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37th PARLIAMENT, 1st SESSION

Standing Committee on Agriculture and Agri-Food

EVIDENCE

CONTENTS

Wednesday, February 20, 2002

1000

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

1025

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

The Chair

1030

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

The Chair

Mr. Howard Hilstrom

The Chair

Mr. Myron Thompson (Wild Rose, Canadian Alliance)

1035

The Chair

Mr. Desrochers

The Chair

Mr. Dick Proctor (Palliser, NDP)

The Chair

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

The Chair

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.)

The Chair

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

The Chair

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

The Chair

Mr. Ward Toma (General Manager, Alberta Canola Producers Commission)

The Chair

Mr. Nico van der Giessen (Director, Alberta Canola Producers Commission)

1040

The Chair

Mr. Tom Kulicki (Individual Presentation)

The Chair

Mr. Tom Kulicki

1050

The Chair

Mr. Tom Kulicki

The Chair

Mr. Tom Kulicki

The Chair

Mr. Duane Stevenson (Individual Presentation)

1055

The Chair

Mr. Allan Webber (Individual Presentation)

The Chair

Ms. Sadie Macklin (Individual Presentation)

1100

1105

The Chair

Mr. Norman Dyck (Individual Presentation)

1110

The Chair

Mr. Norman Dyck

The Chair

Mr. Leo Meyer (Individual Presentation)

1115

The Chair

Mr. Dave Hegland (Individual Presentation)

1120

The Chair

1125

Mr. Howard Hilstrom

Mr. Duane Stevenson

Mr. Howard Hilstrom

Mr. Duane Stevenson

Mr. Howard Hilstrom

1130

Mr. Duane Stevenson

Mr. Howard Hilstrom

Mr. Duane Stevenson

Mr. Howard Hilstrom

Mr. Duane Stevenson

Mr. Howard Hilstrom

Mr. Duane Stevenson

Mr. Howard Hilstrom

Mr. Ward Toma

The Chair

Mr. Desrochers

1135

Ms. Sadie Macklin

The Chair

Mr. Odina Desrochers

Ms. Sadie Macklin

Mr. Nico van der Giessen

1140

Mr. Desrochers

Mr. Ward Toma

The Chair

Mr. Murray Calder

Mr. Nico van der Giessen

1145

Mr. Murray Calder

Mr. Nico van der Giessen

Mr. Murray Calder

Mr. Nico van der Giessen

The Chair

Mr. Proctor

Mr. Dave Hegland

1150

Mr. Dick Proctor

Mr. Dave Hegland

Mr. Dick Proctor

Mr. Ward Toma

Mr. Dick Proctor

The Chair

Mr. Paul Steckle

Mr. Steckle

1155

Ms. Sadie Macklin

Mr. Steckle

Ms. Sadie Macklin

Mr. Steckle

Ms. Sadie Macklin

1200

The Chair

Mr. Borotsik

Mr. Duane Stevenson

Mr. Borotsik

Mr. Duane Stevenson

Mr. Borotsik

Mr. Ward Toma

Mr. Borotsik

Mr. Leo Meyer

1205

Mr. Borotsik

Mr. Leo Meyer

Mr. Borotsik

Mr. Leo Meyer

Mr. Borotsik

Mr. Leo Meyer

Mr. Borotsik

The Chair

Mr. Borotsik

The Chair

Mr. Thompson

Mr. Tom Kulicki

1210

The Chair

Mr. Norman Dyck

The Chair

Mr. Thompson

The Chair

Mrs. Ur

The Chair

Mrs. Ur

Mr. Leo Meyer

1215

Mr. Thompson

Mr. Leo Meyer

The Chair

Mrs. Ur

Ms. Sadie Macklin

1220

Mrs. Ur

Ms. Sadie Macklin

The Chair

1230

1235

Mr. Cliff Richards (Individual Presentation)

1240

The Chair

Mr. Irv Macklin (Individual Presentation)

1245

The Chair

Mr. John Sloan (Individual Presentation)

1250

1255

The Chair

Mr. Ron Matula (Individual Presentation)

The Chair

Mr. Ron Matula

1300

The Chair

Mr. Wayne Davies (Individual Presentation)

1305

The Chair

Mr. Claude Smith (Individual Presentation)

1310

The Chair

Mr. Harry Schudlo (Individual Presentation)

1315

The Chair

Mr. Howard Hilstrom

The Chair

Mr. Howard Hilstrom

Mr. Myron Thompson

Mr. Thompson (Wild Rose)

1320

Mr. Cliff Richards

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

Mr. Myron Thompson

Mr. Harry Schudlo

1325

Mr. Myron Thompson

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Myron Thompson

Mr. Harry Schudlo

Mr. Myron Thompson

Mr. Harry Schudlo

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Murray Calder

Mr. Harry Schudlo

1330

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Murray Calder

Mr. Irv Macklin

Mr. Murray Calder

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Dick Proctor

Mr. Cliff Richards

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Ron Matula

1335

Mr. Harry Schudlo

Mr. Proctor

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Steckle

Mr. Harry Schudlo

Mr. Steckle

Mr. John Sloan

Mr. Steckle

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Irv Macklin

1340

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Borotsik

Mr. John Sloan

Mr. Borotsik

Mr. John Sloan

Mr. Borotsik

Mr. John Sloan

Mr. Borotsik

Mr. John Sloan

Mr. Borotsik

Mr. John Sloan

Mr. Borotsik

Mr. Ron Matula

1345

Mr. Borotsik

Mr. Ron Matula

Mr. Borotsik

Mr. Ron Matula

Mr. Borotsik

Mr. Ron Matula

Mr. Borotsik

Mr. Cliff Richards

Mr. Borotsik

Mr. Cliff Richards

The Vice-Chair (Mr. Howard Hilstrom)

Mrs. Ur

Mr. Wayne Davies

Mrs. Ur

1350

Mr. Ron Matula

Mrs. Ur

Mr. Wayne Davies

Mrs. Ur

Mr. Ron Matula

Mrs. Ur

The Vice-Chair (Mr. Howard Hilstrom)

1355

Mr. Claude Smith

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Claude Smith

Mr. Irv Macklin

1400

The Vice-Chair (Mr. Howard Hilstrom)

Mr. John Sloan

The Vice-Chair (Mr. Howard Hilstrom)

Mr. John Sloan

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Cliff Richards

The Vice-Chair (Mr. Howard Hilstrom)

Mr. Art MacKlen (Individual Presentation)

1405

The Vice-Chair (Mr. Howard Hilstrom)

The Chair

CANADA

Standing Committee on Agriculture and Agri-Food

NUMBER 048

1st SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, February 20, 2002

[Recorded by Electronic Apparatus]

À (1000)

[English]

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

This is rather a big hall for those of you at the back. If some of you would like to move your chairs up around our own table, just on the perimeter, you're welcome to do it if the outfield--the back forty, as they say--is too far for you.

À (1025)

Pursuant to Standing Order 108(2), the Standing Committee on Agriculture and Agri-Food is here this morning in Grande Prairie to meet with you to look at your presentations on the study on the future role of government in agriculture.

This is the third province we've visited. The plan is that we'll travel across the country with the four western provinces this week and later on go to Quebec and Ontario and then into Atlantic Canada. Our committee is here to listen and not to speak. We're here to hear your presentations, to listen to your concerns, and to prepare for an eventual report to the House of Commons on what we have gleaned from the presentations that are made.

In the first two provinces we probably had about 125 presentations. A lot of people came out. This morning we want to say that for those of you who have indicated you want to make presentations, you are certainly on the agenda. If there are others in the hall who would like to speak to the committee, at the end we will have a period of time when you can very briefly give us your message. When we have heard all this and when we write a report, the report will reflect what you have said to the committee and not what the committee has as its message. Rather, it will be your message going directly to the House of Commons.

It's anticipated that we'll get back to Ottawa eventually and spend some time writing a report as a committee. Hopefully it will be a unanimous report, but some reports are not unanimous. In other words, the parties have their points of view, which sometimes differ from each other.

Hopefully it will be done in June, and after that we'll try to see that people who did make presentations are mailed a copy of the report as it goes to the House. There's no assurance that the government is going to do everything that is in the report, but we want to assure you that your views will be presented as those of the farmers and agricultural leaders from the various parts of Canada.

We do have interpretation for those of you who need it. The little machines haven't come around yet, but they will be coming.

Monsieur Desrochers, are you comfortable? Your English is pretty good, but would you like to have that before we start? I think in fairness we should because--

Mr. Odina Desrochers (Lotbinière--L'Érable, BQ): You can start now. No problem.

The Chair: My apologies for it, but I guess some of our....

For your presentations, we've said five minutes, and as chair, I'll give you a sign when you get close to five minutes. Generally, people have been very cooperative. Only in a couple of cases have we had to say, well, you've had six minutes and it's time for us to shut off your microphone. Try to be as accurate as you possibly can with the time that's allocated to you.

À (1030)

Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance): Perhaps we could have a little self-introduction before we....

The Chair: Before we begin, we're going to do all that. The vice-chair of our committee is Howard here, and Howard, if you would introduce yourself first, we'll move around the table.

Mr. Howard Hilstrom: Thank you very much, Mr. Chair.

My name is Howard Hilstrom. I'm the official opposition's chief agriculture critic. My riding is Selkirk--Interlake, which is just on the north side of the city of Winnipeg, Manitoba. I live about 60 miles north of the city of Winnipeg and am a cattle rancher up there. I grew up down in southern Saskatchewan on a mixed grain and cattle farm.

The Chair: We'd like to welcome Myron too. You probably know Myron very well out here in Alberta, and he's filling in today as the second member of his party's representation here. Welcome, Myron. Would you like to say a few words?

Mr. Myron Thompson (Wild Rose, Canadian Alliance): I'm Myron Thompson from the riding of Wild Rose. I'm an alternate member for the agriculture committee as well as an alternate member for the Indian affairs committee, an alternate member for the parks committee--a number of them--because in Wild Rose there's a wide variety of issues, farming being one of the key ones.

So it's a pleasure to be part of the committee and hear what the Albertans have to say to the committee today. I'm most anxious to hear that and it gives me pleasure to be here. It's good to see some of you again.

À (1035)

The Chair: Thanks, Myron.

Odina.

Mr. Odina Desrochers: Good morning, everybody. My name is Odina Desrochers. I'm a member of Parliament. I represent the Bloc Québécois. My riding is Lotbinière--L'Érable. It's close to Quebec City. It is the most rural riding in the province of Quebec. I was born and I grew up on the farm. I'm really glad to be here to visit you, to hear you, and to help you. Have a good day.

The Chair: Merci.

Dick.

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

My name is Dick Proctor. I'm the New Democratic Party agricultural critic and represent the riding of Palliser in Saskatchewan. I have been the agriculture critic since I was elected in 1997.

Thank you.

The Chair: And Rick.

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

My name is Rick Borotsik. I'm a member of the Progressive Conservative Party, their agriculture critic, and I represent the riding of Brandon--Souris, beautiful Brandon, Manitoba, home of the Brandon Wheat Kings. It's nice to be here.

The Chair: Rose-Marie.

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.): Good morning, everyone. I'm Rose-Marie Ur. I'm member of Parliament from southwestern Ontario. I was elected in 1993 vice-chair of the rural caucus, and I'm pleased to be in Alberta and to see some familiar faces at the table again, those who have come to Ottawa to represent our agricultural issues. I live on a farm and look forward to the presentations.

The Chair: Paul.

Mr. Paul Steckle (Huron--Bruce, Lib.): I'm Paul Steckle from the riding of Huron--Bruce in Ontario, a southwestern Ontario riding. It encompasses communities such as Goderich and Grand Bend. We have a totally agricultural riding. I'd like to claim that it's the largest agricultural riding in its dollar-value production of any riding in Canada east of Winnipeg. We have the largest inland grain elevators in Canada in the village of Hensall.

I'm proud to be here. I've been on the standing committee since 1994 and I look forward to your presentations today.

The Chair: And Murray.

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

My name is Murray Calder. My riding is Dufferin--Peel--Wellington--Grey, which is in central Ontario. I'm the vice-chair of the standing committee and the chair of national rural caucus. My riding deals within it any and all types of agricultural production, including market gardening and tender fruits. In my other life, I'm still an active chicken farmer. Our farm is Calderwood Farms at Holstein, and we market around 360,000 chickens a year off the farm.

The Chair: Thanks, everyone.

And my name is Charles Hubbard. I'm from Miramichi, New Brunswick.

I would like to say today that it's certainly good to be here. We have appreciated the efforts that your farm leaders have made in going to Ottawa on many occasions to make presentations, and I know they do represent you. But with our tour we are hoping that everyone within the agricultural groups and the community areas can come and speak with the committee, so we are a little bit more open than we would be in inviting people to Ottawa to be witnesses or to make presentations.

So with that, we'll start first this morning with the Alberta Canola Producers. It's my understanding there are two people here from that. Who is going to do the presentation?

Mr. Ward Toma (General Manager, Alberta Canola Producers Commission): Thank you, Mr. Chairman.

My name is Ward Toma. I'm the general manager with the Alberta Canola Producers Commission. With me is Nico van der Giessen. He's a farmer from Bezanson, just outside of town here. He's an elected director to the commission and he'll be making the presentation.

The Chair: Thank you.

Mr. van der Giessen.

Mr. Nico van der Giessen (Director, Alberta Canola Producers Commission): Thank you very much, Mr. Chairman.

Ladies and gentlemen of the committee and guests at this hearing, I want to welcome you to the Peace River block. A little trivia: we probably have as much agricultural land here as Manitoba has.

Anyway, now to get back to business. The Canadian government plays an integral role in many aspects of our food production and marketing system and food safety. Ensuring the integrity of the food safety system will continue to be an important role of the Government of Canada. In regular consultations with our domestic and international customers, we have been told that they trust the Canadian system of food approvals that ensure human, animal, and environmental safety.

Do they want more? Yes, they will always take more if we give it to them for free. Will the sale be lost if it is not provided? Not likely. The simple fact is that Canada has one of the best food safety systems in the world.

If the Government of Canada were to put in extra measures that are above what is necessary and above what the consumer is willing to pay for if he is able to obtain something cheaper from another producer, the Canadian government must bear the cost. The Canadian farmer alone cannot afford to pay for it.

Marketplace integrity: The integrity of the canola market, the ability of market signals to move from consumer to producer and vice versa, is key to our industry's ability to meet consumer demands. The Government of Canada has a role in ensuring that the canola market operates properly. This is not to say that the Government of Canada should perform the functions of the canola market or any activities that are conducted within it. The government's role is to ensure the integrity of the market in which these functions occur. Its role is to ensure that the market is open and without barriers to entry or exit, that competition exists, and that no single segment or entity has undue influence over the consumers and the producers of the product.

Agricultural safety nets: The Canadian government, in collaboration with the provincial governments, is developing a comprehensive farm income safety net package for farmers. When market price is continually forced down by international subsidies, the averaging mechanism of current programs quickly reduces income support, placing the Canadian oilseed producers and grain growers in an unsustainable financial position. The Alberta Canola Producers endorses the efforts of the Grain Growers of Canada in its development of a program to compensate for trade injury. A proposal of this program, delivered to the National Safety Net Advisory Committee, addresses the serious issue of Canada's eroding position as an internationally competitive producer of food.

International trade: International trade is the lifeblood of Canadian agriculture and the Canadian canola industry. A positive conclusion to the current round of WTO talks is important for the future competitiveness of our industry. Science-based sanitary and phytosanitary trade rules must be implemented and enforced; otherwise, there will be a proliferation of non-tariff trade barriers. Fair and free trade must work in both directions and not be subject to political whim.

Research: Canadian agriculture and canola in particular have benefited greatly from the research efforts of the Canadian government. Our industry's competitiveness is a result of it. The Government of Canada must provide enhanced resources for investment in research, infrastructure, and manpower to continue to provide the base for future stability and growth of agriculture in Canada.

In summary, in the future the Alberta Canola Producers Commission sees the Government of Canada ensuring the integrity of Canadian food safety, having in place a comprehensive safety net for agriculture producers that takes into account the impact of international subsidies, negotiating an international trade agreement that allows Canada the ability to compete freely; and being a leader in agricultural research and development, attracting private sector research to the industry.

Thank you for allowing us to share a vision of the future role of the Government of Canada in the agriculture and agrifood sector.

À (1040)

The Chair: Thank you, Mr. van der Giessen.

You're under five minutes, with about 30 seconds to spare. You really did well.

Tom, are you next? Tom Kulicki. And if you would, maybe just give us some background-- who you represent, what farm you have, or whatever--so we can have that on the record.

