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37th PARLIAMENT, 1st SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Thursday, February 21, 2002

1625

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

1635

Mr. Terry Klokeid (Individual Presentation)

1640

The Chair

Mr. R.A. Gatzke (Individual Presentation)

The Chair

1645

Mr. Schmidt

The Chair

Mr. Howard Hilstrom (Selkirk--Interlake, CA)

1650

Mr. Werner Schmidt

The Chair

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

The Chair

Mr. Dick Proctor (Palliser, NDP)

The Chair

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

The Chair

Mr. Murray Calder (Dufferin--Peel--Wellington--Grey, Lib.)

The Chair

Mr. Paul Steckle (Huron--Bruce, Lib.)

The Chair

1655

Mr. Greg Norton (President, Okanagan-Kootenay Cherry Growers Association)

1700

The Chair

Mr. R.A. Gatzke

1705

The Chair

1710

Mr. Russell Husch (Representative, B.C. Agriculture Council)

1715

The Chair

Ms. Anna Kirbyson (Project Director, AgraRoots Network)

1720

1725

The Chair

Mr. Tony Stewart (Chairman, British Columbia Wine Institute)

1730

The Chair

Mr. Gordie Ivans (Individual Presentation)

The Chair

Mr. James Calissi (Executive Member, B.C. Fruit Growers' Association)

1735

Mr. Joe Sardinha (Executive Member, B. C. Fruit Growers' Association)

1740

The Chair

Mr. Rob Holitzki (Director, B.C. Fruit Packers)

The Chair

Mr. Rob Holitzki

The Chair

Mr. Rob Holitzki

1745

Mr. Richard King (General Manager, B.C. Fruit Packers)

1750

The Chair

Mr. Gerry Shaw (President, B.C. Tree Fruits Ltd.)

The Chair

Mr. Greg Gauthier (General Manager, B. C. Tree Fruits Ltd.)

1755

The Chair

Mr. Gordie Ivans

1800

The Chair

Mr. Alan Clarke (Apple Valley Country Gardens)

The Chair

Mr. Schmidt

Mr. Hilstrom

1805

Mr. Russell Husch

The Chair

Mr. James Calissi

1810

The Chair

Mr. Howard Hilstrom

Mr. Alan Clarke

The Chair

Mr. Desrochers

1815

Mr. Russell Husch

Mr. Desrochers

Mr. Russell Husch

Mr. Desrochers

The Chair

Mr. Borotsik

Mr. Richard King

Mr. Proctor

1820

Mr. Greg Gauthier

Mr. Proctor

Mr. Greg Gauthier

Mr. Proctor

Mr. Greg Norton

Mr. Proctor

The Chair

Mr. Murray Calder

Mr. Greg Norton

1825

Mr. Murray Calder

The Chair

Mr. Rick Borotsik

Mr. Greg Norton

Mr. Rick Borotsik

Mr. Greg Norton

1830

Mr. Borotsik

Mr. Richard King

Mr. Borotsik

Mr. Greg Norton

Mr. Borotsik

Mr. Tony Stewart

Mr. Borotsik

Mr. Tony Stewart

Mr. Borotsik

Mr. Russell Husch

The Chair

Mr. Steckle

Mr. Greg Norton

1835

Mr. Steckle

The Chair

Mr. Gordie Ivans

Mr. Steckle

The Chair

Mr. Greg Norton

The Chair

Mr. Rob Holitzki

The Chair

1840

Mr. Rob Holitzki

The Chair

1850

Ms. Lisa McIntosh (Individual Presentation)

1855

The Chair

Ms. Lisa McIntosh

The Chair

Ms. Lisa McIntosh

The Chair

Ms. Lisa McIntosh

The Chair

Ms. Lisa McIntosh

The Chair

Ms. Lisa McIntosh

The Chair

Ms. Lisa McIntosh

The Chair

Ms. Lisa McIntosh

1900

The Chair

Mr. Howard Hilstrom

Ms. Lisa McIntosh

Mr. Borotsik

Ms. Lisa McIntosh

Mr. Borotsik

Ms. Lisa McIntosh

Mr. Borotsik

Ms. Lisa McIntosh

The Chair

Ms. Rochelle Eisen (Individual Presentation)

1905

The Chair

Ms. Rochelle Eisen

1910

The Chair

Mr. Peter Johnston (Individual Presentation)

1915

The Chair

Mr. Peter Johnston

The Chair

Mr. Peter Johnston

The Chair

Mr. Peter Johnston

The Chair

Mr. Peter Johnston

The Chair

Mr. Peter Johnston

The Chair

Mr. Peter Johnston

The Chair

1920

Mr. Howard Hilstrom

Mr. Peter Johnston

Mr. Howard Hilstrom

Mr. Peter Johnston

Mr. Howard Hilstrom

Mr. Peter Johnston

Mr. Howard Hilstrom

Ms. Rochelle Eisen

Mr. Howard Hilstrom

Ms. Rochelle Eisen

Mr. Howard Hilstrom

Ms. Rochelle Eisen

Mr. Howard Hilstrom

Ms. Rochelle Eisen

1925

Mr. Schmidt

Ms. Rochelle Eisen

Mr. Johnston

The Chair

Mr. Proctor

Ms. Rochelle Eisen

Mr. Proctor

Ms. Rochelle Eisen

Mr. Proctor

Ms. Rochelle Eisen

Mr. Proctor

Ms. Rochelle Eisen

The Chair

Mr. Murray Calder

Ms. Rochelle Eisen

1935

Mr. Murray Calder

Ms. Rochelle Eisen

Mr. Murray Calder

The Chair

Mr. Schmidt

The Chair

CANADA

Standing Committee on Agriculture and Agri-Food

NUMBER 050

1st SESSION

37th PARLIAMENT

EVIDENCE

Thursday, February 21, 2002

[Recorded by Electronic Apparatus]

º (1625)

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Good afternoon, everyone. I'm going to do something a little unusual with this sort of meeting, because we have one gentleman who has to be back to catch a plane in about 15 minutes. We'll do the introductions after he has an opportunity to present, if everyone would agree, and I'll start the meeting with the usual opening.

Our federal committee from the House of Commons on agriculture and agrifood is here this afternoon in Kelowna pursuant to Standing Order 108(2), conducting a study on the future role of the government in agriculture.

Mr. Terry Klokeid, I guess, represents the B.C. Fruit Growers' Association. Is that right? That's what they wrote in here, but whoever you do represent, tell us, and let's get on. We'll give you about five to seven minutes, and then some may have a few questions.

º (1635)

Mr. Terry Klokeid (Individual Presentation): Thank you. My name is Terry Klokeid. I live on Salt Spring Island, and I grow vegetables for seed. I grow and sell the seed.

The quality of the food we eat is determined primarily by the genetic makeup of the seeds used to grow it. In other words, the seeds have a potential quality before the growers do anything to them. The vegetable seed supply is, therefore, vitally important for our future. In particular, you can't grow productive, healthy plants from seed that isn't adapted to your climate and other local conditions. So the only place on the planet where the necessary research and trials can take place for vegetable varieties adapted to the conditions of Canada is right here in this country. I would ask government to play a long-term role in supporting the maintenance of the seed supply for vegetables adapted to the conditions of this country. I have three general topics.

I operate a small farm on Salt Spring Island growing vegetable seed, and I know of about half a dozen more operations within the immediate area, another half dozen on Vancouver Island, and perhaps as many again across the country. These operations range from strictly part-time to a number that are full-time operations supporting one person or a family or several people. However, there isn't really information about the seed industry available. The census, for example, does not collect information on seed production, but it should. That is my first recommendation: please encourage the collection of information about the seed industry in this country, as it does exist. Tomorrow in Vancouver a group of local seed growers are getting together to possibly found an organization of seed growers within this province, which will be a little more evidence that the industry exists, I guess.

I'm distinguishing between them and the seed importers. Most vegetable seed in this country is imported. I have no problem with that, as it may be cost-efficient to grow most of the seed in other parts of the world, but my concern is that we maintain a supply of seed for vegetable varieties adapted to the climates and other conditions of the regions of Canada. So my second point is that there be support for research in identifying those varieties. The only way to determine the suitability is through research and trials right here, province by province, region by region. Seed-importing companies and small-scale seed growers such as myself are already carrying out research and trials, and we would look to government to support us in this. This is a long-term concern. With the young vegetable I'm growing seed for, my customers report a growing consumer demand, and I'd like to be able to offer the best varieties I can to my customers, which means carrying out research. I'd like to see support for that research I have to do; I can't do it alone. It would call for, I think, a partnership or collaboration between government, universities, the seed-growing companies, and non-profit organizations, such as Seeds of Diversity, in carrying out this research.

Third, I would like to recommend what I'm calling the founding of a stewardship program for the maintenance of regionally adapted vegetable seed, beyond the research, maintaining a seed bank of locally adapted vegetable seed. Plant Gene Resources of Canada does have a seed bank, but I believe they're relying increasingly on volunteers to maintain that seed bank, such as Seeds of Diversity Canada, the non-profit organization, and I myself have participated in their tomato seed growout. But I'd like to distinguish for you levels of plants. I distinguish four levels in regard to the complexity of seed saving, and in my written brief there's an appendix that goes into this in some detail.

What I call level 1 vegetables are technically the annual inbreeders, such as tomatoes and lettuce. These are fairly easy to save seed from to maintain a variety. Volunteers such as Seeds of Diversity can maintain these seeds. The minimum number you might need is only 10 to 100 plants to maintain such a variety, but when we look at level 2 vegetable varieties, outbreeding annuals, level 3, outbreeding biennials, and level 4, clones and tubers, such as potatoes and sunroots, these are much more challenging. A level 2 plant variety cannot be maintained with 10 to 100 plants, you need at least 1,000. This is what current research is showing as a minimum number of cross-breeding plants to maintain a single variety. This is beyond the level of a volunteer organization like Seeds of Diversity, which Plant Gene Resources of Canada is currently relying on.

So I would like to call for a stewardship program, a collaborative effort of government, seed companies, universities to support growers such as myself in carrying out this larger-scale maintenance of those seeds. My vision is that these locally adapted varieties would be maintained in this way, and growers such as myself would be free to sell those seeds in the market, whether or not they are grown out in quantity. Whether or not that takes place in Canada or elsewhere, where it's more cost-effective, is not an issue for me, but the varieties must be maintained in our country. No other country can maintain that basic core of seed for us.

So those are my three recommendations. Please support the maintenance of information about the seed industry, please support better research, and please support a seed stewardship program.

Thank you.

º (1640)

The Chair: Thank you, Terry.

I've just been told too that Mr. Gatzke has to catch a plane too.

Mr. R.A. Gatzke (Individual Presentation): I'm catching a plane out around 5 o'clock. I would like to hear some of the proceedings, if possible.

The Chair: Okay, sure.

Terry, I know you will have to leave, and probably there are members who would like to ask questions on what you presented, but I must first say this.

Our committee is travelling across Canada to all ten provinces. We have already visited Manitoba, Saskatchewan, and Alberta, and this afternoon and tonight we're here in Kelowna and tomorrow in Kamloops. It's a standing committee of the House of Commons. One of the press asked, why all the paraphernalia you have with you, why all the transcription, why all the interpretation, and all of that? The reason is that a standing committee of the House of Commons consists of representatives of the different parties in the House. In fact, it's an arm of the House, and it's here tonight in Kelowna. It is almost as if part of the House of Commons were here. We are attempting to visit agricultural communities to gain input from different organizations and individual farmers. As you present, everything is transcribed, and eventually it is written up in our so-called blues, and it will be available on our website. We go next to Ontario and Quebec, and then into Atlantic Canada. We have a lot of people who present their views to us, and if you want, you may also put in written submissions. The committee will go back to Ottawa, consider what has been presented, and write a report that will be presented to the House of Commons.

We are glad to be here tonight in Kelowna. It's a beautiful area of Canada that I've heard a lot about. I'd like have each member introduce himself to the group here. I guess we don't need to introduce your local member, but, Werner, would you like to have a brief statement first? Then we'll follow with Howard.

º (1645)

Mr. Werner Schmidt (Kelowna, CA): Because we are running a little behind time, my opening statement will be very short. I'm Werner Schmidt as you all know, the local member here for Kelowna, and I would like to first of all thank you very much, Mr. Chair, for bringing the committee here to Kelowna. We've been after you to do this for quite some time. I'm so glad you finally came. Howard works with us as well. I want to welcome the other Liberal members here too. I think these committees very often get more work done than the actual House of Commons. I think that's pretty important.

The other big thing, of course, is that we have a very different kind of agriculture than that found in the prairies in particular. I'm very happy to see Mr. Husch here, because he can put into perspective a lot of good things. I also notice that Tony Stewart is here, who represents the wine industry. I don't know if you were aware, folks, but I made a rather enthused statement about the wine industry yesterday in the House. It's really a sad commentary that on the trade mission to the west it was California and French wines that were served at the receptions and dinners. I think we need to recognize that our local wine industry has been very successful, has won some international awards, and I think the time has come for the Canadian government to adopt a policy where Canadian wines are served at their official receptions and dinners. I think we want to recognize that.

We also want to recognize the difficulty the fruit growers have had here in this area, particularly when it comes to prices and such things as dumping certain fruits into this area. I'm sure Russell will speak about that in far more detail. He understands the industry very well.

So I just want to welcome everybody here. Please say what you want to say. Don't be afraid, don't be shy. We've listened to all kinds of things, and we will continue to do that.

The Chair: Thank you, Werner.

Howard, would you like to be second?

Mr. Howard Hilstrom (Selkirk--Interlake, CA): Yes.

