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REPORT OF THE COMMITTEE

WEDNESDAY, June 29, 2000

The Standing Senate Committee on Agriculture and Forestry has the honour to present its

FOURTH REPORT


Your Committee, which was authorized to examine the present state and the future of agriculture in Canada, and to present its final report no later than June 29, 2001, has, in obedience to its Order of Reference of November 24, 1999, proceeded to that inquiry and now tables an interim report entitled, Repairing the Farm Safety Net to Meet the Crisis: Simple, Successful and Sustainable.

Respectfully submitted,

Chair
LEONARD J. GUSTAFSON


Repairing the Farm Safety Net to meet the crisis:

Simple, Successful and Sustainable

Chair : The Honourable Leonard J. Gustafson

Deputy Chair : The Honourable Joyce Fairbairn, P.C.

June 2000


MEMBERSHIP

The Honourable Leonard J. Gustafson, Chair
The Honourable Joyce Fairbairn, P.C., Deputy Chair

 and

 The Honourable Senators:

*Boudreau, J. Bernard, P.C. (or Hays, Daniel) Robichaud, Fernand, P.C.
Ferretti Barth, Marisa Rossiter, Eileen
Fitzpatrick, D. Ross Sparrow, Herbert
Gill, Aurélien Stratton, Terrance R.
*Lynch-Staunton, John, P.C. (or Kinsella, Noel A.) St. Germain, Gerry, P.C.
Oliver, Donald H. Wiebe, John

 *Ex Officio Members 

Note: The Honourable Senators Banks, Carstairs, Chalifoux, Grafstein, Hervieux-Payette, P.C., LeBreton and Perry were members or present at meetings at various stages during the course of this study.

Staff from the Parliamentary Research Branch of the Library of Parliament:

 

June Dewetering
Research Officer 

Blair Armitage
Clerk of the Committee


 ORDER OF REFERENCE

 Extract from the Journals of the Senate, Wednesday, November 24, 1999:

The Honourable Senator Robichaud, P.C. (Saint-Louis-de-Kent) for the Honourable Senator Fairbairn, P.C., moved, seconded by the Honourable Senator Watt:

That the Standing Senate Committee on Agriculture and Forestry be authorized to examine the present state and the future of agriculture in Canada; and

That the Committee report no later than June 29, 2001.

The question being put on the motion, it was adopted.

Paul Bélisle
Clerk of the Senate


 TABLE OF CONTENTS

EXECUTIVE SUMMARY

LIST OF RECOMMENDATIONS

Introduction

Simple

Successful

Sustainable

Conclusion

APPENDIX 1 : Witnesses


EXECUTIVE SUMMARY 

About one year ago, in the report The Way Ahead: Canadian Agriculture’s Priorities in the Millennium Round, the Standing Senate Committee on Agriculture and Forestry noted that the agriculture industry was in crisis. One year later, the situation is unchanged and indeed has worsened for many farmers. Bankruptcies, foreclosures, voluntary sales, family and marital breakdown, suicides and poverty have become all too common on Canadian farms and in rural communities.

This report, Repairing the Farm Safety Net to Meet the Crisis: Simple, Successful and Sustainable, summarizes the suggestions of witnesses before the Committee on the elements of a future farm safety net. They told us that it must be simple, successful and sustainable: simple to ensure ease of access to funds, successful in that it will help farmers cope financially with the risks inherent in farming, and sustainable from both the trade and fiscal perspectives.

While witnesses commented on crop insurance, the Net Income Stabilization Account (NISA) program and the Agricultural Income Disaster Assistance (AIDA) program, they directed most of their concerns about simplicity to the AIDA program. In acknowledgement of the problems experienced by farmers in accessing the program, the Committee recommends that Agriculture and Agri-Food Canada select and consult a panel of farmers and rural accountants; their input should help ensure that any application form for disaster or other assistance is sufficiently straightforward and, to the extent possible, requires farmers to provide information that they already collect or calculate.