Mr. Tom Kulicki (Individual Presentation): Thank you.

I'm actually a bit of a freelancer here. I don't really represent any segment. I farm southwest of Beaver Lodge, so I'll get right into this.

The Chair: And your farm? Could you just mention what type of farming background you have?

Mr. Tom Kulicki: I am a second-generation farmer. We're basically grains and grasses.

Thank you for the opportunity to express my views on the future and, may I add, proper role of government in agriculture. First I must explain that I suffer from a mild case of libertarianism and as a consequence I may well not endear myself to my fellow panellists. However, be that as it may.

In my mind, the economic state of agriculture in Canada is a direct reflection of the state of the economy as a whole. One cannot have a financially stable agriculture industry without having a strong vibrant economic base from which to grow. For example, our dollar has declined from 82¢ U.S. in 1993 to just over 62¢ today. To paraphrase a recent editorial from The REPORT Newsmagazine, cheap labour and an unstable currency are third world policy hallmarks. Therefore, to me the proper role of government in agriculture is merely an extension of the proper role of government and the economy as a whole.

Government itself should neither encourage nor discourage production by artificial means. Encouraging production is the proper role of the capitalist free market. Throughout my 40-year career in agriculture, the government and/or agriculture companies have in turn encouraged farmers to specialize, to employ economies of scale, to diversify, to engage in high-input, low-margin production, and, as Mr. Vanclief recently inferred, to be sure to plant crops only in summer-fallowed acres if it isn't going to rain that season; and if all these things fail, to upgrade alternate skills and subsidize the farm through outside employment.

Just as centrally planned involvement in western diversification, east coast industrial policy, and native development have all been dismal failures, so has government's attempts to steer the agriculture industry. Government intervention in the market has quite plainly caused more problems than it has solved.

A quick look around the world clearly shows that the greatest influence on the viability of agriculture is not climate, it is not soil type, it's not prices, but the activities of government itself. It's no coincidence that by and large the most primitive economies, the most wretched conditions, and the hungriest people are all found in countries with the most autocratic, despotic regimes. It is also no coincidence that the countries that are most highly inimical to private enterprise have the greatest ability to subsidize production, which inadvertently distorts the mechanisms of a free market.

We can see this quite clearly in the fact that the countries with the highest levels of agricultural subsidization also have the highest levels of land prices, thereby denying young people the opportunity to enter the industry.

Once again, government intervention does not solve problems; it creates them. The proper and limited role of government is to protect us from bureaucratic inefficiency and to maintain a strong currency and a fiscal regulatory and tax framework in which private enterprise can flourish. Left to their own devices, farmers could and would respond to signals from the marketplace.

A recent news article in The Economist stated that the richest countries combined subsidized their farmers to the degree of $1 billion per day. At the same time, the U.S. Congress is about to pass a bill increasing subsidies to farmers and making freer trade in textiles and agricultural products much harder.

Understanding our government's self-imposed limitations of massive public debts, a bureaucratic and regulatory nightmare, and unfunded liabilities to natives, pension systems, health care, education, and so forth, one must ask, where do we go from here? Do we do nothing and watch countless thousands of farmers quit or go broke? Do we, as farmers, ask government to match subsidy with subsidy, only to watch them being capitalized into the price of land and machinery? Or do we ask government to do the only thing that it truly has the power to do, and that is to aggressively pursue relief through the regulatory, fiscal, and tax side of the ledger?

Assuming government had the wisdom and courage to go this route, farmers could and should expect the recognition of the extreme volatility of grain production with a tax approach accorded to that of, say, mining or fossil fuel exploration. Farmers could and should expect relief from fuel taxes, capital gains taxes, income tax, property tax, tire recycling tax, and an endless list of other fiscally demoralizing taxes. Farmers should expect a depreciation--

À (1050)

The Chair: Tom, you're over your time now. Can you just summarize. I've been trying to signal you.

Mr. Tom Kulicki: I only have a little bit left, if I can.

The Chair: I'm not sure I'm reading you right, but anyway I'm going to give you 30 seconds to sum up.

Mr. Tom Kulicki: Farmers should expect a depreciation schedule that takes inflation into account. The NISA program, if retained, should have artificial triggers removed. Whatever form crop insurance takes, the level of coverage should reflect not bushels per acre but the average cost of production.

The Chair: Thank you, then, Tom. I'm going to cut you off now, and you'll have a chance when people have questions.

Mr. Tom Kulicki: Sure.

The Chair: I didn't meet you in Doha, but you may have been there. You have some points similar to what I heard there.

Duane, Mr. Stevenson.

Mr. Duane Stevenson (Individual Presentation): I'll give a bit of my background as well, Mr. Chairman. I'm an agriculture advisory person with Meyers Norris Penny, an accounting and business advisory company. I represent farm clients in the Peace River region. My role is to help manage business risk on farms to sustain profitability.

I'd like to thank you for the opportunity to speak here today. I'd like to talk about four different issues: fair trade barriers, grain transportation, agriculture research and value-added, as well as the farm safety net program.

First I'd like to speak in regard to the government's role in barriers of trade with other countries. In my role as adviser with my clients, marketing is a large part of the decision-making process to make profit on each farm. At this time, we all know that a major amount of our production is exported to other countries. In order to sell our product for a fair price and compete with these countries, we must have a strong federal force to reduce those barriers. Our government has a strong program, and I encourage that this department grow to ensure that we have a long-term initiative for national trade disputes.

The second important role of the federal government should be to continue to focus on the grain transportation for export. Over the past 10 to 15 years, we've been in a major rationalization with the grain industry in western Canada. Railroads have been reducing branch lines, removing rail tracks, and focusing on more efficient systems of unit car operations. The grain companies were affected immensely by this and moved to reducing the number of grain elevators in the country. Permanent facilities then were strategically placed in areas where they matched the best freight rates for their customers.

In 1996, the federal government paid farmers to pay out the Crow subsidy on freight to the coast. The farm community has struggled with rapid change and has had to adapt very quickly to move their production in a timely manner. It is important that the federal government recognize what some communities have lost in terms of grain delivery services and continue to support the adaptation process for the least cost of delivery.

A typical situation that illustrates how things have changed in our area is that in the Fairview area north of Peace River, the community has lost the rail line completely from Hines Creek to Grimshaw, and in turn the grain-handling facilities became defunct. The farmers' only option is to truck the product to a major handling facility in the Rycroft area at his or her own expense.

The farmers naturally did not like what had happened and had no influence on this. In order to reduce their operating costs, farmers have been pursuing loading rail producer cars. Loading of producer cars has been a right of farmers for many years. In the media these days we read about pressure from the grain industry to the Canadian Grain Commission to license facilities to do this. There may be risk of needing bonds and legislation to regulate producer cars. This could be a major loss for our farmers who are marketing through producer cars, so we strongly recommend that we allow it to continue. The Canadian Wheat Board seems to be very proactive in supporting that the farmers do load their own producer cars in those communities.

We are pleased by this direction and by the evolution of this process. I understand that only about 2% of the grain in western Canada is shipped by producer cars, and that there are some major savings--between $1,000 to $3,000 per rail car--to move grain through producer cars. So that is very important.

As well, value-added may come out of farmers using producer cars. Processing that's done before the product moves to the coast is very important. It reduces the cost at the ports and encourages industries to develop in the local communities.

The third important role for the federal government is agriculture research, as was mentioned earlier. There has been an evolution towards privatization. We think it's important that the federal government remain involved to ensure integrity of the research and food safety for our customers, and to control quality as well as standards. The other important thing we would like to see continued is tax credits for farmers to do on-farm research and to promote applied research on their farms.

Fourth, just quickly, is with regard to the safety net programs. The safety net programs have transitioned into the NISA, AIDA, and FIDP programs. They have been very good programs. We like what they have done for farmers over the last three or four years in our community, and we would like to see them improved.

NISA is one program that I think we need to be clear on in terms of the drawings from it. About 30% of the eligible drawings have come out, but this is not a bad thing, because it does help us with our generational transfer, with the next generation of farmers.

I apologize for taking so much time.

À (1055)

The Chair: We all have that trouble, but we try to make sure it is five minutes.

Mr. Webber.

Mr. Allan Webber (Individual Presentation): Good morning, Mr. Chairman.

I'm an organic farmer from the Grande Prairie area. As well, I sit on the board of the Alberta Organic Association.

There are many issues facing organic producers, but probably the most important one at this time is the lack of a national system of certification that will gain producers access to their intended markets. The major problem is that regulation is coming from outside of Canada right at this time.

There are serious concerns relating to the impact of GMOs on organic production. Canola, for all intents and purposes, is no longer viable as an organic crop. The introduction of GMO wheat would probably eliminate organic grain production in Canada.

Another major concern is research of organic systems. This potential has only begun to be investigated. The Government of Canada can choose to take a leadership role in developing research programs and providing initiatives to promote this research, which will undoubtedly provide knowledge pertinent to sustainable rural development.

I will now pass the mike to Sadie.

The Chair: Sadie Macklin, welcome.

[Translation]

Ms. Sadie Macklin (Individual Presentation): Thank you. My name is Sadie Macklin. Please excuse me for speaking just in English but, since I have only five minutes and I have a lot to say, I am better able to communicate in English.

[English]

I have a farming background, but I am not a farmer. My parents have a mixed farm north of DeBolt. I am a student, and I do various other jobs to pay my studies. I study political economy.

Á (1100)

On the future role of the Canadian government in agriculture, I do have a lot to say. I think it is important to everyone, since everyone eats, but the future is more important to people in my own age group and younger than it is to older people.

What bothers me is what sometimes is taken into account and what sometimes isn't taken into account when we look at the role of the government in industry. We take into account how the economy, money, and trade are impacted, but quite often we don't take into account how it impacts people, how it impacts the community and the environment, and how it will be sustainable in the long term.

I would like to see the Canadian government do things that sustain healthy community bonds, provide for a sustainable and healthy environment, and enable Canadians to believe in the food security and stability of their food system. I would like to see the Canadian government take a valued role in healthy food production. If we want to leave this in the hands of others, in the hands of private industry, that's fine, but we also have to realize that this is in the interests of money and not in the interests of the general population.

The way in which I see this happening is to have the Canadian government enforce very strong and effective health and safety regulations that are rigorous, justifiable, and trusted by the Canadian population. We need regulatory agencies that are well funded and universal, and we need to raise rather than lower the common standards of what we're looking for.

The other thing I think the Canadian government really needs to look at is to make sure that we have adequate infrastructure. We need to be able to live in rural communities in a healthy manner. There needs to be a good infrastructure to provide for a good distribution of agricultural products. As agriculture is an important component of our economic system, we need that infrastructure in order to maintain a healthy economy.

Taxes can play a very important part, I think. I am not in favour of taxation for taxation's sake, but I am in favour of taxation for providing services. That is my view of what taxation is put there for.

The role of the market is important, but I believe it needs to be limited to what is in the best interests of people in general. When it comes to foreign power and foreign negotiations, I believe we need to be in charge of our own domestic policies and we need to allow other countries the same privilege in their terrain. Individuals need to have independence to do things, but that also has to be restricted when it comes to how it affects other people. That is the principle behind any laws we have, and I don't see why that should be any different in an industry that provides our food.

As a young person, I am very concerned right now. As I look around me I see the apathy in my peers and how negatively people view politicians and politics. I look at what's happening in some other countries. Food riots are very often one of the ways in which discontent comes out if we don't maintain a very good, safe, trusted, secure food system. I would not be surprised if in my lifetime things just completely fall apart.

Thank you.

Á (1105)

The Chair: Thank you, Sadie.

Would Steve Schnider mind coming up to the table too? We've tried to balance out our groups, and I see Yvonne Sinkevich didn't come. If Steve would come up, I'll call on him. Is he here?

I guess that's someone else who hasn't shown up.

Would Dave Hegland be here? Okay, Dave, would you mind coming up to the table now. I'm going to go to Norman and Leo, and we'll have you as part of this first roundtable.

Norman Dyck.

Mr. Norman Dyck (Individual Presentation): Thank you, Mr. Chairman, and thank you, panel members, for showing up in Grande Prairie.

The clerk has some graphs the panel members may find useful to refer to later.

My wife and I farm an hour out of Grande Prairie and will farm one more year. We started off homesteading. We farm in a community where we now are surrounded by a partnership that controls 170 quarters. Our six-quarter farm is now up for sale. It's probably sold.

The comments I want to make here are based on input from some very thoughtful friends and family members, and also the National Farmers Union.

Stability: that's what we're looking for in agriculture, for our communities and the health of our food system.

For 20 years governments have removed the barriers to corporate greed in the name of efficiency and deregulation. Who have been the beneficiaries? The results are a complete failure of the market to fairly allocate the benefits of the technological innovation invested and applied by farmers back into the farming community. The results are so self-evident even a stock promoter should be able to see the disaster in rural Canada. Value-added, although always a good idea, will never be a great economic driver for most of the west until transportation becomes cross-subsidized by taxpayers or we have a huge population increase.

Yesterday's end-run policy of agricultural deregulation has failed because the raw products we can grow--grains and oilseeds--make up such a small portion of the costs of the consumer-ready product that even giving it to the processors below our costs of production cannot lure enough processing capacity here to absorb our production potential. The graphs you have will show and verify this.

A good example of the failure of value-adding is the Sexsmith canola plant and numerous other plants across the prairies.

So what do we do? The following steps would recognize the reality of farm production in the west, as opposed to the ideologically guided policy of the past two decades.

Number one, take away the railway's right to exploit their oligopolic control of transportation. Either reimpose a statutory freight rate that is tied to the value of the commodity--for example, set freight rates to 5% of the commodity price at port--or nationalize the rail beds and open them to all competent operators to move grain and other freight. In other words, allow open and competitive joint running rights. Where there is no competition to discipline the railways, there must be regulation to ensure competition.

Number two, provide a credit system to farmers based on fixed-interest loan rates. Farm income is so variable that the added burden of variable interest rates is a risk most prudent farm managers avoid, because they have seen too many of their neighbours destroyed by a sudden change in interest rates. I bear that out in my community. I'm the last small farmer in our area. A big corporate farm has taken over. It's decimated the area. The only thing that kept me alive was pharmaceutical drugs to keep myself together.

The crop insurance system is using the commercial insurance system as a model: the more accidents you have, the higher your premiums and the lower your coverage. Crops, on the other hand, are mostly lost through no fault of the farmer. Hail, drought, frost, and excessive moisture are called acts of God, yet the farmer is the one who is then penalized with higher premiums and lower coverage. We need a crop protection plan that does not penalize conscientious farmers for events beyond their control.

Commercial plant breeders have demonstrated their conflict of interest by focusing on strains that require their manufacturers' petrochemical products to survive, for example, Roundup Ready canola. It is important that the government include market impact in the variety registration process. Monsanto is less than two years away from introducing a GM wheat variety.

The Canadian Wheat Board's survey of Canadian wheat customers has documented that two-thirds of our customers do not want to buy GM wheat. If GM wheat is introduced for commercial production, is the government or are the seed companies going to compensate for the billions of dollars in lost market share?

We need the federal government to announce, again, a financial plan with the public interest in mind. The focus once again needs to be on the profitability of farmers with hardy, disease-resistant, and versatile varieties, not what the private sector is giving us, the hothouse varieties that require costly proprietary inputs from the mother company.

We've lost our European market for canola because of the conflict of interest and greed of the private trade. We are well on our way to losing the Japanese market as well. The world wants high quality, and the private trade is only interested in bulk shipments of low quality. Contrast this pathetic performance by the unregulated trade with achievements of value-adding and board grains in the west.

About 30% of Canadian wheat and durum is milled or processed on the prairies. In the United States only 11% of their wheat and durum is milled or processed on their prairies. The largest malting plant in the world is located in Alix, Alberta. The Wheat Board markets small barley.

Obviously the Wheat Board has not been a deterrent to the development of the largest concentration of feed lots in Canada, in southern Alberta, although the generous subsidies from the Alberta government and the deregulated freight rates have played an important role in its development. Higher freight rates have made feed grains dirt cheap. Contrast this with the inept attempts at value-adding in canola...a major crushing plant assessed with several tens of millions of dollars of Alberta government subsidy loss is being converted to a glue laminate plant for the forestry industry. Add the closure of another plant--

Á (1110)

The Chair: Norman, you're running over your time.

Mr. Norman Dyck: In conclusion, I will say to you, the largest society, that we'll have nothing without profitably driven farms--no rural communities, no environmental stewardship, no economic progress.

I live in an area where one farmer now owns 170 quarter sections of land. In the meantime we have lost our community. Those of us left live with our services and no farm families.

