FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 17, 2000

• 0905

[English]

The Co-Chair (Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.)): Good morning, ladies and gentlemen. Today we have the privilege of having a joint committee meeting between the Standing Committee on Agriculture and Agri-Food and the Standing Committee on Foreign Affairs and International Trade. Co-chairing this meeting is my good friend Bill Graham, who is the chairman of that committee.

Today we're having a meeting around World Food Day, which actually was yesterday. We didn't have an opportunity to discuss matters around World Food Day yesterday, but we can do so today.

We're privileged to have some distinguished witnesses with us. From the Canadian Council for International Cooperation, we have Esperanza Moreno. From the Canadian Foodgrains Bank, we have policy manager Stuart Clark. From Oxfam Canada, we have Rieky Stuart. And from the Canadian Federation of Agriculture, we have Jack Wilkinson.

Just before we call on the witnesses, I would ask Mr. Graham to say a couple of words.

The Co-Chair (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Thank you, Mr. Harvard.

Colleagues, on behalf of the foreign affairs and international trade committee, I would like to welcome the witnesses here today. I think this is the fourth joint hearing we've had on or around World Food Day.

Obviously, food production is an extremely important dimension of our own society here in Canada. We're very proud of what our agricultural community does, but as members of the foreign affairs committee, we're also extremely aware of the fact that global food shortages are one of the contributing factors to enormous poverty and, in turn, a lack of security throughout the world.

As you may know, the FAO, the United Nations agriculture organization, was founded in Quebec City in 1945. We as Canadians have always taken a strong interest not only in our own agricultural production, but in ways in which we can help others around the world with their agriculture production. In our WTO study, our committee has looked extensively into food security, so we're always pleased to hear what our witnesses have to tell us about what more we could do as Canadians to contribute to this.

[Translation]

Welcome, everyone, to this annual meeting.

[English]

Perhaps I could just make a small note of the fact that the Hon. David MacDonald is here. He was the one who originally got us into these hearings, and we're glad to see him back here.

The Co-Chair (Mr. John Harvard): Thank you, Bill.

I guess we'll start with our witnesses. I assume we'll hear from all groups before there are questions.

Ms. Moreno, are you going to start? If so, we'll move on to the next witness after you have finished.

We do have two hours this morning. We'll have plenty of opportunity for questions, so welcome to all of you.

You may begin, Ms. Moreno.

Ms. Esperanza Moreno (Acting President and Chief Executive Officer, Canadian Council for International Cooperation): First of all, thank you for inviting us to appear before the committee today to mark the 20th anniversary of World Food Day.

As many of you know, CCIC is an umbrella organization of over a hundred Canada-leading development NGOs. As part of our in-common campaign, we work with our members and alongside other organizations to ensure a strong and effective Canadian contribution to ending global poverty. Every year for twenty years, World Food Day has been for us an opportunity to remind us of the great challenges we face in the world in order to assure food security for all and food as a right for all.

One of the most basic and telling signs of poverty is hunger. We are here today as members of the Canadian NGO Food Security Action Plan Working Group, whose members and supporters are working in Canada and overseas to reduce hunger and to support farmers' and people's organizations. The great poet and activist Pablo Neruda said “For now, I ask no more than just eating.” It is important for us to reflect on the justice of eating.

• 0910

I want to speak to you about three things today. First, what is the problem? Secondly, what is possible? And third, I want to point to broad areas where we can take action, areas about which my colleagues here will speak in more depth.

On the problem, many parts of the world, including Canada, are enjoying a time of unprecedented prosperity, yet every day millions of people wake up knowing they won't have enough to eat that day. That hunger should exist when the earth produces enough food to feed everyone is totally unacceptable.

[Translation]

The reasons for this anomaly are numerous and complex: destruction of the environment and a world trading system that puts the production of fertilizers for farming ahead of local self- sufficiency. In the 1970s and 1980s, the green revolution pushed small-scale local farmers off their land; the government and rural elites wanted to make way for large scale high tech farming. Local crops were pest- and drought-resistant. They were replaced by less resistant hybrid varieties, which are protected and patented by individuals and have a much higher yield, but require greater quantities of energy and commercial fertilizers, which are often important.

In communities that once survived on traditional fishing and farming, there is now unemployment and underpaid employment. Hunger strikes even in countries that produce enough food. In fact, if you look closely, you can see that it strikes in our own backyard. According to the Canadian Association of Food Banks, 2.4% of Canadians depend on food banks to feed their families. Over 40% of these people are under 18.

Today's Globe and Mail reports that the number of people going to food banks has increased by 1.4% since last March, an unprecedented period of prosperity in Canada. The number of food bank clients has doubled in the past 10 years. In 1989, there were 378,000 clients; there are now 726,000 clients.

In Canada, many farmers and fishers can no longer make a living supplying food to Canadians. While farmers need more and more land to survive, transnational corporations can put food on our tables more cheaply, owing to freer trade in foodstuffs and because they often have contracts with small farmers or exploit the rural labour force of countries of the south.

The problems become more complicated in many developing countries when domestic food production is unable to meet the caloric and nutritional needs of the population and there is not enough money to import foodstuffs to make up for the shortage.

In both the north and the south, the poor are the hardest hit: small landowners, those without land or who rely on fishing, refugees, Aboriginal people or immigrants who have recently left the poverty-stricken countryside. Women have it worse than anyone else. Although they produce well over half of the food in Africa, Latin America and Asia, land ownership legislation, customs and agricultural development methods in rural areas block access to land, credit and technology, thus hindering women's production capacity.

In cities, because it is so hard for them to find employment, women cannot buy food. The lack of social services in urban and rural settings adds to the burden on women and leaves them less and less time and energy to engage in paid work and produce food. In many countries, because of their lower status, the girls and the women eat after the boys and the men. There is often very little left for them to eat.

Now,

[English]

what is possible?

It wasn't supposed to be this way. In 1996, representatives from more than a hundred governments, including Canada's, met in Rome for the World Food Summit. They agreed that everyone has a right to adequate food that is safe and nutritious. They then promised to work on it, and they set themselves a target to reduce the number of hungry people in the world—800 million—by half by the year 2015. This goal was modest and is absolutely realistic. It means reducing the number of hungry people by 20 million a year, but we are falling far short of the target, with reductions in hunger sitting at about 1 million per year.

• 0915

You could say that the car bringing an end to hunger was supposed to be travelling at 100 kilometres an hour, but it is dawdling along at only 40 kilometres an hour. Progress is so slow that the target for the reduction of hunger has now been set for 2030. Also, an additional 12 million people are hungry each year because of the failure to deliver on the promise made at the World Food Summit.

What can be done? Action is being taken by citizens and farmers all around the world to make food security a reality.

[Translation]

Today, in Brazil, following a 1993 nation-wide civic action campaign by neighbourhood associations, churches, companies, unions and schools, some 3,000 independent committees are working to end hunger for 32 million Brazilians. This campaign has given rise to a new, grassroots political approach and a new, more decentralized form of organization, which has forced the Brazilian government to recognize the problem of hunger.

In Ethiopia, India and Kenya, foundation seed is being collected, stored and used by NGOs in order to restore the genetic diversity of local food crops that are resistant to new illnesses and pests and grow without irrigation or chemicals.

Throughout the world, farmers' rights groups have sprung up in opposition to the monopolies that control seeds and plant production. The same phenomenon can be seen even in Canada. In Saskatchewan, for example, farmers are trying out new forms of land ownership based on collective interests. They want to develop viable agriculture and to produce healthy and nutritious food themselves.

In the Maritimes, independent fishers are forming larger organizations in order to better manage in-shore fishing in keeping with the interests of costal towns. These initiatives, which come largely from and benefit the poor, show how much can be done.

[English]

But citizen action alone is not enough. Governments need to make this a priority and fulfil their international commitments. My colleagues in the food security working group will speak about specific areas in which Canada's actions can make a difference: in Canadian aid programs; through food aid; through international trade policy; and, very importantly here at home, through better supports to domestic farmers.

With respect to Canada's aid programs, we are tabling with the committees today a proposal on how Canadian aid can better address food security. The proposal is in front of you and it is entitled “Towards Reducing Hunger by Half: A Canadian NGO Proposal for Canadian Aid”. By matching human ingenuity with commitments by national governments and the international community to end poverty, the simple justice of eating could be transformed into a reality.

Thanks.

[Translation]

Thank you very much.

[English]

The Co-Chair (Mr. John Harvard): Thank you very much.

Ms. Stuart.

Ms. Rieky Stuart (Executive Director, Oxfam Canada): Thank you very much, Mr. Chairman, Mr. Graham, Mr. Harvard, distinguished parliamentarians, colleagues.

[Translation]

We are very pleased to take the opportunity we are given today to discuss a subject as important as hunger.

[English]

Thank you very much for this opportunity.

Oxfam Canada has worked on the problem of hunger since our founding 37 years ago. We have approximately 40,000 Canadians who support our work dollar by dollar, and we partner with CIDA to increase our reach. We work with small farmers and rural community associations in 20 countries in Africa, Latin America, and the Caribbean. Through our affiliation with Oxfam International we can learn from experiences in 120 countries around the world.

Along with many other Canadian non-governmental development organizations, we've learned a few things about what causes hunger and what can cure it. In the document that Esperanza just referred to, you have before you a summary of our thinking about the role of Canadian aid in global food security. I will elaborate here on the long-term development aspects of that proposal.

