I feel for you the way you've had to bare your souls and put your lives out for doing your laundry and sharing so many intimate things with us.

It is a crisis. And perhaps more than a crisis, it's a tragedy. And it's not just with farmers, but it's rural Canada.

I'd like to say this. My small role in Ottawa with the government is rural caucus chair. I watch very closely. I shared my feelings with our government following the Saskatchewan provincial election. I mean, it's very significant there what we have to learn when you have a complete rural-urban split.

We've got some money under AIDA. It's been a disaster getting it out, but there's money there. The minister says he's going to have it out by Christmas. The money for the 1999 year is sizeable, and we need to add to it, but we need to get that out quickly and smartly. Have you seen the advance forms for the 1999 payment? Would you qualify, more or less? I wish you'd just share your thoughts on that, Mr. Thompson.

Mr. Dennis Thompson: Yes, I looked at the forms. They have my flax priced at $6.52 or $6.56 a bushel. If I could get that, you could keep your AIDA. I could survive another year.

Voices: Hear, hear!

Mr. Larry McCormick: No, I appreciate you and other farmers have told us you don't want the AIDA; you'd like to get the value of your crops paid to you, which would be great.

Mr. Sheppard, I wonder if you... You know, we do need to make the changes to spend the money we've got, and we need to do it early following this year.

Mr. Lorne Sheppard: I guess, maybe unfortunately, I didn't qualify for AIDA. I did apply, I did step through the hoops; I had my accountant do it. I have a $275 bill, which I put a note on when I mailed them the cheque that something's wrong with this scenario when he's the only guy that got any money out of AIDA, basically. He tells me, yes, I may qualify this year, but my family farm is incorporated with the year-end in June, so I'm just currently doing my taxes and addressing AIDA.

It's just the wrong approach. I guess the most amazing thing to me about AIDA is how such a complicated and cumbersome program could be developed even by bureaucrats in such a short amount of time.

Voices: Hear, hear!

Mr. Larry McCormick: Well, I do want to applaud you for that, and we've got to recognize the truth, and I think we all have. We were too slow in recognizing that.

Mr. Lorne Sheppard: I agree with Mr. Lingenfelter's view of the situation this morning that the payments should go to everybody. Those who are making excess income will pay more taxes. We all know that some day you're going to get us on taxes, so I wouldn't worry about that going to somebody who's got some money.

Mr. Larry McCormick: Do we have that same opinion across the table, that the money should go across the board and not just be targeted for the short-term money that's needed, gentlemen?

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Mr. Denis Martine: Actually it's difficult for me to say. I would have said yes, probably, before the springtime. We've gone through two disasters. I know there are other areas in Saskatchewan that have gone through droughts. I think there are other farmers suffering in the same way and I think all farmers are short of cash. If you decide to spread it out and pay it out on an average to all farmers, I'm just hoping that it doesn't backfire against us later on.

The Chair: In what sense, Denis?

Mr. Denis Martine: Well, I'm just wondering... If the provincial money they were going to contribute to the AIDA, along with the federal, and if the federal decides to pay out with the balance of the money throughout the province, over an acreage, to everybody, is that not going to backfire on our money we're asking the federal government for?

Mr. Larry McCormick: Thank you.

The Chair: Thank you very much.

Mr. Proctor.

Mr. Dick Proctor: Thank you very much, Mr. Chair.

Mr. Sahl, by your own admission, you've been farming for a long time. Perhaps you even remember the task force on agriculture that came about in the 1970s. Others have come before this committee and said that it had an enormous influence on agriculture policies in the 1970s and 1980s.

One individual also said that he simply didn't think that western farmers—in particular—knew what course the government was on and that it was time the government sent some signals to farmers as to whether it wants them to exit farming. If so, the government needs to provide a bridge to retirement, which, as Mr. Lingenfelter indicated this morning, would be available for any other sector where we've had to make changes. I'd be interested in any comments you might have on whether it is time for the federal government to send out a clear signal about what they have in mind for farmers in western Canada.

Mr. Avery Sahl: I think some kind of a signal is long overdue, particularly for some of the younger guys, and even for some of the fellows that are my age. A lot of them are pretty proud people and maybe they're not prepared to confess their sins like I just did as to what's going on in their support and their backing for their families on the current farms. I think some kind of a signal is long overdue. It's a national disgrace for an industry that contributes some of the numbers I went through to be treated the way it is.

Mr. Dick Proctor: Thanks very much, Mr. Sahl.

Mr. Sheppard, on the first page of your document you said the government stampeded to eliminate subsidies to western farmers at the WTO but forgot to look back to see if Europe and the U.S. were following. I think it's important for everybody here to understand what happened in the GATT Uruguay Round. Canada and all of the other signatories to that agreement agreed they would reduce their subsidies by 20% over five years. It's only one country that's offside on all of that and it's this country, because we charged ahead with things like eliminating the Crow rate and we reduced our subsidies by 60%. That's three times as much as we had to under any international law.

Mike Gifford, who's a trade negotiator focusing on agriculture, has been before this committee and before Mr. Gustafson's committee. He said that Canada could put $2 billion back into agricultural domestic subsidies tomorrow without engendering any kind of dispute on an international level.

So we are the country that's offside. I know there's not a question in there, but it's just a statement that I think needs to be heard and understood by one and all.

Mr. Lorne Sheppard: I think we should throw it in the face of the Americans. Maybe we can't compete with them and the dollars they have, but we can say, look, you guys, you've been screwing us around here for the past four or five years.

Of course I was farming then too, and I thought, oh, at last our problems are going to be addressed over the next number of years. Well, we were thrown into the fire out here. I was on the wheat growers board then. I'm not saying we should have kept the Crow forever, because it does hurt the manufacturing component of doing something with diversifying our grain in western Canada, but we had to have a program to step out of that. As we were developing a broad array of what we might do, the subsidy was dropping. But it was pretty nearly handed out in a cheque overnight, and after several years of reduction...

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I think we should step right up to the plate and tell the Americans and the Europeans, “Look, we can't put up with this BS any longer. We're going to pay out a direct subsidy here, and when you guys want to talk about living up to your commitments of four or five years ago, come and see us then, and we'll get back to the negotiating table.” But to pussyfoot around and try to... I guess the typical Canadian way is to be obliging and diplomatic and so on. Well, it's not cutting it out there in the free trade world.

The Chair: Thank you.

Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman. I'm going to ask the question that Mr. Calder usually asks—

A voice: Chicken farmer...

Mr. Rick Borotsik: —along with the comment that he's a chicken farmer from Ontario.

I'll throw that in, Murray.

To all of you, over the last couple of days we've heard the comments with respect to a set-aside. We recognize right now that there's an overproduction, an oversupply of product in the world, mostly because of subsidies in the European and American markets. When you get subsidized, you oversupply, you overproduce.

We have a problem in that we haven't been keeping in tune or in time with the subsidies of the Americans or the Europeans. Is there perhaps some potential for a set-aside, a compensated set-aside, not just simply a set-aside and a reduction of production for us, but a compensated set-aside? I think the number that has been bandied about is about 20%. I'd like to hear your comments about maybe taking the blinders off and looking at something like that beyond just simple subsidization.

Mr. Avery Sahl: There's this perception that there's all this grain and oversupply in the world. I just don't believe that, because I've been farming long enough to know that one little hiccup in one grain-producing country... And you've seen it happen. There was the situation in Australia and you know what that caused. There were the situations in the United States, with the flooding of the northern plains, the corn blight, and you know what that triggered: almost a world shortage. They were clamouring for food. So I'm not convinced there's this big world surplus that everybody talks about. I happened to be talking to a researcher from Northrup King, and he feels the same way. He says it's a perception that is not true.

Mr. Rick Borotsik: Does anybody else have any comments?

Mr. Lorne Sheppard: I would have no objection to a set-aside. In fact, I'd like to set aside my whole farm for a year.

Voices: Oh, oh!

Mr. Lorne Sheppard: It sounds like a welcome relief to me.

Mr. Rick Borotsik: Thank you.

I have one question, Dennis. You're affected with excess moisture in your area. I think you said a third of your farm was affected by excess moisture. I come from an area where we lost 1.1 million acres. You got $50 per acre on an unseeded acreage payment from the Province of Saskatchewan, like we did from Manitoba. But you also said that after the deductions that $50 didn't quite come out to $50. Can you just expand on that and tell me exactly what you achieved out of the $50 per acre? Can you also tell me what it cost you to maintain that land that was affected by the excess moisture?

Mr. Denis Martine: In 1998 we lost a third of our seeded acres to flood. We lost the expenses that we put in there.

In 1999 we were only able to seed one-third of our acres. We were supposed to be paid for the two-thirds of the acres that we had unseeded. In that case, there was the $25 that was paid through the Saskatchewan crop insurance, which was administered through their office, topped off with the $25 an acre federal, the same as Manitoba.

The money that was subtracted from that payout is, of course, your premiums on your crop insurance, plus they had a 5% discount on the $25-an-acre crop insurance, and they also had 5% on the federal. They subtracted any summerfallow acres you had in your past five-year average and any uninsured acres.

