AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, October 4, 2001

• 0904

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Good morning. Pursuant to Standing Order 108(2), our committee is participating in a briefing session this morning with the Canadian Cervid Council.

We would like to welcome this morning Mr. Dennis Schmidt and Mr. Serge Buy, who are here in Ottawa this week as part of their meetings.

• 0905

We apologize for giving a rather late answer to your request, but the committee was only organized this week. We did want to meet with your group. In fact, as a result of your invitation to us as members this week, a good number of people visited your presentation. We also have some members on the committee who are very much involved. Carol, of course, has been here for some time.

We have about 10 minutes each for the presentations, and after that we will open up the floor for questions and discussion.

So welcome to our committee. I'm not sure who will go first.

Mr. Serge Buy (Executive Director, Canadian Cervid Council): Thank you very much, Mr. Chairman.

The Canadian Cervid Council is an organization that represents elk and deer commerce across Canada, from the Yukon to the Maritimes.

We'd like to thank the members who joined us at the reception on Parliament Hill on Tuesday night. That was appreciated. It shows another measure of support from our members of Parliament for agricultural industries.

The industry has been part of the diversification—

The Chair: Serge, I'd like to remind you that we do operate in both languages. When the clerk told me how to pronounce your name, I realized, of course, that your first language may be other than ours. Marcel is from the province of Quebec. Feel free to speak in either language.

Mr. Serge Buy: Thank you, Mr. Chairman.

The industry has been part of the diversification effort in agriculture in Canada. We have been in Canada for more than 20 years. We went through challenges in the past, and we will be facing challenges in the future. But as Minister Vanclief said to us on Tuesday night, the industry is presently facing challenges but it has a bright future, and we're working on that.

[Translation]

We are now past the first development phase of the industry. First of all, we started by increasing our herds, so that we could increase the number of animals in our operations and meet the demand for velvet antlers, which comes primarily from Asia, and so that we could obtain the critical mass we needed to reach the meat markets we have recently penetrated.

We are now developing meat products, as well as velvet antlers. We also process velvet antler products for international markets.

[English]

We are working to penetrate the North American market at this moment.

I'd like to introduce Mr. Dennis Schmidt, who is going to give a little background on our industry. Mr. Schmidt is our past president. He also was president of the Ontario Deer and Elk Farmers Association and a representative on the North American Elk Breeders Association board and on several other boards in our industry.

Mr. Dennis Schmidt (Past President, Canadian Cervid Council): Mr. Chairman and members of Parliament, I'd like to give just a brief history of the cervid farming industry. A lot of people feel that it's quite new, and it is new to Canada. It's only in the last 25 years that we've really seen it take off. Worldwide it's a 2,000-year-old industry, so it has been very well established.

The cervid industry in Canada represents approximately 2,500 farms. For elk, mainly in the western provinces, you're looking at about 65,000 head out there. In the east it's predominantly red deer and fallow. The white-tail would be spread throughout the country, with a total of about 110,000 head at the present time. The approximate value of just the livestock alone would be in the area of $400 million.

The main products we derive from these farms in the elk and red deer are the velvet antler. From the red deer and fallow deer it would be meat products. The white-tail at this point is still mostly a breeding stock phase.

The velvet antler, I should point out, in case some of you are not familiar with it, is the antler we actually harvest during the velvet stage of growth, and it's a whole antler. It has been used in the Orient for well over 2,000 years for medicinal purposes. In North America we use it mostly for arthritis and osteoporosis.

• 0910

There's a very lucrative market for the industry. For an alternative livestock it makes a lot of sense, because the animals are indigenous to Canada, and we don't need extra housing. They're well adapted to the climate. So it became very profitable to raise elk in the past. Like any industry we have our ups and downs, but in the overall view it does have a very bright future.

The one thing that has been a bit of a problem of late is the chronic wasting disease issue we have in Saskatchewan at this point in time. The biggest problem we've had with it is that it's of the same family of TSEs that BSE and scrapie in sheep are associated with, so it has gotten a lot of media attention, which has really hurt our industry.

Just to give you a quick background on it, chronic wasting disease was first discovered at a research facility in Colorado with mule deer. Unfortunately, they released these animals back into the wild when they were done with their research and sent some to game farms as well. Actually, some even ended up in zoos, the Toronto zoo in particular, where they had to put these mule deer down. The disease first appeared in Canada in 1996. There was one animal diagnosed with it in Saskatchewan. In 1998 we diagnosed another animal.

At that point the Canadian Cervid Council approached CFIA to create an eradication program and to make it a reportable disease so that we could eliminate it from Canada. Through the traceability programs we have within our industry, we realized that this disease did originate in the U.S. and that it could possibly be from as little as one animal that was imported into Canada in the late 1980s. So if we got on top of it, we had a real opportunity to eradicate it from the herd completely.

In 2000, shortly after we had our consultative meetings with CFIA, we had a third case, and at that point we started the depopulation. To date we've put down about 6,700 animals, of which only 150 were actually positive. We're doing trace-outs of trace-outs now, and CFIA feel they have a real handle on it. With any fortune at all, we should have it wrapped up by the end of the year, barring any new cases.

The one thing that has been in our favour is that we have a traceability network in place whereby all animals that move have transport permits through CFIA. So when we had this outbreak, we were able to trace where every animal had been, and every farm. This allows us to eradicate the disease quite effectively.

