AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, December 7, 1999

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[English]

The Chair (Mr. John Harvard (Charleswood St. James—Assiniboia)): On behalf of the Standing Committee on Agriculture and Agri-Food of the House of Commons, I want to welcome the witnesses before the committee. And of course I would like to welcome everyone from Estevan and area who have come here today to witness, to watch, and to take part in these proceedings.

I can assure you that all of us on this committee take these proceedings seriously; they're very important to us. We were in Manitoba yesterday, and this morning we had meetings in Portage la Prairie, Dauphin, and Brandon. They went very well, and I think we are the major beneficiaries of those meetings. I expect more of the same here in Saskatchewan.

We will be hearing from a number of farmers in the first part of the meeting. In the middle part of the meeting we will be hearing from the Saskatchewan Wheat Pool and the Saskatchewan Pulse Growers, and then we'll get back to more presentations by farmers right after we've heard from the organizations.

Yes, Mr. Borotsik.

Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Chairman, in Brandon this morning we had a number of people who wanted to speak, and we didn't ask questions in the open-mike session so we could have more people come forward. Do we have a fairly long list of people who want to speak to the committee?

The Chair: Right now we have five.

Mr. Rick Borotsik: Five. So maybe we could shorten up our questions and answers.

The Chair: In the last 45 minutes, sure. That's wonderful.

Let's start the first round. I think it's already been indicated that we'd like to have maybe five or seven minutes from each of you and then we'll have time for questions. As we did in the good province of Manitoba, we took you alphabetically, so you're number one, Leroy. You're up front. Thank you for coming.

Mr. Leroy Berry (Individual Presentation): Thank you, Mr. Chair. I'm happy to be here today, in one sense, to be involved on the Standing Committee on Agriculture. In another sense, I'm not happy to be here, in that I feel it shouldn't have been totally necessary to come this far in the situation we have with our problem in agriculture here in western Canada.

Our farm is located in the southeast corner of Saskatchewan and is comprised of 26 quarters of land with a beef-cow herd of a hundred head. My son and I grow a variety of crops, including traditional cereals, as well as oilseeds and pulse crops such as lentils and peas. We have also grown spices—coriander, caraway, dill and fenugreek—to gain experience with them but also to diversify and seek new markets.

Our cost of production in this black soil zone has been below average for this soil type as established by Saskatchewan Agriculture and Food. We have crop insurance. We are in NISA, our account in which now has been depleted. In the past, as a business we were able to cover our production costs, our financing costs, including land, replacing equipment as needed, and of course living costs. That is, we were able to operate in the black when we had average crops and a reasonable price for our commodities. However, things stated to unravel in 1997.

The first rain we were to have in 1997 came on July 1, with not much more to follow in the growing season. In 1998 rain commenced on June 15 and then couldn't shut off. We received inches. The crops were planted, but we know that many of those do not do well with excessive rainfall. For example, lentils, which have been one of our higher net dollar-per-acre crops, will not form their pods. And 1999, which has been well documented for a spring during which there was no planting time in southeastern Saskatchewan and southwest Manitoba, was a disaster.

One year ago I became alarmed with our financial deterioration and contacted the Canadian Farm Consultation Service. We had concluded that we needed someone who could look at our situation and point out what we were doing wrong or what we should do to improve our management. A representative of this service has been down at our farm many times over the past year and has looked over all aspects. In his final analysis he said to me, “Leroy, I cannot see that you've done anything wrong. You're a victim of bad weather and low commodity markets.”

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I must say that as a Canadian I'm becoming very disillusioned. There has been a constant cry for help to get through these difficult times. The response from some quarters has been less than sympathetic. It is noteworthy that in the United States, fifteen kilometres from where we now sit, officials—the President, the Secretary of Agriculture, and members of the Senate and the House of Representatives—expressed concern about the plight of the primary agricultural producer. The United States have acted.

Before opening the World Trade Organization talks in Seattle, a European Union official told the media: “We do not view our agricultural producers just as another business. We view them as not only producers of food, but also custodians of the environment of our countryside.” We do not expect to be funded in a manner that benefits a European farmer, but do we just let our producers of crops in the prairies fail, when it is not of their doing to find themselves in the present situation? When the cost of production overtakes the price received for that commodity, how can any business carry on?

I had the privilege of being a member of the board of the Canada-Saskatchewan Agri-Food Innovation Fund. Its purpose is to foster development in the agricultural sector in areas where it is viewed to have a possibility to diversify, thus making producers less reliant on commodities that have a wide variation in price realized. In order to take advantage of new developments arising from these programs, rural Saskatchewan needs people. We need to retain the younger, more widely educated generation, who are the most highly leveraged and therefore the most vulnerable. The movement of our young people from primary agriculture has begun. We're entering a threshold of innovation in agriculture but losing the very people who are needed to build the industry in our area. Can we let this happen? What is the solution?

It is very difficult for an individual producer to say exactly what must be done to solve the problem we have. As individuals, we do not have the resources to delve into the study needed to develop successful programs. We can only hope that government maintains close contact with a wide range of active producers and farm organizations to promote a two-way flow of information in the formulation process. Programs need to be responsive to disasters such as we have had in southeast Saskatchewan and southwest Manitoba. Emergency financial assistance of $1.3 billion is necessary for Saskatchewan and Manitoba under the circumstances. Crop insurance requires improvement. Above all, the support program that we counted on to deliver assistance is needed for the long term.

I would like to speak about the third sheet that you have from my file. This is crop production costs in the black soil zone of Saskatchewan. This document is from Saskatchewan Agriculture and Food for 1999. I have abbreviated it a certain amount. It is for conventional seeded crops. Many people are direct-seeding and so on, which is not very different from this, and this does give one a perspective. If you look at the lower end of the page, it gives the break-even price per bushel or per pound. In the case of lentils and canary seed, it is per pound. The rest are per bushel.

For example, for spring wheat the cash costs or variable expenses are $2.44 a bushel. To cover total expenses, it's $5.50 a bushel. Yesterday in Carievale, our local elevator, in the pit, number one Canadian western red spring wheat was $2.36. That's number one, protein up to 12%. To go to the highest protein level, 15% protein, add $1.10. Canadian prairie spring wheat is $2. It costs $4.41 in total cost to produce. In the case of feed barley, we are looking at $1.50 today.

The prices that I give of the crops, other than the Wheat Board prices, are prices taken from the data transmission network stat publishing, so from various grain organizations I have taken an average.

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To get back to the barley, as I mentioned, it's $1.50. Feed barley costs $3.06 to produce in terms of the total cost.

In the case of oats, it's $1. Many of the oats that are produced in southeast Saskatchewan and southwest Manitoba this year are white. Therefore, one can only expect 80¢, or perhaps they don't want to take them at all. It costs $1.05 cash cost to produce, and $2.60 if one takes in all the costs involved.

In the case of lentils, which is the only bright spot, at 20¢ a pound, the total cost, the expenses, to produce lentils is 20¢. It's even. We're not talking about a profit; we're just even. And the reason the price of lentils is good is simply because the crop of lentils in western Canada this year was not up to par. As a result, we have a higher price for lentils. In our case, we couldn't even plant lentils because it was so wet. As I mentioned earlier, lentils do not do well with wet feet.

In the case of feed peas, it's $3.85 of what the price is now; it costs $7.21 to produce them, total cost.

Flax is $5. The total cost to produce is $8.75.

Canola, which has been the saviour of farmers in western Canada with the low cereal prices of the last few years, has also hit the deck. It's $5.50 now for canola, roughly in that range; and it costs $9.21 to produce.

As I mentioned earlier, as a Canadian I'm very disillusioned, because we, as agricultural producers, have been trying over the last year to point out the problems we have in agriculture here, and to be very frank, we feel very much ignored in our situation. Something needs to be done in order to keep the western farmer solvent.

In our yard we have a flagpole. That flagpole is now empty. It was the situation that we had a flag there for 30 years. My wife and I were married 30 years ago. She became a new Canadian citizen at that time. I watched a TV show that had taken place with the CBC agricultural forum at Carlyle, Saskatchewan. This was back a few weeks ago. The young man got up and spoke and said “We had a flag flying in our yard as long as I can remember, and we have since taken that down because we don't feel as Canadians in the situation.” I confess I didn't think about our flag, because it's been a fixture of our farm for 30 years. But it has been taken down.

Thank you, Mr. Chairman.

Voices: Hear, hear!

The Chair: Thank you, Mr. Berry.

Now we welcome Tom Cameron.

Mr. Tom Cameron (Individual Presentation): Thank you, Mr. Harvard, and the other members of the agriculture committee. I'm very pleased to have the opportunity to speak here today.

In 1986 I returned to the family farm from Flin Flon, Manitoba, and people asked me at the time, “Why would you want to go to farming from teaching? You're going to be getting a good pension.” I think I'd have a different answer now from what I might have had back then.

Most years the farm has paid for itself as well as giving a fair return on investment. To supplement my income I've continued substitute teaching in some form.

The year 1999 began with price forecasts showing a decline in almost all crops. Then came May 3 and the rain that never stopped. I did seed 83 acres out of a planned 340 acres. Many of the neighbours couldn't seed at all. The crops that were sown were seeded late and in the mud. Harvest was late. There was a lot of frost damage. My 83 acres of wheat yielded 1,251 bushels. Delivered straight to the terminal it was worth $2,824 net. It would not pay for the chemical fertilizer and fuel I spent putting in the crop. Like others in the flooded area, I will have no crop income for almost a year. It was a wonderful year to put a crop in.

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The flooding disaster of 1999 was a “once in a hundred years” occurrence. It may not have been as dramatic or life-threatening as the Quebec-Ontario ice storm or the Red River flood, but it was a disaster with long-lasting consequences. There are salinity problems, and the weed bank has been built up.

Every family was and is under a great deal of stress. The July visits by Ms. McDonough, Mr. Clark, and Mr. Manning throughout the southeast area did lift our spirits and hope that we would receive recognition as a disaster area. I'd also acknowledge that Mr. Vanclief came to Carlyle, and I appreciate that. He met with some of the local leaders. But it would have also meant a lot to have our Prime Minister say even just a kind word or provide some acknowledgement of the reality of our situation.

The area did receive up to $50 per unseeded acre. Unfortunately, by the time the deductions were made, it was much less. Some may have received as little as $10 per acre. No one was able to receive the reported $50. I understand that for 2000, the $50 per unseeded acre may become part of the crop insurance. If that had been in place by June 1 of this year, it would have been nice. We could have made a rational choice about continuing to seed. We had no idea what to do. People were going without sleep just in terms of trying every means possible to put a crop in, and nothing was going on.

One thing I meant to put in here was that the average received per acre out of the $50 was probably $25 to $27. That's what the farmer would have received.

In the area, 40% of the acres are not in crop insurance. There are a lot of valid reasons for that. We've been told we must be in existing programs if we wish to receive additional help. I agree, but don't force me into a poor-quality program.

Any assistance that we have received was spent on trying to control the weeds. I know the Rural Disaster Recovery Coalition has been working hard on behalf of both southwestern Manitoba and southeastern Saskatchewan. I support and extend my personal thanks to them.

That's enough about us locally.

Commodity prices have been on the skids and don't seem to have an upside. When we are taking a look at what we should grow in the spring, the best thing might be another crop of weeds. I don't know. Wheat, oats, barley...everything's been dropping. As farmers, we all know the European and the American subsidies are the main culprits. Living right along the border gives us a personal insight. A few American farmers who farmed on both sides of the border have up and quit farming. They've just given the land back. They don't want to rent it any more, so they've gone. They're going back because they don't want to use their American income to subsidize their Canadian operations. The Canadian operations just don't pay.

I watched the progress at the WTO in Seattle. Mr. Vanclief and others were successful in having agriculture at least in the final statement, but it will be years before that impacts on the prices. What happens to the Canadian agriculture industry in the meantime? I can't believe Canadians are willing to see agriculture collapse, or that Canada as a nation would be better off without the industry.

I know you've heard and will hear others talk about safety net programs. From a personal point of view, NISA will provide some help this year. I should be receiving a small cheque from crop insurance for my yield and quality loss. AIDA, for all of its flaws, will hopefully help me, based on the 1999 year. Most people will figure that because they didn't have a crop they must be getting something from the disaster program. Many of the farmers in this area are counting on the AIDA cheque to seed next year's crop and to survive until the fall of 2000, but we're also looking for something from the government for this winter.

Mr. Vanclief agrees with all prairie farmers that AIDA is not a very satisfactory program. It has too many cracks for producers to fall through. The most glaring case is that of northwestern Saskatchewan. Three years of drought followed by the 1998 drought was a disaster, but they didn't receive any AIDA money. However, an area that had three bumper crops at reasonable prices, followed by an average crop, would have received a big payout. It really doesn't seem fair.

There are producers who will be missed because they have a 1999 year-end that falls in 2000. This means some farmers in the southeast will receive no help from AIDA for the major disaster year.

AIDA discriminates against those who diversify. Any new crop requires modern technology and expensive specialized equipment for that crop. The costs of those expenses cannot be included under the AIDA. If you want to diversify, it costs you more to do that, but you can't include it.

The province will lose many farmers this year. A real exodus will begin if we do not have a long-term program in place soon. Young farmers used to have an off-farm job for their first four or five years, until they could get established. Now they look around and see that their parents and the other 50-year-old neighbours still have to have that off-farm job. This isn't the future they want. The good quality of life that farming used to provide is no longer there. Farmers both young and old are losing hope for the future.

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I had one grain ticket that grossed $1,434 for 480 bushels of number one hard red wheat. I netted $901.91. I paid part of that, $277.73, for freight. I really wouldn't mind if you would ask the transportation minister to ask the railways to pass some of their cost savings on to me.

There's also a Canadian grain growers' fee of $4.39, another cost that the government used to pay in the name of the common good.

In summary, a disaster should be treated as a disaster. We need an updated national disaster act. It has to be flexible enough to cover a variety of occurrences. I really don't want to see any other part of the country have to go through what we went through this year, with the uncertainty and the unknown.

Take a look at the concerns of the Rural Disaster Recovery Coalition with a good heart.

Emergency financial assistance is needed for Manitoba and Saskatchewan farmers. An amount of $1.3 billion will at least help farmers get through the winter, and may give us time to have a look at our options for next year. Should it be targeted or a blanket? I don't really care. It just has to be soon, or it's going to be too late for some.

We also would like you to take a look at recognizing that crop insurance needs some review. I would certainly be prepared to pay a little bit higher premiums for a more appropriate, more suitable program.

AIDA must have fewer cracks or wider boards for its final year.

A third leg of the safety net is necessary, and is probably the most important thing. Perhaps to avoid another AIDA situation, input could be received from farm focus groups and/or farm accountants next time. I know Mr. Wiens is coming later on and that you hear other people, but it may be an idea to run some of the programs by actual farmers or accountants just to see how they're going to work.

A national agriculture policy speaks for itself.

I recently phoned Dennis Mills, a Toronto member of Parliament for the Liberal Party, because I'd heard that he's organizing a farm aid educational day in the Air Canada Centre. I told him that I'm a farmer from western Canada who wanted to compliment the Liberals. I wanted him to know that Saskatchewan farmers appreciate his efforts. He asked me to remind the agriculture committee that it's certainly non-partisan, and he would welcome any input from all the parties to lend a hand.

I sincerely appreciate the committee coming to Estevan to listen to our concerns. Thank you.

Voices: Hear, hear!

The Chair: Mr. Ed Keyowski.

Mr. Ed Keyowski (Individual Presentation): Thank you, and welcome.

Good afternoon, gentlemen. My name is Ed Keyowski, and I farm in the Hamton area, which is located in east-central Saskatchewan, about 18 miles northeast of Yorkton. I've just finished my 28th year in the agriculture business, strictly related to dry-land grain farming. At this time, I own 1,220 acres and lease 630 on a cash-and-share basis. I also custom-farm an additional 1,250 acres.

My wife of 27 years, Deb, is in her 29th year as a customer service representative for SaskTel in Yorkton. We have two children: Dana, who's in her third year of studies at the University of Saskatoon, enrolled in the College of Commerce; and my son Garrett, who is a 1999 grade 12 graduate and would like to pursue a career in farming. As for myself, I'm a draftsman by trade. I worked at Morris Rod Weeder, in Yorkton, Saskatchewan, for eight and a half years, until the workload on the farm became too much to do both.

We started our farm business from the bottom and worked our way up with great hope, and a lot of fun and hard work, planning with great expectations for the future. We are proud to say we had purchased at least one piece of new farm equipment every year since 1985, until 1997. The first real blow to our farming business came in 1992, when our provincial government made the big change to our GRIP plan. The only items that stayed the same on the two different contracts were our signatures, which I think is a real crime. A big injustice was done to Saskatchewan farmers and probably to every taxpayer in the province.

In 1996 we had the removal of the Crow rate. Yes, we did get some money from the federal government, but it was taken back with large increases in freight rates. But I would add that this was done at a good time, because grain prices were starting to climb, so the additional freight rates we were paying didn't seem too bad at the time. But in the following years commodity prices plummeted, and freight rates rose, taking at times 30% to 35% off the top of the farmer's cheque. Where did the federal government put this money? Saskatchewan farmers pay $350 million to $650 million in freight. This money goes out of the province each year.

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In 1998, with low commodity prices and high input costs—fertilizers, chemicals, fuel, repair costs, and added taxes or increases to existing taxes—we had to reconsider our plans for 1998. Firstly, we gave up some rented land. Then we decided to cancel the purchase of a high-clearance sprayer. Weather played a big role in farm income loss in 1998 in our area. In the winter of 1997-98 we had little snow, so there was little spring moisture. Seeding started in mid-April. Our area's average time is May 5 to May 7. Crop emergence was below average. On May 26 to June 5 we had three heavy frosts, followed by dry weather. Spring was delayed because of crop stress. Middle June brought us 16.5 inches of rain in ten days, flooding crops in low-lying areas. On our farm we lost 32% to 35% of seeded acres and crop quality was down.

In 1999 no thought was even given to purchasing of new equipment or land. Also in 1999, seeding did not commence until May 25, due to cold, wet weather. With good weather in June and July, crops did advance almost to normal. As harvest came, the weather again turned wet and cold, thus resulting in poor quality, tough and damp grain and pushing harvest into late October and November.

Thousands of acres still remain unharvested in our area. Grain prices at this point are at an all-time low and the movement of grain from country elevators is at a snail's pace, therefore leaving farmers with little or no money at all.

Every year from 1985 to 1998 we on our farm purchased our next year's fertilizer and some of our chemicals for the following year. As of today, we are not purchasing any inputs this year for the following year, as there is no extra money. We went out this year and did some custom work, as neighbours with breakdowns and costly repairs to equipment were unable to pay for these repairs or replace equipment.

With the talk last winter of farm aid came the AIDA program, which I might say put some hope into a lot of farmers' minds. As the forms came in we could see that the AIDA program was no more than window dressing and made good newspaper headlines. This program did little for some farmers and did nothing at all for most. Personally, I would like to see a breakdown of this program in administration costs, advertising costs, meeting travelling costs, and actual money paid to producers.