• 1025

I don't think that was fair, because anybody who has had to diversify, who has been talked into it, or to whom it was suggested that diversification was the proper way to go had a lot of crops that were seeded that were not insured. Now, for those acres that were not insured in the past, such as coriander, caraway, chickpeas, or beans, I don't know.

Mr. Rick Borotsik: Ballpark, how much did you receive per acre?

Mr. Denis Martine: In my case, I received $40, but for my neighbour and quite a few other people—I work with Saskatchewan Crop Insurance part-time—the average payout in our area from the administration was $17.

Mr. Rick Borotsik: Thank you.

The Chair: We have one minute for Mr. Breitkreuz.

Mr. Garry Breitkreuz: Thank you. Just as a very brief question, Mr. Chairman, for everyone—

The Chair: You can't get them all to answer.

Mr. Garry Breitkreuz: It's just a show of hands.

We have heard this morning that AIDA punishes those farmers who change, who adapt, or are efficient. Would you support AIDA being scrapped or fixed up? If it is scrapped, would you like to see a broadly based payment made to all grain producers? There's a choice there.

Mr. Chairman, can we do like we did yesterday? We have a huge audience here. Can we find out from all the farmers how many would like to see AIDA somehow fixed, and how many would like to see a complete, broadly based payment made to all farmers?

Only about four of our audience and panel would like to see AIDA fixed up.

Now, how many would like to see a broadly based payment made by the government? Okay, everybody but those four. I think that's absolutely clear. Thank you.

A voice: If they scrapped it, we'd all agree with that.

Mr. Garry Breitkreuz: Okay, thank you.

Mr. Rick Borotsik: This is also a question to the members of the audience. If you'll just indulge me a bit, by a show of hands, how many in the audience have actually applied for AIDA? It's about half.

Now, you don't have to indicate if you don't want to, but how many of you have received an AIDA payment? Three? Thank you.

I think that says it all for the AIDA program.

Voices: Hear, hear!

The Chair: Maybe I could put this to Mr. Sahl, since we have only 30 seconds.

The show of hands was quite revealing, Mr. Sahl, in that if you go by the show of hands, very few have received AIDA. Yet the stats show that about $100 million has come into Saskatchewan up to this point. There seems to be a dichotomy. The money is obviously going somewhere, but it's not showing up. Do you have any opinion as to why it's not showing up?

Mr. Avery Sahl: My son and his wife are the bookkeepers and what not in our operation. They've applied, but AIDA hasn't even been heard from. I can't tell you what—

The Chair: Maybe it's that because it's such a big hole even $100 million doesn't show up. Is that possibly the answer?

Mr. Avery Sahl: I don't know.

The Chair: Thank you, Mr. Sahl.

And thanks to all the rest of you. I've really appreciated your comments.

We're going to go into two 45-minute segments. In the next segment we will be hearing from the official opposition in the province of Saskatchewan, along with a representative from the Canadian Farm Women's Network.

I also want to give a heads-up to the next round of farmers, and I'm going to try to get two rounds in. It'll depend on how long the farmers talk, but in the first round I will be calling Ron Bishoff, Richard Wright, Ray Bashutsky—I understand he's not in the room, but his name is on the list—and an old friend by the name of Roy Atkinson. And I'm hoping we can then get to some other names. As I say, though, it'll depend on how much time is taken.

We will now be hearing from Mr. Boyd, the agricultural critic for the official opposition in Saskatchewan, and from Raquel Moleski. Thank you for coming.

Welcome, Mr. Boyd. We'll start with you.

Mr. Bill Boyd (Member, Official Opposition Agriculture Critic (Saskatchewan)): Thank you, Mr. Chair, committee members.

• 1030

It's certainly my pleasure to be here to speak to you this morning as the agriculture critic for the official opposition. Just as importantly, and perhaps more importantly, I'm here as a farmer from the province of Saskatchewan as well.

You've heard a great deal about the concern surrounding the whole income shortfall situation here in Saskatchewan. When I look back at the farm people who have joined us here this morning, though, I want to make it very clear to you that the farmers of this province are not looking for a handout. That's the last thing they want. They would very much like to see their income generated through the marketplace, through grain sales, through livestock sales, through the normal way of operating a farming operation. But they also see a situation in which it just simply isn't possible to continue operating their farming operations at the necessary levels. They're asking for understanding, and they're also asking for a commitment for action from the federal government—as well as the provincial government, I might add.

Yesterday in the legislature, in a very unprecedented fashion, the farm groups came forward and let their view be known to the Standing Committee on Agriculture in the legislature in Saskatchewan. They were unanimous in their view that there is a need for a trade equalization payment of $1 billion here in Saskatchewan to bring us up at least somewhat towards the level of subsidies that other countries are providing to their producers.

What I've always believed a good, strong federation is about, the glue essentially that holds the country together, was our sense of responsibility to our country. Whether it's in times of conflict, whether it's in times of national crisis, or whether it's in times of regional crisis, we have a responsibility—all of us, collectively—to our country to respond. When it was an ice storm in Quebec and in eastern Ontario, we were there as a nation to say yes, we had a responsibility to respond. When it was the fisheries problem in the Maritimes, we were there to say it was the right thing to do to respond to the crisis nationally, and we did. When it was with respect to floods in southern Manitoba, as a nation we responded by saying yes, it was the right thing to do, and we moved forward with help as quickly as we possibly could. In fact, many people suggested that we perhaps didn't provide enough help in those areas.

Agriculture may not have the same kind of graphic television image that those kinds of disasters were able to generate, but it indeed has the same kind of disastrous proportions, and it's happening right as we speak here in Saskatchewan and in western Canada. It was therefore extremely disappointing to hear the Minister of Agriculture for the country of Canada, Mr. Vanclief, suggest that perhaps what is needed is a message of tough love to the people of Saskatchewan. Does that message of tough love extend to other areas in the country of Canada? Does it extend to other areas in agriculture? I would submit to you that it does not. In the areas of milk, eggs, poultry, and other supply-managed industries primarily based in Ontario and Quebec, we have virtually the same level of commitment as other countries we compete against in those areas.

We would say that the message of tough love simply is not applicable in Saskatchewan under the conditions we are faced with. We would suggest to you that that message of tough love is more a message of favouritism, of suggesting that western agriculture, western grains and oilseeds and the livestock sectors, are somehow or another different from other areas of agriculture in this country and other areas of the same magnitude of disaster—for instance, ice storms, fisheries, or floods. I say to you that just as we have a responsibility to respond to a national crisis in those areas, we have, as a collective nation of people who want to do the right thing, a responsibility to respond in Saskatchewan today.

• 1035

I say, on behalf of the official opposition here in Saskatchewan, that I think this committee has a great deal of clout when it comes to moving the federal government along. I'm certain that this committee will be advancing the interests of western agriculture when it returns to Ottawa. I'm also certain that this country will respond, because ultimately it is our responsibility to respond. I'm hopeful that the federal government will do the right thing, as I am confident they will. What has happened to date in terms of support for agriculture clearly has been inadequate.

Mr. Chair, I have read your recent comments with respect to AIDA and how inadequate it is, and how much of a disaster it has become. I certainly took a great deal of hope from those comments.

I also take a great deal of hope from the comment by Mr. Vanclief that he recognizes that AIDA has become a four-letter word in western Canada. It most certainly has. I think the farmers of Saskatchewan deserve better.

Thank you.

Voices: Hear, hear!

The Chair: Thank you, Mr. Boyd. We appreciate your comments.

Now we're going to go to Raquel Moleski. She represents the Canadian Farm Women's Network. Welcome, and good morning to you.

Ms. Raquel Moleski (Board Member, Saskatchewan Women's Agricultural Network): Thank you, Mr. Chair, and committee members.

On behalf of the Saskatchewan Women's Agricultural Network, which is a member of the Canadian Farm Women's Network, I am pleased to have the opportunity to share with you today some of the very important issues Saskatchewan farmers are facing, and in particular, the effect the farm crisis has had on my family and my community.

I must admit that the first time we were called to attend a farm rally, and the first time we heard the terminology “farm crisis”, we were relieved. After struggling to try to make our farming operation viable, it was somewhat comforting to know that we were not alone; that the problems we were facing were not because we were bad managers or not working hard enough; that we were victims of government downloading and an international trade war.

We began farming in the early 1990s. The farm economy was not strong enough to allow us to buy out our parents, and they could not afford to give us the farm. We are working hard to build an operation. We've made many mistakes along the way, but we've learned from them.

We realigned the farm and tightened our budget and we thought we were finally on the right track. We were diversified. We had built a purebred cattle herd and were growing a more diverse group of crops than our parents had. We had cut costs and we began continuous cropping and direct seeding to maximize our production.

When we still were not making ends meet, we took the next step and rented more land. When you're only making a couple of dollars an acre, you need more acres to be profitable.

We now find ourselves with much higher operating loans and farm supply bills, and yet with bumper crops this year, our income has not increased. We are not bad managers. We are intelligent, hard-working people. But we are victims of circumstances beyond our control.

There is no relation between the cost of production and the value of our products. The cost of chemicals, fertilizers, machinery, and fuel as well as property and school taxes continue to rise with no regard for farm returns. There must be guidelines put in place to monitor price-fixing and the gouging of prairie farmers.