On the basis that the success of the safety net depends on its ability to meet the financial needs of farmers, most witnesses spoke of both the weaknesses and strengths of the current farm safety net programs. Two elements -- crop insurance and the NISA program -- have existed for some time now. Witnesses identified shortcomings in both programs; consequently, the Committee recommends that their design and operation be reviewed by Agriculture and Agri-Food Canada, its provincial counterparts, and other relevant stakeholders. Conclusions, with recommendations for change, should be reported to the agriculture committees of the Senate and the House of Commons.

Most witnesses mentioned the inadequacy of the AIDA program for meeting the financial needs of farmers. They did, however, stress the importance of having a disaster assistance program as part of the farm safety net. In this area, the Committee recommends the establishment of an adequately funded and comprehensive disaster assistance program to support farmers in situations that fall outside the parameters of crop insurance schemes and the NISA program, with the funding level based on need.

The farm safety net must be fiscally sustainable -- for both governments and farmers -- and sustainable from the perspective of Canada’s international trade obligations. The Committee recommends that the dialogue that takes place between Agriculture and Agri-Food Canada and the Department of Foreign Affairs and International Trade prior to the introduction of any new agricultural program be formalized. Moreover, these departments should ensure that the elements of the three-year farm safety net agreement reached in March 2000, as well as any subsequent agreement, are fully consistent with Canada’s trade obligations and should table the rationale for believing that such consistency has been achieved with the appropriate committees of the Senate and the House of Commons.

Finally, the Committee also received testimony on a range of other topics, including the inadequacy of returns to farmers, trade rules and multilateral trade negotiations, select farm input prices, infrastructure, assistance in facilitating diversification and value-added processing, biotechnology and the precautionary principle, and other factors involved in the sustainability of the farm sector. The human dimension of the financial crisis in the agriculture industry was also mentioned. From this perspective, the Committee recommends that Agriculture and Agri-Food Canada examine the full range of issues identified in this report and submit a report to the Committee on actions that it will take to ensure the financial and social health of the agriculture industry.


LIST OF RECOMMENDATIONS

 The Committee recommends that:

  • Agriculture and Agri-Food Canada select and consult a panel of farmers and accountants conducting business in rural areas to ensure that any application form for disaster or other assistance is simple and, to the extent possible, requires the provision of information that farmers already collect or calculate. More generally, simplicity and linkages between programs should always guide the department’s design of new programs.
  • Agriculture and Agri-Food Canada, with its provincial counterparts and other relevant stakeholders, review the design and operation of the crop insurance program. The department should then report its conclusions to the agriculture committees of the Senate and House of Commons and make recommendations for change.
  • Agriculture and Agri-Food Canada, in conjunction with its provincial counterparts and relevant stakeholders, review the design and operation of the Net Income Stabilization Account program. A report on the findings and suggested recommendations for change should then be tabled with the agriculture committees of the Senate and House of Commons.
  • adequate funding be made available through a comprehensive disaster assistance program to support farmers in situations that fall outside the parameters of crop insurance schemes and the Net Income Stabilization Account program. The funding level must be based on need, as identified by Agriculture and Agri-Food Canada together with its provincial counterparts and relevant stakeholders, and must recognize the substantial contribution of the agriculture industry to Canada’s employment and Gross Domestic Product.
  • Agriculture and Agri-Food Canada be required to consult with the Department of Foreign Affairs and International Trade to ensure that the elements of the three-year farm safety net agreement reached in March 2000, as well as any subsequent agreement, are fully consistent with Canada’s international trade obligations. A report should then be tabled with the appropriate committees of the Senate and House of Commons giving the rationale for believing that such consistency has been achieved.
  • Agriculture and Agri-Food Canada examine the full range of issues identified in this report, and report to the agriculture committee of the Senate on actions that will be taken to ensure the health of the agriculture industry. The term "health" should be comprehensively interpreted during the department’s examination to include both financial and social aspects of the industry.

 


Introduction

Almost one year ago, the Standing Senate Committee on Agriculture and Forestry released the report The Way Ahead: Canadian Agriculture’s Priorities in the Millennium Round. At that time, many Canadian farmers were in crisis, and it was hoped that the negotiating position adopted would lead to improved world trade rules and thus a stronger financial situation for Canada’s farmers.