Good evening, ladies and gentlemen. My name is Howard Hilstrom. I'm the member of Parliament from Selkirk--Interlake, which is between the two big lakes in Manitoba, stretching from the city of Winnipeg northward for some 200 miles. I operate a cattle ranch there, with a cow-calf beef operation. I'm the vice-chair of this committee that's here tonight, and have been on it since 1998. So I look forward to this evening.

º (1650)

Mr. Werner Schmidt: Mr. Chairman, I made a terrible mistake. I only welcomed the Liberal members. I want to make sure I welcome my other friends from the House of Commons as well. That was an oversight. Please accept my apology.

The Chair: Odina Desrochers from Quebec.

Mr. Odina Desrochers (Lotbinière--L'Érable, BQ): Good evening. My name is Odina Desrochers. I'm a member of Parliament from the Bloc Québécois. I represent Lotbinière--L'Érable. It's close to Quebec City. I represent the most rural riding in Quebec. I'm happy to be here today. I visited your city three years ago, when I visited all of the Okanagan Valley. It was a beautiful place, and you have a lot of beautiful agriculture too. Tonight I will be here to discover your region, listen to you, and then try to help you. Have a good night.

The Chair: From Saskatchewan, Dick Proctor.

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

My name is Dick Proctor. I'm the agriculture spokesperson for the New Democratic Party. I represent the riding of Palliser in Saskatchewan, the Moose Jaw-Regina area. I am looking forward to the presentations tonight. I'm sorry we didn't have an opportunity to find out what kind of vegetable seed Terry grew, but I guess he's back on the plane.

The Chair: Rick, from the province of Manitoba.

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

My name is Rick Borotsik. I'm the member of Parliament from Brandon-Souris. I'm a member of the Progressive Conservative Party, their agricultural critic. As was mentioned by Werner, it's true, we have different types of agriculture in the west, and certainly in the prairies. I look forward to hearing your proposals, recommendations, and opinions as to where government should be heading in the future with respect to agriculture. It's just a pleasure to be here.

The Chair: Our other vice-chairman is Murray Calder from Ontario.

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

As Charles has already said, I'm a vice-chair of the committee. I'm also the chair of the National Rural Caucus. My riding is Dufferin--Peel--Wellington--Grey, and it is just along the edge of the GTA in central Ontario. I have market gardening, tender fruits, beef, pork, cattle--you name it, all the way through dairy. In my other life I am a chicken farmer. Our operation produces around 360,000 chickens a years. And I'll tell you, I'm a very strong supporter of VQA, because I like to see Canadian wines drunk with my chicken.

The Chair: Also from Ontario, Paul Steckle.

Mr. Paul Steckle (Huron--Bruce, Lib.): It's nice to be with you this evening to share in the presentations you have for us. It's been an honour to be able to go across the country this week and listen to the western part of our country. I'm a farmer from Ontario, the western coast of Ontario, as we're now known, in a riding called Huron--Bruce. I've served since 1993. I have served on the agricultural committee almost continuously since that time. As a farmer, I understand somewhat the difficulties agriculture is going through, but every region has its unique problems. Of course, we're here to listen tonight. I am also a good friend of your representative, Werner. We've been good friends since 1993. It's a pleasure to be here.

The Chair: On the format of the meeting, we usually divide it into two or three sessions. We have some names at the table of people who didn't come. We'd like to have a few more people at the table. Are there others in the hall who plan to present? If you would come up to the table, we'll try to fill up the table for the first round. Maybe others will come in later.

With your presentations, we have generally worked with five minutes for each. After all the presenters have given their report, we have a round of questioning. I'll ask that you watch me when you get to about four or five minutes, because I will give you a signal that your time is pretty well up. We probably won't be as close with that as we have been in other places, where we've had a lot more presenters.

Greg would you mind being first?

º (1655)

Mr. Greg Norton (President, Okanagan-Kootenay Cherry Growers Association): Thank you, Mr. Chairman.

My name is Greg Norton, and I'm the president of the Okanagan-Kootenay Cherry Growers Association. We represent approximately 100 British Columbian cherry growers who farm in three valleys, the Similkameen, Okanagan, and Creston valleys. We also represent a great deal of the export cherry business in British Columbia. Most of our members grow and pack their own fruit and export it throughout the world through various channels, mostly through private brokers.

We feel we are a very vital and dynamic part of the agricultural and horticultural sector in the Okanagan valley. We are optimistic, we are growing, we are making money, and we are interested in staying at the top of the world in production. British Columbia cherries are a very sought-after product, our markets tell us that. There's a great deal of pressure at harvest time for our product, and we sell our cherries for a great deal of money, which puts us in a very profitable position. It allows us to be optimistic, it allows us to expand. We're looking for land, we're looking for new varieties, and we're looking for new markets all the time. We're not a sunset industry at all, we are on the move.

Our problem, I guess, is that what we like to do is stay ahead, and in order to stay ahead right now, we are facing the greatest challenge of our history, the registration of new softer chemicals and pesticides to use in our farms. Unfortunately, we don't have an enemy that's offshore, we have nature, which we accept as growers. We have learned how to deal with Mother Nature, we understand that she always bats last. We're farmers, and we can live with that. What we can't live with is the unseen or intangible enemy called the PMRA, the Pest Management Regulatory Agency. It's a federal agency that has been stubborn in allowing us access to new products to use on our crops.

We've had an incredible amount of pressure, increasing every year, from our markets for fewer chemicals, less harsh chemicals. I have here a document from Marks & Spencer, which is one of the largest retail outlets in Great Britain. Last year on our farm alone we sold $200,000 worth of cherries through this marketing agency in England, and most of them went to Marks & Spencer. This document simply says that lobby groups have been increasingly targeting the use of hard chemicals. These are the people who give me the money to be successful and optimistic. It goes on to talk about the use of softer chemicals and transition to smarter application technologies. The long-term aim of Marks & Spencer is to sell residue-free produce.

Those products are available in this world, and our competitors have them. In this week's edition of the Good Fruit Grower, which is an industry magazine we get out of the United States, there's a very good article about control of a pest called the cherry fruit fly, which is one of the most insidious pests in cherry production. They refer to some of these softer chemicals. The formulations are softer, they're easier on the environment, they're easier on the consumer, they're easier on us as appliers, they're easier on everyone, yet the PMRA--and that particular chemical has been on their table for quite a long time--simply do not give us a response. We don't get a negative response, we just don't get a response. We feel the chemical companies don't want to go to the PMRA, because they've been frustrated in the past. The PMRA experience has not been a good one for either the chemical companies or the users and the sellers. They are stubbornly holding us away from those markets.

Today we are in a position where we have to quantify. I actually send my spray records to this market in England. They need to have a record of it before they'll buy our product. Right now, if they compare my spray records with those of our American competitors, I'm already number two. We're not even in bloom yet, and I already know that in this market I'm behind the eight ball.

It's a very lucrative market. It's a lucrative market for our operation, it's a very lucrative market for our industry, yet we can't have it. Last June we were assured by PMRA that spinosad would be on the list and we'd have it. It took them seven months to inform us that they had actually changed their minds and they weren't going to be going ahead after all. We could have applied for a minor use permit last June, and we could be in a position where maybe we could have it this year, so we could compete and be in the game. It's not there. It took them seven months to say they'd changed their minds. This kind of unfair treatment is something that is going to keep us in number two position. There's no future for me in number two position in the world of selling cherries.

We didn't come here with a brief today, Mr. Chairman, with a whole bunch of issues. We came with one issue, strictly to inform you of the frustration we're sensing, the threat to our livelihood. It's not offshore competitors, as with the greenhouse guys today, it's not unfair trading, it's none of those things, it's our own government, your people, my people, who we hire and I pay to frustrate me in my business. Quite frankly, on behalf of my members, I have to say it's not good enough. I would urge you folks, who we hire to fix it, to get on with it.

» (1700)

The Chair: Thank you, Greg.

Mr. Gatzke, I forgot again, but I'm going to go to you next. The floor is yours.

Mr. R.A. Gatzke: Thank you.

My name is Alan Gatzke. Thank you for this opportunity. My family has been tree fruit farming here in the Okanagan for 73 years. I started out in the wholesale production of fruit. Later my experiences--and they were the most difficult ones--were in the transition from wholesale production to the market-driven--some people refer to it as garden market sales--and more recently, the development of a direct farm marketing movement. So if I have a goal today, it would be to increase the awareness of the committee members of what exactly direct farm marketing is, all the different activities that would fall under that banner, and some of the economic benefits.

At the end of my brief I've come up with a number of recommendations, too many to mention in the five minutes, but they represent possible directions that, on a local level, the Economic Development Commission and direct farm marketing associations are working on provincially through extension services. I will leave it up to you to find the opportunities at the federal level to support, and perhaps further, some of the initiatives. In these five minutes I will be flipping through a lot of pages. I'd like to highlight and bring into focus some of the aspects of direct farm marketing. With tree fruit production, I analyse all the growers and divide them up into three unique groups--and I can see all three of those groups are represented here today.

The co-op producers are primarily wholesale, producing fruit through an existing industry. I won't even attempt to address any of their concerns. I'm sure they will be well represented and you will get good information on that.

I would include Mr. Norton as one of the vertically integrated producers, who would comprise the second subsection of the tree fruit industry here in the Okanagan. They're responsible for not only the production, but the grading, storage, distribution, and marketing of the product.

The third category are the direct farm marketers, people like myself, who are involved with a number of activities. Direct farm marketing is a very broad term. In my definition I would include things like agri-tourism, farmers' markets, value adding, events and festivals, edu-tainment farming--I think that phrase will follow quickly on the heels of agri-tourism--pick-your-own, grow-your-own, and community supported agriculture, mail order and on-line. And of course, vertically integrated primary producers also are a form of direct farm marketing.

Briefly, agri-tourism is partnering agriculture and tourism for mutual benefit, with operations such as fruit stands, wineries, farm tours, and special events.

Farmers markets, while we know what they are, do bring the farmer from the rural setting into an urban centre. They provide retail value to the primary producer. They allow alliance building and positive interaction within the producer groups. They provide access to customer volumes that individuals can't draw on their own. And they stimulate and demonstrate the advantages of cooperative marketing.

Adding value is an interesting and rarely understood term. It can be as simple as packaging, taking one of Greg's boxes of cherries and dividing it into smaller baskets, which can add value by increasing the price. It can be grading the fruit, on-farm processing, taking some 10 cents a pound peaches and turning them into jams or jellies. Bakeries, jammeries, and juice mills are also examples of adding value, in particular to the tree fruit industry.

Events and festivals is another very interesting one. It's an activity that has an agricultural component, but it also bridges agriculture to the community in many ways. A really good example locally would be our wine festival, which lasts a number of weeks. It could be something that lasts a day, perhaps an apple festival or a blossom festival, or it could only last a number of hours, such as a spit-a-pit contest. If anybody is familiar with it, I believe 750,000 people go every year to the Gilroy Garlic Festival. You can understand the implications for the economy of developing that form of agriculture.

Edu-tainment farming, farm tours, school tours are cultural things. I believe this is an important part of agriculture in the future. If we're looking for success for agricultural operations, this edu-tainment farming can be part of that. It could stand alone, or it could be part of an existing market feature.

In my brief I've suggested probably two dozen areas that would stimulate the development of direct farm marketing. I've also laid out in very simple terms how we contribute not only to the economy, but to the community and the financial well-being of the farms.

A very quick example of value-adding is that on our farm we take a $40 bin of apples, convert it into juice, and retail it for $500, or we can dry it and turn it into $1,500. So the numbers are there. I believe that direct farm marketing has not been identified as a major contributor to agriculture, and I think that its future is as bright as many others. I will look forward to your seeing where you can contribute and support the development of that sector.

Thank you.

» (1705)

The Chair: Thank you for a very interesting report. We have groups on the Hill sometimes called direct sellers, who come and tell us how they market. I guess it's good to see that the middle component is being cut out in that.

Russell, can we go to you now?

» (1710)

Mr. Russell Husch (Representative, B.C. Agriculture Council): Thank you, Mr. Chairman, and welcome committee members.

This afternoon I represent the B.C. Agriculture Council. Collectively, they represent 10,000 farmers and some 250 commodities in British Columbia. I'm a fruit grower, I live in this area, but today I represent all British Columbia's farmers, the ones that belong to our council. I'm going to take a somewhat different perspective here. I'm going to be a little broader than some of the speakers we're going to hear around the table, and that's because we want to give a broader perspective as to what we want to see in British Columbia.

Our message to the standing committee is pretty clear. Agriculture in British Columbia is an important part of our business community. We have tremendous opportunities for growth, especially when we have such a diverse climate. The other aspect I want to leave here is that all governments, federal, provincial, or municipal, through their agriculture policies, can play and will play an important part, either negatively or positively, in agriculture in British Columbia. We want to make sure that message is quite clear. Agriculture policy is quite important here. I'm always of the belief that governments are my partners. You control a lot of the aspects of my business, with labour regulations and so on. You're going to have some say in my operations.

In British Columbia we employ 267,000 people, and we have a producer-to-consumer value of $19 billion. Over the last five years exports from British Columbia in agricultural commodities have grown by 43%, with at least one in twelve British Columbians employed in bringing food from the farm to the fork. Agriculture is the only primary industry in British Columbia whose job growth has kept pace with population. We can't say that about some of the things that are going on, in particular in our forest industry.

I'm not here to dwell on the past or to put doom and gloom in people's eyes. I think we're all cognizant of the fact that governments in Canada today have reduced their support for agriculture. That's an important issue for all of us in British Columbia, as we're well aware that in competing in the world market today, there are different aspects that keep the competition level. One of them that doesn't keep a level, of course, is subsidies.