You can pay us now and preserve rural Canada or you can pay later to maintain the dinosaur corporate farms that are rapidly blotting out the memory and physical landmarks of farmsteads, shelter belts, community halls, and schools. Along with this will be a loss of community, and the infrastructure will be a dramatically impacted physical environment and compromised food safety.

Thank you, sir.

The Chair: Thank you, Norman.

Mr. Meyer.

Mr. Leo Meyer (Individual Presentation): Thank you very much, Mr. Chairman.

I hope to put a little more of a positive spin on agriculture after this, Norm.

Ladies and gentlemen of the committee, good morning. And bonjour à vous, monsieur Desrochers. It is with great pleasure and gratitude that I have the opportunity to make a presentation on the future role of the Canadian government in agriculture.

As a family, we farm about 75 kilometres northwest from Grande Prairie in the Saddle Hills towards the White Mountain area around the communities of Spirit River, Rycroft, Woking, and La Glace. We operate an integrated grain production, pre-processing, marketing, and logistics management operation. We emphasize good economics, environmental stewardship, and sustainability and we grow only non-transgenic crops. Our products are delivered to our customers across western Canada, but mainly into central and southern Alberta.

The following points are only ideas, and I'm not here to make statements on the topic in question.

One, have better communications, promotion; in essence, better PR. Promote proper image-building and send positive messages to the non-agricultural community about the agrifood sector, about the sector's importance in our economy and society.

Two, make the connection between food, defence, and overall nation security and draw out with this the necessary conclusions for a much more comprehensive and committed agrifood vision and policy in Canada.

Three, quit the laissez-faire policy that is so evident today. Give positive support to farmers. Don't tell them if they can't make it just to move on when so often the reasons for such circumstances are way outside the area of their own influence.

Four, build knowledge chains between participants and the agrifood sector, the research community, markets, and consumers.

Five, participate in the WTO in a meaningful, efficient, open-minded, transparent, and forceful but equal and fair way. Communicate with stakeholders about WTO and agency-related issues promptly, timely, and cooperatively. Point out consequences of evolving processes in WTO, including informing the provinces.

Six, build networks between industry and government. Improve intergovernmental communications and cooperative approaches. Harmonize rules and regulations Canada-wide. Create a national transportation policy and truly free trade among all provinces across Canada, including Quebec and the UPA.

Seven, create a framework for transgenic crop production, processing, distribution, identity preservation, and a segregation system. Put a national policy in place for genetic cloning and other emerging modifications in biotechnology. Have independence from multinational science corporations, and make Canada a renewed leader in healthy food production and environmental stewardship approaches. Label all transgenic products. Make clearly visible for consumers those that introduce transgenic modified species in the first place. Review rules and policies on intensive livestock operations.

Eight, make the connection between healthy food, good environmental stewardship, respect for nature, and the wellness of a society. Good health care begins with the healthy food one eats and the clean water one drinks.

Nine, establish world-class laboratories to test not only food and feedstuff but also plant disease and control.

Ten, establish a national centre for animal disease control and excellence in genetics and biodiversity.

Eleven, encourage better economic consideration, crop rotation, environmental stewardship planning, and awareness of the water and its fundamental importance for all of us.

Twelve, provide comprehensive and meaningful cost-covering crop insurance programs as a number one risk management tool. Review NISA.

Thirteen, encourage risk management through knowledge chain approaches and crop insurance linkage. Leverage cashflow through better risk management.

Fourteen, enhance and maintain the crops advance act. Spring and fall advances are very helpful, easy to access, and relatively simple to administer.

Fifteen, improve farm improvement loan access and availability other than just through the banks and credit unions. Increase the maximum limit with respect to the upper ceiling.

Sixteen, create a forum, and through that a vision, with regard to financing agriculture in the future, maintaining some independence among farmers.

And seventeen, establish centres of excellence in agriculture to foster ideas and a knowledge base in agrifood education and enhancement.

These are only a few ideas added to the many good suggestions made today around this table by my colleagues. Agriculture is in constant change. So is everything else, I guess, but the changes in the next few years in the agrifood sector will be felt by everyone, one way or another. There is a need for government to establish some rules and a framework for those future dramatic changes in our industry to protect the public interest and farmers' survival.

Mr. Chairman, some of the effects of the coming changes will not be reversible. They will also be fundamental to what we remember as being the rural Canada of the past. We have a chance to influence some of those changes. Let's do it together as a proud nation. Farm families across Canada need to see some more positive signs and commitments from the federal government, and we hope they will come soon.

Thank you very much, and God bless you.

Á (1115)

The Chair: Thank you very much.

Mr. Dave Hegland.

Mr. Dave Hegland (Individual Presentation): I'm Dave Hegland from west of Grande Prairie. I have a grains and oilseed farm. I'm also vice-chairman of the Alberta Pulse Crop Growers Commission.

I'd like to thank the committee for the opportunity to speak today. I think one of the first things we have to look at is a vision for agriculture in the country. This vision would make this industry an economically sustainable industry, one that value-adds new investment and creates employment. Within this vision we would clearly define the role of growers, private industry, and government.

I think government has to provide leadership in all areas of this vision. This vision should include international trade, market development, research, food safety, environment, and risk management.

Because of our restrictions on time I would like to concentrate on one issue rather than several. To illustrate my point on this issue I would like to give some insight into an area I'm involved with, the pulse industry.

Canada is a major player in the world pulse trade. It accounts for 50% of the lentil trade, nearly 40% of the global pea trade, and it's among the top five chickpea and bean export nations in the world. Continued growth in the pulse production forecast for the next ten years will further strengthen Canada's role as a trend-setter in the international marketplace.

The value of pulse production in Canada has risen to about $1 billion annually. The industry forecasts by the year 2005 it would be worth about $2 billion. Seeded acreage has increased 2,500% in the last 20 years. In the last decade, Alberta pea production has increased 675%. Chickpeas have gone from a non-existent crop in Alberta to 90,000 acres in the year 2001. Alberta pulse growers have a vision for crop rotations in 2010 to be 25% of the acres. A large part of our success has been the support of the federal government through AIMS funding.

In the few short years Pulse Canada has been in existence we have developed markets for Canadian peas around the world. An example is the Canada-Chile Free Trade Agreement, or the introduction of feed peas in China, which is the largest feed industry in the world. We have worked on tariff barriers into Taiwan and Korea and need more work done in that area. We've worked with NAFTA on agreements with Mexico, which is a large market for the bean industry. So far the U.S. has a larger share of this market because of quota restrictions on our bean growers into the market.

As much as we try to develop markets to improve our position as producers, we rely on the assistance provided by the federal and provincial governments. Governments have influence and access that are not available to growers and importers. In this area I see the need for government to take a leadership role, providing access and opportunities for our industry.

The current issue facing the pulse industry in Canada is the inclusion of peas, lentils, and chickpeas in the U.S. Farm Bill. Our experience in the past with these unfair subsidies is that they place an undue hardship on producers in Canada. I believe the role of the government should be to lobby the U.S. not to include these crops in this bill. I have been told that if they are included the production will increase. This will certainly put burdensome supplies in the market and devalue our product. I think some lobbying now could prevent a lot of future hardships in our industry.

One idea I guess I have in dealing with this is a level playing field. We should do the same as the competition. If we think the safety net programs do not work, maybe we should do something the same as the U.S. and provide specifically targeted compensation to producers affected by trade subsidies.

I don't believe our objective can be achieved if we don't deal with some of these issues. How do producers manage risk if risk is price risk influenced by large subsidies outside our control? Developing new markets through market research may assist us to develop new crops we need to compete.

Food safety environmental concerns form a very important part of this whole scenario, I believe, and if addressed may give us a marketing edge in the world marketplace. We need to identify specific needs and fulfill them through partnering with producers and industries. We could be marketing more finished products instead of raw products. Success in this, I would suggest, is from partnerships, not vertical integration.

In conclusion, I think we need to get the industry clearly focused and define the roles of each player. I believe government leadership and initial support is very critical. In areas where producers and industries have a problem with trade issues, government can be a very important partner in dealing with international issues such as trade, embargoes, and quotas.

Thank you for your attention.

Á (1120)

The Chair: Thank you, Dave.

Before we go into our round of questioning, we've heard some very diverse--Sadie--political concerns here.

Subsidies are an issue, and international trade, of course, is a dominant theme we've heard throughout our meetings so far. But I'm not sure Canadians really recognize the frustration that people from the third world feel about subsidies, especially on what they feel are the very cheap grains we are producing in this country.

Most of the poor countries rely on a very agrarian society as their basis. The small-time farmers in many of those third world countries are very frustrated with the Americans and others who subsidize and put cheap grain--as they call it from their perspective--into the international marketplace. We lose sight of some of that.

Internationally, we have farmers in just about every country. Our country, of course, is heavily urbanized, but over the years we've put more and more pressure on most farmers to produce more at a cheaper cost, and I know it has affected all of you.

More importantly, if we go home with those good Christian principles to think about, it puts tremendous pressure on third world people who are living in poverty, because some of the richer countries in the world, including our own, put out cheap food for their people.

Howard, I'll let you start with questions, and we'll move around the table from there.

Á (1125)

Mr. Howard Hilstrom: Okay.

Just carrying on with that theme a little bit, one of the big problems on the last WTO round was that the rich countries have more or less denied access to our markets for all those poorer countries. I think that's a point to consider when we're looking at the poor countries.

In any event, Leo, it's good to hear the positive message you've brought to Ottawa before. It's certainly in contrast to what we hear from the National Farmers Union. If they had their way with their proposals, we'd be back farming like my dad and my grandfather did in 1930--you know, nationalization of the railways and that kind of stuff. We owned CN Rail, and that just doesn't work.

We can't deal with everything here, and I only have limited time, so I'd like to deal with just one area, and that's grain transportation. It ties in with these producer cars. Duane, I guess I'll be talking to you.

The Canadian Wheat Board only controls wheat and barley, but your clients aren't just wheat and barley producers.

Mr. Duane Stevenson: That's correct. They are growing other grains.

Mr. Howard Hilstrom: Okay. So the issue with producer cars is access to them--that's what the big deal is. It's not the insurance of the grain elevators, or whatever. By having producer cars, you more or less get first access to the cars. Isn't that what it is?

Mr. Duane Stevenson: That's true; that's what we're interested in. But we also want to continue this process, so it is always there. The concern is that we don't limit the use of those cars, or start charging a tax to use them.

Mr. Howard Hilstrom: All of us are in favour of producer cars, I guarantee. But the question is--and you can maybe elaborate on this somehow--the Canadian Wheat Board has a primary interest in wheat and barley because that's their mandate. They don't have a mandate for anything else. And the Liberal government is using the Canadian Wheat Board to carry out their policies on western Canada grain transportation--rail transportation.

In order to have a really efficient commercial-based grain handling system, how can an entity with only wheat and barley as its mandate act in the best interests of canola growers and all the other shippers who want to ship by rail transportation? Can you explain that?

Á (1130)

Mr. Duane Stevenson: Okay...and I'm not a representative of the Canadian Wheat Board.

Mr. Howard Hilstrom: No, but you said you thought they were really good at running that.

Mr. Duane Stevenson: What I'm saying is, what I've experienced locally is that they are very supportive of the wheat that is going in. I guess I should have been more specific in the interests of time, but they've been very supportive of the process locally. I commend that because we do want competition and we do want the opportunity to move at least our wheat through the rail cars, and that's their involvement.

Mr. Howard Hilstrom: How widespread would you like to see that modern evolution of producer car facilities, which includes loading unit trains, and what effect do you see that having on our current grain handling elevator system and the effects on non-wheat and barley shippers?

Mr. Duane Stevenson: As I was saying, only 2% of the grain is being handled that way at this point in western Canada, so it's a very small portion.

My point was that we want to keep it as an option. I'm not saying it should go to a certain percentage, because obviously 98% of the grain is going to be handled through the elevator system.

Mr. Howard Hilstrom: Could producer cars still not be mandated as being available under a fully commercial, contract-driven rail transportation system?

Mr. Duane Stevenson: I guess they could be.

Mr. Howard Hilstrom: See, we're getting back to this Estey-Kroeger report.

I'll ask the canola growers, what's your position in regard to grain transportation? It has been put forward that there could be large savings passed along to farmers by having a more efficient, effective rail transportation system. Do you believe we should move towards fully implementing the Estey-type commercial contract system, or should we be saying that the Wheat Board should continue to control that, along with the involvement of the CTA, of course?

Would you answer that? I'd like the canola growers' comments on grain transportation, in this area or otherwise.

Mr. Ward Toma: The canola industry in general has supported the full implementation of the Estey-Kroeger recommendations and are supportive of competitive factors within the grain handling and transportation issue. How that affects the Canadian Wheat Board and how the Canadian Wheat Board's activities affect the canola industry really is the only issue that the canola industry has with the whole system. It has nothing to do with the monopoly buying and selling powers of the board.

Regarding access to producer cars, producer cars are available for canola. They're used quite widely with the issue of producer car loading facilities. At our recent annual general meeting, a resolution was passed by the growers supporting the continuation of unlicensed producer car loading facilities as long as they are producer car loading facilities and behave as such.

I think that's a common theme coming from most of the farm groups on the prairies, and part of the reason for that is the rationalization that has happened within grain handling and transportation. The elevation system has brought forward opportunities for farmers to move grain to the end buyer at the coast and to use producer car facilities to try to achieve some of the benefits, to reduce the cost of shipping their grain, a cost that they bear solely.

I don't know what else. That was kind of long and round about, but I hope that answers your question.

The Chair: Thank you, Howard. I'm going to move on now.

Monsieur Desrochers.

[Translation]

Mr. Odina Desrochers: First of all, I am very pleased to be here today in Grand Prairie and to hear the concerns of people who are directly involved in the future of agriculture. However, since starting this tour at the beginning of the week I have noticed that there has been a lot of talk about organic farming. Much has also been said about the whole issue of GMOs.

My question is directed first of all at two presenters: Sadie Macklin and Mr. van der Giessen. Taking into account that the federal government is refusing to legislate on the issue of GMOs and the risk that genetically modified organisms represent when close to organic crops, can organic farming survive in this context?

Á (1135)

[English]

Ms. Sadie Macklin: I understand some French; I have not listened to the translation. The question as I understand it is that, given that.... Can I get the question quickly rephrased for me?

The Chair: Recently there was a motion before the House, and I think the Bloc were very much in favour of labelling. So the question is, is this a problem for organic producers?

Mr. Odina Desrochers: That's not the question. I'll repeat it slowly,

[Translation]

...in French. The federal government is refusing to legislate on the issue of GMOs (legislation about the GMOs) and on the risk that genetically modified organisms represent when close to organic crops. We know that if GMOs are close to organic crops, it will be difficult to obtain certification. In this context, does organic farming have any chance of surviving? My question is for you, Ms. Macklin, and for Mr. van der Giessen.

[English]

Ms. Sadie Macklin: On the topic of GMOs and the possibility and the evidence of genetically modified organisms being released into the environment and not being able to be called back afterward, I think it is critical we look at the consequences before we proceed along this path.

I think the idea of the consuming public being able to trust their food supply is crucial, and they will not trust a genetically modified organism. If we cannot maintain certain barriers, if once something gets out we cannot get rid of it, that will be a great problem.

I don't know how organic or healthy systems and that trust can be maintained if we aren't very, very careful about that.

Mr. Nico van der Giessen: Well, in our understanding of this debate, as growers, we're innocent bystanders. We're not driving this. However, we are definitely right in the firing line, because our crops were the first to use it, and we've used a lot of it.

For a grower, there are great benefits for using it, and that's why it's being highly adopted. At present, there is no recorded health-safety hazard of GMO products. They've been tested to the best of our abilities. And eventually, there is risk in anything we do. We can walk out of this building and get hit by a car. That's statistically proven.

Whether it happens or not, you'll find out. We have great faith in the regulatory and food safety systems in this country. We have one of the best in the world. I think it's impossible to prove 100%.

The cross-pollination with the organic growers, from a producers' point of view, is unfortunate. And unfortunately, the crop we have used readily cross-pollinates. That is the reality of life, and there's no use skirting it. It has created problems, but I don't know what the answer is. To say it's not an issue may not be accurate if you're growing organic crops. But if you could test for cross-pollination within varieties of canola, I'm sure you would find it. As to whether there is or isn't a safety factor involved, I guess we're talking here about details that eventually people are going to have to lay to rest. It's a philosophical discussion, and unless there's a proven hazard, it's Mother Nature at work.

Á (1140)

Mr. Odina Desrochers: I have a quick question, Mr. Chairman.

What has happened with the future of exportation? The Europeans say no; the Japanese say no. So what's happened for the future if you cannot export your grain?

