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37th PARLIAMENT, 1st SESSION

Standing Committee on Agriculture and Agri-Food

COMMITTEE EVIDENCE

CONTENTS

Tuesday, February 19, 2002

1745

The Chair (Mr. Charles Hubbard (Miramichi, Lib.))

1750

Mr. Anderson

The Chair

Mr. Dick Proctor (Palliser, NDP)

The Chair

Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance)

The Chair

Mr. Odina Desrochers (Lotbinière--L'Érable, BQ)

The Chair

Mr. Rick Borotsik (Brandon--Souris, PC/DR)

1755

The Chair

Mrs. Ur

The Chair

Mr. Steckle

The Chair

Hon. Clay Serby (Minister of Agriculture and Food, Province of Saskatchewan)

1800

The Chair

1805

Mr. Anderson (Victoria)

1810

Mr. Clay Serby

Mr. David Anderson

Mr. Clay Serby

1815

Mr. David Anderson

The Chair

Mr. Odina Desrochers

Mr. Clay Serby

Mr. Abbott

1820

Mr. Odina Desrochers

Mr. Clay Serby

The Chair

Mr. Proctor

Mr. Clay Serby

Mr. Proctor

Mr. Clay Serby

Mr. Proctor

Mr. Clay Serby

1825

The Chair

Mr. Borotsik

Mr. Clay Serby

Mr. Borotsik

Mr. Clay Serby

Mr. Borotsik

Mr. Clay Serby

Mr. Borotsik

The Chair

Mrs. Ur

1830

Mr. Clay Serby

1835

Mrs. Rose-Marie Ur

Mr. Clay Serby

Mrs. Rose-Marie Ur

The Chair

Mr. Howard Hilstrom

1840

Mr. Clay Serby

Mr. Howard Hilstrom

The Chair

Mr. Steckle

Mr. Clay Serby

Mr. Steckle

Mr. Clay Serby

The Chair

1845

Mr. Edwin Wallace (Representative, Empress Line Producer Car Shippers Association)

1850

The Chair

1855

Mr. Ken Hymers (Representative, Canadian Organic Certification Co-op)

1900

The Chair

Mr. Ken Hymers

The Chair

Mr. Brad Nelson (Representative, Honey Bee Manufacturing Ltd.)

1905

The Chair

Mr. Bill Boyd (Representative, Saskatchewan Party Caucus)

1910

The Chair

Mr. Con Johnson (Individual Presentation)

1920

The Chair

Mr. Lynden Elviss (Individual Presentation)

1925

The Chair

Mr. Newton Myers (Individual Presentation)

1930

The Chair

Mr. Dean Smith (Individual Presentation)

1935

1940

The Chair

Mr. Stewart Wells (President, National Farmers Union)

1945

The Chair

Mr. Keith Murch (Individual Presentation)

1950

The Chair

Mr. Arnold Schmidt (Individual Presentation)

1955

The Chair

Mr. Howard Hilstrom

Mr. Hilstrom

2000

Mr. Newton Myers

Mr. Bill Boyd

The Chair

Mr. Dick Proctor

2005

Mr. Dean Smith

The Chair

Mr. Proctor

Mr. Dean Smith

Mr. Dick Proctor

Mr. Ken Hymers

Mr. Proctor

The Chair

Mr. Dean Smith

The Chair

Mr. Borotsik

Mr. Bill Boyd

2010

Mr. Borotsik

Mr. Bill Boyd

Mr. Borotsik

Mr. Lynden Elviss

Mr. Borotsik

The Chair

Mr. Steckle

Mr. Edwin Wallace

2015

Mr. Steckle

Mr. Stewart Wells

Mr. Con Johnson

The Chair

Mr. Anderson

Mr. Edwin Wallace

2020

The Chair

Mr. Edwin Wallace

The Chair

Mr. Edwin Wallace

The Chair

Mr. Brad Nelson

The Chair

Mrs. Ur

Mr. Stewart Wells

Mrs. Ur

Mr. Stewart Wells

2025

Mrs. Ur

Mr. Stewart Wells

Mrs. Ur

Mr. Con Johnson

Mrs. Ur

The Chair

2040

Mr. Garry Nisbet (Individual Presentation)

Mr. Abbott

2045

The Chair

Mr. Garry Nisbet

The Chair

2050

Ms. Irene Ahner (Individual Presentation)

2055

The Chair

Mr. Ron Gleim (Individual Presentation)

2100

The Chair

2105

Mr. Larry Bonesky (Individual Presentation)

2110

The Chair

Mr. Stephen Erickson (General Manager, Prime Pro Ventures Inc.)

2115

The Chair

Mr. Grant Payant (Individual Presentation)

2120

The Chair

Ms. Linda Trytten (Individual Presentation)

2125

The Chair

Mr. Charles Kieling (Individual Presentation)

2130

The Chair

2135

Mr. Cliff Murch (Individual Presentation)

2140

The Chair

Mr. David Anderson

The Chair

Mr. Dick Proctor

The Chair

Mr. Rick Borotsik

Ms. Irene Ahner

2145

Mr. Borotsik

The Chair

Mr. Steckle

The Chair

CANADA

Standing Committee on Agriculture and Agri-Food

NUMBER 047

1st SESSION

37th PARLIAMENT

COMMITTEE EVIDENCE

Tuesday, February 19, 2002

[Recorded by Electronic Apparatus]

» (1745)

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Good evening, everyone.

Pursuant to Standing Order 108(2), the Standing Committee on Agriculture and Agri-Food tonight, and in fact this week, is conducting a study on the future role of the government in agriculture.

With that we'd like to welcome you to our meeting.

Very briefly, to outline what we've been doing, yesterday we were in Manitoba, both in Stonewall and Brandon, and this morning and towards the afternoon we were up in Davidson, and tonight in Swift Current. As a committee, we are travelling across the ten provinces of Canada, meeting with farm groups, farm leaders, and farmers themselves to allow you and us to have some input of your concerns, your ideas, and your aspirations in terms of a vision for agriculture.

As a committee, we will travel throughout the country. We will hear your briefs. We will put them together. In fact, tonight everything is being transcribed. Blues eventually will be written. The committee will go back to Ottawa, and from there we may call further witnesses. But it's our hope that by June, before this House terminates for the summer, we will be presenting a report to the House of Commons.

Our committee, of course, is a committee of all parties in the House, and before I begin tonight I'd like to have each member introduce themselves.

I think I'll start with David Anderson, who doesn't need any introduction, but, David, you might want to say a few words here in this good part of Saskatchewan.

» (1750)

Mr. David Anderson (Cypress Hills--Grasslands, Canadian Alliance): I just want to thank everyone for coming out tonight. I want to thank fellow members of the agriculture committee for making the decision to come to western Canada, and particularly for privileging us with a stop here in Swift Current.

I know you'll treat them well and with respect, and I look forward to the evening.

The Chair: Saskatchewan is well represented on the committee. Maybe Dick Proctor would be the second.

Mr. Dick Proctor (Palliser, NDP): Thanks very much, Charles.

I'm the member of Parliament for Palliser, which is Moose Jaw in the southwest corner of Regina and some of the small towns around there. We have had good meetings, as Charles has indicated, and we're looking forward to the one tonight.

Thank you.

The Chair: Howard is our vice-chairman.

Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance): My name is Howard Hilstrom. I am, as he said, the vice-chair of the committee. I'm the chief agriculture critic for the Canadian Alliance.

I have run a medium-sized cattle ranch in Manitoba, about 60 miles northwest of Winnipeg.

The Chair: From the Bloc Québécois, Odina.

Mr. Odina Desrochers (Lotbinière--L'Érable, BQ): Hi. My name is Odina Desrochers. I am a member of Parliament from the Bloc Québécois. I represent Lotbinière--L'Érable. It's close to Quebec City and it's the most important rural riding in Quebec.

I was born on the farm and I grew up on the farm, so I understand your concerns very well.

Have a good night.

The Chair: From Manitoba, Rick.

Mr. Rick Borotsik (Brandon--Souris, PC/DR): Thank you.

My name is Rick Borotsik. I'm the member of Parliament from Brandon, Manitoba. I represent the Progressive Conservative Party. I'm their agriculture critic.

We're the home of the Brandon Wheat Kings. I'm sure you've heard of them. They usually beat the Swift Current Broncos.

We're only one point out of first against Regina, so be cheering for Brandon, okay?

» (1755)

The Chair: Thank you, Rick.

Rose-Marie.

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.): Good evening. I'm a member of Parliament from southwestern Ontario. I am a farmer and live on the family farm. I was elected in 1993. I'm the vice-chair of the rural caucus. I certainly have enjoyed visiting the western provinces, and I look forward to this evening.

The Chair: Paul.

Mr. Paul Steckle (Huron--Bruce, Lib.): I represent the rural riding of Huron--Bruce. I am a farmer and have sat on this committee since 1993-94. I look forward to this evening, and of course continuing travel through the western provinces.

The Chair: My name is Charles Hubbard, from the Miramichi riding in New Brunswick.

Tonight, as our first presenter, we would like to welcome the Honourable Clay Serby.

Clay, I know you come to Ottawa on occasion--in fact only last year--representing the farmers of Saskatchewan. The farm leaders who have come have certainly done an excellent job, but we felt that tonight and this week we're out here on the ground in the midst of your community, and hopefully we can get a better idea of what it's like here at the grassroots level.

Mr. Serby, the floor is yours for your presentation.

Hon. Clay Serby (Minister of Agriculture and Food, Province of Saskatchewan): Thank you very much, Mr. Chair. Good evening to the members of the committee. I, too, want to take this opportunity to welcome you to Saskatchewan and to Swift Current. I also appreciate the opportunity we had this past summer to make a presentation to your standing committee. I hope the kind of work you do in our province and in western Canada over the next couple of days and weeks will translate into some of the issues that are important for us to deal with at the national table.

I want to also say that I have not had an opportunity to translate our document into the French language. I will make that apology this evening, before we get into our work. We'll try to have that available for you along the way.

First I want to highlight three areas that I want to spend some time talking about this evening. One is the potential drought and how this affects our industry here in Saskatchewan. I want to talk a little bit about the impact of the international subsidies on the grains and oilseeds producers, and I want to talk a little bit about potential program enhancements governments need to consider, to assist Canadian producers in building a stronger agricultural industry.

Saskatchewan farmers take the view that the real question that needs to be answered over the next little while is whether the Government of Canada will be there with the funding that is necessary to help farmers fight in the ongoing trade wars, and help farmers in times when there are crises, such as the one we just experienced here last year, as they relate to the drought.

Today, our national government spends about 1% of its entire budget on agriculture. From Saskatchewan's view, and certainly that of other prairie ministers and national Canadian agriculture ministers I sit with, it is simply not acceptable, when we pride ourselves as being provinces that feed the world and our national budget today in agriculture is about 1%.

On the current drought situation in our province, I've attached information for the committee on a series of maps, outlining the scope and severity of the current moisture conditions that exist in Saskatchewan. I've coloured yours a little darker, Rick, so you can understand them more fully, because I know that reading sometimes is an issue, so I've made them a little darker for you.

The extremely dry conditions experienced in 2001 across the province, coupled with the low levels of snowfall so far this winter, have resulted in very low reserves of moisture in our province. Many livestock producers are already short of feed this winter and have had to purchase substantial amounts of feed as a result of the 2001 drought.

Of course, the lack of snowfall does not bode well for the spring pastures and the water conditions and water sources. These producers need to see significant snowfall prior to the spring, to regenerate water sources and get spring pastures and forage crops off to a good start.

While Saskatchewan grain producers will be the first to tell you we've never lost a crop in February, producers are very concerned that if the above-average timely moisture is not received in spring, the losses to the crop sector this year in our province will be significant.

A drought in February 2002 in Saskatchewan will have a devastating impact, not only on our primary producers but also on the entire economy of our province. Today in Saskatchewan, 40% of the jobs, directly or indirectly, are affected by our agricultural community, so the value of a good crop in Saskatchewan is critical.

Programs that are already in place can go a long way toward helping producers address the issues arising from moderate or short-term drought conditions, but governments need to be prepared to respond in a timely and real way to producers, if the dry conditions persist in the spring and the summer months here.

Over the last number of months, I have sent correspondence to the federal Minister of Agriculture and Agri-Food, Mr. Vanclief, outlining some program modifications for 2002 that I believe would be very beneficial in assisting producers who face drought conditions in our province.

We have specifically suggested a number of potential crop insurance enhancements for 2002. Allowing producers to purchase higher coverage levels and expanding the commodities covered by the program will better position the program to respond to producers' insurance needs.

These enhancements require additional federal funding, without any question. In the absence of this funding, it will be very difficult to provide a significant improved 2002 program. An enhanced crop insurance program is also part of a more comprehensive proposal I presented to Mr. Vanclief and other provincial ministers of agriculture in January. It is outlined in more detail in your package today.

Saskatchewan has also requested that the federal government increase the investment made by the federal prairie farm rehabilitation administration program, or PFRA, in water development. The PFRA currently provides $2.2 million annually for water assistance in our province. We requested last year an additional $5 million for water assistance, of which we received, I believe, $1.5 million. Our province added $1.5 million, to move the target last year from $2.2 million to $5.2 million.

In order for us to sustain a strong, vibrant agricultural livestock industry in our province, if our drought continues we're going to need some assistance this year to the PFRA program. We're asking the federal government to look at enhancing our $2.2 million to around $7 million. We think we are doing our part here in our province, but we need to have some assistance on the drought, particularly for livestock producers this year, and an enhancement to the PFRA program.

I want to spend a few minutes talking about the international subsidies and the United States farm bill. When the World Trade Organization agreement was signed in 1995, Saskatchewan farmers thought international subsidies would be reduced over time. In Canada today, subsidies to grains and oilseeds producers have been significantly reduced, but in the United States and the European Union countries these subsidies remain, and in some instances have grown. They are continuing at levels similar to what they were in 1995.

Last fall, Premier Calvert submitted a report for all the premiers in Western Canada called A Fair Deal for Canadian Farmers, which outlined the problem of farm subsidies, to the committee. The premier's paper outlined the impact of international subsidies on Canadian producers and called on the federal government, on behalf of Canadians, to negotiate a substantial reduction in these trade subsidies, and also to mitigate the impact of these subsidies on our producers until solutions to the WTO were found.

I urge your committee to look closely at the premier's report, and I urge the federal government to attempt to find adequate short-term and long-term responses to these subsidies.

In the past six months, we in Saskatchewan have been dialoguing with our provincial friends in Manitoba and Alberta, and we have submitted a safety net proposal to the federal government. The federal, provincial, and territorial agricultural ministers have just recently agreed to develop a long-term agricultural policy framework to strengthen the position of the agricultural industry, to take advantage of the current and future opportunities and respond to future challenges.

We've taken the farm safety net program and developed it into a farm stabilization program. It has five envelopes to it, of which safety nets are one.

¼ (1800)

On January 24 of this year, the agricultural ministers met in Toronto to discuss the proposal of the new agricultural policy framework. At this meeting, we distributed our Saskatchewan paper, which is supported by both Manitoba and Alberta. It's called An Option for Future Agricultural Safety Net Programming Within the Agricultural Policy Framework. I've attached a copy of that document for your committee to review.

This paper builds on the background work prepared by the premier and by our provincial farm support review committee, which travelled the province extensively this summer for about four months and put together their recommendations about what we should be doing in terms of safety net enhancement in our province.

It was also endorsed in Saskatchewan by seven of our farm organizations and groups before I took the document to Toronto. We talked about three areas we'd like to see enhanced.

We suggested enhancing the crop insurance program to improve coverage offered to producers and provide production insurance options for a broader list of commodities that would include forages and grasses.

We also said a new program should address itself to a new crop sector revenue deficiency program to offset the international subsidies.

Thirdly, we said we should be providing an enhanced gross margin insurance program to allow producers to cover a higher percentage of positive margins, as well as provide coverage against negative margin losses.

Tonight I want to encourage the standing committee to take a closer look at this proposal, because I think this proposal, as described, would go a long way toward meeting the risk management that need not be only for Saskatchewan producers but could be here for Canadian producers. Producers in our province and across Canada want responsive and predictable programs. If this type of programming were in place now, the issue of how governments respond to drought and international subsidies would be taken care of right here within these programs, and governments would not feel the pressure for ad hoc responses on these issues.

I want to, again, thank the committee for coming to Saskatchewan, for meeting with us and the farm groups that are here tonight and that were in Davidson. I want to thank you for the opportunity to appear before you, and I sincerely hope you will take some time to reflect on the information we've provided as it relates to Saskatchewan's position.

I want to close by saying this. The health and future of the agricultural sector is an important issue for all of Canada, and for sure in this province it's one of the primary drivers for our future. Canadians value their farmers and the contributions they make to our economy and the social fabric of our country.

It is my view that the federal government, acting on behalf of Canadians, needs to demonstrate leadership in addressing the important issues facing Canadian farmers. The federal government must demonstrate that by standing behind its farmers.

We know our Canadian treasury cannot compete with the U.S. and the EU, but we think remodelling the safety nets by enhancing our federal funding can make a difference.

As I said earlier in my comments, it's very difficult for me to understand how this industry, as large as it is, with the magnitude this industry has, both domestically and internationally, receives only a token amount of funding at the national government level--at 1%.

I conclude my comments, and I would be happy to answer any questions the committee might have of me.

The Chair: Thank you, Mr. Serby. We will have a few brief questions. I see David has one, and other members may have some.

Just as you concluded there, I would like to say that your government is to be commended for being at Doha with the World Trade Organization. As you'll recall, and as most people here probably know, Chris Axworthy, one of your ministers, was at Doha. He took a great interest in it and certainly supported what you people in Saskatchewan have been talking about in this presentation.

So with that, David.

¼ (1805)

Mr. David Anderson: Last week Minister Vanclief came to our committee, and there was a presentation on the new farm plan. It looked very good, but no details were given on it. No money has been committed to it, and there has been no agreement with the provinces. When we were in Manitoba yesterday, Minister Wowchuk told us she was not consulted before the last announcement was made. Primarily, the idea was that one size fits all and you either take it or leave it. Were you consulted before that announcement was made?