So you're aware, government farm support in Canada is 9% of the value of the farm product, in the U.S. it's 29%, and in Europe it's 41%. Those numbers are a bit too far apart to keep a competitive aspect in our trade relationship. This is not just direct support to farmers like myself. It builds a whole bunch of other infrastructure. It builds processing plants, it builds different trade regimes, and so on, which we're not a part of, but we're sitting back here and we have to compete against that. If we allow those types of processes, those industries, to go on, it's just going to make us uncompetitive, because we won't be able to use the products these gentlemen are growing and get them into the system, someone else is going to be there. So it's just not direct farm support. What we're doing is building all the other infrastructure as well.

What I want to talk a bit about now is what the key building blocks, what policy can do for us in British Columbia. I'm pretty sure it'll be somewhat similar to what you've been hearing.

First I address regulatory reform. It's frustrating for us out here to have to go through three or four jurisdictions just so that I can plant alongside a stream, I can mow the grass alongside a stream, or something of that sort. That's just not tenable. We have to find another way of bringing all those issues from the different jurisdictions into one box, one envelope, so that I can deal with it. I can't run around, as a farmer, and deal with all these different people. That doesn't make sense economically. Not only that, each one of them has a different priority. The three jurisdictions I deal with, municipal, provincial, and federal, don't even have the same direction, so how am I, as a farmer, supposed to meld all this into my business? You can understand my problem. And it's related to fisheries, it's related to water, it's related to endangered species, those issues. They're really important for us. I think you can understand why.

I want to relate a story that came to my attention a year ago. An investor wanted to grow seaweed for medicinal purposes; they're going to change it, remanufacture it, and so on. He came to British Columbia, went through the regulatory process, and said, I can't deal with this, it's just too big. He goes to Hawaii. In Hawaii--it goes to their structure--they've set up one person to work with him to lead him through that maze of government offices, jurisdictions, and so on. One person did that. He said, “where do you think I'm going to do this?” And that was pretty obvious. He's in Hawaii now, and we lost, as British Columbians and Canadians, that operation. So that's where regulatory reform has to happen.

Enhancement of the processing sector can be really big. If we're going down this road of life sciences, we have to find a connection between me the farmer and that processing person to get into whatever technology is going to be available to us. I can't be sitting down here on a lower tier producing the product and not expect to get that lift from the life sciences. We have to find a way in this processing strategy to make that work.

Our trade policy has to change. Canada is a saint in a world of sinners. We're always going to have that competition between governments. If I were a government, I would want my business to do well too. I can't afford that. I have to get elected. I've been a politician, I know what that all means. We have to find a way, as Canadians, to get that a little bit more level. That's what we're looking for from our federal government.

The other aspect I want to talk about is research and development, because that's a key factor here. Without research and development, we're not going to be here. It has helped people like Greg maintain and grow those large cherries, and it's helping us with our insect problems. It's also helping other facets of our industry develop new types of tomatoes, new types of peppers, and so on. We need that type of research. We have a facility out here at Summerland that's absolutely instrumental in moving our industry in British Columbia forward. If we can put more emphasis on those types of assets, our industry is going to be able to move forward, and it's going to rely less and less on, let's say, government support. None of us want that. We want to be out there on our own, and there is opportunity for us.

Thank you.

» (1715)

The Chair: Thank you, Russell.

From AgraRoots Network we have Anna Kirbyson.

Ms. Anna Kirbyson (Project Director, AgraRoots Network): Thank you.

I work with the AgraRoots Network. We're an organization based in the Boundary area of British Columbia, which is southern B.C. We're kind of nestled in between the Okanagan and the West Kootenays. We're here today because of government support, so what I'd basically like to do is talk a little about where our funding comes from, what we're doing as a project, and a few recommendations.

AgraRoots has been running for about a year now. We're co-managed by a boundary-based community economic development corporation and Turtle Island Earth Stewards, which is based out of Salmon Arm, B.C. We're in partnership with the Boundary Organic Producers Association and the Boundary Farm to Table Society. Basically, our mandate is to assist local agriculture producers and processors to compete effectively within the regional marketplace. To date we've been working to identify local agricultural businesses, including producers and processors, developing a functional network for these businesses, and creating a website and a farm business directory to provide marketing support.

As well, our network is intended to increase the profile of the local agricultural sector in our region and to provide a context in which the community can understand the impact and potential of agriculture in our region. To date it's been overshadowed by forestry, and previously mining, but agriculture has certainly been a steady supporter of the economy and of local families in the region. So we're working to provide consumers with information about the agricultural sector in the Boundary and emphasizing the importance of supporting local agricultural producers and processors.

Our funding comes from the Canadian agricultural rural communities initiative, which is under the umbrella of CARD, Community Enterprise B.C., which was a program that was part of the B.C. government's commitment to help regional economic diversification, and InVOLve B.C., which was launched in 2000 to recognize the voluntary sectors.

To briefly go over what our accomplishments have been to date, we've established an advisory committee of community leaders who work within the agricultural sector and also are representative of the major communities in the Boundary. We have 75 active members, including producers and processors, retailers, non-profit organizations, and consumers.

We've developed working relationships with organizations and individuals, both within and outside the Boundary region, that support agriculture and a sustainable community food system.

The AgraRoots website was launched in May 2001. We have 24 member web pages, and seven non-profit organization web pages are under development. This website is becoming a resource for both the agricultural community and consumers, and is linked with various organizations and websites, such as AgriWeb Canada.

We've developed a directory of Boundary agricultural businesses, and 3000 copies of this are being produced to be distributed throughout the Boundary and neighbouring regions.

We have 100 signs being developed, and they will be distributed to member business as a means of identifying AgraRoots, and also to promote agriculture in a really visible way.

We've held focus groups in the communities of Christina Lake, Grand Forks, Greenwood, and Rock Creek.

Needs assessment surveys were distributed throughout the region to gather information from the agriculture community on perceived gaps and opportunities in the Boundary.

We've held two capacity building workshops, and a conference has been planned for March. On December 15 we had a workshop facilitated by Nico Human of AgAware B.C., and the objective of this workshop was to obtain community input on the project and provide direction for the next steps. On February 9 and 10 we held a workshop with David van Seters, who's president of Small Potatoes Urban Delivery, which is the largest organic home delivery service in Canada right now. The objective of this workshop was to provide local producers and processors with an opportunity to expand their market, and also to assist farmers and the local business community in developing collaborative relationships. On March 16 and 17 we're holding a two-day conference. Topics will be new generation co-operative, holistic management, value-added products, direct marketing, farm succession strategies, small-scale food processing, and youth entrepreneurship in agriculture. The objective of this conference is to provide workshops for the agricultural community to enhance their capacities as individuals and as a group.

As for next steps, in discussion with members of the AgraRoots network through focus groups, workshops, and one-on-one meetings, this project is seen as having three distinct streams. These are to provide marketing support, access to resources and educational opportunities, and organizational development. So for our next funding period we're looking at co-operatives and co-operative development, developing a marketing toolkit for small-scale agriculture, capacity building and leadership development, research into the socio-economic value of agriculture in the Boundary, and educational outreach.

» (1720)

To go over a few of our recommendations, it's been recognized that for rural communities in transition, building on existing strengths and providing support around areas of weakness is crucial for establishing sustainability. This project is based on a long-term strategy for the development of a sustainable agricultural sector in the region.

There are factors that limit this approach, one being short-term funding programs. Solutions that require long-term investment in community have been dependent on funding for the short term. This approach is short-sighted. In the context of this project, the development of a network and completion of the deliverables has provided a solid foundation for the next step, but now we find ourselves at the end of the funding period, and there's no effective process in place for us to build on our successes. So what we would suggest is that funding be flexible, to reflect the long-term development of projects based on the evaluation of outcomes for the project and community.

Second, given the current political situation and the elimination of any programs that support rural communities, it becomes difficult to secure 50% matching funding for projects. It is our belief that projects should secure funding from a variety of sources, but it should be reflective of the resources that are available. We'd like to suggest again that funding be flexible, but that this be in respect of percentages that are required of matching funding.

» (1725)

The Chair: Thank you, Anna, I have to stop you. There will be questions. I think most of us are familiar with the CARD program.

Tony Stewart, then, from the British Columbia Wine Institute.

Mr. Tony Stewart (Chairman, British Columbia Wine Institute): Thank you.

On behalf of the B.C. wine industry, I'd like to thank you for coming to the Okanagan and taking the time to visit with us. The British Columbia Wine Institute has received substantial support from federal programs, and it's been instrumental in the success of the wine industry. I have prepared a brief, which I'll leave after this.

The comments by Werner I'd like to acknowledge. Certainly, the VQA wine program has worked. How many people here today are aware that this year alone B.C. wines have won over 1,000 awards in international competitions? This attention to our wine industry has sparked a PhD program at the University of British Columbia, and to kick that off and really get it going, British Columbia is going to host what will probably be the premier event for wine competition in the world. It's going to be the chardonnay of the century. They will be giving away $1 million U.S. in prize money for this competition, and it's certain to put British Columbia and Canada on the map in the world of wine.

To give you some of the background on the British Columbia part of the wine industry, we currently have just over 5,000 acres planted in the valley. Our production from this harvest is just over 14,000 tonnes. Current sales in British Columbia alone of VQA wines are coming in at over $60 million. Nationwide VQA sales are over a quarter of a billion dollars.

The industry in British Columbia has experienced rapid growth over the last 10 years. This growth has been on the back of a quality program, the Vintners Quality Alliance, which is a method of ensuring that consumers are aware that our product is made from 100% Canadian-grown grapes and that the wines have been screened for quality and defects. The industry employs in British Columbia over 2,000 full-time people. The capital investment for the last 5 years in this province has been $564 million. There is an estimated $313 million planned in this valley alone over the next 5 years. Tourism, people who visit the wine regions to experience wine country experiences, produces just over $20 million in sales at the wineries. Sales for VQA wine in this province are just over 4 million litres, which has a retail value, as I've said, of over $60 million.

The wine industry in B.C. is contributing just over $74.9 million to federal and provincial governments. Currently, the excise tax alone for the federal government is over $10 million, and revenues from direct employment are over $3.8 million.

The industry has had many successes and has many strengths. Certainly, we are getting a large amount of recognition internationally, which is helping to develop the initiatives to maintain the quality program. However, where we may have thought a five-year horizon was a long time in the wine industry, it's not. We need at least 10 to 15 years to get the critical mass we need to go forward. As the French have noted, the wine industry is actually quite easy, it's the first 200 years that are a problem. We are experiencing this as we try to modernize our vineyards, to get the right clones in the ground, and to import the skills necessary to make the premium wine that we need to make.

The British Columbia Wine Institute is embarking on a very aggressive marketing program. We plan to double the sale of VQA wines from our members over the next five years. This will incorporate forming a strategic alliance with other agricultural producers in the province. We feel that it will be very successful, and it will require the support of all sectors in the province.

Currently, we have some requests that have been presented to the Prime Minister's agricultural task force, as well as to various other members of government, through the Canadian Vintners Association. The Canadian Wine Institute and the grape industry wish to acknowledge the support of the program for export market development and to let this task force know that program is essential to our industry. It's used for the development of new markets. Canadian exports over the last five years have gone up fourfold, and we are continuing to put forward applications for PEMD funding.

We ask for the continued support of the federal government in regard to national wine standards. This has been an ongoing challenge over the last seven years, and we want to see that we finish this project before some of our members move on. As well, we have some other requests we would like to put forward with regard to grower research and development and credit.

Finally, I would like to make one comment on what Werner said earlier. The Canadian Vintners Association has made a request to the federal government and the House of Commons that VQA wines be served exclusively throughout programs the federal government is involved in, and we really would appreciate your support in that. So if you hear anything about it, please support it.

Thank you.

» (1730)

The Chair: Thank you very much.

We go to Gordie Ivans. Maybe you could mention your sector or who you represent.

Mr. Gordie Ivans (Individual Presentation): Thank you, Mr. Chairman.

Actually, there are two speakers from the fruit industry who are going to be presenting briefs here, Rob Holitzki and Gerry Shaw, so I would like to reserve my comments until these people have made their presentations.

I'd like to say, when we saw Howard coming through the door, we thought it was Eugene Whelan coming with a suitcase full of money, but he said by the time he got finished with Alberta and Saskatchewan, there was nothing left for us guys here.

The Chair: Okay.

James Calissi, are you ready then to present?

Mr. James Calissi (Executive Member, B.C. Fruit Growers' Association): Before I begin, on behalf of the B.C. Fruit Growers' Association, I'd like to thank the standing committee for the opportunity to address the future role of government in agriculture.

Our association represents about 1,100 orchardists in the Okanagan, Similkameen, and Kootenay valleys. Our annual sales are approximately $200 million, and it's been estimated that there is about $900 million in economic activity associated with those sales. We employ approximately 2,500 people.

The tree fruit industry is in transition, moving from domestic sales to exports. The United States and China, for example, are increasing yields in productivity at an exponential rate. Old World producers in eastern Europe and the southern hemisphere are now entering the global economy. The tree fruit trade has evolved into the global economy. British Columbia tree fruit producers need to look abroad to compete and win in this global market, and to compete, B.C. producers need to be more sophisticated in research and development, marketing, new products, and so on. These icons in the business world allow B.C. orchardists to improve productivity, increase exports, and stave off competitive rivals.

To accomplish this, we need a strong collaboration between farmers, education, research, and government, forging a cluster to bring different parts together, develop success within itself, and allow all parties to collaborate under a common interest. Such clusters have been highly successful in Canada. The fuel cell industry in British Columbia and the biotech industry in southern Ontario are classic success stories in our own nation. In the United States Silicon Valley would not exist today if it were not for input from the U.S. government. Such a cluster in the tree fruit industry would bring parties together and focus them within a region to bring success. The tree fruit industry needs government to be an active partner in the cluster. The payback to the Canadian economy in improved productivity and economic growth goes without saying.

I'll now turn it over to Joe Sardinha to outline some of the elements we feel government may bring into the cluster.