Mr. Ward Toma: First of all, we haven't really lost any markets due to genetically modified organisms. We haven't lost any markets. Europe is a red herring. The European Community produces more canola-quality rapeseed than Canada does. They're our major competitor in the export markets, and above niche markets they do not receive any substantial premiums from price.

Our industry talks to the Japanese buyers twice a year. They come over here in the summer; we go over there in the winter. We talk to them. We ask, but they have no problem with the product we're delivering. There are some buyers who wish to purchase a non-GMO product and, to our knowledge, their needs are being met. So loss of markets has not happened.

The Chair: Murray, would you like to...?

Mr. Murray Calder: What I'd like to do is take a look at the issue of whole farm income. We as a government have basically told farmers to diversify their operations. Beneath the programs we have right now.... I'll use an example of, say, a P.E.I. potato farmer who has been progressive; he still has his potato crop and yet he has gone into beef cattle.

Now beef cattle are good; last year potatoes in P.E.I. were very bad. But through the whole farm income process, he probably didn't trigger CFIP or AIDA. But say, for instance, another gentleman down the road who is not as progressive as this potato farmer just stuck with potatoes; he would trigger the program.

I'd like your comments on whether the whole farm income approach we've been using as a government is in fact working or whether there's a way we can improve it. I'll put the question to Nico and Ward first.

Mr. Nico van der Giessen: Ward says I'm the farmer.

I've mixed emotions on this whole package. If we believe in ups and downs and cycles, I can understand why the government is interested in the whole farm, because I guess on the average they're not going to pay anything. What's high goes down and what's low comes up, so I guess on a long-term average it's mediocre.

Aside from that, it's easy to say “diversify”. I don't think because a person doesn't diversify he's not progressive. To get into a cattle operation costs a lot of dollars. And if you're already in the hole, are you going to reinvest? Cattle markets also cycle. It's easy to say “diversify”; when you get down to the business level, it's not very easy at all. There are still efficiencies in size and in doing what you are capable of doing best.

A grain farmer is probably a lousy herdsman and he knows that at heart; that's why he's a grain farmer. It works the other way for a cattleman. If you say, “Industry, your salvation is to diversify”, I think we're going to lose the expertise in the concentration of the areas that these guys excel in.

Á (1145)

Mr. Murray Calder: Would I be right in saying, then, Nico, that we as a government should take a look at a sectoral approach to farm support instead of this whole farm income approach that we're using right now?

Mr. Nico van der Giessen: Off the top, I would say yes, because right now I believe the hurt in agriculture is in the grain and oilseeds sector.

The cattle system has had some nice years and it looks as if they're going to be nice for another couple of years, depending, but their cycle is overdue already. There are events happening that are prolonging it. The marketing board controlled areas are fairly consistent and they have their built-in protection, so I can't speak for them, but I think they're pretty well covered off. It's fairly constant.

Because of the variability, I think the sectoral approach would be better.

Mr. Murray Calder: Okay. Then I want to move to one thing here. I have been part of the Prime Minister's task force on the sustainable future for agriculture. One of the things we heard all the way through is that by and large, right across the country, everybody thinks the NISA program is a good program. It was brought in by the Conservative government. But one of the things we hear consistently from the Minister of Agriculture is the fact that about $1.8 billion should have been triggered, and a smaller percentage of that has been triggered.

I went in and did some research on it, and this is what I found. Say, for instance, a farmer has a payout of $20,000 or $25,000. He goes into the bank and the bank says to him, “Listen, Mr. Farmer, tell you what, we will extend your operating line of credit. You're getting a 3% premium over prime with it. By doing that, probably your operating is one or two percentage points over prime, so you're making 2% or 1% and you're not paying any income tax on it.” So that's what the farmer does. It's just good business policy, but it sends out the wrong message for us to lobby that in fact agriculture has problems with income. We hear back from the Minister of Agriculture and the Prime Minister that all this money could have been triggered and hasn't been triggered.

What do we do about that aspect of it within NISA to fix that problem? I'll throw this out to anybody.

Mr. Nico van der Giessen: I guess my response is make it so that I can administer the funds personally, I can use it as my source of funds. The trigger mechanism is basically impossible and unworkable, and everybody has their own trigger where they need it. If they're smart enough to be in farming, let them be smart enough to administer those funds. I think you would see a lot more use of NISA funds if that were available.

The Chair: Thanks, Murray.

Dick.

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

I want to start with Mr. Hegland. You indicated in your remarks that Canada needed to be lobbying the United States on the U.S. Farm Bill. I'll give Mr. Vanclief the benefit of the doubt; I'm sure they are and he is lobbying hard. I guess my question is related to what happens if all that hard lobbying comes to nought. What should Canada's response be at that point?

Mr. Dave Hegland: I really, truly hope they are lobbying, as you suggest. My thinking on that is that if there's injury to our industry, then maybe we have to do the same as what they do.

I believe the only way we can compensate, or at least offset this, is to follow a suggestion I made, which is something in the way of targeting certain commodities or sectors through a program of injury-type compensation. I guess that's where I feel we may need to go, although I really hope we don't have to. We've been really successful in our industry, and we don't want to see that change.

Á (1150)

Mr. Dick Proctor: I guess the dilemma for me is that.... A couple of years ago we had the experience with the split-run magazine industry, where Canada quickly backed away because of the threat to our steel industry. We have the softwood lumber industry, which affects a number of provinces, and the government seems to favour not taking that sector-by-sector approach but looking at the bigger picture, if you will.

I guess we're just at a disadvantage as a country. Although we talk about two-way, so much of our stuff is going south and so little of theirs is coming north that one wonders what we can really do to protect our producers.

Mr. Dave Hegland: Yes. We talk about risk management. Risk management is an important tool, and it's something we have to consider as producers, but when it's outside our influence it's pretty tough to manage. We just can't do anything about it. I really believe the only one who could accomplish this would be someone like the federal government, who has influence, who has the ability to access areas that we, as producers in the industry, do not.

So perhaps if we focus our attention that way...although I don't know exactly how you'd do it.

Mr. Dick Proctor: Thanks, Mr. Hegland.

To Mr. van der Giessen, in your remarks you talked about but didn't elaborate on Canada's eroding position on international food. I just wonder if you could elaborate a little bit on that.

As well, sir, you talked about Japan and you talked about Europe. There's no impact there with GM canola. What about this new registration process that we've recently learned about? China is now saying that it's unlikely, apparently, that we're going to be exporting much canola to China, at least in the coming 12 months. I just wonder if I can get your comments on that country as well.

Mr. Ward Toma: Do you want me to answer that one on China? All right.

China is interesting, because they have millions of acres of GM oilseeds. China is a shrewd negotiator, as we all know. On the one hand, they have ascension to WTO, and they are changing their discriminatory tariff policies on seeds and oils. On the other hand, we now have a non-tariff trade barrier called “science”. So we've traded one for the other.

China is an opportunistic buyer. They always have been and always will be. When they need the product and when they want the product, they'll find a way to get the product. Right now there's just a lot of cheap soybean oil and cheap soybeans in the world and in their country. So they really don't need to buy, and they have a nice excuse not to.

That is my view of what's going on with China, and it gets back to Nico's comments on erosion. We do have the best food safety system in the world, but if gamesmanship like that happens, and you're allowed to use sanitary and phytosanitary rules as non-tariff trade barriers, you've lost everything you have, because you can't compete against that. That's totally irrational behaviour, driven by political whim.

Mr. Dick Proctor: I have one more quick one.

Duane, you talked about....

Sorry, Mr. Chairman, never mind. I'll come back, because I'm not sure....

The Chair: Thanks.

I'm going to go to Paul now.

Mr. Paul Steckle: I want to direct my questions to Sadie, a young person here this morning. We haven't seen very many young people around the table this week, and I don't anticipate that we're going to see a whole lot.

You have a future ahead of you. We've heard a number of times this morning, and many times over the last couple of days, that our food system is pretty safe and secure in this country. All of us believe that, but do we have food security? There's a difference.

You seem to think that unless we have a plan to ensure that in the future this country will guarantee its citizens the right to food domestically produced....

You're in the business of producing a product in a different way from how I farm. Knowing how you produce that crop versus how other people grow their crops, using commercial fertilizers and doing other things, do you really believe you could sustain the food supply to a needy world? We don't have too much food in the world; we have a distribution problem.

I want you to answer that question. It's not a loaded question because I'm serious about this. I have one further question, when you answer that one.

Á (1155)

Ms. Sadie Macklin: First of all, I'm not currently in the business of agriculture, and my family farm is conventional.

We don't have a problem with not having enough food on the shelves, but I look at my peers and the interest in organic, in specialty things, in vegetarianism, and that says to me people are worried about their food. While we don't look at not having food on our tables, there are concerns about the quality of the food we're getting, and that really worries me.

Mr. Paul Steckle: You are a younger person, in a new generation of taxpayers. We're meeting to look at the government's role in agriculture. If it were deemed necessary for government to impose a food tax to ensure a policy of food security in this country, what would your generation of people think about that idea?

Ms. Sadie Macklin: My peers have a negative view of politicians and government, and as a result there are a lot negative views on taxation. As I said, I believe taxation serves a purpose and we have a very cheap product. I believe the graph Norm distributed shows that the portion of the Canadian dollar spent on food is lower than that in any other countries shown. As such, is food not an important part of our whole functioning? As such, shouldn't we pay for it?

Mr. Paul Steckle: I appreciate that, and I'm not here imposing a wish upon you that we impose a food tax. As I've said a number of times--my colleagues are going to get tired of my saying this--we go to a restaurant today and leave more money on the table as a gratuity for the lady or the man who brought the food from the kitchen to our table than we pay the farmer for producing it.

If a 1% food tax--probably hidden--were imposed to support farm programs or the guarantee of food security in this country.... That should be part of the vision we have to determine, and the reason for our going around doing this exercise. I'm feeling people out on this one because it's not necessarily my wish that this happen, but I'm wondering what people are saying about that. If they give me an argument, I will wonder on what basis.

Ms. Sadie Macklin: There is potential in that, but a more effective and useful method would be to make sure our regulatory agencies, when it came to marketing of our products and things like that, had the power to act in the best interests of farmers, in general.

I am a supporter of agencies such as the Canadian Wheat Board. They raise farmers' bargaining power in terms of getting a fair return for their product.

I would like to see some mechanisms put in place to make sure the cost of production and those sorts of things are taken into account in the cost of the product. I think if that happens, then you wouldn't need taxation to support programs. Any supplementary program is going to have some inefficiency in it. There are going to be places and people who fall through the cracks. If we can make the system work in the first place, then we don't have to try to use band-aids and fix the system in the end.

Â (1200)

The Chair: Thank you, Paul and Sadie.

Rick.

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

First of all, I would like to echo the other members of the committee in welcoming everybody to these sessions.

We've had a number of them over the past couple of days, and there are some recurring themes. Safety nets, water, environment, and trade are always issues where agriculturalists and producers feel there should be some role for government.

One of the recurring themes is research. Duane, you mentioned that. You also talked about the potential of on-farm research tax credits of some sort. It's an interesting way to run with this. I'd like you to expand on those two items.

Mr. Duane Stevenson: As it stands right now, we do have a tax credit in the system.

Mr. Rick Borotsik: Should it be expanded? Should we be heading that way as a policy change or shift on the part of government toward agriculture?

Mr. Duane Stevenson: I believe it should be expanded, and it should be part of a PR campaign, as Leo was saying. There are some things we should be communicating to the agriculture industry. I believe we're missing a huge opportunity for farmers to research in years when they are in shape to do some research. We could work together with the research facilities that are in place, whether it's provincial, federal, or private, to multiply those dollars as well.

Mr. Rick Borotsik: This isn't just for one sector of agricultural products, either. We've heard it from the pulse, canola, and livestock producers. From the canola side, perhaps you could touch on the research component that you think government should be getting more involved in.

Mr. Ward Toma: There was a recent announcement that through their levy paying organizations, such as the Canola Producers, farmers can access the scientific research and experimental development tax credit. Our organization spends between $400,000 and $500,000 a year funding research and development efforts. That is all farmers' money. It's levered, in some cases as high as seven to one. Under this program, as I understand it--and I just got the documents several weeks ago--not all that money would qualify for the growers to obtain that tax credit because of the definitions of scientific research and development.

A lot of what we do in the Pulse Growers Commission and other commissions is demonstration, which is an extension, and it proves the science at the local level, which is what Duane is talking about.

Mr. Rick Borotsik: Ward, thank you for your comments.

I don't have a lot of time, so I'll turn to Leo now. Leo, thank you for a very positive presentation, and I mean that sincerely. We hear a lot about some of the negatives we've been dealing with in agriculture, but it's nice to hear the positive.

I have two questions. First of all, you mentioned transgenic. Are you referring to transgenic as officially defined or genetically modified? There's a difference between the two. Do you have some difficulties with GM? That's my first question.

You also talked about crop advances. We have a crop advance right now in the system from a policy perspective. Should that be changed? Should it be increased? Should there be some policy machinations that go with it that would make it better for producers? That is my second question.

Mr. Leo Meyer: Thank you, Mr. Borotsik, for that question. I am always a little bit troubled about generalizing genetic modification with GMOs. It is really a non-scientific type of misleading statement, because I ask you this--and I don't need to go very far--what is “genetically modified”? We could probably spend two days here discussing what “genetically modified” means.

We grow, for instance, a lot of triticale. Triticale is in essence a naturally genetically modified crop. It resulted from a cross between durum and rye. Mutations, you see, are in a way a natural type of genetic modification. The only difference there is between a laboratory type of mutagenic and a natural mutagenic occurrence is that, as the name says, the naturally resulting type of mutagenic process is occurring in nature and the laboratory one is happening in the laboratory.

In essence, to point out the laboratory one, which happens to be the smart canola system--

Â (1205)

Mr. Rick Borotsik: You're going to get cut off, Leo. I'd like to hear your comments also about the cash advances you talked about.

Mr. Leo Meyer: I appreciate that question, Mr. Borotsik. As I pointed out in my statement, I think it is a very worthwhile type of engagement, with off-board advances--

Mr. Rick Borotsik: Should it be increased?

Mr. Leo Meyer: Well, I think it should be enhanced. I think it should keep pace with the change in agriculture. I mean, $50,000 today to pay crop inputs isn't very much, when some of us have $250,000 or $300,000 or $400,000 crop inputs to pay.

Mr. Rick Borotsik: Have you done better with your oats outside the board, or within the board?

Mr. Leo Meyer: I'm shocked, Mr. Borotsik, you have to ask that question.

Mr. Rick Borotsik: Did you do better with oats outside the board?

The Chair: Rick, now you've had more than your time.

Mr. Rick Borotsik: Maybe there's room for some other questions.

The Chair: Myron, do you have questions?

Mr. Myron Thompson: Yes, thanks. I'd like to make a few comments and then I'd like to get a response from possibly Tom and Norman and maybe Leo.

The Chair: You have five minutes, you know.

Mr. Myron Thompson: Five minutes.

Norman, your words brought back memories of when my father and brother lost a farming operation after much effort and how it affects you. Of course, we have a lot of farmers in our region, particularly in southern Alberta, who are quite concerned about what their next year is going to bring if we have a third year of drought. It's going to be devastating. They're really looking for some solid help from somewhere.

You'll remember the positive things that happened, Leo, such as the open barley market the Conservatives brought in, which we felt was such a good thing and benefited so many farmers. Even the Wheat Board increased their sales by a tremendous amount during that period; yet it was shut off immediately, after it had just barely begun. I'd like your comments in general on Wheat Board activities first, and then secondly on some legislation that is going to have some drastic effects on farmers.

I'd like your opinions about the Wheat Board operations presently. I'm also concerned about the mandatory audit that's coming from the Auditor General, which I understand will not be made public or be available to any farmer or possibly others who would have some interest.

The second thing is the legislation coming down from this government respecting the endangered species and protection to animals act. I've seen such legislation in the States, where I have many relatives who have lost land uncompensated. It has drastic effects. Yet the legislation I see before me today in Canada is far worse than what I saw in the states of Idaho and Colorado, where I have relatives who are farming.

I'd like you to just comment, Tom, if you would, and Norman and Leo, possibly, if you would just stick around.

Mr. Tom Kulicki: Thank you, Myron.

As far as I'm concerned, the endangered species act is draconian; it certainly is. There's only one way to go, and that's 100% the other way: cooperating with farmers rather than penalizing them.

If I could get off topic for just one second here, I was unceremoniously stopped before I summarized. I know I ranted, or sounded as if I ranted.