In reference to the AIDA program, my reference margin for 1995, 1996, and 1997 was at $98,000. My 1998 program margin was at $63,200. You don't need a calculator to see that there was a 34% drop. Yet I got nothing. My total farm income for that year of 1998 was $315,000. My income for this year of 1999 stands right now at $221,000, a $95,000 drop again from last year.

The farm crisis is real, and a lot of farm families have broken up. Stress levels are running at a maximum. Some farmers in our area have chosen to take the easy way out and have taken their own lives. Our country of Canada has money for foreign aid and third world countries. Let's have a serious look at the farm crisis, gentlemen, and think about it when you sit down for your next meal, and realize that no matter what you're eating, it was produced by a farmer.

In closing, if the farm income crisis is not addressed, and done so soon, next year could be my last year in the farming business, putting 29 years of my life's work at producing cheap food, not only for our country but for the world, to an end.

For myself, as with Mr. Berry, for the last 22 years the Canadian flag flew high and proudly off my farm workshop near Hamton, Saskatchewan. This fall, after listening to all the broken promises from all levels of government, the Canadian Maple Leaf flag flies no longer in my yard.

Thank you, gentlemen.

Voices: Hear, hear!

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The Chair: Thank you, Mr. Keyowski.

Now we'll go to Ray Walton. Welcome, Mr. Walton.

Mr. Ray Walton (Individual Presentation): Mr. Chairman and committee members, I live in Estevan, Saskatchewan. We farm in about five different RMs, but our base is at Stoughton, Saskatchewan. So when I read this report, you can understand the magnitude of the problem, because it covers many RMs.

I was pleased to be asked to speak to the committee. There is no doubt that we have a cashflow problem in Saskatchewan agriculture, especially in the grain sector. AIDA and NISA have not seemed to help enough farmers.

My understanding of this meeting is that we know the problem, and we are looking for some sort of solution. In talking to other farmers in the community, I have come to the opinion that the problem should be approached in two ways: for short-term cashflow problems, funds needed immediately; and a longer-term agricultural policy to prevent this from happening again.

In the short term, farmers I have talked to seem to favour an acreage payment. They need to get help with operating money for the upcoming year. Most farmers have an operating loan from the current crop year or bills to be paid in the community.

In this area, three things have happened: the crop was not as good as it could have been; grain prices were low; and it was too wet and not enough acres were seeded.

To give you some idea, on our farm we would have seeded 5,700 acres. We ended up seeding about 2,600 acres, or 45%. After the crop insurance payment, the federal government payment, and harvesting the crop, we will lose between $15 and $20 per acre, or around $100,000 this year. As you can see, this cannot continue for a long period of time.

To find a solution, I think we have to look in a few areas: crop insurance; continuous seeding farming; amount of coverage; a guaranteed price per bushel, no less than the cost of production; freight rates; how trucking could be better utilized; input costs—fuel, fertilizer, chemical, and labour; obviously, world subsidies; the role of the western Canadian Wheat Board; cash advances; and dual marketing.

The governments of the day, federal and provincial, should revisit AIDA and NISA. Both programs may need to be replaced by one program combined with crop insurance to arrive at a guaranteed income for farmers, so much an acre or so much a bushel. Of course, farmers would have to participate. These premiums could be cash payments or a percentage taken at the time of delivery. To work, in my opinion, it would have to be on all sales of grain, no matter what kind. This should not be considered a subsidy but an insurance plan. I also think premiums should be based on grain sales, so it would fit all farms no matter what size they were. If there was no crop, farmers would have a revamped crop insurance program to fall back on, as it would be part of the guaranteed income program.

I'm sure other people have thought of all kinds of programs that would work. This is only a thought. I hope it can help us find a long-term solution to the financial problems in agriculture. But the bottom line is, short term, farmers need a cash payment now.

Thank you.

The Chair: Thank you, Mr. Walton.

It's time for questions. First of all, let me allow my colleagues to introduce themselves, starting with Mr. Calder.

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

Gentlemen, I'm a farmer from central Ontario, and I've had the experience of weathering our farm crisis in the middle 1980s. I have a very good idea of what you're going through, because I've already gone through it and survived it. We have a poultry operation.

The Chair: Larry.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): I'm Larry McCormick, a member of Parliament in eastern Ontario and also the chair of the government rural caucus from across the country.

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Mr. Joe McGuire (Egmont, Lib.): I'm Joe McGuire, parliamentary secretary and member of Parliament for Egmont, Prince Edward Island.

Mr. Garry Breitkreuz (Yorkton—Melville, Ref.): I'm Garry Breitkreuz, the member of Parliament for north of here, Yorkton—Melville, and I'm on the agriculture committee as the official opposition.

Mr. Dick Proctor (Palliser, NDP): I'm Dick Proctor, member of Parliament for Palliser, a corner of Regina and all of Moose Jaw, and I'm the NDP agriculture critic.

Mr. Rick Borotsik: I'm Rick Borotsik, agriculture critic for the Progressive Conservative Party and representing Brandon—Souris of southwestern Manitoba. I'm very understanding of the problems that are also faced here in the southeastern Saskatchewan corner.

The Chair: I'm John Harvard, the chairman, and I'm from the city of Winnipeg.

Now we'll start questions with Mr. Breitkreuz.

Mr. Garry Breitkreuz: Thank you very much, Mr. Chairman.

Thank you all, gentlemen, for coming.

And I'd like to express my appreciation to all those present in the room for coming here today. This is a tremendous support for the issue we are trying to battle and wrestle with in the House of Commons, and I'd like to thank you all very much for coming.

I'd also like to welcome this committee to my home province, a province I'm very proud of.

I really believe the crisis has been understated. I live on a farm near Springside, north of here, and I was shocked by the changes that have taken place in the last couple of weeks. Young farmers who have been renting maybe half of their land have given it up. They find it totally unprofitable. Many people in the area are unable to find anyone to rent their land.

This is a big turnaround from last year or anything I've experienced previously. My own brother is seriously looking at cashing it in. I never thought that would ever happen. So it's hitting very close.

One of the problems we have is communicating with the big cities the extent of our problem and how important agriculture is to everybody in Canada.

I made a speech a couple of weeks ago in the House of Commons, and as one of you mentioned, Dennis Mills responded to that speech and on the spot said he was going to do something in Toronto. This is a non-partisan issue. This is not something where politics should enter in. I appreciate very much and I commend him for what he is doing, and I do so publicly.

What can we do to get the message through? What can be done? There has to be tremendous support on the part of all Canadians.

I was at a meeting in Whitewood last Friday. Two of you mentioned you're not flying the flag any more. The “s” word was brought up, and probably 80% of the people there said, why do we continue along this way? Even our own premier has said on CBC, the federation isn't working.

How can we get the attention of Canadians? If the thinking has come to that extent and is that extreme, surely there must be some solutions here. I would welcome comments on that.

Mr. Leroy Berry: What would help immensely is if the leader of our nation would recognize that we have a problem. As I mentioned in my brief, when one looks south of the border and sees the attitude of President Clinton or Secretary Glickman.... There was an American agricultural writer at the writers' convention in Winnipeg back a while ago, and he made the comment that if the Secretary of Agriculture in the U.S. had treated farmers with disregard, as does our agricultural official in Canada, that man would be fired.

It starts at the top. If the Prime Minister and the upper officials of our government in Ottawa.... If it came to the fore that this is a situation that has to be dealt with, then this would trickle down.

What has made me so angry.... I was out fixing a fence on the day the group, the premiers of Saskatchewan and Manitoba, went to Ontario, went to Ottawa. I had the truck radio turned on so that I could hear what was going on, and I heard the response of the group going to Ottawa. I really think this was very callous treatment.

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Had there been sympathy with the situation, had there been a situation where other Canadians, someone living in the city of Toronto, had heard that the Prime Minister says we do have a problem, we have an extreme problem out there in the west.... How else can an urban dweller think, if our highest officials disregard the problem and say, “I don't think it's as bad as perhaps you think it is; it's improving out there”? How can you honestly expect the urban dweller to accept it when we say we have a problem and yet it is not acknowledged elsewhere?

Mr. Garry Breitkreuz: Would anybody else care to comment on that, or maybe give us some suggestions of what we can do to assist in the short run?

Mr. Ray Walton: I personally favour some sort of acreage payment. I realize this isn't a long-term solution, but we have to help people put the crop in next year, including me. There would be some relief there through some type of acreage payment. It would be the simplest to administer. Most people fill out a permit book, so the acres could be taken from there.

However, this is not the solution to our problem. This is only fixing it for maybe next year. If we don't have a long-term solution, agriculture is in very serious trouble, in Saskatchewan anyhow, and it sounds like Manitoba too.

Mr. Ed Keyowski: My question would be, is the federal government looking at maintaining this AIDA program? The rumour is they're dumping it. Is that it? Or are you guys going to refine it?

Mr. Garry Breitkreuz: You're asking us, and I can't answer for the government. Would you like to see—

The Chair: That was only for two years, Mr. Keyowski. It was for 1998-99, so it goes with the end of those two years. If there's something else, there will be something else. My guess is it won't be called AIDA.

Voices: Oh, oh!

Mr. Garry Breitkreuz: What suggestion would you have?

Mr. Ed Keyowski: There are some big problems in there. We sat down and went through them, and especially pertaining to the Canadian Wheat Board payments and deferrals of grains, that would make big differences in money to the farmers and would really show what the true farm income is, not an inflated one, as this AIDA program does.

The Chair: Thank you.

Just before I go to Mr. Calder, can I ask you something, Mr. Walton? You mentioned that you favour acreage payments. I don't know whether acreage payments would fly under WTO or not, but let's assume they would. Do you think acreage payments would be fair, given the fact that they would be given to all farmers, regardless of financial circumstance?

Mr. Ray Walton: Yes. That doesn't bother me at all, actually, because if our system were working, anybody who really didn't need them or deserve them should have to pay income tax at some point in time, so the government would get a portion of that money back anyhow. So I'm not concerned. I never worry about the person who may not need them; I guess I'm worrying about the people in my community and me.

The Chair: Except some people might say that if you do it that way, when you have more farmers involved in getting the money, there is less for each individual farmer, especially for the needy.

Mr. Ray Walton: Well, that's probably a good point, but I could name for five minutes different programs we've had. With a stopgap program such as an acreage payment, I don't think we can get picky and worry about who gets it. Just pick a number and pay everybody, and there will be no arguing.

The Chair: Thank you.

Mr. Calder.

Mr. Murray Calder: Thank you very much, Mr. Chairman.

As I said, in the mid-1980s, I was sitting where you were sitting and talking to government officials of the day back then.

What I've tried to do here is put down in point form exactly what I've heard in the last couple of days, and this is what I've heard. I'll ask for any of your comments after this.

Bring back the GRIP program. There should be a set-aside program, where we look at taking out of production around 20% of the land that is now in production. We need a short-term fix, which can range anywhere from $20 to $30 an acre in support. Strengthen NISA and make it more accessible, because it's hard to trigger and 30% off the top is taxed. It needs to address the low-income, low-equity young farmers. The crop insurance program needs to be enhanced. We need long-term agricultural support, which is basically what we'll be recommending after AIDA is done, and we will probably call it anything else but AIDA. That needs to address also young start-up farmers with low equity.

• 1610

Finally, this is something for Rick, my colleague across the road. I heard mention of an agricultural disaster program that recognizes flooded land maintenance.

Those are the points I have heard so far. I'd like your comments.

The Chair: Ed, do you want to start?

Mr. Ed Keyowski: Yes, thanks.

I would like to see the GRIP program come back as long as you wouldn't allow the provincial government to do anything with it.

Voices: Hear, hear!

Mr. Murray Calder: Okay, but you have to understand how this works. We have researchers here, and it's our job as a committee to dig out this information for them. That's what they want to hear.

Keep on going.

Mr. Tom Cameron: In response to another idea there, the set-aside program, this is something we talked about as well. We talked about it with some of Mr. Vanclief's department.

If you're going to have a set-aside program as opposed to a permanent cover program, there needs to be some money put into it to establish the program. It has to be for marginal land, and you have to have a yearly payment that will make it worthwhile leaving that in there.

I don't think it would be a positive thing to see the 200,000 or 300,000 acres of marginal land go into the hay and livestock and pasture industry within two years. I think we would probably end up destroying the livestock industry, and then we wouldn't have anything left out here.

If you want to bring that land back into the cattle industry, have a slow release over a number of years, where you're paid this much and then after five years you have to release some of it back into the livestock industry. That way it won't have a sharp impact and it won't destroy the cattle industry. That's just one of the ideas.

NISA really came home to my wife and I this year. I probably shouldn't say this, because I see the income tax people have told one young lady that she is no longer anything but a hobby farmer while her husband is a bona fide farmer. They have half the farm. My wife and I are the same way. We'll maybe have to change that now.

At any rate, she triggered NISA under the revised rules this year. We have identical things to the penny. I wasn't eligible because of the second trigger. I have other income.

I mean, I understand why they have that, but it was just a rude awakening for me at the time.

Thank you.

The Chair: Leroy.

Mr. Leroy Berry: I would just like to ask a question. I have talked to advisory people within Agriculture Canada and so on with regard to programs. They tell me that there was a program developed but not implemented following the demise of the GRIP program. That was a grains sector program, as I understand it. Under that plan, it would have paid up to 95% of the average of the five years previous.

I'm wondering why this was abandoned.

Mr. Murray Calder: I was not in the government of the day, and I don't have an answer for you, but we'll get one.

The Chair: We'll see if we can get an answer shortly.

Do you want to say something, Ray? We have one more minute for this segment.

Mr. Ray Walton: I agree that some type of income stabilization program has to include crop insurance. We can't leave crop insurance out.

The fact that we were continuous-cropping—well, we were, but we got a lot of summer fallow we didn't plan on—was, except for the hail coverage, the only reason we stayed in crop insurance, to be honest with you. In our area, we have fairly high hail rates, and we could never get enough coverage.

That program isn't beneficial to a whole lot of people. If you have three or four disasters in a row, for instance, crop insurance doesn't work. So crop insurance should be incorporated into an income stabilization program.

The Chair: You mentioned in your remarks that you would like to have crop insurance to the extent that it would cover the cost of production, right?

Mr. Ray Walton: What I meant there was that with crop insurance, when they figure out what your guarantee is for each year, they take your acreage guarantee and tell you what a bushel of wheat is worth, for instance. That price should reflect the cost of production, not the selling price. That's what I'm saying.

The Chair: I'm just wondering whether that would be quite expensive.

• 1615

Mr. Ray Walton: It probably would be quite expensive, but it was just a thought on how we can get this program to work again.

The Chair: Hey, we like thoughts—expensive, you name it.

Dick.

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

Welcome, everybody, and thank you for your presentations.

I wanted to come back to the acreage payment in conjunction with the set-aside program. Let me just elaborate for a few seconds.

A few of us were talking about this in Brandon after the meeting. Someone who knows more about these things than I do said that in other countries where you have an acreage-based payment, you always find in the years following its introduction that the number of cultivated acres goes up. It has worked successfully, however, in conjunction with a set-aside program, where you would set aside a certain number of acres to avoid those numbers of cultivated acres rising.

My question, then, is along those lines. If we could have an acreage-based payment and not contravene any of our international trading obligations, should we do it in conjunction with a set-aside program?

Tom, you were talking about it earlier.

Mr. Tom Cameron: I never thought of it in terms of putting the two together. It may well have some merit. I was looking at the marginal land that really shouldn't be in production anyway, because you have no hope of getting anything out of it. You just keep on ploughing it year after year. I have 80 acres that should have been back in hay long ago. It's just that you always hope that this year you're going to make a fair bit on it. You don't.

An acreage-based payment as part of a set-aside program could be part of the solution, I would think. It maybe would respond to more than one concern. I know everybody has a little bit of wasteland or land that maybe shouldn't be in production, but across the whole province I'm not sure how that would work.

Mr. Dick Proctor: Does anybody else have a thought on this?

Mr. Ed Keyowski: In terms of a set-aside program, what period of time would that be for? For instance, would summer fallow be classified as that, on a continuous-cropping basis?

Mr. Dick Proctor: There would be a certain number of acres that you would agree—

Mr. Ed Keyowski: So percentage-wise.

Mr. Dick Proctor: Yes.

Mr. Ed Keyowski: They wouldn't have to be set aside for three to five years or whatever or put into hay but be, let's say, taken just out of production.

Mr. Dick Proctor: Right.

Mr. Ed Keyowski: I think that would probably be the answer.

Mr. Dick Proctor: I noticed coming out of Ottawa yesterday that someone, an unnamed official, said it would be hypocritical now on the part of the federal government to introduce subsidies or support payments in the wake of the failure of Seattle. In other words, having gone to Seattle to argue against subsidies and to encourage the elimination of them, even though we've seen an almost unmitigated disaster in Seattle, it would be wrong and hypocritical on the part of the Government of Canada to turn around and introduce subsidies. This was in today's news.

Mr. Rick Borotsik: Who was that?

Mr. Dick Proctor: Unnamed.

Mr. Rick Borotsik: A bureaucrat.

Mr. Dick Proctor: Yes.

To the farmers present, any comments—printable, I mean?

Voices: Oh, oh!

Mr. Tom Cameron: Probably that would be an excellent idea. I can certainly see that working. If we're going to do that, let's take all the fences out and give 'er back to the buffalo. We could all farm buffalo and just have open range.

The Chair: Mr. Berry.

Mr. Leroy Berry: We're talking about the WTO and so on?

Mr. Dick Proctor: Yes.

Mr. Leroy Berry: The Europeans are not going to change. I can't believe they will. People who have travelled in Switzerland and France and so on see the farmer out there working, tilling his soil and so on. People don't want that to change. Support for their agriculture is certainly not going to be any different in the future and so on.

We know that agriculture is cyclical. It changes so quickly, next summer we could have a drought anywhere in the world. If it happened to be in the U.S., which is the largest producer, it would change the whole scenario. What is necessary, from my point of view, is effective programs.

I also have been able to talk to people involved in the AIDA program, and they have told me that if incorporation had been made of certain points, this would have been a very effective program. But the points they brought forward were overruled.

• 1620

I think we have to have programs that will take effect. As we mentioned about southeast Saskatchewan and southwest Manitoba, when is this going to happen again? Maybe it will never happen again in our area, but programs need to be in place to trigger, to help people through.

The Chair: Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

I echo the rest of my colleagues' sentiments to thank each and every one of you for being here. I know it's certainly an eye-opener for a lot of other members who don't live this every day of their working lives. So I thank you for being here.

Murray had mentioned a number of points that we gleaned from the meetings thus far. I would put mine down a bit and say a long-term disaster program that's consistent, that's going to treat everybody equally, whether it be ice storms, floods in the Red River Valley, or the excess moisture we had in southwestern Manitoba and southeastern Saskatchewan. That's something that has to be developed, because we've seen it. Those things have happened in the past, and I anticipate they're going to happen again—I hope not in this area, Leroy, but I think that's one of the things we have to look at.