Since the loss of the WGTA, transportation has taken a huge chunk of our income. The railways must share efficiency gains with the producers in the form of lower freight costs.

As I'm a relatively new farmer, AIDA is of no use. To qualify for AIDA, you must have made money in the past. Although my income has declined, less than nothing leaves you a margin of nothing.

On the road to building a farm, money was needed to pay bills and for capital investments, with none left for NISA contributions, much less a savings account. There is no crop insurance coverage for a young farmer who must use the area average for yields. It does not cover 50% of our inputs, and we cannot afford to pay the premiums until we have established our own yield averages.

• 1040

In the past, we have struggled to make the circle, to pay our bills on time, to put in next year's crop. Off-farm income put food on the table and paid the utilities. However, this year we have not reached the new year but have reached the end of our cash.

A sad fact is that compared with many of our friends and neighbours, we're doing relatively well. Within a four-mile radius of our farm, we've lost all but two of our neighbours. When the first couple of families were forced to sell, people said they were bad managers, or they had not diversified enough. However, we have now lost those who worked very hard and did everything they could to improve their farm.

Those who are left have little time in between their off-farm jobs to try to keep their farms going. This has a devastating effect on small communities, which rely on volunteers to keep churches, community centres, and rinks functioning. With fewer people left in the community, the burden falls on the shoulders of a few dedicated people whose time and resources are already stretched to the limit. Men, women, and children are working long hours on and off the farm, and still have little or no money left at the end of the day.

Where else would people work a second job to cover the expenses of their first job and still have difficulty feeding their families? This sounds ludicrous, but it shows you how dedicated Saskatchewan farmers are to their land, their communities, and their industry.

To help illustrate this, let's say that when you became a member of Parliament you were given a salary as well as a transportation allowance to get you to and from work. One day, to save money, your transportation allowance was eliminated. Your costs have now increased, but your income has not. Next, you find that the more affluent political parties are subsidizing their MPs' salaries. The wage you can demand has been dramatically decreased, therefore, to a 1930s level, and your party cannot afford to subsidize you.

When you think things could not get any worse, your superiors decide you must now pay for everything you use. You must now pick up the cost of every paper clip, pencil, and notepad used in your office. Your costs have increased and your income has been slashed. You cannot pay your office bills, much less have anything left to take home.

Would you get a second job to cover these costs, depend on the free labour of your spouse and children, or simply walk away? What would happen if all of our members of Parliament walked away? Our government, and perhaps our country, would crumble.

What would happen if all of the farmers walked away? The economic and social structure of this province, and perhaps this country, would crumble. The safe, abundant, and high-quality food supply that Canadians take for granted would be gone.

It is very easy to look at this as simply an economic issue—that is, the government cannot afford to financially assist farmers. We probably could not afford the foreign aid we sent to Turkey or East Timor, and we probably can't afford the expense of our highways or health care system. However, as Canadians, we have a social responsibility. Our country is known around the world for helping those most in need. Do not let us become known as a country that will not help its own.

Food, air, and water are the three basic sources of life. If any one of these is in jeopardy, we are all in jeopardy.

Thank you very much.

Voices: Hear, hear!

The Chair: Thank you, Ms. Moleski. Your remarks are just another example of the thoughtful comments we have heard over and over again since we began this trip early Monday morning, starting from Winnipeg and on to Portage la Prairie, Dauphin, Brandon, Estevan, and now Regina.

• 1045

Let me just say to you, Mr Boyd—and I think I can speak for all members, opposition and government—that it certainly is the intention of the committee to do our best to convey the strongest possible message to the government when we get back to Ottawa.

Let me also say that a year ago AIDA appeared to be—and I underline the word “appeared”—a rather generous response to the farm crisis, but we now know AIDA has failed to recognize a large number of farmers whose incomes have been sliding rather drastically over the past two or three years. AIDA simply doesn't recognize that particular group of farmers. That's one of the reasons AIDA has come under such withering fire, if I can put it that way.

The other thing, and another disappointment for me, is that the incessant rain that occurred in your province and my province in the months of May and June did, in my opinion, cause an unmitigated disaster, especially for the farmers living there, and yet our national disaster program for whatever reason did not recognize that as a disaster. Due to the variables or maybe the caprice of the regulations and criteria, there was no catching of the disaster in Saskatchewan and Manitoba in so far as the farm community was concerned, but the disasters in the Saguenay and the Red River Valley were recognized by the criteria. There's something wrong with those criteria, and they simply have to be changed. I'm sure that is going to be one of our messages as well.

I've spoken long enough. We have some time for questions and answers, and we'll go to Mr. Breitkreuz.

Mr. Garry Breitkreuz: Thank you very much.

I enjoyed your presentations very much. Your example, Raquel, was just excellent when making the point about government. I'd almost come back and say that if we lost most of our MPs and began to downsize government, it might solve our farm crisis because we could reduce our tax burden. Many farmers don't realize how much tax they pay that is built right into their input costs. For fertilizer alone it's $300 million. I just really appreciated your example there.

I'm really impressed with the presenters this morning—or maybe I'm not impressed—because everybody sits very calmly and talks about this crisis even though there's a lot of hidden emotion there. This is a serious crisis, and people are not standing up on the tables and jumping up and down. But if you go and talk to farmers, the tears in their eyes and the emotion really indicate just how serious this is.

Along with short-term solutions, do we not need to have a long-term solution put in place at the same time? Strike while the iron's hot. We need to give farmers hope. The suicides in my own riding of Yorkton—Melville indicate that farmers are losing hope. I'm wondering if you see that out there. Do we not have to have something put in place in the long term to indicate to farmers that we care for them and that something needs to be done? I think that along with a short-term solution, which is absolutely essential, at the same time we have to put something in place for the long term. Our young people won't even get involved in farming if they don't see some light at the end of the tunnel.

I'd like both of you to comment on that. Is this not impacting on families to the extent that they have to have some hope brought in here through the long term?

Ms. Raquel Moleski: There is no hope. I think the comment made yesterday was that it's always next year country in farming, and there's no next year country left. There's no optimism whatsoever. Without a doubt we need an immediate cash injection to prairie farms, but I'm hoping that this issue of an immediate cash injection does not cloud the bigger issue. There is a need for long-term stability and plans to be put in place. That is absolutely necessary, but at the same time we have to be looking at long-term solutions.

Mr. Bill Boyd: Unquestionably, that is true. The farmers of Saskatchewan I think were very hopeful that the WTO talks in Seattle would provide them with some hope. I think that has been erased as we see that isn't going to be something that's going to change their fortunes in the near future or perhaps in the long future. It's going to be for a long period of time that we're in this type of situation where there's such an imbalance between our competitors and ourselves in terms of support from our governments.

• 1050

Indeed, as part and parcel to this problem, there has to be a short-term program and a long-term safety net. In Saskatchewan there is virtually no income support program. We have crop insurance, which essentially deals with crop disasters, and we have NISA, which a lot of farmers view as a way of putting away some income so that they can hopefully pass on to their children a farming operation that is somewhat less riddled with debt. We no longer have a long-term safety net. GRIP was taken away in 1992, and no replacement has been put in place since then.

Mr. Garry Breitkreuz: I'm sharing my time with Mr. Kerpan, by the way.

Mr. Allan Kerpan: Thank you.

Mr. Boyd, last night, yesterday in the legislature, and today I've heard you, Mr. Ligenfelter, and many others talk about a level playing field. I've heard you talk about not asking for a subsidy or a handout. In fact, in the motion that was passed in your assembly last night you talked about trade equalization or trade compensation dealing with the distorted world trade problems. I would like you, if you would, please, to just clarify once more for this committee that's exactly what you're asking for and not necessarily a handout or a hand up.

Mr. Bill Boyd: I think farmers here in Saskatchewan would like to see nothing more than simply gaining their income from the marketplace. But when the marketplace is as distorted as it is at the international level, we see no other avenue than to call on our federal government and our provincial government to respond to the need to try to balance our farmers' fortunes with the fortunes of other producers throughout the world.

When we're competing with the United States and the EU that have subsidy levels, support levels, and equalization payment levels for their producers of four times in the United States and six or seven times in the EU, how can we possibly compete under those circumstances? To bring it down perhaps to a different level, if there were two competing car dealerships in Regina, Saskatchewan, and one parent company all of a sudden decided they were going to reduce the cost of their product to their customers by 40%, how long do you think it would be before that dealership would be out of business? It wouldn't be long.

The Chair: Thank you, Mr. Boyd.

Now we'll go to Mr. McCormick.

Mr. Larry McCormick: Thank you, Mr. Chair, and thanks to both of the witnesses for being here.

Part of the long term is that we have to work together, as this committee seems to do quite well, in developing support throughout urban Canada. I just want to take this opportunity to make a plug for a small effort that I think can make quite a significant difference with the awareness level in Ontario, where a lot of people live. A member of the House of Commons is working hard to put together a tribute to the family farm, which will take place in the Air Canada Centre in Toronto on I think January 15 and 16. Yesterday we were in Brandon, and I was glad to hear that a young woman from there is going to be one of the entertainers. I know that won't pour money into Saskatchewan, but as we look at the long term, I think these are some of the things we have to do.