The other thing we have implemented as an industry is the velvet tagging so that our antler is all tagged. We can actually take any stick of antler at any point during the processing and take it right back to the actual animal it came from. We are leaps and bounds ahead of the U.S. in this respect. They have no traceability at this point in time and are scrambling to get it. We're hoping to have this wrapped up by the end of the year and to have one of the cleanest herds in North America.

The next issue I want to cover quickly is the venison outlook for our industry. With the increased demand in Europe, this is looking very promising, and also in the States, other than a slight slowdown for fresh-meat products because of what happened there. The only problem we face in this area is a lack of distribution channels in Canada, which we are presently trying to address, and slaughter facilities that can actually handle venison. They are very limited, the ones that are actually EU approved to be able to ship to the European markets. So this is one area we are looking to address in order to increase that outlook.

The velvet antler market has been very good for the industry. Unfortunately, Korea has put a temporary ban on our product until such time as we have the CWD situation taken care of. This is one area where we feel we could use some help in that to date they have not been very responsive to CFIA as far as sitting down and negotiating the opening of the border. Because of all the things we have implemented, we'd like them to sit down with us and at least give us an outline of what it would take to get the border open again.

Our relations with the Canadian Food Inspection Agency have been just great. We commend them. They were a little slow getting started on the eradication problem, but since then we've worked very closely with them. They've had a lot of industry input. I can't say enough good things about how they've been working with industry in that respect.

• 0915

The other area of concern for us as an industry, in terms of Agriculture Canada, is with the CFIP program. As an industry we're not looking for new handouts, so to speak, to get us through this bit of a period, but we would appreciate it if we could get a better review of the program. Right now a lot of our industry members are new farmers, and it is very hard for new farmers to qualify under this program and to meet the requirements. It isn't unique just to our industry; it's in all agricultural endeavours. The majority of the farmers in the industry are in the building stage, building up their herds, so they don't have that five-year track record to be able to kick in the qualifications for the program.

I understand they are reviewing it and making some changes, but any help in that area would be much appreciated and it would benefit all agricultural endeavours, not just our industry.

At that point I'll maybe turn it back to Serge.

Mr. Serge Buy: Definitely, as Mr. Schmidt said, one of our main issues at the moment is the reopening of the borders with Korea, and this is where we could certainly get some help from our members of Parliament, who could work through contacts with their colleagues in Korea, if there are such contacts, or with the Minister of International Trade, Mr. Pettigrew, in a coordinated effort in order to negotiate the reopening of those borders.

In terms of the raising of awareness of cervid products, developing proposals for better markets and the development of promotional products, our industry is looking at that at the moment, and we'll be looking, with Agriculture Canada, to develop some material. We are also looking at the adjustment of current programs such as the Canadian farming income program, as Dennis mentioned, in order to benefit our industry better.

We understand this committee will be travelling across Canada. We would like to invite this committee, once you're in the west, to visit a farm and the processing plant that we have chosen. It would be wonderful if you could take the time to do that; it would certainly give you the best example of what our industry is all about.

Thank you, Mr. Chairman.

The Chair: Thank you, Serge.

Carol's going to lead off.

Ms. Carol Skelton (Saskatoon—Rosetown—Biggar, Canadian Alliance): Thank you, Mr. Chairman.

Thank you, Serge and Dennis, for being here this morning.

I have one question. The other night at the reception, the Minister of Agriculture stated that you would be getting some money within the next couple of days. Have you gotten any money from the Canadian government, and can you tell us about it?

Mr. Serge Buy: We understand that we indeed received some funding. The money we had requested was for a trade delegation to Korea. It was also for the development of some brochures for Korea, including translation into Korean, and for the creation of a website on health issues.

The creation of the website has been declined, but the brochures have been approved and the mission to Korea and New Zealand has been approved. As well, I'm aware that a project for a video on elk farming proposed by another cervid association has also been approved.

Ms. Carol Skelton: Good. Thank you very much. I'm very glad to hear that he did come through with it. There was no announcement yesterday so I hadn't heard about that.

I have a further question. Minister Pettigrew was at the reception the other evening. Have you had a formal meeting with the minister about the trade issue?

Mr. Serge Buy: No. At the moment we work mainly through CFIA, the Canadian Food Inspection Agency, and their trade officials. We realize that the Canadian Food Inspection Agency is a scientific branch of Agriculture Canada. They deal with inspection and health issues relating to bringing products in and getting products out.

We're at the stage where we can definitely deal with the international trade department and we were very pleased to see Mr. Pettigrew at the reception. He made a commitment that in the next two weeks he will be meeting with his Korean counterpart and he will be raising the issue. Actually, he said he was going to meet them twice, not once but twice. He asked us to bring him some points so he can bring that to his Korean counterpart, and we will definitely be doing that in the next few days.

• 0920

The main issue is to get them back to the table. The CFIA met with them in the month of May, and the response from the Koreans was, we're not interested. We won't give you a timetable. We will not give you anything. We're just not interested in pursuing discussions.

In our view, it is not really an acceptable type of discussion, and we want to make sure that the Koreans come back to the table and definitely negotiate with our government some type of a plan in order for our producers to get ready to do all that will be required.

Mr. Dennis Schmidt: I'll maybe just add to this that the Koreans do have quite a large domestic market in our industry. And from what we can gather, that market has been putting a lot of pressure to keep the border closed, this being a perfect opportunity to do so.