• 0920

As Esperanza pointed out, hunger is not caused by a lack of food but rather by a lack of access to food. The food is there. We produce enough food in the world, but people can't afford to buy it. The hungry are mostly women and girls. Most live in poor countries where small-scale agriculture is the major source of employment and income. Yesterday FAO released a very interesting report on the status of world food security, which I would like to draw to your attention.

For this reason we believe that a central part of the struggle against hunger must be to increase rural incomes and to enhance local production for local consumption. By strengthening small-scale agriculture and dynamizing the rural economy, people who are hungry will have the means for growing their own food and for generating income and employment to supplement what they can grow.

Whether or not food surpluses exist at the global or national level, the failure to develop agriculture and to increase food production locally often lies at the heart of local food insecurity problems. For example, 45% of the hungry children in the world live in countries where there is a surplus of food production. The long-term goal may be to reduce dependence on agriculture, but the road to that goal will require an improved rural economy that provides livelihoods and food for the local population.

To explain how we reached this conclusion, allow me to trace a bit of the history of development thinking since the heyday of aid optimism in the 1960s and early 1970s. Like some of you, I was there. That was the time of the green revolution when new seed varieties, monocropping, and chemical fertilizers and pesticides were first introduced. Oxfam Canada has worked with small farmers in Africa, Latin America, and the Caribbean since those early days of modern agriculture. Our partners lived through the green revolution. Some survived thanks to its successes, and all suffered from its failures.

I'd like to share their experience with you. For the first ten years the green revolution made history doubling and sometimes tripling the production of basic grains. Although only wealthier farmers were first able to take advantage of the new techniques, soon government loans and subsidies helped the technologies trickle down, particularly in Asia and Latin America.

By 1980, however, farmers around the world were reporting problems. Yields were falling and costs were rising. The new strains of wheat, corn, and rice sucked minerals from the soil and depleted water resources, requiring ever greater applications of costly chemical fertilizers and the diversion of rivers and streams. Yields were also falling due to pests as pests became resistant, requiring applications of ever more toxic herbicides and pesticides.

A little known fact is that some of the increased production was in fact a substitution for the more traditional production of vegetables, fruits, and other agricultural products so that the net gain, even in the heyday of the green revolution, was not nearly what it has been purported to be. Nowadays in countries such as Bangladesh you see that people are trying to go back to producing more diverse crops in order to improve people's health and ensure that they get the necessary diversity in their diet.

The green revolution's reliance on intensive inputs has become a weighty burden on the ecosystem and public health. The skyrocketing cost to farmers, especially as government followed the IMF dictates to phase out subsidies, put many small farmers deeply into debt. Thousands went bankrupt and lost their land. The result was an explosion in the number of hungry farmers streaming into cities, their lands either abandoned or taken over and consolidated into large corporate farms. Once in the city, of course, they have little possibility to feed themselves, and they join the swollen ranks of the unemployed.

If the displacement of rural people and their growing food insecurity are to be avoided, existing rural livelihoods need to be strengthened and new livelihoods developed. Appropriate agricultural technologies are essential, those geared to small-scale sustainable agriculture. Traditional knowledge systems based on low-input technologies and an intimate acquaintance with the physical and social environment are a more practical source of development know-how for small farmers in Nicaragua or Zimbabwe than the high-tech exports of Monsanto and other corporations.

• 0925

I recently visited both Nicaragua and Zimbabwe to see the work of our programs there, and I'd like to tell you a little bit about it. In Nicaragua, for example, we support an organization called Campasino a Campasino, Farmer to Farmer, in which small farmers are encouraged to experiment with increasing their production and their livelihoods and to share their knowledge with each other. There are well over 1,000 farmers, some working in quite difficult hilly terrain. They're there either because the most fertile farm land is not available to them or because that is their traditional area. They have massive problems with erosion, soil degradation, and either too much water or not enough.

In going to see some of these farmers, what was impressive, first of all, was the slope of the land they were farming on and farming successfully. But, secondly, what was most impressive was the kind of production and security in livelihood they had managed to achieve. They all said they used to produce one crop a year and if it failed that was it. Now they had something to take to market every few weeks. They were sharing what they had learned with their fellow farmers, and they felt much more secure in their livelihoods. One of the women told me about being able to educate her son because of the increased income she had been able to get using the techniques that Farmer to Farmer was promoting.

In Zimbabwe we're working with CIDA's support on a fairly substantial program to reintroduce drought-resistant sorghum strains that have been developed locally and to disseminate them widely. Western Zimbabwe is an area that suffers from drought. The new varieties have been very successful. The farmers who are producing the first seed have significantly increased their incomes. There has been a really good uptake. The milling technology that we are providing along with the seeds has made a big difference in terms of the accessibility of the crop to local markets.

Now you might ask, is that ever going to be enough, these kinds of small-scale projects? Don't we need something bigger? My answer to you, ladies and gentlemen, is that it takes both. We need reform of agricultural legislation as to who has the right to land, we need access to markets, but we also need to be working with farmers at the grassroots level for two reasons: one of them is around this issue of sustainability and livelihood, and that is very key, but equally key is the fact that by working together these farmers increase their sense of their own capacity and their own power. They're better able to negotiate with local governments and with national governments, and they are better able to determine their own needs.

This struck me very strongly in Zimbabwe. Zimbabwe, as you know, has had a very hotly contested election in the last year. In talking to the farmers we work with, people said, here in Matabeleland the products of development have not reached us; our government has not been working with us, and we are determined that is going to change.

When I lived in southern Africa, in Botswana, about 20 years ago, this was not a sentiment you would have heard from farmers or rural people locally. They felt grateful for whatever gifts were due to them. They were ecstatic over having won independence, and the idea that it was their right to hold a government accountable was really not part of the public discourse. It is today. It isn't unless we combine work at the policy level with work at the grassroots level that we're going to be able to make a sustainable difference.

• 0930

Unlike the green revolution or biotechnology, sustainable technologies do not emphasize boosting yields under optimal conditions. Rather, they provide farmers with food to eat and local sources of income under the varying and difficult soil and climatic conditions that usually prevail in small-scale agriculture.

By understanding and relying on the efficiencies of crop mixtures, local resources, and the community's and ecosystem's ability to bear risk, our partners are developing strategies that are tailored to their needs. These needs include making sure their governments and their communities respond to their situation.

Agricultural development, as practised by donor agencies, has tended to discount such know-how and to assume the superiority of modern solutions from outside the local community. Virtually all CIDA's support has gone to the promotion of modern industrial agriculture, with a few exceptions like the program in Zimbabwe that I described.

As with the displacement of people, such knowledge displacement can often be profound and abrupt. Control, which with local know-how is retained within the community, often transfers to agents outside the community—for example, global companies that are seed suppliers, fertilizer suppliers, equipment and fuel suppliers—with significant negative food security consequences, since poor people have limited ability to command external input.

In fact, the return to sorghum in Zimbabwe was part of a reaction to the pressure to produce maize. They were trying to grow maize in parts of Matabeleland as part of large-scale agricultural promotion in a rainfall area that was totally unsuitable to maize. This led to a number of very severe problems of poverty and malnutrition for the farmers in that area.

The push under IMF structural adjustment programs toward export-oriented agriculture also tends to undermine local systems—this, despite the increasing evidence that, particularly under the less than ideal conditions small farmers face, local small-farmer methods are more effective in producing reliable and nutritionally appropriate food supplies.

Our precious agricultural research dollars should be spent to support agricultural methods that build on, rather than replace, indigenous agricultural practices. A major element of this should be a greater focus on organic/agro-ecological agricultural production. CIDA should increase support for developing varieties of important crops that have a wide genetic base, to provide a robust crop suited to the specific situation.

But we must do more than invest in appropriate technology. Appropriate institutional supports and government policies are also key, because the point is not only to improve crop yields but to dynamize the rural economy.

Improvements to the infrastructure in poorer marginal areas can improve market access, and locally managed small credit can increase the possibilities for income-generating activities off the farm. Likewise, we can support the development of economically viable markets for products produced in rural areas.

One of the things that Oxfam has worked on for a number of years is fair trade, particularly fair-trade coffee. One of the things I would encourage you to look at, in your own life, in the life of the parliamentary restaurant, and in the life of your grocery store, is where the food that is eaten in these places comes from. Are the producers paid a fair price, and are we doing all we can to ensure that farmers in fact get a fair return for their production?

• 0935

Just as the solution to world hunger is not only technical, it's not also only economic. Hunger is a living social problem and must be addressed with policies that address the political and social dimensions.

For example, we should support activities to protect farmers' rights to own, conserve, and use traditional seeds. Here our partners confront the powerful forces of international agribusiness and the question of the ownership of intellectual property such as plant genetic material.

In addition, women producers are hampered by land ownership laws, custom, and lack of access to credit and appropriate technologies. Most of the hungry people in the world are women and girls.

While too much of CIDA's agricultural development work has taken a top-down industrial agriculture approach, perhaps more damaging has been CIDA's turn away from agriculture altogether. According to CIDA's own figures, allocation to agriculture, food, and nutrition programming declined by 58% over the 1990s. This alarming trend must be reversed and reversed fast.