For Raquel, I just wanted to mention that we do have a new ministry and a new minister in Canada. Let's give the Prime Minister his due here. For the first time we have a minister responsible for rural development in Canada. The minister's name is Andy Mitchell. His chief of staff, the person who works for him, his senior person—and I know this because she came through my office, in my riding and in Ottawa—has been a long-time, hardworking, I'd almost use the word “activist” on the executive of the Canadian Farm Women's Network. I listened to a lot of the good you people have been involved with as we spent time together.

• 1055

Part of the solution down the road has to come from the many facets of government. I mean, with the economic development moneys we can do a better job with western diversification. And as previous witnesses have said, one of the major parts of the solution is to address the transportation situation. Of course, in this great province you have more miles of road—I'm old—than in any other province in the country, and the policies have gone against many things here.

I just wanted to also say to you, Bill, baring my soul, that one time as I first arrived on this committee in Ottawa I had a little run-in with your leader—a very friendly one, I think. Yet during the campaign this year, sensing this rural-urban split that didn't happen just this year—and I hate to see it go any further anywhere in this country—I was cheering you along, because we need you there for so many reasons.

Raquel, one of my fears is... What a wonderful wrap, in your presentation, that food, air, and water are the three basic sources of life. People in Ontario come to me and say “We won't have any food”. The food will be there, but in national and multinational companies, and that's not the way I want to see us go. I even hear rumours that we may go from pork to grain to where you'll be able to sell your crops in advance to some controlling company. Have we seen much of that happening here in the prairies?

Ms. Raquel Moleski: As far as multinational control of our food is concerned, it's happening, and the GMO issue is one of them. From our technology-use agreements, the chemical companies are selling us the seed and the chemical, and they want guarantees that it's coming back to them. Yes, the GMO issue is a big one right now, and people are scared. I don't think all the facts are out there. But if you lose the farmers that you have now, who take care of their land, who do their best to grow high-quality food, food safety will become a problem in this country. If you turn the control of the land to multinationals, there will be huge environmental concerns and there will be food safety concerns.

The Chair: Thank you.

I understand Mr. Calder wants to take the last two minutes of your time.

Mr. Murray Calder: Yes, thank you very much, Mr. Chairman. And thank you, Larry.

Bill, I'm going to point the question to you. Saskatchewan in past years had a GRIP program, and at that point in time you were sitting on a surplus of $337 million. The program was cancelled, but we in Ontario still have it. I'm wondering if you would be interested in bringing GRIP back here in Saskatchewan.

Mr. Bill Boyd: GRIP wasn't perfect. No one ever said it was. But it was an income shortfall mechanism, a guaranteed program that farmers could at least look toward, look at their revenue, and make a determination as to where they wanted to head with crop production. There are essentially two types of programs: risk management, which are crop insurance and arguably NISA to a certain degree; and income-generating or income insurance programs. I think there continues to be support for that type of program—maybe not GRIP, but something similar, perhaps. There needs to be at the end of the day some form of support program there that farmers can look toward as a bottom line of what they can expect from the production they come forward with.

The Chair: Thank you.

Mr. Proctor.

Mr. Dick Proctor: Thank you very much.

• 1100

Let me just stay with the GRIP program, Mr. Boyd. Some folks have felt—I think it was the general consensus from the five or six meetings we've had so far—that NISA does seem to be working well, although some of the presenters have noted that it's not particularly beneficial to the younger farmer. NISA is more beneficial if you've been around, seen some good years and been able to put away some money, and had the government match that.

You indicated in your last answer that GRIP wasn't a perfect program. Some folks have suggested that we do need a revenue insurance plan that would help particularly the younger farmer, and that perhaps it could be based on some kind of cost of production. I'm just wondering if you would care to give the committee your thoughts on altering GRIP to reflect the cost of production.

Mr. Bill Boyd: Well, the problem with cost of production is how you develop the formula for it. The costs of every farming operation are different. There are no two that I know of that are the same in terms of that. Everyone has different levels of debt. Everyone has different levels of input costs, in terms of how they decide to manage their inputs—fertilizer costs, chemical costs, whether they are an organic operation, or whether they have a diversified operation in terms of production of crops or livestock. Every farm is different with regard to that, and it's extremely difficult to come up with those kinds of things.

That is part of the problem that I think farmers feel happens whenever we develop these types of programs. They become so complicated no one understands them, and the AIDA program is a classic example of that. Even after you've finished going through your AIDA application with your accountant, you still don't know whether you're going to get a payment.

Mr. Dick Proctor: Just to follow up, what kind of modified GRIP program do you think would work?

Mr. Bill Boyd: I think it should be an income insurance type of program that looks at the specific commodities and determines from there a base level of income that farmers should be able to receive from those types of crops, or basket of crops, if we have concerns in terms of trade. To try to determine cost of production takes it into extremely complicated areas very quickly.

Mr. Dick Proctor: That's helpful. Thanks.

This is a question to Ms. Moleski. In your presentation—and I too appreciated the government example, the analogy that you used—you said there must be guidelines put in place to monitor price-fixing. I'm sure, because you only had five minutes to make your presentation... Could you expand a little on what your thinking is there?

Ms. Raquel Moleski: I think that everything from transportation... Now we're saying that we have competition with the two railways. We're not sure if that's real competition.

The price for our product has never increased, yet the price of our machinery, our chemicals, and our fertilizers just keeps climbing, and it isn't relative. I'm not sure what the federal government can do, but the chemical companies must come to you for licensing. Maybe it's time to say “Before you get a licence to sell your product in this country, show us what your cost of production is. We're not going to let you gouge farmers. If it's costing you... We'll let you make a fair return on your product, but...”

Maybe those are some things we can start looking at instead of looking only at the top end, of giving farmers cash to help them out. We can look at the other end. I'm not sure how government works and how a lot of these things work, but perhaps there are some things that can be done at that end of the spectrum.

The Chair: Thank you very much. Thank you, Mr. Proctor.

I just want to mention to the audience that we will be following this with a 45-minute round to finish our morning session. I have on my list the names of nine farmers, so if each farmer limits his presentation to five minutes, we can hear from all nine. You may want to think about that. I'll be calling forward, right after we've heard from Mr. Borotsik, five of the nine farmers: Ron Bishoff, Richard Wright, Ray Bashutsky, Roy Atkinson, and Ron Gleim. As I say, if you each stick to five minutes, we'll hear from all nine.

Mr. Borotsik.

• 1105

Mr. Rick Borotsik: Yes, and I'll be quick with my two questions.

The first question is to Ms. Moleski. You belong to SWAN. I'd like to know more about the organization. Do you have a resource within the organization that deals with the human problems that are now cropping up, the stress that's hitting the farms right now? The women within the farming community right now are obviously being terribly affected by what's going on. Do you have any resources built into your organization to deal with that?

By the way, in a couple of other areas we've heard from other people who are dealing with that very issue, the stress. Can you give us a little better understanding of what you see happening out there?

Ms. Raquel Moleski: Our organization's mandate is to bring a women's perspective to farm issues and a farm perspective to women's issues. So yes, we do have representatives sitting on the Farm Stress Advisory Group and things like that, and we do keep a close tab on what's happening.

Mr. Rick Borotsik: What is happening?

Ms. Raquel Moleski: I do not sit on the Farm Stress Advisory Group, but I think I heard yesterday that calls are up significantly from last year. I can't give you any details on that.

It's not a women's issue, but in farm families farm women are the ones who are having to deal with the issues such as Christmas presents for their children, and putting food on the table, and telling their little children they can't play hockey because they don't have the money. I don't think that is the issue that's being heard. That is why we are here, to make sure those issues are heard.

Mr. Rick Borotsik: Thank you.

I have one question to Mr. Boyd. Welcome, Mr. Boyd.

Mr. Lingenfelter was sitting in that chair not that long ago. There was a question asked about the responsibility of the federal government vis-à-vis the Saskatchewan government, and at that point Mr. Lingenfelter said that in other jurisdictions it's the federal government that has been providing the supports, if you will, or the subsidies. He also said that he felt it was the responsibility of the federal government to do so here in Canada as well. Do you agree with that concept? And if you do, do you not believe that Saskatchewan, as a province, has a part to play in delivering some of those supports to the farmers?

Lastly, we talked about the expanded GRIP or the modified GRIP. Do you see that as being a tripartite arrangement with the provincial and the federal government and producers being partners or joint partners in that type of a program?

Mr. Bill Boyd: I partly agree with Mr. Lingenfelter. I would say “partly” because when it comes to trade equalization payment types of issues, I think it is the responsibility of the federal government. However, that does not let the provincial government off the hook. I believe the provincial government has a role to play, and virtually every one of the groups that spoke yesterday agreed. The farm groups suggested that the provincial government also had a responsibility to fulfil, not in just the short term but in the development of a long-term safety net program as well.

Mr. Rick Borotsik: Financially?

Mr. Bill Boyd: Yes. I believe the provincial government has a role to play in terms of areas over which they have responsibility, things like fuel taxes, taxes on input fertilizer, and property taxes.