Ms. Carol Skelton: And it will drive the prices down, of course.

Mr. Dennis Schmidt: Yes.

Ms. Carol Skelton: I know from being a breeder who hasn't had a herd infected with CWD that the Canadian Food Inspection Agency, once they got enough employees and everything, went ahead very quickly. Do you think that if they would have just followed the trace-outs and forgotten about the eradication program until later it would have speeded up this whole thing? It seemed that they would go in, find a trace-out, take that herd down and then...

Mr. Dennis Schmidt: The problem is, they had to do the testing to be able to know where the next set of trace-outs would be. The most unfortunate part of the whole issue was that they were severely understaffed at the time and not able to deal with it in a timely fashion, which has really spread it out. We have the ability to trace the animals, but we need to know which ones were infected in order to go to the next farm to be able to trace it out. And the lab was the real holdup in terms of them being able to process it, and also the ability in the field to be able to put the animals down in a timely fashion.

This did slow the whole process up, but I understand now they have hired new staff and new lab space and it's coming along. They've assured us that all the samples will be processed by the end of the year. So with that, and because we are at the second tier of trace-outs now, there's been no... What would you call it for animals that were all subclinical? We feel we're caught up on it now. There may be another few animals that got past that tier. We're hoping not. But the quicker they can get these test results in, the quicker we can wrap it up.

Ms. Carol Skelton: As far as I know, the cervid industry is one of the most regulated industries in Canada healthwise.

Mr. Dennis Schmidt: Yes.

Ms. Carol Skelton: I've found that ever since we became involved in the cervid industry. What other ways can the Canadian Food Inspection Agency continue to guarantee consumers the quality of the livestock we're producing? Are there any other ways?

Mr. Dennis Schmidt: All the testing that has been done to date on antler, and on meat and so on, has shown there is no jumping of the species barrier, so to speak. But we would like, as an industry, to have more testing done to give a higher level of confidence.

As you say, the testing that has been done in Canada and the U.S. to date all shows that it's even less likely than scrapie to jump the species barrier, but we'd like more done in order to satisfy the world that it is a disease that is just contained to cervids. We feel this is important, especially in the velvet antler aspect. We don't feel enough antlers have been tested to date to give confidence, undeniable confidence, in that area.

The Chair: There's only about one minute left. Do you want to move on? It'll come back to you; it might be best to do it that way.

Ms. Carol Skelton: No, go to somebody else.

The Chair: Marcel.

[Translation]

Mr. Marcel Gagnon (Champlain, BQ): Thank you, Mr. Chairman.

It is interesting to note that you have some experience in breeding elk. Elk breeding is on the increase, and so far the experience has been good. You state that there are already 2,500 breeders, particularly in the West, if I understand correctly. Are there any elk breeders in the eastern part of the country, in Quebec?

Mr. Serve Buy: There are 2,500 elk breeders in Canada. I would say that in Quebec, there are about 300 to 400 breeders of red deer, mostly white-tailed deer, elk and fallow deer. There are many members of our association in Ontario, and even some in the Maritimes. There are breeders in New Brunswick and Nova Scotia, and one breeder on Prince Edward Island. As I said, we can be found in almost all parts of Canada, from the Yukon to Nova Scotia. In Quebec, we have some 300 to 400 members.

• 0925

Mr. Marcel Gagnon: The elk adapts extremely well to conditions in Quebec, and there are possibilities for expanding across Canada. You were talking about opportunities and problems in exporting to Korea, among other countries. Mr. Schmidt pointed out that there were also good marketing opportunities in Canada. Do these national markets provide new expansion opportunities for the industry?

Mr. Serge Buy: I would like to take a few seconds to give you an example of the cervid industry. New Zealand is the best example, without any doubt. In the 1950s, New Zealand started breeding cervids with a few animals taken from the wild and brought into farms. Today, the country has 2.2 million cervids on farms. It is the third largest export breeding industry in the country. New Zealand exports lamb and mutton, beef and cervids. It is the third largest export industry for meat and such products as velvet antlers.

There are opportunities for growth in domestic markets within Canada, and we still have to focus on such growth. We need to research some distribution networks. We must also promote the product. I'm quite certain that some of you have never heard of velvet antlers until today, and that lack of knowledge can be a problem. Velvet antlers have been recognized in Asia for over 2,000 years. They are a tried and tested product, which is also recognized in Russia and in other countries. The velvet antler market in North America is now beginning to expand. Velvet antlers can even be found in some chain stores, if I understand correctly. I cannot check this, but I am aware that some products can be found in Wal-Mart and Loblaws stores. The market is expanding. We are satisfied on that score, but there is more work to be done. The Canadian market could certainly absorb increasing quantities of product.

Mr. Marcel Gagnon: How does cervid meat compare with other meats, in terms of cholesterol, for example? Would it have lower cholesterol than the beef we are familiar with?

Mr. Serge Buy: Exactly. Venison has a very low cholesterol content, and a very low fat content generally. It is comparable to skinless chicken breast, for example. From a health standpoint, it compares very, very well. Some doctors even recommend venison, because it is good for health. It is highly prized for those qualities.

Mr. Marcel Gagnon: One problem I see is disease control. Though disease does seem to be well controlled, there is still some risk. Is there a particular problem because these animals—deer, for example—are found in large numbers in the wild here and elsewhere, or are the farmed herds kept effectively apart from wild herds so that disease can be controlled? In other words, are our wild deer affected by the disease mentioned?