I really don't believe we're taking a good, hard look at the other end of the agricultural industry. I think, in my career, we've had an elephant on our toe and all we've ever done is use bandages, stitches, and pain killers to kill the pain. We've never tried to move the elephant. I know this isn't something that's going to happen overnight, but there is such a dramatic effect on our industry beyond farmers' control, and it is how government is run in the country.

The value of the dollar, for instance, from 83¢ to 62¢, makes us 25% poorer in eight or nine years. If you could envision a $200,000 tractor if we bought it with our dollars or if we bought it with American dollars, if we were at par we could save $80,000 on that tractor. If we did that, and financed that tractor for 10 years, we'd have paid double--we'd have paid $160,000 for that tractor.

In my mind, if our economy was where it should be and we were close to par, that's akin to a $16,000-a-year subsidy for 10 years. That's what we'd have to get as a subsidy to make up for the fact that our dollar is weak and we're not at par. I think we could gain more in the tax area and all the rest of it than by fighting an insane subsidy war. We could do it. We would be GATT and WTO compatible and everything else.

Â (1210)

The Chair: I'm having some trouble with this, because Myron has five minutes and you're ruining it.

Mr. Tom Kulicki: And I'm ruining it, okay. That's a fast five minutes.

The Chair: No, you should be short.

Myron, you have two or three people on your list?

Mr. Myron Thompson: There are a couple of more comments.

The Chair: I'm sorry to use the word “ruining”. I didn't mean that.

Mr. Myron Thompson: I would like some comments regarding my Wheat Board affairs.

The Chair: From the same people?

Mr. Myron Thompson: Sure. Tom, Norman, or Leo.

Mr. Norman Dyck: Thank you, Mr. Thompson, for the question.

In the draft that I handed out--you may not have it--there are some positives to regulation in the marketplace. If you have a look at this draft, you'll see that the farmers' portion of the return in the food dollar reaches almost half in the regulated marketplace: dairy, milk, eggs, and bread. We have the two-priced wheat; there is still the domestic milling price for wheat regulated by the Wheat Board. We lost the two priced-wheat system, which took money out of our pocket.

In spite of what Mr. Hilstrom says, we seem to be moving in the direction that we throw everything out that has worked for us. Why do we do that? We are put against the vagaries of the marketplace if we do that.

Regulation helped us in the rail sector. We've had delivery throughout the prairies. We had reduced waste of fossil fuels, so we weren't contributing to global warming. Now with all the track pulled up, the centralization of delivery, we're adding to the fossil fuel waste and global warming. We do desperately need to get back to some rules in the game, because the marketplace isn't going to do that for us.

I'll go back to your earlier comments, Mr. Chairman, which I really want to respond to, just briefly.

The Chair: I'm sorry, Norman, it just doesn't work that way. We start off with the opposition. They have about eight minutes for their questions. And then we go for five-minute rounds. With that, I have to make sure everyone has their turn, and when you give an answer, you should answer the person who asked the question. So we can't....

Myron, you're up to six minutes.

Mr. Myron Thompson: It's the first time around for a while. I could stand eight.

The Chair: I know you could. I've watched Myron in the House, and eight minutes isn't much. I watched you one time go for an hour, I'm sure.

Rose-Marie, would you like to finish this round?

Mrs. Rose-Marie Ur: I'm going to relinquish my time to Leo, because he had two or three interventions he wanted to make.

The Chair: Leo.

Mrs. Rose-Marie Ur: Did you want to answer Mr. Hilstrom? You never got a chance.

Mr. Leo Meyer: Thank you.

Would you like me to comment on what issue the Wheat Board wants?

Â (1215)

Mr. Myron Thompson: Yes, or the legislation before us today.

Mr. Leo Meyer: I think there's an important issue here, and several members of the committee have touched on it. Some people mentioned, for instance, the value in the system of the Canadian Wheat Board. We have to realize the value that is, in a way, demonstrated to many of western Canadian farmers is a very serious trade issue.

You can't really argue, as the Canadian Wheat Board, that you have a value to us, when pooling everything together and going into international markets, on the one hand, and, on the other hand, not going along with the American type of position and saying this is a different type of engagement in the international marketplace. You can't really argue that, can you?

It is a very serious issue right now. I think the last intervention from the United States on this, which is brand new this weekend, is causing a very serious problem. I think it needs to be considered with a very open mind. It can't be called a victory for the Canadian Wheat Board at all. The CEO and president, Mr. Harrison, pointed out this is a victory because actual sanctions haven't been applied. I think it's not quite a fair thing.

Mr. Thompson, do correct me. I think your question was on whether there is a significant value, for instance, for me, as a farmer, in the way the Canadian Wheat Board has somewhat changed, and in the way it's presenting itself and trying to change in the future.

I will quickly answer that 18 or 20 years ago we probably did 85% of the business with the Canadian Wheat Board. Today we're probably down to 15% or 12%. We survive because of the business we do outside the Canadian Wheat Board system.

I don't say it to offend anyone here, or the Wheat Board supporters. It's just reality. If you want to be in today's type of farming business, you have to operate differently. You have to look at markets. You have to listen to consumers. You have to be “on the pulse”. It involves a complete holistic approach to the way you do business. It's not yet working, even though they tried to change the Canadian Wheat Board.

I appreciate your asking the question. I didn't say it, really, to offend supporters. I realize there are a lot of supporters around. We need to more dramatically change the board, if you want a meaningful participant in the future.

The Chair: Rose-Marie, do you have anything further?

Mrs. Rose-Marie Ur: Do I have time left?

The Chair: Yes, you have two and a half minutes.

Mrs. Rose-Marie Ur: My question is to Sadie. You mentioned in your presentation that we needed to raise our standards for healthy food and the quality of food.

I've done a little bit of travelling, not a lot. To me, Canada is recognized for the high-quality standard of food that our primary producers produce here in Canada.

As farmers, we're constantly at the mercy of the consumers with their demands on our primary producers, and we're always trying to meet those needs. It is always coming out of the pockets of our primary producers. Consumers demand, without having to really compensate for their requests.

When you say you want to raise the standards, what are we missing? What do you feel, as government policy, are the regulations that need to be improved upon?

Ms. Sadie Macklin: I'm not sure the standards themselves are actually flawed. I'm concerned about people's ability to trust the standards. As there's more interest in organic food, and in certain ways of finding food that does not simply rely on the mass system that is protected through the regulatory system, to me, it shows concern about the standards.

Maybe the standards need better enforcement and better education. Maybe the standards need to be improved. I do think, when you compare Canada with other countries, we do have a very good system. I don't think it means we should rest on our laurels, though. I think we need to have a system that is exemplary and make sure people are confident with it.

Â (1220)

Mrs. Rose-Marie Ur: The question was asked earlier of you, and I don't recall exactly getting an answer: Do you really feel, with the population we have here in Canada, that organics would be sufficient to feed our own population? We've heard several organic producers looking at exports. I think there's certainly a long way before we look at that. But do you really feel that there are sufficient farmers to produce enough food to feed our own people organically?

Ms. Sadie Macklin: If you put a boundary around all of Canada and just dealt with that, I don't know, but there is more food produced in the world than is needed to feed people. If we can improve our distribution system, I don't think a reduction in actual production would mean a reduction in access to food. It would have to work in conjunction. We couldn't do one without the other, and it would have to be done on a slow, transitional format.

I have questions about whether looking at agriculture from a purely economic perspective is the best way for the benefit of our society as well.

The Chair: Thank you, Rose-Marie and Sadie. With that, we'll recess for about three minutes.

We would like to thank the presenters. I know some of you may not be pleased with the chair--Tom--that you couldn't have had a full half-hour or whatever. But in any case, we would like to thank everyone for coming. We got the gist of your presentations in all cases, I believe, and if there's further information you would like to give to the clerk or mail to us in Ottawa later, we would certainly look forward to hearing from you.

So we'll have a three-minute recess, and perhaps the other presenters would come to the table.

Thank you.

Â (1220)

Â (1229)

The Chair: If people would come to the table now, we'll try to get involved with our second round of presenters.

In returning to the agenda, we would again like to reinforce that each presenter has about five minutes. As it approaches five minutes, I'll give a signal. I don't like to cut people off, but when it gets to six minutes, I guess I have to do that.

We operate on quite a tight schedule. In fact, if you see a member leaving the table while the presentations are going on, I'd like to remind you that everything is recorded and that members and all of you will find on the website the transcription of the information we receive. But we have another meeting later today, and one by one, the members are going to have to go out and get a sandwich or something to keep us sustained until our meeting in Vulcan later today.

Â (1230)

With that, Mr. Richards, we'd like to welcome you and others to the table. The floor is yours, Mr. Cliff Richards.

In most cases, it's just farmers. You don't represent somebody, maybe only yourself. But if you represent an organization, we certainly would like that put into the transcription, so that when it's read eventually, we'll know who you are and where you're from.

Â (1235)

Mr. Cliff Richards (Individual Presentation): Cliff Richards. I'm third generation on our farm--cereals, oilseeds, pulses, grass seed production, and bison. I sit on the East Country Bison Association, and I also sit on the Pulse Growers Zone 4 as a representative. My name was put forward by Wild Rose Agricultural Producers.

I'd like to thank you for coming to hear our concerns, suggestions, and recommendations. What I'm presenting to you is not meant to be derogatory, but meant to present the urgency of the issues and concerns for immediate resolve. Many of these should have already been dealt with to the benefit of the primary production.

It is time to take immediate and positive meaningful action to ensure prosperous survival of all primary agricultural production in all of Canada. More effort must be placed, though, I feel, in western Canada, as policies vary greatly between east and west and it's mainly due to the end-use markets and distance to them. Savings in rail-line abandonment have not been passed down to us, and it's increased our costs by about $7 to $10 a tonne to ship our grains to the high-throughput elevators.

There's a lack of common running rates in many regions, allowing monopolies and resulting in no competition or efficiencies for services and downloads to producers. Lack of government policy to enforce full mileage sell-off of branch lines allows the main lines to control the branch lines. Again, that downloads costs to us.

Fuel tax revenues are not being fully used to support, maintain, and build new infrastructure to deal with the increased road traffic. A lot of it is being channeled to other areas of financial concern. It could be used for additional fuel rebates and fertilizer rebates.

The federal government has not enforced the anti-combines rules in the past, and as a result we now have only one major manufacturer of nitrogen fertilizer. This monopoly is creating an increased burden of costs to the producer again.

The funding of the Canadian Grains Commission is being reviewed. This must be a federal expense to the benefit of the best interests of foreign trade, which in turn benefits all Canadians both directly and indirectly. The Canadian Grains Commission is the only means the grain producers have to protect against wrongful dockage, grading, protein, etc., by private industry.

Producer car loading must be preserved at no extra cost to the grain producer, regardless of any argument put forward by industry.

It is the federal government's responsibility to bring back the primary grain production on a level playing field for profit of production. The WTO's old rules allow Canada to provide support to equal support of other countries in the world. No decline should have been put forward unless in harmony with others, mainly the U.S. and Europe. Economic hurt at home has resulted in the grain sector, and must be resolved immediately.

The implementation of cost-of-production insurance is vital to supporting primary grain production in all of Canada. Product prices and yields vary greatly from year to year, region to region, and producer to producer. In order to encourage the next generation to enter agriculture, they must feel confident that both governments, federal and provincial, will create and maintain an environment that is going to encourage investment and ensure economic survival and profitability within this industry. This insurance must be affordable and must cover all costs, both fixed and variable. The level of coverage should be open to risk within each operation, regardless of its size or level of involvement. It would keep an economic balance, I think, in the marketplace by doing so.

If the government will not protect us against input costs, foreign subsidies, market manipulation, or big business mergers, then it has the responsibility to provide such a protection through a program called “Insurance for All Primary Production”. Margins are far too thin for far too short a time to allow survival in today's marketplace.

We have to look into the future for this industry and consult directly with it to shape a viable direction for tomorrow. Secondary processing and value-adding mean nothing to Canadians without the product or producer of that product to be available for its creation. The governments must invest today for rewards for tomorrow--more money for agriculture.

Proper objective analysis of government statistics must take place. The information is being used to fit the agenda of the finance department, not necessarily that of the industry. An old saying goes “Liars can figure, and figures can lie”.

Again, the industry is being left out of the process, resulting in improper, meaningless decisions being made, with the outcomes affecting primary production. Again, the industry suffers.

The not-so-free trade issue--i.e., corn entering into Canada cheaper than U.S. farmers' loan guarantee rate at the expense of barley, feed wheat, pulses, and canola meal--only benefits the end-user, which is livestock and ethanol.

Another issue is the WTO red meat policy to Europe. Bison and elk must be broken out and be treated like horsemeat, with no tariffs. This would help diversification industries that are already in economic hurt.

I would like to leave you with another saying, “a chain is only as strong as its weakest link”. This chain, primary production, has been dragged through the dirt for 15 years or more and is about to disintegrate any day. When the primary grain production link lets go, the wreck is going to be so drastic that the cost and the time to rebuild it will seem insurmountable.

Government is supposed to be of the people, by the people, and for the people. However, from agriculture's point of view, it is clear that the government is of big business, by big business, and for big business. It is the government's responsibility, and should be its mandate, to correct the imbalances now occurring and right the wrongs of the past in order to enable primary ag production to economically survive.

In conclusion, correction must start immediately and our industry must be front and centre throughout discussion, policy setting, and enforcement.

Thank you.

Â (1240)

The Chair: Thank you, Cliff. I'm sorry, but you're over six minutes.

Mr. Macklin.

Mr. Irv Macklin (Individual Presentation): Mr. Chairman, ladies and gentlemen of the committee, and guests, I've farmed in the Peace River country for some 40 years now. I had a couple of years of trade school and one year of university. In 1973 I was second-highest in production, with a 50-cow dairy herd. In the middle of my so-called farming career, I went broke with 24% interest and started over. Currently, I farm approximately 60 miles from here and operate a mixed farm in a community that is dying. It isn't quite close enough to Grande Prairie to give the influx of population as a bedroom community and is strictly agriculture.

My presentation is more in the line of give us our daily bread. I'm after some specifics here as opposed to a philosophical discussion, but it does have to do with how Canada can help.

The first subject I want to talk about is water enhancement, which has been administered for years and years in the prairies by PFRA, the Prairie Farm Rehabilitation Act. Seemingly, in the last few years, this federal organization, which helped farmers develop water supplies both financially and with their expertise, has felt that it has pretty well run the course. The southern Alberta area, which had by and large the bulk of the cattle population in Alberta, had pretty well developed its water supplies, so they were looking for a new mandate.

As of yesterday--I called to confirm it--the Peace River federal PFRA office says they are no longer funding individual water developments with technical and financial assistance. Unlike Saskatchewan, in Alberta their mandate is something called group activity. Whether that's municipalities or Hutterite colonies, I'm not sure, but what I'm sure of is that I, as an individual farmer, am not included in this new operation of PFRA.

Just to give a little background, I'm told that in 1991 we had 270,000 cattle in the Peace River country. That was the Canada census figure. In 1996, the last official census, five years later, that had risen to 365,000 cattle in the Peace River country, an increase of 30%.

At that time, the Crow rate was being abolished and elevators were being torn up. So I would assume that in the next census figure, which will be coming out sometime this year, for the year 2001, the Peace River country will show a far greater than 30% transfer to raising livestock, as opposed to shipping export grain to the coast.

So here we are; it's our turn to develop one of the last settlements in the Peace River country. My homestead in my first quarter cost me $50--plus, of course, a bunch of duties, but the cash outlay was $50. So I would think, because this isn't a blanket statement of operations across western Canada--as I understand from the Western Producer, individuals in Saskatchewan have been assured that they are still eligible for funding--that, at least in the Peace River country of Alberta, we maintain that option while we increase our cattle herds, and therefore our water supplies.

That brings me to the next topic that I want to discuss, which is also a money topic. I'd just like to say briefly upfront, as a member of Wild Rose Agricultural Producers, a local volunteer who has to come here voluntarily and go home voluntarily, trying to get other people to volunteer their time to go who knows where voluntarily, to let you people know that the species at risk legislation that only compensates 50% is bad legislation and maybe it should be looked at.

We need funding. Volunteerism, as I saw in a TV program the other day, just doesn't seem to work anymore. Whether we're all too busy or what, I don't know. But when our organization's provincial president, Neil Wagstaff, goes to the Canadian Federation of Agriculture to represent Alberta, which has 25% of the agricultural production in Canada, he doesn't have any delegation. Well, Quebec has $11 million to spend to send its representatives to that body, Ontario has $7 million, and Alberta has $150,000; that's what we meant. Why is that?