The education portion of property taxes is something that's a very large issue here in Saskatchewan, where the downloading has been tremendous and significant to the property taxpayer farmers. They've seen the education portion of their property taxes continuing to go up, and yet their schools are deteriorating in rural Saskatchewan, and the quality of education isn't there any longer.

With respect to your question on an income insurance type of program, yes, I believe it has to be tripartite. I think the farmers are prepared to take responsibility in terms of paying for, or helping to pay for, a portion of those types of programs, but there also is a larger responsibility to the federal government and the provincial government.

The Chair: Thank you.

We have time for one short question from Mr. McGuire and Mr. Breitkreuz. Joe.

Mr. Joe McGuire: I have a short comment and a short question.

• 1110

We were chided yesterday in Estevan about pitting farmers against farmers with our various comments, whether they were from us or from fellow farmers. I agree with that. To pit supply-managed farmers against exporting farmers is not very conducive to finding solutions.

Raquel, in your presentation you said you've lost all but two of your neighbours within a four-mile radius. Who bought your neighbours' farms? Was an equal number coming in as went out? Were there young farmers coming in? Who bought the property that was in your district?

Ms. Raquel Moleski: In our immediate area, two of the farms went. The land was distributed between some larger farmers, and the farmyards went to people who are working in the city, commuting to and from.

We're very lucky in our community, in that we've had a number of Europeans move into our area. They're buying farms and they're moving in, so we are replacing some of those farmers. But that doesn't dispel the fact that for our neighbours with the oldest family farm in the RM, they were forced to sell.

The Chair: Thank you.

Now we'll hear from Mr. Breitkreuz.

Mr. Joe McGuire: So Europeans are coming in. Things are not that great in Europe and they are coming into Canada to buy land.

The Chair: Thank you.

Mr. Breitkreuz, it's your question.

Mr. Garry Breitkreuz: Thank you very much.

I want to compliment you on the fact that this has really been a non-partisan issue and you have unanimously agreed on that resolution. I think that's a key signal to the federal government that we should take partisan politics out of it federally as well.

How can we communicate to the people in the cities, where the government gets a lot of its support, the seriousness of this problem? The crisis doesn't make good TV viewing. The media does not communicate to Toronto, Montreal, and so on, the extent of this crisis. How can we get the politics out of this and get the people in those big cities to support us?

Mr. Bill Boyd: Perhaps that's a question better asked of you and of the committee members, some of whom represent cities, some of whom I think have the federal government certainly represented by many members in the cities. I think they have a responsibility, just as we do. We've highlighted the issue time and time again, not only here in Saskatchewan but in Ottawa and all across the country. The government has taken a great deal of responsibility for that in terms of informational-type campaigns.

We seek your advice in that area as to how we can better get our message to the city people with respect to this. We certainly ask for their understanding, their concern, and their help in this area, because clearly it appears to me at this point that the message isn't getting through and we have to do a better job in this area. So any advice the committee members have to the farm coalition here in Saskatchewan would be useful.

Mr. Garry Breitkreuz: Yes. Thank you very much.

The Chair: Thank you.

Thank you, Mr. Boyd, for coming today, and also to you, Raquel. I appreciate your comments very much.

Now we will go to our final segment. I want to call forward now Ron Bishoff, Roy Atkinson, Ray Bashutsky, Ron Gleim, Richard Wright. We have four more farmers who would like to be heard from. Whether we hear from them is going to depend on this group. The four others who would like to appear are Barry Farr, William Giblett, Sinclair Harrison, and Al Wigmore. We can hear from all nine if each of you sticks to five minutes.

We're going to go alphabetically. Roy, you're first up.

Mr. Roy Atkinson (Individual Presentation): Thank you, Mr. Chairman. I'll try to make the best use of five minutes within the terms of reference of this committee.

The first issue, I would submit, is there is no problem in agriculture. Agriculture is doing very well. It has been pointed out here this morning that our exports have dramatically risen, productivity per farm has risen dramatically, efficiency is there. If efficiency means profitability, it ought to be there too. The question we have to address is profitability.

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I want to submit to you as members of Parliament that you're not really and have not been in command of the situation, although you're supposed to be responsible for it. A number of years ago one of the ministers, the Honourable Mr. Masse, meeting with a group of senior public servants in Charlottetown, Prince Edward Island, addressed the civil servants, or the public servants as I would rather call them, with these words: “I have my written submission to present to you today, and when I'm finished I will talk to you.” And when he finished he said this: “You are the brains. We politicians or members of Parliament are merely the actors. You decide and we'll implement.”

Let us examine what the situation is. It's a matter of an imbalance of power, an imbalance of power between the people who produce the food and fibre in this country, those who make the policy, and those who purchase or sell goods. Really, now, in terms of those who purchase or sell goods, we call them an oligopoly. They buy and sell at the same place, except in those instances where farmers have put themselves together and have supply management. The results are very clear.

There is another point I think should be made clear. A lot of people are running around talking about Adam Smith and free markets and all the rest of it. They have forgotten, or they never knew, that Adam Smith also talked about the public good. And public good means when there is an imbalance of power there is an intervention in order to create the opportunity for public good and distribution.

Let's have a look at this whole business of AIDA, or whatever they call it. You people had nothing to do with that. You had nothing to do with it. That was the public servants who put it together. Those public servants have a particular set of values, and that set of values is to get rid of as many producers as possible and to convert or to transfer their productive inability—because they were no longer productive—to the transnational corporations, who are now moving quickly into this deregulated new milieu that was supposed to bring all the good things to the farmers. Regrettably, most farmers, or many of them, bought that line. Fortunately, they're now learning that was not the direction that would protect them.

I get incensed when I hear farmers or politicians implying that the way to resolve this dilemma is to cut taxes, just cut taxes. Well, fellows, if you cut your salaries, how many services could you buy? The question is, if you did cut taxes, who are the beneficiaries? Are they common people? Are they the middle class? No, they're the super-rich. And if we want to look for money, let's look there. There's lots of it.

How many more minutes have I got?

The Chair: You've got about 45 seconds.

Mr. Roy Atkinson: Forty-five seconds. Well, the issue we have is an issue of crisis, and it has to do with people. It has to do with the value system, the value system that's always talked about but is never considered and implemented. As far as AIDA is concerned, scrap it.

The most important thing we can do at the moment is secure the branch lines. Emmett Hall gave us a chart, a branch line authority that takes in all branch lines. One branch line by itself cannot stand the pressure from the railroad companies. The whole notion of competition between railways is a myth. It's a myth. It never was true and it never will be true.

So we have to think of the mistakes we've made and correct those mistakes.

The Chair: Thank you very much, Mr. Atkinson.

Mr. Roy Atkinson: May I make one more point?

No elevator that's designed to be destroyed shall be destroyed until we put a plan together, because all that's really happened is the inefficiencies of the elevator companies and the railways have been downloaded onto the community and the farmers in it.

Thank you.

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The Chair: Go ahead, Ray.

Mr. Ray Bashutsky (Individual Presentation): Thank you, Mr. Chairman, committee members. It's hard to follow Roy Atkinson, but I will try, and I will add to what Roy is saying here.

I'll start with the railway issue. I may not be very knowledgeable in a lot of the instances that deal with railroads, but I have some real simple questions I have to ask here. I move grain from Wynyard, Saskatchewan, to Vancouver for $39 a tonne, and if I were a potash producer I'd move it for $29 a tonne. Simply, where is that $10 a tonne? Who is negotiating for us here? A very simple question. Freight is one of my biggest costs on my farm. I'm losing $10 a tonne, as is every farmer in this province and in western Canada, I'm assuming.

The second issue—I'm going to try to get as many in as I can here, so bear with me—is this whole AIDA issue. People tell us, and these are bureaucrats, that there is $100 million paid out to Saskatchewan already. I run small surveys. I talk to accountants. The accountants I've talked to, without exception, the people who are filling out the AIDA forms for these farmers, tell me that between $3,000 and $4,000 is the average payout they're getting out to farmers. The federal government says it's $10,300. My question to you folks is are there 10 farmers out there who are collecting $1 million each? I haven't talked to all the accountants in this province, but the ones I have talked to are telling me that's where we're at.

Another thing I want to talk to you about is that I run farm meetings around the countryside to talk to farmers. The feeling we're getting out there is that half these farmers are ready to do something serious out there. The other half are saying no, we'll do everything legal that we can here. But the other half are ready to do something. The level of frustration has gotten to that point already, where there's either apathy out there and they've given up hope completely, or they're out there ready to do something. I'm sure if I asked this group of people behind me, you could get 50% of them to say that something has to change seriously, right now.

I come from north of here, from a place called Wynyard, a hundred miles north of here. We have had the pleasure of having tremendous crops for the last several years. My farm has probably produced above-average crops by 30% for the last couple of years. This year I'm going to show a negative $27 per acre average return. I'm an efficient farmer. I'm as good as they get. I'm not ashamed of that. But I'm still showing a negative number in my final returns.

How much time have I got left, Mr. Chairman?

The Chair: One minute.

Mr. Ray Bashutsky: One minute, okay.

Short term? Simply, we need cash to those farmers. The provincial coalition is asking for $1 billion. That's fine; that represents the loss of the subsidies the Europeans and the Americans are paying out to the farmers. But we're still saying there's more out there than that. Right now the farmers are losing equity in equipment, equity in land values. Any farmer who has to sell his land would get probably 30% less for his property right now. That is a loss that's not showing up in any of the numbers yet.