¼ (1810)

Mr. Clay Serby: All of the ministers from across Canada met with the federal minister in June, and it was in June that we put together the risk management package. In that package are five envelopes. So we know what those envelopes are. They're food safety, environmental stewardship, renewal, transition, and life sciences.

What we don't know is how much new money will go into the program. Today we have $1.1 billion, which is only for safety nets. That is only one envelope of the risk management package. The federal government tells us there will be more money for the risk management package if in fact we buy the whole deal. We have not been consulted on what the whole deal looks like. Our interest will be to negotiate with the federal government the whole package on risk management with the five envelopes. But you can't build a national agricultural program on $1.1 billion. It can't be done.

Mr. David Anderson: We understand what a couple of the other parts of it are. One is that farmers will be expected to file environmental farm plans. I know there has been some resistance to that in the west. They'll also be expected to trace their product from when they seed it in the ground until it goes to wherever it ends up. The farmers are going to end up paying that bill.

I have a great concern about this program. It's like having a book with chapter titles and blank pages in between.

You mentioned that we're going to have new money. There doesn't seem to be any indication of that, and there won't be any new money this year. He made that clear. He said there's no new money to combat drought or for other subsidies this year.

What is the provincial government prepared to do for farmers in this province through this next year, as the federal government apparently has already made a decision not to put any more money into agriculture?

Mr. Clay Serby: We've done a number of things. We're looking at enhancements that we might be able to make to the crop insurance program.

We did make a suggestion to the federal government. I'm not suggesting this only as the Saskatchewan minister, but as the prairie ministers meeting in British Columbia. Because the federal government isn't putting any new money into the pool, we've suggested that we take the bonus interest portion of NISA and do a top-up to crop insurance. What we hear in our province is that we should have an enhanced, enriched crop insurance program, which I agree with, and it's part of our document.

Mr. David Anderson: One of the problems with that is that we're already at the end of February. People need to make their plans. How can they do that? This has been talked about for six months. It isn't something new that you brought down in February. It came up last summer. We knew we had a problem. I'm sure you've addressed it as well. The federal government hasn't moved on it one inch, unless they're coming up with something new in the next week.

Mr. Clay Serby: The federal government's position is that there is absolutely no new money this year, as you've pointed out, and that any new enhancements to safety nets will only occur after the spring of 2003. You're absolutely right about that.

You asked me what we're doing. The provinces are attempting to find additional revenues, both provincially and federally, within the existing safety nets, to reconstruct them.

I understand what time of year it is, and we'll soon be going to crop insurance products. Within the next couple of weeks we'll be going to a new product. So my lobby and my provincial colleague's lobby is to try to get some of that existing money and some of the safety nets moved out, because I think it's the responsibility of the national government to help us with that.

Finally, I'm not sure if this comes from your question, but if you think the provinces can build safety net programs with their own money, I can tell you that's an unachievable objective, particularly in a province like Saskatchewan that has 40% of the arable land.

¼ (1815)

Mr. David Anderson: I understand that. I just think it's important that we let producers know they're going to be basically on their own this year.

The Chair: Thank you. I want to move on now.

I'm a little concerned about our questioning. The minister has come here to present to the federal government, and I don't think we should try to probe into.... He comes as a presenter and I know he....

Anyway, next is Mr. Desrochers.

[Translation]

Mr. Odina Desrochers: Good evening, Mr. Minister. I'm very happy to welcome you here, to Saskatchewan. I am familiar with the particular characteristics of agriculture at this time and the problems you're facing, but if I may, I would like to discuss a problem which also concerns Quebec, that is to say the whole issue of subsidies.

We know that in 1995, the Canadian government, the United States and the European Union had committed to reducing their subsidies, which Canada did, whereas the United States and Europe did not do so.

Do you not think that before undertaking a new round of negotiations, Canada should ask its partners to begin by respecting the commitments they made in 1995? Do you not think that the federal government should adopt a firm position and state that we will begin to negotiate anew, but that first and foremost, our partners must respect the commitments made in 1995?

[English]

Mr. Clay Serby: That is a very important and good question. I was at the meeting with the Canadian Federation of Agriculture two weeks ago, at which the federal minister spoke. The following day he spoke to the ministers of agriculture across the country. Our position is exactly how you've painted it.

We first need to level the playing field in Canada. In levelling the playing field, we need to have our national government get in, because the other guys are not getting out. We've had a WTO agreement and the NAFTA agreement for six years, since 1995, and we've seen the U.S. and EU subsidies continue to grow while we've taken ours out.

The last document prepared for us by the federal Department of Agriculture finally acknowledged, for the very first time in the last six years, that if you take just the wheat crop, this year in Saskatchewan alone it has cost our farmers about $1 a bushel on wheat. If you translate that into our wheat crop this year, as bad as our year was, that's about $300 million out of the jeans of Saskatchewan wheat producers alone.

We have to compete in an international marketplace, where that subsidy is not fair. So your point, and our position, is that we need to mitigate the subsidy. We know our Canadian national treasury can't handle it and shouldn't get into it, but they can go into the safety nets.

They can provide funding nationally in the safety nets, which won't affect the marketplace and won't affect what farmers do in this province, or in Canada for that matter, in terms of their choices. But we need to have our national government insert themselves at that level, absolutely.

¼ (1820)

[Translation]

Mr. Odina Desrochers: That is another issue, Minister. I have trouble understanding the position of the federal government with regard to its participation in the Cairns Group. It is a right wing group. The United States are not members, nor is Europe or Japan. However, we know that MERCOSUR, Australia and New Zealand are its leaders. Don't you think that the Canadian government has a tendency to give greater respect to the Cairns Group philosophy than to the demands of the provinces?

[English]

Mr. Clay Serby: I think the national government is in a tough spot--and I say this kindly, recognizing that you are a member from Quebec. I say this from the point of view that our national government tries to protect both the international marketplace, which they try to lobby on our behalf, for those of us who compete in the international marketplace in the grains and oilseeds, and at the same time they try to protect their supply-managed market, which is in Ontario and Quebec.

Through the Cairns Group we have our national government lobbying for a fair level playing field in the international markets, but still protecting the supply-managed industries, which are very important to Saskatchewan and Canada, and we support them as well. But then when they get to the WTO and they talk about reductions in subsidy, our national government has not been able to deliver yet.

So they're giving two messages to two different groups, trying to protect two different agricultural industries in our country. I appreciate the tough challenge they have; however, we in western Canada believe there needs to be a mitigation for the subsidy.

I'm pleased to hear, Mr. Chair, that the Minister of Agriculture, at the Canadian Federation of Agriculture two weeks ago, and to the ministers of agriculture two weeks ago, said it's time to mitigate on the grains and oilseeds side for western Canadian farmers. I'm pleased to hear that.

The Chair: Thank you.

Dick.

Mr. Dick Proctor: Thanks, Charles.

Minister, I wanted to pick up on Odina's point, because what you're saying is that both the European countries and the United States never really left the subsidy field, but now they're back in more heavily than ever. So what was Doha, then? Was it just a sham? Was it just an exercise in public relations where they said, yes, we'll sign on, but then Bush comes back and says if the Congress passes this new farm aid bill we won't veto it? How do we indicate what Doha means in the great scheme of things?

Mr. Clay Serby: In the way in which it's been interpreted to me, Doha now has established the parameters for which to begin the negotiation. So now, through the last round of Doha, they have a method to look at how we're going to mitigate or get out of the subsidy challenges in the U.S. and in the EU.

Mr. Dick Proctor: But many years down the road.

Mr. Clay Serby: But that's three years away before they start the negotiations, and the experts who speak to us on a regular basis, not only in Saskatchewan but across the country, say we're five or six or seven years away from beginning to mitigate the subsidies. We've already been in them for six years at a disadvantage.

So we need to level the playing field, and that levelling of the playing field is not about our treasuries trying to compete, but it's about our national treasury putting some cash into the safety net side, because there we can provide some of that mitigation. That's our strategy.

Mr. Dick Proctor: I have one final question. To pick up on David Anderson's point, I agree with him completely that when Mr. Vanclief was before our committee a couple of weeks ago, there were not a lot of details. But one of the things that was very clear to me, and I think to others, was that, yes, we are going to be prepared to put money out for risk management, but on what he refers to as passive income support or farmers who tend to be at the other end. They want to go in a completely different direction. It seems to me that they want those people out and they're not going to support them any longer. How will that impact in this province, from your perspective?

Mr. Clay Serby: Well, our interest is not to make a decision or a choice about who is or who isn't capable of being a successful farmer in our province. That's not a decision this department is going to pass judgment on at all. Our interest is to try to build a strong agricultural community, and the only way we think we can do that is by providing the kinds of resources Saskatchewan producers need to do the job.

I don't dispute, Mr. Proctor, the risk management structure. I think the five envelopes are right. I think they can achieve the kinds of things we want to do in Canada. But they shouldn't be done at the expense of the amount of dollars that are there today. It's a very small sliver of money that's there today, and it addresses only one of those envelopes. The national government is saying you need to do all five envelopes with one envelope of money, and it can't work. It can't work.

¼ (1825)

The Chair: Rick.

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

Let's not blow smoke. I agree with you that something has to be done. The federal Minister of Agriculture sat at our committee and said there is no more money. You just said the minister told you, as the Minister of Agriculture here in Saskatchewan, that it's time we mitigated against the unfair subsidies. Well, let's not fool these nice people here. That's not going to happen this year. There is no more money, the Minister of Agriculture says.

So, Mr. Minister, what can we do now, between now and seeding for this coming year, to help mitigate against those situations?

Mr. Clay Serby: There are two things I think this committee can do, maybe three things.

One is that in western Canada today--Alberta and Saskatchewan for sure--we need some money for drought assistance. So we'll need help through the PFRA programs that are established today for that piece.

Secondly, we're going to need some enhancements, in my view, to our existing crop insurance programs so that livestock producers can insure grass and forage and we can bump up our crop insurance program. We think we need to see that happen this year. If that doesn't happen, then we're going to be into that whole round of emergency money again, where we're travelling to Ottawa and making all kinds of appeals for additional money. So we need to top up, and this committee should be looking at helping us do that.

And thirdly, I think this committee should be lobbying or putting forward a position on the risk management piece. We shouldn't discard the risk management piece, because the national government has an agreement from all the provinces today on that package. But what it needs is money. This committee should be talking about what the subsidies...in Canada, how they've affected Canadian grain and oilseeds farmers, and that there should be extra cash.

Mr. Rick Borotsik: I'm going to cut you off, because I have one more question, and the chairman's really an ogre; he won't let me go on much further.

You have a really interesting program here, and you say that with your enhanced crop insurance program--which I agree with--the federal and provincial governments and producers should be partners.

Mr. Clay Serby: Yes.

Mr. Rick Borotsik: How much do you see the producers being a partner?

Also, I'd like you to touch on where it says the federal government should pick up a larger portion. Have you worked out any kind of formula for Saskatchewan in regard to what portion the federal government should be responsible for?

Mr. Clay Serby: I haven't worked out the latter piece, because when we go to the crop sector program, we'll want to see that being nationally mitigated. That's a subsidy piece, and I think they should carry that whole bag. That's the national government's commitment to the subsidy issue. I don't know what the number will be, but it would be two or three times larger than their national contribution is today, if you could put that entire program into place.

Mr. Rick Borotsik: What about the contribution from producers?

Mr. Clay Serby: Today, producers on the crop insurance program, Mr. Chair, are somewhere in the neighbourhood of 30% to 35%. I don't want to see that number grow, because if you put that onto the backs of the farmers, they won't buy the product.

Mr. Rick Borotsik: How many are currently--

The Chair: Now, Rick, you're really causing me.... You're a nice guy and all, but....

Mrs. Rose-Marie Ur.

Mrs. Rose-Marie Ur: I want to thank the minister for an excellent presentation. I certainly look forward to reading the rest of your brief. There's a lot of good information in there that I'm sure we'll be able to use.

You talked in your presentation about a remodelled safety net program. Yesterday, when we were travelling in Manitoba, we listened to 57 presenters. Many of those presenters indicated that they basically liked the programs that were there already, but they needed a little tweaking--and the tweaking was not necessarily a lot more dollars but more in terms of reallocation.

Is that something you're thinking of when you suggest remodelling the safety net program?

¼ (1830)

Mr. Clay Serby: My remodel is far larger than the one you might have heard Manitoba producers talk about. Our farm safety net review committee has talked about taking CFIP.... I can't imagine why anybody would say it's a good program, when 20% of the producers today in Canada access CFIP.

I can't even imagine producers saying, in large number, that today in our province, where crop insurance only addresses about 60% of the agricultural producers' land, this is a good program. We have 40% that isn't part of the program. When you're competing in an international marketplace and losing $1 a bushel on the wheat side, I don't think anybody would suggest we had a good safety net program in place today. Even the federal Minister of Agriculture now says they're not working.

So I don't think we should be spending a whole lot of time talking about whether or not our safety nets today only need tweaking, because they need more than tweaking; they need reconstruction, in my view.

Yes, people like NISA a whole lot, and 95% of our producers in Canada are in NISA. In this province, I think we could access $600 million, and we're only accessing about $170 million this year. It's working, but it's not working for the benefit of those for whom it was initially designed.

We should take what we have, add to it on the safety net side, build a national comprehensive program that isn't shared 60-40--provinces like ours pick up the lion's share, when we have 40% of the arable land--and reconstruct it. That's the position we take, and I think we need to try to get there.

¼ (1835)

Mrs. Rose-Marie Ur: One presenter this morning was supportive of the one-size-fits-all program. I'm part of the Liberal government and I had trouble digesting that myself when the minister presented the framework. I'm not as pessimistic as many people, but that was only the framework. Now it's up to the ag ministers across Canada to put the meat to that framework. Do you really feel that will be achievable?

Mr. Clay Serby: We think we're in line for a fairly major hair pull in the next couple of weeks or months. I think you can get to a national program, if it addresses some of the issues we've put in our Saskatchewan paper. You might lead with a program like a crop insurance, which I think has national acceptance. You need something that addresses the subsidies on the grains and oilseeds side. I think we'll get there, if we have the appropriate amount of resources.

You could use something like a CFIP to mitigate the livestock industry. It works in the livestock industry, where you don't have the kinds of peaks and valleys you have in the grains sector. We could get there with a national program that might be called one size fits all. It would have five or six variations to it, in terms of its implementation, but we need a national program because the kind of disparity you have today across the country doesn't work.

Mrs. Rose-Marie Ur: Thank you.

The Chair: Thanks Rose-Marie.

Howard, do you have a short question, and then Paul?

Mr. Howard Hilstrom: I have a bit of a comment and a short question. The cost of government and slow action on the part of governments, no matter what stripe, can add costs to farmers, or lack of opportunity. This falls in the areas of marketing and clarifying the producer car issue. Of course, these are federal.

On the Pest Management Review Agency, we have problems there, and if it worked better it could save farmers money. My colleagues agree with me. We have the issue of user fees that really are for the benefit of the whole country, but are paid by farmers. Fuel taxes could be dropped. There are transportation issues that could make for cheaper transportation for our prairie farmers. Then there are income tax things. The five-year averaging could be brought back.

The last thing in this safety net package is the land set-aside issue, which I'm sure you were consulted on. So I'd ask you to comment on that.

Also on the provincial side--we have this in Manitoba where it's becoming a big issue, and I know it is in Saskatchewan--my neighbours and I are all paying school taxes on every section we have. We'd be quite willing to pay it on our home quarter and our home buildings, but we don't feel we should pay it on our pastures and farmland.

All these things I've listed are not direct subsidies to farmers. You don't have to send farmers cheques; you can just lower his costs. Would you be able to help lobby the government on those things I've listed that are federal? It's not fair for me to ask you about what to do on the provincial side, but I'm telling you what we've heard in our hearings so far.

¼ (1840)

Mr. Clay Serby: All of those things you've listed, Mr. Hilstrom, are things we can all lobby and have lobbied on from the provincial perspective. In some instances provinces have been successful in getting some mitigation from the national government; in other instances they have not been.

What I'd like to see in Canada is fair and equal treatment of agricultural producers irrespective of where you produce food, whether you're a New Brunswick, a Saskatchewan, or an Ontario farmer. Developing a national strategy and a national program seems to me to be the only way this can be done, and that's what we think we have.

Don't think for a minute that I'm saying we should not spend time on the transportation piece, which is important and a high cost to producers today, and not to lobby for reductions to the fuel tax. We should try to get some of the excise tax off. And where we might have user fees or look at enhancing the marketing capabilities for producers, we should do those things as well. They should be in conjunction, in my view, with the larger national piece.

We've looked at the issue of setting land aside as well. We have an organization in Saskatchewan you're probably familiar with, the APAS organization. It has talked about setting land aside in this province. A chunk of federal money is required to do this. We support them in that process as well.

So I think you can do all the kinds of things you're talking about today, but they should be done in concert with a larger national vision, in my view.

Mr. Howard Hilstrom: Thank you, Mr. Serby.

The Chair: Thank you.

Paul.

Mr. Paul Steckle: Thank you, Mr. Minister, for appearing this evening.

I have two questions. Certainly as we move forward in new directions in terms of the future of agriculture in Canada, the one thing we want to do is get away from ad hoc programs. In listening to various presenters over the last two days, it's clear to me that the province wants more money. It wants an enhancement of money programs from the federal government.

What is the province prepared to do? Some programs are 60-40. Other programs are broken down in other ways. Are you prepared to continue under the percentages you spoke about just a moment ago, that 60-40 being broken down to something else? Again, has any dollar value been attached to that?

This is my first question. Perhaps you want to address it, and then I'll ask my second question.

Mr. Clay Serby: I think, Paul, you're the second person who has asked me what the province is prepared to do.

Today in Saskatchewan we invest six times the amount of funding in our agricultural budget than the national government does--six times. Of our total budget, 6.2% goes into agriculture. And we're not alone in Canada today. We're probably the third province from the top in terms of supporting our agriculture. The national government supports it at 1%.

We think that in a province like Saskatchewan--where we have 40% of the arable land and a small population, where we trade in the marketplace for 85% of our commodity--we're doing our share. And we'll try to do more with the amount of resources we have available to us. So we'll want to see the national government coming to the table with a larger chunk of money.