Short term, we need immediate supports for agriculture in general with respect to the commodity crisis. Long term, absolutely, we have to develop something that's outside of AIDA and certainly a hell of a lot better.

There is one thing he missed, which I want to talk about and I want your views on it.

Mr. Murray Calder: I missed something?

Mr. Rick Borotsik: Well, you did, and you missed it this morning when I mentioned it too.

It's a long-term agricultural philosophy that's embraced by the government, saying where the hell do we want agriculture to go in the next 10, 15, 20, 25 or 30 years? We don't have that, as far as I can see, in this particular government—and that's not a shot. The Europeans have it.

And, Leroy, you're right. I sat with European parliamentarians, as did the chairman of this committee, and they're not changing their philosophy. They're going to continue to support their farmers to keep them in their villages, and they're going to do it come hell or high water. So we recognize that we have to do something in order to compete with that.

I want to hear what your views are on a long-term agriculture policy. You've touched on it a number of times in your own presentations. The first thing we do is recognize the importance of agriculture to us as a Canadian society, but how do we do that? Do we compete with the Europeans? Is that what we're saying? Do we in fact have some sort of a guaranteed income for agriculture? Do we look at the multi-functionality they talk about, where in fact environmental issues are important in agriculture? Endangered species issues obviously are something society has to pay for, with agriculture.

What's your vision of a long-term agricultural philosophy that we should be working on right now? Please help me with this one. You've talked about policy, and I'd like to have your views.

The Chair: Go ahead.

Mr. Tom Cameron: In deference to Mr. Calder, I don't think this government is the first one that has lacked a national agriculture policy. I think it goes back to other governments as well. I can't remember when we've ever had a real agriculture policy.

Yes, we need one, and it needs to be one that's developed not only with the government in power, but with the assistance of the opposition parties and recognizing that there are problems all across Canada. Whether it's potatoes in Prince Edward Island, the orchard industry in B.C., or corn producers in Ontario, there are problems all the way across. A lot of ad hoc programs have been developed over the years. Maybe don't tell the other bureaucrats, but once bureaucrats get a program going someplace, they like to keep it going, and it's hard to kill a program when it's served its effectiveness.

Mr. Rick Borotsik: One of the things we want as Canadians is a cheap food policy, or at least that's what we have in place right now. How do you feel about that issue? Should we continue with a cheap food policy? Should more of the dollars that are being generated in the foods at the grocery store be generated back to the farm gate? Is that an area we should be dealing with?

Mr. Ed Keyowski: Are you talking about a two-price system?

Mr. Rick Borotsik: I'm talking about a cheap food policy that our society in Canada, particularly in the urban centres, has embraced. One of the guys this morning said maybe we should have a tax on food that should be directly related to the farm gate where the food is produced. Would you consider something like that?

Mr. Ed Keyowski: Personally, I hate like heck when somebody suggests another tax.

Mr. Rick Borotsik: I know. Exactly.

Mr. Ed Keyowski: But when we look at it here, I don't mind selling my malt barley for $1.70 for a guy in Korea so he can have a beer once a week too; he's making 50¢ a day or whatever. When the guy who is driving the CN train to Vancouver hauling my malt barley down there is getting $32 an hour and still buying my malt barley for $1.50 a bushel....

• 1625

Mr. Rick Borotsik: I have one more question, Mr. Chairman.

Of the four producers here right now, how many of you have applied for AIDA? Three of you have.

How many of you have received AIDA? Two of you have. Okay, that's not bad. That's better than the average has been.

The Chair: What happened to you, Ray?

Mr. Ray Walton: They just didn't like me.

Mr. Rick Borotsik: How many of you have triggered NISA?

Mr. Tom Cameron: I've triggered under the new changes.

Mr. Rick Borotsik: Ray, you didn't either?

Mr. Ray Walton: My wife did.

The Chair: Did you not only trigger, but did you actually withdraw it?

Mr. Tom Cameron: I withdrew it.

Mr. Rick Borotsik: One of the comments that has been made quite often is that there's $2 billion sitting there in NISA accounts. That's a bit of a misnomer, quite frankly, because a lot of the people have drawn down a lot of their NISA accounts right now.

By the way, I don't want to scare the hell out of you, but I don't anticipate any real major changes in commodity prices for next year. I'm sure you're smart enough to recognize that too.

If we run into a situation in the year 2000 similar to what we have now, without the natural disaster, will you have enough in your NISA to be able to trigger it or draw it down?

Mr. Ed Keyowski: On this trigger deal, in my account, with some $50,000 sitting there that's after-tax dollars, when I tried to get that out I was told I was allowed to take $10,000 but it was at the federal amount. I said I'll leave that there, because I can't afford to pay taxes on it anyway. Mind you, I guess I don't have to worry about income tax.

I couldn't touch my money that was in a bank. Why can't we do that? That money's sitting there. Like you say, every day we read in the paper that there's all these millions of dollars, that we're not taking it, that we don't have a problem. I say I want that money.

The Chair: Thank you.

Larry, we have time for one question from you.

Mr. Larry McCormick: I want to mention a couple of things.

On that tribute in Toronto that Dennis Mills is doing, are rural caucuses supporting it? We think part of the solution here in our domestic market is the awareness. I think the theme is good, tribute to the family farm. I know it won't pour any money into this room, but I think it's one of the tools we have to use to work on that.

We have this AIDA money designated. You've had three disasters or crises—the weather, the commodity prices, and of course the well-intended program was a failure with the delivery. But we have the money now for the 1999 year, which is almost finished. We do welcome and need suggestions on how we can get it out quickly next year underneath the same umbrella.

Thank you, Mr. Chair.

The Chair: Thank you, Larry.

Thank you very much. We're going to move on to the next set of witnesses.

Mr. Rick Borotsik: I would make one comment.

Don't lose faith; it's a great country. The flag is very important. The country is an outstanding one. It has done well for us, believe me. Don't lose faith. We're there for you. What we have to do is develop the agriculture policy that's going to be there for you in the long term. Please don't lose faith.

The Chair: Thank you very much.

Now we're going to hear from Lee Stanley, Trevor Doty, Eric Wilmot, and Mark Alexander.

We'll do this alphabetically. Mark, you're up first. Then we'll go to Trevor and Lee Stanley. Eric Wilmot will speak last.

If you could keep your remarks to five or seven minutes, or something like that, we'd appreciate it.

Welcome. You may begin.

Mr. Mark Alexander (Individual Presentation): As stated, my name is Mark Alexander. I'm a 30-year-old farmer from 15 miles south of Weyburn. I have a young family: a wife, whose name is Melanie, and three children—a six-year-old daughter named Britney, a three-year-old daughter named Brooke, and a two-month-old daughter named Autumn.

I'm thankful for the opportunity to be here today, but I am not pleased for the opportunity to be here today. I just don't know how many more words have to be said, how many more words have to be wasted, how much more time and effort has to be put into this.

At 30 years of age, I can walk away from my farm tomorrow, a fourth-generation farm, but I would destroy my father and destroy what has been built there.

• 1630

I'm part of possibly one of the smallest minority groups in Canada: I am a young farmer. Until something is done, until a serious look is taken at the serious problem that is before us, I don't believe there will be anybody like myself to follow.

Last night I was chairperson of a meeting that occurred in the Weyburn Inn. At least 200 people attended. Also, with some other farmers, I was involved in a whirlwind press tour through the state of North Dakota, meeting with American farmers. The strain of all of this has been tremendous for my family. This morning when I woke my six-year-old daughter for school, she said “Daddy, do you have another meeting or something tomorrow?” I said no, that I'd be able to be home, that we could do some stuff outside. She was excited by that.

I just don't know how many more letters, faxes, and stories have to be told. In this day of information, I would guess that more information has flowed to Ottawa on this issue than on any other issue—but did they get my fax...?

Yet they refuse to be moved. I can tell right now that this government is making choices. I'm just not sure what those choices are.

I was in North Dakota meeting with farmers from Bismarck through to Jamestown and Fargo. When you hear an American farmer say the same thing you are saying...he said the only difference between us is that they have been able to get some money. He says they could not be doing it without that badly needed money. What will be done here? History will judge Canada for what happens here. He said “I can't believe you Canadian farmers. Are you guys going to just lie down and die?”

Agriculture around the world is at a crossroads. I don't think people would disagree with that. Banks are recording record profits. Multinational companies are recording record profits. Why is that? They operate in a policy environment that allows it. Farmers operate in a policy environment that allows them to go broke.

We must develop effective programs. If not, farmers are going to take it into their own hands. When the fence is broken, you don't wait for somebody else to fix the fence. You get our your fencing pliers and you do it. We don't wait for somebody else to come to our fields and do the work. Farmers are going to unite, and I believe that is true, because the consequences if they do not will be devastating to everyone.

My wife's sister lives in Georgia and we had the opportunity to go down there a couple of years ago when farming was making a little money. I toured around the Augusta, Georgia, area and visited an ADM crushing plant. It was a plant they were closing down. There was one employee left, an older gentleman, who told me that ADM had just built a new plant near the Florida-Georgia border. He told me things that made my skin crawl. He told me that ADM is buying the best prime land that they can find in America.

We are all being lowered to the lowest common denominator. They maybe don't want the Alexander farm, but they don't me farming it.

We must develop effective programs in order to maintain the rural infrastructure. Mr. Murray Calder alluded to the list of things that farmers have spoken about, the list that has come forth, the ideas that people have put forth. These are ideas that are real. We must develop programs that would involve set-aside, tied in with carbon credits.

• 1635

Our farm has been almost zero till for ten years now. A Canadian energy company just recently made a deal for carbon credits to some American farmers in the State of Iowa. I don't understand these things. I don't understand why that is allowed. We need a revenue insurance plan that is flexible and cannot affect the market. There are many plans out there, but I'm going to reaffirm that these are the plans that we must have or, as we see it, we will not exist.

That's all I have to say. Thank you.

Voices: Hear, hear!

The Chair: Now we're going to turn to another young-looking fellow, Trevor Doty.

Mr. Trevor Doty (Individual Presentation): Good afternoon.

I, along with my wife and parents, farm near Carlyle. Our farm has a historical background. It was homesteaded in 1898 by my great-grandfather, who at the time was a very successful farmer, a large farmer by that day's standards. He prospered, and in 1915 built a grand two-storey home, complete with running water and wired for electricity. The farm was later taken over by my grandfather, who also did well in the early years. However, he was forced to leave the farm in the thirties in order to find work so he could provide for his family. He later returned and enjoyed post-war prosperity in agriculture.

Later, my parents took over the reins. Their first year of farming was a disaster due to drought. However, they were able to carry on and enjoy a comfortable living on the farm. My mother never had to work off the farm. Instead, she dedicated her life to her children and to charitable organizations. Not all years were good ones. However, they were able to pull through because in the sixties and seventies the costs and financial risks were not what they are today.

In 1996 my wife and I decided we too wanted to enjoy farm life, like both our parents and grandparents did. We say with a great amount of pride that we are fourth-generation farmers living in that grand two-storey house that my great-grandfather built. We purchased some land and entered into an agreement with my parents to farm some of theirs. In total, we farm approximately 1,700 acres.

The last three crop years have not been easy. In the spring of 1997 it was dry, and by the time the rains came, many acres had such poor germination that they had to be reseeded. Approximately 500 acres were resown. The later crops did not do so well. We were able to pull through by mortgaging some of my parents' land.

And 1998 started out like 1997—dry. We were optimistic rains would come, and they did. Along with the rains came cooler temperatures and an unexpected frost in June. Once again, we were reseeding, this time 400 acres. Yields and prices were good, but the crops that were damaged by the frost were the oilseed crops, the ones that make you money. By then, the bank was taking a closer look at the farm and requiring more security on the operating loan for the following year.

The next year—this year—proved to be an extremely difficult year. We were unable to seed 600 acres due to the abundance of spring rain. We were very lucky to get in what we did. Some crops produced very well, while others were hurt by disease and too much moisture.

We've been farming three years. My wife and I both work off the farm, my mom looks after our baby, and my dad, who should be doing less work, is forced to do more. The emotional and financial stresses on our family are enormous. After three years, we now have a financial deficit of over $60,000. Once again we're looking at refinancing and hoping for next year, but there may not be a next year.

You may be asking, what about crop insurance and what about AIDA? In all three years, we have had crop insurance and have made claims and received payments. The reseeding benefit does not come close to covering the cost of reseeding. The unseeded acreage payment of $50 per acre turned out to be about $30 per acre after crop insurance calculations and deductions. This did help, but farms today have to be extremely cost efficient. That means that every acre you farm has to produce a crop. Every acre has a fixed cost attached to it. When you take one-third of your acres out of production, the other two-thirds has to pick up the slack. This year they could not do that.

Then there was AIDA. Well, we filed in July, and we knew it would take longer for our application because we were new farmers and did not have a three-year reference margin. Therefore, one had to be made up for us. To this date, and after many phone calls, we still do not know if we're going to receive a payment. This is a far cry from having something bankable and in your pocket by spring.

So here we are, once again asking for help. I do not enjoy this, and every other farmer will tell you the same: we want to be paid what we deserve for our products. And we don't care what it takes.

• 1640

Over the last three years, prices for the crops we've grown have fallen drastically. I've prepared a comparison of prices per bushel received in 1997 and what we can expect this year for our crops. These are grains grown on our farm. I do not include all the grains. Canola in 1997 received $8.50-plus. Right now, we're looking at around $5.75. Flax was $8-plus. Now it's worth around $5. Oats in 1997 was $2.50 to $3 a bushel. Now it's $1.25. For rye in 1997, I received $4.25 right off the combine. This year the best price I could find was 75¢. Feed barley in 1997 was approximately $2.50. In 1999 it's $1.65.

Many people ask why we should we help the farming industry. They say farming should be treated like any other industry. This may be true, but there are two very important reasons why farmers should be helped. First, Canadian farmers are not playing on a level playing field—like most businesses in Canada do. Farmers are forced to compete with the federal treasury of the United States and with the European Union because of the large subsidies they hand down to their farmers.

Second, and most important, we provide Canadians with a safe, guaranteed supply of food. Once Canadian farmers are extinct, Canadians will be forced to pay a higher price for food that is imported from other countries and the guarantees of supply will vanish.

People have the illusion that farmers are wealthy. Let's face it, when you can afford to spend $150,000 on a piece of equipment, you must be rich, right? Wrong. Most farmers who are able to buy some of this high-priced equipment do not own it. It is either leased or the bank owns it. But the bottom line is that we need this equipment to produce the crops we grow. The majority of farmers do not own new equipment. You ask any farm equipment salesperson and they will likely tell you how few their sales have been in recent months. Instead, farmers keep patching up older equipment to make do for another year.

On our farm, in 1975 my dad purchased a new tractor and grain truck and he paid cash for them. This is something I can only dream about. That same tractor and truck are still in use on our farm. In fact, we also have a grain truck and tractor that are still in use and were built in the sixties. The newest tractor we own will be 15 years old next year. I'd like to say out with the old and in with the new when it comes to our line of equipment, but the reality is that there's no money to do that.

In many cases, this old equipment is unsafe and poses a health hazard. The tractor that I use for spraying chemicals has a very poor ventilation system. When I have been spraying all day, at the end of the day my skin is sticky from the chemicals, I have a headache, and many times I feel sick for several days afterwards. I know this cannot be good for me, but what can I do? In the other tractor we use from one day to the next, the air conditioner does not work and the windows are designed not to be opened, so on a sunny day the cab of that tractor turns into an oven. My situation is not unique. Other farmers will tell you similar stories. They will also tell you they have no choice but to put up with it.

This winter, gentlemen, if any of you go on a holiday someplace warm, I would like you to do something for me. Before you leave, go out and buy some lawn chemical. When you arrive at your destination, dab some of this chemical all over your body and then rent a car with no air conditioning and drive around for eight hours with the windows rolled up. This will help explain the point I'm trying to relate.

To be honest, though, the crisis out here is not the fact that farmers can't afford new and advanced equipment. The crisis out here is that farmers cannot afford to pay everyday bills for food and shelter for their families. The crisis out here is that children are being put to work at very young ages on the farm because there's no money to hire extra help when needed, and the result is that these kids are often hurt—and sometimes killed—in farm-related accidents. The crisis out here is that a way of life is being eroded away and that small towns and communities are dying. The crisis out here is that emotional and financial stresses are becoming too much, thus leading to depression, marriage breakups, and, in some cases, suicides.

Farmers do not have benefit plans like the majority of wage earners have. Prescription drug plans and dental plans, along with company-sponsored retirement plans, are not available for farmers. When you hear about parents having to choose between next week's grocery bill or eyeglasses for the kids, the depth of this crisis hits home.

The farm crisis has brought western Canadians together. At the same time, it has been driving the wedge between east and west even deeper. To some extent, this has become a national unity issue.

I always thought that when you were citizens of a country you worked together and that when one part of that country needed help the rest of that country would pull together and help out. This was the case in 1998 during the ice storm that hit eastern Canada. The west helped out in every way possible. We sent power crews, money, electrical generators, and other forms of aid, not to mention what our federal government kicked in. Our federal government did not send out a committee to investigate the need for aid in that region. They took their word for it. I didn't hear our Prime Minister say to Ontario and Quebec, “Fend for yourselves. We have no money to help you.”

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I have no idea what eastern Canadians went through during that winter; I can only imagine. The bottom line was that a part of our country was in need, and people were suffering. It was our duty as Canadians to help out. I realize that a majority of Canadians do not understand what we're going through. Please, take our word for it, this is a crisis. A part of Canada and its people are suffering. So once again, it is your duty as Canadians to help the people in need.

For the last year we have been trying to convince our government of the problems out here, and that we need immediate assistance along with a long-term plan. All we have been getting is a lot of talk about trade subsidies, and about how even though the Americans and European Union continue to increase their subsidies to farmers, they would not tolerate Canada increasing hers.

That line does not work for me any more. If they did have a problem with Canada increasing its farm subsidies—and I don't think they would—it is time we as Canadians tell them to go to hell. It seems to me that in order to get them to reduce their subsidies, Canada should be increasing theirs. Then we can tell them, “You first. We already tried it with us going first.”

Several weeks ago I spoke at a farm forum in Carlyle, which was heard by many people in Canada. I received many phone calls and letters from people across Canada. I'd like to read an excerpt of a letter I received from a gentleman from Brampton, Ontario.

Mr. Doty:

I am very angry at our Federal Government's inadequate response to help you and all farmers in western Canada. If we have a federal Minister of Agriculture, he has chosen to be silent, or he is incompetent in an overwhelming bureaucracy.

Remember the names Jean Chrétien and Paul Martin in the next federal election.

I especially want you to know that everyone in Eastern Canada cares about you, and we are also aware of the problems in the Atlantic Provinces.

I am very hopeful that your appeal was heard and that all levels of government will do something NOW. Keep up the pressure, because politicians despise negative publicity. DO NOT LOSE HOPE.