Thank you.

» (1735)

Mr. Joe Sardinha (Executive Member, B. C. Fruit Growers' Association): Good evening.

I was left in charge of what we consider to be the future role of government in the agricultural sector. At the recent Whitehorse conference the directions were set clear that safety nets, food safety, environment, renewal, and research would be the main parameters of the future of agriculture policy. We have six points that do touch on these items. They're listed in order of importance with regard to what our industry requires and would like future policy to be based on.

First, we see an increasingly important aspect of the future of agriculture to be a continued involvement in safety nets. In our own industry we have a very high participation level of over 80% of tree fruit growers in NISA crop insurance and advanced payments for crops. We have the Canadian farm insurance program, which, unfortunately, has not quite met the needs of our industry. With these safety net programs, we have also heard that the federal government intends to come up with an all-encompassing program to cover crop insurance, income stability, and what not. We are not clear as to what that program would be, but we do recognize the importance of what NISA and crop insurance in particular have brought to our industry.

Second, our industry is very labour-intensive. You've heard from Greg Norton tonight about the cherry industry. The acreage being planted is growing exponentially in this valley. Cherries are very labour-intensive to harvest, and so are apples. We have critical shortages during harvest time. What we need is more practical and flexible government regulation of statutory benefits, and we need to focus on ways of attracting more labour to this valley at the times we need it, through student visa permits or whatever means we can.

Third, as Greg mentioned this evening also, we need to fix the Pest Management Regulatory Agency. There are problems there with timely registration of pesticides. The BCFGA has put forward resolutions in the past and made lobbying efforts saying perhaps what we need is harmonization with the EPA. We could eliminate duplication, speed up the process, and give Canadian producers access to the new technologies. A big focus of federal policy is, in fact, food safety. Food safety is dependent upon access to these new technologies and removing the harsh chemicals from our production methods.

With food safety and environment, we need to match government resources to government statements of support. It has been said that federally, we want to create a Canadian brand that stands for safety, accountability, and traceability. Our growers in this valley will be embarking on it soon enough. We are undertaking integrated fruit production. There is a cost to not undertaking integrated fruit production. The retailer and the consumer are going to demand greater safety and accountability in the future. If we do not embark on changes in the industry, we will lose market share, we will be shut out of foreign markets. We need to have the backing for food safety and environmental choices at a federal level, so that we may remain competitive in our industry. There is a certain cost also to this, and we hope to have the support federally.

Fifth, with trade, we need to work on reducing international subsidies. The government has to recognize that subsidy reductions must occur globally for Canadian producers to remain competitive. In the meantime we have to protect our industry from unfair trade. To me, free trade shouldn't imply a free-for-all, where Canada becomes a dumping ground for foreign products. There have to be safeguards to protect the domestic producer.

Finally, there is renewal. We have to continue investing in research. I am from Summerland, B.C. The Pacific Agricultural Research Station is in my own backyard. It is a valuable source of innovation. New varieties are being developed through a plant breeding program there, and we have critical research leading to safer food products. That is very important for our future.

Thank you very much.

» (1740)

The Chair: Thank you, Joe.

To get this for the record, Rob Holitzki is from the B.C. Fruit Packers, and Richard King is--

Mr. Rob Holitzki (Director, B.C. Fruit Packers): I'm an apple grower in the area. Richard King is the general manager of our packing co-operative, B.C. Fruit Packers. We're sort of a package deal here, and it may be--

The Chair: We'll give you more than five minutes.

Mr. Rob Holitzki: No, I'm just saying we also have Gerry Shaw, who is the president of B.C. Tree Fruits, and Greg Gauthier, who is the general manager of B.C. Tree Fruits, which is our marketing arm. They have presentations as well. Perhaps we could do these all together as a fruit industry presentation.

The Chair: It sounds good, and if the members would agree, we'll try to deal with it as a package.

Welcome to the table.

Mr. Rob Holitzki: Thank you, Mr. Chairman.

As I said, I'm an apple grower in Kelowna. I'm also a director of B.C. Fruit Packers, my packing co-operative, and a director with B.C. Tree Fruits, which is our marketing organization. I am going to make a few brief comments, and then hand it over to my colleague Richard King, who will give a specific presentation on GST. Then we'll have our B.C. Tree Fruits presentation, to give some kind of continuity to the effort here.

My concern is that Canada's position with regard to being a world leader in reducing agricultural subsidies is making Canadian producers world losers in the marketplace. In order for this tack of reducing agricultural subsidies to be successful, it is necessary for other WTO nations to support the reduction, which obviously has not happened. It's painfully obvious that many of the WTO nations are going in the other direction and increasing agricultural subsidies. So my comment at this point in time is that perhaps it's time for Canada to rethink its game plan for the agricultural policy in our country. We cannot compete in the world market without the tools to do so.

That's basically my concern, that we've been going down the road of subsidy reduction in the world, and we seem to be the only ones going down that road, without much support from other nations. How far do we go before re-examining our policy on agriculture in this country?

Thank you. I'll turn it over to Mr. Richard King, who has a presentation on GST.

» (1745)

Mr. Richard King (General Manager, B.C. Fruit Packers): Thanks, Rob.

Mr. Chairman, Joe mentioned the regulatory and legislative environment under which agriculture operates within this country. It's a very important part of it. As I understand it, the purpose of the standing committee is to look at how the federal government may work forward in regulating and working with agriculture down the road. What I'm going to speak about is something that's just happened that shows how the apple growers in the Okanagan are going to be affected by GST. I'm also going to ask for some support from the committee in helping to get the situation resolved.

I'm speaking on behalf of Okanagan Federated Shippers, which represents all of the major packing houses in the Okanagan, which handle probably 85% of the tree fruit crop grown here. We provide services to about 1,500 fruit growers in the area. Recently, we've been given a ruling by Canada Customs and Revenue Agency on GST collection. Although collection of GST on our packing and selling charges to our growers would be a wash transaction to the federal government, in other words, the grower can collect the GST back on an ITC, we are facing very significant cost increases for administration and with money being tied up, both for our growers and for other agricultural sectors in Canada.

When GST was instituted in Canada, co-ops and companies that stored, packed, and marketed agricultural products on behalf of primary producers were specifically exempted from charging GST to those producers on storage, packing, and marketing costs. In 1996 a change was made to section 177 of the Excise Tax Act that has just now been brought to our attention. We were not aware that this change had been made, and consequently, we were not charging GST from 1996 until now. The change requires that fruit packing co-ops and other agricultural product handlers do have to charge GST on storage, packing, and selling, and Canada Customs and Revenue Agency has told us that they will be enforcing the regulation, effective October 2002.

In the case of the B.C. tree fruit industry this change will require our packing houses to bill growers for approximately $3 million of GST annually. Growers can claim the money back, but their cash is going to be tied up for somewhere in the neighbourhood of six months while the paperwork is processed and so on. The change in policy also is going to cause really significantly increased administration expenses for both the producers individually and our packing organizations, at a time when farm revenues have been really seriously depressed for several years.

Okanagan Federated Shippers has brought this matter to the Minister of Finance, and has received a sympathetic response from both the minister and the CCRA officials we're dealing with. However, in spite of the sympathy, CCRA officials have stated that unless the legislation is changed, they have no option but to enforce the regulation and insist that we collect GST from our growers on the storage, packing, and selling costs, effective October 2002.

From our point of view, this is a classic example of an unnecessary intrusion into agricultural enterprises by legislation. As far as we can make out, it was never intended that the federal government charge growers GST on the production of food products. In this particular case there will be no revenue raised by the federal government. All that will happen is that there will be significantly increased administrative costs at the grower level, the packing house level, and at the Canada Customs and Revenue Agency, because they are going to have to process all the collection information, as well as the rebate information.

So on behalf of the tree fruit growers in the Okanagan, we are requesting the support of the standing committee in achieving the necessary legislative changes. We understand that the officials in the revenue agency must abide by the law, but it seems to us that this is a classic case where Parliament could significantly assist growers in Canada without affecting the revenue of the government, and in fact, reducing expenses. I should point out that this is not just going to affect us, it's going to affect many other agricultural sectors as well.

With that, I am done.

» (1750)

The Chair: Thanks, Richard.

Gerry.

Mr. Gerry Shaw (President, B.C. Tree Fruits Ltd.): Thank you, Mr. Chairman and other members.

My name is Gerry Shaw. I am the current president of B.C. Tree Fruits Ltd. We are the marketing arm in the valley of the fruit industry. I'd like to thank you for providing this opportunity to speak about the future role of government in agriculture. My personal wish is that government would not have to intervene in my agriculture business. However, to compete with the rest of the world, we need your help. I have with me the current CEO of B.C. Tree Fruits. He is the one who is going to do most of the speaking and make the presentation. We handed out to everyone a presentation full of good paperwork. I hope you will read it. Perhaps Greg and I can answer some of your questions.

With that, here's Greg Gauthier.

The Chair: Welcome, Greg. The floor is yours.

Mr. Greg Gauthier (General Manager, B. C. Tree Fruits Ltd.): Thank you, Mr. Chairman.

We understand we only have a few minutes, so we have produced two documents, which I believe have been distributed. We're not going to take you through those documents in detail. There's a lot of material there, and that's for your leisure reading, hopefully later this evening. But we do want to take the time to talk about two items that are in the documents.

First, I want to give you a little background on B.C. Tree Fruits. We are the sales marketing agency for the co-operative packing houses in the Okanagan Valley. We sell about $90 million worth of fruit each year, apples, pears, apricots, all the fruit grown in the Okanagan. We represent about 80% of the product of all the apples that are sold fresh into the marketplace. We are one of the largest fresh apple sales organizations in North America. We sell both domestically and internationally. We're really here today in our capacity as sales and marketing specialists.

The first document I handed out to you is a bit of a background on B.C. Tree Fruits, but more importantly, it's a review of the major issues that are affecting the marketing of fruit.

The second document was prepared for us and supports our key message to the committee today. That message is that foreign agricultural subsidies, especially those in the United States, have a severe negative impact on the profitability of apple growers in the Okanagan and other parts of Canada. I'm sure you are well aware of the proposed U.S. farm bill and its potential to distort trade. The USDA recently reported that in 2001 43% of U.S. net farm income arrived in the form of direct government subsidies. For the past two years alone the U.S. has directly subsidized U.S. apple growers with more than $200 million for quality or market losses and market assistance. We believe the Canadian federal government needs to ensure that Canadian growers have a level playing field.

The second area where we want to focus attention is the significant risk that Canadian consumers may see the supply of Canadian fresh produce available in Canada and in Canadian retail stores diminished. Our prime concern is that foreign, primarily large U.S.-based retailers are purchasing control in Canadian retailers. In their efforts to drive efficiency into their systems, they will centralize buying decisions in U.S. locations. U.S. buyers will eliminate or reduce the availability of Canadian product to Canadian consumers. There is a need for the government to be vigilant, or the Canadian consumer may find it increasingly difficult to buy home-grown products.

There is a real-world example of this now happening. Canada Safeway, the largest food retailer in western Canada, has recently announced that as of mid-July, it's transferring purchasing of all produce from its buying office in Calgary to Phoenix, Arizona.

In summary, my two messages to the committee are these. There is a need to level the playing field on agricultural subsidies in order for apple marketers and fruit producers to compete both in Canada and internationally. And we need to ensure that foreign ownership in the retail sector has some commitment to support of Canadian producers.

Thank you.

» (1755)

The Chair: Thank you, Greg.

Gordie.

Mr. Gordie Ivans: Thank you, Mr. Chairman.

Greg was mentioning the subsidies that are happening out there. We've had some studies done by Wendy Holm showing the American and European subsidies. I'm a third generation fruit grower here, and the programs we've had, we've seen them disappear on us. It's right to the point where we've got probably the smallest agriculture budget in Canada provincially.

Federally, we understand that you're going to go to a universal program here, where a whole farm could disappear. One shoe fits all, and I guess we're wondering how we fit into this, because the way it looks right now, we've lost a lot of our offshore markets to China and the Philippines. The Taiwan markets are all gone. I guess the States are fighting a similar situation. Basically, we've got the North American market left, so there's going to be a lot of dumping, and I think Canada is going to be the place where it's going to be happening.

How do you brace yourself for that kind of activity, when we do have a high cost of production here? We understand that by 2004 or 2005 this program should be in place, but it would certainly be nice if we could have a lot of input on how it fits our fruit industry. The whole farm program maybe services 20% of our fruit industry, and the rest of the guys are hung out to dry, so it's a program that doesn't really benefit the fruit industry. We're just hoping that with this program that is developed, we don't have a similar situation, where just a small percentage of guys trigger the program, and for the rest of the guys it's tough luck.

So I would like to conclude by saying, if we could be active in the input to this, we certainly will be here to give you all the information you need.

Thank you.

¼ (1800)

The Chair: Thank you, Gordie.

Alan Clarke.

Mr. Alan Clarke (Apple Valley Country Gardens): Mr. Chairman, committee members, I was going to talk about the WTO talks, the way they've been going, and trade. Rob couldn't have said it better, and I concur with what he said.

I'm a fourth-generation farmer. I grow apples, pears, cherries, and peaches. I am very involved now in agri-tourism and direct farm marketing. I still, though, ship some fruit to the co-operative in a wholesale fashion. Canada Customs and Revenue Agency haven't defined agri-tourism and agri-business. I had my accountant send letters to them asking how we are classified. We're very diverse. I have a tea room, for example, and a small restaurant. We make pies. The fruit comes off the farm, the wife makes the pies, we sell them. We don't grow wheat, but we make bread. It's all value-added things, like jams too. We produce honey and sell it. We can't seem to get any clarity from Canada Customs and Revenue Agency regarding how we're going to be treated as an agri-business. It's something new.