We know there will be a price to pay if we fail to take decisive action. The latest figures show that the number of hungry people was reduced by 8 million per year during the first half of the 1990s. That's important progress, but at that rate, nearly 700 million people will still suffer from chronic hunger in the year 2015. Canada can and must do more.

Thank you.

The Co-Chair (Mr. Bill Graham): Thank you, Ms. Stuart.

Thank you, actually, for those helpful comments about CIDA. In our committee we are constantly struggling with what we might be doing, and I'm sure members will be coming back to you with some questions about that aspect and how we could pursue those issues.

Ms. Rieky Stuart: Thank you.

The Co-Chair (Mr. Bill Graham): We'll now go to Mr. Clark.

The Co-Chair (Mr. John Harvard): I want to remind you that we've already gone forty minutes. We have only two hours, so if you want any questions in, you might take that into consideration.

Mr. Stuart Clark (Policy Manager, Canadian Foodgrains Bank): We certainly welcome your questions, and I will endeavour to stay within the ten minutes that I have prepared.

Thank you for the opportunity to speak to your joint committee in conjunction with World Food Day 2000.

I'm sure I share your wish that we might have had this discussion one month earlier, when you wouldn't have been so pressed with many other issues. We are really grateful for you taking the time to listen to us this morning and hope that you'll find it useful.

The Co-Chair (Mr. Bill Graham): Mr. Clark, are you suggesting we might have something else on our minds?

Mr. Stuart Clark: Possibly.

The Co-Chair (Mr. Bill Graham): Where did you ever get such an idea?

Mr. Stuart Clark: So I'm going to try very hard to get your attention with some focused comments.

I wish to speak to you about the food aid sections in the papers you have before you, and I'd also like to make some comments about the relationship between hunger and food trade, which I think is a matter that concerns both committees.

Some of the need for food aid is symptomatic of the lack of will to realize the World Food Summit goals. The need for international food aid arises when either there is an outright shortage of production, which was the case in North Korea, or the inability of people to buy what is available, which is often the case in Bangladesh and India, and about which Ms. Stuart has already spoken.

But the need for food aid is not a normal requirement in a rural community. A strong and healthy agriculture sector has the resilience to withstand bad weather and various other problems and bounce back. An economy that produces sufficient sustainable livelihoods provides sufficient household income to purchase food; food aid is not necessary. But for almost 800 million people today, this is not the situation.

Hunger is experienced by over 100 million households today as a result of both a lack of available food and a lack of the ability to obtain it. When these two factors are combined you can calculate a global household cereal deficit, something the U.S. Department of Agriculture has done and estimates that, with current trends, by the year 2009 this household deficit, combining both the problems of access as well as availability, will rise to 33 million tonnes per year. By comparison, the entire wheat crop in Canada is 25 million tonnes per year.

• 0940

Despite these continuing trends, both global and Canadian food aid have been declining. From a peak in 1993 of 17.3 million tonnes per year, global food aid plummeted to 7 million to 8 million metric tonnes in 1998-99. The last year has seen some restoration of food aid levels, arising from the huge increase in food aid from the United States, some of which has caused its own problems for farmers everywhere, including here, by interfering with global grain markets.

Canadian food aid has followed the same downward trend. Total Canadian food aid declined from 900,000 metric tonnes in 1993-94 to just under 500,000 metric tonnes in 1998-99. Canada has made some significant advances in the quality of its food aid by addressing the need for certain micronutrients, but the provision of food remains a vital issue.

Changes in global markets for food commodities have greatly increased the movement of food within regions and across borders, resulting sometimes in situations in which locally preferred food is available at a cost considerably lower than that of sending food from Canada. During the past five years, the Canadian Foodgrains Bank, working with Mennonite, Nazarene, and Christian reformed church partners in Kenya, has provided food aid to communities combatting drought in isolated parts of that country. Purchasing locally produced corn at approximately 65% of the cost of delivering Canadian corn means we can supply 50% more food for the same price. In addition to being more cost efficient and meeting local preferences, such local purchases of food aid also provide incomes for local farmers and stimulate local production. Canadian government-supported food aid policy limits such local purchases to 10% of our total food aid. That's much lower than the 40% permitted by the European Union. This reduces both the quantity and the quality of Canadian food aid.

The relationship between food aid and food trade has become a major trade issue where food has been alleged to cause problems intentionally or otherwise with normal markets. The practice of selling Canadian food aid in developing countries to generate money for other projects, called monetization, can produce a double benefit. The sold food can add to the national food supply, and the money can be used to fund projects that reduce hunger at the household level. However, with the changes in global food trade, it's becoming increasingly difficult to avoid simply substituting for commercial purchases. When that happens, food aid becomes trade-distorting and does nothing to add to the local food supply.

Our paper contains three recommendations specific to food aid. First, restore the growth in Canadian foreign aid so that Canadian food aid budgets can be restored to the levels of the early 1990s. The CCIC in-common campaign is calling for an increase of $350 million in the year 2001-02, a mere 2% of the projected surplus for that year. Secondly, change the rules to allow the use of up to 30% of Canadian food aid funds to purchase food locally. Lastly, ensure that Canadian food aid sold in developing countries contributes to meeting the needs of hungry households by providing additional food and is not substituted for commercially obtained food, therefore running afoul of trade considerations.

I'd now like to make some brief comments on the food trade side.

For those who are hungry and have money, expanding international agricultural trade can help to reduce hunger by both adding to local food supplies and reducing local prices. Broader expansion of trade may also help boost the incomes of the poor by creating sustainable livelihoods through increased exports. However, for the poor, the way the international agriculture trade expands does matter.

• 0945

In developing countries, up to 80% of the population depends on agriculture for their livelihoods. Furthermore, only 10% of total agricultural production is traded internationally. The current rules regarding agricultural trade established under the Uruguay Round Agreement on Agriculture affect the entire agricultural sector in developing-country WTO members. Trade rules that, with other related policies, result in sudden declines in the meagre income of developing-country farmers will create more hunger than they alleviate.

The greatest trade-related threat to poor farmers in developing countries has come from the dumping of imported foods produced in countries with high subsidies. Canadian farmers know this problem well, but in the case of developing-country farmers the consequences can be immediate and irreversible. They're forced off their farms and join a growing number of hungry people in urban slums. The Philippines and Jamaica provide two examples of how this plays out.

In the Philippines, the majority of corn for the local market comes from the poorer parts of the country, particularly the island of Mindanao. Some 1.2 million households depend upon the production of corn for their livelihood. The replacement of import controls by tariffs and the reduction of these tariffs for a significant proportion of the domestic corn market have left these farmers competing with heavily subsidized corn flooding in from the United States. Farm incomes are dropping by as much as 30% as these imports force local prices down. Increasing hunger and further urban drift are inevitable. Civil unrest—and I remind you of the kidnapping of the tourists in that area—is already a problem in the area and is increasing.

In Jamaica, small-scale dairy farming is a common activity amongst those living in rural areas. Those of you who have travelled there will know it to be a fairly mountainous place. There is not a lot of flat land for crops, but it is good land for pasture. Plentiful sunshine, adequate rain, and well-adapted local cattle breeds have led to an efficient local industry. However, the liberalization of the trade in milk powder has caused an avalanche of milk powder from the European Union to pour into the country. This highly subsidized product has destroyed the market for locally produced milk, forcing farmers to dump over half a million litres of milk during each of the past two years. Dairy cattle are being sold off and hundreds of small farmers are being forced to abandon their livelihoods.

This issue is foremost on the minds of many developing-country governments. The growing influence of these very governments at the World Trade Organization means that making common cause with them will increase Canada's ability to address the concerns of our own farmers. Through rule changes that realize the full hunger reduction potential of international agricultural trade, Canada will be able to pursue both its domestic agenda and the World Food Summit goals. Our suggestion in this area is to request that Canadian positions and proposals for the further development of the WTO agreement on agriculture include the reduction of hunger; that is, the maintenance or the enhancement of household food security as a Canadian policy objective.

As a final word, the personal contributions by the Canadian public when there's a food crisis in the world point to the exceptionally strong public support in Canada for reducing hunger. The lead-up to and immediate follow-up to the World Food Summit saw the development of a powerful collaboration between Canadian academics, NGOs, farm organizations, and government departments.

• 0950

Agriculture Canada, as lead agency in the follow-up from the World Food Summit, has set up a special interdepartmental committee on food security to bring together the various ministries whose synergy can really make a difference. Agriculture Canada has also recently re-established the food security advisory committee as a way of drawing together partners outside of government.

Yet important and highly commendable food security-related initiatives, such as the new CIDA social development agenda with its focus on health and nutrition, remain unconnected.

Better collaboration will help Canada make the contribution to reducing hunger that Canadians expect.

Thank you for your attention, and I look forward to your questions.

The Co-Chair (Mr. John Harvard): Thank you, Mr. Clark.

Now we'll go to Mr. Wilkinson. Thank you for your patience.

Mr. Jack Wilkinson (Policy Manager, Canadian Federation of Agriculture): Thank you. I'll only take two or three minutes. Since I have no notes, I won't have to go through them all.

I am representing Bob Friesen, who normally would be here as president of the Canadian Federation of Agriculture. There's a meeting in Quebec City of North American and European farm organizations, so I'm standing in for him.