In my view, $1.1 billion for a national agricultural industry is embarrassing. From where I sit, this would be the most important industry in our province next to health care. We feed people with safe, quality food for the world and we get an investment of 1.1%. I think we're doing our share at 6%.

I'm not embarrassed today to say that we should have a larger chunk of money from the national government to help us offset some of the difficulties we have in the international marketplace--I think not.

Mr. Paul Steckle: For clarification, on your PFRA program you're currently getting a value of somewhat over $2 million. You want to extend it to $5 million. How is this money used to help farmers access a water supply? Is it by drilling new wells? How is it done? How is the money disposed of?

Mr. Clay Serby: It is disposed of in just the way you have described. The money goes directly to the producers through the PFRA program. They use it for the development of wells, dugouts, maybe a pipeline. The way the program is designed today, there is also a producer portion of contribution. It's not all covered off by the national government. Historically, in Canada, the national governments have looked after the water piece.

Last year in Saskatchewan we took $1.5 million and put it in because that's how serious our problem was, and it went directly to producers. I think we had 2,500 people who applied. From the additional $3 million we had, we were able to satisfy about 1,500 of those producers. About 1,000 are still without resources.

The Chair: Thank you, Paul.

Mr. Minister, I want to thank you for coming tonight. I would hope, if you're not too busy, you could stay for a while and listen to some of our presenters.

The rest of the evening we have broken into three rounds. In each round we have a group of presenters or people coming as witnesses before the committee. We would also like to say there may be a few in the hall who have not already requested to say a few words to our committee. At most places, if we have time--and certainly it's going to be a long night yet--if you do want to make a short presentation, we will allow about two minutes for you to come to the microphone and give us your concerns and your ideas, and we want to welcome you to do that.

So thank you, Mr. Minister.

For the next moment or so, we would ask that Mr. Wallace, Mr. Hymers, Mr. Nelson, Mr. Boyd, Con Johnson, Lynden Elviss, Newton Myers, and Dean Smith please come forward. There will be places put around for you to sit. The clerk will have cards to show who you are for our members.

We would first of all like to welcome you and thank you for coming.

For your presentations, the clerk has already indicated you have five minutes. Usually as you approach the five minutes, I'll give a signal to indicate. I hope most of you can confine your remarks within that five-minute period.

With your presentations, members will be asking questions afterwards. We'll start, then, with Mr. Edwin Wallace, from the Empress Line Producer Car Shippers Association. Mr. Wallace.

¼ (1845)

Mr. Edwin Wallace (Representative, Empress Line Producer Car Shippers Association): Good evening. I first contemplated dragging a kitchen sink along with me tonight to demonstrate the all-inclusive nature of the topic: the future role of federal government in agriculture.

On further consideration, however, I agree with the choice. This is your opportunity to hear from people like myself who have never been a part of a delegation to Ottawa, who have seldom if ever been consulted directly for a view on any specific program or policy, who only read and hear what others have to say, and finally resign ourselves to see what comes down the pipe.

This evening I present to you reasons that I believe justify maintenance of farmers on farms. I will end with an appeal for your fair and thoughtful consideration of a very important issue now before us, a new safety net program.

Agriculture has come to mean everything that costs farmers money. Evidence around us shows that agriculture, which includes, for example, banks, chemical companies, manufacturers, food processors, and railways, makes far more money from our efforts and produce than we do as farmers.

This evening I seek an enhancement in the public's regard for farmers. By this I mean to change the context in which farms and farmers are viewed by the general public and politicians. I choose, therefore, to make my little part here tonight not about agriculture as such but rather about the positive attributes of farms and living-on-the-farm farmers.

A farm has its own infrastructure. On our farm, and replicated on thousands of farms just like it across the prairies, each of us has a self-sufficient, complete micro-infrastructure. Of course, there is the power grid, gas distribution to some, and the telephone service, but they only serve to make our important life-supporting private infrastructures work.

A farmer is a participant in a unique way of life. The successful farm demands self-sufficiency, ingenuity, and a desire on the part of the farmer to make life fulfilling and comfortable. This is manifested, in large part, by the application of the very components of a private infrastructure.

A farm is a business. Not even considering the matter of production on the farm, there is that standby power plant, that sewage system, that water supply, and I could go on. It is a self-contained, privately paid for infrastructure that requires maintenance and upkeep--I repeat, paid for by the farmer.

A farmer makes few demands on his community. We go to town for the mail. We acknowledge that critical police, fire, and health protection is not instantly available. We accept that unplanned power outages are a guarantee. The vital claims we make on our community are tax-based, and most of us pay our taxes on time. We do not expect art galleries, sound stages, theatres, or other cultural expenditures to be undertaken in our midst. We accept the great expense of travel to enjoy art and entertainment near and far.

We provide employment opportunities in our communities. We keep local business alive. Non-farming Canadians and our governments, I believe, often view farmers as too expensive to serve. I maintain this is not so. I would argue that all of us will be better off if we maintain our farmers on their farms with their own little private infrastructures.

The main topic at a recent Saskatchewan Urban Municipalities Association convention was the need for more money through revenue sharing with senior governments. What would be their demands for new urban infrastructure if many of our farmers were displaced to the city? Or is that the reason the urbanites feel hard-pressed now?

My argument is this. Canada benefits because of the few demands made by its farmers. But due to the volatility of world and domestic markets, international agreements, and vagaries of the weather, a comprehensive safety net is required. A new safety net must be meaningful for farmers as well as the general public. In other words, it must be up to the task of preserving the concept of self-sufficient farming.

Recognizing that, I suggest an enhancement be built into any new safety net for living-on-the-farm farmers. A new safety net must be fairly administered, be transparent in its application, and understandable enough in its intent and purpose to be acceptable by most Canadians.

I ask then that you go from here tonight with this general thought in mind. A meaningful safety net for farmers is of great economic importance to non-farming Canadians.

Thank you very much.

¼ (1850)

The Chair: Thank you, Mr. Wallace.

The chair shouldn't say very much, but I had a discussion with a reporter on the bus between Davidson and Regina today of the same tone. It's certainly a good philosophy you have there.

Mr. Hymers, from the Canadian Organic Certification Co-op.

¼ (1855)

Mr. Ken Hymers (Representative, Canadian Organic Certification Co-op): Thank you.

I would also extend a welcome to the members to western Canada, and in particular to discuss opportunities for the government to contribute to a healthier environment and to increase Canada's confidence in food safety.

My wife and I farm northwest of Swift Current, but tonight I'm representing an organic certification cooperative based in Saskatchewan with ten years of experience in organic farm certification. We are an integral part of an organic quality assurance system that can provide niche market access opportunities commanding price premiums, which in turn provide longer-term financial sustainability for producers and processors.

The growth in the organic production sector, by most estimates, is in the double digits. Worldwide, the organic movement and the inherent demand for organic food creates a unique opportunity for trading in traditional exporting nations such as Canada. Saskatchewan therefore becomes the leading province in terms of organic land base and product export.

Beginning in the early 1990s, leaders in the organic movement from across Canada recognized the need for a national organic production and processing standard. By 1999, the Canadian Organic Advisory Board, representing those interests, realized the national standard of Canada for organic agriculture. This voluntary national standard, developed through the Canadian General Standards Board, became a milestone in terms of standards development worldwide.

Based on a certification of production and processing units meeting recognized standards of operation, the organic sector has been on the cutting edge in terms of identifying consumer demand trends related to on-farm food safety issues. As this growth develops worldwide, demand for standardization of certification methods and equivalence agreements between respective governments increases.

The European Union, leading the world in demand for organically grown food products, has adopted standardization through the International Organization for Standardization, or ISO, in particular Guide 65, and they are requesting compliance by trading partners by 2005. Traditionally an exporting region, Saskatchewan and its organic producers rely heavily on export into the U.S. and the European Union. We therefore require compliance with ISO Guide 65 by 2005.

Our cooperative has embarked on an ambitious adventure to operate our certification program, in order to comply with the accreditation requirements of the Standards Council of Canada, to ISO 65. Ideally, the avenue of choice for Guide 65 accreditation would be through Canada's member on ISO, the Standards Council of Canada.

To the federal government's credit, a subsidy to offset part of the initial cost of accreditation through the Standards Council has been provided. The kicker, however, is that at this point in time the federal government appears to be encouraging the organic industry to default to the USDA accreditation system. I have a copy of a letter from Samuel Watson in that regard, and I'll leave it with the committee.

While this practice may facilitate export into the U.S.A., and possibly into the European Union until 2005, accreditation from country of origin of product will be required after 2005. The action to date from the Minister of Agriculture is simply not satisfactory.

There is a severe void in national, agricultural, and regulatory policy within Canada as it relates to organic agriculture and on-farm food safety proposals coming forward from the Whitehorse action plan. The future of sustainable agriculture production systems' organic and on-farm food safety must include unimpeded market access and maintenance of traditional market share.

As an organic industry we need a clearly defined agricultural policy for organic and on-farm food safety, including regulatory requirements in Canada. We need a national organic on-farm food safety advisory council, with interim financial support from federal and provincial governments. We need Canada to develop international equivalence agreements with trading partners on organic industry standards. And we need measures in place to provide the organic sector with comparable financial support to that given in U.S. aid to organic agencies to offset the accreditation costs to the USDA.

The USDA appears to be providing accreditation services to Guide 65 standards at minimal cost to certification applicants, including foreign certifiers. This creates an unlevel playing field and distinct disadvantages for SCC accreditation in Canada. We need a real commitment to develop a made in Canada organic industry that meets the scrutiny of importing nations. We have an unparalleled opportunity to develop a truly environmentally and financially sustainable agricultural production and processing system in Canada. Recommendations from the Standing Committee on Agriculture and Agri-Food could play a monumental role in providing guidelines to allow the industry to mature unencumbered.

I respectfully submit that.

½ (1900)

The Chair: If you have one final sentence, go ahead.

Mr. Ken Hymers: I just wrapped it up there. Thank you.

The Chair: Okay. Thank you, Ken.

I've asked the clerk about having a couple more people come to the table. We'll go for two rounds tonight instead of three, and it'll give us more time for questioning.

Would the members agree?

Some hon. members: Agreed.

The Chair: Next, from the Honey Bee Enterprises, is Brad Nelson.

Mr. Brad Nelson (Representative, Honey Bee Manufacturing Ltd.): It's actually Honey Bee Manufacturing.

The Chair: Honey Bee Manufacturing; I'm sorry.

Mr. Brad Nelson: Yes.

The Chair: Somebody made a mistake.

Mr. Brad Nelson: Anyway, Mr. Chair, committee members and ladies and gentlemen, my wife and I farm at Frontier, Saskatchewan, and I also manage a company there that produces farm equipment.

I have three points I would like to share with the committee tonight, and I'll try to cover those as quickly as I possibly can.

My view of the future role of government in agriculture is impossible to share with you in five minutes, so what I will attempt to do is share with you three points and some supporting thoughts.

The first point I would like to cover is cheap food. We, along with other western nations, have a cheap food policy. Cheap food is not a new phenomenon; it has been supported by governments and is to this day. It is an expectation of the taxpayer; therefore, let's assume that government doesn't want to appear to be endorsing anything different. But the fact is, base agriculture as we know it will not survive and prosper if this mentality continues. No business, including agribusiness, can survive without realizing a profit.

So what is the government's role? It is to support and encourage investment in value-added industries that move the base ag producer up the food chain. The best results for the rural ag economy come when the local players play. You, the government, have access to resources, to expertise, and to educators. Use them, but don't abuse them. Governments tend to get on one-track investment opportunities--today it's hog barns; tomorrow it's ethanol--because they make headlines. You don't always have to think big. Sometimes you need to think small. Agri business people are not stupid. Multi-million-dollar ethanol plants will not be in every rural community, but there are other opportunities--in processing, manufacturing, etc.--that would complement base agriculture production if legislation and regulation were complementary.

My point is, all you need to do is open the gate to the ballpark. Producers and other agribusiness people have demonstrated that, given the opportunity, they will step up to the plate.

My second point is around subsidies--in my view, an unwinnable battle. It is a false economy that breeds inefficiencies. That being said, it is the agricultural economy of today. Is it sustainable? I would like to think not. The better question might be, how do we survive it?

Allow me to share with you a thought. The best thing that has happened to base agriculture in southwest Saskatchewan is U.S. farm policy. Both U.S. and European farm policies have, as you all know, had a major impact on commodity prices in the last number of years. Those very policies force our farms to review and change our way of farming. Our crops changed; our cropping practices changed; our management practices changed; our survival was dependent on change. Why? Because we had become dependent on farming practices and a government-supported system that was out of date and not able to compete in a global marketplace. The fact is, if we are not prepared to move outside the box of outdated practices and an outdated system, we will not survive.

So what about today? How will we exist in a marketplace that soon may have a new U.S. farm bill that includes support payments for the very crops that now pay our bills? I wonder, could identity-preserved products play a role in long-term producer viability?

Some experts would suggest not, but I believe it does have potential. What is the government's role? It's simple. Get alongside producers and agribusiness in a manner that encourages development of IP market strategies and food safety policies that put Canadian agriculture in a front-row seat. Think about these opportunities in terms of successes, not in terms of choking them with bureaucracies and regulation.

The third point concerns sacred cows. It is the view of some in the ag community as well as the current government that we have some untouchable sacred cows that are the backbone of agriculture in this country. Yes, they have played a role, but, quite frankly, they need an overhaul. The old saying “the perception is not the reality” applies here. They are politically driven, self-indulging, outdated bureaucracies that we cannot afford.

To quote our minister in charge of the Canadian Wheat Board:

What we need to look at, and I think what everybody needs to be guided by, is practical results. And quite frankly, if farmers conclude that they'd be better off financially with another way of doing things, that's their prerogative.

In response to that I ask, “practical results” compared with what?

Secondly, it is the prerogative of many farmers that there might be a better way, so why not give the opportunity? Give the farmer the option to make a choice to market their wheat and barley outside the Canadian Wheat Board without the encumbrance of the questionable buyback policy of the board. Scary thought, isn't it?

Change is inevitable. And again I quote from our minister in charge of the Canadian Wheat Board when asked about this province's longer-term future. He said:

It will all depend on how willing it is to master change.... That's where the creativity and ingenuity and common sense of rural people will be critically important. And how they respond to change will be the most decisive factor in what the rural landscape is going to look like.

I agree to a point, but the most common obstacle to change has not been the people of this province. Most every time one of us farmers gets the idea we may be able to think for ourselves and we question the territory of one of the “sacred cows”, we quickly experience the wrath of government regulators and institutions who perceive they might be affected by a thinking farmer. Interestingly enough, at the same time, politicians disappear from the face of the agricultural landscape.

To conclude, Mr. Chair, agriculture is in a changing global economy that requires critical thinking, profit-driven economics, new technologies, and creative marketing. As a government, you need to be a facilitator of this type of activity, not just a regulator. Government should provide sound infrastructure, the basis for a sound investment climate, and the freedom for people to think the impossible. Agribusiness is an important part of our economy. Expect it to have potential; the results may surprise you.

Thank you.

½ (1905)

The Chair: Thank you, Mr. Nelson.

From the Saskatchewan Party Caucus, we have Bill Boyd.

Mr. Boyd.

Mr. Bill Boyd (Representative, Saskatchewan Party Caucus): Thank you, Mr. Chair.

Committee members, ladies and gentlemen, my name is Bill Boyd. I'm the official opposition agriculture critic in the province of Saskatchewan. The official opposition, the Saskatchewan Party, represents 26 out of 28 rural constituencies, so we believe we speak for a lot of farmers in our presentation here this evening.

We believe there are four main areas of concern that the committee should be drawing its attention to: the first one is drought; the second one is efforts to stabilize the industry; the third one is opening up opportunities within the industry; and the fourth one is diversifying opportunities in the industy.

Within the first one, the drought, clearly we have a very serious problem in Saskatchewan, and indeed in many parts of western Canada. We think--and we agree with the Minister of Agriculture from the province of Saskatchewan--that there need to be adjustments to the crop insurance program to top up coverage levels as we go into this year's cropping plans for farmers. Clearly there need to be adjustments in that to address an act-of-God type of problem farmers are faced with here in Saskatchewan these days.

We need to stabilize the industry. When we say that, we believe there needs to be a long-term safety net put in place as soon as possible. A third line of defence--that's a term that hasn't been used for a long time by either the provincial governments or the federal government in Canada, but that was the term that was put in place that the governments of the day were going to replace the GRIP program with in 1992. Both the federal and provincial government promised at that time, when the removal of the GRIP program happened in Saskatchewan, they would put in place a third line of defence--crop insurance being first, NISA being second--to replace the GRIP program.

We've been waiting approximately ten years now for that to happen. Nothing has come forward from the provincial government or from the federal government.

In terms of a long-term safety net, we've had a whole host of ad hoc programs along the way. Many of them--CFIP, AIDA, and CSAP--have been viewed by the agriculture community of Saskatchewan as nothing more than four-letter words. And I suspect that until we see a predictable, bankable, long-term safety net in Saskatchewan, any efforts will be viewed in much the same way.

We think opening up opportunity in Saskatchewan for new investment in agriculture is critical to the long-term growth.

We think the farmland ownership laws in Saskatchewan are antiquated and need changing.

We think labour legislation has played a role in not attracting opportunity and investment into agriculture.

We think there is opportunity within intensive livestock operations in Saskatchewan by streamlining the approval process.

And we certainly agree with the last presenter that there need to be more marketing choices for farmers here in Saskatchewan, allowing farmers to make the decision about how and when and where they want to market their products.

We think diversifying the industry is going to be critical to a long-term stability as well. We think there is opportunity in a number of areas; certainly ethanol, pasta production, intensive livestock operation, malt plants, irrigation are just a few of those opportunities that hold promise for Saskatchewan producers.

As I have said, we have been waiting for about ten years now for a long-term safety net to be put in place that would be negotiated by the federal and provincial governments, and we have seen nothing to this point. Now it appears that unquestionably there will be nothing additional for this year of 2002. We will be waiting another year before anything happens.

Another year goes by with the unfulfilled promise from the federal government and the provincial government for a long-term safety net. Another agriculture minister or two and conferences go by, three or four--perhaps more--federal committees roll through western Canada, and unfortunately still nothing. It's time, we believe, that the federal and provincial governments got their acts together and fulfilled the promise they made when they tore up the contract they had with farmers for the last long-term safety net program.