Mr. Serge Buy: That is a very good question. We do indeed think that farms effectively keep their animals apart. We have very high fences which make it possible to isolate the producers' operations. As Ms. Skelton said earlier, from the health and other standpoints, our industry is one of the best regulated in Canada. Sometimes, we feel that the regulations are even excessive. There is certainly no lack of regulations.

There is one minor point I would like to mention. In April, a wild mule deer in Saskatchewan was found to have the disease. A second diseased deer was found in June, in a very specific area of Saskatchewan, within a five-kilometre radius. The Saskatchewan Department of Natural Resources is eradicating all the animals in the area. I therefore do not think there's a problem. Both animals were genetically related, in any case. We do not think there are any problems there.

• 0930

Mr. Marcel Gagnon: This shows how important it is for us to identify the disease and eradicate it as quickly as possible within herds so that it does not spread. There are many wild deer in Quebec, and in some regions, such as Anticosti Island and eastern Quebec, the disease has reached almost epidemic proportions. It must be kept out of farmed herds so that it does not destroy your breeding operations.

Mr. Serge Buy: Exactly.

The Chair: Thank you.

[English]

Larry.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you, Mr. Chair, and thanks, gentlemen, for being here and for the reception the other evening. I'm sure we all enjoyed it.

The product of the elk, especially, has been used for thousands of years in the Orient, and I'm sure the deer as well. South Korea has a domestic supply, but because of the size of the country, I'm sure it must be relatively small, or smaller than ours. I'm wondering where they're getting their supply from now. I mean, New Zealand is a producer, and a very large one, but I'm sure they had many customers.

So it's a two-part question: Where would South Korea be getting their supply from now, and how many countries are into this business in a major way?

Mr. Dennis Schmidt: The main players are obviously here in North America, but New Zealand is the biggest by far. I believe they have in excess of 1.8 million deer behind wire.

It's 2.2 million now? It keeps getting bigger.

China and Russia are probably the other main players in marketing the product. Korea not only consumes but is also the middle person for the majority of the velvet that goes through Korea. A lot of it is consumed there, and a lot of it continues on to other countries.

The New Zealand market is twofold. It's red deer, for the most part, so the main emphasis is on venison, but it can fluctuate. Depending on the price of velvet, they will keep more animals back for velvet production, and when the price of velvet drops, more animals will go into the slaughter trade. They have been more than able to make up the difference.

The advantage we have is that the Koreans like the larger sticks, and we produce those. So as we can produce more, we can cut into their market. As we've been building our herds here in North America, we've had no problem taking away their market share, and they then just shift more to venison.

So they can produce more than enough in the Orient; it's just that they can't produce the large sticks, which are the most sought after in the North American elk... and the Russians, but with the Russian delivery system, a lot of times the product does not come out in very good shape.

So we have the premier product in the world, but we need to build up the herds to be able to capture more of the market.

Mr. Larry McCormick: Thank you.

I had once heard that at least 70% of the value of an elk was from the antler, the velvet—and probably higher, as my colleague says—and at least 70% of all our value from this country went to South Korea, as you say.

United States has some elk being raised, and yet they're not tagged with the chronic wasting disease.

Mr. Dennis Schmidt: They are. Their borders are shut as well.

Mr. Larry McCormick: I don't want to cut into my colleague Mr. Merrifield's question, which will probably come up next—he's also a producer—but can I ask you, where is this Canadian product going now?

Mr. Dennis Schmidt: That's a good question. It's actually still being sold, at a much lower price. I have a chart that shows the average price for the last 30 years. It has been approximately $65 to $70 a pound. Right now we're getting between $20 and $30 a pound.

It's being bought and sent to Hong Kong. From what I can gather, from there it goes to China and is mixed in with their velvet; it goes back to Hong Kong and is then sold as Chinese velvet to Korea. Everybody seems to know this, including the Korean government. So our velvet ultimately ends up over there, but some people are making a big profit in the middle, and the Canadian farmer is taking the hit.

Mr. Larry McCormick: I think I'll share my time with the producers. You can add that to whatever time they have—unless I have a colleague who wants to ask a question right now.

• 0935

The Chair: Time is getting very short anyway.

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

The Chair: Rick, we'll go to you.

Mr. Rick Borotsik (Brandon—Souris, PC/DR): Thanks, Mr. Chair.

I have a simple question to which I should know the answer. How is CWD passed from animal to animal?

Mr. Dennis Schmidt: The jury is still out on that.

Mr. Rick Borotsik: Oh, good—then I guess I shouldn't have known the answer. I feel a lot better.

Mr. Dennis Schmidt: We feel that it's mostly from animal to animal. But in a heavily concentrated area, such as at that research centre in Colorado where they had a high density of animals in a very small paddock for research purposes, we feel that the ground actually did get contaminated and that it would actually enable the disease to transfer if animals were put in that pen again without some type of proper disinfection.

So there are actually a lot of studies being done in the U.S. right now on this. They've actually taken those highly contaminated pens and put cattle in them. They've been in, I understand, almost five years. We just heard the latest report, and there has been no sign of it.

Mr. Rick Borotsik: From cervid to cervid, how is it passed? Is it the saliva?