I believe this gentleman spoke for many Canadians, and that in itself should be a mandate to help prairie farmers. This crisis is for real. People are going broke. Families are being torn apart. If the majority of farmers were to quit and move to the cities, then pretty soon the business people from small towns would follow, because there would be no one there to support them. The major cities do not have the jobs or the infrastructure to handle a massive flow of people from rural areas.

I challenge you people, don't let this committee be positive publicity for yourselves and your government. Go back to Ottawa and do something now. As I said before, it is your duty as Canadians to help a region of Canada when they are in crisis.

Thank you.

The Chair: Thank you very much.

So that we can hear from as many farmers as possible, try to keep your remarks as compact as you can. I don't want you to ignore the essence of your message, but if you can....

Mr. Stanley, welcome.

Mr. Lee Stanley (Individual Presentation): Thank you, Mr. Chairman.

Gentlemen, my name is Lee Stanley. My family and I own and operate a mixed farming operation south of Carievale, Saskatchewn. I would be honoured to address this committee and present you with my opinion of the depth of this current farm income crisis and how I believe the government should take action to end it.

If I could interject here for a second, I'd like to say that like most farmers, I'm not very comfortable dressed like this. In fact I usually wear a suit only when I'm going to a funeral. But I felt it was fairly appropriate today, because as far as I'm concerned, right now the Canadian family farm is on its deathbed. I don't want to go to its funeral.

Gentlemen, the family farm has been the backbone of the Canadian economy since Confederation. Agriculture is still the number one industry in Saskatchewan and among the top industries in all of Canada. However, due to factors beyond our control, the family farm is now in danger of being wiped off the map. The western Canadian farmer is being forced to compete with his counterparts in the U.S. and Europe, farmers who are subsidized heavily by their governments. We, as farmers, are not able to earn enough from the sale of our products to pay our costs of production. Simple logic states that if you spend more than you earn, you're not going to be in business very long.

On our own family operation we have done everything we can to try to make the farm viable, but each year we seem to be sliding backward instead of making progress. Like the rest of these gentlemen here, I take great pride in the farm. My grandfather came to our farm in 1944. The century-old stone farmhouse where he raised his family and my father raised his own is now home to my wife and I. The way things stand right now, I doubt that a fourth generation will be able to live and work there.

• 1650

My wife Laura and I were just married, but we have postponed starting a family due to the fact that our financial situation forces us to have an off-farm job. My wife works as an EMT and spends the majority of her time away from our home. This is not unique; rather, it's the general rule on most farms nowadays, as almost any job pays better than farming.

My family and I have tried to do what the experts say is necessary to survive, but it simply isn't working. We have expanded our land base from five quarters to 24; we've expanded our cattle herd from 20 cows to over 100; and we now grow a variety of 10 different crops, instead of just wheat. We've been told over and over again to expand and diversify, and we have, yet our standard of living is lower now than it was 30 years ago. We're forced to work harder and farm better, but we earn less money. As a result, we've been unable to replace our aging equipment and we now force 20-year-old combines to cover more ground than they did when they were new. When your net income is below minimum wage, a $300,000 purchase is out of the question.

The biggest problem facing agriculture today is the lack of hope. The young people of western Canada are leaving the farm in droves, because they don't want to struggle to survive the way they've watched their parents struggle. When these young people leave, they don't come back. Who will grow our food when today's aging farmers finally quit?

Today's farmer desperately needs short-term cash assistance, above and beyond the current programs, as quickly as possible. But I believe the most important thing we need now is an effective long-term safety net program, based on revenue. This program must work alongside crop insurance to insure farmers receive enough revenue to at least cover their costs of production. Administered and funded in cooperation with both the federal and provincial governments, as well as farmer-paid premiums, such a program would allow a farmer to know his expected return before he seeded a crop in the spring. We, as farmers, need to have this information in order to budget accordingly. Obsolete farm machinery needs to be replaced, but modern farm machinery is very costly. The only way we can reasonably take on the substantial debt load is to have a program in place that will guarantee our full cost of production now and years down the line.

Without assistance, many farmers will be forced to leave the land this winter, and no one wants to take that land over. Most of that land will sit idle, growing weeds, benefiting no one. If this happens, western Canada will become a barren wasteland filled with unemployed people. Do we want our country to become a third-world country?

Ladies and gentlemen, when a family farm is lost, it's not just a business failure, it's the loss of that family's legacy, the loss of their home. The time has come for Canada as a nation to show support for its farmers, because no farmers means no food. Every Canadian who eats should be concerned with the fate of the Canadian family farm. Farmers are Canada's source of a cheap, reliable, safe food supply. That supply is now seriously threatened, and without help it will soon disappear forever.

I call upon our federal government to listen to these concerns and act quickly to help us save our farms, save our families, and save our homes. I'd like to thank you for your time today.

The Chair: Thank you, Mr. Stanley.

Now, we'll go Mr. Wilmot. Welcome to you.

Mr. Eric Wilmot (Individual Presentation): Good afternoon.

I would like to use my allotted time to bring to your attention an issue of lost inputs that resulted from the excessive rainfall in southeastern Saskatchewan and southwestern Manitoba in the spring of 1999. In order to give you a better understanding of why I consider this to be an important issue, I would like to give you some background on my farming operation and myself.

I am 46 years old. I was raised on a farm in Carnduff, Saskatchewan. I've been farming since graduation from the University of Saskatchewan's School of Agriculture in 1973. I started by renting 600 acres from a neighbour. Currently, I farm 2,800 acres, 2,600 of which is owned or being paid for. In the 26 years of farming there have been many changes. I believe that our farm has been reasonably efficient and has evolved with the changes. Initially we cropped two-thirds of our land and summer fallowed the remaining one-third. We grew 80% wheat or durum, with the other 20% being made up of fall rye, flax, and occasionally barley. All of these were traditional crops in our area. Today, we crop all our acres, but we have diversified to non-traditional crops. Today, about a third of our acreage is planted to cereal crops, about a third to oilseeds—mostly canola—and a third to pulse crops, such as green and yellow peas, various varieties of lentils, chickpeas, and alfalfa hay. In addition to these diversifications, we began growing and selling pedigree seed about 15 years ago.

• 1655

These changes have not been made just to keep things interesting. We needed to evolve in an attempt to increase returns. Improvements in technology permitted the changes. Larger machinery, specialized machinery, improved herbicides, improved crop varieties, and various market developments helped to make the changes possible. However, these changes and diversifications didn't happen overnight. I've had to learn new production agronomics and marketing skills, and had to make specialized machinery acquisitions. However, I have persevered with these changes, and I have done my best to follow the advice of agriculture advisers and government agencies to diversify in order to remain viable.

Three years ago, I shut down my off-farm business. I thought I could improve my returns if I spent more time in the farming business. In addition, the days were no longer long enough to properly conduct both businesses and still have time to be involved in raising a family of three children.

More time was needed to monitor the growing crops than was necessary when I first started farming. We now must monitor growing crops for insects, diseases and weeds that may be resistant to herbicides. These problems did not exist in pre-diversification days. Crop rotation, chemical rotation and market research also require more time and planning than a monoculture production system.

During the last three years in particular, we have experienced declining commodity prices, which meant it took above-average yields to basically tread water. One crop that seemed to return us a profit was canola, which we began growing about six years ago. Now even the price of canola has gone from $8 a bushel to $5.50 within the last year, with no prospect of better prices in the near future.

In 1973, the year I began farming, the best wheat that you could grow would return approximately $4 to the farmer's pocket. In 1999, the best wheat, using a midpoint on the pool return outlook, is estimated to be $4.40. In the meantime, the costs of inputs have increased exponentially. Farm fuel is an example. In 1972 gasoline was 19¢ a gallon. In 1999 it's $2.66 a gallon. In 1972, five gallons of 2,4-D cost $17.50. In 1999 it cost $134.

As you can see, commodity prices have not kept up with the sample input of costs. It is even sadder when you examine the consumer price index. This is the economic reality that I've been dealing with over the last three years in particular: declining prices, increasing inputs and reduced margins.

Enter the spring of 1999. I was able to seed approximately 40% of my acreage due to the excessive spring moisture. I didn't qualify for AIDA in 1998. I thought that since I got nothing in 1998, I should be in line for something in 1999, since I had less than 40% of my farm in production. However, when I completed the advance application for 1999, I was entitled only to $7,000, of which I can get $4,200 as an advance. This may be considered as a significant amount until you compare it to my annual expenses for the last year I grew a crop. In the 1998-99 tax year, my farm had expenses of $408,000. I have moved from paying income tax of $42,000 into a current tax situation in which I will not be paying any income tax at all.

Many tax-deductible expenses are not allowed to be used in AIDA calculations. However, if they are not accounted for, the best that you can say about them is that they are a donation or a subsidy to the consumer of my production. Consequently, even with the ongoing expenses and less than 40% of my acres seeded, $7,000 in AIDA is basically of incidental value to me.

• 1700

Now, I had even one more problem related to the spring soil saturation situation. In the fall of 1998, and prior to the start of the rain in 1999, I applied $16,000 worth of nitrogen fertilizer and granular herbicide. Unfortunately, these products were applied to fields that I was unable to plant. The result is that these products have been lost and I'm out of pocket for these expenses.

I thought our lost inputs would be covered by some sort of disaster relief program that was similar to that used to assist farmers in the Red River flood of 1997. Those farmers were compensated for these types of lost inputs. In that situation, the water subsided, and I understand that over 90% of the effective land was seeded.

I placed a claim for these items with the provincial disaster assistance program. I was advised that the lost inputs were not covered by that program, and I was further advised to contact the Saskatchewan Crop Insurance Corporation in Melville for assistance. I did this and was advised that they didn't know of any program under crop insurance that would assist in this situation. My investigation led me to an office at Saskatchewan Agriculture and Food, where I was advised that the federal government would not participate in a program for lost fall applied inputs.

To hold the line on my farm in my situation of requiring above-average crops at current low prices, you know that if you have a year of below-average production, as in 1999, there are going to be serious problems. Then, when the disaster program—which AIDA is called in its preamble—provides little or no protection, the financial situation becomes more distressing. The weather, the commodity prices and input costs are beyond my control. Therefore, I believe it is important to be treated with the same compassion shown the Manitoba farmers in the 1997 Red River flood.

There are a lot of issues intertwined in the present crisis. However, I think that if the Government of Canada had shown some real leadership in dealing with international subsidies in agriculture, the present crisis would not have arisen. Crop insurance and NISA may have been sufficient to allow farmers to avoid the present crisis. At present, I feel as if I am subsidizing the consumers of my products, and that I have been doing so for many years.

Voices: Hear, hear!

The Chair: Thank you, Mr. Wilmot. We appreciate that very much.

We're a little bit tight for time in this segment, so we'll move right along to Mr. Breitkreuz.

Mr. Garry Breitkreuz: Thank you, Chairman.

Thank you, witnesses, for your presentations. It takes a lot of courage to come here to do what you're doing, but I've found your words to be very meaningful. You're very calm. I don't see any placards and there's no need for pepper spray to control you, despite the seriousness of the situation. I commend you for coming here.

If you've read the reason we're coming around here, it's to study the effectiveness of long-term safety nets and other national initiatives to provide stability and an environment necessary for stable growth in the agriculture industry. There have been comments made in Ottawa that farmers are divided on this issue, so what can the government do? Do you sense a lot of division in the communities you represent, the communities you come from? Is it that farmers can't agree there's a crisis here, and that something has to be done?

Mr. Lee Stanley: I don't think I've ever seen farmers come together the way I've seen it this year. We've all come to the conclusion that we need some meaningful assistance. There have been groups formed that we didn't think we'd ever see from farmers. We didn't think we'd ever see them get together to form an effective lobby group. As you say, every farm is different and there's always a dissenting opinion among farmers. But as far as dissent among the farmers is concerned right now, we're pretty unified. We need some money out here, and we need it now.

• 1705

Mr. Garry Breitkreuz: I appreciate that.

Would anybody else like to comment? I know in my own farming community I have never seen this before, where farmers are coming together and agreeing that we cannot hang separately; we'd better hang together. I don't know if any of you have comments on that.

Is there a spinoff effect within the communities, going beyond those directly involved in farming to other businesses?

Mr. Trevor Doty: By all means there is. You see it in all kinds of small towns, though maybe not every town. Other towns have other things going for them—industries other than agriculture. But some towns that rely 100% on agriculture have just dried up and blown away. If Mr. Chrétien were to actually come out here and tour some of these towns and speak to some of the businessmen in these towns, he'd get a sense of what's going on. Once those towns dry up, once the businesses close, it's gone. It's never coming back.

Mr. Eric Wilmot: The other thing is, as was mentioned previously, how many people have had off-farm jobs? I gave mine up in an attempt to increase my returns, hoping I could have slightly shorter days. You can only deal with so many phone calls when you come in from harvesting at 11 o'clock at night. So I thought if I concentrated on that, I'd need one less job, and that's a job somebody else could do.

There are all kinds of people in Saskatchewan. I don't know how many families are involved with off-farm jobs, but I'll bet you it's close to 80%. If it weren't necessary for those people to be working off the farm to maintain their farm, to basically subsidize production, there would be opportunities in these communities for other people to be school teachers, to be dental assistants, and in my situation, to be lawyers.

If we had a viable economic situation in these small towns, you wouldn't have everybody scrapping for the jobs. That then leaves your community with the churches and the schools and the rinks and everything else. There are more people to use them, so there are more people to assist in paying for them.

This situation we're in—and it has been developing for a number of years—is to our own detriment, all these off-farm jobs. They're only there because people have to do it. They have to do it.

Mr. Garry Breitkreuz: My last question for you is this. The average return to a farmer in Saskatchewan under AIDA is one of the lowest in the country. Only 51% of the applicants have been able to trigger any kind of payout. The average payment is a little over $10,000. One of you mentioned that your expenses are $408,000. Do you find this AIDA payment is adequate?

Voices: Oh, oh!

Mr. Dick Proctor: That's a loaded question.

Mr. Garry Breitkreuz: Well, I made my introduction. Are these long-term safety nets effective? The average payout is $10,000. The country ought to know what your expenses are. One of you mentioned $408,000. Is $10,000 adequate? Tell me. The laugh doesn't get to Ottawa, but really, isn't this a joke?

Mr. Trevor Doty: I don't want Ottawa to make me rich. I don't want Ottawa to cover all my expenses. But the disasters we've had this year and other years are snowballing.

I can't see that I'll get $60,000. It would be nice to think I would. Maybe I will. I haven't heard yet. But $10,000, to a lot of the bigger farmers, is peanuts. My farm is 1,700 acres. My property taxes and hail insurance that I get through municipal was a $10,000 bill. I have far more expenses than that and a lot more losses than that.

Mr. Eric Wilmot: On that point, I'm the guy who mentioned that. I know I'm not going to get anything more out of AIDA. That's why I'm making the suggestion. If I have nothing there, at least treat me the same as the Manitoba farmer in the flood and help me get back some of those lost inputs.

I know I'm sunk for this year on AIDA. There are guys who got nothing either, here in my community. Reg here may be more familiar with the AIDA administration, but I've talked to accountants and was involved in making a presentation to the AIDA people in Winnipeg in July or early August; I've just forgotten when it was.

• 1710

We talked to accountants to get a profile of who's getting AIDA, who's getting significant AIDA. Do you know who it is? It's retiring farmers—guys who are slowing down their farming operations and have rented out some of their land, and who haven't made any capital purchases in the last number of years. So the younger farmer, the guy who's still going, is making payments on machinery he can't use as the depreciation off the AIDA application.

So farmers who are on their way out, have rented some of their land, and haven't made any capital purchases are getting money. Guys who are diversifying and trying hard and have bought extra equipment are getting nothing.

The Chair: Thank you.

On the question of average value of payments, Mr. Breitkreuz is right in saying the average payment in Saskatchewan is $10,000, but it gets skewed because of the number of claims. In Saskatchewan you have over 9,000 claims approved, and that in effect drives the average payment down to $10,000. If you look at British Columbia, the average payment there is $20,000, but of course there have only been 630 in British Columbia. In Alberta it's $19,000, almost as much as B.C., but they have only 3,400 claims, compared to Saskatchewan's 9,000. So in some ways these average payments don't tell a very accurate story.

Mr. Eric Wilmot: I guess if there were a program that was administratively a little more friendly to the farmer, there would probably be some applications that weren't made. Everybody is needing some money. There's an AIDA program out there. Everybody is doing their best, they're struggling on their own to do it, or doing it with the assistance of accountants, and they're going to get that AIDA application off, whether or not they're going to get anything.

In my particular situation, my wife and I spent over thirty hours doing that AIDA application. We have a slightly more complicated situation, because we have a joint venture farm with my brother. It took a long time, with all the pedigreed seed and all this. It took thirty hours to get ready to see the accountant. We saw the accountant and spent four hours with him to do the thing, got a $500 bill from him, and got zippo from AIDA. That's not very administratively friendly.

On your point, a lot of people who apply are applying with the faint hope that they might get something, and obviously they're not getting anything.

The Chair: Thank you.

Now we'll go to Mr. McGuire.

Maybe you could put your question to Mark Alexander, because I know he wants to say something. Go ahead.

Mr. Joe McGuire: Thank you, Mr. Chairman.

I agree with Mark Alexander and Leroy Berry and others who appeared before this committee before you. Not only did you not expect to be here; we didn't expect to be here either, because a year ago, we just announced a $1.5 billion disaster program, which was designed by federal, provincial, and industry representatives. At that time it was a very positive announcement, but sometime shortly after Christmas the wheels seemed to come off, and they haven't gotten on again. Out of the $1.5 billion, which has been upped since then, because we included negative margins and other things, only $400 million has actually been paid out. So there's $1 billion sitting there.

Of course applications are in and they're being processed. Some of them in Saskatchewan are fairly large, and by law, anything over $40,000 has to be audited. So it's taking a little time, but the minister has given instructions to his bureaucracy to get those cheques out before Christmas.

The federal and provincial people, the ministers and deputies, are meeting, I think, on Thursday in Toronto for another federal-provincial safety nets meeting. This is the last meeting, I believe, before the final agreement next February on the new safety nets program for Canada. They'll be listening to what you're saying here today. Reports will be made on what you and others have said here today. I know you're looking for a short-term payout, just to get the next year's crop in and so on, but they'll be making any changes that may occur in the next year of AIDA and in the future of the safety nets for the country.

Would the four of you maybe make some suggestions on what form that long-term disaster program should take? We're looking for grassroots input. We're not looking for deputy minister or assistant deputy minister input. Let's hear it from you. Exactly what form should a long-term disaster program take?

• 1715

The Chair: Mark, do you want to try?

Mr. Mark Alexander: I have two quick comments.

In our AIDA, we're on the 70% level, but they haven't finished playing with the structural change part. It looks like there'll be some money there in the 1999 AIDA. I think there's going to be a lot more money that could possibly flow out of the 1999 AIDA program, but everybody's forgotten that it's a prorated program. There's enough money in that program to pay out what potentially could be paid out under the 1999 scenario.