One year later, the agriculture industry is still in crisis. Numerous farmers have left the land, either as a result of bankruptcy or in order to preserve the equity remaining in their farm business. Many farmers and farm families who remain on the farm are experiencing high levels of stress, as well as depression, suicide, family and marital breakdown, violence and poverty. While some viewed the Seattle launch of the multilateral trade negotiations as a failure, negotiations on agriculture are continuing. In addition, the prices for many agricultural commodities remain low, input costs remain high, and farmers in some other countries continue to be subsidized at a much higher level than farmers in Canada.

It was in this context, and in view of dissatisfaction within the Canadian agricultural community with the design and administration of the Agricultural Income Disaster Assistance program and other elements of the farm safety net, that the Standing Senate Committee on Agriculture and Forestry decided to hold hearings. Agricultural representatives were given the opportunity to express their views on Canada’s farm safety nets -- what works, what doesn’t and what is needed for the future if the agriculture industry is to survive, let alone thrive and meet its export goal of 4% of world agricultural trade by the year 2005.

Throughout the hearings, witnesses argued that the elements of the farm safety net must be simple, successful and sustainable. Simple, in order that farmers can access funds in a relatively straightforward manner and using data they already collect or calculate; successful in that farmers will be helped to cope financially with the risks inherent in farming and possible income shortfalls; and sustainable from international trade and fiscal perspectives.

This report summarizes the testimony received by the Committee on each of these three elements and makes recommendations that we believe, if implemented, will contribute to the long-term sustainability and viability of Canada’s agriculture industry and thereby ensure the vitality of Canada’s rural communities. We are confident that the implementation of needed changes to the farm safety net will enable the agriculture industry to meet the challenges, and exploit the opportunities, of this new millennium.

 

Simple

The farm safety net in Canada, originally established in the late 1980s, currently comprises crop insurance, the Net Income Stabilization Account (NISA) program, the Agricultural Income Disaster Assistance (AIDA) program, and companion programs offered by the provinces. Farmers can also have access to cash advances although, strictly speaking, these are not part of the farm safety net.

Crop insurance protects against production risks by minimizing the negative effects of crop losses caused by such natural disasters as drought, flood, hail, frost, excessive moisture and insects, as well as crop damage resulting from protected migratory waterfowl. Although provincially delivered, financial contributions are made by the federal government under the authority of the Farm Income Protection Act. Contributions also come from producers and provincial governments. Premium rates must be set in an actuarially sound manner, provincial schemes must be self-sustaining, and the method used to establish probable crop yields must reflect actual yields produced.

The voluntary Net Income Stabilization Account program, established under the Farm Income Protection Act, helps producers achieve long-term farm income stability. As in the case of crop insurance, contributions are made by the producer, the federal government and the relevant provincial government. In years of lower income, producers can withdraw funds from their account.

The Agricultural Income Disaster Assistance program provides assistance to producers who face significant declines in their income as a result of factors beyond their control and which are not covered adequately by existing programs. This is a "whole farm" program, which applies to all commodities.

In addition, the provinces establish companion programs, such as those for wildlife damage to crops and predator damage to livestock.

Finally, through the Advance Payments Program, made available under the Agricultural Marketing Programs Act, farmers are provided with cash advances, of which a portion is interest free. This program enables eligible farmers to store eligible crops after harvest so that they can market them later in the season when prices may be higher, while meeting their short-term financial commitments.

Several witnesses commented on crop insurance and the NISA program, although their remarks usually focused on the ability of these programs to meet farmers’ financial needs, rather than on their simplicity. More often, witnesses spoke about the complexity and cost of applying for AIDA funds and that program’s short reference period and inability to assist adequately those sectors with chronically low margins. In connection with the program’s initial design, witnesses also criticized the valuation of inventory, negative margins, the treatment of farm family labour and the three-year calculation period. They also indicated that acreage payments would be far simpler than the current program. Moreover, witnesses noted that farmers in the United States receive payments very quickly after a new program or funding has been announced there.

Despite the problems with the AIDA program, and in view of recent improvements to program design, however, it remains clear to producers that a comprehensive farm safety net must include an adequately funded, long-term disaster program. Such a program is a necessary complement to crop insurance, which addresses production problems, and the NISA program, which addresses some income fluctuations.