Mr. Dennis Schmidt: It seems to be. That's what we believe, yes, but there's no definitive proof of that yet. They're still—

Mr. Rick Borotsik: Well, then, here's another question that may not have definitive proof: How long until we can actually say that we are disease-free? If we don't know how it's passed, how long is the incubation? How long can an animal carry it? How long is it going to take before we can go to Korea and say we are disease-free?

Mr. Dennis Schmidt: That's a very good question. There is a model that CFIA, working with USDA, has set up, and to date every single case of CWD has fallen within this model, the model being that it takes anywhere from 18 to 22 months, as a rule, on average, for the disease to show itself. The maximum case has usually been 30 months, and so what we've done with our program is to go with 36 months, that all animals that have been exposed within a 36-month period are being put down, and because of the unknown, they've even gone two years more for surveillance on those animals, to five years or 60 months.

Mr. Rick Borotsik: Good, Dennis. Now, how long into the future is it—another 18 months, another 12 months, another 36 months—before we can actually unequivocally say, through this model, we are now disease-free?

Mr. Serge Buy: I'd like to answer that, Mr. Borotsik.

All cases of chronic wasting disease in Canada have related to one animal. One animal was sent to a farm. All cases after that have been related to that farm. CFIA has done the trace-outs and has continued. All animals were depopulated. Once they finish that process, we believe we will be free of chronic wasting disease, because there is no way a farm that has not been related to the first farm can have the disease.

Mr. Rick Borotsik: Okay. This then goes into my next question, which is the trade issue with respect to Korea. It is, as I understand, the market, or the majority of the market. You can do a circuitous route through other areas, but Korea is the main market. It seems to me that a lot of what you're talking about today is a non-tariff trade barrier. Albeit CWD is there, but they're using it as a non-tariff trade barrier. As Canadians and a Canadian industry, we have to get back to the Korean market.

I have two questions. First, are you developing any other markets? In any industry... For instance, I know Murray raises chickens. If there was only one person he sold to and that person said, no, I'm not taking your product, Murray would have a hell of a lot of chickens that he couldn't sell. But then he'd probably quit raising chickens.

What other market are you going to be able to develop outside of the Korean market? If it doesn't happen, what do you do with the animals?

Mr. Dennis Schmidt: The answer is twofold. On the antler itself, we've been working on the North American market. As you can appreciate, any time you're bringing in a new product it takes time to develop. But we are seeing it now in a lot of the local health food stores. We've increased it, but we haven't reached that critical level.

Mr. Rick Borotsik: What has been the top value of your exports, by the way?

Mr. Dennis Schmidt: In dollars?

Mr. Rick Borotsik: Yes.

Mr. Serge Buy: That is something we can't answer. There is no number that you can get. As the product is shipped in different ways, by different products, under the Statistics Canada classification there is no code for our product. We are unable to get the exact numbers from Statistics Canada. The only numbers we're getting are from producers and exporters themselves, and we don't believe those numbers are reliable. But clearly you're seeing quite a bit of dollars being shipped to Asia.

I apologize, but we cannot give you a number on it.

• 0940

Mr. Dennis Schmidt: I believe we now have in the neighbourhood of about seven process plants across the country. We are endeavouring to build that market and make more product available to the North American market, but that takes time.

The other is the meat. We've reached the point now with our herd where we're actually able to have enough so that we can at least start supplying the restaurant trade. The biggest problem, or holdup, has been the slaughterhouse facilities.

Mr. Rick Borotsik: How confident are you of getting Korea back to the table? I would be very disappointed to have a marketplace that doesn't even want you. How confident are you, with the help of Pierre Pettigrew and the trade department, of getting Korea back to the table?

Mr. Dennis Schmidt: Well, we always like to be optimistic.

Mr. Rick Borotsik: You're in the industry. Of course you're optimistic.

Mr. Dennis Schmidt: Right, but without help from the government in applying pressure, I could see three years as the worst-case scenario. But with some help, because we've done everything to ensure that the product is safe, we would hope it would be sooner. It potentially could be up to three years. That's one area we are focusing on now. We're not looking at getting the Korean market open, but we are looking at alternatives.

The Chair: Mr. Calder.

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

I've had experience in the past with diseases in Elk herds. What type of perimeter fencing do you have for your operations? It sounds as if with CWD you can definitely have nose-to-nose contact. As with TB, that would be one of the ways the disease would be transmitted. If you don't have double perimeter fencing around your operation, you're open to nose-to-nose contact with the wildlife. Do you have standards for the perimeter fencing of your operations to maintain biosecurity?

Mr. Dennis Schmidt: Each province has its own regulations as to how it deals with what it considers to be standard.

Mr. Murray Calder: What are the industry standards?

Mr. Dennis Schmidt: The industry has a code of practice. I believe we've suggested eight-foot fencing as being the norm for elk and—

Mr. Murray Calder: But that's single fencing.

Mr. Dennis Schmidt: That's single fencing. But you have to understand that chronic wasting disease is not a rampant disease. Nose-to-nose contact looks highly unlikely. It looks as if being with animals that are infected for extended periods of time is more important.

If you look at any farm that first started with the disease, it takes two years usually for another animal to get infected. It does have a snowball effect over time as more animals get infected. But since it's such a slow-moving disease, we saw only one case in 1996, one in 1998, and then another in 2000, by which time the disease is finally getting a foothold. It does take a very long time of exposure.