Mr. Joe McGuire: Others have the opposite opinion, that we're not going to spend it all, but the minister went on record in Regina as saying he will spend every penny of that on the disaster program. Maybe it's not enough. We'll have to wait and see. But if it's not enough, I'm sure we'll....

Mr. Trevor Doty: If the time is calculated in the year, what money is left to pay out? Because of the disaster—that's over a year gone by—it's going to be too late. If you're saying what I understand you're saying, when it's all said and done, if there's $200 million left over at the end of the year 2000, when all the AIDA cheques are sent out, that $200 million isn't going to amount to anything for the guys who have gone broke this year, and by next spring.

Mr. Joe McGuire: I realize you're looking for something in the short term, but what I asked is, in the long-term, how would you design...? You guys are young farmers, and hopefully you'll be around for a long time. So if we're looking for a third line of defence to keep people farming, we'd like to know what form that would take.

Mr. Mark Alexander: My personal belief is that we have to have a revenue insurance plan, because that works in all parts of Canada. We don't have a national agriculture policy now. It doesn't matter what crop you grow anywhere in Canada—it would fall under revenue insurance. It would have to be a program developed that way.

The Chair: Mr. Stanley, do you have a thought?

Mr. Lee Stanley: I believe, gentlemen, that we had our program in place. It was called GRIP. On our farm, we were guaranteed $100 an acre. I know that's not a great deal of money when you look even at Saskatchewan government cost-of-production figures on a crop like wheat, canola, or whatever. But looking around the room, most farmers are a pretty ingenious bunch of people, and I think if we know what our bottom line is going to be in the fall, we'll figure out how not to spend a whole lot more than that. We can figure out how it's going to be. But you can't go out in the spring and spend x amount of dollars without knowing what you're going to take in in the fall. We need a program like GRIP, and we need it back in time, before the tractors come out of the shed this spring.

Mr. Trevor Doty: I agree with Lee. We need something revenue-based. And the American system, where they have a guaranteed price per bushel—I don't know if that's a system that would work—is another option.

When I told my accountant I was going to be speaking and asked if he had anything he'd like me to say, he said “I mean you no disrespect, but KISS”. I asked what he meant, and he said “Keep it simple, stupid”. I don't mean any disrespect to you gentlemen by saying that, but that's what we need. I don't want to pay my accountant $500 every year to do this. I want something that I can do. I have an education in business, but I didn't want to do the forms—I was too busy. I didn't have the time. So make it something revenue-based and simple, something the average farmer can do.

The Chair: Eric, have you a thought?

Mr. Eric Wilmot: Yes, I do. I agree with what they've said and with the previous panel's suggestions that some land out of production could be of some assistance. But the GRIP program did have some problems, and one of them was that it wasn't commodity neutral. If a little more work were given to that, if as much energy could be put into that as was put into all that work that's been going on since there was going to be some money in the pockets before last Christmas, and if a portion of that work could be done in a GRIP-type program, I think something more market neutral could be made.

The Chair: Thank you. We're out of time.

Mr. Proctor.

Mr. Dick Proctor: Thanks very much. I'll just note in passing, I think this is the youngest quartet of farmers we've had, so it's good to get some of their ideas.

The Chair: Maybe it's just that we're getting older.

Mr. Dick Proctor: Maybe, as the days go by, that's right.

I know that there are “lies, damn lies, and statistics”, or whatever, but yes, it is true that Saskatchewan has the highest number of claimants for the AIDA program. But it would be predictable that when you have 47% of the arable land of Canada, you would have the highest number of AIDA claims in this province.

• 1720

I was speaking with a gentleman before the meeting started who showed me some figures in his neighbourhood of the age and the number of quarters that farmers have. And for you young farmers who, as Joe said, will hopefully be around for a long time to come, according to this gentleman's figures there are fifteen farmers who are in their sixties, four who are in their seventies, and one who is more than eighty years of age. There's nobody in their fifties, and there is a bulge of twelve people in their forties and two people who are forty or under.

So my question to you, based on that, is what is going to happen to farmland and who is going to take over those 96 quarters of land that are going to be available?

Mark, do you have a response?

Mr. Mark Alexander: If I could comment on that, when we travelled through North Dakota we were at a convention and were special guest speakers there. I walked in the room and, no offence at all, it was a pretty grey crowd. It was no different there. And I think that if something isn't done now to keep farmers.... We are trying to be innovative, we are trying to do.... I have a university education in agriculture, and I'm trying to apply all this knowledge. But if we don't do something now, as I said, I can walk away. I'm young enough to start over. I would have to start from nothing, but multinationals are going to win by default. That's all I can say.

Mr. Dick Proctor: Anybody else?

Mr. Eric Wilmot: What any long-term policy ought to have, and it's something that's been missing in agriculture policy, is something to entice and keep young farmers there. Otherwise, the communities are going to continue to dwindle and die, and where I live in Carnduff is going to be a long way from any essential services that I'm going to need, or my family should they choose to try to follow in the agriculture career.

Mr. Lee Stanley: I'd like to add a little to what Mark has said here.

Mr. Proctor asked who would be farming the land. As Mark said, it will be large multinational corporations such as Cargill and ADM. And this is just a thought, gentlemen, but a large multinational corporation like that isn't going to stand for a cheap food policy in Canada. They have the power to withhold the grain. If they controll the land, they'll withhold the grain until they get the price they need for it, the price they want for it, and we'll have to pay that price.

Mr. Dick Proctor: Thank you very much for those responses.

I have one question, Mark, on GRIP. We heard yesterday from a farmer, I think it was in Dauphin, who thought that GRIP was not a bad program, although he noted it was based on long-term averages and that in his opinion the end result would be that producers would end up paying larger premiums without a chance of surviving until prices had rebounded. And someone else—it wasn't the same gentleman, but somebody else—suggested that perhaps GRIP could be changed to some form of a cost-of-production formula. Do you have any thoughts on whether that would be a good idea to propose in terms of a long-term safety net?

The Chair: You'll have to give a short answer. We have only a minute in this segment.

Mark.

Mr. Mark Alexander: Yes, in my thinking it has to be just an income insurance program. The user can select a level of coverage, and if you don't obtain that coverage you can't farm the program, and you'll be surcharged on your premium. You can't lose on something like that. It's up to the individual farmer to choose the level of income coverage that he feels would work for his various crops, regardless of the crop.

The Chair: Thank you very much.

Mr. Borotsik.

Mr. Rick Borotsik: Thank you. I have a question to Mark on that one.

In terms of the income guarantee program, or the GRIP, that you talked about, do you see it as being a tripartite arrangement among the federal, provincial, and producers, as them being partners in that type of an income program?

Mr. Mark Alexander: That would be my personal view.

Mr. Rick Borotsik: You like the GRIP model.

Mr. Mark Alexander: You have to start somewhere.

Mr. Rick Borotsik: Okay, fair ball.

You'd mentioned also, Mark, that when you were down in Georgia ADM had moved to the border and it scared the hell out of you because they obviously were buying up land, I assume, and they were a producer: they were farming that land or at least they were getting to people to farm the land. Is that where you were heading with that particular story about ADM?

• 1725

Mr. Mark Alexander: Yes. The proof was in the pudding there, I guess. They moved the crushing plant to the area where they'd bought that prime land.

I don't blame the farmer, with the dollars they were paying for it, but they're going to wait until they can get it for 25¢ on the dollar pretty soon.

Mr. Rick Borotsik: You all had great presentations, but there are couple of points I want to make in terms of Eric's presentation.

I come from the area that's affected by the excess moisture, and my argument has always been this: Be consistent in the disaster programs. Where you have programs being delivered in the Red River Valley that are like the lost inputs program, then there should be lost inputs coming into this area as well. In fact, we've been impacted to a greater degree. They got a crop off at Red River even though they didn't get paid for 50% of their lost inputs, which to them was great, but for us, obviously, there's an inconsistency there.

I should also tell you that this was not an agriculture department program. DFAA, I think, delivered that program. When we approached the agriculture department side of it, I know our agriculture minister went to bat with the people who administer DFAA, the Department of National Defence. Don't ask me why they do, but that's where it comes from. But they said no. I even have a letter on my desk that says no.

Do you think the agriculture department should then come up with a program to have the consistency in place that we had in the Red River Valley?

Mr. Eric Wilmot: If there's a prime target area for any surplus, I guess it happens to be in the present AIDA fund. If there happens to be some money there, perhaps it could come that way.

But yes, I do. I think consistency ought to be there, whichever way it comes. Personally, I made donations to the Red River flood situation and to the ice storm situation. All of a sudden the shoe's on the other foot, and where am I?

Mr. Rick Borotsik: Good point.

You have another point here that I'd just like you to clarify. You said that if the Government of Canada had shown some real leadership in dealing with international subsidies in agriculture, the present crisis would not have arisen. Can you explain that?

Mr. Eric Wilmot: I can give a couple of examples. The first would be the Crow benefit. I guess the last round of World Trade Organization discussions resulted in our Crow's Nest rate not being acceptable, and we had a certain amount of years to phase it out. Well, there was nothing better for the federal government to do but to jump right on that bandwagon and say, okay, let's get it done, and let's lead the farmers into helping us balance the budget. That's one example.

Then there's all the off-loading that has happened with the rail transportation situation. For goodness' sake, the highways in this province are just going to heck. What cheaper way is there to move grain than rail? It doesn't make sense. Those big trucks are on the road continually. Think of the safety aspect. There's something going wrong here with our leadership in terms of policy development.

Those are two examples.

Mr. Rick Borotsik: It explains where you were heading with that one.

The Chair: One minute to go.

Mr. Rick Borotsik: Okay.

Lee, I think you mentioned in your presentation that you farm about 24 quarters now. Is that all owned or is there rental land in there?

Mr. Lee Stanley: Among my father, my brother, and I, we own 15 quarters, and the rest is rented.

Mr. Rick Borotsik: The rest, I believe, have also indicated that there's rental land as well.

What would you say would be the average amount of rented land in a normal farm operation right now? Would about 40% of the land that's being worked right now be rented land?

Mr. Trevor Doty: In my personal situation, I rent my dad's land, so it's two-thirds, yes.

Mr. Rick Borotsik: Let's talk arm's-length land now. Lee, is yours arm's-length land, rented land?

Mr. Lee Stanley: Yes, we rent from several landlords, but I would like to get to the point where....

I started farming through a retired neighbour farmer who was beginning to sell me his land. I rented it and bought it a piece at a time, making it my own land. That was the plan originally, to just keep on, because the way things have gone right now, we're not making any money off the land we own.

Mr. Rick Borotsik: I'm asking the question because in the disaster area, with the excess moisture—and I know most of you have been affected by that—I'm wondering whether your landlords are expecting you to pay the rent.

A voice: Absolutely.

Mr. Lee Stanley: Oh, definitely. We can't blame them. I mean, we signed a contract.

• 1730

Mr. Rick Borotsik: Well, no, I don't blame them either, but I guess where I'm headed with this is that some unseeded acreage payments have been made, and a lot of people seem to think it's almost like a windfall. When you take into consideration, however, the rental you have to pay, the additional spraying you have to put into place to get the land prepared for next seeding, and the lost inputs you put into some of that rented land and are never going to see, the unseeded acreage payment really hasn't amounted to a heck of a lot, has it?

The Chair: We're out of time.

Mr. Rick Borotsik: I just need an answer, Mr. Chair.

Has it amounted to a lot?

Mr. Trevor Doty: No.

Mr. Mark Alexander: No.

Mr. Rick Borotsik: Thank you very much.

The Chair: You've made excellent presentations. We appreciate your coming very much. Thank you.

Voices: Hear, hear!

The Chair: We're now going to hear from Marvin Wiens of the Saskatchewan Wheat Pool and Lyle Minogue of the Saskatchewan Pulse Growers.

I would like to inform the audience that I'm going to try to put up a panel of at least five farmers for the next round. I'd like to give the names now so that we can give you a heads-up, as it were. The five farmers that I think we can at least squeeze in are Ian Cushon; Glen Seeman; Jack Pick; George Godenir; and Arlynn Kurtz. Squeezing in any more will depend on how long each farmer talks, but I think we can squeeze in at least five more.

Welcome, Marvin. It's nice to see you again.

It's nice to see you too, Lyle. I haven't seen you for a coon's age, at least.

Since “M” comes before “W”, we'll start with you, Lyle Minogue. If we can get five to seven minutes out of you we'll then go to some questions.

Mr. Lyle Minogue (Director, Saskatchewan Pulse Growers): Thank you, Mr. Chairman and honourable members. It's a privilege to be able to appear here before you today to express the opinion of the Saskatchewan Pulse Growers regarding the farm income crisis and safety nets.

Pulse growers in Saskatchewan believe there is a farm income crisis. The prices are partly due to subsidies from other countries but there are other reasons as well.

Ever since I started farming I've seen that we lose some farmers every year because of changing technology and expanding farm size. But this year, we're going to lose a lot more than normal. What's worse is that we're going to lose a lot of our rural communities and a lot of the infrastructure that goes with that. We need that infrastructure if we're going to continue to farm and if we're going to have a next generation take over on these farms.

You asked the question of whether farmers agree that there's a farm crisis. I haven't heard anyone in my community say that there isn't a farm crisis.

On my particular farm, I will say that we had a good crop last year. We were very fortunate. We happened to have crops where the prices weren't too bad. In terms of my own personal situation, then, I don't expect someone making $10 an hour to send me part of his paycheque, but I also realize that not very far from me, it has been very dry for three years. They've had very poor crops and low incomes. The crops are ones that have had very low prices. If something isn't done, I'm going to have no communities to go to and no infrastructure to work with in the future.

We have some safety nets. Crop insurance is a good program. I believe strongly in crop insurance and always have. I think NISA is a good program. I believe in the NISA program. AIDA has proved useful to the hog sector in particular. I'm glad that the hog producers had the AIDA program, but it's done little for the grains sector. I can go into detail later on with regard to why I think it hasn't worked for the grains sector, but it's primarily in the method of calculation. A lot of our grains are sold through the Wheat Board, so income tends to get averaged over the years. Your base period isn't reflected properly. There are a number of technical questions like that.

For one reason or another, then, AIDA just hasn't worked in Saskatchewan, and I don't think there's time to develop a new program to save the guys who are in trouble this year. If you're going to have these guys here go seeding next year, you're going to have to make a quick payout through NISA. It may not be great, but it's the best you have. If you come up with a new program and get approval from Parliament next winter and work on it for two years and come out with the details, these guys won't be around to collect the money.

• 1735

The unfortunate thing about the low prices we're currently receiving is that they're also taking a lot of attention away from some of the other problems we have that are forcing our incomes down. Our current crisis is a crisis because our farm economy hasn't been in good shape for a number of years, and farmers aren't in a position in which they can carry through if they have one bad year.

Let me just talk quickly about some of the problems I see that I think the government hasn't dealt with adequately, and that this committee should be working on at the same time when you're working on actually sending out cheques in the mail.

This recent strike on the west coast has probably hurt farmers more in dollar terms than any amount you're going to send us in programs in the next two years. First of all, there's the cost of lost sales. Any company will tell you how many sales they've lost. I grow red lentils. The price was 20¢ a pound. When the strike was over, companies weren't taking any red lentils, period. There is no price now because they have some floating around on ships on the sales that they lost.

In addition to that, I've travelled the world with the pulse growers in market programs, and I've been in many countries and have sat with traders when they tried to sell Canadian grain. There's never any doubt that we have good grains and that we can produce good grains of good quality. But when we're down there discussing our great product, they always ask how we would get it through Vancouver. I've heard this comment in the Philippines, and I just came back from Sri Lanka, Bangladesh and Pakistan, and I've heard it in Chile, Colombia, China, and a lot of other places.

When they buy products from the United States, it comes out of gulf ports on 10 days' notice. When they buy it from Australia, it comes out on 10 days' notice. They know that if they buy from Canada, they need to buy 60 days in advance, and then they're not sure they're going to get it. It may turn out to be 90 days. These companies put up money for a letter of credit, so their credit is tied up while they're believing that product will come. When it doesn't come, they don't have access to additional funds to buy from someone else in the meantime, so it's a real hazard for them buying from Canada.

The answer is simple. If Canada wants to make the sale, keep discounting the price until there's such a savings that they're willing to buy. I'm sure that loss, if we were to calculate it, would be greater than all the money that's been paid out in safety net programs in this country in the last 20 years. I think that will continue in the future if we don't work on those.

Our transportation system is in a mess primarily because it's geared for wheat. Everything we've ever done in transportation in this country focuses on wheat. Look at the Estey review. The Estey review came up with recommendations that are trying to get us to ship 100-car trainloads of wheat from concrete terminals on the main line. The reality is that even in the wheat industry we're going to niche markets and smaller markets, with more segregations and smaller quantities of grain.

There's also the fact that 30% of our acres now aren't wheat and wheat-type products; they're speciality crops like pulse crops. They're high-value crops, and there are a lot of reasons why we should be growing them. The Estey review has one line on the first page that recognizes that 30% of current acres are not board-related grains, and then it proceeds to never mention these crops in the rest of the document.

Kroeger is carrying on with Estey's recommendations, and the needs of the high-value specialty crops like pulses are completely ignored. These pulses, however, have many benefits. They improve the soil. They fix nitrogen, so they reduce the need for commercial fertilizers. Pulse crops break disease cycles and insect cycles, so they reduce the need for chemicals. They're good in crop rotation, so they reduce the amount of summer fallow. And they extend rotations with minimum tillage, and store carbon in the soil to reduce greenhouse gas emissions, so they should be a value in the carbon credits if we play things right. Yet in spite of these many benefits for pulse crops, they're handicapped by this wheat mentality in Agriculture Canada.

Wheat was developed with research funded 100% by the Government of Canada and the provincial governments. Now, with government cutbacks to funding, the new policy is that funding has to be cost-shared. We have a mechanism to collect a large levy from wheat, so we can still fund research on wheat. We can get some money for pulse crops because we do have a levy in the pulse industry. But new crops like buckwheat, coriander, caraway, or crops that may be our Cinderella crops of the future have no way to get any research money to develop those crops.

This happens not just in research, but in transportation with the Canadian International Grains Institute, with the Canada Grains Council, and many of our provincial government programs. In spite of this, though, there has been a dramatic increase in the acreage seeded to pulse crops and special crops in western Canada. But I ask you to think about what could have been accomplished if the government programs had been proactive instead of restrictive.

• 1740

I'm going to mention one more factor here that I think impacts seriously on the cost of production in this province. A few years ago, the federal government started cutting back on education funding. Education costs were transferred to the provinces and the provinces in turn passed them on to property. The education portion of property taxes has gone way up, and farmers in Saskatchewan pay a very disproportionate share of the costs of education. Ask any farmer in the room how much he pays to fund schools in this province. If governments could deal with that, I think it would also increase the abilities of farmers to carry through the odd period of low income.