The wine industry is basically a tourism-based business in the same situation. They're very clear with the wine industry, but some of us who have gone into direct marketing vegetables and tree fruits, taking a page from the wine industry as tree fruit growers, are in limbo out there right now. I'd really like it if the committee would meet with officials at CCRA and try to get some consensus. Maybe we need a piece of legislation specifically covering direct marketing, agri-tourism, and these types of things.

Thank you.

The Chair: Thank you, Alan, and all the presenters. This is a new table for us, because we've been dealing mainly with the other three provinces, where it's been largely livestock and grains. So I'm sure that, like myself, the members will have a lot of questions to ask. We usually go around party by party, back and forth.

My gosh, a guy who knows it all is going to ask questions first. Werner, the floor is yours.

Mr. Werner Schmidt: I think the last comment you made, Mr. Chairman, shows why I'm so happy you're here. There is another side to agriculture besides what exists in Alberta, Saskatchewan, and Manitoba. I think it's really important that we get the total perspective in focus.

I'm very pleased with all of the presenters who have been here. Many of the problems that have been raised I know, and actually, I'd be much happier, in a sense, if those people who aren't perhaps as familiar would ask the questions.

I'd like to get into some of the details, but I'm not sure whether that's really what you'd like to do. With the safety net programs, for example, what are the specific problems? We hear all this talk, but how can we actually help and make those safety programs work better? I think that's really the issue here. We have so much generality. It's talk, talk, talk, talk, and it doesn't really help very much.

Howard, why don't you just ask your questions.

Mr. Howard Hilstrom: The safety net issue was commented on as being one size fits all, and I think the general consensus is that this approach is not likely to work too well. What is it about the CFIP and the NISA that you find really good or really poor? Russell addressed that, so I'd ask him, and Mr. Calissi, who was also talking about the safety net programs.

¼ (1805)

Mr. Russell Husch: I was around when we started developing CFIP. The structure of CFIP is such that if you have a down year, the program helps you, but if you're in a downward trend and you have three or more years of low returns, no matter what that might be, because of weather or whatever, the program doesn't work. That's where the problem lies with CFIP. We've got to find a way of restructuring it.

The other aspect of it is that it's much too complicated. When you've got to take these forms to your accountant to fill out and he has difficulty, obviously, there's a problem.

But the big problem with CFIP is that it's a two-year program, and after that it's finished. And you've got to have three good years after that before the program is any use to you.

The Chair: Mr. Calissi.

Mr. James Calissi: The answer to that question is awfully complicated.

I'll start with CFIP. As Russell has said, it's a program whereby, if your revenue dips or if you have a spike in input costs, it will trigger a payment to the farmer. That works really well if you're just going along and everything is very profitable, and all of a sudden, one year there's a collapse in the marketplace, for example, and your revenue is highly constrained. Then that program will trigger out a handsome payment. If you are in a cycle where you have been in a downturn for several years, and all of a sudden, the next year is a further slide downward, you don't have any historical revenues to base your payment on. So the program says, we'll guarantee you 70% of your gross margin, but if your gross margin has been lacking or extremely poor, 70% of zero is still zero.

That's the main problem with CFIP. It's a highly complicated application to fill out, and that in itself can be a daunting task for many producers.

NISA is an extremely good program, in that it's a very universal program, and any farmer who has a dollar in revenue is eligible. In the tree fruit industry it's been a highly subscribed program. In that regard, it makes it a very good program for the fruit industry. It's a very simple application to fill out. As a matter of fact, you could file your income tax and NISA with the same piece of paper. So in that regard, it's an effortless act for the farmer.

But there are several problems. One is that there are caps in NISA. It's entirely based on your revenue, and if your revenue is larger than $250,000, that additional amount of revenue is not covered under the NISA program. Anyone who's a larger producer runs into trouble with the caps. So a farmer says, gee, I've got $150,000 payroll on my orchard, and NISA gives me risk management of $7,500 a year, so in many regards, it's a non-program for the type of farm I have. That's where you run into trouble with NISA for larger producers.

For producers in general, NISA can be a troublesome program. It was really designed such that money dribbled into the program over a number of years. If you had a troubled year, you would trigger money out of that program, and everything would be great. Again, if you're in that sort of cycle where you've drawn out your account and you have no money in it, the amount of money you have available is not enough to cover any financial disaster you may have on the farm. That's where you run into trouble a bit with NISA.

The other trouble you can have with NISA is that you run into a situation where a lot of money is not accessible to the producer, and I'll give you an example. A producer may have a trigger in NISA and would appear to be eligible to withdraw money from NISA, but in essence, if that trigger isn't large enough, all he can do is build up his account, and he can't withdraw any funds from it. So some producers run into that problem, where they're unable to secure access to the funds from the program, even though the program says, yes, you do have a trigger, and yes, there is some sort of financial downturn on your farm.

¼ (1810)

The Chair: Thanks, James.

Howard, do you have another?

Mr. Howard Hilstrom: I think there's something that needs to be explored. Alan, you mentioned that really what we're talking about is almost a definition of a farmer and a farming enterprise. Werner and I were talking about this. Have there been examples where Revenue Canada has come back on somebody who has claimed those expenses under the Income Tax Act for a farming enterprise, albeit a related one for jam or direct sales, and denied those expenses on the basis that it's not a farming enterprise?

The second part of that question is, do you think there should be a definition under the Income Tax Act of who is a farmer and what constitutes a farming enterprise?

Mr. Alan Clarke: We had a couple here--they were supposed to actually make a presentation here, or they were scheduled--Sheila and Bill Ackerman. They got into a deal with Revenue Canada that involved Bill working off the farm for income. He would, of course, claim against the farm, and they didn't allow that. They were a farm in transition, and they were spending great amounts of capital redeveloping their farm, planting it to high densities, and the fact of the matter is, in the transition period you have no production. So he was forced to go and work outside the farm and raise capital to do his infrastructure improvements. It ended up going to the courts, and Revenue Canada was ruled against, so Bill and Sheila have won that fight.

The frustrating part, when I'm talking about the jams and the value-added products, is that it's something so new that nobody's got a handle on it yet. We weren't doing this 15 years ago.

I just want to touch on one other thing here. Listening to the safety net debate--

The Chair: Alan, I'm sorry, we can't work it that way. In fact, we're being a little bit different here tonight. Usually, it's so many minutes for each member, and the answer to his question is included, but we're a bit informal tonight and we're trying to be accommodating.

Odina.

[Translation]

Mr. Odina Desrochers: I am very happy to be with you this evening. Agriculture is apparently highly diversified in British Columbia. I am increasingly realizing that agriculture is highly diversified not only in British Columbia but also throughout the country and that local forces form a strong presence.

I paid careful attention to the presentation made by Mr. Husch, who talked about the complexity and duplication involved with numerous officials in the federal, provincial and municipal governments. As you will appreciate, Mr. Husch, I will not be launching a constitutional debate this evening, because we would never get through it.

However, I would like to ask you to give me a short description of the one-stop service that you are looking for and to tell me which level of government federal, provincial or municipal is the most important to you for the purposes of making your work easier in the farming world.

¼ (1815)

[English]

Mr. Russell Husch: That's a good question. You're asking me to determine who's going to have more power here, the federal government, provincial, or municipal? I don't think you want me to go down that road, but I will say this. We've got to have a common direction on these jurisdictions, in particular on the fisheries side and at the municipal level. The three government bodies have to come together first and decide where they're all going here. Put that operation under one jurisdiction. I'm sure there's some kind of method and working relationship they can find. That individual or that jurisdiction would be responsible to all three governments. It has to be that.

This probably isn't just related to agriculture. I want to come in as a businessperson, go to a particular office, and ask them to lead me through it: What must I have to start my business or to change my business? I think you've got to bring all that together. If we, as individuals in Canada, don't bring this together, our costs are going to be exorbitant, and then I will not be competitive. I think we're all aware that money flows faster than anything else in this country. I'm not different from anybody else, I want a return on my money, and I'll just go somewhere else.

So we've got to find a way of doing it. I don't know how, but I know we have to get the three levels of government sitting at the table to figure out where we're going here. I'm a believer and a pretty positive person. I think it's doable.

[Translation]

Mr. Odina Desrochers: You answered very philosophically but were not really precise when I asked you which level of government was the most helpful to you, federal, provincial or municipal. I am going to ask you another question.

I understand that it is difficult for you to comment on the matter, but we know that the federal government is very much inclined to impose national standards that would make the current programs even more rigid. Do you envisage national standards or even an overall policy with the flexibility to enable the provinces to implement programs that are more realistic for their products?

[English]

Mr. Russell Husch: I don't have enough information to answer that question, I'm sorry.

[Translation]

Mr. Odina Desrochers: That's O.K. Thank you, Mr. Chairman.

[English]

The Chair: Thanks, Odina.

Dick.

Mr. Dick Proctor: Thanks very much, Charles, and thanks to all the presenters.

As Charles indicated, this is very different from what we normally hear when we're at committee and what we've heard, more specifically, in the the last three days in the prairies. So it's an education, at least for me.

I wanted to get some elaboration from Richard King. You said this rule you've run into, Richard, with CCRA was never intended to hit your industry. Was this some kind of drive-by shooting, where you were the unintended victim? Who was CCRA aiming at when they wounded you?

Mr. Richard King: We don't know, and no one will tell us. A drive-by shooting is a pretty apt description, because it was picked up by one of our own auditors, who said we might be liable under this section; he got legal advice and so on. We brought it to the attention of CCRA, who, I think, would have preferred never to have heard about it. Our problem was that once it was brought to our attention that we were in violation of the law, we had to deal with it. As I say, we don't know who it was intended for. We don't know what instituted the change. All we have done is say we really would like to have the legislation changed back to the pre-1996 situation, where we were specifically exempted from charging GST.

Mr. Dick Proctor: Based on what we've heard, I wouldn't think anybody would oppose that. When we get back to Ottawa, we should perhaps arrange to have CCRA come before our committee to explain who this was intended for, to see if there's anything we can do at this eleventh hour to make sure it doesn't affect this industry. The way it's been explained at least, it seems to be an administrative nightmare that's going to benefit no one, but is going to raise the cost of government.

Mr. Gauthier, was it you who talked about Safeway?

¼ (1820)

Mr. Greg Gauthier: Yes.

Mr. Dick Proctor: This is more an elaboration. About three years ago MacDonalds Consolidated, which is Safeway in Saskatchewan--it may be Safeway across the country, I don't know, but it's their warehouse--left Saskatchewan and moved to Edmonton and to Calgary, and that had an impact. We have a small market garden area in Lumsden, Saskatchewan, a little bit north of Regina. We drove through it on the way to one of our meetings a couple of days ago. That froze those growers out of shipping their product or selling it at the Safeway stores in Regina. Obviously, it's going to be a whole lot worse once Calgary is closed and it goes to Phoenix. So I really do think the federal government has to step in with some rules to protect the domestic industry before it's too late. I don't know if there's any elaboration you want to make on it, but it's a significant issue.

Mr. Greg Gauthier: You really need no elaboration. You're correct, MacDonalds Consolidated is the wholesale arm of Safeway, they actually do the buying, and they did pull out of Winnipeg and Saskatchewan, moved all operations to Calgary, and are now making the move down to Phoenix later this year.

Mr. Dick Proctor: Again, maybe this not so much a question, but it is to Greg Norton, and maybe others will have something to say. He and the other folks should know that we did have a very firm meeting with the PMRA officials. I think it was the last meeting in Ottawa before we embarked on this tour, with Dr. Franklin. It would have been good to have you there to say it as clearly as you said it, but they insisted that they are making changes and it's not as bad as it seems. It sounded pretty grim the way you described it, Mr. Norton.

Mr. Greg Norton: I have a copy of a letter from the former minister, Allan Rock, to our senator, Ross Fitzpatrick. Perhaps I could forward it to you, as it's quite enlightening. They say all the right words, but the net result is nothing. I think you should be aware of that if you're dealing with them.

Mr. Dick Proctor: That's my list of questions and comments.

The Chair: Thanks, Dick.

Murray.

Mr. Murray Calder: Thanks very much, Mr. Chairman.

As Dick was saying, we've had Claire Franklin and Wendy Sexsmith in front of the standing committee. I'll be honest with you, I found it very frustrating as a member of Parliament, because this is an issue I keep coming back to. I find it a pain in the neck--in fact, we could go a little bit lower in the anatomy. We, as members of Parliament will visit this, and then we have to move on to other problems, and we find that those bureaucrats just go back to their old way of doing things. I would like to see an ombudsperson out of the Auditor General's office put in place to monitor this. It would be a completely unbiased individual. You line your ducks up, you go to that individual, and that individual brings Claire Franklin's toes to the fire in that department. I'd like your comment as to what you think of that idea.

Mr. Greg Norton: I hope it's not broken that badly. I honestly believe that if we could interest the federal minister of health, take her aside, and ask her to spend an afternoon on this issue with the right information, it would be painfully obvious what's wrong. It really grates on me, as a producer, that the Canadian consumers are eating product soaked in this stuff from other countries. That's the sort of thing that really makes me angry. It makes me really angry to lose my markets as well, but the irony of this whole thing.... I honestly have a hard time believing that a minister would not see the logic and would not act. I don't honestly feel the PMRA has been given any attention by a minister of health.

I believe it's a half-day job, and if it doesn't work after that, your ombudsman idea is a wonderful idea. I need this stuff tomorrow. We're at budswell. Things are moving out there, and I have to sell these things in July. We wait around for an ombudsman, he'll have to plough through this stuff, which you alluded to, and that'll take another year. It's like the answer they gave that we couldn't get this one pesticide registered. It took them seven months to say they had changed their minds. I believe an ombudsman could dig enough and could get to the bottom of it, but the problem I'm having is timing. I think a minister of health could fix this thing at the drop of a hat.