Like the witnesses, the Committee believes that the AIDA program, or some other disaster assistance program, is a critical component of the farm safety net, along with crop insurance and the NISA program. We feel, however, that the benefits of these programs must not be diminished by their complexity or access costs. As a result, the Committee recommends that:

Agriculture and Agri-Food Canada select and consult a panel of farmers and accountants conducting business in rural areas to ensure that any application form for disaster or other assistance is simple and, to the extent possible, requires the provision of information that farmers already collect or calculate. More generally, simplicity and linkages between programs should always guide the department’s design of new programs.

 

Successful

For the farm safety net to contribute to the sustainability of Canada’s agriculture industry, it must be successful in providing sufficient support, on a timely basis and in both the short- and long-term, to enable farmers to survive the vagaries of weather conditions and the marketplace.

Witnesses told the Committee that the current farm safety net programs have both weaknesses and strengths; they stressed that a comprehensive safety net is needed that can address market and production problems as they arise. Many argued that the current safety net was not designed to address the international subsidy wars or multi-year disasters now being experienced. The Saskatchewan Association of Rural Municipalities suggested that the safety net should include a program to provide income insurance or cover the costs of production.

The Committee was told that crop insurance compensates for losses at the current market value of the commodity; as a result, when commodity prices are depressed, the value of crop insurance coverage drops. As well, crop insurance schemes are not designed to insure against income loss due to depressed markets and, being targeted to crops, are not available to livestock producers. We were also informed that, in some cases, premiums are too high for the coverage available, the program does not apply to unseeded acreage, and, given the narrow margins in some commodities, the levels of coverage do not cover expenses. Witnesses identified the usefulness of pilot projects involving new crop insurance alternatives.

As stated above, the Committee believes that crop insurance is a vital component of a farm safety net. Like our witnesses, however, we believe that the crop insurance schemes administered by the provinces could be improved. In view of the range of concerns identified by witnesses, and the length of time for which the crop insurance schemes have been in operation, the Committee recommends that:

Agriculture and Agri-Food Canada, with its provincial counterparts and other relevant stakeholders, review the design and operation of the crop insurance program. The department should then report its conclusions to the agriculture committees of the Senate and House of Commons and make recommendations for change.

 

While acknowledging the NISA program as a vital component of the farm safety net, witnesses raised several concerns. Although producers of all non-supply-managed commodities can participate and can manage their fund, the program has some weaknesses. The Committee heard that producers’ access to their accounts is restricted, so that funds are available only when a producer’s income has fallen below a trigger level based on the average previous years’ income. Moreover, we learned that while total moneys in the NISA system seem to be substantial, estimated at $3 billion for 140,063 participants in February 2000, they are insufficient to address the losses faced by producers. It was reported that the creators of the NISA program had estimated that funding of $10 to $12 billion would be needed to truly stabilize the agriculture industry.

Some believe that government funding of the NISA program should be increased to enable accounts to grow more rapidly, particularly those of beginning farmers who have difficulty in achieving the cash flow to contribute to the program and those of farmers in financial crisis. The Wild Rose Agricultural Producers identified the need for a mechanism whereby accounts could grow more quickly in good years. As well, some farmers have expanded their operation in an attempt to achieve or maintain viability; though their eligible net sales may have been growing, many of the costs related to expansion are not considered under the program. Thus, while they have very low margins, they are unable to trigger a NISA payment. It was suggested that the program be amended to provide greater flexibility on withdrawals and allowances for taking advances on future earnings. Witnesses also noted that payments from the NISA program cannot be triggered in situations of multi-year losses, and spoke of the need for timely payments.

The Committee also considers the NISA program, like crop insurance, to be a key component of the farm safety net but believes that the program should be reviewed. We are aware of the March 2000 announcement that the federal and provincial Ministers of Agriculture made a commitment to review the NISA program to ensure that it responds better to the needs of farmers and is integrated more directly with the disaster program. In supporting this initiative, the Committee recommends that:

Agriculture and Agri-Food Canada, in conjunction with its provincial counterparts and relevant stakeholders, review the design and operation of the Net Income Stabilization Account program. A report on the findings and suggested recommendations for change should then be tabled with the agriculture committees of the Senate and House of Commons.