Quite frankly, committee members, western Canadian farmers aren't that impressed with what they've seen from the federal or provincial governments to this point. However, that being said, we are cautiously optimistic, Mr. Chair, that your committee will not disappoint western Canadian Saskatchewan farmers once again.

Thank you.

[Applause]

½ (1910)

The Chair: Thank you, Mr. Boyd.

Very shortly I'm going to ask Mr. Wells, Mr. Murch, and Mr. Schmidt if they could come and join us. We have three chairs around the table, and I'd like to bring them in to this part of our meeting.

We'd like to welcome now Mr. Con Johnson. With that, Mr. Johnson, would you tell us whether you are representing just yourself or a group? Everything we say goes into the transcript, blues are printed, and we want to make sure we have the correct titles of all the presentations. Welcome, and the floor is your.

Mr. Con Johnson (Individual Presentation): Mr. Chairman, committee members, my name is Con Johnson. My wife and I farm at Bracken, Saskatchewan. It's the extreme southwest portion of the province close to where Mr. Anderson is from. I'm just representing the general farm people from down there.

While we hear every day that some people think government should be all things to all people, I'd like to give you an example of when less involvement is better and agriculture has the ability to do very well. If we had a good enhanced crop insurance program that would take us through nature's abnormalities, infrastructure to get our products to their designated markets, and the ability to market our crops when and where we want, agriculture would prosper.

The extreme southwest portion of Saskatchewan has noticed in the last several years the pulling back of government help in all areas. This is especially true in the provincial jurisdiction, i.e., roads and health care. As our population continued to shrink and services dwindled, a group of farmers from the Bracken, Climax, and Frontier area got together and decided if we didn't help ourselves, there wasn't going to be a future for us or for our families.

We formed an investment group called Prime Pro Ventures, with the idea of starting businesses that would add value to our area and to our farm. Our first acquisition was a local chemical company and a NAPA store. We then built a cleaning plant to clean, size, and bag chickpeas. After two years of processing for other companies, we found out that created logistics problems and that having our own marketer would really solve a lot of these problems, and it would move our company ahead. We hired a trader who had worked for a major company in Vancouver. Soon after we opened our office in Vancouver, and now Prime Pro Seeds International sells chickpeas all around the world.

From two employees our first year, we now have 19. First-year sales were $1.5 million. This year our gross sales from all divisions will be $25 million. We are presently expanding into the crop input sector, and with this new venture we'll have close to 50 employees and gross sales of $50 million. These jobs mostly employ young people who would surely have left our area if we hadn't created these opportunities. Their wages stay in our communities, they help support the stores, eating establishments, gas stations, banks, credit unions, etc. Also, think of all the revenue we've created for the Government of Canada.

As our trader has sold chickpeas around the world, he's encountered dozens of small traders, grain companies, and family mills who want access to our cereal grains in small container lots. These small mills want to essentially marry their operation to a single farm here so they can be assured of constant quality and supply.

You could multiply the $50 million in gross sales we hope to achieve this year by ten if we had the freedom to market our own cereals the way we can pulse crops. As identity-preserved foods become more and more of an issue, the opportunities to service these niche markets will be essential.

The Wheat Board says they're working on an IP program, but they aren't now or ever will be able to deal in small lots like a single container. Their IP program will be designed by bureaucrats for the preservation of bureaucrats and not for the good of all farmers.

As we talk with people around the world who want to buy container lots of wheat, they can't fathom the idea that in a free country like Canada, farmers from the designated area can't sell their own grain.

You can't change things by keeping them the same. Until we can maximize returns when markets spike, there will always be calls for government programs to help farmers. The year 1996 gave us the highest wheat prices ever and western Canadian farmers realized minimal benefits from them.

Processing plants and value-added facilities for pulse crops, oilseeds, and oats have grown up all over the prairies and they're flourishing. Where are the facilities for wheat, durum, and barley? One example is Grupo Modelo. It's a Mexican company that makes Corona Beer. They're building a plant in Idaho rather than Canada. They wanted to be assured of a constant supply of malt barley. They wanted to go out and contract directly with farmers. They can't under our system.

The trade talks of 300,000 metric tonnes of new malt capacity that should have been built here in Canada, but they'll be built in the U.S. for that same reason. We ship durum into the U.S. to process while we should be doing it here, and then we fight with them over the trade issues. The jobs go to the U.S. as well.

We hear the ideology issue about the board again and again. This issue isn't ideology; it's economics.

I've given you a good example of what farmers can do for themselves. Give us the option to market cereal around the world like we can our pulses and we will do fine. Keep things the same and you'll continue to hear about farm programs that have to pay out every year to keep farmers on the land. What scenario sounds best to you?

If some people wonder about the actual commitment some farmers have to market their own cereals, tie that issue to your new farm program. Give them a choice between market freedom and a farm program, and I'll guarantee that a majority of the acres on the prairies will go with market freedom.

We need a good infrastructure and we need a good crop insurance program. Farmers can and will do the rest.

Thank you for your time.

½ (1920)

The Chair: Thank you, Mr. Johnson.

Mr. Elviss.

Mr. Lynden Elviss (Individual Presentation): Mr. Chairman, members of the Standing Committee on Agriculture, my wife and I operate a mixed grain, livestock farm at Brock, Saskatchewan, and I have been reeve of the Rural Municipality of Kindersley, the local government agency, for several years.

This presentation reflects my personal views and is not linked with any group.

I deem it a privilege to participate in the study of the government's role in the future of agriculture. The agriculture sector in Saskatchewan, in its present form and under the current circumstances, is not sustainable as a viable option for earning income or providing for a comfortable retirement.

The economic well-being of western Canadian agriculture has declined significantly with the elimination of the Crow's Nest Pass freight rate agreement. I feel this agreement should have been as binding and secure as any of the first nations treaties. The agricultural sector of this nation is the only business I know of that has to pay freight on products produced and products purchased. The highly rated compensation package paid to producers as a result of the Crow rate elimination amounted to less than one year's worth of freight on grain for the average farm in Saskatchewan.

Perhaps all products should be f.o.b. farm gate. Canadian society as a whole should share the freight costs on products consumed in Canada as well as those exported, as the whole nation benefits. The primary producer can no longer afford to subsidize the agricultural industry. We cannot afford to pay freight on malt barley to Thunder Bay or Vancouver ports when it is processed into malt locally in Saskatchewan and in malt plants in Manitoba. We as producers are forced to prepay freight on the processed malt for export.

The primary producer cannot afford to subsidize multinational corporations through patent rights legislation on chemicals, seed varieties, and drugs used in livestock operations.

My view of the current farm assistance programs is that they have been dismal failures. To me, all these programs provided was employment for government bureaucrats.

The NISA program has been beneficial to most producers, and I am one of the participants. The Minister of Agriculture has said we should be utilizing the funds within the NISA program before we start asking for further handouts. I would venture to say that if you were to analyse the present fund holders, you would find that they are older participants who are debt free and who are using NISA as a retirement income-generating investment. These are the people who hold the most balances.

The agriculture sector needs a realistic support or insurance program that will cover the current costs of production. Crop insurance programs of today do not provide enough financial security to cover costs. Perhaps crop insurance needs to cover 90% to 100% of the long-term acreage yields at realistic prices.

Perhaps producers need an incentive to self-insure through a program whereby in good years a producer could deposit up to 10% of the gross income, tax free, into a self-insured fund. Income tax would apply when these funds were withdrawn and used in leaner years.

My personal view is that Canada must maintain the Canadian Wheat Board as a single desk sales agency. However, this board must be efficient and cost-effective and provide the greatest return to producers.

Primary producers need some protection from the effects of other nations' legislation. We've currently gone through another round of opposition to the Canadian Wheat Board monopoly on marketing grain.

The U.S.A. are introducing legislation on country-of-origin labelling of meats, which, if passed, will certainly have an adverse effect on Canadian beef exported to the U.S.

I feel the Canadian agricultural industry needs to have a more aggressive education program that will ensure urban people truly understand and appreciate the complexities facing farmers.

Future government involvement may assist in the field of research and development of new crops, chemicals, funds for diversification within agriculture, some of which could include the development of ethanol plants, feed lots, etc.

To summarize, correct the freight rate inequities and provide future simple and equitable assistance programs.

Thank you, Mr. Chairman.

½ (1925)

The Chair: Thank you, Mr. Elviss.

Now, Mr. Newton Myers.

Mr. Newton Myers (Individual Presentation): Good evening, Mr. Chairman and committee members. My name is Newton Myers, and hopefully I will be able to adequately represent my community.

My grandfather homesteaded. He was a homesteader, and my father was born in a sod shack on that homestead. Our family has farmed for four generations, living and working on the same farm. When I consider what has taken place in less than a century, it causes me to pause and reflect upon the elements that came together initially that made this all possible. I believe there were four things.

The first was the land. In this area we have been blessed with a wonderful patch of good ground. If you travel around the world you can't help, when you get home, being impressed by the blessing it is to have the quality of this vast area of fertile ground.

The second element is the people who came to farm it. People came to this part of the country with great ambition, competent people who believed in what they were doing.

The third element is other vested interests, the railroad and other industry that also believed in this project, believed that this region of the country could contribute and prosper.

The last and fourth element was that we had favourable governmental and administrative policies and procedures that allowed all of this to take place, and that took place because there were elected people and politicians who believed it could happen and believed it was worthwhile making it happen. They were willing to go to other parts of the world and advertise this land before it was even developed. They were confident it would happen. I find no record of politicians debating whether or not it was viable, whether or not western Canada was viable.

Here we are, four generations later, less than 100 years. That's not a long time in the history of most nations. We find ourselves in a situation where for many farm families what this government does in the next five or ten years will determine whether or not there's another generation of farmers.

We still have the same good land, and farmers have, particularly in the last generation, gone to a great deal of effort to preserve that. I think that on my farm, my land is in better shape than it was when I started farming.

I believe we have adapted to the necessities of the industry. I farm more than three times the land that my father farmed, and on a good year I'll grow eight times as much product as he grew in an average year.

We've gone to a great deal of effort to review and consider what needs to be done for transportation, and grain handling, and other aspects of the other vested interests in agriculture. Many of the problems there wouldn't be challenges; they're only relevant because the price of what we produce is not adequate to support the transportation.

If we were receiving what many would call a fair price for what we produce, I don't think transportation would be much of an issue. But the challenge for us in this country today, and the challenge for you folks, because you're the fourth element, is that in order for our region and our industry to succeed, we have to have government that is going to help with that and wants us to succeed. It's one of the concerns I have with the reports I've heard about the newly proposed agricultural policy.

I've always taken this view; that if you plan to succeed there's always a chance you could fail, but if you plan to fail you will almost certainly succeed with your plan. When I hear the Minister of Agriculture suggest that one third of farmers deserve a final solution, that doesn't sound to me like a plan to succeed.

When we realized that income levels were far too low, we designed a program on the premise that you should be happy with 70% of what's far too low on a diminishing balance. That doesn't sound to me like a plan to succeed. That sounds to me like a plan to fail. I don't care so much what side of the political spectrum you come from. I think we need to work together. I think it is worthwhile doing something to make it work.

In closing, my representation to government would be, listen to the MPs who represent us. Regardless of what political stripe they're from, my experience has been that they come with some pretty good ideas. It would be a good place to start. Thank you.

[Applause]

½ (1930)

The Chair: Thank you very much.

When you go back all the way to Sifton and the opening up of the west....

Dean Smith is next, and I'd appreciate it if the other people would come to the table.

Dean, the floor is yours.

Mr. Dean Smith (Individual Presentation): Good evening. My name is Dean Smith. I farm northwest of Swift Current. I'm a third generation on the family farm, and with the present conditions of farming, I will probably be the last.

I would like to take this opportunity to thank the committee for giving us this brief time to present our current situation to you. It appears that this time allotment is proportional to the time our politicians spend on our farm crisis today.

I'm going to touch on a couple of fronts--safety nets and farm policy. There are notable differences in these two issues. However, we cannot have one without the other.

Safety nets. There needs to be less focus on the support of high production with high cost input versus the fact that we need to support a sustainable farm network of farm people who create the diverse supply of farm produce. We should never put all our eggs in such few baskets. I believe that safety nets cannot be spread so thin that none of them is of any value.

A lot of thought and effort has been put into the process of evaluating safety nets, and by consensus, crop insurance is being considered our cornerstone of safety nets. However, it has only been given lip service. We need better production coverage, i.e., 90% of actual individual coverage instead of 70% of 70%. Spend less attention on pricing issues, perhaps a percentage of a ten-year average, with an understanding that we never exceed the current market price. Use a baseline price versus a market price for individual crops. Spend less money on NISA by implementing proper caps. Do not get involved in other ad hoc programs such as AIDA. As we've all said in the past, this approach does not work.

Consider making the programs cross-compliant and make sure there's consistent participation. Corporate and corporate-like farms should not be eligible for what I consider to be a farm safety net. If they need support, there must be another avenue to do so. After all, these are the very people who say they're self-sufficient.

Farm policy. Both provincial and federal governments need to put in place a comprehensive farm policy. This should be a real farm policy, not mixed with an agriculture policy, as the governments of today seem to be so focused on. Governments are putting value-added and general wealth creation way ahead of a guaranteed agriculture production system. Let's remember why Europe protects their food supply: they don't want their people starving like they did during World War II. Governments are so worried about creating value-added and the jobs that go with it that they forget who they are displacing.

I would like to give you a couple of examples--bulk grain or wheat export. Twenty years ago, this was a great value-added product for myself. Previous to that, we were considered to be the bread basket of the world. We had markets, demand, and also a guaranteed supply of quality product. What happened? The erosion of our essential wheat market took its hardest hit when it was decided to get rid of the Crow rate. This was the very link that made it possible to have an economic transportation component and it was also part of a guaranteed delivery system. This was the value-added part to our grain farmers of Saskatchewan.

What happened? In somebody's wisdom, it was deemed there would be more money made if we added a different flavour to the valued-added, and we charged ahead, stating that the value-added process would make more money for all. Little did we know that this would simply put the money-making ability into the hands of a few at the expense of the majority. It simply gave the private sector a monopoly.

I believe when governments make changes like this they need to have a vision and a long-term plan in place before they remove what was working. When the Crow disappeared, there was nothing in place such as long-term financing to let farmers restructure.

Another example is the red meat market. Increase the hog and cattle production. Great idea when the Crow was gone. But when this was put in place, it was done with the intent of lowering feed prices so that the meat market was more competitive, not that the meat market was a higher value. This was a financial gain at someone else's expense, the grain producer.

Get rid of regulations, get out of our face, the industry is saying. But what about the people issues--water quality, sound environmental practices? These are good examples of the lack of coordinated policies. A policy that gives people the most access and negatively impacts the fewest.... Where's the long-term vision? Government should be proactive, not reactive.

Good farm policy and safety nets are one and the same and neither will be effective without the other. The federal government must come to the plate and show leadership in these areas. They have a responsibility to provide adequate funds to make the safety nets work.

½ (1935)

The federal government must come to the plate and show leadership in these areas. It has a responsibility to provide adequate funds to make the safety nets work. These safety nets need to be designed to support a broad-based farm sector, not only a corporate base that has scales of vertical integration in mind. This is important to make sure we have a long-term supply of food.

I thank you.

½ (1940)

The Chair: Thank you, Mr. Smith.

Stewart, I'm going to go to you next: the National Farmers' Union, with Stewart Wells.

Mr. Stewart Wells (President, National Farmers Union): Thank you, Mr. Chair.

First of all, I'd like to commend the standing committee for undertaking these meetings across the country. I know it's quite an undertaking, but I think farmers do understand that you're making an extra effort.

From the perspective of our farmer members, the question is not if the government should be involved in supporting agriculture in Canada, but how? Food production and supply are too important to a country's sovereignty to be ignored by any responsible government. Incidentally, this is the same reason the National Farmers Union has been critical of the move to include agriculture in the World Trade Organization discussions. Throughout history, control of the food supply has been used as a weapon, and we ignore this at our own peril.

I'd like to make two points tonight, the first in regard to the new agricultural policies being developed for 2003. Second, I have a few points regarding the government's continued support of the Canadian Wheat Board.

Safety nets need to be a central part of any new agricultural policy framework. Farming is not just another business, as some would have us believe. Many aspects fall beyond the control of the farmer, and the largest concern is of course the weather. Large areas of Canada were affected by drought last year and parts of Saskatchewan and Alberta were particularly hard hit. It is far too early to predict any disasters for the upcoming seasons, but surely the whole logic behind safety nets is to prepare for the worst and then hope for the best.

Also, we must recognize that any safety net program is guaranteed to fail if it is not adequately funded. We feel it is important that government spending on agricultural programming increase as a percentage of total government spending. It needs to. Compared to the initiative to decrease taxes by $100 billion over the next few years, agricultural spending is extremely modest.

With the preceding in mind, I would make a few recommendations to the committee. Number one, more federal money needs to be spent on securing water supply. This includes money for construction of on-farm storage facilities like dams and dugouts, the digging of new wells, and money for pumping of water from reservoirs to on-farm storage.

The second point is that the crop insurance program should be enhanced. Crop insurance is the only program that ensures against yield loss due to weather problems. There has been some discussion about doing away with the crop insurance program altogether, but we think most farmers would like to have it enhanced rather than discarded.

Number three, the NFU believes that the new funding formula in place, commonly referred to as the Fredericton formula, is inappropriate. The Fredericton formula awards the safety net dollars on the amount of gross income in the sector. In other words, the more money coming into a region of the country, the more money it receives in safety net dollars. The inverse is also true. The more trouble a region encounters, the lower its share of safety net funding. The National Farmers Union has members across the country, but even where they are beneficiaries of the new formula, our members believe that safety net dollars should flow based on the problems encountered.

On the subject of the Canadian Wheat Board, the United States has launched nine unsuccessful challenges into Wheat Board marketing since 1990. This amounts to almost one unsuccessful challenge per year. This can only be recognized as systematic trade harassment, and it is costing Canadian farmers and taxpayers millions of dollars.