¼ (1825)

Mr. Murray Calder: I have already been talking to Anne McLellan on this issue, and also about the ombudsperson idea, because it's much more than the fruit industry. You're also into the department of veterinarians, because we're also using drugs that are anywhere from 10 to 15 years outdated. So it's an issue.

I'm very interested in your approach--education, the websites, holding workshops. I believe this is something incredibly important for our industry. We have 96% of the population of Canada right now, quite frankly, not knowing what's in season. That I find very scary. As I said before, I'm a poultry producer, and we're into bio-security. Quite frankly, a person sees my barns, sees the signs “No Entrance”, and they're saying, what they hell are you doing in those barns--I'm eating this? So I think what you're embarking upon is very good. I would ask you to go into the agricultural website, which is www.agr.ca, and look for the Canadian Rural Partnerships, the Rural Adaptation Council, and the second sustainable development strategy. You may find there is some funding available for what you're doing. It comes under Andy Mitchell's office--he's the secretary of state for rural affairs. He's developing what they call the rural lens. So you may find some money in that area. If not, I have a website, and I would ask you to contact me, and I'll take a look for you. In fact, I can give you a card later.

The Chair: Rick.

Mr. Rick Borotsik: It's been mentioned that we've had issues with PMRA as a committee for a long time. I apologize for our not having fixed the problem, but we are on your side on this one.

What we keep on getting is that with minor use particularly, a lot of the manufacturers of the product don't submit applications, because of a very small marketplace. You've talked about a product right now, Greg. You've indicated it's a softer product, which is obviously much better for us as consumers than the harder product. How do you know it's a softer product? Has there been application made by the manufacturer of it? This was one of the excuses we got from Claire Franklin, that if there are new active ingredients, it takes a much longer time with efficacy, as well as all the other wonderful things that go into it. Can you tell me if any of those things is the problem with this particular product?

Mr. Greg Norton: To zero in on the spinosad, it has been registered for apples in Canada. So all the testing is in the hands of the PMRA. It's being used in the United States for cherry production as we speak. There's a lot of safe information.

Mr. Rick Borotsik: So there was an application.

Mr. Greg Norton: That's the one that we got stalled on for seven months. The cherry growers' association was going to apply for minor use last year. We were assured by people at the PMRA, whose names have been already mentioned here tonight, that we shouldn't worry, we're going to shotgun, we're going to put this through, this is one of the ones we're going to get registered for you. Seven months later we were told, by golly, we've changed our minds. It's the year 2000 right now.

If I may make one last point, last year there were 901 new products registered for agriculture in the United States of America. This year in Canada there were 22. How can I or anybody else compete?

¼ (1830)

Mr. Rick Borotsik: Thank you, Greg. We're on your side on this one--honest, we are.

Richard, you scared me. You said there are other situations, there are other processors or other producers that will be affected by the enforcement of that rule. Who are we talking about other than your own co-operative processors and marketers?

Mr. Richard King: Our understanding is that any co-operative or corporation that's storing, processing, or marketing any agricultural product on behalf of a producer would be required to charge GST to that producer. The key is that the corporation or the co-operative does not take ownership of the product. If the grower maintains ownership of the product and the co-op or corporation is doing the work on his behalf, GST would be chargeable under this change.

Mr. Rick Borotsik: One thing that has not been touched on here, and I'm rather intrigued that no one did, is genetically modified organisms of any sort. Is it not an issue with your particular product? Do you not see it at any point in time being an issue? I know you have a lot of interesting ways of developing new product. Is GM ever going to be an issue in your industry?

Mr. Greg Norton: As a board, we have dealt with it and sent a message to Agriculture Canada at Park in Summerland saying we're not interested. We're afraid of it. We don't think our consumers, who don't want any pesticides at all, are going to go for it. So it's a dead issue for us.

Mr. Rick Borotsik: Vintners.

Mr. Tony Stewart: For the wine industry it hasn't been an issue, it hasn't come up, but I'm well aware that it's a huge federal issue.

Mr. Rick Borotsik: Is there no opportunity? You have a lot of really interesting qualities to your grapes. Is there not something that can be done with a grape that would make it much better for consumers?

Mr. Tony Stewart: With the vines, there's a huge tradition of how they're developed. Most of the vines brought into Canada are coming from France. It hasn't been an issue at this point. That's not to say it won't come forward later on, as they deal with diseases. I'm sure UC Davis is looking at things like this, but we don't have any facilities here doing it.

Mr. Rick Borotsik: Russell.

Mr. Russell Husch: There is one project going on right now, in particular, in our industry. It has to do with turning the gene off. That's my understanding of it anyway. To make a long story short, investors took the product and moved to the U.S., where their project would be completed and they wouldn't have the stigma and all the hoopla around this GMO issue.

The Chair: Thanks, Rick.

Paul.

Mr. Paul Steckle: When you become clean-up person, it's a little difficult to establish a line of reasoning in questioning. All the things that have been asked and discussed this evening have been very pertinent, whether they relate to the wineries, whether they relate to the PMRA.

Greg, I don't want to belabour that issue, but I wonder if you've ever heard the argument from PMRA that the chemical companies have not put forward an application, even though you're wanting that product. Have the chemical companies, in their wisdom, decided, because of the cost, not to put forward an application, so it's been stalled there? We went down that road, and we're as frustrated as you are. We want to find a fix for it. Has that ever become an issue for you?

Mr. Greg Norton: We are currently researching a specific product, and we expect to have the full details of that. However, we have certainly heard from chemical companies that the PMRA is so prohibitive, so costly that the rules are unworkable, and they just don't want to go there, particularly for small crops like tree fruits, and even the vineyards. It's not a huge market for them. That is an issue. We, as an association, have a bit of a war chest built up to try to put some money into some of this testing, if we can get through the maze. I think we need to get confidence in the chemical companies that with the PRMA, they would be faced with a system they can actually work with. They too are frustrated with the length of time for answers, and with the attitude, I guess.

I'll be in a better position to answer that by the middle of next week, because we have specifically gone with a product to a company, and we're now working together with them. We want to answer that question as much as you do.

¼ (1835)

Mr. Paul Steckle: Could you forward that information to the chair of this committee at such time as you have it? It would be important for us to have that.

Mr. Greg Norton: We would be happy to.

Mr. Paul Steckle: As we look at the future role of government in agriculture, and as we've travelled for the last number of days--we have a number of weeks ahead of us yet--it is my sense that farmers are becoming more ingenious, they're becoming more entrepreneurial, they're finding niche markets. They really want to go it alone if they can. They really don't want government involvement, but they do want government to be there to facilitate and to accommodate. If you can tell us in what way we can do that better, and we know areas where we've not done it very well, please tell this committee tonight--anyone.

The Chair: Gordie.

Mr. Gordie Ivans: Thank you, Mr. Chairman.

I just want to mention this last package that came from Ottawa, the $25 million that British Columbia received. Prior to the election here the NDP government did not put up their 40%, and unfortunately, the Liberals didn't put up their money either. There was supposed to have been about $16 million added by the provinces. I think, on the federal side, you guys have to put the pressure on the provinces. If you're going to put up the money, they must put their share of the money up, they can't weasel out of the game . This is what's happening right now. They'll tell you, oh, we can spend it in a better way, and you never see the damn thing. So if you guys can do that, I think it'd be great. If you put your dollars up, make sure they put their money up to match it.

Mr. Paul Steckle: That game is not only being played here, it's being played in other provinces, and the matter of how that money is expended came up in Ontario too. Believe me, we have some of the same thing. We have the wineries, the fruit growers, even in my own riding, so I can tell you, we understand quite well your situation here.

Thank you.

The Chair: Greg.

Mr. Greg Norton: Thank you, Mr. Chair.

I'd just like to respond to that a little bit. Our cherry industry wouldn't be here without the Summerland research station and their varieties. I have to tell you, the federal government is supporting the cherry industry, the apple industry, the horticulture industry in this country wonderfully. I would say at this time, in their defence, don't cut their budget any more, give them a bit of a bumper, because the old Cadillac up there has low tires, the tread's wearing a little thin. Keep an eye on that, because their administration and maintenance budget I think has been frozen for the last three years, and you know what happens when you don't keep things up.

I'm excited about that. I'm so proud to be a neighbour of the Summerland research station. We work with their scientists. We're working on disease control with them, pest management projects. We've cooperated, joint funded, provided seed funding for the scientists at Park to go forward on some issues, and it's a great relationship, it's wonderful.

I can go it alone in this world quite nicely as a cherry producer, but we need a little tweaking. What I'm talking about is tweaking. We have a great system. I feel we're given an opportunity and a great place to work. What you're doing is handcuffing me with the PMRA.

The Chair: Rob.

Mr. Rob Holitzki: Thank you, Mr. Chairman.

One of the things I wanted to touch on, because we haven't heard much about it here today, is the crop insurance program in our own province of B.C. We are hearing rumours that our government wants to privatize the crop insurance program here. As producers--

The Chair: Rob, this doesn't answer Paul's question, and Paul's over time. We're going to have another session, if you want to come back. We have about five or six other people to talk about crop insurance.

¼ (1840)

Mr. Rob Holitzki: I'm sorry, I thought I was answering his question on how he could help, in that we need a good crop insurance program, and I'm sure the federal government could get involved in that.

The Chair: Okay, we'll take that as a short reply, then. But we have to be fair to all members, and Paul, you've had your five minutes.

I have two or three small points as chairperson. Senator Fitzpatrick had hoped to be here, in fact, I had anticipated it. He's not here tonight, though I know he has a representative here. He's a great supporter of your industry.

I was very concerned about some things with the wine industry. A lot of our liquor corporations across Canada don't take advantage of our many good Canadian wines. In fact, in some provinces, I know, you have great difficulty getting your bottles on their shelves. The Governor General, of course, has one the larger wine cellars in Ottawa, and a lot of people visit there. I was very happy to see that with our new Governor General--maybe not new, she's been there for a time--recently, last year, they decided to bring in Canadian wines big time for the people they were entertaining at the Governor General's house, Rideau Hall.

I, as chairperson, want to bring up one item Greg and others referred to, and that's merchandising. As a committee, we heard only recently that four or five major chains control about 80-some per cent of the groceries in Canada, and two of them control over 50%. I have a limited background at one time trying to sell milk, and of course, your own co-op dairy here in British Columbia has virtually disappeared, it's been sold out. There is a major problem in this country in how you're going to deal with companies that are so large and have their head offices so far away. They pay very little respect to the local situations. So I hope you will continue in your efforts in dealing with government and dealing with the public, so that you can merchandise your wares and get them out, not be dealing with some group from Phoenix or some company that's 1000 miles from where you are and really has no share in the future of your particular area. I think it's probably one of the largest issues we have to deal with in the next few years, who controls what these companies are buying.

I'm sorry to have to cut it off, but we do have another session. We'll take a break for a few minutes.

¼ (1838)

¼ (1845)

The Chair: Of our next presenters, Ms. McIntosh will be first.

¼ (1850)

Ms. Lisa McIntosh (Individual Presentation): My name is Lisa McIntosh, and I'm here representing the views of my partner and myself. We run an organic produce home delivery service in the Okanagan, delivering to about 300 people a week. So we're not a huge business, but we're trying to increase the market for local organic producers. Some of the views I'm going to express also reflect the concerns and interest expressed by our customers, as consumers, and by the farmers from whom we purchase. I wanted to categorize my comments according the five objectives expressed in the agreement in principle that was reached in Whitehorse.

The first one is renewal. We would like to see national and community-based food security highlighted as a priority for agricultural renewal. To borrow a phrase from Brewster Kneen, we should be feeding the family and trading the leftovers. There's been a lot of talk of export market development today, and while that is important, I think we should also be talking about import replacement and getting our product to Canadian consumers first, especially in light of the comments about the changes to the buying structures in Canada. My dad works for Westfair Foods, and he's not looking necessarily for Canadian product, he's looking for the cheapest product.

My next point is safety nets. I won't say too much about this, because I don't have any experience as a grower. We want to just show our consumer support for farmers being guaranteed a solid wage for the work they do. We think this is really crucial for ensuring that there are future farmers and that we're growing the next generation of farmers. Young people need to see that there's a viable future for them in order to be considering farming as a career. Of course, that's important for national food security in the long term.

On the environment, again I have not too much to say. I'm really pleased with the way this was expressed in the plan. The one area that does not appear to be covered is considerations related to animal welfare. So my one recommendation would be to take the lead from organic farmers with organic standards, who have already been doing a really good job of protecting and enhancing the environment through the work they do. Some of the standards could probably be looked at, and also the ways of monitoring their practices.

On farm food safety, some of the discussion brings up fears for me. I'm really worried that we're going to be implementing identity tracking and tracing systems that make it really difficult for small and medium-sized farmers to keep up with the bureaucracy and the paperwork that might be involved. I want to know that community-based economics, like the direct farm marketing, what we do with the organic produce delivery service, and other kinds of activities that are in a local circle are not thwarted by regulations that require lots of extra work on behalf of the farmer.

On genetic engineering, I'd like to see the government reconsider the practice of granting GE foods substantial equivalence, as is commonly done, and question whether GE foods can be seen as safe foods, when we don't have the tracking or the testing in place to ensure that there aren't going to be long-term indirect or direct impacts from GE foods on people, on ecosystems, and on biodiversity. I don't think we really have the information we need to be making those decisions, and I certainly don't think the Canadian government should be involved in promoting GE foods, when polls keep showing that consumers do not want that.

It also doesn't make market sense. As we saw last week in the Globe and Mail, China is creating new regulations that make it really difficult for Canadian GE canola to get into their marketplace. This is happening in Europe and other parts of the world as well. Consumers do not want to have GE foods, and their governments are being forced to respond. So the farmers are not going to be making money off GE foods either. The only people who are making money are the transnational corporations who are marketing the seed and the pesticides that go along with it.