In closing, quite simply, the six major banks in this country last year showed a profit of $7 billion. That's $10 billion more than the farmers in Saskatchewan made last year.

The Chair: Thank you.

Mr. Bishoff.

Mr. Ron Bishoff (Individual Presentation): Thank you, Mr. Chairman.

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I'm going to give a very brief introduction of myself. My wife has been working off the farm for approximately nine years now. It isn't for the purpose of paying for a holiday in Las Vegas or Hawaii or buying a new truck or a new car or fancy things for the home. It is very simply to try to keep our operation afloat and to put food on the table. That's the only reason. She does enjoy her job, but believe me, it is being done simply to try to supplement our farm income.

I wanted to make a fast comment on a point our chairman made regarding the fact that he couldn't understand why the criteria for the farm disasters we're facing right now did not meet those of the federal national disaster program, and yet it did in Manitoba. I think there's one criterion that was omitted there, unfortunately, and it becomes very political, but that was the fact that it was happening at the time of a federal election. I think that was the criterion that triggered the national disaster program that lent assistance to the people in Manitoba. Believe me, I am not suggesting the people of Manitoba should not have gotten that assistance. They needed it. But so did the people in southeastern Saskatchewan, in southern Manitoba this year, as well as those who are in the northwest part of the province and have been suffering from severe drought for a good many years.

Mr. Gary—and I'm not even going to try your last name—I almost thought you must have stolen my speech. You got into an area that was almost word for word what I wanted to say.

Farmers are eternal optimists. It doesn't matter what happened in the past, what has happened to farmers, they've always talked about next year country: We're going to make it next year; we didn't make it this year, but it's going to be next year. I'm going to tell you gentlemen, next years have run out. We don't have any more next years left. The light at the end of the tunnel is gone, and when that light is gone, there is no more hope. And when hope is lost, what you're facing is despair. That is what the farmers, not only in Saskatchewan, the farmers in western Canada, the bulk of them right now, are facing—an awful lot of despair. Unless there's a major change in what we're doing, that despair is going to really create some serious problems. It's been referred to over here.

One of the things I heard about the other day is that the federal government has implemented a further mediation program for dealing with farm debt, and a lot of people were trained to deal with this. The concern is being expressed about the fact that this process isn't happening and in actual fact maybe there isn't a farm crisis out there because farmers are not requesting mediation assistance. Well, I'll tell you the difference between now and when mediation processes were in place before.

Several years ago, when debt mediation was brought in, farmers at that time thought they could see light at the end of the tunnel. They wanted to continue farming and they were trying to come up with a means by which they could do that. Today, gentlemen, that does not occur. The light isn't at the end of the tunnel any more, and these farmers aren't asking for mediation because you don't need mediation to get the hell out of farming. That's what's happening now: the people who are in very serious difficulty are looking at getting out of farming. They don't see any light and they're not looking at trying to stay in or trying to come up with a means by which they can remain on the farm. They want out.

Our federal Minister of Agriculture, Mr. Vanclief, made a statement, and unfortunately I couldn't find the article. It was on the front page of the Western Producer, and I think it was back in October. Basically, within that statement he suggested it was a waste of money to give it to farmers who were going to go broke in the next couple of years anyway.

I would suggest to you that unless the federal government changes its direction regarding agriculture, and I'm referring to getting into the ball game and coming up to bat as far as subsidies are concerned for agriculture, matching what we as farmers are trying to deal with in the international scene as far as European subsidies and American subsidies are concerned, in several years' time all the farmers are going to go broke. We simply cannot compete on a world market any more.

One of the things that concerns me about this is that I'm suspecting he is suggesting we would be rid of the inefficient farmers, those who are poor managers, or whatever the case may be. Ironically enough, I remember back to the days of Otto Lang, who suggested that one-third of the farmers had to go because they were inefficient, they were poor managers. I'm wondering at what point—and believe me, that third is gone, and I'm not too sure how many more thirds have gone since then—do we get down to that core group of efficient farmers who are good managers. I don't believe they exist. I honestly don't, not according to the criteria that are being required by our federal Minister of Agriculture.

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The Chair: Your time is up, Mr. Bishoff.

Mr. Ron Bishoff: I just want to add—

The Chair: You can go on as long as you want. It just means somebody else will lose out, that's all.

Mr. Ron Bishoff: I hate to step on somebody else's toes, but I want to make a very quick point.

I'm of the opinion that when you come up with a program, even a short-term cash injection—and preferably we should have a long-term safety net program in agriculture—to suggest that the baseline on this should be 70% of the last five-year average is absolutely ludicrous when the largest percentage of us have been producing for way below our cost of production for a good many years.

Voices: Hear, hear!

Mr. Ron Bishoff: I would refer to my wife, working for nine years.

I want to make the quick comparison that this is very similar to a man who is out in a lake, whose nose every now and then comes up high enough that he can get a breath of fresh air. Let's say he's in a lake that's ten feet deep. With the suggestion that when disaster hits he's going to get 70% of his last five-year average, that puts him three feet under the surface. I'm afraid that doesn't solve his problem.

Thank you very much, gentlemen.

Voices: Hear, hear!

The Chair: Mr. Gleim.

Mr. Ron Gleim (Individual Presentation): Thank you.

I'm glad to see that you made it out to Saskatchewan. It's too bad you couldn't have driven all the way out. As a couple of other guys said, you would have seen what the roads are like.

I'm also the chair of the Western Rail Coalition, and we're looking at putting competition into the rail industry through promoting short-lines in western Canada.

I farm with my wife and my 20-year-old son. I have two daughters who still go to school. We all work, but my wife is the only one who gets paid. She'll stay home and make sure the farm is managed so I can go out and do these kinds of things. She doesn't get paid much cash; it's just other benefits, which I can't even talk about.

Voices: Oh, oh.

Mr. Ron Gleim: At any rate, I'd like to read to you your order of the day. It is to “Study... the effectiveness of long-term safety nets and other national initiatives”—here's the important part—“to provide the stability and environment necessary for stable growth in the agricultural industry”.

Well, I guess I would say that ownership is stability. We don't own any railroads; we don't own any elevators; we're losing equity in our land, and we're losing equity in our machinery. We're also losing hope.

I gave a presentation last week in Winnipeg to the Fields on Wheels. I want to go over two initiatives we talked about that can put a half-billion dollars into producers' pockets every year if producers are given some kind of control over their destiny.

In the 21st century, producers are going to have to get involved all the way through the food chain, right from the farm bin to the value-added in the importing country. To me, this is the only way farmers will ever reap any benefits out of the products they produce and sell at the end of the day.

The future is the new technology that I want to talk about. The future is inexpensive infrastructure and producer-created competition. That's the only real competition we're ever going to see in our industry.

This software I'm talking about isn't rocket science. Grain companies are using it today. There's a pilot project going on in western Saskatchewan today. I know Mr. Sheppard alluded to some of the fellows who are working on a branch line out there now.

It all starts at the farm bin. The Canadian Wheat Board employer or an agent probes the bin to identify the inventory, the type of grain, the grade, the protein, the dockage, and other pertinent information. That all goes into a computer with thousands of other producers' information, and at the end of the day, I want to show you how much money can be saved if producers can do this.

Once all the inventory is entered into the computer, they know exactly the quality and the quantity that's stored in the farmers' bins. Then, when the Canadian Wheat Board makes a sale, the computer informs them where this grain is located, what type of grain it is, and how it'll be blended to that certain requirement. Then the grain is hauled in and blended as required. Again, this is not rocket science.

The benefits all go to the producer. I'm going to talk about them in a minute. This technology is already being used in the terminals today, and this new technology being developed by producers and the Wheat Board will cost far less than does the terminal we're seeing out here today.

The new technology of the 21st century could very well make many of these high-cost terminals obsolete in the future. New technology can be moved from farm to farm and from elevator to elevator. A producer gets paid up front, and doesn't have to filter it through the railroads and the grain companies' books first. That's the important part.

Producers should own a lot of their own facilities, and they will. They'll own them along branch lines, which will create the much-needed competition in the system. Branch lines are not for every producer, just as terminals are not for every producer, but they should be allowed to co-exist so that producers can create the competition and protect their investments too. It's about creating competition and protecting investments. Producers will only see true competition when they own and control part of the system. Ownership is important.

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The whole process that Mr. Kroeger and Mr. Estey went through did not take into account producers' initiatives and ideas, and I think the whole system will fail because of that.

I want to talk a little bit about this new technology. It should only take about two minutes. And if you want to write some numbers down, get your pencils ready.

For the grain companies today, for what a terminal will give to them or what a terminal does for the grain company, they have blending opportunities there. Put a dollar down for that, and put down a dollar for protein. The storage revenue is $2.85. The elevation tariff is $9. Shrinkage, dockage, and sale of screenings is $3.77. Rail efficiency rebates are $3 to $5. You then have terminal premiums, grain promotion revenue, condominium revenue, and grain drying and blending. I asked the question in Winnipeg about what that number would be. Every grain company was there, but nobody wanted to tell me what that might be. Anyway, there's also custom trucking and extra road costs, which are going to be an extra $2 to $3. Trucking costs are going to be another $3. That all gives them control. That comes out to around $26 a tonne, and then shared are productivity gains. The farmer has his hand out to the grain company and the railroad and asks what they'll share with him.