To maximize the survival of farmers, it is vital that the Canadian government maintain its support for the Canadian Wheat Board. We are encouraged that Ministers Goodale, Vanclief, and Pettigrew have recently agreed to fight any charges levelled against the Canadian government and the Canadian Wheat Board as a result of the latest investigation by U.S. authorities.

As the Canadian Wheat Board is a fair trader and has been proven to increase the returns of Canadian farmers from the marketplace, the NFU recommends, first, that the Canadian government introduce changes to international agreements that would penalize countries involved in trade harassment. A resolution to this effect was passed at our 2000 annual convention. Second, the NFU recommends that the Canadian government continue its support for smart marketing by farmers through the Canadian Wheat Board, including support for financial guarantees offered through the Canadian Wheat Board.

Thank you for the opportunity to speak with you tonight.

[Applause]

½ (1945)

The Chair: Thank you, Stewart.

We have two more now before we begin our rounds of questioning just for members.

Keith Murch.

Mr. Keith Murch (Individual Presentation): Thank you very much. I have a presentation on the role of the federal government in agriculture at Swift Current.

My name is Keith Murch. I have been a farmer and a livestock producer for 26 years. The focus of this presentation is the future role of the federal government in regard to the health of agriculture, most specifically the enhancement of soil biological life, the base building block of the soil.

Welcome to southwest Saskatchewan. This region is the birthplace of medicare. It was called Swift Current Health Region Number 1 because it was the first one in Canada. The purpose of medicare was to cure afflictions. Phase two, which in all likelihood will be part of a national review commission on the health care system, is the prevention of affliction. This is as true in our soils as it is in our bodies. Indeed, improvement of our soils improves our bodies.

The future role of the federal government in this activity is multi-faceted. It includes, but is not limited to, the ten points I have here: research and education of processes and crop rotation; education in our school systems on the importance of soil biological life; ensuring that land stewardship, the public trust of agricultural soils, takes place in an environmentally sustainable manner, enhancing soil biological life; financing primary agricultural entities where private businesses refuse or are unable to do so, so that resources can be used on rotations, crops, and practices and not on large interest and capital payments; ensuring that the non-national grain trade is not allowed to take resources required to build soil biological activity away from the producer; maintaining licensed buyers so that payment is ensured; ensuring that varieties that will negatively impact on other beneficial varieties are kept segregated or revoked, most particularly GM wheat; cooperating with producers in the development of markets for products; servicing markets, dealing with difficulties our customers encounter in years of poor quality; and, as has been previously mentioned, maintaining a crop insurance program that is affordable so that producers can use it for backup in years of crop failures in the rotation.

The health of agriculture is dependent on the biological life of the soil. The biological life of the soil is a base in which nutrient exchange takes place and which governs the tilth of the soil. It follows that our resources must go to enhancing that environment.

Many of our practices today in agriculture are detrimental to that soil biological life. Years of no rotation of crop species and the accompanying lack of vibrant soil biological life has led many farmers to town to buy nitrogen and phosphorous in an attempt to maintain production, while the base building block, soil biological life, deteriorates. While this deterioration takes place, disease and weed populations and insect populations, detrimental to crop production, grow. The farmer again goes to town to buy chemicals to fix these symptoms. The cure is not in town; it is on our farms, within our hands.

As in human medical care, curing the symptom does not cure the affliction. Enhancement of soil biological life will. Through crop rotations, green manure plowdown, the careful addition of bacteria to the soil, and other practices, we will ensure that our soils are able to grow the foodstuffs we require. The nutrients in those foodstuffs will be increased. We will no longer be overeating our way to ill health.

Just to expand on number one, research and education of processes and crop rotation, much research has been done over the centuries. Research continues on the farm by producers and their organizations, as well as by publicly funded researchers on experimental farms and universities. This public funding is essential to ensure that processes, practices, rotations, and products being used around the globe to enhance soil biological life are used here, as well as exporting our practices to be used there. To repeat, the cure is on the farm, wherever on the globe the farm is.

University degree and diploma programs, as well as extension programs and community college classes, need to emphasize the benefits of building soil biological life. The federal government can use its resources to ensure this is done.

I have mentioned the school systems and education in our school systems on the importance of soil biological life. A federal government program designed for use by educators in the classroom, emphasizing the basics of soil biological life, needs to be developed. This is happening, to an extent, in many classrooms in this province. The soil is an excellent venue to bring together the sciences of chemistry, physics, and biology. Many available resources need only be coordinated so that the teacher can easily implement such a program.

With apologies to the translator and to those who are following, I'm going to skip to number 5--ensuring that the non-national grain trade is not allowed to take resources required to build a soil biological activity away from the producer. Crops produced in the soil-building program vary from producer to producer. Some regions produce some crops better than others. The effects of climate change on this have yet to be seen.

Suffice it to say that major crops have national and international interest. Particularly for those crops, but not exclusive to those crops, marketing agencies need to be maintained to protect producers from collusion by buyers. This is the role of the Canadian Wheat Board. The board operates to ensure the majority of producers obtain the highest average price possible year after year. Adaptation and change of practices will take place, as has happened in the past. Returns to the producer are necessary to fund this building of soil biological life.

In closing, the building of soil biological life is the responsibility of every individual on the globe. In Canada, in our system of government, the federal government is the representative of every citizen. The federal government has a lead role in ensuring the health of agriculture. Healthy soil equals healthy people.

This is respectfully submitted by Keith Murch. Thank you.

½ (1950)

The Chair: Thank you, Keith.

Mr. Arnold Schmidt, the floor is yours.

Mr. Arnold Schmidt (Individual Presentation): Value-added avenues for the Canadian farmer...to diversify his livelihood without intervention from the marketing system...and that he has the freedom to market his own product or services to wherever he chooses. We are not asking for money, but we are asking for the right and the encouragement of the federal Department of Agriculture and Agri-Food to allow us to help ourselves without interference.

For example, I'm a farmer, but I'm also a manufacturer with commercial flour mills.

While doing business with an American company that was looking at purchasing one of my mills, they requested a sample of flour from my mill. This is common practice, and I packaged up 400 pounds of flour for the sample. I marked on the bags what it was and then when I got to the border they told me I needed an export permit because the product is under the Canadian Wheat Board Act. So I acquired a permit.

I had to sell my flour to the Wheat Board, although it is a commodity the Wheat Board does not handle. This portion of the grain in the sample was from my own crop. I had to buy it back from them at their profit margin. Then it would have been legal for me and for my mill to send the sample out.

The Canadian Wheat Board, who represents the Canadian farmer as their marketer, forced me to buy my own wheat as if I were a foreign buyer, at the same profit margin.

This practice of the Wheat Board is irresponsible and ridiculous. This is not helping the farmer to help himself. This is putting up roadblocks so he cannot help himself. To be so petty as to interfere with sending out samples of my product to representative customers is hindering any development of valued-added situations that I might be involved in.

Now this is only my personal example. We have some very good friends in the sunflower seed business, Tom and Emmy Droog of Spitz Sunflower Seed Co. Ltd. When Tom started his business he was supported financially by the Canadian government in loans to start his operation and to expand. When he completed his expansion he was prevented from buying his sunflower seeds freely without government intervention. In order to solve the problem, he had to fly to Ottawa for a personal interview with former Prime Minister Trudeau, which resulted in Mr. Droog being able to buy his sunflower seeds from his own source without further restriction.

These are just two of the samples of farmers who wanted to add value to farming aspects of their business but were interfered with. If the government really wants to help the farmer help himself, then it must take a different stand than it does now. If this situation of continuous interference remains, the sons of present farmers will not want to fight a losing battle with the powers that be and will opt out of farming. Over the next two or three generations there will be a mass exodus from the farming industry. Not only Canadians will suffer, but the whole globe.

With an estimated 57 million human beings predicted to die of starvation this coming year, you would think that farmers would be encouraged--instead of harassed--to produce mass amounts of grain for the world. Canada and its vast growing area will soon be called upon to feed the world's population. Encourage us; do not stop us.

Thank you very much for inviting me and allowing me to express my thoughts as a Canadian farmer and businessman. We live in a great country, so let us make it greater.

½ (1955)

The Chair: Thank you, Mr. Schmidt. I can't help but note that you've been to Ottawa with the same problem and you've had no resolution, no change. It is disappointing that a fellow like yourself can't get a little thing like that fixed up.

Howard, I'll go to you first, and then we'll move down.

Mr. Howard Hilstrom: I guess you know that coming out of this your suggestions and ideas will be part of a report that will go to the minister. So, Mr. Schmidt, you will have another position put forward to the minister.

We're trying to look at this new vision and give advice to Minister Vanclief. He hasn't been able to provide many details, and of course the budget didn't provide any money, although there is a commitment that there will be some in the future.

One component that they did come out with that has details with it was the land set-aside. The proposal that was put forward was done by Ducks Unlimited at one of our committee meetings in Ottawa. It involved one-million-plus acres, with a large majority of that being in Saskatchewan. They of course would be putting in some of the money.

Saskatchewan already has, I believe, a bit of a provincial plan in regard to land and seeding down land. Also, there's the federal Grasslands National Park, which is a large acreage set-aside.

Ducks Unlimited crossed the west and has done some good work. Of course, their headquarters is in my riding. But we've also got some problems with their projects involving water. The problem that came up in our area pretty significantly was that water levels were being kept at a higher level than what was in the agreement with the local farmers, the problem being, of course, that the local farmers don't have the resources that Ducks Unlimited has in order to try to enforce that legal agreement if Ducks Unlimited doesn't live up to it.

In our area, Ducks Unlimited was only part of the problem, I'll grant you that. But they have their name on the agreement and on the title.

The land set-aside component will go ahead, according to the ministers, and my question here is whether you believe there should be land set aside--Mr. Myers, I would ask you to talk about this a little bit, whether or not there should be this large amount of land set aside in Saskatchewan and whether or not Ducks Unlimited should be a party to the agreement to this problem that I've identified, as to how the farmer is able to legally stand up to someone that large.

This is a large private American corporation with a Canadian component of Ducks Unlimited.

Are you in favour of the land set-aside in Saskatchewan? If the land is set aside, you could say how much. Should Ducks Unlimited be part of the party to the agreement? Should the federal and provincial governments be party to the agreement, so in the future, if there are public policy reasons to bring the land back into production, if it is set aside, there are not mammoth costs to buy out Ducks Unlimited, and the government of the day would be able to say the agreement needs to be changed for public reasons?

I'd like Newton Myers to make some comments on the land set-aside. You may not have heard the details. You know the concept and what you think it would be, plus and minus, for Saskatchewan. Then maybe Bill Boyd could give us a few comments. It may have to be personal. It may not be his party's position.

¾ (2000)

Mr. Newton Myers: Fortunately, I farm in an area where we have some pretty decent land. It's not particularly relevant for us to be setting land aside. I do understand the specific issue you're talking about. I understand your concerns.

In my opinion, it raises a larger question when you're talking about organizations, institutions, and large corporations from other jurisdictions becoming involved as equal partners with the farmers with respect to government.

It is my opinion that the primary producer should have a particular role that perhaps is a little more important. As I stated before, we're here for four generations.

I might make a brief comment about the corporations we invite to take over a lot of our industry.

When we allow people to come to our country as immigrants, we are particularly concerned about whether or not they have a criminal past, and what their performances as citizens have been. Sometimes when we allow corporations to come over, come into our country, and buy up large portions, particularly since we've entered into the NAFTA agreement, we have companies that have been heavily fined and prosecuted for various violations, particularly under the Competition Act.

Often they are allowed to come in without any review. I'm not saying these companies shouldn't be allowed to. I think it should be weighed. I think there should be some review given to it and some conditions attached.

Mr. Howard Hilstrom: Thank you.

Mr. Bill Boyd: Thank you for the question.

It's difficult to comment on it in any great detail. We don't have a lot of detail about the program on things like compensation levels, land classification, and length of term. What kind of land would qualify? Is there a mechanism for intergenerational transfer? Can the land be grazed? Are there hunting rights? All of those questions would have to be answered.

In general terms, I think we would support a land set-aside program in principle. We would certainly want to know the details before we committed in large measure to a land set-aside program.

The Chair: Thanks, Howard.

Dick.

Mr. Dick Proctor: Thank you, Mr. Chair. Thanks to everyone for some very good presentations this evening.

We're nearing the end of a second full day and we've probably heard from well over a hundred producers, I'm sure, in the two provinces we've visited so far.

Dean Smith, I wrote down your point about corporate farms or corporate enterprises not being eligible for public support. That may not be exactly the way you said it. I wonder if you could elaborate on that, because I don't think we've heard that one before. We are starting to hear some repetition after these many presentations, but that was a new one for me.

¾ (2005)

Mr. Dean Smith: I guess I used the Ducks Unlimited thing as an example of corporate farms. I'm not getting at large family farms. I don't think the size is as critical as the ownership. We're hearing about a lot of examples of foreign ownership and so forth. I think if you listen to what the public taxpayers out there are saying, they are saying they will not tolerate spending money in any type of safety net or support if it's going to a corporate or corporate-like structure that's headed to vertical integration.

I'll use the example of the chicken industry in the United States, which Cargill completely dominates. They own and control the market, and I guess if you want to look at our hog operations here, we're getting very close to that. I'm predicting that by the year 2005 we will have virtually no hog farmers. There'll be between 20 and 25 producers producing all the hogs, closely linked with the packing houses. If that's what we're looking at, what's the point of supporting it?

To follow up, and just to deviate a little bit, Dick, if you'd allow me the time, I would like to talk just a little bit about the DU situation. There was some good intent with that--

The Chair: Excuse me, Dean. I'm having trouble here unless Dick wants to give you his time. Each member has so many minutes.

Mr. Dean Smith: I was hoping to get in a quick answer, Mr. Hubbard.

Mr. Dick Proctor: Actually there is a response here. It's a follow-up to what Howard was saying and it's useful to have it on the public record.

Go ahead, Dean.

The Chair: So you would like to take his part?

Mr. Dick Proctor: Sure.

The Chair: Okay.

Mr. Dean Smith: Back to DU, I think when they started with the process the ownership thing was always that they did not maintain control and had the private sector within the province to operate it. I'll use the example of the conservation learning centre at Prince Albert. Since then they've deviated. I guess I'd say a little word of caution. DU got a lot of money under waterfowl management, of which the federal government put up $500 million. That's a considerable chunk of change and I guess I'm questioning it, because we can't seem to get $500 million in Saskatchewan to help our producers, so what the hell are we doing giving $500 million to DU in a roundabout way, which is going to be foreign corporate ownership?

You wonder why I have a concern about corporate farms. That's a good example of why I'm concerned. Now, I've had some very close operations with DU and they're very fine, but it comes right back to our farm policy. If we're going to make these changes, folks, we'd better put the policy in place, because not only do we have to deal with our own people, we now have to deal with international and especially WTO regulations. We cannot put something in place and then change the rules.

Mr. Dick Proctor: Thanks, Dean.

Ken, in regard to this letter you received from Mr. Watson, approximately when did the letter arrive? Is there a date on it?

Mr. Ken Hymers: It's dated July 20, 2001.

Mr. Dick Proctor: Will you make sure that's tabled with the committee so we can see it? That's an important part of what we're striving to get in this country with our own policies, and not going to the United States Department of Agriculture to have them dictated to us from there. I appreciate that.

Thanks, Mr. Chairman.

The Chair: Thank you, Dick.

Dean, I'm not sure about that $500 million. I've never heard that said before. If you have something on that--

Mr. Dean Smith: It was a number of years ago. It was all part of the green plan conservation plan and it was money definitely defined for waterfowl management. I don't know if DU got it all, but they were in charge of it. It was over a five-year period.

The Chair: If you have any information on that perhaps you could give it to the clerk.

Mr. Dean Smith: We can dig it up.

The Chair: Rick.

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

Mr. Boyd, first of all I should make a comment. You suggested that there hasn't been a third line of defence. Mr. Vanclief has insisted that the AIDA program was the third line of defence. We insisted it was more like the Maginot line than it was a line of defence.

I think everybody around this table believes that for the drought possibilities that are out there right now in western Canada, there should be a proactive program being anticipated right now. We're told, and we have been told by the Minister of Agriculture, that the safety net programs you see today are the only ones available and going forward.

Can you tell me, Mr. Boyd, in Saskatchewan what do you feel would happen? I asked this question of Mr. Serby, the minister, and he said “We would have to go to Ottawa to ask for more assistance”. In your opinion, what would happen to Saskatchewan producers if--and I know it's hypothetical--in fact there were another drought this year? What would happen to producers if there were nothing other than the existing programs in place?

Mr. Bill Boyd: Well, it's somewhat difficult to foresee the future in that regard. But if we don't see significant rainfall or snowfall--and we're all hoping we will--I think we're going to see a province change dramatically in terms of farm numbers. I think we will see many farm producers see this as their last year.

¾ (2010)

Mr. Rick Borotsik: So we should be proactive?

Mr. Bill Boyd: It just seems a little like the sky's falling in, but the fact is there are many producers out there whose credit lines are stretched to the limit right now, and they haven't even looked at facilitating credit for this year. We see virtually no grain in storage as a result of last year's drought, and it will be a very, very difficult year.

All you have to do is talk to farm suppliers or implement dealers and they will tell you that when a farmer walks into their operation these days, they grab them by the arm because it's been so long since they've had an opportunity to talk to one another.

Mr. Rick Borotsik: Mr. Boyd, I'm going to have to cut you off. I know that politicians like to talk.

I have one more question for Mr. Elviss, if I could, please.

You talked about the NISA program, and you suggested that the majority of the producers who have the NISA program now are probably older and more mature--senior producers. What we haven't heard tonight was how we can encourage young people to come back to the farm.

Could you give me some understanding as to how you feel we can get young people coming back into the farm, and maybe tie it into the...well, first of all, if we don't use NISA, it's going to be a lost program. The reason I mention NISA is that the young producers can't get into this program. What in your opinion are some of the policies we should be looking at to get young producers back onto the farm?

Mr. Lynden Elviss: Basically, we need a viable agriculture industry. Unless we can get prices and support programs that guarantee a level of income that young people can make a living on, they aren't going to be here.