 

During the Committee’s current study, as well as during our previous hearings on international trade negotiating priorities, we were repeatedly told of the problems with the Agricultural Income Disaster Assistance program. Several of these have been alleviated to some extent by recent changes to the program, such as coverage of negative margins, the option of using an "Olympic" average and changes to the NISA linkage. Nevertheless, problems remain. In addition to the program’s lack of simplicity and the associated difficulties in qualifying, witnesses identified the inadequacy of the payments, particularly for expanding farms, and poor targeting, which resulted in the funds not being received by those farmers in greatest need. Many believe that the appropriate funding level is one that would meet farmers’ needs, rather than one that depended on the fiscal situation of the government.

According to the Alberta Soft Wheat Producers Commission, one problem with the AIDA program is that support levels are based on past revenues obtained in the marketplace and do not take account of market distortions caused by support programs in other countries. Another problem is that some commodities are not covered under the program. For example, the Canadian Dehydrators Association, whose members are in that situation, argued for an immediate cash injection to address financial losses and ensure the viability of the dehydrated alfalfa industry. In particular, payments of $9.7 million for 1998 and $22.7 million for 1999 were mentioned. Funding is needed in order to halt plant closures and curtailed production within the industry, particularly given that the farmers in this industry have added value and diversified, exactly as the government has been telling the agriculture industry to do for many years.

Like our witnesses, the Committee is anxious that funds spent on a disaster assistance program should, to the extent possible, reduce the crisis in the agriculture industry. Key questions, however, are the appropriate amount of such funds and how the term "disaster" should be defined. We hesitate to cite a specific dollar figure, feeling that the necessary amount will vary from year to year, depending on market, weather and other circumstances. Moreover, in our view it is important that the term "disaster" be interpreted broadly, to include both the natural and market-related disasters that can befall all sectors of the agriculture industry.

The Committee supports the assertion of the Western Canadian Wheat Growers Association that the need is for a long-term, national disaster assistance program that is predictable, reliable, targeted, production-neutral and eligible for "green box" treatment under world trade rules. For this reason, the Committee recommends that:

adequate funding be made available through a comprehensive disaster assistance program to support farmers in situations that fall outside the parameters of crop insurance schemes and the Net Income Stabilization Account program. The funding level must be based on need, as identified by Agriculture and Agri-Food Canada together with its provincial counterparts and relevant stakeholders, and must recognize the substantial contribution of the agriculture industry to Canada’s employment and Gross Domestic Product.

 

The design of a farm safety net for the future must take into account all sectors of the agriculture industry and all regions of Canada in order to ensure it is truly able to assist every Canadian farmer and farm family in need. Consider, for example, the highly diverse agriculture industry in British Columbia. According to the British Columbia Agriculture Council, the province produces more than 200 different commodities and serves a multifunctional role unparalleled in Canada. The situation of such value-added processors as the dehydrated alfalfa industry is also a concern, although the Committee is unable to assess the range of implications of extending safety net coverage to value-added processors.

Finally, the discussion above has focused on the design of a farm safety net that will ensure financial "success" for farmers. It is equally important, however, that farmers enjoy "emotional" success. Among the Committee’s witnesses, the Saskatchewan Rally Group in particular told us of the human costs of the financial crisis in the agriculture industry and the high rates of suicide, depression, divorce and poverty. Clearly, while the industry’s financial health is a concern, its emotional health must be also.

 

Sustainable

As noted above, the farm safety net must be sustainable from both international trade and fiscal perspectives. A number of former farm support programs, including that provided under the Western Grain Transportation Act, would not be in compliance with current international trade rules. As noted above, although many believe that the launch of the Millennium Round in Seattle failed, multilateral negotiations on agriculture are continuing and it is hoped will produce rules that will benefit Canadian farmers. Because it will be many years before new rules are implemented and their benefits felt, there is an urgent need in the meantime to develop an effective, adequate and long-term farm safety net for Canadian farmers.