My point there follows along to the science and research. When I read through the plan, it looked like the only kind of science and research the government was looking at supporting was in the life sciences. I find that to be a really scary euphemism. It sounds wonderful, but what life sciences are all about is death, in my view. We just want to urge you to do your part and help to prevent further catastrophes, for producers and possibly for the environment and human health down the line.

As an aside, I noticed that in the “Did You Know” section of the Agriculture Canada website it says Canada is regarded as an ideal country for producing organic food, because of its land base and the cold climate, which reduces pest and disease. So I'd like to see follow up on this good news statement in the form of infrastructure, production, marketing, all kinds of support, to producers to help them make the transition to organic, or to help organic producers who are already in production to augment their business.

I don't want to go on too much further, because I have to pick up a friend at the airport and because other people need to speak, but I do have presentations here that I can leave for the committee.

¼ (1855)

The Chair: For the record, then, you said you have 300 customers, is that what I heard?

Ms. Lisa McIntosh: That's right.

The Chair: And you grow this, or do you...?

Ms. Lisa McIntosh: We buy from local producers, and through wholesalers for imported produce, and then we box and deliver the organic produce to our customers, to their homes in Kelowna.

The Chair: To 300 people. What types of vegetables and that would you be delivering?

Ms. Lisa McIntosh: It depends on the season. We look to local farmers first, so whatever is in season is going to be what's in the box, and then we supplement that with imported produce.

The Chair: Is this a hobby or full-time?

Ms. Lisa McIntosh: It's triple full-time.

The Chair: So one of the Whitehorse things is that there are three classes of people involved in farming, but really you're a merchandiser. According to what we received, there was a group with gross income of $20,000, and then up to $100,000, and over $100,000. But you're really not a farmer, you're someone who is helping farmers out with the business.

Ms. Lisa McIntosh: Yes, that's right.

The Chair: Well, we appreciate your coming. I'm sorry you have to go--unless you come back afterwards, when we might still have some questioning time.

Ms. Lisa McIntosh: Were you saying I'm not a producer, and therefore my comments are not accepted at this meeting?

The Chair: No, my comments were more about how the Whitehorse people identified three groups of farm people, and what you're saying, really, is that there is a big demand out there. If you can have 300 families who you're delivering to in this community, that's certainly significant.

Ms. Lisa McIntosh: The other point I'd like to make is that we spent about $100,000 locally on produce last year, but we spent over $150,000 on imported produce, and our goal is to be reducing the amount we're spending outside our area, so we're working with local farmers all the time on that import replacement. To pick up on what Murray Calder was saying, we need to also be educating our customers about what is in season and when it's in season, and why it makes sense to eat turnips in the winter and not tomatoes.

½ (1900)

The Chair: Well, thank you for coming.

Howard has a question, and maybe we can deal with a few people.

Mr. Howard Hilstrom: The committee is studying the government's involvement in agriculture, and we in this country have agriculture in every province, and we want all the agriculture to be successful, so accuracy of information is important. It seems the way you've stated the Chinese issue with canola is not accurate. Japan still takes in GMO canola, and China is a spot buyer of canola. We've heard this in presentations from the canola growers, so I would refer you to them for accurate information in that regard. I would trust that the organic growers are not trying to use it as a marketing tool, to make it seem that GMO and other products are unsafe, so marketing of organic would be more acceptable to the consumers. According to Health Canada and the Canadian government, our food supply is very safe, there is nothing the matter with it. So I just wanted to make that comment that when you are promoting your organic, you should not tear down other agriculture and scare people off food that is perfectly safe for them.

Ms. Lisa McIntosh: We don't have to do a whole lot of marketing with organic. Our customers choose organic because they believe it's healthier. They are concerned about GMOs. We don't talk to them about that, they're the ones telling us they are buying organic because they know organic standards do not allow for GMOs. That's not part of our marketing in any sense. Our marketing is word of mouth, and it's customers who choose to buy from us because they have these concerns of their own. I do, as an individual, share those concerns.

Mr. Rick Borotsik: I have one other question, if I can, before Lisa leaves. You just said the standards of organics do not allow for genetically modified foods. Those are voluntary standards. There are no mandatory standards in Canada right now for organic produce. So how does one actually know that there are no genetically modified or, for that matter, any other types of non-organic foodstuffs that are going into your organic foodstuffs?

Ms. Lisa McIntosh: Do you know anything about the organic certification process?

Mr. Rick Borotsik: Sure, it's voluntary.

Ms. Lisa McIntosh: But you can't call a product certified organic unless it's been certified through.... Rochelle can probably speak to that.

Mr. Rick Borotsik: But it's a voluntary standard. There are no visual opportunities to say whether it is or is not organic, is that not correct? It's your word that it's organic.

Ms. Lisa McIntosh: Organic farmers need to undergo at least one inspection a year, that's my understanding, and often two in the case of new farmers. They also need to fill out a whole lot of paperwork documenting exactly all the inputs coming on to those farms, what their soil management practices are, what their pest management practices are. It's certainly voluntary to participate in the organic certification program, but once you're participating, adhering to the standards is not voluntary. If you're not adhering to the standards, you can't market your product as certified organic.

The Chair: Thank you, Lisa, for coming. This could be quite a debate, but I know it's a growing corner in many grocery stores.

Rochelle, could we go to you?

Ms. Rochelle Eisen (Individual Presentation): You're correct, the ability to make organic claims in Canada is voluntary, it's not mandatory. But if you want to identify something as certified organic, you must be within a certification body and have the third party verification process take place. This is a major problem for the Canadian industry, and we do need to talk about this. It is planned to deal with this shortly, is it not, at the Canadian General Standards Board level? This is a problem, as we can't claim equivalency.

This is not on my brief, but one of the things I have planned is that CFIA is going to have to do the work. If people are going to be allowed to voluntarily claim they're organic, and CFIA is responsible for labelling under the Food and Drug Act, then CFIA should have to go in and assess compliance with all the Canadian standards as they exist in legislation at this point.

Does that help?

½ (1905)

The Chair: Rochelle, could we have your brief?

Ms. Rochelle Eisen: Okay.

I'm honestly not dealing with organic stuff. That's not the reason I came. But you should know that I am an organic verification officer and I do work throughout this province, and the organic standards, provincially, federally, internationally, are quite extreme. It's a big thing, but that's not why I came. And in five minutes, what can I tell you that would impress you? Actually, I started off my brief saying, “I am standing in front of you today wondering what I can say in 5 minutes that you have not heard before”, and man, I'm surprised at what you haven't heard before. That's extra, and will convince you that some of my personal philosophies warrant government concern and attention.

I, like many others, have mulled over my submission for an excruciating length of time to get to the essence of what I feel the future role of the federal government should be in agriculture. Succinctly, I feel, and I can say, security, autonomy, and freedom are the most important considerations, feeling secure that the food that I buy meets my health criteria, that my food source in not vulnerable to international manipulation, and that I have the right to know what is in my food and can choose accordingly.

To focus this submission I have listed three policies I would like this committee to endorse.

First, support local food production, despite the trend to globalize the food system. I'm not saying anything new here, and there are many experts who can argue both sides of this equation, but we, as a community, cannot afford to lose our food production capacity, as then we become vulnerable puppets of the have nations, while contributing to increased greenhouse gas emissions. Statistics show that the average mouthful of food travels over 2,000 kilometres before being consumed. All this transportation means more fossil fuel consumption, which means more climate change. In North America it's estimated that the energy consumed in shipping, refrigerating, and storing food is eight times greater than the caloric energy provided by the food itself. In all countries for which there are data people are depending on food coming from further and further away. Seeking out and supporting local food sources can help us reverse this trend and sustain healthy rural Canadian economies.

Even local foods do not remain local. A large part of the Canadian food system is in jeopardy because of our continued cheap food policies, our inability to produce cash crops year round, and the constant influx of imported goods to fill those gaps, goods that are on our tables year round. Some of the direct consequences of cheap food policies are polluted steams, fouled air, questionable food quality, and security at the expense of our environment and every inhabitant in it, human or not.

I live in a part of Canada that does not have a great abundance of arable land, and most local producers aim for export specialty markets, as their economies of scale cannot compete with other importing jurisdictions. This strange turn of events forces local farmers to ship their products to distant markets composed of customers willing to pay the true cost of production for their specialty products. Do not misunderstand me. I do not berate any local producers who follow this course of action in these precarious financial times, but it should be recognized as an excellent barometer of the condition of our food sector.

Second, I would like you to reconsider policies that blatantly support development of biotech foods touted as the solution to feeding the hungry in our midst, as I feel further progression down this road will eternally undermine the safety of our food supply and our capacity to market our products on the international stage.

In a recent interview in the Sun Anuradha Mittal, a political scientist with extensive experience in international food-related activism, said, “People are hungry because they're too poor to buy food. There's a shortage of purchasing power, not a shortage of food.”

As Peter Rossett of Food First sees it:

In a world where one quarter of its inhabitants don't get enough food, genetic engineering has little role to help address the problem of global hunger, as the lack of technology is not the limiting factor for most subsistence farmers.

He goes further and says:

Per capita food production increases over the past four decades have far outstripped human population growth. The world today produces more food per inhabitant than ever before.

Rossett states of a growing number of rural farmers:

They can't make a living farming and more production isn't going to solve that problem. The real causes of hunger are poverty, inequality and a lack of access.

People cannot become self-sufficient.

In addition:

The green revolution was immensely successful in increasing crop yields, because of the development of high-yielding crop varieties and the use of chemical inputs. But this resulted in the destruction of many sustainable agricultural practices. Farmers using transgenic varieties risk being caught on a similar chemical treadmill, with crops requiring higher chemical inputs to achieve their promised yields, particularly high fertilizer applications. New developments in agricultural biotechnology are forcing farmers around the globe to buy seeds from multinational manufacturers and increasing our dependence on pesticides, fertilizers and monocropping systems. We need to reject a food system that requires intensive resource inputs and emits polluting, often carcinogenic, outputs.

The third thing I'm interested in is improved labelling policies for fresh, processed, packaged foods, to include extensive nutritional information, country of origin, fair trade, organic standards, and genetically modified contents. Improved food labelling allowing individuals to make their own choices would also advance the image of Canadian agriculture in a world arena already becoming alert to GMO issues, and as none of us can assure the future in respect of the impact of GMOs on our food source, it is imperative that those who create GMOs are responsible and willing to segregate and label their product. Every consumer has the right to know what is in their food, and many have made it abundantly and repeatedly clear that they desire this information.

In conclusion, I will support the development of Canadian agricultural policies that provide Canadian farmers with a greater share of the food dollar, encourage conservation, reduce the monopoly power of agri-businesses, require complete disclosure on food labels, preserve farm land, and support the ability of farmers and farm workers to earn a fair wage. Changes in federal policy can play a critical role in reversing decades of food system concentration, while reducing environment degradation, which will improve financial sustainability of family farms, improve water protection and food quality. At a time when every country must begin immense changes in how it approaches issues concerning the environment, its population, and its power structures, these proposed policy changes could only strengthen Canada and its people

Thank you.

½ (1910)

The Chair: Thank you, Rochelle.

Peter.

Mr. Peter Johnston (Individual Presentation): Thank you.

The two things I want to talk about are efficiency and economy. Small-scale growers are, I would argue, among the most efficient in the world and among the most important in the world. In Britain there was a case where a farmer's field was developed into housing, and the actual food production on that field went up. More people had back gardens and they grew more food in their back gardens than the land had as a field. Britain generally is a much more efficient producer per area than Canada, and I have no doubt whatsoever that many fields--probably not in the Fraser Valley--across this nation would become more productive if people were given good-sized, and I don't mean huge, city lots with back gardens and were encouraged to garden.

As well as that, local production is really important. I totally agree with what Rochelle said. Somebody said in the last panel that most people don't know what season it is. I would argue that most people don't know there are seasons. They certainly know there's a winter, spring, summer, and fall, because they have to change their clothes, but as for food, fruit, and vegetables, they haven't a clue. All year round in every supermarket in the nation it's the same. You can get strawberries any month of the year, though they cost more some times. I think we've got ourselves into a sorry state because of that.

When I was a young person, the provincial ministries of agriculture had extension agents who put in a fair amount of time publishing pamphlets, going around doing things, showing people how to grow stuff, and encouraging them, when they had problems, answering questions, and I would say that's one of the most important things that can be done. I can see that it is probably a provincial duty rather than a federal, but it's not being done, and you people could encourage that.

As well as having farms locally producing food that is fresher, healthier, lower-priced, I would argue that direct sales are very important, where people know their growers, where growers know their customers. They're important in a social, as well as an economic, sense. If we don't want Safeway and one other company maybe to take over our total food production, we have to do it ourselves and do it for our neighbours, and know where our food is coming from, know what season it is.

I brought a prop, a potato. I was going to bring, but I couldn't bring myself to buy, a bag of chips. So you'll have to imagine the bag of potato chips. This potato I got from neighbours seven or eight years ago. Actually, people on Saltspring Island got the original from the Pure Seed Company out in Fort St. John, certified organic potato growers. We have a give and take relationship. I got a few pounds of a number of varieties of seed potatoes. I didn't pay them, they gave them to me. I spend some time at their place, I do some work for them, they get some of my garlic, I get some of their cheese product and these seed potatoes. Since then I've grown the potatoes, given them to my children and their families, who live nearby, neighbours, when somebody doesn't have potatoes or has had a crop failure or for some reason doesn't have them. Most years I give several hundred pounds to the Salvation Army on Vancouver Island, near the island I live on.