Most of us my age who are carrying any kind of debt load have used our NISA funds to try to finance the past two to three years of operations. Now that they're gone, if we have another drought in 2002, I personally feel that I will be one of the ones Mr. Boyd was talking about--I won't be in agriculture. It's that serious.

Mr. Rick Borotsik: You're not just worried about the young people coming back, you're worried about the seniors as well.

Thank you, Mr. Elviss.

The Chair: Thank you, Rick.

Paul.

Mr. Paul Steckle: I really don't know. After two days of asking questions, what new questions can you ask?

But let me put it to you this way. All of you take thought for a moment of what I'm going to ask you.

Mr. Wells believes the Wheat Board is doing a great job. There are many around this table who believe it's doing a pretty good job; some believe we can't do without it. Mr. Schmidt has just given us an example of how it's not working very well. We've heard those kinds of stories before. We have diversity of opinion around this table. But one thing we do agree on is that we want to see agriculture strengthened for the future. We want to make sure we have a sustainable food supply for Canadian people into the forever future. I believe that's what we want.

How do you, as a person sitting here tonight, put yourself in my, the chair's, this committee's, or the minister's position and try to rationalize all of those diversities to bring together a program that is cost-effective and does exactly what we want it to do? Now we're not Solomon, but maybe we should consider being that wise if we want to do this. I'd like your opinions on that.

I'm going to go to Edwin Wallace, because I liked his commentary this evening.

Mr. Edwin Wallace: Thank you very much.

I think there's a responsibility on the part of our leaders, and that includes you politicians, our farm leaders, maybe our corporate leaders. It has to come down to a decision: do we want to preserve farming in the traditional sense or not? That diversification of opinion around here can exist. But do you really want us here?

My plea is it's good sense that you have us here. I think there's economic benefit for Canada to keep us, in all our diversity: healthy, and maybe not wealthy, but economically viable.

¾ (2015)

Mr. Paul Steckle: Anyone else? Stewart?

Mr. Stewart Wells: Thank you. I'd have to go back to something Mr. Smith has already gone around the edges of, but for any farm program we have to define the goals first and then define the program later.

I think in the past recent history, maybe that hasn't been done. There has been a lot of ad hoc--I wouldn't say electioneering--but I think it's important that we define the goals, define what we think agriculture should look like, and then try to move there. I'm hoping, of course, that this new policy architecture for 2003 may be a step in that direction.

Mr. Con Johnson: I guess I have two comments on a farm program. Number one will touch on the marketing. I think I said in my presentation that you can't change things by keeping them the same. I think there's huge potential out there for people who want to think outside the box as far as marketing their grain is concerned. I don't see why you can't have both, if people want to stay under the board jurisdiction. I think it will make the board better, because then they're going to have a measuring stick.

I'll even agree that the Wheat Board is the best marketer we have--they're the only marketer we have--and they're also the worst. They're the biggest; they're the smallest; they're the cheapest; they're the most expensive. If they had that other measuring stick, I think it would pull both sides up.

The second comment is on land set-asides. If anybody wants to see the effect of huge land set-asides, just go across the border where Dave and I are from, into the U.S. They have a program--CRP, the conservation reserve program. That program was put in place to take acres out of production. They can't do anything with it; it sits there. It was supposed to raise the price of grain and save rural America. It's destroyed it.

Hill County, the land around Havre, Montana, is the best farm land there is. One-third of that is in CRP. Havre is a ghost town. All the little towns are ghost towns. There are no inputs. People who own the farms sold their machinery and moved away. All the services went with them. It's made it virtually impossible for young people to get into farms. That's one you have to look at closely before you get into it big, because it's destroyed everything down there.

The Chair: Thank you, Con.

I'm going to go to David now, and then back to Rose-Marie.

Mr. David Anderson: Okay, fairly quickly.

Bill Woods gave an excellent presentation this afternoon about the producer car loading facility at Eston. I understand there are other different types of facilities in the area. I'd like to give an opportunity to a couple of people. Mr. Wallace, I understand you're involved with that, and, Brad, I think you've been involved as well.

I'd like to give you an opportunity to give us your opinions on the discussions that are hinging around the Canadian Grain Commission right now and on their interest in licensing facilities.

Mr. Edwin Wallace: My opinion is it's rather unnecessary. We think the problems that have been put before us are a result of a biased chief Canadian grain commissioner. We think he has been over-duly influenced by the Western Grain Elevator Association.

We're concerned about a couple of things. First is the elevator licensing, or producer car loading facility licensing. We're concerned about inward inspection; that is, having the grading of our grain at port done by Western Grain Elevator Association agents rather than the independent Grain Commission employees, as it is now.

There is also a matter of limiting the number of producer cars that can come to producers, and I'm probably missing two or three other things that are prominent. But our concerns are also with how rolling stock is delivered to us. We're loading producer cars. That's difficult. If it's going to be that sexy thing to politicians, like West Central Road and Rail, some of us are going to be hard-pressed to duplicate that; it may not be possible.

While I have the microphone, can I ask one question? I won't even wait.

¾ (2020)

The Chair: No.

Mr. Edwin Wallace: What is the reason for a set-aside program in Canada?

The Chair: Mr. Wallace, I probably didn't make that clear when we came: we came to listen.

Mr. Edwin Wallace: I want to be heard.

The Chair: David, do you have another question?

Mr. Brad Nelson: It's on the same question. I think I'll try to answer it from a little different context, or in a little different way. I agree with what Ed says; I think we have some interference from people who have an interest other than what they should have as far as these producer loading facilities are concerned.

I'll just give you an example of how farmers, at least in our area of Frontier, are willing to take the ball in their own hands. We were about to lose our rail line, and part of keeping it to move our grain out of that area was to secure some producer car loading facility on that line. In the course of about 11 days, in our little community we raised about $170,000 to buy a wheat pool facility, we privatized it, and we operate it as a group of producers. And that business has been totally successful.

Along our rail line you can take that same example. You can just go down the line eight miles, sixteen miles, and producers have done exactly the same thing.

The point of this whole thing is that the regulatory bodies don't like farmers thinking for themselves. That's all we did. We just took the matter into our own hands and decided to take some action, and we're sitting there as a viable operation today in our own community, employing people.

Thank you.

The Chair: Thanks, Brad.

Rose-Marie, do you have a question?

Mrs. Rose-Marie Ur: Yes, I have a couple of questions.

My first question is with regard to the situation here in Saskatchewan in the past and what you're possibly going to see this year again. How can the safety net assist the drought-afflicted areas, and what kinds of dollars would you be looking at? I'll refer, perhaps, to Mr. Wells on that.

Mr. Johnson, regarding the Canadian Wheat Board, of course, the board’s face has changed with ten elected farmer representations now on the board. That being said, with what I’ve heard here today and yesterday, there is a mixed reaction as to support for the Canadian Wheat Board. But if there could be changes to the regulations, with ten producers there, surely they would recognize that there should be some sort of change for the niche markets so that you wouldn’t have to sell your flour for a sample to buy it back. Do you think there could be changes made within that?

So Mr. Wells, and then Mr. Johnson.

Mr. Stewart Wells: Thank you.

I think it's a very difficult question to answer as far as a very definite dollar value goes. I think in terms of the range, depending on the drought and depending on who was affected, if you're just talking about Saskatchewan, you may be talking of a shortfall in the hundreds of millions of dollars. But it's very difficult to know what the shortfall would be.

Crop insurance this year paid out in the hundreds of millions. I believe it was roughly $200 million below what they expected to pay out this year, but it's very difficult to answer. I did try to engage the federal Minister of Agriculture in this discussion, though. I wrote him a letter in mid December to try to start this dialogue, to start some thinking, about what would happen in the worst-case scenario. It's been a little over two months now and I haven't got an acknowledgment from his office or a response.

Mrs. Rose-Marie Ur: How long do you think this could continue, though? For instance, weather patterns change, but how could we possibly continue this kind of compensation?

Mr. Stewart Wells I think if any of us could predict the weather we wouldn't be here, really.

¾ (2025)

Mrs. Rose-Marie Ur: I can appreciate that, but I was just saying....

Mr. Stewart Wells: I just don't think I can answer that question. We just have to prepare for the worst.

Mrs. Rose-Marie Ur: Mr. Johnson?

Mr. Con Johnson: Going to the election process, first there are ten elected. I guess I'll ask you people a question. How many of you were elected on a preferential ballot, with one-third of the government appointed before the election and in constituencies that covered two provinces?

Having said that, I know most of the people who were elected--very knowledgeable, good people. I think the only change they would have to make is on the buy-back Mr. Schmidt talked about.

If you're a farmer in Ontario, you can get your export permit with a phone call; that's all they need to do. When you try to get down to the legality of that, Mr. Ridder, the chairman, is a lawyer. I don't think you can really pin him down on the legality of that--nobody has. I think that's all they have to do.

I guess some of us wonder. The board is supposed to be in the hands of farmers and the directors, but you hear a lot of stories. You all know how bureaucracies work. Maybe the bureaucracy runs itself and the farmer-elected directors don't, because change seems hard. I think they'd better change fairly quickly because the pressure is building, and when it goes, it's going.

Mrs. Rose-Marie Ur: Thank you.

The Chair: Thank you, Rose-Marie.

I'm going to conclude this part of our meeting. For those who want to present individually, we're still talking names. Michel is at the door over there, if you'd like to put your name down.

We'll adjourn for about five minutes. We'd like to thank the presenters for coming. We certainly had a lot of good information tonight. As someone said already, we're up to more than 110 presentations, so we are hearing a lot of good ideas.

After about five minutes, if the other group can come to the table, we'll continue our meeting.

The meeting is suspended.

¾ (2035)

The Chair: While we're getting back again, I hope people have a list. If you don't, I'm going to just indicate.

First of all, we'll hear from Garry Nisbet, then Irene Ahner, and then Ron Gleim, followed by Larry Bonesky, Bob Copeland, Steve Erikson, Eric Lawrence, Grant Payant, Charles Kieling, Cliff Murch, and Linda Trytten. I probably pronounced some of those wrong, and I apologize.

As you present, of course, everything goes into the record, as we mentioned here, with transcription provided.

As chair, I want to recognize an old friend of mine from the other side of the House, who came out to listen tonight. I asked him if he was going to present. We're always glad to have Mr. Morrison. I enjoyed his speeches in the House over some years. He was one of the last frontiersman, I sometimes think. He told us about life here in southern Saskatchewan.

We're certainly glad to see you come out tonight, Lee. Your experience certainly was always a factor in the speeches you made for us. I guess David here is your successor in the riding you represented in Ottawa.

So our first presenter is Mr. Nisbet.

¾ (2040)

Mr. Garry Nisbet (Individual Presentation): Thank you, Mr. Chairman.

My name is Garry Nisbet. I farm in the Rosetown area with my wife. I'm also a councillor and deputy reeve of the RM of St. Andrews, which surrounds the town of Rosetown.

Mr. Chairman, members of the committee, thank you for the opportunity to speak to you and provide some input into the future of Canadian agriculture. Government affects the western agriculture industry in many facets, not just the current programs that are in the media spotlight. There are some good programs currently in place that would only require a small change to make them better. There is also a great deal about agriculture that has not kept pace with the ever-changing global economy we now live in.

Federal agriculture policies over the past 20 years must shoulder responsibilities of the current state of western agriculture. Many statements and directives that have come out of the federal agriculture department are in conflict with the mandates and laws that govern many of the departments and agencies.

The federal agricultural minister and the Wheat Board minister both made statements this past summer that producers must diversify and make changes to survive, though neither one would offer to change any policies to accommodate this. The Wheat Board is no longer the major commodity marketer for most farmers. In the municipality of St. Andrews, the board would market well below 50% of the grain produced.

Government, however, has not kept pace with the transition and the Canadian Transportation Agency's mandate that the Wheat Board is guaranteed a large percentage of the rail cars. This chronic shortage of rail cars has contributed to the loss of many sales of special crops. The difference between a rail car of wheat that's being shipped and that of a special crop commodity is in the tens of thousands of dollars to the western economy.

Federal policy has also vigorously defended the supply management sector of Canadian agriculture, while leaving the grain industry to compete against the U.S. and European government subsidies out of their own pockets.

Many times agricultural producers have been warned that if they're not in the government program--for example, crop insurance--they would not be eligible for AIDA or CFIP. Many producers purchased crop insurance, paid their share of the premiums, collected crop insurance, and were ineligible for AIDA payments because of the payment from crop insurance. Some producers who did not take out crop insurance--since AIDA covers income loss below 70%--received a payment, even though they were warned they would not qualify if they were not in the government program. They did not have the expense of paying crop insurance premiums.

Crop insurance should be mandatory for inclusion in any program. It should also be expanded to producers who should have the option of 100% coverage. This would pay bills and alleviate the need for many ad hoc programs. You don't risk insuring your house for 80% or less, yet producers are expected to invest that amount into input each year on that risk.

NISA is a great program if you never want to access the money in the account. Many farmers need funds to make payments and have working capital to get the crop in. They are denied access to these funds, even though they themselves have placed half of the funds in the program. They must wait until the formula arrived at by a great bureaucrat triggers a payment. The farmers cannot decide for themselves when economic times warrant a payment. The NISA program is widely quoted by the federal Minister of Agriculture as having a large, unused sum of money, even though many of these accounts are held by active, on-paper-only farmers.

Producers need to be able to access their own money without penalty when it is needed. The major fault of this and many other programs is that they are slow to respond to immediate needs.

The federal government and its agencies are responsible for hundreds of thousands, if not millions, of acres being cultivated that never should have been cultivated. The Canadian Wheat Board quota system and the acreage-based payments programs led to farmers exploiting every possible acre to maximize these revenue sources. In many cases it was marginal land at best. The RM of St. Andrews feels that sufficient federal assistance in returning this land to grass or hay would ease burdens that this unproductive land has placed on programs such as crop insurance. Assisting farmers in returning this land to its natural state would reduce the government risk in crop insurance, lower production levels of all grains, and reduce much farmer reliance on grain-based income. The lowering of production numbers would help alleviate the constant demand to find export markets. A program such as this would also account for green space in Canada's environmental commitments.

The federal government is considering new programs. We applaud their efforts and believe they are on the right track. We have some concerns. Many producers are concerned that the unused NISA accounts will simply disappear and be rolled over into new programs.

¾ (2045)

The Chair: Garry, can you just summarize the last bit? You're over your time and--

Mr. Garry Nisbet: I'm sorry.

In conclusion, if government continues to have control of many aspects of agriculture, as it currently does, it must develop programs that ensure producers remain viable. In this state of agriculture, we feel like second class citizens of Canada who have been forced to beg for scraps instead of being proud to say we help feed the world.

The Chair: Thank you, Garry.

¾ (2050)

Irene Ahner.

Ms. Irene Ahner (Individual Presentation): Thank you for allowing me the opportunity to express some of my thoughts on the future role of government in agriculture. Welcome to those of you who are not from western Canada. Welcome home to some of the others.

My husband and I raise cattle for a living northeast of Maple Creek. We live on three and three-quarter sections of sand that is used entirely for grazing and forage production. We are dependent on land leased from the provincial and federal governments and community pastures to provide summer grazing for our cows.

Most of our land is totally unsuitable for growing grain and oilseeds. In years when the rain falls, we have the capability of producing enough forage to carry our herd through the winter with, occasionally, some left over. We need approximately 1,100 large, round bales each year. In 2001, the total production on our land came to 91 bales.

As a result, after making the decision to try to stay in business rather than selling the cow herd we have been building up for 28 years, we purchased all the feed for the winter from eastern and central Saskatchewan at much higher prices than usual, and with the attending freight costs. Even with the current prices for live cattle, there will not be much income tax contributed to the federal treasury from our community at the end of April.

This is, of course, not the first time we have experienced such drought conditions. It is the first time, since we came home to the farm, we have had to struggle through without any disaster aid from either level of government. I found it very upsetting that some organizations who claim to represent the cattle industry oppose such aid on the grounds that our American neighbours would consider it an infringement on free trade, and perhaps would insist on countervail duties on our exports.

When will our own federal government stand up for us in such matters? American producers were already receiving aid that allowed them to come up here and compete for our forage resources, thus driving up prices. I understand money has been put into plans for finding new water supplies. It is very important, but adequate water supplies for cattle are just part of the equation. If there is no available feed, or if the price is prohibitive, the cattle herds will not be present to drink the water.

The land we use today was once part of eight different homesteads. We're not large operators. There was once a schoolhouse full of students every five or six miles. I've heard many people long for the “good old days” and the close-knit communities. No one in their right mind would want to return to the conditions of living in our grandparents' day, dependent on horses or oxen for transportation, and living without electricity or running water.

Until I graduated from high school, the only running water in our home happened if you were in a hurry with either the water or the slop pails. For some strange reason, it finally occurred to farm families that they deserved the same standard of living as their urban counterparts.

It was soon discovered that a family could not survive on a half section of land, especially in the more arid regions, so the changes in our communities were inevitable as farm sizes grew and population declined.

However, people are still expected to run RM councils and school boards. Families still want to have 4-H clubs, curling rinks, hockey teams, music festivals, church organizations, and programs for senior citizens. The governments want people to serve on health boards, local housing authorities, economic development councils, and agricultural boards. With the decline in population, those of us left in the communities are trying to hold all these things together, with the same people running more and more things. Amalgamation may not be popular, but it's coming.

The thought occurred to me one day that no one in my immediate family had been involved in the military during either world war. They were farmers producing food for the war effort and considered an essential service. During those years, they had a sense of dignity and pride in their profession that is sadly lacking today. The agricultural producers of Canada are the gatekeepers of a safe and abundant food supply for all Canadians. We would like some credit for what we do, not just during agriculture week, but every week.

The Canadian consumer on average has earned enough by February 7 to pay for their year's groceries. They have paid the farmers' portion by January 9. The current incumbent in the Minister of Agriculture seat, instead of pointing out the inequity of this situation, complacently says this is a reminder of the good value provided to consumers by the Canadian food system.

Does he assume Canadian food producers will continue to subsidize the rest of the population forever? There may come a time, probably combined with bad weather and low markets, when there will be no one left willing to earn slave-labour wages so that everyone else can eat.

Many of us remember, rather fondly, a former Minister of Agriculture with a big, green hat who would travel the country to observe producers at close range and make sure agriculture made the news on a regular basis.