Mr. Serge Buy: If I may, Mr. Calder, when we did the depopulation study with the Canadian Food Inspection Agency, about 6,700 animals had been depopulated so far. Out of those animals, 159 were found with the disease. On the source farm—a farm with about 500 animals—they had the disease for about 10 years. The percentage of infection in that farm was a little over 10%. This is not a disease that transmits rapidly. This is not a disease that you can get with just a quick nose-to-nose contact.

We are quite confident with the measures taken, as are the regulating agencies. Otherwise, they would be coming to our door to ask us for more provisions. But we are quite confident that all the measures that the farmers and the different departments have been taking are adequate on this one.

Mr. Murray Calder: But I still go back to your answer to Rick's question. You're not 100% sure how this disease is transmitted.

Mr. Dennis Schmidt: No, but just the history of it shows that it doesn't transmit readily. It takes extended exposure. Even on the source farm, CFIA has conducted some really exhaustive histories. Looking back, they saw that the disease actually got a foothold with calves being exposed to animals that had actually died in the pens with them. They were more prone to it. But it was because of extended exposure over an entire winter—being in a pen with animals that were dying—that caused them to get infected, and even then only a small percentage became infected.

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As a disease, it's not like TB or any of those others that travel quite rapidly, where nose-to-nose contact can be a problem. This one seems to require extended periods of contact, right in the pen, in order to—

Mr. Murray Calder: It would definitely be a major problem with the likes of TB, which is the issue I dealt with a few years back.

Mr. Serge Buy: If I may, sir, chronic wasting disease is a new disease, and the science is evolving on that. You're talking about chronic wasting disease and the possibilities. There are scrapie possibilities and a lot of other disease possibilities. What we're dealing with at the moment is the science we have now and the assurances that our different governments are giving us regarding the transmissibility of those diseases.

We are quite confident that we are going in the right direction and taking the right steps to eradicate the disease in Canada. Clearly, none of our farmers would enjoy having wildlife contaminated, so we're taking the steps necessary to ensure that this does not happen.

Mr. Dennis Schmidt: I should point out too that now it is not only reportable, but we have also implemented a surveillance program across the country if it should ever show up on another farm.

Mr. Murray Calder: Just to wrap up this line of questioning, is your industry looking at industry standards that you would police yourself? We have self-policing standards within the poultry industry, for example. We have a national standard as to how our barns are built and basically how they're managed. Are you looking at something along the same lines with your industry regarding the issue of perimeter fencing?

Mr. Dennis Schmidt: Yes, we have now implemented the CWD certification program right across the country. But many of the provinces where the bulk of the elk are, such as Alberta and Saskatchewan, have extensive programs in place. The government has to have licensing.

In Alberta, for instance, there are requirements. I'm not familiar with all the requirements for each province, but I know that in Alberta, in order to have the first animal on the farm, farmers must have so many acres fenced to a set height—I believe it is eight feet. They have to have the handling facility all in place. An inspector comes out to inspect it before they're even allowed to have one animal come onto the property.

Each province is different, but in the west they have their own mandatory tagging systems. They're quite heavily regulated in the two provinces where 90% of the elk are.

The Chair: Thanks, Murray.

Rob.

Mr. Rob Merrifield (Yellowhead, Canadian Alliance): Well, I'm really pleased to hear that French kissing isn't the problem with their elk herds, with regard to CWD, even in Quebec. I've yet to see that happen on my farm. I don't see the need for double perimeter fences, but we're pleased that we're not dealing with a disease like TB in herds.

They say anything that doesn't kill you just makes you stronger. I think that's the case in the elk industry in that we do have probably the safest standards now. We can trace right back to the exact animal, not only for CWD, but also for anything that might come along within that industry.

My concerns are with Korea. The market in Korea has certainly been the driver of the industry. Now, whether we're going to be successful or not... I'm pleased to hear that you've got the funding to go over to Korea and New Zealand to try to do something with regard to the markets, and I hope that's successful. I expect it will be. We all know that Korea is still buying our antlers even today, only through the back door.

Nonetheless, if the industry is going to grow and be very successful, as a country and as a government, we need to consider putting dollars into research of the product. The awareness in North America of this product and the benefits are 2% to 3% of the population. You can discern that just going around the table here.

Are you getting research dollars? Is the research money going into the industry right now?

Mr. Serge Buy: There are some research dollars coming in. We are doing some research on different programs. I understand the CFIA is looking at some tests on velvet, and Health Canada is also doing some research on CWD and the product.

As well, the industry has spent thousands and thousands of dollars on research on the quality of the velvet and also on disease issues. We are at the moment engaged in a three-year program for TB research with the Canadian Food Inspection Agency. The industry is probably going to spend $180,000 just in cash and much more money in kind to do some research.

So we're indeed doing some research. We would definitely like to do more, but our industry's funding is limited. In a time when the market is not great, it is difficult for us to invest our own money when the money is not there.

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Mr. Rob Merrifield: Then the question is, are you requesting more funding, not only for research on the safety of the product but also for the promotion of a burgeoning industry that has phenomenal potential?

Mr. Serge Buy: Yes.

Mr. Rob Merrifield: It's not only in North America. Even if the research is done here, there are other countries in Europe and around the world that would benefit from the nutraceutical values of the industry.

That's more my line of questioning. Is that something we should be asking for, something we should be going for, to develop that North American industry?