With this new technology where the Wheat Board buys the grain on the farm and you can run a short line, you pay the producer for the storage on the farm. That's $2.85. You cut your elevation tariff from either $5 or $9 if you do it all on your own. At West Central Road and Rail, they're cutting it by $9. You blend for the producer. That's $1 and the protein is $1. The shrinkage and dockage is $3.77, with the cleaning and the selling of screenings. Your road maintenance costs go down by $2 to $5 a tonne. Your trucking goes down $3 a tonne. For your rail efficiency rebates, you will get the same, at anywhere from $3 to $5 a tonne. And your locally owned facilities will create jobs in your own community.

All that comes to anywhere from a low of $21.62 to a high of $28.68 a tonne. That's 58¢ to 78¢ a bushel that farmers can put in their own pockets without even going to the railroad or the grain company. If you put that over half the grain that's sold out of the 15 million tonnes, you're looking at between $300 million and $400 million a year, and that's something this government can help producers to do on their farms.

One last point I want to make is on the inputs that have been talked about here over the last while. We've been talking to different professors in Manitoba, Saskatchewan, and some places in the U.S. about input costs. If we had an input company that could buy fertilizer from Russia, from Florida, or from somewhere else, and could pay cash to buy it by the trainload or by the boatload, we could probably cut our costs by 20%. We need a huge co-op that's run and owned by the producers, one that could buy product in the hundreds of millions of dollars at one crack. Do it with a farm improvement loan at 5%, plus 1% interest, and we could cut our inputs by 10% to 20%, which would double our net take-home pay of 1995.

I think those are two positive initiatives this government could help us with, but that's the long term. In the short term, we need money.

Thank you.

Voices: Hear, hear!

The Chair: Thank you.

I think we'll be able to hear from only three more after Mr. Wright. Mr. Farr, Mr. Giblett, and Mr. Harrison, get ready.

Mr. Wright.

Mr. Richard Wright (Individual Presentation): I'll try to be quick.

My name is Richard Wright, and I'm a hog farmer. I've been producing hogs for over 25 years, and I've dedicated most of the last 10 years to helping communities and to working with communities in western Canada to establish pig production operations that bring some life into those communities.

One of the points I wanted to bring to everyone's attention is that while we certainly have had a prolonged period of depressed prices in the grain sector in agriculture, for the last two years we've had what I would call terribly disastrous prices in the hog sector. I would therefore like to just give a little background and provide a few facts about these points I've raised.

In response to the removal of the Crow rate a few years ago, and in response to the decline in rural communities throughout rural western Canada, there are many people who have looked for alternatives and ways to do things that would bolster their communities. They've looked at a variety of agricultural endeavours, all directed toward value-adding to the primary products that are produced from the grain fields that exist. One of the activities is hog production.

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There is no doubt that the fundamental advantages of producing pigs and other livestock in western Canada are very sound. There are fundamental advantages that will be around for a long time.

The reality of modern hog production is that you can't start a 50-sow, 20-sow, or even 200-sow pig production operation, or even a stand-alone 600-sow or 1,200-sow operation and survive these days. You have to be part of a system that produces enough hogs to make you competitive. In many communities in western Canada, in order to come up with the capital to do this, what has happened is that a lot of people have had to pool their capital to come up with enough equity to provide the rest of the financing that would enable the establishment of a pig operation.

I'm familiar with many projects in which upwards of a hundred people have pooled together $5,000, $10,000, $15,000, or $20,000 in order to put together the equity needed to make a pig production operation possible in their community. This has resulted in some really good advantages, creating hundreds of jobs, creating a local market for millions of bushels of feed grains—very important to the grain sector—and creating a lot of economic activity in small communities. I think we've only started down the road, but we have to go a lot farther.

Talking about the depressed prices, I handed out a background paper on the hog industry in a couple of years and some of its problems. I have some extra copies for anyone who wants one. Attached to my paper is a graph I'd like you to look at. With this graph, I just want to talk about the disastrous price situation in the hog sector.

The graph shows the cost of production for the last two years, and it shows what the price has been. Basically, the price in the hog sector has been below the cost of production for over two years now. A year ago you couldn't help but see in the papers that the prices were so depressed that you weren't even recovering as much as your feed grain costs from the marketplace. It was a disaster.

The AIDA program was born at about that time. Perhaps the plight of the pig industry helped to motivate the creation of that program, but the fact is that the AIDA program has failed to provide support for many projects and many pig operations in western Canada, particularly the ones that are owned by fifty to a hundred people. There are eligibility rules that preclude assistance to any owners who own less than 10% of the operation.

The people in western Canada, mostly farmers and business people in small communities, have responded to the removal of the Crow. They've pooled their funds, and they've come up with a plan to build pig operations and other value-added operations. The marketplace has gone against them seriously in the last two years. I won't go into all the reasons why we had such disastrous prices, because I think they're well known, and my paper does describe them. Their confidence has been terribly shaken because of the effect of the losses.

To illustrate the point, one operation I'm familiar with started to sell pigs in January 1998. It's a very efficient operation, but it has never seen a profit. After nineteen months of sales, it currently has a deficit of $1 million. If you look at its history, the pig industry is used to the ups and downs in prices. We're used to depressed prices every four years, and we've learned to live with them. But the worst period of depressed prices in the last fifty years wouldn't have seen that particular operation seeing a deficit of much more than $150,000. As a result of the experience in the last two years, the retained earnings deficit is eight times worse now than it ever would have been otherwise when people got into these projects.

I would very much like your group to consider what's been going on in the hog industry. In light of everything else, we certainly need the grain industry. We think we're a tremendous adjunct to the grain industry in western Canada. But we have a problem. Investor confidence has been shaken, and we won't see the hog industry grow the way I'd like to see it grow, unless we get some assistance through the AIDA program, and perhaps the NISA program as well, to provide long-term stability—AIDA for the short term and NISA for the long term. But let's make it an even playing field. Let's let everybody who is in this business who should qualify get the assistance they deserve.

Voices: Hear, hear!

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The Chair: Thank you.

We're out of time. Sorry, Roy. I want to hear—

Mr. Roy Atkinson: I want to answer one of the questions about the jurisdiction. Under section 92 of the Constitution, the British North America Act, federal responsibilities are clearly defined: interprovincial trade, international affairs. Under that same section the responsibilities of provinces are clearly defined: the jurisdiction of the province is over production and agriculture. Therefore, in this instance, under the Constitution, the federal government is purely and simply responsible.

The Chair: Thank you.

We now have Mr. Farr, Mr. Giblett, and Mr. Harrison. We are going to go alphabetically, so we're going to start with you, Mr. Farr. If we're to finish at noon, you have about four minutes each.

Mr. Barry Farr (Individual Presentation): Thank you, Mr. Chairman. Thank you for being here and taking the time to listen to us.

I'm not going to spend much time on my history. I have two sons. They have three sons; they're babies. We are, if I count my four-year-old grandson by the name of Brody, who runs a combine with a 36-foot header on it, a five-generation farm.

I'm trying to convince my sons, who are very much discouraged, that their three sons should go somewhere else. We farm 12,000 acres. We truck across North America. We have 14 trucks on the highway and we run two fertilizer chemical resale outlets.

What I wanted to talk about here was we are in trouble—I guess you know that—but I think the only reason we are in trouble is someone else has our money. These multinationals are coming into this country of ours and they're building very large operations. I'm a free enterpriser, and I have no problem with that, but I'd like them to use their own money.

I've never been one to say get rid of the Canadian Wheat Board. I'm one of the original originators of the Farmers for Justice, and any time they start talking about the Canadian Wheat Board, I said I want no part of this. I still demand freedom of marketing. If we had freedom of marketing in this country, if it was given today, I firmly believe that we would not be reaching to the federal government or the provincial governments. The thing would take its own course. Rather than selling, let's say, $2, $2.50, $3 wheat, we'd be getting what it's worth on the market. Somebody else has that $2 or $2.50.

When we hauled grain across the line the one particular time, and this wasn't the best time, we got a whole bunch of it down there and we got about $8.37 a bushel to ourselves. That year when the final payment came out from our Canadian Wheat Board we were under the $5.

When I sat up in Lumsden, where I attended a Wheat Board meeting in early January, I asked the people from the Wheat Board who were there, the chief commissioner himself... I just said “Time”. They told me it cost me 5¢ a bushel the previous year to take care of our grain through the Canadian Wheat Board. I listened to this for an hour and a half, and graphs and all that stuff, and I finally said “Time”. Lorne and I know each other, and I said “Lorne, if this is factual, where's my $3.30 a bushel? Where is it?” At that time we took a coffee break and a doughnut break and the meeting never went back to being.

I'm going to get away from that now. In late August one of the senators, one of the good senators—there are many of them here in our good country of Canada—called me because my name was easy to say and whatever. I never met this man before and he asked me if I would come to his place. He was very concerned about the plight of agriculture out here. So I went and I visited him—I will not reveal his name—and I spent a whole afternoon with him.