The Canadian Federation of Agriculture has a number of points it would like to make. Number one, it has been involved in the past in some farmer to farmer development projects both in Ukraine and Russia in which it has some practical experience to offer to the issue. As well, it is involved in the International Federation of Agricultural Producers, which is a worldwide organization in which 85 farm organizations and 65 countries around the world are represented and in which trade and food development and civil society issues are dealt with.

It comes to the issue, I think, of what needs to be done with some authority. To be very blunt, I think around the world policy-makers and governments have taken rural people and farmers for granted. They have chosen to ignore the rural issues and the stressful economic issues that are in front of farmers. That includes developed countries, I might add, just as badly as developing countries.

Because of this laissez-faire attitude and letting farmers sort out the problem, we have had a continual movement and migration in developed countries in particular, which is now taking place around the world, of people being forced to move to larger and larger types of farm operations with lower and lower margins. This displaces people, and therefore they move to urban areas for jobs and security. We're down to less than 1% of the population of Canada being in the farm sector. If this trend follows in developing countries around the world, I'd like somebody to explain how in India, China, and Asia you are ever going to create enough jobs to have in fact 2 billion new jobs in that area over the next 20 or 30 years without burning the earth up.

If people don't start taking seriously the fact that we are failing miserably in our development policy on keeping farmers and rural people in rural areas by rural economic development.... Study after study has shown that it's more cost effective to keep farmers and people in the rural area than it is to move them to the slums of large cities. You can take places such as Mexico and many South American and Asian cities where poverty increases dramatically as they move off the land. They'll move off the land because they can see no future in staying there as farmers because governments are instituting policies that have them producing below the cost of production. That is happening right now in this country, it's happening in the United States, and it's happening in every country around the world, and people have their heads stuck in the sand.

Therefore, our sense is very clear. You have to create the environment in rural areas in every country around the world so that people can see economic activity and a reason to stay there; so that they can have the net income that's required to reinvest in seeds, fertilizers, etc.; and so that they can maintain their independence and create an infrastructure where they can in fact see the type of development and economic viability that is necessary in order for them to be able to afford to buy that food. Until that happens we will be basically playing around the edges of this issue.

Thank you.

The Co-Chair (Mr. John Harvard): Thank you, Jack.

Now it's time for questioning. I think we'll go to the official opposition first, followed by the Bloc, and then over to the government side. I see somebody from the New Democratic Party, so he can go fourth. I think Mr. Casson has indicated that he will start off for the official opposition.

• 0955

Mr. Rick Casson (Lethbridge, Canadian Alliance): Thank you, Mr. Chairman.

I'd like to thank the witnesses for being here today.

I'd like to direct my question to Ms. Moreno, if I could. You commented on a target of 20 million a year, I think it was, to take off the hunger list, for lack of a better word. You said that we're missing that target and lagging far behind. Can you expand on what in your opinion are some of the things we're doing globally that are working and that aren't working in order to get this food out and people off that list.

Ms. Esperanza Moreno: In fact, Rieky touched on two issues. There are levels of work that is happening in the field, and there is also policy work that needs to be done. I think on both levels we can have that implemented. Many NGOs for years and years have given support to farmers' groups and women's groups. That's something that needs to continue, because we have seen results and we have seen improvements in the lives of people. If that type of work is not accompanied by more macro-level work, all that work that we have—

The Co-Chair (Mr. John Harvard): Excuse me, I think we may have a microphone problem.

Okay, we're firing on all cylinders.

[Translation]

Ms. Esperanza Moreno: I was just saying that the two examples Rieky referred to are illustrations of action that should be continued and strengthened. NGOs do a tremendous amount of work, as the various presentations have shown. NGOs work at the grassroots level with local groups to help families feed themselves better, but there is also a lot of work to be done at the national and multilateral policy level to ensure that decisions made at that level do not defeat the grassroots work. Such decisions can very quickly undo years of hard work.

The various witnesses have given examples both in Africa and Latin America which may give us hope. The work of organizations in the field must continue. For example, we must continue to support fair trade experiments or initiatives, because there is potential for farmers, whose work will be more productive and profitable. I believe that there is a will to pursue this innovative approach both on a small scale and at a policy level.

[English]

Mr. Rick Casson: Thank you.

I'd like to pose my next question to Mr. Wilkinson with regard to your comment, sir, about policy that has put our producers at a disadvantage. We know that in Canada our producers are seeing record low commodity prices for grain and oilseeds and that they're struggling to get by. We've done various things, including getting bigger and having continuous crops. All the things we've asked our farmers to do they've done, but we're still in a position where we have a very unstable agricultural community, and it's shrinking.

The idea of going backwards, and instead of getting bigger and better and changing methods to do that, and, especially in developing countries, have more people involved on the land and keep them there.... How do we ensure that we do that? Ms. Stuart, I think you alluded to that a little bit in terms of having different crops and different seeds and not going so much to the bigger is better angle. How can we do that in developing countries in order to avoid the situation we've developed in Canada, where we have done all those things and we're still not making agriculture viable?

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Mr. Jack Wilkinson: I think there are a number of things that can be done, and they vary somewhat by country. In a situation in which you're developing agriculture policies, you can develop policies that do in fact drive people to high-volume production and low-margin operations. I think that's what a lot of the policy-makers want, because that in fact lowers the cost of food to consumers, which seems to be the goal of almost every government.

If you go to high volume, you know you're going to displace a lot of producers. We are continuing to see this growth in Canada. As you introduce the technology, farmers now are capable of farming literally sections upon sections upon sections of land. Quite frankly, from a technology point of view, there really is no limit to how few of us there need to be to work all the ground in Canada and increase yields at exactly the same time. Therefore, how do you change policies so that you don't force people there? It may happen over time.

The example of the Philippines was given. There was a Cairns Group meeting in Alberta last week. One of the leaders of the Philippine farm organization was there. They're struggling with the question of the average size of a Philippine corn producer. I believe it's around 2.3 acres. They used to get $170 a tonne, but landed U.S. corn is available at $135 a tonne. If that differential exists for much longer, those Philippine corn producers are going to be broke because they're living at around $350 a year. They're just going to go out of business. When they go out of business because of that trade policy, they have no choice but to move to urban areas. The government has no ability to support them.

So on trade policy, for example, why did the Philippine government not protect its producers in the WTO round? There was no requirement to tear the wall down. We protected our supply management people here to some extent so that they would have a transition period. Governments have basically thrown their producers to the wolves of export subsidies out of the U.S. Why are we going into this round of conversations on trade being so soft with the United States and the European Union on export subsidies? We know clearly that there is nothing worse to disrupt prices, both Canadian and international.

There are many things like this that are doable, that will take the gun away from the heads of these producers, and that will allow them time to change. They may move to 3% of the population in agriculture over 50 years, but if we keep them moving in the current policy direction, they're going to be changing very quickly, faster than jobs can be created in their countries. That is a terrible sin that can be avoided very simply.

The Co-Chair (Mr. John Harvard): Thank you, Jack. Time has expired.

[Translation]

Ms. Alarie.

Ms. Hélène Alarie (Louis-Hébert, BQ): Hello. I have two questions. My second question will be about biotechnology, if there is time, but my first question is on food security. Food security is a major concern for agronomists. I lived in Africa for a few years and participated in organizing an FAO meeting. So I have been concerned about this for some time.

However, I have a problem with this concept. I think the problem of food security at present is not production but distribution. I cannot understand why some countries have surpluses while others are dying of hunger. In my view, the whole problem is that the way we are organized overall is always subject to the rules of international trade.

It is really too bad, but when I see people dying, I am less and less impressed by the rules of international trade. There is a lot of talk and discussion at the FAO, but not enough action in my opinion. I think the FAO should become a regulatory body. That way, if there was overproduction in one area and underproduction in other areas, whether because of the weather, drought, etc, the FAO could ensure adequate food distribution in the world. I do not understand why these two elements cannot be brought together. That would bring changes in some places because the situation evolves. Some countries might become more independent with time.

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In my opinion, something is wrong at the present time. When we had a pork surplus problem a year ago, I asked, in the House, why we could not get rules to give that surplus to countries in need. The Americans always find the rules. I was told that we could not do that because within the framework of the WTO that would count as hidden subsidies. I am sorry, but as a politician and an agronomist, I do not accept being told that you have to watch people die because international trade rules do not allow for that kind of action. I would like to know if you have any solutions to that.

[English]

Mr. Stuart Clark: I would like to respond to that question.

Right now, and of course working in one Canadian organization that gives about 90% of its time and energy into moving food from places where there is a surplus to where it is required, we recognize that the way people obtain what they need is by market access.

Nobel Prize winner Amartya Sen was the first to sort out that famines take place in the midst of plenty because people don't have economic access. They simply don't have a claim on the food. That claim comes usually from three possible sources: either they have income, there's a social safety net, or they have family connections that make it possible for them to eat. When those entitlements break down, it doesn't matter how much food is on their doorstep; they don't have access to it.

I think we all realize that we have chosen to use the market as the way we spread things around, and that's why, Madame Alarie, we have laid such a focus on the question of sustainable livelihoods, because if people don't have income, they have no entitlement to the food that's available.

Related to that is the reason we would say our agricultural trade policy should be a policy that, amongst other very legitimate domestic objectives, deals with the question of food security and sustainable livelihoods, to try to ensure that there are people who can buy the exports we want to make.

Mr. Jack Wilkinson: I don't think there's anything in the World Trade Organization trade rules that limit any country from donating as much food aid as possible, as long as it clearly is food aid.