Experience has revealed to producers in all sectors the high costs and uncertainty of trade disputes, including anti-dumping and countervailing duty cases as well as World Trade Organization (WTO) panels. For this reason, it is critically important that all agricultural programs and policies, including those of the farm safety net, be fully consistent with the trade agreements signed by Canada. This consistency is important; however, the Committee points out that witnesses during our hearings on international agricultural negotiations felt that Canada sometimes behaved like a "boy scout" and acted too quickly and fully to meet its Uruguay Round commitments. For our part, we believe that there may be a misconception among Canadian farmers that the United States and the European Union are contravening WTO rules, and subsidizing their farmers unfairly. Similarly, some farmers in the United States mistakenly believe that certain aspects of support for Canadian farmers violate world trade rules.

The Committee understands that ongoing consultations take place between Agriculture and Agri-Food Canada and the Department of Foreign Affairs and International Trade when new programs are being designed; however, we feel that this important step in program development must be formalized. From this perspective, the Committee recommends that:

Agriculture and Agri-Food Canada be required to consult with the Department of Foreign Affairs and International Trade to ensure that the elements of the three-year farm safety net agreement reached in March 2000, as well as any subsequent agreement, are fully consistent with Canada’s international trade obligations. A report should then be tabled with the appropriate committees of the Senate and House of Commons giving the rationale for believing that such consistency has been achieved.

 

It should be noted that farmers in some other countries are supported to a greater extent than are Canadian farmers. For example, in its appearance before the Committee, the Ontario Federation of Agriculture cited figures from the Organisation for Economic Co-operation and Development showing 1998 total per capita farm support of $381 and $363 in the European Union and the United States respectively, compared with $140 in Canada. Keystone Agricultural Producers stated that for every dollar spent by Canada to support its farmers, the United States spends $2.35, while the European Union spends $2.65 and Japan spends $3.00.

Moreover, "multifunctionality" appears to have been accepted to a greater extent in the European Union and Japan than in North America. This means that citizens abroad will support their farmers not only in order to safeguard their food supply, but also to protect the environment, ensure populated rural communities, preserve habitat and provide open green spaces. To the extent that financial support is given to achieve these objectives, North American farmers are likely to be disadvantaged. The National Farmers Union told the Committee that European citizens and politicians want small farms in the country, cattle grazing in mountain valleys and thriving rural communities, and will do what it takes to ensure that those farmers, herds and communities survive and prosper.

Until recently, the federal government spent about $600 million annually to fund safety net programs. Pursuant to an agreement negotiated in March 2000, however, the three-year safety net agreement raises the federal funding commitment to $1.1 billion annually; $435 million will be allocated to income disaster assistance, while the remaining $665 million will be spent on the NISA program, crop insurance, companion programs and cash advances. Moreover, funding for basic programming will be distributed to the provinces according to their share of national farm receipts; disaster program funding will be linked to the needs of farmers as indicated by demand for disaster program payments.

Witnesses stressed that farmers need an adequately funded safety net, with resources exceeding the $1.1 billion negotiated in March 2000. They also noted that annual income disaster assistance funding of $435 million is lower than the federal commitment for 1998 and 1999, which was already perceived to be inadequate. As well, they argued that, while the three-year agreement is welcome, the need is for a permanent disaster relief program. In the view of many, the appropriate action would be to design a program that met its stated objectives, and then fund it accordingly. Support levels should be determined by need, rather than by the government’s budget in any year. Witnesses believe that, given projected federal budget surpluses over the next five years and the extent to which the industry has contributed to federal deficit elimination, the resources are there to make a stronger and longer-term financial commitment to agriculture.

Not all stakeholders are satisfied with how safety net funds will be allocated among provinces. For example, the Saskatchewan Wheat Pool argued that the decision to award federal funding on the basis of farm cash receipts and market receipts effectively rewards those provinces whose agriculture industry is doing well, while penalizing those whose are not. In its view, greater variation in provincial programs is also likely to occur. Other witnesses similarly noted that agriculture policy on safety nets should be uniform for all provinces.