Mr. Serge Buy: We were pleased that we had meetings with Agriculture Canada officials. There was some type of misunderstanding in terms of how to get to this funding. The director general of Agriculture Canada, Mr. Gilles Lavoie, came to our meeting on Tuesday and explained to us the program they have. They've been very interested in working with our industry.

We believe in the future there will probably be some dollars coming up. We will certainly keep you updated on that, because our industry would like to do much more promotion and marketing on the North American market. We would like to get some funding for those things, yes.

Mr. Rob Merrifield: Do you have a specific action plan for promotion?

Mr. Serge Buy: We are developing one at the moment with Agriculture Canada.

Mr. Dennis Schmidt: In the past it has been more short-term projects, immediate projects. Now we are setting up a long-term promotional program. That's what we're endeavouring to do at this point in time.

Mr. Rob Merrifield: We're pleased to hear that. Thank you.

Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance): Can I use one of his questions?

The Chair: Oh, yes.

Mr. Howard Hilstrom: We've been in Manitoba, around Riding Mountain National Park. We've been trying to work with the Minister of Heritage, who's responsible for national parks, in regard to the tuberculosis problem with elk and the associated cattle herds around there that keep getting reinfected from year to year.

Have you had discussions in the best interests of the industry with the minister, or that department, with the view to having some kind of effective program for national parks in particular? That's where the herds are allowed to grow virtually unlimited. Could you expand on that issue just a little bit? Do you think it would be wise to have some kind of program to monitor and reduce the incidence of tuberculosis in the national wildlife parks?

Mr. Dennis Schmidt: That has been a real concern to our council. The standards, obviously, for the park are not the same as for our industry. In our industry, we have our entire herds checked every three years for TB. We can't move an animal unless we're on those programs. We have to have permits. In the park, they found some cases of TB in their wild population, yet CFIA seems to be unable to do anything about it because of the park's authority.

If you're talking about double fencing, that would definitely be one place I would start. It's sad; they need to really look at that. We've made motions that we want no animals, because the Manitoba government has done some capture and released them to game farms. We have had motions that we've passed on the table now for several years asking the Manitoba government not to release wild animals back into the domestic herd.

We cleaned up that problem years ago and we don't want to revisit it by an animal slipping through the process. We feel our herd is squeaky clean in that respect now, and we don't want any chance of reintroducing it from the wild. Our philosophy at the Canadian Cervid Council is to not have animals come from the wild into our domestic herds.

Ms. Carol Skelton: Do we still have time, Charles?

The Chair: Carol, I will come back to you.

Mark, do you have some questions? We have another five or seven minutes left of our hour.

Mr. Mark Eyking (Sydney—Victoria, Lib.): Yes, I have two questions.

Can the traditional farmers—for instance, grain and beef—and especially the farmers on marginal lands, or on farms that are not really profitable right now because of the weather conditions, adapt to this kind of farming quite easily? Is the market there?

Mr. Dennis Schmidt: Well, it has been there all along. As I say, we would need to do some work on developing the venison end and on developing the North American market for our velvet antler.

That has been the great thing: this is a great alternative. These animals are indigenous to our country. We don't need special housing. Their metabolism over the winter shuts right down. They need hardly any stored feeds, because they are suited to the climate. They won't breed until the fall. They won't calve until the spring, until the grass is flush. I mean, they're an ideal animal, suited to our climate.

• 0955

There is the stigma that they are a wild animal, but you have to remember, the animals we care for have been behind wire for generations now. I have some who, when they get out, just run around the perimeter looking for a way back in. I mean, this is their home. People don't understand they are a domesticated animal now, and they're the most perfect animal for raising in Canada, in our climate.

Just to give you one quick outline on where the potential is, in the Orient, or in Chinese medicine, velvet antler is the second most commonly used ingredient, second only to ginseng. Of the 300 million people here in North America right now, if we had only 180,000 taking our product, they would consume everything we produce. This is one area we really need to focus on, but it takes time. And it does take a little money.

Mr. Mark Eyking: I remember the tobacco growers had a lot of problems when things changed two years ago, and there was some money available to help people get from tobacco to other crops. Do you think there should be a program for other farmers to get introduced into your industry?

Mr. Dennis Schmidt: We'd love any help we can get. Realize that we're not coming here looking for handouts.

Mr. Mark Eyking: No, no, I'm just...

Mr. Dennis Schmidt: As an industry, we'd just like to get back on track, and getting the border open would be the biggest single thing that could do it. Barring that, help—

Mr. Serge Buy: If I may, I would make just a few comments on this.

The government, in the mid- or even early 1990s, pushed for diversification of farming. It is a good thing; however, we want to make sure we also have the programs that follow.

Just to say diversify, and then you're on your own for marketing, promotion, and other things, is not entirely what we're looking for. We want to make sure this is followed by programs in marketing and promotion, to ensure that when someone gets into the farming, there is the availability of markets in the future.

Mr. Mark Eyking: Do I get one more question, Charles?

The Chair: Yes.

Mr. Mark Eyking: With regard to hunters across the country, is there any way it's tracked when they shoot a wild animal? Do they have to pass in any... Is there anything across the country now that would be a good way of tracking if you shot a wild white-tailed deer?

Mr. Dennis Schmidt: Each province has been collecting heads and sending them in for CWD inspection. That's actually how this one in Saskatchewan was discovered.