There are concerns, for example, that the United States has disguised its food aid policy to capture commercial markets, because of its subsidization of credit, because of its repayment terms—a host of other things. But as a point of correction, I believe clean food aid has no trade rules that would prevent it from moving around.

The question really, though, as you said, is money. We're sitting in a situation where just about all the developed countries have the World Food Summit in Rome, they make flowery statements for five minutes each, get on the airplane and come home, and then domestic governments cut their expenditures on foreign aid by 50%.

Well, if people really want to change the way the world unfolds, increase the food aid budget, untie the ability of people to buy local produce, which Mr. Clark has talked about.

There are all sorts of solutions sitting out there. The question is really very basic: Is there any political will in those countries that have money to solve these problems for those countries that don't have money? When the market is the place for this transaction to take place, unless we deal with this question, it really becomes an academic discussion. Therefore Canada has to encourage developed countries around the world to take their social responsibility and put more resources on the table.

The Co-Chair (Mr. John Harvard): You have about 90 seconds, Madame Alarie.

[Translation]

Ms. Hélène Alarie: In that case, I must conclude that we have been talking for nothing for a long time and that the statistics you have given us are not at all encouraging. On top of that, I wonder if working with market forces is not a mistake. Do I have any time left?

[English]

The Co-Chair (Mr. John Harvard): We're pretty well out of time.

Ms. Hélène Alarie: Okay.

The Co-Chair (Mr. John Harvard): Thank you.

Dr. Patry.

[Translation]

Mr. Bernard Patry (Pierrefonds—Dollard, Lib.): Thank you, Mr. Chairman, as well as this morning's witnesses. First off, I would like to make a comment that is a bit more local than international; Canadian, in other words.

Ms. Moreno, at the beginning of your statement, you quoted an article from this morning's Globe and Mail mentioning the increasing number of Canadian men and women that have to count on food banks despite our country's present prosperity.

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My comment has to do with the possible causes of this increase in the use of food banks. Are there organizations in Canada like yours, or other organizations, trying to find the causes and determine the role that governments have to play in this instance? Actually, I am thinking about the social cost of casinos and lotteries, and that's also a current topic. I don't have the figures for Canada, but I was told last night that in Quebec, casinos and lotteries earn more that one billion dollars net per year for the government coffers and 500 million dollars of that amount comes from the machines that you can find in all the bars and public areas. The users of those machines are not tourists, they are local citizens, most often low income people, and the consequence of that in an increase in the use of food banks. So one can wonder whether our governments are not one of the causes of the impoverishment of Canada's population.

That being said, my next question is really more international in scope. According to the Food Security Bureau, over 800 million human beings don't get to eat their fill in world that is actually producing enough food to feed all men, women and children. After the World Food Summit that took place in Rome, Canada conceived an action plan and the Food Security Bureau was set up in February 1999. Do you really believe that the objectives of decreasing by half the number of undernourished people by 2015 is realistic, and, if so, what are the priorities to get there?

[English]

Mr. Stuart Clark: If I may, I'd like to say that if we look at what has been achieved—and I want to refer to what may look like a very bleak situation. There is the analogy of a car that was to be doing 100 kilometres per hour but is only doing 40 kilometres per hour. There is a problem in that it's simply not going fast enough, but it's in motion. Lest we think there is no progress, we need to remember that the world's population is also growing at the same time, and yet the number of people who are hungry is declining at the rate of 8 million people per year. So it isn't as though we have zero results. But how can we go faster? What are some of the things that can be done about that?

The 790 million people are hungry because of a variety of things. There are policies where you, ladies and gentlemen, have your hands on the buttons: the Canadian aid policy, a policy that has seen a cut of 50% in support for agriculture, food and nutrition over the past eight years. This is a cut much greater than the average cut in overall foreign aid.

That's a question for you, but I really don't want to say that's the only question. There are international questions around trade policy, and to be absolutely fair, and it's certainly true, domestic policies in host countries, in developing countries, play a very big role. So it's a constellation of things.

There are certain rules that you have the potential to influence, in terms of our trade policy, in terms of our aid policy, but I think we also need to recognize, as the World Bank has shown in its study, that aid, particularly development aid, is most effective in an appropriate policy environment. If the national government policy is to impoverish farmers, then perhaps putting a lot of money into agricultural development isn't going to do a whole lot for food security. On the other hand, where there is a hospitable policy environment, you can make a big difference.

So I think it's clear what the questions are here today for us, and I think it's probably also important that we look where we would help.

The Co-Chair (Mr. John Harvard): Is that it?

Mr. Bernard Patry: Yes, it is.

The Co-Chair (Mr. John Harvard): Thank you.

Before we go to Mr. Gruending, I have a question for you, Mr. Wilkinson. Your constituency is Canadian farmers, especially Ontario farmers, given your current position. Are you in support of Mr. Clark's suggestion that we use more of our Canadian food aid towards the purchase of grain in third world countries, locally produced?

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Mr. Jack Wilkinson: Yes, because to a great extent right now there is very little volume going out of Canada as a percentage of our production that is going under a food aid package anyway. Effectively, Canadian production finds its home on commercial markets, so you're not displacing. We can't sell to somebody who has no money to buy right now, so there's no business transaction taking place.

It's not a problem from our point of view if foreign aid is able to pick up something in a neighbouring African country and move it over. It's not displacing a commercial sale that we would have had. So from our point of view, it's economic activity around the world that gives people money; it creates what we want. Then they can buy from us, because Canadians don't want to pay anything for the food. So we're actually looking for export markets so that we can increase our cashflow.

The Co-Chair (Mr. John Harvard): Thanks, Jack.

Mr. Gruending, please. This will be five minutes.

Mr. Dennis Gruending (Saskatoon—Rosetown—Biggar, NDP): We got to the five-minute round before I got my chance at the seven-minute round, it seems.

Ms. Stuart, when you were speaking it seemed to me you were showing a certain amount of skepticism toward what I would call a free trade model in agriculture and food. You talked about what had happened with the green revolution. You talked about industrial agriculture, biotechnology.

Also, the Canadian Council for International Cooperation has an excellent booklet, which I've read, which wasn't discussed this morning. When you talk about food security, you say one of the reasons we have problems is a global trading system that favours producing food for export rather than encouraging local self-sufficiency. You say to achieve food security we need policies that support regional systems of food production and distribution.

I'm very interested. We have here someone who represents farmers, someone from the Foodgrains Bank who works closely with farmers, and two people from the NGO community. I'm wondering in a round table sort of sense here if I can get from you the best path forward. Is it free trade, access to markets, industrial agriculture? Is it bottom-up, local self-sufficiency, small farmer-based food security? For example, in my constituency this argument comes together over big hog barns for export, or local producers saying we don't want these big barns in here because they're going to knock us out. It's a very difficult problem for all of us to wrestle with.

So for any of you who wish to spend the rest of my five minutes talking about this, I would be interested to know, should we have free trade in agriculture or should we have this other model?

Mr. Jack Wilkinson: I think you need a blend. There are nearly 200 countries around the world and there is no rubber stamp that fits all. Within the current agreement we have flexibility, if people would use it, to basically protect to some degree domestic markets by the ability to limit market access, to have tariffs, to in fact protect, if they choose, some aspect so that they can slow down the transition.

On the other hand, if you're going to move food around the world, which will inevitably happen—since the beginning of history we have moved food around—you want to do it in a way that does the least to disrupt the local production base. I think that's really what many of us are talking about. You do not want to have a United States or a European Union, for example, be able to give export subsidies to dump corn into a particular country for one sale that's below local production cost, which is an unrealistically low price, which is going to drive those farmers out of business, and then next year they don't have any commodity they want to dump because there's no surplus. What's that country supposed to do now that it has just basically totally disrupted the agriculture community there?

From our point of view, those things need to absolutely disappear in this next round of trade. If you have fair international trade, we do not have to unduly disrupt the agriculture production and domestic market. I think there is a balance there that can be achieved without having the degree of disruption.

Mr. Stuart Clark: I will just make one brief follow-on comment. In my presentation I referred to the fact that about 10% of agricultural production is traded internationally, which means that 90% is local production for local consumption. This is a hard reality for us to get around because it's not our situation here, but it is very much the norm in developing countries.

We set rules to regulate how that 10% works, but it affects the whole 100%. If there are ways that we can start to regulate internationally traded commodities but not at the same time have the same sorts of policies completely sweeping over the other 90%, it may be possible to have a constructive blend between local production for local consumption and international trade. The problem right now, as I said yesterday in a press conference, is you have a bull in a china shop, where by breaking down the barriers you've got rules made for 10% of production having a devastating impact on the full 100%.

• 1020

Ms. Rieky Stuart: I think we're saying it would be nice to have black or white solutions, and in the past probably some of us would have advocated for one clear answer rather than another. What we're saying now is that it does require judgment; it requires the application of sometimes conflicting policy directives. For example, I thought Stuart's point about making global food security one of the objectives of Canada's trade negotiations a very sensible one. It's not always congruent with other objectives, but that's what good policy-making is all about, trying to find the right solution in a complex world. It does seem to me that that's our way of posing the challenge back to you and that for us it isn't either free trade or a totally domestic market; it's starting with what people need, what communities need to survive, and then trying to build a sensible policy framework around that.