¾ (2055)

No matter what political stripe we were, we all felt there was someone in our corner in Ottawa.

In recent years we have not seen the same support and encouragement. I would suggest that the federal government, no matter which party is in power, make sure that the holder of the agriculture portfolio has had a successful background in agriculture and fills the bureaucracy with people of the same mindset.

I have always felt the security of any country is dependent upon its food supply. How many of you have taken the time to check out your weekly grocery basket to see how much of it was actually grown, not just packed, in Canada?

What would happen to us if another crisis led to the closure of our borders? We would be swamped for a while with the excesses of beef, chicken, wheat, and oilseeds, but the supply of fruit, vegetables, and tomato sauce for all the fast-food outlets would disappear fairly rapidly.

At one time Canada produced enough of these items to feed its own people. Under the cheap food policy carried out by successive governments, we have lost much of our productive capacity to Mexico, Chile, and southern California.

There are several greenhouses in western Canada producing flowers instead of vegetables, because people are willing to pay $5 plus tax for a single long-stemmed rose, but they are unwilling to pay $3 a pound for tomatoes.

When federal government support programs are being planned, they cannot be designed from the top down, but they must be studied by organizations and provinces most concerned with the details before they are put into place.

I would like to see the future role of government in agriculture as one of providing assistance when natural disasters such as floods, drought, and ice storms strike. I would like to see government fund research for new and improved farming practices, protecting food producers from harmful policies in other countries, overseeing the safety of food and water, and providing a safe, secure, but not necessarily cheap, food supply to all Canadian citizens.

Thank you.

[Applause]

The Chair: Thank you, Irene.

Ron Gleim.

Mr. Ron Gleim (Individual Presentation): I farm at Chaplin, Saskatchewan, with my wife and my son. We are in livestock and grain and we have diversified into specialty crops and bison. I'm making money at one of them and you can guess which one it is.

I'm also the chairman of the Western Rail Coalition for Saskatchewan, which is looking at short lines and producer cars. I am also the president of the Saskatchewan Bison Marketing Committee.

We couldn't market our buffalo and we were all going broke, so we decided to do something ourselves. We've slaughtered 300 animals to date, so we're moving ahead there.

My presentation today is going to be on the use of land. I've taken a lot of it from APES, a farm organization, and I've made it revenue neutral. It's called, “Giving Producers a Choice and Giving Government a Choice”. I call it safety nets versus diversification. Safety nets aren't for everybody, they're not working for everybody, and we need to look at a different way.

In Saskatchewan we have 47% of the crop land in Canada, and 72% of that land is used in agricultural output of grains and oilseeds. We have to move in another direction. What Saskatchewan is facing today is this. We have 10 million acres of low-quality land that many would say probably shouldn't be farmed. We're also facing the fact that young people, the next new generation, are leaving the farm.

If you update it four years, the 1996 census says that 80% of the farmers are over the age of 40. That should be a concern to everybody in this country.

Saskatchewan today is at a standstill. We're creating about $6 billion in agriculture. We have been at the same $6 billion for the last number of years.

Producers are unable to diversify or value-add today to any extent, and the reason is because of low grain prices, low oilseeds prices, and many diversification enterprises that just haven't worked. This has exhausted our cashflows and our credit reserves, and we are unable to diversify to the extent that it's going to help the farm. Saskatchewan is at about $86 per acre of income, the lowest in all of Canada.

So the concept I want to spend time on today is a voluntary concept. I want you to think about the concept I'm going to put forward, which is this: can it work for individual farms, and should they be allowed to make that decision?

What I'm saying is every year we should take 20% of the land that a producer farms. He should be able to take it out of grain production and out of crop insurance if he wants to. There will have to be a price to this. I'll get into that in a minute. If you were allowed to take 20% of your land out of grain production and out of crop insurance, it would be a manageable cash injection into diversification--it doesn't all happen at once. This would give time for the agricultural industry to adapt to the changes in the market opportunities that are going to be out there.

The government's contribution to agriculture--federal and provincial--in Saskatchewan is about $1 billion a year. Last year it was $1.166 billion. The year before it was around $900 million, and the year before that it was about $700 million. But on average--just use this for your concept--it's $1 billion a year. On 40 million acres, that's $25 a year we're spending today. I guess I'm saying, is there a better way? Is there a better way to satisfy producers?

We need a program that doesn't distort the economic use of the land, the way, I would say, crop insurance does. We need a program that rewards environmental and economic initiatives and recognizes that diversification costs money and takes time.

And if we approach land use differently, we can be much more successful with less risk.

So what I'm saying is we need a paradigm shift in the way our governments allocate money to agricultural income support programs. The way we're doing it today doesn't work for many producers. We need to give producers a choice. We need to recognize that crop insurance and ad hoc payments force producers to grow grain for a guaranteed income, for cash advances, and to finance their inputs.

I believe we can design a program so that it's revenue neutral with the amount of money the government is now spending on safety net programs.

We have a fellow in Saskatchewan by the name of Red Williams who says we need to increase, double, the cattle and hog herds in Saskatchewan. Well, to do that we have to grow some grass.

So at $25 an acre in government support today, we're looking at two options. The first one is crop insurance, NISA, CFIP, and so on. I call that the status quo. The other way to spend that $25 is in diversification enterprises like livestock, feedlots, hay, trees, or something other than what we have today.

The risk gets higher every year as our margins get smaller, but what this would allow us to do is allow those who want to get out of the grain cycle to do so with a one-time, five-year program payment on 20% of their land base per year. So it would be $25 an acre over ten years--or I would say $50 an acre over five years, so that we could actually do something. If we do this, I think crop insurance could be funded even better as you take $10 million out of crop insurance over the next five years.

To give you an idea of what it costs to convert a section of land, 640 acres, into a livestock enterprise--because $50 an acre for five years sounds like a lot of money--to spray that alone, you're looking at $10 to $15 an acre. You're looking at between $6,000 and $9,000 just to spray it once. To seed it, you're looking at another $25 an acre, or $16,000. Your crop loss, because you won't get a crop off it the next year, will be $16,000 to $20,000.

For four miles of fence, you're looking at $12,000. For the cross fences, you're looking at $6,000. To put a dugout or a well in, you're looking at $6,000 to $25,000.

To put your cattle facilities on the land, you're looking at $10,000 to $30,000. And to put 50 cows on there, you're looking at $60,000.

So to put a section of land back into livestock production, you're probably looking at $130,000 to $150,000. Producers don't have it today. They want to diversify. They want to do something different, and they want to get out of that grain-growing cycle that forces them to stay in crop insurance. As Mr. Vanclief said, you're either in them all or you're out. I guess what I'm saying, and what a lot of producers are saying to me, is, I want out. I want out and I want to use that $25 an acre that you're spending on me today, that I'm not getting. Give it to me another way and let me go on my own. Give the guys on the light land a choice. That's what it's all about.

Thank you.

¿ (2100)

The Chair Thank you, Ron.

Larry Bonesky.

¿ (2105)

Mr. Larry Bonesky (Individual Presentation): First of all, I want to thank everybody from the standing committee for coming out and listening to the people here in western Canada, especially in Saskatchewan. Thank you so much. I sure appreciate all the points of view that everybody has talked about tonight. It's just really great. And thanks for pronouncing my name right.

As a farmer in the business of agriculture for 35 years, I've had an opportunity to experience first-hand the role that government has played in our industry. Our farm was homesteaded by my father in 1909 and we continue to farm today, together with our daughters and son-in-law. As the global economy evolves, we expect and anticipate change. We are adaptable to change and strive to make decisions based on stability.

What we expect from government on our farm, first of all, is that their job is to serve the citizens of this country. This is very simple. We need service, we need integrity, and we need wisdom in decision-making. We believe the role of government is to make the decisions today, with the wisdom to learn from the past and mindfulness to the future.

We believe the role of government is to be smarter than it has been. This would mean having the wisdom to understand the differences in the regions, looking at the strengths and opportunities of each while using existing infrastructure to build on for the future. For instance, I looked in The Western Producer on January 31, 2002, in the “land for sale” pages. Alberta was 20,200 acres, which is 11%. Manitoba was 36,800 acres. Saskatchewan had a staggering 141,960 acres for sale, and this is all from the total acres. In this province we have had an exodus of over 15,000 farmers in the last three years.

I guess I have to miss some of my presentation here. It will get too long.

I guess what I want to say is think about the assets of our country: our people, our natural resources, water. We have a vast land base and the ability to produce safe food in large quantities. As the global population continues to grow, the vast amount of land that is in Canada will only increase in value.

In summary, I would like to say that government must decide whether it plans to provide supportive service to the agriculture and agrifood sector. The government needs to be honest with its farmers about this decision.

If the government chooses to support this sector in this province, these would be my suggestions. Respect the business of agriculture. Strive to create a level playing field with other countries. Create simple, cost-effective safety net programs that work. Find ways to support the use of existing NISA accounts for local agricultural initiatives. Evaluate where the money is spent in delivering every program. How much is caught in administration? How much benefits the producer? It is not the role of agriculture to create jobs for bureaucrats. Use existing programs where possible; adapt crop insurance to 100%. Possibly use a target price for our products. Adapt a program for young farmers so that they have a chance to get started. Learn from other business sectors in our Canadian economy. It is the small business that is the engine of our economy.

As a small number of large companies position themselves to control the global food supply, we are risking global sustainability for our people. We need to honour and protect our land, which provides us with healthy food, water, and natural resources. We can develop a diversified industry if you are mindful of your actions. Instead of allowing agriculture to deteriorate, causing the same cycle we've seen in other business sectors, let's learn from these lessons to build a strong economy for our future and agriculture in our province.

Thank you.

¿ (2110)

The Chair: Thank you, Larry.

Steve Erikson.

Mr. Stephen Erickson (General Manager, Prime Pro Ventures Inc.): Mr. Chairman, I'm pleased to be able to participate in this program tonight. I am Steve Erickson, general manager of Prime Pro Ventures Incorporated in Frontier.

You may have heard a lot of talking about how hard things are down on the farm. In many areas this may be true. In our area, the very southwest area of Saskatchewan, our company, Prime Pro Ventures Inc., and a group of farmers have taken a different outlook on the future of agriculture.

It started in 1992 when our area was hit hard by frost in the early fall. Added to that was a multitude of marketing problems associated with attempting to market their cereal crops with the Canadian Wheat Board. Morale in the farming community was at an all-time low. A local group of progressive farmers decided we needed to do something in the area where they had more control over their crop management and marketing decisions. Many options were researched and considered that would help to ensure the future of agriculture in the southwest. Consequently, in 1996, Prime Pro Ventures was formed. Many farmers had made the decision to diversify into the chickpea market--a crop that was not controlled by the Canadian Wheat Board. A short time later, a processing plant and marketing division were added to the company.

The enjoyment of farming is back, as farmers face the challenge of growing and marketing crops new to the area. This has resulted in better cashflow, more prudent selling decisions, and consequently, better control of their crop income plans and marketing choices. Spinoffs from this endeavour have resulted in more employment opportunities for young people within the community as well as from surrounding areas and increased revenue for local businesses, such as grocery stores, hotels, restaurants, and gas stations. Local farmers accomplished all this without assistance from the government.

Support from the provincial government is needed in such things as highways, health care, and education. Highways are vital to all people of the province. They are necessary not only for farmers to move their commodities to market, but also to allow goods and services to be delivered back to rural people. This lifeline needs to be upgraded and properly maintained. An acceptable level of education and health care is necessary in rural areas to allow for active and viable communities. As Prime Pro Ventures expands and more people are needed to fill the employment requirement, schools and hospitals are of prime importance to young families who consider moving into our area. Rather than handouts for farm programs, our federal government should consider payments for infrastructure to our province that would benefit not only farmers but all of Saskatchewan's citizens.

In agriculture today, research is a key component in the plan for us to stay ahead of other countries in the quest for providing high-quality food products to the importing nations. In the area of pulses, we are lacking in the amount of pathologists to work on new varieties that offer enhanced disease resistance and fewer days to maturity. To be the best exporters of quality pulse products, it is essential to be given the best material to work with. The Canadian pulse industry has grown approximately 3,000% in the last 20 years. In this same timeframe, investment in pulse research has remained steady and constant.

To keep up with this growing industry, continued and increased funding for local research facilities, such as the Semi-Arid Prairie Agricultural Research Centre here in Swift Current and the College of Agriculture at the University of Saskatchewan, is very important because of their location and proximity to the large number of acres where the crops are developed. In the 2000 crop year, approximately 40,000 acres of chickpeas were grown locally. In the 2001 crop year, that number increased to approximately 70,000 acres. Because of the fast growth in the number of acres of chickpeas grown in our area, disease issues became a problem. Not only is more research needed to provide growers with better cultivars that are disease-resistant, but also needed is government help to provide us with the proper chemicals to help control these diseases when they occur. Because pulses are relatively small acres on the world scale, it is difficult to get research done for the use of new chemicals on pulse crops. With the federal government cooperating with groups like Pulse Canada, chemical companies, and researchers, this unified approach would ensure a higher level of success in getting products registered.

Some problems within the PMRA system for minor-use registration need to be overcome. Working with research information and researchers from the United States and Europe would go a long way to helping get some of the minor-use chemical products to the farmers sooner. Minor-use registrations may have to be considered from a grower need for the product rather than from a sheer risk and profit evaluation of the chemical company.

Transportation of our products to ports for export, whether it be to the west coast or to Montreal, has often been interrupted by trade relation disputes and work stoppages. These problems are totally out of the control of the farmer, but they reflect directly on Canada's ability to supply buyers with products when they need them.

Too often Prime Pro Ventures has been held hostage by a strike at one of the ports, while our customers accuse us of not being able to meet contractual obligations on the delivery of goods. These delays give cause for customers to renegotiate prices. This results in a cost to the exporting company, which ultimately results in a loss to the primary producer.

To summarize, the federal government's role in agriculture today should not be simply to provide handouts to farmers, but rather to provide resources in the areas of infrastructure, research, chemical registration, and labour.

Thank you very much.

¿ (2115)

The Chair: Thank you very much, Steve.

Next is Grant Payant.

Mr. Grant Payant (Individual Presentation): Thank you, Mr. Chairman and the rest of the committee, for coming out to sunny Saskatchewan. I appreciate it.

I'll keep this fairly brief. I had 35 different points that I was going to mention. Most of them have been touched on. There's a few that I'll touch on just a bit.

First of all, I'm a realist. I'm a third-generation farmer. My wife and I have been in the Assiniboia area all that time and we've had a good life and not a bad business. Once in a while you pay us income tax. It's not quite as ugly as a lot of people make it look. It's not that bad a deal, depending on how you approach it.

Being a realist, here's what I perceive. No offence, but I don't know the odds of getting a whole lot more money federally or provincially. We can see deficit budgets coming. If that's the case, and assuming the money isn't there, if we're going to offset government support, there should be a trade-off in the form of less regulation, by which I mean, number one, the Canadian Wheat Board, which I support.

There are times when I would like to be able to sell my product. One example is durum wheat, our main crop. Last year I contracted 100% of my production. The Wheat Board took 80%. This year I've contracted all of this crop plus the 20% from the year before. The Wheat Board is going to take 80%. What do I do with this 20% of my production? That's my profit. That's what I use to pay off my line of credit.

I get hauled across the line, spend some time in jail, and get fined $6 a tonne, I believe it is, if I tell them I had more than I really did. If I can't deliver it, I get fined also. They don't have to take the 100%, but we have to guarantee our delivery. It's not fair. It's common-sense stuff here. I'd like to have the option that for anything over, the Wheat Board can't take 100%, and possibly we can get a zero buyback on it and do as we please.

I think that goes for most other regulations. Ideally, I'd like to see a very effective crop insurance that we all pay into. In the event of a year like we had last year and the year we're possibly facing this year, we'd have a mechanism that would help stabilize agriculture. I think it's there, rather than funding a lot of these ad hoc programs, which don't seem to be doing the trick.

I've had 27 years of experience harvesting in the U.S., from Texas to northern Saskatchewan. I've seen what subsidies can do to a culture and a community. Mr. Johnson addressed the CRP program. It's true that it has killed a lot of small communities by putting it into grass. I watched the farm subsidies go into land costs, inputs, and machinery. I don't think those people are in a whole lot better shape than we are.

We bit the bullet. Probably 50% of our equity was eroded after we lost the Crow, which we accepted. But that was an offset.

Basically what I'm asking for now is that if the government is going to back away from agriculture, maybe there's something else we should get in return, a little more freedom.

Other than that, there's the matter, which was only touched on once, of encouraging people to come back to the farm.

That's one of the points I had. I have two sons. One is taking his ag tech degree in Lethbridge; he's out there welding now. The second one's going next year to a school out there also. Hopefully they'll both come back to farm, but something I'd like to see--and it's common sense again--is to ensure young people are indeed returning to viable farms. Don't send them back to a farm that's not going to make it; you're not doing them a favour.

Transfer of ownership is largely the responsibility of the ones stepping down--vis-à-vis agreements of sale, long-term lease options, and that sort of thing. Large debt is not the best way to start out. Parental agreements and options to buy may be better. A sound management base must include, first, qualifications to enter the industry. Large amounts of land will be transferred over the next few years, since baby boomers will play out and step away from this thing. Hopefully there's someone there to take it.

We should stop dwelling on the negative aspects of agriculture. I think we've all had a gut full of this. We appreciate what you guys are doing. I think it's got to be done. As for the media, I wish they'd pick up on some of the more positive parts of it. Let's not scare these kids out of the province as we've been doing.

Thank you.

¿ (2120)

The Chair: Thank you, Grant.

Linda, I'll go to you next. I'm not sure I even have your last name written properly; is it Trylten?

Ms. Linda Trytten (Individual Presentation): Actually, it's “Trytten”.

The Chair: Thank you.

Ms. Linda Trytten: I hadn't planned on giving a presentation, but there are a few points I would like to bring up and some things I need to say.

I'm a fourth-generation farmer, and the land will soon be in our family 100 years--I think it's in 2011. That's quite a long time for farmland to be in a family. We consider ourselves good stewards of the land and we hope some day one or more of our four children will carry on.