Now, it could have been a random... Like other prion diseases, there are some cases where it's one in a million. That's what it could be. We don't know. It's really hard to fathom that this animal could have gotten it from a game farm. First of all, the range of mule deer is usually only five to ten kilometres, and there are no endemic farms even close. You'd have to go 70 to 100 kilometres, I believe, to get to a farm that actually had the disease. Mule deer, just because of their nature, stay in a set area.

So it's really baffled us as an industry where this came from. We'd hate to think that... It's out there in the wild, but it could be just a random case. Obviously it showed up in the wild in Colorado. It could be all over, for all we know, but just randomly, never going anywhere. Until it's put in a confined area, it won't show up. The disease is such a slow-moving one it would never really get a foothold in the wild.

The Chair: Thanks, Mark.

Perhaps I can take about 30 seconds of Mark's time and ask you, with your herds, it's my understanding they're registered nationally. Is that it? You have a registration of herds?

Mr. Dennis Schmidt: Yes, health of animals. The CFIA knows where every animal is.

The Chair: Specifically, with animals, are they registered by ear identification?

Mr. Serge Buy: We have an ear tag. The tag system is called “health of animal”, under the Health of Animals Act. Yes, they are registered.

The Chair: Each animal.

In terms of what you're working toward, I understand it's essential that every farm that has an animal showing signs of this should be identified, and the information brought to...

Mr. Serge Buy: Yes. This is why we have a heads-up on the United States. We have a trace-back system for both the animals and the movement permits. We know where the animals are and where they went.

We have a lot of data. Indeed, we're very regulated. But this saved us, basically, from the problems the Americans will be facing over the next couple of years to clean up the disease. We can say we'll be clean, because we have the measures to control. The Americans cannot say the same. But we can trace the animals anywhere, yes.

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The Chair: The onus then is on each individual farm, that any animal that shows signs or whatever is brought to the attention of the CFIA?

Mr. Dennis Schmidt: Yes, by law. It being reportable now, even the vets have to report it, if anyone sees a sign of it.

The Chair: I'll go to Carol for just a minute.

Ms. Carol Skelton: Very quickly, I just want to reassure you, Charlie, we have a herd inventory. If any animal dies on our farm, the head of that animal goes to the veterinary college. It's totally checked, and comes back clean. If you have any disease on the farm, it's reported.

Murray was asking about what kind of marketing and development we're doing. Venison is known as the food of kings; in Great Britain only kings ate it. It's used extensively in the restaurant market here in Canada. The pet food market has also been developed quite extensively in Alberta. We've gone ahead, and people are paying a lot to have their dogs and cats on elk velvet antler.

The one concern I had with the Canadian Food Inspection Agency this year was when they allowed animals to come from Alberta into Saskatchewan. That bothered the Saskatchewan people, and it bothered me.

I wrote to the Minister of Agriculture and he said there were some rules and regulations. But it bothered me that when our province had worked so hard to clean up our herds and reassure our consumers that we were safe, the Canadian Food Inspection Agency was allowed to do that. It helped the Alberta guys because they sold some animals, but it bothered me as a producer and quite a few of the producers in Saskatchewan. That was my one concern.

I would really like to thank you for coming and telling Canadians more about our wonderful industry.

Mark talked about diversification in Saskatchewan, but the elk were there before the settlers came. That's why they have adapted so well to the lighter land and to farming. They are a perfect thing. But when the government gets us to diversify, they should stand behind those people who have tried to be different.

[Translation]

The Chair: Marcel, a brief question.

Mr. Marcel Gagnon: Thank you.

I would like to come back to the velvet antler trade. You said that 70% of your earnings came from the sale of velvet antlers, and 30% from the sale of venison. Are the velvet antlers bought by pharmaceutical companies? What should we be doing to increase velvet antler sales? It sounds like a very good product. What products can it replace? Who are your competitors in the velvet antler industry?

Mr. Serge Buy: Seventy per cent of earnings, and perhaps more with elk, come from velvet antler sales. Probably over 80% of an elk breeder's earnings would come from velvet antler sales. For red and other deer, the money is in the venison.

I cannot give you any details on what products the velvet antlers replace, but as my colleague said earlier, in Chinese medicine it is the second most widely used product after ginger. It is used for conditions like arthritis, as a natural product, it is sold in natural food stores and pharmacies. As I said, it is now even sold in Loblaws. Ms. Skelton made a comment earlier. It is sold in pet food stores. As you can see, we are seeing increasingly extensive use.

During the reception held on Parliament Hill, some members of Parliament said they would like to try it, and asked us to send them some. We will be sure to send them some.

Mr. Marcel Gagnon: Thank you.

[English]

The Chair: Thank you very much for coming.

Would you like a further conclusion, Dennis or Serge?

Mr. Dennis Schmidt: No.

Mr. Serge Buy: No, thank you.

The Chair: We certainly learned a lot this morning. I think we've been reassured, as a committee, that you're making a really determined effort, along with CFIA, to purify the outlook for your industry. We want to wish you every success in the future.

As you have seen, we have two members of Parliament here who are very much involved.

Marcel, I was rather amazed the other night. I just forget the gentlemen's name, but there was an elk farmer from Quebec who had around 1,000 head of elk. It's a growing industry across Canada.

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We'd like to wish you good luck with it. Thanks for coming. Hopefully some solution can be reached to obtain better markets for you.

With that, I'll adjourn this part of the meeting and we'll move in camera to look at future business.

[Editor's Note: Proceedings continue in camera]