Mr. Dennis Gruending: Do you have any comments, Ms. Moreno?

Ms. Esperanza Moreno: No.

The Co-Chair (Mr. Bill Graham): That's fortuitous because the time is up. Madame Moreno's name is Esperanza, and as the chair, I always have hope that this will happen. You're the first one who has ever done it. You're wonderful.

We're going to go now to Madam Augustine.

Ms. Jean Augustine (Etobicoke—Lakeshore, Lib.): Thank you, Mr. Chairman. I too welcome this discussion this morning, and I'm looking for the hope, Mr. Chairman, in all of this discussion because I think it is a bit depressing in the year 2000 that we can sit here and have this conversation.

I want to ask three small questions and then I'll let the witnesses decide who will answer. I want to ask what regions of the world are most affected by food insecurity. I think we can make some guesses, but I'd like to hear from you where those regions are. I know that food security can be attributed to a number of environmental factors, the issue of soil erosion, climate change, consumption patterns, etc. If you can somehow reflect on that in those regions or in some way how those environmental issues affect food security.... I also want to throw in the role of conflict, war, and all these things that create turmoil in regions. I'll throw in the issue of a critique of CIDA, how you see Canada playing a role in all of those issues.

[Translation]

Ms. Esperanza Moreno: Actually, Sub-Saharan Africa is the area in the world where you have the greatest concentration of people suffering from hunger. Unfortunately, it is also the area in the world where you presently have the greatest number of conflicts which have caused all kinds of population displacement both within the countries and outside of their borders. For these people the consequence was that they had to abandon the fertile lands that fed them. There is actually a huge correlation between the zones most affected by conflicts or environmental degradation and those areas where you have the greatest concentrations of people suffering from hunger.

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On the other hand, some 250 million of the 800 million we are talking about are in South-East Asia. Often, when you look at the major natural catastrophes either in Bangladesh or India or in another of those countries, you will see that they are the most vulnerable populations.

So population displacement is one of the major causes we are looking at here. Among the solutions put forward in the document, especially for agencies like CIDA, you have this one: when you give aid to populations displaced either because of conflicts or environmental matters, you also have to try to support the local populations hosting the displaced populations.

Often, ill-organized and ill-planned population displacement leads to greater environmental problems or aggravates conflicts. Actually, the local populations often wonder how they can become refugees and get help. They are often the first to be set aside. When the refugee populations show up, they get the impression they are unequal compared to the newly arrived populations in their areas.

So I think you are quite right. This huge correlation presents a challenge for the Canadian International Development Agency: to see to it that all humanitarian aid programs are of benefit both to the local populations as well as the displaced populations.

[English]

The Co-Chair (Mr. Bill Graham): Thank you.

Ms. Jean Augustine: What can we do right now to reverse some of those situations?

The Co-Chair (Mr. Bill Graham): Mr. Wilkinson.

Mr. Jack Wilkinson: Just one very brief point. I think CIDA is clearly getting better, but one area that I think they need to look at very seriously is the groups they work with in a number of these countries. One thing that I heard constantly from many organizations during my involvement in the international federation was that often aid organizations come in and try to create bodies and groups within that country that they're going to work with instead of looking at the community that's there. For example, I would hear that farm organizations in the local community were often ignored as the group to work with, and that always seemed to be a very big mistake. You make cultural errors when you do that, and you don't have the long-term effect. After the program is over and CIDA moves out, what was created often collapses. So I think a lot more energy needs to be put into farmer to farmer exchanges, farmer to farm organizations, and community infrastructure groups that are already there. You build the infrastructure, the community, and it remains after the program is over. I think that can be improved upon.

The Co-Chair (Mr. Bill Graham): We'll have to stop there, Mr. Clark, as we've gone over the time.

Mr. Hilstrom.

Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance): Thank you very much.

First of all, I'd just like to say that in Manitoba, where I farm, we support food aid very much and trying to help countries where there is hunger. We also have this program where we raise x amount of acres of grain and it's matched by the government. Of course, that all helps.

A comment is that democracies around the world, based on market forces and that type of thing, tend to be self-sufficient in food and/or maybe exporting, whereas we find countries such as the Soviet Union and North Korea where due to their government structure they were unable to feed their own people and/or make arrangements through trade to feed their people. So I think when we talk about a super-socialistic system or a market-signalled system to in fact feed the world, we do not want to move too far away from the free market trade system. You may want to comment on that.

With regard to domestic policy—Jack, I think you'd be the one I'd ask this question to—about four years ago North Korea was in an awful state, and it still is today, and we had a situation where the Canadian Wheat Board sold a big shipment of wheat to North Korea. A lot of farmers believed that grain was sold much below market costs into that country. The reason I'm asking this question is that as Canadians we all support making sure that people in North Korea aren't hungry, and as Canadians all of us should, share in that cost. What our western Canadian farmers who supplied that wheat are concerned about is that it is their pooled price that is being food aided into these countries at a lower price than what the market situation is. Are you aware of what price that grain was sold at to North Korea from the Canadian Wheat Board? Do you think this is a good policy?

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Mr. Jack Wilkinson: First of all, no, I'm not aware of the actual price of that sale. Secondly, I don't believe that within the Canadian Wheat Board they have a mandate for, nor do they make, food aid shipments. So if it was going to be classified as a food aid shipment, it would maybe be handled through the Wheat Board, but there would be a contractual arrangement with the government in which the producers would then be compensated at a below-market price because it was deemed to be food aid.

There's always speculation by some that the Canadian Wheat Board in fact goes out of its way to drive down the pool price so that it can hurt farmers. I've never believed that argument, quite frankly. I don't believe that if it was a commercial sale, they were doing anything other than matching the competition.

The Co-Chair (Mr. Bill Graham): I think Mr. Clark has an answer.

Mr. Howard Hilstrom: But don't cut me off on time, then, please.

The Co-Chair (Mr. Bill Graham): Do you want to hear the answer to your question that Mr. Clark was going to give you in terms of the price? I think it was just for that.

Mr. Stuart Clark: I think, Mr. Hilstrom, I can probably answer your question. The Canadian Foodgrains Bank has sent about 45,000 metric tonnes of grains and oilseeds to North Korea during the past five years. In addition to that, the only other food that has gone has been Canadian food aid that was sent officially through the World Food Programme. Those are the only two shipments. There have been no commercial shipments because there's no money in North Korea.

As to the issue of price, you'll be interested to know that it's one of our bones of contention that actually we pay a very high price when we buy food aid through the Wheat Board, as does CIDA. We're what is known as a price taker, which means we take the price they tell us we're going to pay. So in this particular situation, this food certainly did not get shipped at the cost of Canadians. Quite the contrary, I think we paid a rather premium price for it.

Mr. Howard Hilstrom: Okay. So would you give me those exact prices? You have those as you were involved in this sale to North Korea. Farmers have been waiting for a long time to know this. If I don't get the answer out of you here, I guarantee that the press is going to get the answer out of you later on.

Mr. Stuart Clark: I would be very pleased to make that information available to you. I know we bought number two, but I don't know the exact price today. I didn't come equipped and ready to—

Mr. Howard Hilstrom: I appreciate that, and maybe you could send that to my office, please.

Mr. Stuart Clark: I'd be happy to.

The Co-Chair (Mr. Bill Graham): I'm not trying to interrupt, Mr. Hilstrom, but I think it's important to get a clarification. You referred to the sale to North Korea. I understood from Mr. Clark that this was not a sale to North Korea. This was wheat that was purchased in Canada and given to North Korea. So it was purchased from Canadian farmers by our aid policy at Canadian prices and shipped to North Korea at no cost to the North Koreans. It was not a sale to North Korea. Is that correct, Mr. Clark?

Mr. Stuart Clark: Right.

Mr. Howard Hilstrom: We'll go over the details later.

I'll also have to dig up these details when we're talking about domestic policy. We are all in favour of making sure there is no one in this whole world going hungry. But what I'm saying is that we want the cost to be fairly shared across the Canadian population when we do food aid. We do not want one segment of society, i.e., the farmers in western Canada who have the wheat to export.... We want to make sure that our domestic policies support them because they are having more financial problems compared with the average Canadian. The average floor sweeper makes more than farmers. So this is a very serious concern.

That's fine. We'll dig up the details as to the actual sale we're referring to and then we'll ask you for that pricing. At the time it was made, there was no way of getting the pricing. So I'm surprised to hear you say the pricing is available. But I'll be very pleased to get that.

The Co-Chair (Mr. Bill Graham): Great. That will be helpful.

We'll go back to Mr. McCormick.

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

I'd like to thank the witnesses for being here. It has been very interesting.

I'm sure all of you have our support, but it's just a matter of how we do this. We hear that 45% of the hungry children live in countries with a surplus of food. Also, 55% do not. There is a real need to lower and eliminate export subsidies, but the immediate need, of course, is to feed people, and that's an ongoing need.

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I don't always agree with him, but Jack stole my words: there's a real need for political will in this world to feed the people. We have ample food today. We have too much food available in Canada to help feed people. Our farmers are getting the lowest price in decades for their grains and oilseeds. We certainly can produce more next year. For the first time in a long time, many decades, five continents have had bumper crops for five years in a row. All this food is there.

Whether we need the United Nations or someone else to take another political look at this with the political will to feed the people.... Canadians I talk to, and people around the world I talk to, cannot understand why we haven't made more advancements in what we're doing, all of us here. We're missing targets. We're not being effective to enough of an extent.