There are a number of concerns, I think. When I do books every year--and this is the time of the year when you look at those things--I see that everybody got paid fairly well. For our efficiencies and our effectiveness, we have made a lot of people quite a bit of money.

But at the end of the day, when you look to see what your family made and the hours they put in, it isn't really encouraging. I would like to see that change. I don't know exactly how it's going to come about, but I certainly hope that in time it does change.

I have a lot of concerns for the way things are going for rural communities right now. I look at what we've done in order to survive, and there are some things we do now that probably we would not be doing if it weren't for the fact that we have to look at that bottom line pretty closely.

Last year was the first year we joined Farmers of North America and decided that we had to have a better deal with our chemicals. We'd always supported the local people, but as the bottom line became even closer, we realized we could no longer afford to pay the premiums to the smaller dealers in town. We had to go about getting a better deal through numbers. So we did that; it worked well.

In the meantime, maybe the guys who were farming a township could negotiate a better deal with some of the dealers, but those of us who weren't farming quite that much were having to pay a pretty heavy bill for some of these chemicals and fertilizers and what not.

We did what we had to do, but I'm not saying it was the best thing for our community. That's just one example of a lot of things that are going on. I think one thing that's going to really impact on a lot of rural communities is that a lot of these steps we've had to take to survive as farmers are going to impact not only on the farm family situation but on the rural communities.

And I think it's going to be quite obvious. In the dairy sector.... Even buying milk, if you're buying milk for a large family--there are people who drive quite a distance to pick up their groceries, because the smaller communities have to pay a lot of freight; therefore, farm families are saying, “Well, if I have to go to town to take my wheat or take products, I might as well pick up my groceries somewhere else, because I can save some dollars.”

We wouldn't have considered it. We were pretty loyal to our communities at one time. The loyalty is eroding as we have to make tough decisions now to stay viable.

These are some of the things that I think people forget when you're talking about becoming more efficient. We have to become more effective. We have to do this, that, and the next thing. Who are we really doing this for?

It hasn't really improved our bottom line. We grow more, do it better, and have fewer weeds. Who gets paid in the end?

You look at it at the end of the year. You figure it all out. We paid all our bills last year. We didn't qualify for AIDA. Now it's the new one, CFIP. The accountant was paid every year for the last how many years, because he has taken a look to see if we'll eventually get paid.

We have more cows. We have more work. We have a son who works ten hours a day off the farm, as well as trying to help us farm. We opened a shop. We now do semi-truck and tractor inspections, plus diesel mechanics. We also have a custom farming operation, plus we rent land and farm our own land. We are into lentils, peas, and chickpeas. We use all the chemicals you need to make all the stuff grow. At the end of the day, you're still looking at problems trying to make a decent living.

Are we doing something wrong? Some people say the answer is we have to get bigger. How big do you have to get in the end to survive? Have we ever looked at what we really want our rural communities to look like?

A fellow told me, over in Australia, they have probably 5,000-acre units and a management strategy. They have a manager come in, and a number of people who work and do different things for them. It works better and is more efficient.

Is that what we want to look at? Are we looking at maybe having McCain eventually take over because they can produce it cheaper? In the end they won't, They're going to run it as a business. We should be running it as a business too. Unfortunately, we haven't been given the opportunity. One side we run as a business. On the other side we have to take what we get. Very few businesses will survive that way.

This is a good example. Recently, when NFA were looking at trying to get glyphosate, we were asked to pay the bill, whatever it is. They're trying to get a glyphosate in from Australia. They're having a terrible time doing it because they have a lot of opposition. You can guess where it comes from.

If we're going to have to play the game, we're going to have to have some of the concessions that go along with it. It's not all one way. I wonder, at the end of the day, what we're really going to have for rural communities. I'm not so sure we've looked at the big picture down the line.

I sit at this table. I watch and listen to all of the views and concerns. Everyone's doing the best they can to survive under the circumstances. I'm not so sure there's a single question out there. The bottom line is there has to be enough money in producing something to make it worthwhile. Either make sure there's enough money or maybe we should all be doing something else.

Thank you.

¿ (2125)

The Chair: Thank you, Linda.

We'll go to Charles Kieling.

Mr. Charles Kieling (Individual Presentation): Thank you, Mr. Chairman, and thanks to the committee.

I have a three-page submission that I will ask to file with the committee. I'll briefly summarize what's in the submission.

What can government do to solve the field crop agricultural crisis? Government can start to treat western field crop producers equally with other sectors of the economy and society, both under law and according to ethical principles of equity and fairness in a civilized country.

The people of Canada, by their governments, are, in effect, seizing their food from field crop producers at far less than the cost of production for security of domestic supply.

I would ask the committee to keep the expression in mind, “security of domestic supply”. No other civilized or developed country asks their producers to provide them with security of domestic supply at less than the cost of production. Production costs are saddled to their backs by their own country.

It is no wonder that Europeans laugh in Canadians' faces when Canadians ask them to no longer pay their producers a compensation for providing them with the security of domestic supply. You are asking them to steal their food from their producers at as much of a low cost of production as Canadians are doing with their producers. They have known famine. They appreciate their food producers and feel gratitude to them, at least, if not to God. Canadians show neither gratitude to God nor man by seizing their food from their producers at far less than the cost of production. Cost of production--remember that, I respectfully ask you.

Furthermore, you slander us as producers by saying we are basket cases because we can't survive. We don't need help, or assistance, or a bailout, or a subsidy. This is slander. To call compensation payment a subsidy is a total slander. It means something for nothing. I wish people would look up the definition of those words in a dictionary. We need compensation for providing Canadians with security of domestic supply.

Unless you change your nomenclature and call government payments to producers compensation for security of domestic supply, you will continue to slander us by calling these payments subsidies, something for nothing, and convey to urban Canadians that we are incompetent beggars who are whining for something for nothing, which is what a subsidy means. The truth is that we are subsidizing Canadian consumers to the extent of billions of dollars a year in our commodities, providing them with security of domestic supply far below the cost of production. Pay us cost of production for providing security of domestic supply in Canada.

I'm submitting two documents along with a three-page brief to this committee: one, field crop production costs, a publication by Saskatchewan Agriculture and Food; two, a Canada agrifood biweekly publication, the page entitled “Canada: Supply and Disposition for Grains and Oilseeds”.

Besides providing Canadians with security of domestic supply at far less than cost of production, field crop commodity producers are providing billions of dollars in the foreign exchange from international markets; tens of billions of dollars in GDP; hundreds of thousands of jobs generated; and billions of dollars of tax revenue for governments, provincial and federal.

The solution is to make acreage payments to commodity producers in the growing areas of the commodities capped to perhaps as low as one-half section of land, irrespective of the particular commodity produced so as not to skew production in favour of a commodity and thereby create a monoculture and depopulation of the rural areas. This capped acreage payment would prevent soaring land prices, provide for younger producers, and especially promote diversification through younger producers who receive these capped compensation payments. Diversification into livestock, in combination with seeding submarginal land to grass, would assist diversification.

This question of nomenclature is so crucial that we're being constantly slandered, and you're being hijacked in language by the Liberal government, which has totally sidelined the word “compensation”. That used to be a word that was used in compensatory freight rates. Now in fact we're being used as beasts of burden to haul the food to central Canada. At least under the Crow benefit payments we were paid the freight costs of providing food to central Canada, but now we're less than animals; we have to carry the food to them at less than half the cost of production. That message is not being conveyed to urban Canadians. I'm sure they would understand it if they knew the obscenity of what is being perpetrated by government.

In the Crow's Nest Pass Act, the subtitle of that act is a subsidy paid to a railway. The federal government of the day, in 1897, paid $10,000 a mile to CPR to build a railway from Lethbridge to Nelson, B.C. in the British Columbia interior to open up that land for the mineral and lumber wealth that existed there. They couldn't expect the CPR to build that railway because the return on that would be too far away when they worked on annual budgets. But the government, in a subsidy payment, deemed it of benefit to the country to make the subsidy payment, something for nothing, to a company to benefit the entire country over years. That's what a subsidy is. When I ask for compensation, it's not a subsidy.

Lastly, some of these larger field crop producers wanting total absence of government in agriculture would totally depopulate rural Saskatchewan, and western Canada would become simply a wasteland, such as has been witnessed in the set-asides in the United States.

They remind me somewhat of the elephant declaring, as he danced among the mice, “Everyone for himself”. That's what we would have. That's what's being proposed.

I thank the committee, and I would like to submit my three-page submission to the committee.

[Applause]

¿ (2130)

The Chair: Thank you, and we welcome it.

Our final presenter in this round is Cliff Murch.

¿ (2135)

Mr. Cliff Murch (Individual Presentation): Thank you, Mr. Chairman and members of your committee.

I also want to express my appreciation for the fact that you are here to listen to some of our concerns and for us to have some chance to talk with you.

Like Linda, I have not come prepared to give a talk, but listening to what has been said tonight, I think we do want to make a little comment.

About two years ago we were very busy working on a history book in our community. We farm at the little village of Lancer. In writing that history book, amazingly--and most of you know this story--we came across many stories of the homesteaders and how they settled this country at the beginning of the last century, at the request of this nation, to help build it up, to settle it, to grow crops. As we come along and enter this century, 100 years later, we are almost on the verge of destroying what was built up.

I am sure there is no government in Canada that wants to have the record of being a part of moving people out of farming, because basically that's what we seem to be faced with right now.

You have heard some diversity of opinions here tonight, and some of it comes from the different ages and periods of time in which we were farming.

I grew up in the dirty thirties, as most of you have realized. I experienced, along with my folks, the difficulties and problems we had in the marketing of grain. When I started farming, or decided to farm under the Veterans' Land Act after the war, the one reason I decided to farm was the fact that we had security and the aid of the Canadian Wheat Board.

That shows you a different generation from some you've been hearing from tonight. I guess one of the reasons for this is that we've run into problems and we'd like to attack somebody.

I don't want to be very long, but I do want to go back to something I heard here tonight, and we've heard it before.

Now, we know we need a program. There is no doubt in the world about that. The reason that some here tonight have been doing other things, like going into manufacturing and value-added production and so forth, is because they're looking for a way to offset the loss of farm income. In the end, this is a very admirable thing. It does show the stamina and perseverance of the people of Saskatchewan who settled on these farms and are still here. But is it going to help maintain agricultural production, to provide the food for a hungry world, as we were told we must do? I don't think so.

When we come to design the program--and it's been mentioned here; it's a very good statement--let's first establish the goal. Then we can start working on the mechanisms by which to accomplish that goal.

I know from my experience on a farm, if I want to do some improvements--and most of you have seen this--I must have some money to do it. I don't know how we are going to reach.... I don't know if we've set the goal yet, because I'm not sure whether it is the aim of this nation to maintain as many farms as possible in this country, or is the aim to eliminate a large number of farmers? I think the number one goal is to determine in which direction we want to go.

Having determined that, and I hope we are going to say we want to maintain as many as we can--other countries are doing it. We are not getting subsidies, and that has been very adequately covered by Charles. But we do need help and we need more money. We're being told there is only so much money. How are we going to design a better program without more money?

War broke out after the dirty thirties, a time when there was no money to give any more aid to this nation and farmers. War broke out at the end of the dirty thirties and we found the money. We did not say to the military at that time, “Look, here is a pot of money, there is no more, you go out and win that war.” The money was related to the need.

Today if we want a program, that money must be related, to as great an extent as can be, to the need. It is just not good enough to say “This is a pot of money, there is no more”.

I'd like to ask a question, but it wouldn't be fair of me to ask it of the members of Parliament here. I would like to suggest to you that when you get back to the House of Commons you ask, why is there not more money for agriculture?

Thank you very much.

¿ (2140)

The Chair: Thank you, Mr. Murch.

Now we'll start our rounds of questions.

David, are you going to be first?

Mr. David Anderson: I'm not going to ask a question. I'm just going to make a quick statement. I want to thank the presenters who have come out tonight. It takes a lot of courage to get up, and I appreciate it.

I want to also thank the people who came out and sat patiently and listened. I know that some of these things will be talked about tomorrow in the coffee shops, and we know that you have good ideas as well.

We've heard a lot of ideas tonight, a lot of suggestions, and a lot of concerns and triumphs. I'm always proud to say that I'm from this area. I was proud this afternoon when we got off at the airport at Swift Current to have these people come to our area with me to represent agriculture. Tonight I've also been proud of the way people have made their presentations.

You've been clear, you've had good suggestions, and you've laid things out. I just want to thank you and leave it at that.

The Chair: Thank you, David.

Dick.

Mr. Dick Proctor: I think David started a good trend here. Perhaps in the same vein, I will just say that I think it's incumbent upon us to listen very carefully, as I think we've done this evening. We're going to continue in Alberta and British Columbia, and then in March we're going to be in Ontario, Quebec, and Atlantic Canada.

First of all, there's work involved in listening to the good suggestions that are being made here, but more importantly, I think it's incumbent upon us to write a first-rate report as quickly as possible, and then to make sure we do whatever we can do as a committee, working together, to impress upon the Minister of Agriculture and the Government of Canada the need to take some action now.

Many of you have seen these productions before. I know that some of us were on this agriculture committee in 1999 here in western Canada, and I would think that few of you have seen any positive results from that. It's frustrating for us, as it's frustrating for you. I think we can't afford to have a repetition of that. I very much appreciate you coming out tonight, as well as the other folks who were here to listen.

The Chair: Thank you, Dick.

Rick.

Mr. Rick Borotsik: I have just one question, if I may, and then perhaps a 30-second statement. The question is for Irene.

You talked about the cheap food policy we have. Each one of us, as Canadians, when we walk into a grocery store, I don't think we really realize just how fortunate we are to have the choice we have, to have the availability we have, and certainly to have the price we have.

It's been suggested many times that it would be our desire and wish to have a lot of the dollars that are perhaps going through that checkout counter go to the farm gate. My question, Irene, to you is, how do we set policy to be able to get dollars from that checkout counter to the farm gate? Is it done at the checkout counter or is it done through some sort of a compensation package, like Charles is suggesting right now? Do you have any comments for me on that one? We would like to be able to get some of those dollars to the farm gate.

Ms. Irene Ahner: I'm not sure if I have any direct suggestions for you. I think we need to have some way to get across to the general population of this country that back when some of us were small we were still spending 30% of our disposable income on groceries. Canadians spend 10% of their disposable income on groceries, which is less than the U.S.A., and still we hear people whining about how much groceries cost.

Yes, we need compensating for what we are producing that is under the cost of production. But somewhere along the line, somebody has to look into this fact of how in the world does the price of beef rise from what we get on the hoof to what you have to pay for it in the store. There are an awful lot of steps in the middle there that somebody had better look at.

¿ (2145)

Mr. Rick Borotsik: Thank you.

I have a couple of comments. First of all, there was a survey done just recently that indicated that the majority of Canadians right now--in fact I think the number was 73% of Canadians in the survey--wished to have society in general support the farmer and the small farm. That's very positive, by the way. It's not just the rural community that appreciates what's happening on the farm, but also the urban Canadian too, which I think is very important. We have to make sure the urban Canadian appreciates what it is you do.

I would also simply like to say that I too would like to thank everybody for being here. It has been a fairly long day. So if we look a little tired, it's probably because we were up around 5:30 this morning. We do appreciate all of your comments and your being here. I do know just how important agriculture is to my community, and I just want you to know that we do recognize just how important agriculture is to the country. All we have to do now is try to bring the two together and blend them to make sure we can try to keep you on the farm as best we can and continue that support for our country.

So thanks for being here. I appreciate it.

By the way, Cliff, we've asked the question I don't know how many times: why isn't there more money for agriculture? I can promise you we'll ask the question when we go back again. Okay, Cliff? I can promise you that.

The Chair: Thank you, Rick.

Paul, do you have a comment?

Mr. Paul Steckle: It's not often that I get the last word.

Anyhow, I do want to say to all of you who have come out this evening and to those who have stayed to the end, when you hear the same thing, and we do this day after day after day, obviously it's pretty difficult to establish new lines of questioning. But you've given us a lot of good food for thought this evening. You've raised before the committee this evening a lot of good issues. It's probably one of the most productive sessions we have had, and I want to compliment you for the efforts you've put into presenting this kind of material this evening.

Mr. Murch, you remind me of my father, because he was also that generation of farmer. It reminded me very much of that. And others this evening so eloquently put forward their concerns. We take it very seriously, and we will continue our work, and hopefully we can put forward some sort of an initiative that will in the long term resolve some of these issues.

Thank you very much for coming out.

The Chair: Thank you, Paul, and all the people who presented tonight.

I think everyone has reflected on a very difficult situation. It seems that especially in grains and oilseeds, as Linda has said, someone has told us that the more we produce, the better off we're going to be. But the old law of supply and demand, which sets price, runs upriver against that general philosophy.

The other point I would make that I haven't heard a great deal about tonight--a little bit probably in terms of your chemical companies--is it seems that various other players in this overall cost of production business are able to justify their increases on the basis of what else is available, with tractors, with spare parts for equipment, with all of the inputs you have. This is one of the things that some of the bureaucrats say to us. If they put more money into the system, other people simply gobble it up.

When I started farming a few years back--in fact more years probably than I want to remember--you could buy a fairly good tractor for about $100 of horsepower. The last one I bought was roughly $1,000 of horsepower. Did grain prices and these other prices escalate ten times over the years?

I don't know how, as a government and a community, in terms of a sector, we can go back to some of these input costs and say, “You're just putting yourselves out of our price range”. If you break something on your tractor today, quite often the local supplier doesn't even have it. He has it somewhere in his inventory up the line, through his computer, and it gets there about two days later.

So the world is changing, but the most frustrating part, in terms of our agricultural community, is we have no control over those changes. People are changing it around us, and we're simply being laid upon with whatever others are saying input is costing. So it is difficult.

We'll try to write a good report for you, on behalf of the people here and across Canada. Hopefully, Suzanne will make it available to the presenters and others. We'll try to get enough copies printed and mail them out to you when the report's ready--in June, or whenever we get it to Parliament.

Tonight we want to thank you very much for coming, and with that we'll declare our meeting closed. Tomorrow we'll appear in Alberta for two meetings, in Vulcan and Grande Prairie.

So thank you all and have a good night. We've enjoyed the meeting.