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He advised me they were going to have a meeting of the senators in Calgary on September 14, 15, and 16 of this year. He told me that the figures that had been put together by the senators who were involved in this thing showed that the United States of America at that time had stuck $72 billion into their agriculture people. He said to keep us on a level playing field with the people in the United States, we needed 10% of that, which is roughly $7 billion.

He also said they realize this is not a one-year problem. He said he thought the situation went back three and four years. I agreed. So he said “There is $14 billion available for this thing in Ottawa, but we don't want to break the fund. What we're going to suggest at this meeting in Calgary is to pay out $10 billion into agriculture.” He had some inputs that he wanted us to give if we could from across Alberta, Saskatchewan and Manitoba, because of our connections with the Farmers for Justice. We agreed to do this.

That meeting took place, and I confirmed that with Len Gustafson—he was here earlier, but I don't know if he still is or not—in Calgary on September 14, 15, and 16, 1999. There was never a thing issued about that meeting, not a thing. I asked Len Gustafson at the mini-SARM convention in Regina in October to provide us the documents for that. He advised me this morning that he has sent that to Brenda Bakken, who is our provincial lady in our new government here. So if they're there, I'll have them.

The Chair: Mr. Farr, you're into other people's time now.

Mr. Barry Farr: Just give me a second.

All I'm going to say is with a billion dollars that has been asked for by this province and with the $80 an acre, which was $3.4 billion by another group that was in here, what we don't realize in that figure—I really want you people to know this—is that a billion dollars sounds like a lot of money, but it is not going to fix a program, because the thing is still running, the auger is still running in the back of the bin. You cannot put a person, anybody who has over 1,500 acres on his farm, based on that $1 billion or based on that $3.4 billion that was never asked for under the $80 an acre... That doesn't take care of anybody who's over 1,500 acres.

Thank you very much.

The Chair: Thank you.

Mr. Giblett.

Mr. William Giblett (Individual Presentation): Thank you, Mr. Chairman. I'd like to take this opportunity to thank you and the agriculture committee for having us here today.

I'm Bill Giblett. I farm at Bengough with my son. My son is out out working today because he has to have a job off the farm. This problem is so great we figured that we from the grassroots people better come and talk to this committee also.

I think the crisis here in Saskatchewan is going to extend a socio-economic virus, if I might use that term, right across Canada. We feel it's that bad. There's a prevalent feeling in the west that the grain industry is about to topple like a house of cards. Saskatchewan Agriculture and Food has stated that 40% of the economy is directly linked to the agriculture industry. It's a very large house of cards.

The year 2000 realized net income is forecast to be less than 50% of the 1993-97 average. The loss of the Crow rate as bait for the World Trade Organization, rail abandonment, elevator closures, and the high cost of inputs for crops were all out of the farmers' control. As a result of doing away with the Crow rate, $320 million a year was removed from Saskatchewan farms.

I've shortened up my statement here quite a bit, sir, so you'll have to bear with me.

Farmers are capable people. Economic problems are not caused by farmers but by subsidy wars. We have no control over these issues. We, as farmers, would like to know if this is the theme this country has taken. We want to plan, we want some control over our destiny. We want to maintain the lifestyle we have created for ourselves and for future generations.

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I have a question. What is the theme of the World Trade Organization as it relates to the agriculture sector, and what do we as farmers have to do to protect ourselves? Ad hoc programs may carry short-term relief, but they do not address long-term needs. Farmers do not want to continually be caught in a seven-year cycle, having to ask for support from the various levels of government. They only want a fair return for what they have worked hard to grow.

We do need programs, even as bad as they are, like AIDA, to keep the boat from sinking. The AIDA program is not designed for all producers; we discussed that many times here today.

Every farmer here requires some sort of assistance, and we have a feeling that there might be regional manipulation of the AIDA program—for instance, east versus west.

There's a very growing trend to pass the buck—excuses, excuses, excuses. We're told that the Crow rate was taken so that we could better negotiate with GATT and the World Trade Organization. And where has this taken us? We're told by the province that this is a federal responsibility, and we're told by the federal counterparts that we're not really in a mess, that the numbers say different. Who's responsible? Is there not one person we can speak with who will say “Yes, I made a mistake, and we will change that”? Someone is responsible. Is it our Prime Minister, who has stated that he's in charge of this country? There's nothing in the throne speech indicating that the federal government has acknowledged, or for that matter comprehends, the severity the western farmers are experiencing due to these subsidy wars.

Our standard of living is starting to deteriorate, as well as the quality of family life. It is an industry where seniors are finding themselves out in the fields at age 70 to help their children who are 40 maintain the farm, and where there's the need of off-farm jobs to sustain the farm. In a 15-mile radius where we live, there are currently only three families that are working steadily on the farm. All others have off-farm income. And in these families, mom, dad, and everyone over the age of 15 is working off-farm to meet input costs. Children younger than 13 are left at home by themselves to maintain the household, look after the younger siblings, and do outdoor chores. According to the throne speech and the notes for an address written by Mr. Chrétien, it says that there's overwhelming scientific evidence that success in a child's early years is the key to long-term healthy development.

When this province opened up this great fertile land to settlers, each farm created 70 to 75 man-years of experience. We're now seeing a mass exodus of youth to other provinces and other countries. This experience is not being used when people leave, and they're taking their jobs and their youth with them. We're losing this experience to further generations.

I'll just shorten my presentation here, sir.

Justice is for all Canadians. Marketing boards and some agricultural products are protectionist—for example, dairy. It is putting specialized farmers against specialized farmers. We in the grain industry must have full opportunity to a guaranteed, stabilized income. The system as it is now—i.e., transportation, world markets, etc.—is clearly unfair and objectionable. Benefits are not being trickled to producers. Economic disparities that are permitted in some sectors have allowed sophisticated theories to prevail over common sense. When a farmer has no choice but to sell his farm, he cannot liquidate his assets as easily as business can. He has to rely on a neighbouring bigger farmer to purchase these assets.

As the province of Saskatchewan is experiencing an urban-rural split, so too is Canada experiencing an east-west split. Why? Alienation? No recognition? Corporate agendas? Ignorance?

The province of Quebec may have a point on separation. They also enjoyed national recognition during the ice storm, which they richly deserved. Western producers also need national recognition of the inequities that face them today.

In conclusion to the above statements, we're still left with people in Ottawa we look to. Please do the right thing.

Thank you.

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Voices: Hear, hear!

The Chair: Thank you, Mr. Giblett. I'm sorry I mispronounced your name.

Well, Mr. Harrison, actually we're out of time, but I'm going to squeeze in five minutes for you. Fortunately, we did hear from you in Ottawa, so maybe you can reiterate what you told us in Ottawa. Of course we all know that you represent SARM, the Saskatchewan Association of Rural Municipalities.

Mr. Sinclair Harrison (President, Saskatchewan Association of Rural Municipalities): Thank you, Mr. Chairman. I want to thank you for coming to Saskatchewan.

I want to table some new evidence we have to put before you since we were in Ottawa two weeks ago. I appreciate the two and a half hours that you gave to KAP, WRAP, and ourselves.

The tabled document comes from the parliament of local government, the people of Canada. You represent one level of government in the Parliament of Canada, and the Federation of Canadian Municipalities represents another level of government, and we won't discuss which is most important. We're all important. We all represent the people.

The board of directors of the Federation of Canadian Municipalities meets four times a year. They're predominantly urban people. They're made up of associations like ours, which represent local governments. They're made up of city representatives, all the way from Vancouver through to the Maritimes.

One of your members, Rick Borotsik, when he was mayor of Brandon, sat on that board, and I think he can appreciate the magnitude and the impact of this organization.

A resolution came before the parliament of local government last week, on Saturday. There are five us who represent rural jurisdictions out of the 65 who sit on that board of directors, so to get a rural resolution through a board of directors such as that is somewhat difficult. To get a resolution passed unanimously on any issue is almost impossible.

The resolution that you have before you is asking that you provide immediate short-term financial assistance. Also, a resolution on trade equalization payments is in this resolution. It's also interesting that this basic resolution came out of Alberta, where supposedly there is no problem.

We added an amendment to it to strengthen it, but this came from the parliament of local government from across this country. We had councillors from the city of Toronto speaking in support of it—all the big cities. It was mentioned that there is a tribute to the farm family coming up in Toronto.

The question is whether urban Canada is onside. This is it in spades, so don't ask the question any more. Take this resolution to Parliament. If you need Sam Synard, the FCM president, to come, he will come. I will come. Wait no longer: go to your treasury, take the money we need, and bring it back to the prairies.

Thank you.

Voices: Hear, hear!

The Chair: Thank you, Mr. Harrison, for that message, and you can be sure that we will take it back.

On behalf of all the members, I want to thank the witnesses for such outstanding presentations.

I apologize for pushing the time, but I feel that I have the responsibility to permit as many farmers as possible to speak. I think we've done a fairly good job today. I want to thank everyone in the audience. I think it has been a very profitable morning.

Now we're going to get on a plane, go to Prince Albert, and do this thing all over again.

Thank you. This meeting is over.