In conclusion, I would say that the solution to low farm incomes is to use our existing funding and resources more efficiently. I realize that governments have limited funds, but if the funds available were used wisely, with a vision for the future, all farmers would be better off. Production costs could be lowered through better labour laws on the west coast; through more efficient, lower-cost transportation systems serving all crops; through more research into better varieties and production techniques; through directing scarce resources towards future needs rather than protecting traditional jobs and organizations associated with the wheat industry of the past; and through a more equitable method of funding education.

If the costs were lowered by the methods I have suggested, I don't think farmers would be so vulnerable to the occasional bad year. I would put forward that if we had made these changes twenty years ago, we wouldn't be sitting in this room today.

Thank you.

Voices: Hear, hear!

The Chair: Thanks, Lyle.

We now welcome Marvin Wiens.

Mr. Marvin Wiens (Vice-President, Saskatchewan Wheat Pool): Thank you, Mr. Chairman, and good afternoon. It's a real pleasure to invite the agriculture committee to Saskatchewan. I appreciate the opportunity to discuss the current farm financial crisis with you.

I'd also like to commend you for coming to Saskatchewan and listening to producers so that you hear real stories and can put real faces to those stories. This is crucial, because we're not dealing with statistics here. We're dealing with people. The government is making policy for people, not statistics.

Just by way of a little more introduction, as indicated, I am vice-president of the Saskatchewan Wheat Pool, a position I hold through the election process of our democratic structure. I am also a farmer. My wife and I farm in the southwest corner of the province. My son and his wife farm, as do my two daughters and their husbands. So we have a big stake in agriculture in this province, and we believe in the future. Among the six members of my family, however, there are six either full-time or part-time jobs off the farm. We're very typical, I think, of many farm families in this province.

Many of our members are experiencing severe financial problems brought about by factors far beyond their control. I do stress that farmers are in severe difficulty because of factors they have no control over. These are not inefficient farmers. They are not farmers who aren't competitive. These are farmers who are caught between dismally low world grain prices on the one hand and rising input costs on the other.

Just a few weeks ago you heard from professors Gray and Fulton of the University of Saskatchewan. They told you that margins have dropped from 30% in the 1960s to less than 5% today. Imagine trying to keep your operation sustainable for a succession of poor years on a margin of less than 5%. I think you've heard stories here indicating that very clearly. For many, it just can't be done.

We can all agree that there is a severe farm crisis on the prairies. Over the last year, you've heard in detail what has caused this crisis. We can also agree that farmers cannot compete with the treasuries of other countries. Our farmers are price-takers, not price-setters.

In this province we're landlocked, and yet we rely heavily on the export market. Our costs continue to climb while our returns decline. The list goes on. Every one of us in this room can tell you the toll the financial crisis is having on farmers and rural communities. I want to stress to you today why it is so important to this country that we provide support to these people.

Agrifood is one of Canada's top five industries. It accounts for about 8.5% of the Canadian gross domestic product and sustains almost two million jobs. That's about seven spinoff jobs for every primary producer. Our farmers provide Canadians with among the lowest food prices in the world.

In 1996, for example, 9.8% of Canadians' disposable income was spent on store-bought food, compared with up to 26% in some of the other industrialized countries. I saw a bumper sticker the other day that said “If you don't want to support the farmers, stop eating”. That says it all.

• 1745

Probably the biggest reason you should support farmers is, as I said earlier, we are people, not statistics. We are people who make significant contributions to the economy, to job creation, and to what you put in your mouths each and every day.

So what needs to be done? While we appreciate your willingness to listen to us, what we really need from legislators such as you is action. It is important that you come away from these hearings with constructive solutions. I would like to review some of the action the government should take to address the short-term crisis and to improve the viability of agriculture for the long term.

First of all is the area of safety nets. We were pleased to have Minister Vanclief at our annual meeting of delegates last month, and I was encouraged to hear him admit AIDA is not working. It will definitely not address the overall income problem facing Saskatchewan farmers. That leaves us with a very large problem: How can the federal government deliver money to farmers who have been hardest hit, and how can they get that money to those farmers in time to keep them on the land?

Sometimes I hate to admit it, but I sit on the Saskatchewan Farm Support Review Committee and the National Safety Net Advisory Committee, and I therefore appreciate the difficulty in coming up with a solution that gets the money to the people who need it without jeopardizing our ability to trade with other nations. For example, our safety net committee just recently recommended that we double the government contribution to 6% from 3%. But that takes money, and very quickly it's pointed out to us that the federal government does not have that kind of money. But they really have to sit back and examine that answer.

At our annual meeting, pool delegates identified to Mr. Vanclief many problems with AIDA. I understand from his office that the department is working to address these shortcomings. While some changes have been made and we support those changes, they have been very slow in coming.

I must also stress again that AIDA alone will not address today's farm income crisis. It was designed as a disaster program, and it simply cannot cover off the steep and prolonged decline experienced by grain and oilseed producers over the last two years. Given the bleak forecast for continued low returns, AIDA simply will not provide farmers with the support required, no matter how much you tinker with it.

The federal government's unwillingness to recognize the extent of the crisis and provide the funding necessary is leading to serious imbalances between provinces. More affluent provinces are able to provide their producers with additional assistance. Saskatchewan in comparison has a less diversified economy, and it therefore has a limited ability to provide additional support. Such discrepancies nationally will in the long term be unacceptable.

I just heard today that Ontario is considering pulling out of AIDA. Why? I believe it's because they don't feel they're getting their fair share. Granted, I don't begrudge the support Ontario farmers are getting, but they're getting higher levels of support there, because they have more taxpayers to fund it.

As a member of Saskatchewan's Farm Income Coalition, the pool supports the call for immediate trade equalization payments. That money must be over and above the current allocation made to NISA and AIDA. Given the urgency of the situation faced by many farm families today, such funds must get into the hands of producers as quickly as possible.

However, we still must not lose sight of the need for a long-term disaster program that will adequately address the risks that will always face farm families. Such a program must be developed in consultation with farmers. A good example is that if the AIDA program had been introduced in normal circumstances—which we all hope for—when margins were good, the farmers in southeastern Saskatchewan would have triggered large payments. But when you have no margins, the AIDA program will not work.

We know Ministers Vanclief and Goodale are pushing these issues with cabinet, and we need to know that you support those efforts, as we need this committee to continue to bring pressure to bear on cabinet to allocate more money to the safety net envelope.

I'd like to say a few words on cost recovery. Federal cost recovery initiatives have increased existing fees and added new fees for the services federal departments provide. A study released by Agriculture and Agri-Food Canada showed that cost recovery fees affecting the agrifood sector increased almost 30%, from $109 million to $139 million. That increase occurred in the five-year period ending in 1998.

The grain and oilseed industry pays for services such as grazing and inspections, the registration and re-evaluation of crop protection products, and the provision of navigational aids. According to statistics from Agriculture Canada, the grain and oilseed sector is affected more than most sectors when it comes to cost recovery fees. A full 2.5% of farmers' income is being redirected to pay for federal government services. Indeed, the report notes that the Canadian Grain Commission and the PFRA, both used extensively by prairie farmers, have some of the highest levels of cost recovery as a percentage of operating budget.

• 1750

We ask that you support a rollback of fees affecting the grains and oilseeds sector and we also ask that you work to ensure that in the future cost-recovery fees are applied equitably among all sectors.

I'll say a few words about transportation. Transportation is the biggest single cost for grains and oilseeds producers. Transportation costs have doubled over the last three years due to the loss of the Crow freight rate. In the response to the Kroeger and Estey reports, the government has a tremendous opportunity to provide a more reasonable approach to freight rates.

This summer's review by the CTA demonstrated that railways are putting an undue amount of efficiency gains back into their own pockets. Rightfully, these gains should have been shared with producers. I ask you to support the adoption of option C of the Kroeger report. By doing so, freight rates will be reduced by 18% from 1997 values. That would return some $170 million to producers, an extra $5.71 per tonne for farmers in this room—at no cost to taxpayers.

Taxation reform: One of the most onerous and inequitable taxes farmers bear is education tax on property. That's been mentioned here before. I recognize that this is a provincial issue. However, I ask for your support in addressing this inequity. Land ownership is not an effective measure of income, nor is there a direct link between land ownership and use of the educational system. Tax rebates would be of assistance, but what we really need is a more equitable distribution of the tax burden, one that is based on wealth, not on property ownership.

I was pleased that Minister Vanclief agreed at a recent meeting to review taxation issues facing farmers. I hope you will support the timely completion of that review as well as many recommendations that will reduce the financial burden on farmers.

In closing, I would like you to remind Finance Minister Martin that every dollar invested in agriculture is multiplied sevenfold in the economy. When you invest in Canadian producers, in the people gathered here this afternoon, you are investing in all of Canada.

Thank you very much. I look forward to your questions.

Voices: Hear, hear!

The Chair: Thank you, Marvin. I appreciate your comments. I want you to know that I'm wearing your Pool pin today.

Mr. Marvin Wiens: Thank you.

The Chair: Members, we have 20 minutes left for this segment, so I think we'll limit each party to five minutes, starting with Mr. Breitkreuz.

Mr. Garry Breitkreuz: Mr. Chairman, we made an agreement at the beginning to forgo some of the questioning here so that we could hear from more people—

A voice: [Inaudible—Editor]...final round.

The Chair: Yes, in the final section.

Mr. Garry Breitkreuz: Yes, so I'm willing to forgo my time here so we can hear from more people. I just have a comment.

I really appreciated your presentations.

Lyle, there are some real bombshells in what you've said. Probably this has been going on for years and farmers haven't be able to build up a cushion to get them through some of these difficult times; I mean, the tax structure has needed changing for a long time. Farmers have been paying an inordinate amount of tax, built right into their input costs, and now, when times are tough, they can't get through because they didn't have that cushion in there.

I think this has been excellent. Thank you.

The Chair: Any comments? Or was there a question there?

Mr. Garry Breitkreuz: I gave up my time, Mr. Chairman. If they want to comment, that's fine, but....

The Chair: Okay. We'll go to Mr. McCormick.

Mr. Larry McCormick: Thank you very much, Mr. Chair.

Thank you very much, gentlemen, for being here. I have a couple of questions.

Lyle, the pain and the hurt that is here and real in this room today and which only represents such a small portion of it.... I actually wish that we had the cabinet here to feel this, and I say that sincerely. But I thank you, Lyle, for taking us past just the short term, which we do have to fix, and getting us looking at the future with our vision for agriculture.

I don't know whether you've read this leaked document, which is the government's proposal to the transport minister and the letter to the transport minister from our western caucus and our rural caucus. I think it's been everywhere in Canada except maybe in front of you. I think the changes we are proposing to the cabinet, following on the Estey and the Kroeger reports, are going to be of major assistance and money for Manitoba and Saskatchewan—and I mean large money. But you've taken us past that. We have to look at so much of this. I appreciate that.

• 1755

Marvin, again, you also told us—very well—that we're going to need to have a multifaceted approach down the road. Last night, as we left Dauphin and flew to Brandon, we saw the beautiful lights of the prairies, but we almost felt...that line about the lights going out across the prairies, when we're going to have fewer communities. We have to work for these people, for you people, and then we have to work for the communities.

I want to give the Prime Minister a little plug. He deserves one here today. For the first time ever in Canada, we have a Minister for Rural Development. We have people in the room here who have been involved in local economic development. This new minister, with all our help and support, will make a difference, I think, because so many people here in this room have spent their lives working for the next generation in the communities.

But, Marvin, in the short term, in the present situation, is an acreage payment the only way to carry us over through the seeding season? How much might that be?

I have one other question, because we heard different things from Farm Credit and the Royal Bank. I expect Farm Credit is here today—their local people. They said they can't help 30% to 33% of the farmers.

Marvin, how many farmers today are in dire straits for the next few months?

Mr. Marvin Wiens: Well, I'm not sure I can answer that as well as some people who have all the statistics in front of them. We know that there is a significant portion of Saskatchewan farmers who are facing severe difficulty. A recent survey indicated that 42% of Saskatchewan farmers would get out of the industry if they could. The optimism is gone, and that really concerns me. My family is a good example. They want to farm very badly. They're doing everything they can to farm, but they're losing their optimism for what we think is there as a future.

The recent results at the WTO discussions were very disappointing, because I think there are three ways you can keep a maximum number of farmers on the land: trade rules, but that's very long-term; reducing costs; and third, farm income support, which is what we're asking for now. The Saskatchewan coalition asked for $1 billion. Tell us that the $1 billion is there, and we'll very quickly have a group of farmers available to tell you how it should be paid. I don't think we should get into a debate as to how it should be paid. Tell us it's available. There are committees available. There's a farm support review committee in the province that has 25 to 30 farmers on it, from all sectors. Groups like that could make recommendations very quickly if the money's available.

Mr. Larry McCormick: Mr. Chair, my closing comment is that people have addressed the situation of AIDA today by saying it was designed to help pork producers. Following the news of what we hear from Ontario today, I have to say that in my riding in eastern Ontario is, I believe, the largest purebred pork exporter in Canada. They send the best bred stock around the world. They have a family operation, a huge one. They worked with the government; they worked with AIDA. I talked to them Thursday. They have never gotten a dollar.

Thank you, Mr. Chair.

The Chair: Thank you.

By the way, Lyle, are you—either you personally or the pulse growers—in favour of a targeted, short-term program going to those farmers in need or an across-the-board program going to all farmers, regardless of financial circumstances?

Mr. Lyle Minogue: Before I answer that question, I want to go back to Mr. McCormick's point about the hog producers not getting money. I think if you check with Carl Moore from the Pork Council, you'll find out that isn't right. The hog producers, because they produce a constant volume every year and the income crashed...there have been very large cheques going out to hog producers.

Mr. Larry McCormick: Yes, but all I'm saying is that.... Hay Bay Genetics is the name of the company, and it's well known in our area. Also, Environment Canada has 24 charges against them, at $300,000 each. So I'm not always happy with the federal government and I'm a Liberal. All I'm saying is that Hay Bay Genetics have said publicly that they have not got a cent out of it. Many others have.

Thank you.

Mr. Lyle Minogue: Okay.

Back to the question, Saskatchewan pulse producers would like to see a targeted program, but we believe that to get one that will work properly, as I said before, it will take at least two years to come up with a new program, and that's too late for these people. So we say to go with the NISA program. Now, I know the fault with—

The Chair: The NISA program? Put it through NISA?

Mr. Lyle Minogue: Because you can have money in people's hands in a month's time through NISA.

• 1800

There are people who always say that if you go with the broad-brush approach, people will get money who don't deserve it. But half of that money, if they have high incomes, will come back in tax. Also, if you target a program at low incomes, sometimes you get people who may not be good managers or who didn't make a good effort. There may be people who are living in the city, who have very high incomes, and who are running a hobby farm, and some of those people get money. So no program is 100% clean, with every dollar targeted perfectly.

The Chair: What about the farmers who are not in NISA at all? What do you do for those?

Mr. Lyle Minogue: I think they could apply and get into NISA very quickly. I don't think it's hard to get in the NISA program.

The Chair: Do you agree with that, Marvin?

Mr. Marvin Wiens: Yes, and I'd like to make a comment about that.

Right now, about 90% of eligible net sales are covered by NISA in the province, and the few that aren't could get in. But one issue you would have to look at then, if you used the NISA program, is the areas of the province that have three or four years of crop failures. Their eligible net sales are very low, so they would get less money than those that have had the best years. What you could do in that circumstance is use a five-year average or something. I think there are all kinds of things the government can do that are still trade friendly and that could get the maximum amount of money to the people who need it.

The Chair: Thank you.

Mr. Proctor.

Mr. Dick Proctor: Just to pick up on that, we have heard in the last couple of days—and I think I made reference to it earlier—about NISA seeming to be more helpful to the older farmers than the younger farmers. So I guess my question to Lyle is, to develop this quick payout through the NISA program, can we protect the younger farmer at the same time? If so, how would we do that?

Mr. Lyle Minogue: If the younger farmer had a margin in the previous year, he is eligible for a certain level of NISA, so he can apply for the payment and get money back without actually putting the cash in. He'd just roll it through the account.

It's not a perfect system, but time is of the essence here. There's no sense having a perfect system three years from now if there's nobody left. We're saying to come up with a stop-gap measure, to get some money out quickly through NISA, and to then work on the longer term.

If I could comment further, the bigger problems that came out of AIDA primarily were in establishing a fair and equitable referenced-based period. If you look at board grains, you grow wheat in one year, you haul it out over the winter and into the next year, and you get your payment the year after that. Also, if farmers have a good income year, for tax purposes they will defer grain sales to reduce the tax, because the next year might be lower. A lot of the good years that should have been included in that reference period were not included because the income was rolled forward through the Wheat Board method of payment. And I'm not objecting to that method, I'm just saying it makes the calculation not work in AIDA.

You have 9,000 people who applied for AIDA. There were a lot of others who should have had payments but didn't apply because they knew the mathematics would not give them a payment. So, who knows, there may have been 40,000 people who should have had money through AIDA and didn't get it.

If AIDA is going to work, it has to be like NISA. Every year, when you file your tax return, there's another page on the back that's just filled in from the numbers on the tax return itself. Being in NISA costs me almost nothing in accounting fees and almost nothing in effort. AIDA could be the same. All I would have to do is submit my inventory at the end of every year—it would be included as another line item—and when a payment is triggered, it would then come out automatically. We wouldn't have $500 in accounting fees every year.

Think about the implications of this. People in this room said their accounting fee from the program is $500. If you do that for ten years in good years, and then in the one year that you could collect, you collect $5,000, you just break even. The accounting firm got it all.

The program has to be simple and easy to administer. It has to trigger automatically if it's going to be of any value. I think there are lessons to be learned from how NISA runs that way.

Mr. Dick Proctor: Thanks. I have just one other quick question.

On the way here from Brandon, I was reading in the Globe that the International Food Policy Research Institute, which is a Washington-based think-tank, says that the world's farmers will have to increase grain production by 40% to meet global needs by 2020. It goes on to say that the world's population is expected to grow by 73 million people a year, and demand for meat in developing countries should jump too. It ends up by quoting the institute's director general as saying “For someone who wants to go into farming this year or next, the prospects look very, very good.”

Voices: Oh, oh!

The Chair: Have a nice day.

A voice: So long as they're rich.

Mr. Dick Proctor: Any thoughts?

A voice: That guy was on drugs.

Mr. Marvin Wiens: The point I'd like to make is that over the long term I think there is a future if we get decent trade rules and we're on a level playing field.

• 1805

Our own farm is a good example. We have diversified to the point where half our acres are pulse crops. They're exactly what Lyle talks about. Pulse crops have been very good crops for us. But I believe that if the grains and oilseeds sector isn't healthy, my market for my pulses is going to disappear too, because more acres are going to go into pulses every year and we're going to destroy that market. We need a healthy market, whether it's for livestock, whether it's for pulses, or whether it's for the grains and oilseeds sector. If we don't have a totally healthy market, we're always going to suffer.

The Chair: We'll now go to Mr. Borotsik.