Our provincial government has steadfastly refused to fund our general provincial organization. They are great on funding commodity groups, and just recently they decided to put $6 million into funding something called “how do we work with the Kyoto accord”. So here we're trying to figure out how we can work with this Kyoto accord, and at the same time we're tearing up railroads, which are supposed to transport bulk commodities at four times the efficiency of trucks.

So we really need a general organization. We need to represent ourselves democratically, and this second thing means the feds--you guys--should make a contribution because the province won't and the forum is worth while.

Â (1245)

The Chair: Thank you very much, Irv.

Mr. John Sloan.

Mr. John Sloan (Individual Presentation): I farm 2,500 acres and grow wheat, barley, and canola in what I call an environmentally friendly, direct seeding system. I support conservation tillage and conservation seeding practices. I'm a member of the regional Smoky Applied Research and DemonstrationAssociation and the CentralPeace Conservation Society. I'm also a chemist, college instructor, and a member of the American Chemical Society, a member of the divisions of agriculture and food chemistry and of environmental chemistry.

My topic is essentially on our Canadian farm bill. I like to keep myself informed in terms of the press, and from one point of view I may be talking about cross-purposes, because I've had inklings of an approach to a Canadian farm bill or under some other name. However, I have not received information through normal press channels, so I am speaking from the point of view of square one.

I contend that the agricultural industry is in need of a Canadian farm bill that will bring stability and growth to the industry, and thereby contribute to the economic health of the nation. A Canadian farm bill should enable farmers to manage the risks associated with agricultural production, and should be supportive of farmers being good stewards of the land and environment that is under their care.

On the question of the process for the development of a Canadian farm bill, this may be part of the process. From my perspective there should be an open and consultative process. This is essential for the development of such a bill, a bill that will provide future direction and stability to the Canadian agricultural industry.

The open and consultative process should include extensive opportunities for direct farmer input--and this is one opportunity. Key groups in the development of the process are farm organizations. Farm policy organizations are in a position to provide high-quality professional and volunteer input as well--for example, the Canadian Federation of Agriculture; Keystone Agricultural Producers of Manitoba; the Agricultural Producers Association of Saskatchewan; and Wild Rose Agriculture Producers of Alberta, of which I'm a member and supporter.

The time guidelines for development of an appropriate Canadian farm bill are probably in the range of one to two years. A Canadian farm bill could be all-encompassing. In the next two or three minutes, I'll refer to one or two areas for consideration.

The first area is NISA. Farmers support the NISA program. I recommend NISA be retained and improved with consideration to increasing the matchable contribution maximum from 3% to 6% of gross sales, and by adjusting the trigger mechanism to enable farmers to withdraw from their accounts for any year that their income drops below their five-year average in order to raise their income to that of the five-year average.

Increase the maximum allowable coverage under crop insurance from the current 80% to 95%. The current 80% maximum is based upon local yields and projected commodity prices. Many farmers do not take out crop insurance due to the current maximum levels of insurance often being lower than the projected return.

These first two issues, crop insurance and NISA, are programs to which farmers would contribute and therefore be part of the solution. They would be participants in these aspects of a Canadian farm bill.

Farmers require efficient marketing and transportation policies. All I will say at the moment is that future transportation policies should retain the current right of farmers to load producer cars.

The bill should also address effective measures to offset unfair international trading practices of the U.S.A. and the European Union. A Canadian farm bill should provide equitable support to Canadian farmers consistent with the degree of distortion of the international agricultural commodity prices.

Another topic, relatively new, that requires more input is stewardship of the land and environment. A Canadian farm bill should address the topic of alternative beneficial services provided by farmers in the stewardship of our Canadian landscape and environment. These should include conserving our soil from wind and water erosion; conserving our water from pollution through sound agricultural practices; reducing carbon dioxide levels through agricultural practices that build up organic matter in our soil; and managing our landscape with due consideration to plants, herbs, and animals.

Legislation within this area is currently in place in the United Kingdom. Within Canada, with the support from the Keystone Agricultural Producers of Manitoba, a draft document entitled Alternative Land Use Services is currently in circulation for consideration and comment.

Â (1250)

In summary, my position is that the farmers in Canada, and the nation, require a Canadian farm bill that will provide guidelines and a degree of security for producers. Producers do require stability. Farmers would like to manage the risks of farming, manage in terms of their input costs, manage in terms of the potential for disaster, droughts, excessive rain, and manage in terms of fluctuating commodity prices. So my overall emphasis is the development of a Canadian farm bill that will be beneficial to the agricultural industry and Canadians as a whole.

Â (1255)

The Chair: Thank you, Mr. Sloan.

Ron Matula.

Mr. Ron Matula (Individual Presentation): Thank you, Mr. Chairman.

I'm not very good at this stuff. It's the first time I've ever been to this.

The Chair: We're not good at it either.

Mr. Ron Matula: You have me a little bit baffled.

My name is Ron Matula. I'm with Wild Rose Agricultural Producers. I've been just elected as regional director. I don't know why. I guess they wanted to get somebody younger in there. They did.

I got this bombshell dropped on me a little while ago to appear before a Commons committee.

I farm with my dad and I've only been doing it for about four years. He and mom are in their seventies and they farm about 2,000 acres. It's hard to sell these days, so all they can do is try to get help from the family who have gone off and.... I'm a mechanic by trade, but I like agriculture. I love it, and I would love to do it for the rest of my life too.

I asked them last night, “Mom and Dad, what am I going to speak to this Commons committee about? What's the biggest issue in all your years of farming that you'd like to see change? Here's my chance to voice your gripes after so many years.” They said the biggest thing that they could see was grain stabilization prices.

We're not looking for any handouts. We're hard-working people. We enjoy what we do and we want just fair price for our product. I think that's pretty well what everybody wants.

There are different issues that I'd like to touch on that I do know some stuff about. First is agriculture farm assistance. Farm sizes are increasing due to retirement, farm sales, and farm amalgamation, while at the same time the supply of dedicated and competent farm assistants is decreasing due to depopulation of rural communities. There's a good supply of jobs in the oil and gas, forestry, and industrial sectors of the provincial economy, and many young people of rural heritage are pursuing non-agricultural careers.

Therefore Wild Rose Agricultural Producers requests that local offices of Human Resources Development Canada add the job titles of agricultural assistant and farm assistant to the general occupations listing, and that HRDC assist in allocating occupational, educational, and training factors to these job titles. That would be a great asset.

Biotechnology is quite a big issue, and five minutes is not enough to touch on it, but I agree with much of what Sadie Macklin said about it. The reason we're not getting fair prices for the product we're producing right now is because we're mass-producing as much as we can. We're raping the land, and if it's GMO or whatever, we just throw it in and try to make a dollar. Whatever we do we do to try to make a dollar. And with the organic issue, we can produce less and try to get a better profit out of it, if that makes any sense.

On the Canadian Grain Commission, we've been trying to lobby at Wild Rose to get a Canadian grain inspection facility in our area, the High Prairie area, so it would be easier for us to get our grain inspected.

On crop insurance, I've only been farming for four years. I had two crop failures and crop insurance didn't even come close to covering my inputs. I had maximum protection. I found it a fairly sad situation there.

On farm income, due mainly to the subsidies in the U.S. and the European Union, farm incomes in Canada are being drastically reduced. This is allowable under the World Trade Organization agreement, of which the federal government is a signatory. Thus, Wild Rose Agricultural Producers believe that it is the responsibility of the federal government to provide financial compensation to offset the drastic reduction in farm income.

Farmers should not use 15% of gross farm receipts as a proxy for calculating the farm income when allocating self-employment earnings against EI benefits arising from the off-farm employment. Unlike other self-employed people who can calculate self-employment earnings based on net income, farmers should not need to automatically deduct from their EI benefits 15% of the gross farm receipts, regardless of their actual income earned from the farm operation. Agriculture and Agri-Food Canada has suggested that 5% would be more appropriate. Wild Rose Agricultural Producers suggest using 5% in the calculation of gross farm receipts as a proxy for net farm income.

Grain handling is another issue. We just lost another small elevator in our town. Our farm has just bought in a B Train on an old truck, all we could afford with the grain prices the way they are. I think this is crazy. Here we are, we're not truckers, we're trying to be farmers, yet we have to truck our grain 50 or 60 miles.

Safety is another issue there. Do you want all these farmers buying junky old trucks and hauling their grain to these high-output elevators? That's where the producer car comes in. I could go two miles from where I live to load a producer car if there was a facility there of some sort, instead of driving this big old truck 60 miles and jeopardizing a lot of lives. I'm fairly new at it, but I'm learning a lot about this.

On input costs, we request the provincial government to reinstate the farm fertilizer rebate program to offset the increase we are seeing in the price of nitrogen fertilizer due to high natural gas prices.

Wild Rose Agricultural Producers believe that the federal government should monitor the existence of mergers that would affect the price of fertilizer. The high cost of farm fuel and the high cost of fertilizer as a result of high natural gas prices has created a hardship for farmers at a time of low commodity prices. At the same time, the province has reaped great financial benefits from these high prices. Therefore, some of the windfall benefit of these high prices should be used to lower the energy-related cost to farmers.

· (1300)

The Chair: Thank you, Ron. You brought up some really good points there, something different from what we've heard before. I'm sure that some of the questioners will get back to you.

Mr. Wayne Davies.

Mr. Wayne Davies (Individual Presentation): Thank you, Mr. Chairman.

Committee members and ladies and gentlemen, I'd like to thank you for this opportunity to have a little input on government's role in agriculture. I have put together some of my favourite topics. I didn't elaborate a whole lot, but I put down the thoughts as I had the time.

We must get agriculture, the real story, into the classrooms across Canada. The public are so far removed from agriculture that they believe milk is made in the grocery store. Another thing we need is some help with generically modified crops. Farmers hear information on both sides of this argument and they must act as a judge on which is right and which is wrong. How is the public to know what to believe with all the special interest groups having their little inputs? We need help delivering that truth.

The subsidies we are facing when trading our commodities are very hurtful down on the farm. We sell wholesale and buy retail. That cannot continue. We cannot compete one-on-one with the treasuries of countries such as the U.S. and Europe. We ask for a level playing field.

We could be helped very quickly by removing fuel taxes. It's not a huge amount on each farm, but it certainly would be a benefit. One thing we had a few years ago was income tax averaging. That again is not a huge boost to income, but if we could level the income field, it would help.

Ad hoc programs help in the short term. In fact, they're the only reason I'm still farming. But we do need an income stabilization program. I realize this is very difficult to achieve from coast to coast because of different conditions and spending habits on farms. Crop insurance fails miserably on my farm. We don't have money for premiums in a system that charges a lot for little protection. Over the good years we did invest in RRSPs, and we drew on those in the nineties because of bad years. It's hard to explain to investment people that it worked well for us.

We also used the NISA program as much as we could. It's a good program, but it's always six months to a year late delivering money. We need a system that allows the farmer to put money away in good years and then draw it out in bad years with no penalty. NISA is okay, but it limits the amount you put in and take out. Our expenses are much more than this program allows for. We need to be able to invest more and to take out what we need when we need it. Perhaps NISA could be expanded for this purpose, but do not put limits on money in and money out, and we cannot have time restraints. Perhaps this is an area where government can help by working with farmers to organize a program that better suits our situation.

We need support for our plant breeders--we have some of the best in the world--so that they can carry out their work without having to rely on farmers' up and down income to purchase their seed.

We need to support Canadian manufacturing of powered machinery. We have only one tractor manufacturer left in Canada, and I understand that we may lose that one south of the border.

We need a government that is very supportive in the press all the time and monetarily supportive when times are tough on the farm. We have been told by a minister that we should get a second job. That's not what anyone needs to hear when you have $2 million to $3 million invested in a farm that should be a very rewarding business, and I stress “business”.

As producers we have 40% control of our marketing. Governments and commodity players of the world have the remaining 60%. That 60% area is where we need government help. Get subsidies in check, but don't leave the farmers of Canada swinging in the wind while you do it.

Let farmers have a real voice in making income stabilization plans, and please help educate the public about agriculture by putting it into curricula across Canada.

Thank you.

· (1305)

The Chair: Thank you, Wayne.

Claude.

Mr. Claude Smith (Individual Presentation): Mr. Chairman, I am a grain and oilseeds farmer about 150 miles northeast of here. I'm on the board of directors of Wild Rose Agriculture Producers.

I thank you for the opportunity to come and talk on your topic of the future role of the Canadian government in agriculture. I find that my topics were covered pretty well by some of the other people before me, so I'm just going to highlight what I'm interested in. One is ensuring funding for the Canadian Grain Commission. They are funded by check-off, I believe, and depending on the number of bushels exported, it could vary and go down quite a bit. So they may need help if their funding gets too low to do an adequate job.

It's a real help to have an organization helping farmers with their grading and keeping a high quality of food in the export market.

Another topic is U.S. and European subsidies. We've had lots of talk around how they're not really following the WTO agreement to work at eliminating them. It's unfair for us, trying to compete in the world market. All I have to say in response is that if we can't get them to abide by the rules, we're going to need support. I guess “if you can't lick 'em, join 'em” in the subsidies--and I understand the members of Parliament in their problems with that, too.

I propose that if there's no other way of generating funds to support our primary farmers than by taxation, that is maybe the solution: increasing corporate and income tax. I'm sure a farmer, if he makes profit, will pay income tax, and he'll pay his share back. I guess what I'm trying to say is that the whole of Canadian society and all of Canada is going to have to share in the cost of competing on the world market with European and U.S. subsidies.

I think I will stop at that. I notice that at times you were having, Mr. Chair, trouble with everybody talking over, so here's one contributor who is going to stop it now.

· (1310)

The Chair: Thank you.

Harry Schudlo, is it?

Mr. Harry Schudlo (Individual Presentation): Thank you, Mr. Chairman.

Welcome, all members, to the west Peace River area.

I'm a farmer just northwest of Sexsmith. I farm 3,000 acres with my son, on a family farm, along with my wife and and two sons-in-law. We see the global changes that we have today create a lot of opportunities for our family farm. We must evaluate all the new technologies, first of all costs that new technologies bring to the farm.

First, we have to take a serious look as a government at the impact that hybrids and GMOs, and the fact that we cannot reuse our own seed on our farm, will have in future years. Today it's an extra cost of $30 per acre. If this is going to be the case every year, we have to take a really serious look at it.

Next we must look to new opportunities to add to our business on the farm. We must participate in forming alliances and must be a consistent, reliable supplier of product to our customer overseas.

As a family farm, we must be in bed with our customer. Customers want good quality. They're looking at traceability, they're looking at origin, and they're looking at health.

The life sciences are a revolution. If we do not accept what science is developing for us, we should fire the professor. Canada represents 3% of the world's exports. An extra 1%, if we add value throughout our country, would create an additional 100,000 jobs. That's a great issue for our youth of today who are unemployed.

Environment and public health are going to be the kings of our future. To compete, Canadian manufacturers need global-scale processing. We need more processing to get rid of our product. We need access to markets and impacts that are fine-tuned to meet the customer's requirements. We need to brand Canada today both for the products we produce but also for our record in food safety, because we do have a record on food safety. We must carry that brand forward vocally.

I think a big failure as farmers is that we do not encourage our children to farm. We bring up all the negatives. I agree with previous speakers that we must have an accredited curriculum in our high schools. There are great opportunities in the agricultural field for our youth to get jobs. Many of our educators are promoting that agriculture is bad. It's not that bad if you change with the times.

Agriculture is poised to move up. It could be a multi-billion-dollar agricultural business, because there are many opportunities, not just in the food sector. Let's go to where there's major opportunity in the transportation and fuel needs, let's go to the bio-diesels, let's go to the ethanol. Let's look at how to get to the many different opportunities that exist--and that's by value added. We must double our value added. We cannot stay with the existing process that we have. When I say “existing process”, I started from scratch; the Canadian Wheat Board didn't get me there. I like to have choice. Some 80% of the farmers in Alberta want to have that choice, to have an opportunity to sell to anyone they please.

I cannot see investing $300,000 in a farm per year in input costs and have somebody else do the selling for me. It is out of reach today, where 12% of my major sales are to the board, and the rest.... The canola made us dollars--we're called the Cinderella country of Alberta. The oats this year made us dollars. The open markets made us dollars because we have an opportunity to sell to anyone we please.

How do we get there as farmers? We need a strong agriculture policy and we also need a very strong crop insurance program that covers our cost of production and living expenses, because we cannot tell in which year we're going to have a drought or have excess moisture. The only enemy is the weather. The big enemy is the weather. Crop insurance, the low coverage that exists today, is the only thing that has held us forward to this day.

Thank you.