I don't want to get into the Wheat Board debate at this time—

The Co-Chair (Mr. Bill Graham): Why not?

Mr. Larry McCormick: With the crisis we have here...I'm sure we have more of a crisis here in some of our rural communities and our farming communities than some of our witnesses realize. I just want to throw that out for discussion, about whether we need to take a look at the political will around the table in New York as to what we can do, because we could do better.

Thanks, Mr. Chair.

The Co-Chair (Mr. Bill Graham): We'll call it a soft law.

Mr. Stuart Clark: Perhaps I can just say a little bit about being around that table in New York. I was a member of the official Canadian delegation to the committee on food security, which met in Rome, actually, with the FAO last month. Those of you who have taken part in the UN process know that for the first time it's one of declining expectations. I must say that Canada really stood up rather well. Canada's position in that forum in terms of the political will of articulating a political will was really quite impressive. So I think on the international stage we certainly send the right messages.

It is, however, as a member of the official delegation but also as a member of the NGO community, still somewhat of a clanger for me that we have cut aid in this area by fifty percent. People who would listen to what we say and then ask us about what we do might have caused some embarrassment for us. But I think we did certainly send some pretty strong and clear messages.

The Co-Chair (Mr. Bill Graham): Thank you.

Madame Alarie.

[Translation]

Ms. Hélène Alarie: In biotechnology, the developing countries are presently questioning genetically modified organisms. Many scientists in Mexico, Pakistan, India, Africa, Central America and South America are raising a cry of alarm. They are concerned because money allocated for traditional research that used to allow for the development of small agricultural systems in the developing countries now goes to research in biotechnology.

On the other hand, those countries are also afraid that the same mistake will be made as was made during the green revolution: transporting our models into countries where ecosystems are fragile and can't follow; on top of that, those models are ill-adapted to their needs.

Genetic and food biodiversity are the other problem. If there are 400 varieties of corn in Mexico, it is because the Mexicans have 400 situations allowing them to produce in conditions different from ours.

Are you aware of that? Have you talked about this with the government? Of course, let's forget the big corporations. They are the ones running the world, but I know that nobody talks to them. Have you taken a position on that?

[English]

Ms. Rieky Stuart: Yes, indeed, there are a number of organizations working in international development, a number of NGOs, who are very concerned about that. Last week, for example, there was a joint press conference organized by Greenpeace, CUSO, and Oxfam to discuss very much the questions you are looking at. There is also RAFI, the Rural Advancement Foundation International, which works on these issues.

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From our perspective, there are several issues. One is the level of investment, as you say, in biotechnology, which is in the order of hundreds of millions and billions of dollars, money that is not going into rural sustainable livelihoods. The example that Greenpeace used last week was one of the development of genetically modified vitamin A rice, when that is probably the most expensive way of providing vitamin A to local populations that need it and may not even be culturally acceptable. So why do it, if not for the profitability?

The second area of concern is one around preserving biodiversity, in that the implications of the wide spread of genetically engineered products, particularly those that require transgenic material, is not very well understood. To the extent that it can be experimented with in very controlled circumstances, that may produce some useful results sometime down the road, but certainly in the conditions in which we work in Africa, Latin America, and the Caribbean, this is not a viable substitute for local sustainability.

It is a growing concern, we are aware of it, and we are speaking out on it and very much support the kinds of concerns you raise.

The Co-Chair (Mr. Bill Graham): Mr. Wilkinson.

Mr. Jack Wilkinson: I don't think this is a black and white issue at all.

With some of the products that have come forward from biotechnology, because of the way the investment is being done, obviously some of these large companies have gone after the large commercial market first, because that's where they can make the most money and that's where they are.

But I do think there is potential, if done right and a proper regulatory system is in place, where biotechnology in the future may be very useful for drought-resistant varieties, for crops that can grow under higher salt concentrations in the earth, which can be a very big benefit in certain areas. But we have to make sure it unfolds properly, because there can be some benefit.

I grow biotechnology-type canolas where, for example, my herbicide bill is lower. The type of chemical I use to treat for weed control is much more benign to the environment than what was available in years past, and I view that personally as a benefit, as long as we have a good regulatory system that goes through rigorously and makes sure those products are safe before they come on the market.

I hate this discussion. It's often easy to categorize things like free trade or no free trade, biotechnology or no biotechnology, and I think all of it is that the devil is always in the details, making sure the framework is right, making sure the research is done before it comes on the market.

Maybe we should be charging a patent to Monsanto, where if they want to have a world patent on wheat, they have to take 10% of their money and make sure they put research into climatic areas in other countries, so that they design a rutabaga in that local market that is going to be of benefit. Why not require that?

If we're going to give them a patent for the world, why don't we make them put some of their profits into R and D in smaller non-commercial markets? Those things are the art of the possible, which countries and committees could advocate.

The Co-Chair (Mr. Bill Graham): Thank you very much.

Mr. O'Brien, and then Mr. Breitkreuz and Mr. Steckle.

Mr. Pat O'Brien (London—Fanshawe, Lib.): Chairmen, thank you very much.

On the issue of subsidies, I've picked up a bit of a mixed message from the witnesses—or at least what I perceive to be a mixed message.

I think it was Mr. Wilkinson who said something to the effect that on subsidies, we're throwing our farmers to the wolves, and yet I heard Mr. Clark say how well the Canadian government has spoken up in international fora.

Before my question, as a brief comment, I can tell you that I was with Minister Pettigrew in central Europe in September, in four different countries, and in every single situation with ministers of those countries, he raised the issue of EU subsidies, agricultural subsidies, and of course, Minister Vanclief continually does that. So if there's any kind of a perception that Canada is not raising the issue of subsidies at every opportunity internationally, that perception would be simply, very badly, incorrect. I want to say that for the record.

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I will certainly share the message I hear today with the minister. As his parliamentary secretary, I'll make sure he's well informed about what happens here today.

But I'd like to ask a specific question on international trade policy initiatives, I guess to Mr. Clark. Aside from the very important issue of unfair subsidies by the U.S. and the EU, what other specific trade initiatives would you offer that Canada should consider in order to help address this issue of food shortages in poorer countries?

Mr. Stuart Clark: Thank you for the opportunity to say a few words about that. Of course, I think we need to look at the proposals that are coming forward from developing countries, and of course it's also important to say that there is no one formula that fits for all developing countries. Different developing countries fall into different groups. But those countries that have a large agricultural sector are generally very poor. They have put forward a proposal recently that calls for a development box. Those of you familiar with the trade rules know that there are a number of different boxes—red, amber, blue, green—and taking up on the box idea, they have put forward a development box.

Very briefly, some of the key elements of that development box would do such things as allow those countries—and it would be a very limited set of countries—for example, to positively nominate which commodities they liberalize; it would be a national decision. If the Philippines, for example, wanted indeed to support small-scale maize producers, they could decide to not nominate corn as one of their liberalized crops.

There's a whole package of proposals that are fairly simply put forward, but that's the one that really stood out as a way of gradually moving to trade liberalization. I think as I said in my presentation, it's the way it happens that is so destructive, if it happens quickly. This would allow countries in a stage-wise fashion...just as indeed our own agriculture developed initially under certain protections and then gradually, when it was ready, was able to go global, so to speak.

Mr. Pat O'Brien: My next question, Mr. Chairman, relates to the next round of WTO talks, and obviously nothing is going to happen until the American election is over, so I think this year there will probably be no progress made.

You made a point early on in your presentation, Mr. Clark, that expansion of trade helps poorer countries. It's my perception that although Canada is very much for a more transparent WTO, and the minister has consistently said that and will continue to, do you think the public in general in Canada understand the point you have made here today, that expansion of trade and a rules-based WTO can help poorer countries, not hurt them? Do they understand that? If not, what can government do to help explain that that is one of the objectives of a rules-based international trade system?

Mr. Stuart Clark: I think it is not well understood. The discussion is highly polarized. Just as Jack has said about biotech, it tends to get black and white, and so does the whole question of international trade. If Canada was able, for example, to follow the recommendation we made, which would say that global food security was a policy objective—of course, it has to factor in with the other issues that are of a more domestic concern, but if we recognize that, I think we can then start to build a convincing case for the Canadian public that trade can be, for lack of a better word, hunger positive.

There are very important issues. I spent five years working in Bangladesh, and Bangladesh today now has a very large textile sector. I dare say...well, maybe not the people in this room, but some of us wear shirts that are in fact manufactured in Bangladesh, That makes a real difference, because for people who have had to leave the land—and I don't think anybody wants to say a farmer farming a quarter of an acre of land is something that we necessarily want to preserve; we don't want to see farmers in those countries farming 100 acres, but we want to see them farming more than half an acre. So we need those jobs. Trade can make that difference. I guess Canada having a development-positive trade policy, not only in agriculture but in things like textiles, makes a big difference and would help with the education.

Mr. Pat O'Brien: Thank you very, Mr. Chairman.

The Co-Chair (Mr. Bill Graham): Mr. Breitkreuz.

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Mr. Garry Breitkreuz (Yorkton—Melville, Canadian Alliance): Thank you very much. I have three quick comments or questions. I will just address them to you generally and you can pick and choose the ones you'd like to reply to.