Mr. Rick Borotsik: I just have a couple of very quick questions.

Marvin, you'd mentioned that your safety net advisory committee had suggested an increase of 3% to 6%. Are you talking about the federal contribution to the NISA?

Mr. Marvin Wiens: Yes. Did I say AIDA? Sorry.

Mr. Rick Borotsik: No, you didn't say anything; you just mentioned a contribution of 3% to 6%. I assumed you were talking about the federal contribution to the NISA program.

You then said that at that time the automatic response was that it costs a lot of money and there just isn't that much money available. But there is certainly money available within our ability to pay under the WTO rules that we have. That's not a problem. It's not an issue. You're saying the money's just simply not available because government says there isn't any more money that it wishes to put into agriculture. Is that basically the comment?

Mr. Marvin Wiens: We're told the $1.5 billion that is being targeted through AIDA is the total safety net package, along with the NISA money and the crop insurance money, and that we have to develop programs within that envelope. As you know, though, the money in AIDA will disappear after 1999, so we're back to the $1 billion in support, which is about half the support.

Mr. Rick Borotsik: And it's obviously our job to convince the government, and certainly Mr. Martin, who is the keeper of the huge surplus that we anticipate, to put it into this area as a priority. So, Marvin, we'll need your help on that.

I have another very quick question, and it'll be my last one, so that we can get to some other farmers here.

As the Saskatchewan Wheat Pool, in terms of your position on the Kroeger report, on your documentation you've talked about the fact that you agree with option C of the Kroeger report, and that there has to be implementation. Does that include the Canadian Wheat Board at port?

Mr. Marvin Wiens: I think that includes the Canadian Wheat Board being involved in transportation.

Mr. Rick Borotsik: No, it doesn't.

Mr. Marvin Wiens: Whether that's at port or whether that's some place in between has to be determined by the Wheat Board, by farmers, by the industry, to make it work the best it can.

Mr. Rick Borotsik: Can I put you on the spot? Can I ask you what your personal opinion is with respect to transportation? Do you think the Wheat Board should be at port, or do you think it should be involved in the transportation system?

Mr. Marvin Wiens: I think it has to have some involvement in transportation, but just what that involvement is has to be determined by the Canadian Wheat Board and by the rest of the industry, so that we don't end up with finger-pointing when we don't meet our markets. At least we eliminate some of that. It comes down to the things Lyle talked about. When we can't guarantee our product getting to market, we can make sure people are held accountable in that process—and that includes everyone: the railroads, the Wheat Board, the grain companies, and everyone else. They have to be held accountable.

Mr. Rick Borotsik: Thanks, Marvin.

The Chair: Thank you.

We have time for one question from Mr. Calder, but just on the point about NISA, Mr. Wiens, for 1998-99, the federal government's contribution to NISA was $254 million. Is it the safety net review committee's suggestion to double that?

Mr. Marvin Wiens: Yes, that was their recommendation at their last meeting. Basically, for every dollar that a farmer would contribute, governments then would contribute two dollars, so that the accounts would be built up much more quickly. Those with empty accounts, through a deeming process, could trigger more money from those accounts. It would put the dollars back into those accounts much more quickly than presently. I know that's not a popular request, but that would be one way of doing it much more quickly.

The Chair: Well, it would be popular with me if it's a way of getting money into farmers' pockets faster. That's certainly music to my ears. Let's not ignore that.

Mr. Calder.

Mr. Murray Calder: Thank you very much, Mr. Chairman.

Actually, gentlemen, I was out here in August to research the pools, if you remember correctly.

A set-aside program is what I want to talk about. It's the possibility of taking 20% of the land out of production. To do that, we would deal with historic planting in the program. For instance, there would be a 1,500-acre cap, with carbon credits attached to it. What would be your response to that?

• 1810

Mr. Lyle Minogue: Well, I still remember the LIFT program. We went through all this surplus grain, we took land out of production, and the next year we were into a grain shortage. I can see taking land out of production if you have a specific use for it, for example parks or recreation, or wildlife habitat.

Mr. Murray Calder: How about a fallow program?

Mr. Lyle Minogue: Let the farmers decide. Give the farmers the tools to go out and farm for the year and they'll decide whether land should be fallow or not. We may end up with a lot of soil erosion, or we may end up losing a lot of the carbon we've built up in the soil over the last ten years.

Mr. Murray Calder: In the United States it can be put in fallow, and pasture and hay too.

Do you have any comments, Marvin?

Mr. Marvin Wiens: Yes, I think the idea has some merit. It could be one other issue the governments could use. I think you would have to be careful. It has to be environmentally friendly. It has to be something that doesn't distort another market. For example, you shouldn't encourage growing of hay that might not have a market, or reduce the cost for the person who's already in hay production.

The Americans have a crop conservation reserve program that has some problems in it. It has basically emptied big parts of North Dakota and Montana. I understand people have taken their dollars and left, because they're paid very handsomely not to farm.

A percentage of erodable acres in a permanent cover program, if farmers are compensated adequately, might be another answer.

The Chair: Okay.

Mr. Murray Calder: Thanks, Mr. Chair.

The Chair: In the context of the current farm cash crisis, what would be the purpose of an offset program? I mean, we've heard about conservation, diversification, and so on, but in the context of the cash crisis, what would be the purpose of an offset program?

Mr. Marvin Wiens: Well, I'm supposing it would be directed at most erodable land. It would be directed at land that probably would be better off not in production, and a farmer could take a small percentage of his acres and put it into some sort of reserve program that would put some dollars into his pocket and reduce some production over the short term.

The Chair: Thanks to both of you. We're out of time. We appreciate your presentations.

Now we're going to get back to some individual farmers for the last 45 minutes of our session. We have a plane to catch, so we do have to maintain a schedule.

I would like to call Ian Cushon, George Godenir, Arlynn Kurtz, Jack Pick, and Glen Seeman. Are you all here? It looks like you are; there are five bodies coming. Given the fact that we take the alphabetical approach, we will start with Mr. Cushon.

Mr. Rick Borotsik: Are there others on the—

The Chair: There are others, but.... Will there be questions? Okay, there will be no questions, unless somebody wants them. It will all depend on how much they talk. The less talk here, the more talk from there.

We'll start with you, Mr. Cushon, and if you can keep your comments down to three or four minutes, then we can hear from more. Welcome.

Mr. Ian Cushon (Individual Presentation): Thank you very much, Mr. Chairman.

As a little background on who I am, I run a 1,900-acre farm at Oxbow, Saskatchewan, about 45 minutes east of here. I'm very happy to be here and have this opportunity to speak before the committee, and I'm looking forward to some of your comments as well.

I haven't prepared a text for my presentation, but I want to work on some of the key points here. I'll try to keep it as short as possible.

One of the obvious things that comes to mind to me is that there is indeed a tremendous amount of wealth in the food system, and I think the big issue is how much is the farmer's share in that system. One of the comments that came up at a recent conference I was at was that in North America—and I think the example was directly in the U.S.—more money is spent on the advertising and packaging than is actually received by the productive sector, the farmers. This says to me that we're quite skewed in our view of where and how important the role of farmers is in the productive system. I think there is indeed a tremendous amount of wealth, and we need to tap into that wealth. We need to ensure that consumers recognize that we play a very important role in the food production system and we need to be rewarded properly for that.

• 1815

I also want to talk a little about the question today, which is about what kind of help is needed. I won't go over this in much detail, but I think many of the farmers here today have told you—and I'm sure as you've travelled across western Canada you've heard it again and again—about the problems in agriculture and the problems with the support system, the safety nets we have in place.

I want to cut to the point that I think there really has been a lack of long-term policy in terms of agriculture for western Canadian grain farmers. This seems to me to be the overriding issue at hand, that we really don't know what we want out in western Canada, at least the federal government doesn't know what they want out in western Canada. I think that's very disconcerting to the farmers who are here today from western Canada, who really don't have a clear picture of what is expected and where this industry is going. I think it's incumbent on the federal government to put together a policy that states clearly what we want in western Canada and what the role of producers is in the food system. I think that's the underlying cause of many of the problems we're facing today, that there is no long-term policy in place.

We've certainly seen a round of cuts in the support programs to farmers, whether it be the removal of the Crow or the off-loading to farmers of various costs within the production system.

I want to deal with one other issue that I think is very important, and that's transportation reform. This seems to me an area where the federal government has a clear opportunity to send a clear message to farmers that they're speaking on their behalf. It's fairly obvious to me that the Estey and Kroeger process failed in many respects, and that farmers' interests were not, I think, taken account of. I think any proposal by any farm organization to move to a fully commercial, deregulated, uncompetitive grain transportation system is going to be bad for farmers.

I would like to see your committee take a strong position on this particular issue and ensure that any reform ensures that farmers are paying only reasonable rates for the movement of their grain from the prairies off to the various port positions.

We can certainly look at that revenue cap of 18% reduction from the 1997 levels. That will immediately put $5 to $6 per tonne—over $150 million—back into the hands of farmers. I think the majority of farmers support the Canadian Wheat Board's involvement in transportation. I think they've said very clearly that without that role in transportation, it will hinder their marketing ability and will affect the returns that farmers will receive.

Another point I want to make is that if the minister moves forward with any kind of reform without ensuring that there are indeed competitive measures put in place, without open access or joint running rights, we will not achieve the kinds of lower rates that we're being offered. And that seems to be a fundamental point that needs to be stressed: there needs to be true competition in that system.

One final point is about the support we see through some of the marketing institutions we have, both in eastern Canada and throughout the country, in terms of supply management. Supply-managed industries have generally done very well. Dairy farmers, for example, are some of the best-paid farmers in the country. They've received a lot of regulatory support. They indeed have a good system that returns the cost of production. I think there are a number of lessons that can be learned, although there can't be a direct comparison with an export-dependent sector like grains and oilseeds. But the lesson in terms of stabilizing markets and stabilizing incomes has been a good one, and I think we need to pay attention to that.

In closing, I want to talk about the role of the Wheat Board, because many farmers are calling for a diminished role in terms of the Wheat Board's involvement. I want to point out a study that was done here by Daryl Kraft, Hartley Furtan, and Edward Tyrchniewicz, “Performance Evaluation of the Canadian Wheat Board”, which was completed in January of 1996. It pointed out clearly that the Canadian Wheat Board returned premium prices to farmers in the amount of about $13 per metric tonne, and that was premiums up and above our competitors. If you put that out over the whole grains economy, that added up to, on average, $265 million per year that was put into the western economy. Add into that the other $5 per tonne that the board saves, in terms of the backing it receives from the federal government in terms of the risk management—the lower cost of price-risk management the board system offers farmers is another $5 a tonne.

• 1820

Indeed, the numbers go up from there, because they looked at a period when we were suffering from a lot of export subsidies under the export enhancement program. The level of premium that was achieved by the Canadian Wheat Board system in that period was almost $30 a metric tonne.

You can see that these are not inconsequential returns to producers, over and above what an open-market system or a dual-market system would return. I think this is a very important point. We do not want to weaken these institutions that are actually putting more money in the hands and pockets. We need to pay attention to that. Indeed, because of the transfer of power to elected directors within the Wheat Board, I think those farmers will act on our behalf and in our best interests as an industry.

The Chair: Thank you very much. Your comments are appreciated.

Now we will go to George Godenir.

Mr. George Godenir (Individual Presentation): Thank you, Mr. Chairman, honoured guests, ladies and gentlemen. It's a pleasure to have been asked here to say a few words today.

I am the president of the Pro-West Rally Group, which was organized back in February of this year, and we've come a long way. Our goal is to save the family farm and our communities. We're strictly non-political and non-unionized. We're strictly working to save the family farm. That's our goal and that's what we're heading for.

The family farm is being threatened and will be destroyed if we don't stop. We have been lobbying governments for a year or more. Pro-West has been to Ottawa on three occasions expressing our serious concerns. We have met with most of the cabinet ministers. I believe most of them realize there is a very serious farm crisis. However, the Prime Minister has refused to meet with the farmers and has refused to come to western provinces.

Pro-West returned to Ottawa a fourth time with a coalition group, consisting of the premiers of Saskatchewan and Manitoba, all the opposition leaders, and many farm leaders from both provinces. We were not asking for handouts. Our intention was to get the government to accept their responsibility for eliminating agriculture programs too quickly, which has contributed to the shortfall of $1.3 billion, mainly in the grain industry, for Saskatchewan and Manitoba.

We were unsuccessful in our bid with the Prime Minister of Canada. When the Prime Minister was questioned on the farm crisis in the House of Commons, we personally heard him say there was the AIDA program with $900 million available; farmers were not filling out their forms, so there was no crisis. At this time time, he has absolutely refused to address the problem.

The farm crisis in Saskatchewan and Manitoba has gone beyond serious and has become very critical. At the present time, farmers are being foreclosed on and forced off their lands. We are asking for your help to stop this now. In areas where farmers have had drought and disaster, they don't have money to buy groceries. Their credit is being cut off and they don't qualify for welfare. Right now, farmers with next to nothing are helping farmers with even less.

With this crisis reaching such a magnitude, the churches across Canada are getting together to save the family farm. The Lutheran, United, and Mennonite churches are already working to educate their congregations, so they may respond to the farm problem in Canada, especially in Saskatchewan and Manitoba.

Just to name a few of the problems, there are heavy subsidies to European and American farmers. Canadian governments should not expect individual farmers to compete against the European and American treasuries. The federal government eliminated the Crow benefit on August 1, 1995. Approximately $320 million per year was removed from the pockets of Saskatchewan farmers with that decision. Freight rates for wheat in the Yorkton area of Saskatchewan were $11.58 a tonne during the 1994-95 crop year. The freight rate for wheat from Yorkton in 1999 and 2000 now amounts to $35.75 a tonne, a tripling of the cost to the farmers.

How long does the Prime Minister expect the farmers of Canada to subsidize the food industry? If we cannot hold the Prime Minister accountable, perhaps we should ask him to step down and be replaced by someone with a heart and a conscience. The effect on the farm family, caused by the Prime Minister ignoring this responsibility, is very critical. The farm crisis should be considered a criminal offence.

• 1825

As a solution, some of the tax collected on commodities like beer and rye should go directly back to the farmers who produce the raw materials. Beer and rye alone generate millions of dollars for the government in taxes. Surely governments can pay the farmer more than $1.70 a bushel for malt and barley.

We insist a study be conducted on the 49% hidden tax that is collected by the government on chemicals, fertilizers and fuel, to see if there can be a reduction in this tax. This hidden tax is too heavy to pay when producers are only receiving $1.70 a bushel for malt and barley and $2 a bushel for wheat. If these suggestions were implemented, they alone could help and save the family farm.

When I was in Ottawa, I happened to be one of the persons who attended the meeting with Mr. Goodale, and that was one question we put to Mr. Goodale. We said there was a 50% tax on chemicals and products the farmers buy. They turned around to the two men behind them—because that's what they usually do—and asked them to answer the question. They said “No, it's 49%”. So that's why we're using 49% now.

The freight costs for the average seeded thousand-acre farm—and I'm using the Yorkton area because this is where the study was made—in 1994-95 were $9,607. In 1999-00, the same freight bill was $29,659. The increase in freight costs for the farmer amounts to $20,052. This has meant to our farm that it costs approximately $50,000 yearly to move our grain. There's also the additional cost of trucking our grain from the farm gate to the elevator. Because of elevator consolidation, our trucking distance has increased from 6 miles to 60 miles.

All the farmers here today realize that with these new terminals and everything that's taken place, we can't even truck with our own old trucks because they're not fit to be on the road. We must hire other trucks to come in and haul our grain for us, which is another added cost. Before, we could haul our grain the 4 miles to town, but now most of our grain is going 40 miles from our farm.

My son is here with me today, and we farm on the Manitoba-Saskatchewan border. Our cost last year for freight alone on our farm was $70,000. If I had that $70,000, I can tell you, I wouldn't be here today.

As I will show you, the grain ticket elevator deduction amounted to over half the cost of this load of grain. The price per tonne was $114.00 and the net weight was 35.571 tonnes, so the gross amount was $2,915.09. The Canadian Wheat Board initial payment was $2,913.09. The freight was $936.72. The elevation was $246.19. The terminal cleaning was $89.17, and other charges were $9.76. The trucking to the elevator was $162.00. So out of $2,915.09, the farmer ended up with $1,421.18. Now we still have to take off our crop production cost, which is an estimated price of wheat at $4.03. The break-even amount is $6.87. The shortfall is $2.84 an acre.

How long does the Prime Minister expect the farmers of Canada to subsidize the food industry? If we cannot hold the Prime Minister accountable, perhaps we should ask him to step down and be replaced by someone with a heart and a conscience. The effect on the family farm caused by the Prime Minister ignoring responsibility, and the very solution to the farm crisis should be considered.

These are some of the things that were raised by my organization, Pro-West. Two of our people are in Ottawa right now. They attended the farm conference that was on in Toronto. They will be reporting back to us at the end of the week when they fly home. We also held a meeting last night in Weyburn. We had one in Yorkton and we're holding meetings all over Saskatchewan, Manitoba and Alberta. We also have people joining us from British Columbia who are also having problems.

I want to thank you again for giving me this opportunity.

The Chair: Thank you, Mr. Godenir.

Arlynn Kurtz, welcome.

Mr. Arlynn Kurtz (Individual Presentation): Thank you for the opportunity to speak there. I'm a little nervous, as it's the first time I've ever done anything like this.

My wife and I farm in Stockholm, Saskatchewan, which is an hour southeast of Yorkton. I also serve as a councillor for our rural municipality. I'm a third-generation farmer who survived the 1980s interest crunch. We farm about 5,000 acres. We seed all the major cereal crops, pulses, and oilseeds. We only have some part-time help. None of our children farm. One of our sons came back to farm for a year and left. He wouldn't have anything to do with it.

• 1830

Voices: Oh, oh!

Mr. Arlynn Kurtz: We have tripled our farm in the last five years. That has been to our detriment. AIDA doesn't work for us, and in fact none of the programs work when you expand your farm.

We were at a crossroads and we realized that we had to make a choice. We not only expanded our farm but five years ago sold out where we were and moved to where land was available. We had to upgrade our machinery because it was worn out, and we started expanding our farm.

I look at my operation as a business, not a way of life. It would be great if we had the same flexibility as other businesses.

I would like to briefly touch on AIDA and then I want to address the agriculture system and point out what I see as the problems and how to change them.

I have not read everything contained in the AIDA forms—my accountant filled it out—but AIDA discriminates against efficient operation. Every farmer should get the same subsidy per bushel grown as his neighbour. If I can grow more bushels because of my management, I should be rewarded for it. After all, it may be because we purchased one of the modern, efficient seed drills, at a cost of about $200,000, to reduce input costs and maximize yields. But I also have to pay for that machine. AIDA doesn't take that into consideration. We should be able to use modern equipment. Ford doesn't build cars with obsolete equipment. Why should I farm with obsolete equipment?