The seed has gone I don't know how far. This potato and the potatoes it came from and its brothers and sisters have not contributed at all to the economy of the nation. No cash has changed hands in any of this, but I would argue that it's an incredibly important cementing of social and cultural and neighbourly relations. These days that doesn't get counted and it doesn't get valued, and I think it needs to.

The potato chips, on the other hand, were probably grown in some huge field with a lot of agricultural chemicals, a good deal of fossil fuel, fertilizers, trucked to some processing plant, processed, fried, dowsed in oil and salt, and made very unhealthy, but very expensive. Packaging was purchased, shipped around, cartons, advertising campaigns, lots of contributions to the cash economy. The people who eat them are not going to do all that well. If they eat an occasional bag of chips, it's not going to cause a great deal of harm, but there are people who eat that kind of food a lot, and they're not as well, they don't recover as quickly when ill or injured. So those potatoes have contributed to the cash economy, but not to any good for any of us, I think. For corporations, I think it's arguable it's done good, but not for people.

I think that's all I have to say, except that I'm willing to leave this potato if one of you gardens. Take it home and plant it, or I'll take it home.

½ (1915)

The Chair: The chair will take it home. I always grow my own potatoes.

Mr. Peter Johnston: Okay.

The Chair: It's a variety I haven't seen. I've seen some like it.

I have you as certified organic garlic.

Mr. Peter Johnston: That's correct.

The Chair: Is this a hobby?.

Mr. Peter Johnston: If you look at the balance sheet and the amount of money, probably. My partner and I own a fairly large piece of land on a northern gulf island, and when we made the last payment on it, we said, what can we do here to produce some income? It's one of the few pieces on the island with soil. We decided we would do grow something, so we chose garlic because it was valuable and durable.

The Chair: Is this your only income, gardening?

Mr. Peter Johnston: It's my only income. My partner has a small inheritance income.

The Chair: Yes.

Mr. Peter Johnston: I'm about the middle of your lowest category there. The farm doesn't earn much more or much less than $10,000 a year.

The Chair: I travelled by train up the Fraser this summer, and I was really taken aback by how much garlic is being grown here in the province of British Columbia. It's a big investment. I don't know much about it, other than that you use it once in a while, but there are problems with the garlic price recently too, aren't there?

Mr. Peter Johnston: I actually sell most of mine to friends and neighbours, and our price goes up every few years by 50 cents a kilo. I haven't had a problem with price.

The Chair: Okay. Thank you.

Howard.

½ (1920)

Mr. Howard Hilstrom: We in the Canadian Alliance are fully supportive or organic farming, and not everybody is going to farm the same way. There's conventional farming, organic farming, and farming--should I say?--partially outside the Income Tax Act. I'm not sure if that's very fair, but where, Peter, does the money for health care come from? That's a strange question, and I won't have you answer it. I'll make another point before you answer that.

In Manitoba we grow an awful lot of potatoes. We're second to P.E.I.--I'll defer to P.E.I. here today. We export those potatoes. We bring back tremendous millions of dollars in foreign currency and export earnings that bring wealth into Canada. I think what you're putting forward is a position that a portion of Canadian agriculture can be the niche market, the local economy, but you're not advocating that this be applied in any major way across the country. Could you expand on that a little?

Mr. Peter Johnston: I'm advocating that it be applied in as widespread a way as possible, because I think it produces better, fresher, and more nutritious food. It produces local economies, local healthy economies, locally sustainable economies.

Mr. Howard Hilstrom: After the First World War, at least across the prairies, and I'm sure it was same here, there were many farms that were only a quarter section, families were raised on that. But the economics of modern life don't allow for that any more, and it just seems it's not possible to apply that across the country.

Mr. Peter Johnston: I disagree with you that the economics don't allow that. They don't allow that if you're on the treadmill of buying a new $100,000 tractor and $300,000 harvesters, but there are people who profitably and comfortably farm a quarter section or two or three. They're not in the agro-economic mainstream.

Mr. Howard Hilstrom: I say there is room for that inside the country.

Mr. Peter Johnston: I wonder if there's room for the big people. They're struggling. I think organics are particularly helpful here, because the cost of your inputs is very much down.

Mr. Howard Hilstrom: Yeah, okay, that's fine.

I've got one question for Rochelle, a little bit off the wall, like my health question. You're fairly cognizant of agriculture in the bigger picture. You're a certifier for organic products?

Ms. Rochelle Eisen: I am not a certifier, I am a third party inspector. I am a contractor to the organic sector.

Mr. Howard Hilstrom: Are you familiar with the Canadian Wheat Board at all?

Ms. Rochelle Eisen: Do I know it exists?

Mr. Howard Hilstrom: Okay, maybe you're not.

Ms. Rochelle Eisen: That's a little facetious.

I came out of the conventional sector. I'm a graduate out of the University of Guelph in a horticultural program. I relocated to B.C. and challenged the organic sector; they took me under their arm and showed me the way.

Mr. Howard Hilstrom: One comment you made was that you were against large monopolies and that. Of course, the Canadian Wheat Board is set up by an act of Parliament, which is really like all we citizens together making a monopoly. Should we differentiate between monopolies, some monopolies are good and some are bad, or is it a question of whether it is a big international corporation or a Canadian government sponsored monopoly? Is there a differentiation there?

Ms. Rochelle Eisen: I have two answers for that question. First of all, I'm not a wheat grower, so I don't think it's fair for me to answer that question. Let's ask the small wheat grower who's affected by the policies of the Wheat Board.

As for monopolies and safeguarding our food source, we need to diversify our growing range of crops. We all know this, there's no denial on that, it's just that we focus on that export market so exclusively. I live in a region that exports a lot of product, because this is an ideal area for growing apples, there's no denying it. I'm not saying we should be ripping out orchards and putting in little vegetable fields. I can't see that. Our economies of scale force us to be doing this, and with wheat, I'm sure it's the same thing. It's just that we can't lose sight of quality and we can't lose sight of the fact that bigger scale doesn't necessarily return a better net to a grower per acre. This is proven, we've seen this over the last 40 years. It's basically the same thing Peter's saying-- not that we planned this. The organic farmers I deal with are sure driving way better vehicles than the average conventional farmer who's their neighbour, and I think that speaks volumes.

½ (1925)

Mr. Werner Schmidt: It's not that Howard and I don't agree, I think we do, but is it an either-or proposition? Hasn't the time come for us to recognize that a certain balance is required? We do have to provide for the seasons. We don't grow very much here in Canada in wintertime. We have to do something about produce during the winter. All kinds of things can happen there. Also, certain parts of this country are very well suited to producing certain kinds of food and other parts are not, and that does require bringing together the people who live in one area with the food that's being produced in another area, and that does involve transportation, storage, and all those kinds of things. So the question for me is, is it really an either-or proposition, or is it one of relative balance?

Ms. Rochelle Eisen: Peter, do you want to go first? Then I'll clean up any mess you make.

Mr. Peter Johnston: There is, of course, a need for balance. If I were totally obsessed with my own good as a certified organic grower, I would encourage conventional agriculture, because I think I'm going to lose that niche of certified organic, and I would love to lose it to locally grown and produced things, seasonal and fresh.

The main difficulty I see with conventional agriculture is that it is obsessed--and it's not agriculture's fault, as we all are--with the cheapest possible food, and we're in this race to the bottom. Can you in Manitoba produce potatoes cheaper than anywhere in the world, less the minute amount it costs to ship them? If we paid what the transportation costs really are, and I'm talking about environmental costs and social costs, we wouldn't be shipping food around the world, we wouldn't be eating strawberries from Peru or the asparagus I had the other night from Peru. I don't knew if it flew here. I assume so, it doesn't travel that well by ship. That's a ridiculous use of resources in this world. It's a ridiculous waste of our environment to fly asparagus around the world.

I live on Vancouver Island. We have a climate there that produces food virtually year round. There are many season-extending systems. In Manitoba people ate before modern supermarkets came along, they ate potatoes, they ate turnips. Every farm on every quarter section had a root cellar. And I certainly object less to shipping stuff from the islands, from the coast, the interior. Saltspring Island used to grow apples for much of Canada.

The Chair: Thanks, Peter.

I'd like to move on to Dick now.

Mr. Dick Proctor: Thanks, Charles.

I want to know what a third party inspector does.

Ms. Rochelle Eisen: I'm assigned a file by a certification agency. It could be a livestock operation, it could be a processing plant, it could be a land-based operation in orchard, vegetable, vineyard, whatever. I go out and inspect the books, I do audits, I look at the land, I look at the buffers, I look at the farmer, I talk to the farmer. I know that person inside and out. I have an intimate relationship with close to 500 farmers in this province on an annual basis. I know what makes them tick, I know what they're going to say, I know their commitment. Based on that, I definitely record where they're not in compliance with the regulations. The certification agency committees review all the files, they follow up on all those details annually. This is a repetitive process. You're not deemed to be certified organic and hung up there with a little gold star for the rest of your life. This is an annual process.

Mr. Dick Proctor: How many of you are there in British Columbia?

Ms. Rochelle Eisen: In British Columbia there are probably only about 10 of us. Across North America and the world there are only 150 of us. So there are very few.

Mr. Dick Proctor: And the vast majority would be in North America.

Ms. Rochelle Eisen: There's a high percentage of certified organic inspectors in Europe. Certification came along as a response to pollution loads in a lot of European countries. They were actually the group to start the organic movement long ago, and we've been following on and learning from them. Copper toxicity in soils in Germany became an obvious reason they had to change. So organics is just a response from looking at a system that's already been in place, trying to reconcile where have we gone awry and how we can make adjustments.

Mr. Dick Proctor: Thank you.

I just have one other area. A couple of years ago a senior officer of the Canadian Food Inspection Agency was before our committee in Ottawa talking about testing of foods. He made the point that if a potato from Prince Edward Island was certified organic, the Canadian Food Inspection Agency would test that every time to verify that it was indeed organic. If, however, you had something that was labelled “may contain GM”, they wouldn't check that, because if they checked it today, it might contain GM, if they checked it tomorrow, it might not. So they wouldn't deal with it that way. Does that seem realistic or reasonable to you?

Ms. Rochelle Eisen: There's no standard in Canada for residue testing in certified organic product, because certified organic management does not make residue-free claims. So testing is irrelevant, especially when you think about the pesticide load they find in the ice packs in the Arctic. To claim something is residue-free is not what certified organic processes are about. We're talking about a management system, seeing that people are in compliance with the system. Also, what pesticide would you be testing for? It too could be there tomorrow and not the next day. And then there's the sophistication of the test. All this testing is redundant for trying to move forward in finding sustainable management practices.

GMOs are a big thing, and I'm not saying that “may contain” is the solution, but we should make an effort. We should at least give consumers what they want to know, and that's information. I think we are irresponsible, as a community, not to at least make that effort. If somebody has the right to put GMO products in my foods, I believe they must label it. Why should I have to consume something I don't approve of emotionally?

The Chair: Thank you.

Murray, do you have a question?

Mr. Murray Calder: Yes, very quickly.

Rochelle, you are right into what I was going to ask you about, which is the labelling issue. Last month we had to deal with Charles Caccia's Bill C-285, which was asking for mandatory labelling. I voted against that because, quite frankly, I looked at it and it was an unworkable piece of legislation. Lisa, in her report, was wary of on-farm food safety programs. The reason I voted against mandatory labelling is that you need a tracking, auditing protocol to make it workable. I'm in favour of voluntary labelling, and right now there are only three industries I see that are actively going after that, the poultry industry, the pork industry, and the beef industry, which are setting up a HACCP-style auditing protocol.

So where do you see this auditing protocol, for instance, with the organic? How far along are you that you could actually go with a voluntary labelling system? Do you have any concerns about an on-farm food safety program?

Ms. Rochelle Eisen: That's a loaded question.

A lot of organic farmers truly believe their food is safer because of the methods by which they grow. With CFIA food recalls, there was, I think, one on an organic farm in the last 10 years, and none of them were even E. coli. I think in 1986 there was one instance of E. coli on an organic farm, and I think that's the last recall associated with an organic farm.

As for food security on the farm, with the inspectors already going onto organic farms, this is more contact time than most conventional farmers are getting already. Because we're trained in food safety, these are issues we do try to bring to people's attention. The last thing the organic sector as a whole would ever want is anything that would compromise its status in the consumer's eyes. The last thing we want to deal with is food safety issues, so we try to address them quietly during the process on the farm.

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Mr. Murray Calder: The problem we found within the poultry industry, for instance, is that to remain credible in the consumer's eyes, you need to have a program that is not self-policing, or they're just going to say, oh well, you guys have a vested interest here, why should we trust it?

Ms. Rochelle Eisen: First, inspectors are rotated constantly, so we're never in the same regions. There's no favouritism here. Also, we don't make the final decisions. Right now the provincial certified organic body is in the process of going for ISO accreditation for auditing. So we're already addressing these issues, keeping at arm's length, with the third party professional, this whole thing, to make sure we can comply with the consumer's concerns about whether this is a true process. That's why I'm not speaking on behalf of the organic sector. I came for myself today, because I'm not a spokesperson for the provincial body, I am just a contractor for that infrastructure.

Mr. Murray Calder: Okay, that's fine.

The Chair: Thank you, Murray and Werner. We appreciate being in your community.

Werner delivered a speech last fall on naming a Canadian poet. Do you remember, Werner?

Mr. Werner Schmidt: Yes, I remember.

The Chair: Peter, when I listened to you, I was going back probably another century to an American writer by the name of Thoreau, who wrote the Walden book--you're probably familiar with it. It's good to see we all don't dance to the same drummer, because if we did, we wouldn't have a very good society.

Both of you, we certainly appreciate your input here tonight. It reflects a growing interest in another agricultural sector. On behalf of the committee, I want to thank you very much for coming. We look forward to how we can address some of your concerns.

With that, we'd like to adjourn our meeting. Werner, thank you.