· (1315)

The Chair: Thank you, Harry

Yesterday our committee was in Davidson, Saskatchewan. That is an area that was homesteaded about a hundred years ago. And of course today, in terms of probably one of our last frontiers with agriculture in this country, we're sitting with some of the people who opened up this area.

I was just reflecting back. A number of years ago I worked with a young geologist from the province of Quebec. He was off a farm, and he had I guess that old agricultural instinct that you just can't take away from families and people. He came up here way back in probably the late fifties or early sixties.

It's a new area, and I know you've probably experienced different problems from some of the older agrarian areas. In any case, I know we as a committee and as a government want to commend you for the work you've done up in this area of northern Alberta. It's an area that has done very well in many ways, and again we're learning of some of the problems you're encountering.

Howard here would probably want to start off the questions. Oh, he's going to ask Myron.

Mr. Howard Hilstrom: No. It will get to everybody, won't it?

The Chair: I think we'll have time for everyone. Let's go five minutes each.

Mr. Howard Hilstrom: Go ahead, Myron. I think you have some great things here.

Mr. Myron Thompson: Oh, what a commanding speech that was.

First of all, I want to make a comment to Ron. I could tell from your talk that you were concerned about presenting it. You did very well, mainly because you could tell where it came from, and I think that's where a lot of these talks are coming from. I appreciate that.

Also, I really thank Wayne and I thank Harry for your emphasis on education, having come from that profession--before I went broke farming, by the way--where I spent many years trying to implement and get the Department of Education to mandate more courses along the agricultural line, and having such little success arguing tooth and nail that sex education maybe should be shoved aside and let's talk about some of the other important things of life, or however you want to describe that. I agree with you on that aspect. Any way we can get that done, we need to do that.

I have specific questions for Cliff, then I have another question for Harry. I don't believe Cliff quite finished his presentation. I think he had a couple of things he'd like to add to it. He got to the point where he talked about more dollars for agriculture. I guess he's aware that this latest budget is zero dollars for the agriculture industry.

He also mentioned the priorities of the government in terms of agriculture to some degree, which I certainly agree with. I see huge amounts of dollars being poured into a gun registry, which isn't a really effective thing to do. I see billions of dollars poured into big business grants through HRDC and other mechanisms. We seem to ignore that aspect of it all.

I'd like to ask you, Cliff, to finish those comments, if you would. While you're thinking about that, I'd ask Harry if he could just itemize the stumbling blocks he sees to opening up the future he has envisioned for the upcoming young people who are interested in farming. What are those stumbling blocks and what should be removed?

We'll start with Cliff.

· (1320)

Mr. Cliff Richards: Thank you, Myron.

I guess I understand the federal government's problem. We're running a deficit in the country, but there is one way to get us out of a deficit. I have to do it on my farm, as well as any other business. We have to create employment opportunities and the opportunity to make money so that we can tax that money. We have to start somewhere, and I think it's an investment in the future.

As I mentioned, I'm a third-generation farmer. My son is 25, and he's fourth. He has two children living with us and he has no vision to take over. He wants to farm. He said, “Can I rent some of your land?” I said, “Go see your grandpa.” Grandpa set it up for him. He wanted to do it. But he can't go out and buy farmland right now because it's too high-priced based on the return of the commodities we can produce on that land. You can only put up so many intensive hog barns, or so many intensive cattle operations.

If you know what I'm saying, we have to ensure that what we're doing is profitable and that we'll be able to maintain that. If we're having trouble financing it.... I have always felt that the biggest mistake the government ever made was not allowing GST on food. But if we do have a GST on food, make sure it stays in this pot for agriculture and we set some parameters around it about what it does fund and what it doesn't fund. It shouldn't be funding roads, because up here oil and log are also involved on those roads, as well as grain.

You asked me the question about dollars, and I believe we have to find a way. I think consulting with the industry before decisions are made way off down east, or wherever they're made, is important, because I think you're going to get a better, broader, more accurate look at where we have to go.

The Vice-Chair (Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance)): Myron, you still have a minute. Was there another comment that you wanted from one of these gentlemen?

Mr. Myron Thompson: I would like to hear from Harry.

Mr. Harry Schudlo: You're talking about the young farmer taking over the farm and what's the stumbling block?

Mr. Myron Thompson: That's right.

Mr. Harry Schudlo: Well, the present farming age is over 55; the biggest percentage of farmers are over 55. The financial pressures that are out on the farm today.... He says, “Son, keep following me and some day it'll be yours.” The dad is 80 and the son is 60 and he's still following him. I think we need some kind of an incentive, tax-wise, for the father to give up his farm sooner to his son, maybe some lower interest so that the son can buy the farm.

Too many sons are scared to take on a million dollars of debt right off the bat. It's what is required to buy a valuable farm today. There has to be a partnership. For the partnership, I think the father should be rewarded for passing it on to his son. It's the only thing I can think of right now.

· (1325)

Mr. Myron Thompson: You mentioned some things preventing you from going into added value.

The Vice-Chair (Mr. Howard Hilstrom): Quickly, Myron.

Mr. Myron Thompson: Am I done?

The Vice-Chair (Mr. Howard Hilstrom): You're at the end of your time.

Mr. Myron Thompson: You were mentioning some real stumbling blocks there. If you could hit on that, and then I'll leave it.

The Vice-Chair (Mr. Howard Hilstrom): You have about 30 seconds. Just a quick one, then we're over to Murray.

Mr. Myron Thompson: I thought you were on my side.

The Vice-Chair (Mr. Howard Hilstrom): The chair is neutral.

Mr. Harry Schudlo: Add value by creating more money to be invested in processing.

Mr. Myron Thompson: What's stopping value added?

Mr. Harry Schudlo: Capital investment is stopping it, as well as the buy-backs by the Canadian Wheat Board.

The Vice-Chair (Mr. Howard Hilstrom): Thank you very much.

We'll go now to Murray Calder.

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

Cliff and Irv, I'm going to walk you through something very quickly on short-line railways. In fact, you may want to go into it in more depth after we're finished here.

I have been successful with two short-line railways in Ontario. The approach I used was that the railway's biggest complaint is on property tax. It's one of their overhead costs. The approach is to use the municipalities to buy up the right-of-way and the plant. They can use the plant, basically bought through the railways at scrap price, because most of the rail on the subdivisions is not up to main-line weight anyway.

With the municipalities, the right-of-way cannot necessarily be purchased, but it can be donated to the municipalities. If you're going to change from railway to something else, there has to be an environmental assessment, which is probably going to scare the railway anyway.

The municipalities don't pay tax on the town hall. They won't pay tax on the right-of-way, also, if they own it. After that, it's a matter of maintaining a steel highway, and finding a short-line operator to take and lease the line on a per-car basis. If you want to go into it more deeply, I'd be more than happy to do so.

Harry, I want to get back to you. There are actually two things. Both you and Wayne have raised the issue of education on the farm. Right now, 96% of the population of Canada doesn't even know what's in season. They go to the grocery store, and oranges, broccoli, and asparagus are there. You go every day and get it. So 96% of the population doesn't even know what's in season any more. It is a major problem for us. Getting it into the classroom is something I think we have to work at from a federal-provincial point.

Both of you have also raised the issue of inter-generational transfer. This is a major one. In the fifties and the sixties, the farm was basically given to the next generation and that generation took care of the retiring generation. Now it's purchased. I don't know how we're going to get around it. If you have any ideas, for instance, on how the next generation looks at the inter-generational transfer, maybe you could give me a few pointers.

Mr. Harry Schudlo: I think the stumbling block right now is the expense of a home. The farmers today don't have enough money put away for retirement. It brings up the issue that they have to sell to get dollars from somewhere. They stick it out until they get pensions. By the time that day occurs, the debt load is so heavy they can't afford to hand it over to their sons. Maybe some kind of a program could be developed where it's done earlier, say at the age of 55 years.

I know that the Whitehorse agreement on renewal is how to get the farmer out, but how can you make a horse drink when you bring him to the water? You're not going to start educating guys of 55 and 60 years old. He actually has to retire on only his assets or what he receives from his farm, period.

· (1330)

The Vice-Chair (Mr. Howard Hilstrom): The short-line rail answers then.

You'd asked about the short-line rails?

Mr. Murray Calder: I've probably given them a little information overload.

I think if we talk afterwards, I can give you much more information on how I was successful with it.

Mr. Irv Macklin: Okay. I had the feeling that no reply was called for.

Mr. Murray Calder: Yes, that's right.

The Vice-Chair (Mr. Howard Hilstrom): Is that more or less your question? Okay.

Mr. Proctor.

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

I'm going to ask three questions and then you'll have an opportunity to respond. I have three specific folks in mind, because the issues raised were specific.

To Cliff Richards, you mentioned that you have bison and you mentioned a concern about horse meat and tariffs. You're only the second presenter that is a bison producer, and I didn't get a chance to ask him. So I'd like you to tell us a little about what you require there.

To Ron, you are concerned about the lack of a Canadian grain inspector here in this part of the world. So I'd like you to elaborate on that.

To Harry, you said that traceability, origin, and health are very important to the consumer. We all agree with that. Recently the United States Department of Agriculture indicated that they are looking at country-of-origin labels on red meat. It wasn't clear to me whether you have beef or hogs, but I wonder what your thoughts would be on the impact that's going to have on this country and on our livestock producers.

Let's go back and start with Cliff, and then around one.

Mr. Cliff Richards: With regard to bison, I guess the main bottom line is that the Canadian Bison Association is going to require the federal government's help in the next WTO talks, which are this fall, I believe. As it stands, bison right now falls under red meat , which includes beef and pork, I believe. Horse meat does not, because Europeans want horse meat, so there are no tariffs on horse meat going into Europe.

We need to break bison and elk out of the red meat and let it stand alone. There are ample markets that we'll never fill for years in Europe for bison meat at a premium price back to the producer.

It is a glimmer of hope, I think, for diversification in this country. Some 25% of the Canadian bison population is right here in the Peace district, so it's about 50,000 breeding stock. We can expand that a long way, but we also need help with the buffalo problem.

I'm afraid you're going to end up having a battle with the wildlife side of the government on that. It's definitely an issue that's of real concern here that northern risk management.... We're going to have to clean that park up. It's a detriment to the cattle industry too--berculosis and TB.

The Vice-Chair (Mr. Howard Hilstrom): Could I interject for one second before the next answer comes?

Mr. Cliff Richards: Sure, go ahead.

The Vice-Chair (Mr. Howard Hilstrom): We'll clarify that a little for the record.

What you're talking about is probably tuberculosis and anthrax in the Wood Buffalo National Park?

Mr. Cliff Richards: Correct.

The Vice-Chair (Mr. Howard Hilstrom): That's been raised in Manitoba. We have tuberculosis in the elk herd in Riding Mountain National Park, and of course that falls under Heritage Canada.

Thank you. And the next answer was from Ron.

Mr. Ron Matula: Thanks, Dick, for listening to me.

As far as your question is concerned, Wild Rose is trying to get a grain inspection facility for the Peace region.

I went to a meeting here just a week ago, February 15, and fusarium head blight seemed to be a really big issue. It scared the pants right off me, to be honest with you. We have a nice clean little area where we grow our grain, and we don't have fusarium head blight. It's taken over all of southern Manitoba and half of Saskatchewan already, and it's moving into Alberta. And this stuff is not worth nothing. It affects barley and cereals

If the federal government could help us out somehow in keeping that from our area...because the grain is not worth much as it is, and if we get this disease and we can't even sell it, we're hooped.

I guess that's basically what I was trying to say.

Mr. Dick Proctor: Thank you.

· (1335)

Mr. Harry Schudlo: On the labelling aspect, I'm not a cattle producer, I'm strictly grain. However, the Canadian Cattlemen's Association and the Alberta Cattle Commission are doing a superior job promoting beef. We're branded in Canada as being the best, and I don't think, if we're the best, we should have any fear of labelling, as long as the consumer picks up the tab.

Mr. Dick Proctor: There's no concern about that.

Thank you, Harry.

The Vice-Chair (Mr. Howard Hilstrom): Thanks very much.

Mr. Steckle.

Mr. Paul Steckle: I've heard over the last couple of days a lot of comment about research and where government spends its dollars in research. I've also had to ask the question of myself--I guess education is something--how do we educate people?

We live in a country where three generations ago everybody either lived on a farm or had just come from the farm. Now we're three and four generations removed from the farm. My colleague talked about how 96% of the people don't know what crop is in season, what product is in season.

I guess as a government, as we look at the future of agriculture, the question is where has government failed, and where can government be better positioned to help you, particularly in the niche markets, because obviously government isn't looking for those niche markets. I think they're finding accommodation for those niche markets, but I'm wondering whether we're accommodating the people--and Harry, I think, is probably one of those farmers--who have developed those.

Is there more government can do to help--and not interfere? So often what we do seems to be done in a way of interference, rather than in a helpful way. We need to find ways government can be proactively involved, because the successes we've seen in agriculture have come from those people who have gone out on their own and found ways to accommodate their capacity as farmers. It hasn't come by government organizing for them.

But I think we need to be there as companions to help you, and to be facilitators. What can we do that we haven't done, in terms of better directing our dollars into research and in accommodation to develop niche markets, to help people get their product to those places?

This is to Harry, of course, and I think Cliff looked at me as though he had something to say on that. I'm not limiting it. The chair is the only limiting factor I have.

Mr. Harry Schudlo: Yes, I have niche markets, and they were probably found because of the truckers we have in our system throughout the province. The costs are a little higher, but the service is excellent. However, the truckers have an impact on the infrastructure of our roads. That does not concern me, because it's a social problem. Government will have to upgrade those roads, and eventually it will be a higher cost to government, because of the longer transportation routes.

But I can rely on the trucker. He will deliver my product to Washington, and he will come back with a cheque and take another load with no questions asked. I know what I'm going to get net from my product. I have my customers established, and I continue farming. I know what I'm going to get at the end of the day. The only obstacle is the weather.

Mr. Paul Steckle: Does anyone else want to comment on that? John?

Mr. John Sloan: On the general topic, but not specifically.

Mr. Paul Steckle: Well, on the general topic of where government policy is interfering with what you're trying to do. I know the Wheat Board always comes up as one of those bodies that some people see as standing in the way of developing these markets. That could be one encumbrance. But there may be other things you people have in mind.

The Vice-Chair (Mr. Howard Hilstrom): Irv.

Mr. Irv Macklin: Mr. Chairman, government seems by its nature to want to develop programs with a whole lot of rules that foresee every abuse and everything that might possibly go wrong with this particular program. Then they wonder why, for instance, it doesn't respond to entrepreneurs and innovation.

The other thing is, I believe most innovation comes from individuals. So notwithstanding that government assistance or distribution of the product or the idea afterwards and whatnot is all very good, especially if they're on the ground floor, I think most times when you're trying to invent or discover a new way of doing something, the more people that are involved, the harder it is to get your program off the ground.

Consequently, if the government wanted to assist, I would think they might well give consideration to doing away with that rule that says you have to come to them first, at the beginning of an idea. If you don't come to them first, then they won't fund.

I'm thinking for instance of a limited access ramp that I believe meets environmental standards for keeping water pure and serves the purpose, especially in the fall when it's freezing. PFRA won't fund this after the fact, and they don't particularly like the idea before the fact. So you show them that it will work, and then maybe they will, but they probably won't because they don't fund after the fact.

So I'm saying, if you're going to encourage Canadians to come with an idea that they've already developed, to see if there's funding, and leave that door open somewhat, then you might be encouraging entrepreneurs more than when they're saddled with not only developing the idea, but also a whole bunch of bureaucrats that may or may not be supportive.

· (1340)

The Vice-Chair (Mr. Howard Hilstrom): Thank you.

We'll continue now, over to Mr. Rick Borotsik.

Mr. Rick Borotsik: Thank you.

John, I was rather intrigued with your concept of a Canadian farm bill. We've touched on all the components here and there, helter-skelter, but as a concept, bringing it all together into a farm bill and the vision as to where agriculture is or is going in Canada is rather intriguing, to the point where you also talked about the contribution of agriculture to the environment. You've talked about the contribution of agriculture to the ecological systems, the habitat. We all know that's there from agriculture. How would you put a cost component to the contribution of agriculture with respect to those?

By the way, in Europe we talk about multi-functionality, and that's what you're referring to in that aspect of it. How do you put a cost contribution to agriculture on those components?

Mr. John Sloan: I haven't addressed the issue of the cost component. However, in terms of credit funds and debits--

Mr. Rick Borotsik: That's what I'm looking for, credits and debits, the contribution.

Mr. John Sloan: The major winner is the country, our society.

Mr. Rick Borotsik: In Europe they've done that, and they seem to support agriculture because of that. So I want you to tell me how we--

Mr. John Sloan: In Europe, there is very heavy reliance on subsidies.