One very glaring flaw in AIDA I came across just the other day when we received this new AIDA package. It's for the advance payment for this year. I quickly opened it up to see what it was and I found in there a form for the advance. What did I find? I cannot claim cash rent as an expense. Now, I don't understand this. I guess somebody decided that farmers who have hog farms don't rent hogs, so it's not an eligible expense, and therefore we don't need it out here in the prairies when we rent land.

But enough on AIDA. We need an immediate injection of $80 per acre. It's simple. There's no high administration costs. It's fast. I can then pay some of my outstanding accounts before any payments get eaten up by interest on past-due loans and accounts.

I now would like to address the system and why it doesn't work any more. Just this morning I delivered a semi load of number three wheat. Here are my figures.

The semi load of wheat was produced from 28 acres at an approximate yield of 30 bushels an acre, which is higher than crop insurance records. It's sometimes lower than what we get, but it's probably a good average for my area. We had 22.69 tonnes gross, or 833.7 bushels; after dockage, 22.3 tonnes net, or 819.5 bushels; price, $126 per tonne, or $3.43 a bushel; gross payment, $2,810.30; deducted for freight, $590.02; elevation, $217.14; terminal cleaning, $80.24; CGC, $8.61; and federal freight adjustment factor, $231.29. Total deductions came to $1,068.67, or $29.08 per tonne, or $83.06 per bushel. The cash advance was $1,338, so I ended up with a cheque for $345. Trucking to the terminal cost $90.76, and I had to dry that wheat before we could haul it, which cost $208.50.

Guess what? I have $45.74 left. You can't farm on that very long.

Now let's look at what it costs to produce that. My figures come from custom seeding rates that the Saskatchewan agriculture department puts out. Seed is $9 an acre; fertilizer, $30 an acre; and chemical and pesticides, $30 an acre. Spraying costs $3 an acre, and we had to do four spraying operations, so that cost $12. Seeding costs are $11 an acre; sloughing, $4 an acre; combining, $16 an acre; cash rent, $20 an acre; and insurance, $8 an acre.

The total cost is $140 per acre. If you times that by 28 acres, it costs $3,920 to grow that truckload of wheat.

• 1835

Now let's take a look at the PRO returns for wheat. The highest figure for number three wheat is $164 per tonne. That gives me a possible final payment on that of $38 per tonne. So the total for that wheat, the amount I could get in my pocket, is $2,230.29. That leaves me with a negative figure of $1,690. In other words, I'm short $60 an acre.

The problem with our system is that it's too little money that's too slow in coming and that's being eaten up by any interest. It forces me as a producer to go to a deferred-input contract with our suppliers and our grain companies, which, when they fall in default, bear 24% interest retroactive to the date of purchase.

Initial payments are too small, cash advance is too small, and final payments come 18 months later. Farmers never have the cash in their pockets to pre-buy with cash, and they don't have the market flexibilities they need for marketing.

If governments insist on being in my business, then they have to be in it for the tough times as well. They can't be on one side and not the other.

We must separate the issues now. First, we need an all-risk crop insurance program for the costs of production. It has to be reasonably priced to cover all disasters without a lot of deductions, as we have seen in this $50-an-acre per unseeded crops. On our farm we were unable to seed 600 acres. It should have been $30,000, but guess what? We got about $5,000. So $25,000 is missing off my land. I have cash-rent landlords who would like to be paid, but there is a big shortfall.

Second, we need a guaranteed price for our commodities at the time of delivery. If it is wheat and we need $6, then at delivery we should get $6. Keeping the two issues separate forces farmers to manage the farm to achieve yield, not manage the system to achieve large payments.

Canadians will have to make a decision. Do we subsidize farms or do we wait until farmers are no more and corporate farms take over? Then bread will be $6 a loaf, not $1 a loaf. When the corporations control agriculture, they will not sell the grain until they get what they want. Then they will sell it. They will lock the borders up. You won't import it. You will starve, with grain in the bins.

How are we going to finance this? I hate taxes, as everybody does, but we pay environmental charges on so many things today I think we could put a program in place in which we would add a small fee to every product sold that is grown or raised here in Canada. Whether it's fish on the east coast, grain, dairy products or whatever it is, add a little tax to it. It'll be cheaper for the consumer in the long run than if we do nothing. This money would then be used to subsidize the farmer in the tough times and it would build the fund over the good years. Just look at the revenue that 7% GST has generated in this country.

I would like to comment briefly on the Canadian Wheat Board and the problem in pooling as we have it now. I cannot see what our real costs are in the Canadian Wheat Board, and that bothers me. The books are closed. It's very convenient for the people in charge to pull a little bit out of this big pool, because nobody is going to notice it—for instance, salaries or perks. When everybody else is downsizing, I haven't seen the Canadian Wheat Board lay off any employees.

In closing, I would like to say we need $80 per acre cash injection now or we can't seed a crop in 2000. We need a guaranteed cost of production price for our commodities and an insurance program that works.

You don't insure your house for less than its value. Why would I insure my crops for less than it costs me to grow them? There is no time or money for commissions. Tomorrow is too late, today is okay, and yesterday would have been preferred for payments.

• 1840

Lyle Vanclief said we need tough love; exit if you can't make it. In my area, I would have a hard time to exit. There is no one left to farm in my area. There are sixteen and a half quarters for sale right now in one block. My equipment, if I sold it at an auction sale today, would not bring me enough money to pay the loans.

So what is my choice? If I can't sell, bankruptcy is all that's left. Is that the answer? When I leave the farm and take a job in the city, someone else is unemployed. Or I am unemployed. Either way we have to pay for every farmer who leaves the farm. Possibly two people from the farm will take a job; two people from the city will be unemployed or on welfare.

We would like to be independent and self-sufficient. However, due to circumstances beyond my control, we need assistance today. If Canadians fail to assist agriculture, the effects of this disaster will be felt for many years or generations.

Thank you very much.

Voices: Hear, hear!

The Chair: Thank you, Mr. Kurtz.

Time is fleeting, but I think we can get two more in.

Mr. Pick.

Mr. Jack Pick (Individual Presentation): Mr. Chairman, members of the review panel, I commend you for taking the time to come out and hear some grassroots advice. Many times we farmers do not feel, when we see some of these programs, that anybody remotely concerned with farming had anything to do with their authorship. So I commend you for coming out.

I should introduce myself. My name is Jack Pick. I farm in the Macoun area with my son. We operate on about 3,500 acres, and we grow everything now except marijuana. I'll put that proviso in there.

Voices: Oh, oh!

Mr. Murray Calder: That's a good cash crop.

Mr. Jack Pick: It is.

I have to tell you this. It's humbling and degrading and demoralizing to be involved in an occupation as honourable as farming and have to come and ask for help. My first reaction is to become angry and vindictive, and I think just about every man in this room has to deal with that every day before he can deal with his family and carry on in his community.

I also want to say this. When you're the thirteenth speaker on the same subject in an afternoon, you find yourself being scooped three or four times over. So I've rewritten this speech of mine in my head, and it's going to be a little disjointed, because I don't want to repeat what's already been said.

I'm going to try to lay out how this situation developed up to ten years ago, when it became the operative word of finance ministers to talk about debt reduction and so on, and we started to see hacks and slashes to all programs. I can list a few here. It ranges from a $25 signing fee when I go to export my purebred cattle at the border—a simple little thing like that—to health and education cuts.

Then of course there's the Crow rate, a massive slash. It was just bang. It started off talking about $6 billion or $7 billion in compensation, and then whack, it was $1.5 billion. We didn't even get a chance to duck, and before we knew it, it was shuffled to one side and we were told it was tax-free and it was really going to come off our capital gains in the end when we sold our farm. I can only describe that as insulting. Today it's already been pointed out by several of my predecessors what impact that's having on our operations.

Tax reform is another issue that has to be looked at to some extent. Tomorrow at 11 o'clock I'll go with my son and countersign a note for him to buy a half-section of land. You may say that takes a lot of guts or else I'm awfully stupid, but this boy wants to be a farmer, so I'm going to have to do this. But what worries me more than just the price of commodity groups is that he's going to have to pay that loan off with 60-cent dollars. The cashflow after he pays his income tax on it just makes it too difficult. Contrary to what Miss Byers in Regina or Mr. White in Ontario might say, entrepreneurial cash has to flow to keep these things operating.

When I hear that the United Nations voted Canada as one of the best countries to live in, I also know one of the major contributing factors is the lowest food cost. I can go into those figures—it's 10% or 12% of the average salary here, and 90% is left over for other things. It doesn't compare with the rest of the world. So I find that hard to accept while I'm footing the bill for this honour we rejoice in.

• 1845

When I look at what I got for my grain 25 years ago and what it costs me to buy a tractor or a car, I feel like a magician that I'm even surviving today.

On my farm this year I was fortunate enough to grow three and a half cars of malt barley. I'm not going to go through the costs of elevation and trucking and so on; that's been documented many times. But I want to dwell on this factor. There are about 300 bottles of beer in each bushel of malt barley. In a carload of malt barley, that's $1 million. Do some fast math here. How many jobs does this create? How many taxes are collected at all levels? Alcohol—and I think it's probably primarily provincial—is taxed very heavily at distribution. I belabour this point just to point out that the government must realize that as farmers, we are a major contributor to the GNP of this country—a major contributor.

I could get into the job creations. I've heard some figures already today, and I've heard other figures. The spinoff for every dollar a farmer produces in jobs is tremendous.

On my farm, I also spend about $150,000 a year in consumer goods. That benefits all as well.

I want to say this. I hold no animosity toward my American and European counterparts. I envy them their governments that are willing to stand in and back agriculture to the extent they do. In this community last spring, a very prominent farm broadcaster stood up and said acreage payments are not the answer. Well, I want to say no one thing is the answer in times like these. If you want to remain market neutral and also not discriminate against innovative and diversified farmers, what else is there?

I pick up that term, “market neutral”, because I served on the special grains appeal board back in the 1980s, and that was the catchword at that time. We wanted to remain market neutral. So I have to take a little bit of issue with Lyle Minogue. Where is he sitting now? I want to duck. He didn't agree with targeted payments.

The Chair: Oh, no, he did agree with targeted payments.

Mr. Jack Pick: Did agree, pardon me.

How do you stay market neutral and how do you reward the person? On my farm ten years ago, I was a committed wheat grower, and I straight combined it all. I didn't swap. I didn't have to do any of that stuff. To stay alive, I've had to do everything since then. I grow all sorts of crops. I'm out there swapping. I've started using chemicals and innovative things. If I were just a wheat grower, I would be in very good state today to collect some AIDA money. I know people in my own area who are doing very well off it, and they didn't spray for midge, which helped them to collect on this.

So if you target this money, sometimes you're eliminating your innovative, aggressive, progressive farmers.

In conclusion I want to say this. I'm in crop insurance as a desperate attempt to find some protection from disaster. Its coverage is totally unrealistic. Six to seven bushels to the acre on flax and canola and stubble is just not in it. It's not a good buy.

In short, both levels of government are partly to blame. We need short-term aid, and then in the future the trouble has to be recognized when it's coming down the pike, and not wait till the eighteenth hour, which we're at here today, and then try to put something together in a hurry. We must develop a program, put it in place, and leave it in place. GRIP was scuttled ten years ago, and no meaningful attempt has been made to replace it. We've just stayed in limbo until the situation we're in today.

One of the speakers earlier mentioned lumping it together. When I served on this special grains appeal board, I was privy to a meeting in Saskatoon. I don't remember who called it, but every representative was there—the hog growers, the feedlot people, barley growers, flax growers, and so on. This one gentleman gave a speech on a thing called Grains 2000. Has anybody here heard that proposal?

Some hon. members: Yes.

Mr. Jack Pick: I think NISA was a takeoff of that. But that proposal suggested all incomes related to farming—cattle, grain, custom work, everything—be used as a check-off, and it would be government-matched. This would go into your fund and could grow as a safety net. I would suggest that maybe we take a hard look at that program again to see if there's some merit in examining it.

Thank you, gentlemen.

The Chair: Thank you, Jack.

Voices: Hear, hear!

The Chair: We have just enough time to hear from Glen Seeman.

• 1850

Mr. Seeman, you have about seven minutes, so make the best of it.

Mr. Glen Seeman (Individual Presentation): Mr. Chairman, thank very much.

First of all, I need my name changed to something that starts with an A or a B or something so I become first and not last all the time.

The Chair: You could change it to AIDA.

Mr. Glen Seeman: AIDA, yes, a fairly bad word.

Mr. Chairman and committee members, thank you for the opportunity to speak to you for a few moments.

As a little bit about myself, I farm 17 miles north of Estevan. My wife has been a school teacher for 30 years. She has just retired. She's the one who has kept our farming habit going. Actually, I diversified when I married her, because we had another farm income, and it was just like diversifying.

We were talking earlier about some of the people who work off the farm. In our area especially, it seems like it's probably 75% to 80% of the people. Either the farmers themselves have a part-time job or their wives work full-time just to help support the farm and help pay for some machinery or perhaps some extra land you would want to buy.

With all due respect to our Prime Minister, not very many weeks ago Mr. Chrétien was quoted as saying that obviously the farm sector isn't as bad off as we really think it is. Of course he hasn't visited or been at one of these meetings and heard some of the grain farmers, especially as we have heard today, talk of their plight and some of the things that have been going on in the farm sector.

On December 2, 1999, a report from Statistics Canada said that from January to September of this year, wheat has gone down 5.4% from that same period one year ago; durum has dropped 22.9%; barley 16.9%; and canola has dropped 29.2%. Of course in the case of canola it has dropped even more, about another 40% since those statistics came out.

When I look back in my elevator receipt tickets, I find that ten years ago I was getting $4.36 for a bushel of wheat. That's without the final payment. That's what I was getting at the elevator at the time. Today I'm getting around $2.30 a bushel.

Ten years ago, durum was bringing me $4.69, and again without a final payment, which was fairly good in those years. Today it's $2.60 a bushel. I want to add that if I want to go and buy back that same durum, number three durum, from the Wheat Board today, it's going to cost me $6.30, but I'm only getting $2.60. I have a problem with that somewhere. There's something wrong with some of our figures.

Also, ten years ago I was paying 34¢ a litre for gas. Today I'm paying 65¢ at the pump here. Diesel fuel has gone up about 50% from ten years ago.

Just last week a farm report that was on television estimated that some 20,000 farmers in Canada are going to go bankrupt—I shouldn't say will go bankrupt, but will be nonexistent by this next crop year, when the time comes to put the crop in, because they won't have funds to do it. They'll just disappear. Either they'll sell or they'll go bankrupt.

All the statistics we have heard today are enough reason for concern, not only for myself—and I am concerned for myself, but I'll probably make it here or there somehow until retirement—but also for our neighbours. I think we need to look out for the young guys who are trying to start, for the kids who want to and are trying to get into agriculture, and also for our children, for our sons and our daughters who want to get into farming. How are they going to be able to survive, or how do we help them get into farming? How do we make the transition from us to them?

Our son is a mechanic in Estevan, and he farms some land on the side. He comes out and helps in the evenings. But if I were to give him the land, he wouldn't be able to buy used machinery and pay for it at the price we're getting for grain right now. It just doesn't make any sense for him even to try it.

As farmers, I guess we've always been very optimistic, because we've always looked at next year. Next year was the year we were going to make it. Next year was the time we were going to get good prices. Next year we were going to have a bumper crop. Next year the midge wasn't going to hatch and we weren't going to have to spend $12 an acre to spray for those little bugs. It was always next year. But for some of the farmers, next year is going to be a little bit too late; it's not going to happen for them.

• 1855

There are a lot of industries and a lot of people in industry in the world today, but there is no other industry in the world that cannot put a production cost into the commodity they raise or sell, and that's what we need. We have to have a production cost. We have to have something put in so that this not only pays our expenses but also a little bit extra so that we can live a halfway decent life ourselves and at retirement we can say yes, we did gain something; we did have a little.

There was a motto I read years ago in a store. It was kind of cute, so I remembered it, and I think this is really relevant to us today. It says “We the unwilling, led by the unqualified, have been doing so much with so little, we now try to do the impossible with nothing.” That's just about what we're trying to do.

I think as farmers we've become about as efficient as we can. You've heard everybody talking today about how we have tried to cut costs. We have done different things to try to do it cheaper. A child or a husband or a wife has worked off the farm, and we've done what we can, but we have to pencil in a profit so that we can be able to make it for the next generation.

How is it going to be? I wouldn't want it to be in the way of AIDA payment or anything attached to AIDA, because we don't qualify and we won't qualify for it this coming year. And I know a lot of my neighbours don't either. So we don't want it in that kind of a form, but we do need some kind of help that will tide us over until we can come up with a plan that will be a long-term solution so that farmers can survive in western Canada, and not only western Canada but all of Canada. As part of it, I think we need to look at all of Canada.

I know a lot of things have been tossed out here today, but one of the things I think we do need is probably a floor price or, as we heard about, some kind of revenue guarantees. We have to have something in place for the long term so that we already know what we are going to get on our farm next year. I can't survive not knowing what I'm going to have next year. It may be a full payment; it may be only half a payment. The working person wouldn't put up with that kind of thing. If his boss said “Well, you can come and work for the year and we'll see at the end of the year just how much profit I made, and if I didn't make any profit I'm going to pay you only half the wage”, there would be rebellion. So we need something like that in place.

In closing, I'd like to share something a little bit personal.

My grandparents immigrated from the eastern sector of Europe. Actually, my grandfather came just before the First World War and my grandmother was brought over later. They and my parents related to me some of the hardships and things they had to go through in the 1920s and the 1930s, some of the problems they had. Yet through all those hardships there was always a thankfulness to be in Canada, a thankfulness for where they were.

I'm proud to be from that heritage. Actually, I'm from German heritage, but my parents didn't come from Germany; they came from part of Poland. Through all those hardships, among the things I wrote down here, they always taught us to have a trust in God, to work for what we had, to be thankful for a country like Canada to live in, and to be honest and above-board in all our dealings. I respect and appreciate those values.

We have tried our very best to live up to those values, but in all the hardships that my grandparents and my parents went through, they were still able to pass on some of that farming heritage and also some of the farm property to me and to their grandchildren.

I'm saying I would like that same opportunity. I would like to be able to pass some of that heritage on to my children and my grandchildren so that they could carry on the line of farming as we know it as such. I don't know if we can do it on our own. We need your help, and we need the government's help. Through some of the hard times, we need your help.

Thank you very much.

Voices: Hear, hear!

The Chair: We've heard from some wonderful presenters today. I apologize to the three or four farmers who wanted to appear; we're simply out of time.

• 1900

Before we go, I want to take a few seconds to ask all the audience, with a show of hands, whether you prefer a targeted program going to those farmers in need or an across-the-board program going to all farmers regardless of financial circumstances.

How many of you are in favour of a targeted program? About five hands have gone up.

How many of you are in favour of a right-across-the-board program? There's no doubt. The majority of hands have gone up.

On that, thank you very much. It was a pleasure coming to Estevan. I wish we could come under better circumstances, but we appreciate this very much.

The meeting is over.