One of the comments that seems to have been made and generally accepted is that export subsidies disrupt trade. Would not then sending food abroad have the same effect, because that is in effect a 100% subsidy? I would like a comment on that. As a little addition to that, some around this table have advocated a two-price system in Canada. Would that not also be a form of subsidy and fall into that same category? That's my first question.

Secondly, and this stems from a question that was asked by my colleague—and I have yet to hear a clear answer to this—can you give us examples of programs that have worked in the long term to reduce hunger and take people away from a condition of dependency to one of independence? With four or five thousand years of history, can you give us examples of where that has happened in the long term?

The third question is in regard to this GMO comment that was made about Monsanto maybe having to require 10% of its profits to go into developing products. If GMOs do not seem to be raising any questions in countries where the people are starving, could not Canada assist in that area by starting to develop products along that line that would help those people? I think Monsanto would probably develop products that would be an advantage to Monsanto, but I think government could provide assistance in this area by doing research in those areas. It would reduce environmental risks. It would allow for organic farming, a reduction in chemicals and fertilizers, and so on. Maybe that's one of the areas in which we as Canadians could really come to the fore in helping some of these countries.

I would like your comments on one of those three issues.

Mr. Stuart Clark: A fifteen-second answer on food aid. Food aid should always be targeted to those people who don't have access to the market, so that you are putting food into the hands of people who would not normally buy food. I think the comment about export subsidies disrupting trade is because that food gets into the market. My comments about monetization and the whole business of selling food aid certainly have a bearing on that. It's the question of targeting and being clear about what happens to the food aid, because it can have no effect on the market if it's properly done.

The Co-Chair (Mr. Bill Graham): Mr. Wilkinson.

Mr. Jack Wilkinson: Just further to the point on export subsidies, the reason export subsidies are so damaging to farmers in commercial markets is once a company, say, from the United States makes a sale into a commercial market with an export subsidy, that in fact not only affects that sale, but that hangs in that market constantly. So when the Wheat Board or some other commercial enterprise is trying to sell somewhere else, that buyer then says “Well, just a second, the U.S. sold at $130 and they're $40 below the market.” Then they call back the United States company and see if they can get the same deal there. What we do is we ratchet to the bottom in every commercial market sale because someone made a particular sale at this time period. That is why it is so incredibly damaging, because a few hundred million dollars can literally wipe out the commercial area in certain commodities for all of us, whereas the food aid's targeted movement into a particular area that wasn't going to be able to afford to buy anyway doesn't really hurt us very much. Sure, you'd like to have them strong enough economically so they could buy your food, but if they weren't going to buy anyway.... You want to help them from a humanitarian point of view.

There are some developing countries that are very concerned about biotechnology. India is one in particular. They have been very worried about the way things are unfolding and losing their local diversification and biodevelopments. That was my only reason for saying that in some of these regions some of these international companies are going to have to be much more sensitive to how they work in those countries or they're going to lose political support in those areas. It is happening in some places around the world.

Mr. Garry Breitkreuz: Can you give us examples of long-term programs that work? Surely there must be some.

Mr. Jack Wilkinson: It's working very well in Zimbabwe. There are a lot of places where it is working very well.

Mr. Stuart Clark: The example I just referred to, textiles in Bangladesh. This has grown up in the last 20 years. I worked there in the late 1970s. Textiles were hardly anything and now they're a huge business. This is providing an important livelihood for people. It's not a livelihood necessarily that you and I would choose, but it's far better than the urban environment previously provided them. That's one example.

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To go a little bit closer to the subject of agriculture, Kenya is a place that used to be a fairly major agricultural exporter. It has a large agriculture sector. It's frequently hit with droughts. There's a remarkably effective program that is really making a difference for a lot of people. The program consists of constructing sand dams or subsurface dams, so when the rain falls the water is held back and can be used during the dry season. It's amazing. This is a can opener, because it doesn't cost very much to do and it makes a huge impact.

There are any number of stories. I know that Oxfam is involved in northern Ethiopia with water catchment projects that have taken people back from the brink. Farmers who were on the brink of bankruptcy and having to leave are now able to crop.

There really is a long list. You know, there has to be something that contributes to the fact that we are decreasing hunger by 8 million per year, in addition to keeping up with the population increase. So it isn't bleak, but there is no one single program that I could cite. There are dozens.

The Co-Chair (Mr. Bill Graham): Thank you.

Mr. Steckle, sir.

Mr. Paul Steckle (Huron—Bruce, Lib.): Yes, I'll be brief.

I believe that in one of the opening comments made by you, Ms. Stuart, you mentioned that the hungry of the world are the women and the girls. I hope that, to be politically correct, we would also include the boys of this world. I heard it yesterday on television, and I had to think we're moving into a new dimension of political correctness. I hope that was an oversight, trusting that we also want to include the male gender as part of the hunger-deficient of this world. You might want to correct that.

My sense is that this is a very timely subject for us to discuss, given that we do have a lot of hungry people in the world and we have an abundance of food, particularly hear in Canada. We have underpriced food.

I would like each one of you to give a comment on my question, and this is the question: Given that we do not yet have a second round of WTO agreements, since some of the countries have not completely honoured the agreement to its full intent in terms of subsidization, and given that Canadian farmers have moved about $10 billion more in exports in the last seven years—we've moved in that direction very positively—yet our agricultural sector has increasingly become more impoverished because of the pricing, would you agree that it's only fair to our agricultural community in Canada that, in the short term, we take care of our farmers? If that means going to the public through taxation, through government subsidies to our farmers in the short term in order to keep these farmers on the land so that we don't see the continued exodus of these people into our urban centres, where there are already too many people, would you agree that it's only fair that the public at large share in the support of these people until we can come to some consensus in a new agreement at the WTO, so that these people can remain and are there when we need them down the road?

Mr. Jack Wilkinson: Starting at this end?

Mr. Paul Steckle: Yes.

The Co-Chair (Mr. Bill Graham): I'm glad you asked a brief question, Mr. Steckle, and one with a simple answer—from Mr. Wilkinson, at least.

Ms. Stuart.

Ms. Rieky Stuart: Mine is a little bit more nuanced. We've been working in Ethiopia in the drought recently. One of the comments that people there make to us is that they don't want charity. They don't want to be in a position to require food aid, and they demonstrate that they've contributed millions. I would venture to say that Canadian farmers don't want charity either. They want a living wage, if you like, or a fair price for their production.

[Translation]

Ms. Esperanza Moreno: I also think our international policies have to be consistent. For example, in present Canadian aid policy, we have four priorities. Now, the food security question should be basic to all those four priorities. We can't imagine, for example, working only on education or health and nutrition. For example, being able to earn a living and having proper food also contribute enormously to education or at least to being in a proper state of mind to learn. I am more concerned with the consistency of our political ideas, concerning trade, as well as internationally.

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[English]

Mr. Paul Steckle: I gather that's a yes.

Mr. Stuart Clark: Mine is also a yes, but I would like to say that I don't think the Canadian taxpayer wants to do this indefinitely. I would therefore really ask that you think strategically about how to deal with the European subsidy issue and whether or not it might not be more effective to focus on European exports as opposed to the total European agricultural policy.

The Co-Chair (Mr. Bill Graham): Thank you very much.

Colleagues, I think we'll have to draw this to a close. It's eleven o'clock.

I just want to thank the panellists very much. It was a very helpful review of a lot of basic issues. Speaking for myself, I must say that it helped me a lot with what I consider to be a great paradox. We hear so much about subsidized food being so destructive in terms of the system. As a simplistic view, however, one would have thought subsidized food was helping people who needed food at a lower cost, at least from purely a consumer's point of view. I think we've learned a great deal this morning about how that destroys the whole of the agricultural process and how that destroys the way in which we can intelligently focus on how we can deal with the system as a whole. So that was very helpful to many of us.

Colleagues, I just have an announcement to make that might be of some interest to you. I've been informed that the Prime Minister has announced that Mr. Tobin has been sworn in as the industry minister this morning; Mr. Manley is the new Minister of Foreign Affairs; Mr. Duhamel has taken over the responsibility for veterans affairs, in addition to western diversity; and Senator Boudreau will be the minister responsible for ACOA. Those are the changes in the ministry as announced this morning.

In regard to the second change that I mentioned—Mr. Manley—you will recall that our foreign affairs committee had a meeting with Mr. Axworthy this afternoon to brief us on the situation in the Middle East. You will recall that we have presently a minister from Israel here in Canada, and he is speaking to various groups—some of you may have met with him. We had looked forward to Mr. Axworthy briefing us. Mr. Axworthy is no longer available, as he is no longer foreign minister. Mr. Manley has informed me that he cannot be available this afternoon on such short notice, but that perhaps at our steering committee meeting later we could discuss whether we want to try to pursue this later in the week.

So thank you very much for coming. Again, we appreciate very much this World Food Day.

Did you want to make any concluding remarks, John.

The Co-Chair (Mr. John Harvard): Yes. I just want to concur with what Mr. Graham has said. On behalf of the agriculture committee, I want to offer my thanks to all the witnesses. I thought you did a great job. I particularly enjoyed the exchanges during the question-and-answer session.

I just have a message for members of my committee, the agriculture committee. We're going to have a short steering committee meeting right after this. We're going to go directly to room 371 West Block. The sooner we get there, the sooner we'll have it over.

Thank you, Mr. Graham.

This meeting is adjourned.