Mr. Rick Borotsik: Well, you call them subsidies.

Mr. John Sloan: Subsidies, programs.... There is a move toward retaining many producers on the land as a consequence of providing other services that are beneficial to the general population, to society.

Mr. Rick Borotsik: Can we come up with a value to that to agriculture, a societal value?

Mr. John Sloan: A societal value to agriculture? In terms of the ALUS proposal of the Keystone Agricultural Producers, at that time there was reference to a few dollars per acre.

Mr. Rick Borotsik: Ron, you'd said you got back into farming just recently and have only been at it for four years. Can you tell me why you got back into it? You also indicated that you had two failures out of four years. Why are you still in it?

Mr. Ron Matula: Rick, I love it. I like the work. It's so much different from what I had been doing. I was raised on the farm, born and raised. We had pigs and cows, you name it. And when I was 16 years old I was gone like a thief in the night and never looked back until my dad reached seventy-some years old. I come from a fairly large family, but some of them have gone, moved away, and he needed help. He can't sell his farm. He couldn't get out of it, I guess, what he wanted. He put so much of his heart into it for so many years, he can't just sell it out to somebody. I think he wants me to take it over, but it's virtually impossible.

I approached a bank a couple of years ago, my favourite banker, who I've been dealing with for years, and she just laughed in my face. She said there's no way you can buy a farm nowadays. And I thought, there's a flag there. Why? It's a viable business, it's a business that we need.

Anyway, I'm still in there because my dad has helped me out. It's the only way I could've stayed in it and--

· (1345)

Mr. Rick Borotsik: Does he have a NISA account, by any chance?

Mr. Ron Matula: Yes, he does.

Mr. Rick Borotsik: Yes, I thought he would.

Mr. Ron Matula: Yes, NISA is a wonderful thing.

Mr. Rick Borotsik: For your dad it is.

Mr. Ron Matula: Yes. I couldn't get into the NISA; I was too late, I didn't have enough grain sales and stuff.

Mr. Rick Borotsik: By the way, I think NISA's a great program.

Mr. Ron Matula: It is, it's a wonderful thing.

Mr. Rick Borotsik: It was put into place, as was mentioned earlier, by a previous government, and so was GRIP. It's a good program--

Mr. Ron Matula: But it's a handout, Rick.

Mr. Rick Borotsik: Well, for your dad NISA obviously is a program that's very advantageous to him, but we won't get into that.

I have one other question, if I can.

I think Cliff had indicated that maybe land prices were too high. Did you mention that? Can you tell me why land prices are so high, when we got talking about all of the difficulties there are in agriculture, the two years of losses out of four? When you put the numbers to it, how can you afford to pay those prices for land, and why are they so high?

Mr. Cliff Richards: Part of the reason here is I guess there's no Canadian policy on farmland ownership. Here in Grande Prairie the oil patch is booming, so the oil money moves out. The cost of a lot in Grande Prairie is anywhere from $30,000 to $50,000. You say gee, I could go out and buy a quarter section for $60,000 or $70,000 ten years ago, and now they're up to $110,000. You can't derive return from the product produced.

Mr. Rick Borotsik: But somebody's buying it.

Mr. Cliff Richards: That is correct. So the land is changing hands. And you're going to end up, around the bigger centres, with a lot of probably hobby farms broken apart. The county here has allowed acreages to be sold off in the last five years because it's a tax grab; it's another means to create revenue. So we move our agricultural base farther away. It happens around the big cities--you guys know it. All you need to do is take a look at the map and see what urban sprawl does.

In Europe, to own farmland you have to have a green certificate, and that is four years of agricultural training after school--in other words, a college degree. So a normal citizen can't own farmland unless it's willed to them.

The Vice-Chair (Mr. Howard Hilstrom): Thank you. That's a pretty good answer.

Of course we know that farmland and that is the responsibility of the province. We've seen that in Saskatchewan they have a restricted out-of-province ownership plan, and certainly Saskatchewan land prices are much lower. Whether that's advisable or not, I don't know; it would depend. So that's a good point.

Rose-Marie, did you have a question or two that you'd like to ask?

Mrs. Rose-Marie Ur: Yes.

Before I left Mr. Davies had presented about agriculture in the classroom, and in Ontario we have that program. I don't know what classroom you're referring to, whether it's elementary or secondary education, but I can tell you it is a real positive program within our community and certainly is well received. Is there nothing like that here presently to educate our young people? They're the best people to deliver the messages back home.

Mr. Wayne Davies: As far as I'm aware, there's nothing in the classroom that is a course on agriculture. There's something like “farmers grow wheat”, maybe even as far as “beer is made from barley”, but that's it.

Mrs. Rose-Marie Ur: Right.

Go ahead.

· (1350)

Mr. Ron Matula: I have a couple of sons in school and there was talk last year about a course, but nothing ever evolved.

Mrs. Rose-Marie Ur: Right.

It was stated here earlier, in different presentations, that we need to get information out to our urban community concerning what agriculture is truly about and where our food actually comes from. We've also heard--it's not a new revelation--that politicians aren't probably held in the highest of esteem, whether you're in Alberta or in Ontario.

Beyond that, I think there is a real lack of communication as to how we need to get the message out. We as farmers--and I'm a farmer in my previous life--are not whiners. We just want a fair market price. We don't want subsidies. We are price-takers, not price-makers, and we have to get that kind of message out.

What would be the best mode of delivering that message? I don't think the political avenue is working. I was an assistant at one time for a member of Parliament, and, I can tell you, when that kind of information went out from the previous member and I picked up the mail, the garbage pail next to the post box was full of the information we were trying to send out to his constituents. So what would be the best venue to deliver information as to what agriculture is really about?

Mr. Wayne Davies: As far as I can see or have thought about it, the only way we're going to get a message out is to go into the classroom with a course on agriculture. Otherwise, you send the mail out, as you say, and it hits the garbage can. The only way we're going to tell people about it is in the classroom. Kids take home all the information, and the parents hear about it, if they're enthused with what they're being taught. And the most enthusiastic students, as far as I have witnessed, are elementary. You get the elementary kids and give them a chance to go to a farm--even a petting zoo helps. If they have a chance to witness an exhibit that perhaps moves from school to school--even on elevator scale models, or whatever--those young people take that home, and pretty soon everybody knows about it.

Mrs. Rose-Marie Ur: We have another program in Ontario. It's really a successful program in my riding in southwestern Ontario. It's farm safety, with the young people. It started off with maybe 25 or 30 students and now there are 200 to 250 students. The first time I went to one of these, I was just as amazed, and my eyes were just as open, as the young people's with a power take-off, showing the young people what really can happen if you're not careful around farm machinery.

That's another excellent way. Farm families are busy trying to make ends meet and sometimes cut corners. It's the young people who are educating their parents or their family members about what precautions need to be taken around the farm. Whether it's where our food comes from, or the safety of the equipment, or working around equipment, it's another really powerful course back home.

Mr. Ron Matula: Yes, Rose, I think you just hit on a really strong point there. The farmer has to be a mechanic, he has to be a welder, he has to be a biologist, he has to be everything, and if you could take that into the classroom.... When I was growing up I always remember my employer saying, “That's a farm boy, get him. They learn so much more than they do in the city.”

Mrs. Rose-Marie Ur: Thank you, Mr. Chairman.

The Vice-Chair (Mr. Howard Hilstrom): Thank you.

The chair, of course, has a little bit of prerogative, and as the interim chair I'm going to allow myself to make a little comment and ask the next question. This is often done.

We've consistently had crop insurance identified as a program that either works reasonably well or can be made to work much better, and that's one of the messages we're definitely taking back on the support side.

I'm going to ask a question. If you each have a pen and just jot down a very short word on each one of these issues, it'll remind you. My question is about non-subsidy items that could add income to your farms. You can tell me if they will or will not.

The Pest Management Review Agency at the present time does not register chemicals as quickly as farm groups and the industry would like. There's the cost of registration. All of these costs are passed on to farmers.

User fees, many of which could easily be construed as a benefit for all Canadians as opposed to just farmers, could be reduced.

On trade issues, we see the Wheat Board and the general relationship with our biggest trading partner, the United States. Would it add dollars to your pocket if that was in better shape?

There are the excise taxes on diesel fuel and farm gasoline. If those were totally removed, would that add to your bottom line?

With regard to the Kyoto agreement, is there a concern that it could add costs to your farms?

Would the Species at Risk Act add costs your farms?

There's the marketing issue of the Wheat Board. We've heard from the barley and wheat growers. Some say it would and some say it wouldn't.

Has Fisheries and Oceans added any costs to your drainage issue in this area? I'm not sure if drainage is a concern, but we've heard that in other provinces.

There's the matter of whether or not you would like to see something like five-year averaging on income tax come back. That was in place before. Would that be of assistance? It wouldn't be a direct subsidy, but it might be of some help.

Those are some items, and there may be more. Is there any opportunity in those areas to lower the costs and leave more money in your pocket?

Who would like to comment? Claude, you haven't had a chance to speak for a moment. Would you care to comment on any of that?

· (1355)

Mr. Claude Smith: I'm going to respond to the ones I have an opinion on. I'm not informed on all of them.

The pros and cons of the Canadian Wheat Board have been talked about around here for quite a few years. In answer to your question, maybe it isn't the right thing, but if we lose it, are we ever going to get it back? I like to live in a free enterprise country, but the idea of free enterprise is to make money. Sometimes farmers can become cornered in that market. They have to move their product, they have bills to pay, and they're at the mercy of free enterprise that says they have to make a profit. I'm talking specifically about the railroads and the grain elevators. I'm leery about giving up the Canadian Wheat Board.

The Vice-Chair (Mr. Howard Hilstrom): Would anyone else like to comment on those items?

Mr. Claude Smith: On the five-year averaging, I think bringing that back would help.

Mr. Irv Macklin: I understand that we live in a regulated economy. You earn your living with an abundance of expenses and income. I feel that any changes in all the things you mentioned are positive.

I want to comment on the trade issue. My membership in the Alberta Cattle Commission for the year before last was $500. It turned out that I sold 250 head of cattle at a $2 check-off. That's a pretty substantial membership fee. Their income was some $6 million or $7 million. They entered into a trade dispute settlement mechanism with a bunch of lawyers in the States and Canada and the income for that year was spent on an international trade dispute. I think this should have been within the realm of the federal government, because at about the same time, they moved in with $1 billion or so of guarantees for Bombardier in their dispute with Brazil.

So yes, all these things sure add on a lot. The Kyoto agreement, when we enter a whole new era of carbon credits and having bureaucrats decide whether or not carbon is being brought into the land, or whether it goes strictly into the atmosphere.... Developing policies over all that is a terrible thing to consider. It's a jungle that we're just starting to traipse in now. I think with those comments, yes, all those things are considerations.

¸ (1400)

The Vice-Chair (Mr. Howard Hilstrom): John and Cliff, did you have comments? John first.

Mr. John Sloan: I'd like to make a comment on the Pest Management Regulatory Agency. I'm all for safety. I'm all for appropriate tests to be conducted prior to implementation and acceptance. However, I'm all for sharing of information, interprovincial, interstate, between Canada and the States. It seems there are tremendous financial barriers put in the way of U.S. and Canadian farmers regarding regulations in this whole issue.

The Vice-Chair (Mr. Howard Hilstrom): What you're talking about there is the harmonization and use of scientific information from each country. Is that what you're saying?

Mr. John Sloan: Each country, each province, each state, yes.

The Vice-Chair (Mr. Howard Hilstrom): And recognize that.

Cliff, did you have any comments on these?

Mr. Cliff Richards: Yes. On the pest management issue, I think it's very important that we do take our time, making sure the products that come to us to use are safe.

I can think of one that was a granular peat inoculant for peas to encourage nodulation. They found in it a human pathogen that affected the lungs, and it didn't take any more than two years. It was fortunate that it was your federal research gentleman out at Beaverlodge here working on a granular form who discovered that this human pathogen was there. That product really shouldn't even come to market without that kind of testing, because it definitely created lung problems for farmers using it.

On the other hand, the harmonization is extremely important, too. I'm thinking of the canola treatment that was lost this year. There's a lot of treated canola in the system and the rule says right now, she's over and done with. We should have allowed that to go out of the system, saying next year, be prepared. But it was a straight cut-off.

From what I see, a lot of the problems are caused by a lack of dialogue. More time should be spent down here asking questions and probably getting some more down-to-earth thought processes before we go back and make our decisions that turn around and affect us and sometimes cannot be reversed.

The Vice-Chair (Mr. Howard Hilstrom): Thank you very much.

We're getting very close to the end of this. I'd like to invite those who are sitting in the back to just make a quick comment. You've heard us discussing the issues here today. Is there anyone out there who wants to make a quick two-minute comment, who hasn't had an opportunity? Please do so. Just come up close enough and speak louder. We're just going to do a two-minute comment round.

Mr. Art MacKlen (Individual Presentation): Thank you, Mr. Chairman.

I'm Art MacKlen. I farm northeast of Grande Prairie here--wheat, barley, beef cattle. I'm the farmer-elected director for the Canadian Wheat Board for this area. I'm also chairman of the Canadian International Grains Institute, which is a market development organization that you're probably aware of.

Anyway, I just have a few quick comments. First off, I think it's high time that our government recognized that food is a political item worldwide. Our observation has to be that in the international political arena, in spite of the trade deals, farm support programs in the developed countries have in fact increased. We're looking at a U.S. farm bill with even further increases.

As a farmer, I'm rather disappointed in our government. Rather than recognizing the reality and observing what is actually happening on the world stage, the government keeps cutting us back as producers, and costs are off-loaded onto us.

The United States is now giving $135 per metric tonne in support to their wheat producers. That was in 2000. Europe gives $113. So the Americans are now the highest. Canadians get $26 a tonne.

It's high time we recognize that if we want to have a viable agriculture industry in Canada, it will require government support comparable to what's happening in some of the other countries.

Secondly, I'd just like to quickly talk about regulation. One of the biggest assets we have is the quality of the products we export. That is dependent on an effective regulatory system that is properly funded by the federal government. The Canadian Grain Commission plays a big role in that. It needs to be adequately supported, and not have the costs off-loaded onto producers. They are facing a cash crunch and need support. They have a role to protect producers' interests. We want to see that role enhanced.

Transportation is vital, particularly to western Canada. We're a landlocked region. Western Canada was developed because of federal transportation policy. As the federal government abdicates its responsibility in that area, we have all this rationalization. We have the abandonment of rail lines. If we want to give farmers a choice of shipping options, we must have the infrastructure there. We need the sidings and we need to have them properly upgraded. The federal government has a role in regulation.

The revenue cap was supposed to be there, and $5 was supposed to come back to the farmer. Well, $3 of that $5 actually went to the grain companies, and maybe only $1 has come back to the farmer.

So those are just a couple of quick areas.

The federal government has a very big role to play in market development. I'm the chair of CIGI, which is a market development organization. The federal government funds 60% of that, and we thank them; it's an excellent organization. But the federal government is decreasing its contribution there and off-loading some costs on it, and that makes it even more difficult for us to do that effective market development job.

We've had pensions off-loaded onto the CIGI and we've had interpretation off-loaded. That's taken $275,000 out of our budget to do an effective market development job. The federal government has a role to play.

We elect governments to govern and act on behalf of the public and in the public interest, so I want governments to do that. I believe in democracy and I want governments to do what they're supposed to do, which is represent the people and act in the public interest.

¸ (1405)

The Vice-Chair (Mr. Howard Hilstrom): Thank you very much, Art, for your expertise. You're a well-known farmer and have learned a lot over the years about agriculture. We thank you for those comments.

I'm going to turn it over now to our regular chair of the Standing Committee on Agriculture and Agri-Food, Mr. Charles Hubbard, to wind this up.

The Chair: Thank you, Howard.

I missed quite a few of your comments, but I will have a chance to see them when I get back to Ottawa.

We'd like to thank all of you for coming out today. As we mentioned before, if you have further input for our study, certainly try to get it to the clerk or to my office in Ottawa.

We're hoping to have a report out, subject to the study we're doing, the reading of it, and general application of what our different groups have, in terms of being political parties. Sometimes political parties don't all agree on things, as some of you know.

In any case, we will hope to visit the other provinces. Tomorrow we'll be back here in Alberta. On Thursday night and Friday, we'll be in British Columbia.

Again, thank you. I hope you have a good year and things improve.

Ron, maybe you'll become a full-time farmer before you decide to take back those wrenches, but you might need them around the farm, in any case.

With that, Howard, thank you for chairing that part of it.

We'll adjourn our meeting.