Some witnesses argued that the Canadian government must begin to support its farmers to the same extent as the European Union and Japan support theirs. While we have some sympathy for this viewpoint, the Committee does not believe that the federal treasury could maintain this level of support for the agriculture industry. Nevertheless, it is clear that enhanced support is needed, and should be something on which Canadian farmers can rely. They must be able to count on the availability of support at a certain level each year. In short, the support must be "bankable" and it must be sustainable.

The Committee is convinced that the elements of a repaired farm safety net must be fiscally sustainable; they must also be comprehensive and integrated so as to meet the needs of farmers and provide them with necessary funds effectively and efficiently. This sustainability must exist both with respect to support from the federal treasury, as well as contributions of Canadian farmers. Young and beginning farmers must receive special consideration. As noted above, we are not recommending a specific funding level for the farm safety net, favouring instead ongoing assessment of need.

Finally, the Committee feels that the crisis in agriculture, and the need for enhanced support, must be more effectively communicated to urban Canadians. Urban dwellers may have spending priorities other than agriculture, and may face bankruptcy of their small business due to the absence of federal financial support. We believe the responsibility for raising urban awareness must reside, in large measure, with the agricultural community. To be successful in this regard, farmers must do a better job of speaking with a united voice; during our hearings, we were struck by the extent to which agricultural groups lacked a common position and approach, particularly in the area of communication. The agriculture industry proved it can work together when it developed its consensus position on priorities for agriculture during the Millennium Round negotiations. We are confident that the industry can also achieve a consensus position on the issue of a design for a farm safety net and other agricultural policies.

 

Conclusion

In addition to providing Committee members with their insights about the various programs within Canada’s farm safety net, witnesses expressed views on a range of other topics, including inadequate returns to farmers within the food chain, trade rules and multilateral trade negotiations, select farm input prices, infrastructure, assistance to facilitate diversification and value-added processing, biotechnology and the precautionary principle, as well as other changes that would enhance the sustainability of the farm sector. Particular mention was made of transportation costs, fuel, education and income taxes, government cost recovery, and research and development.

While a consideration of these other topics would exceed the scope of the Committee’s current mandate, we believe that such consideration is desirable. We urge Agriculture and Agri-Food Canada to take these comments into account, and to review the Committee’s June 1993 report Farm Stress: Its Economic Dimension, Its Human Consequences and August 1999 report The Way Ahead: Canadian Agriculture’s Priorities in the Millennium Round.

The Committee was consistently told of the financial crisis in the agriculture industry and rural communities, of suicides and divorce, and of poverty and despair. There is an urgent need for action. While this report focuses on a future farm safety net, we believe that an integrated and holistic approach is needed for the agriculture industry as a whole. From this perspective, the Committee recommends that:

Agriculture and Agri-Food Canada examine the full range of issues identified in this report, and report to the agriculture committee of the Senate on actions that will be taken to ensure the health of the agriculture industry. The term "health" should be comprehensively interpreted during the department’s examination to include both financial and social aspects of the industry.

 

A challenge to be taken up by all stakeholders is the need to develop a long-term vision for the agriculture industry that will ensure its viability and sustainability, as well as a fair and equitable return to farmers. A key element of this vision will be a long-term farm safety net made up of adequately funded, complementary, harmonized programs. The parties must then continue to work together to formulate the short- and long-term policies and programs needed to realize this vision.

Another challenge to be faced is the revolution that is taking place on the farm. The Committee believes that the Canadian Federation of Agriculture had this in mind when it told us that farmers need stability in order to perform in "a new age environment. " Just as society in general is accepting and adapting to the technological revolution, there is a need to accept and adapt to the specific changes taking place in agriculture. As the industry continues to evolve, there will be an ongoing need to assess the farm safety net, as well as other policies, to ensure that farmers have what they need to prosper. The Committee is pleased with the Minister of Agriculture and Agri-Food’s commitment to providing farmers with the tools needed to help the agriculture industry adapt and compete in the global economy.

History has taught us of the fundamental importance of a nation’s ability to feed its people. The agriculture industry has been, and must remain, a critical element in Canada’s prosperity and independence, and in its ability to promote new and healthy patterns of trade and commerce in the highly competitive world of the new millennium.


APPENDIX 1

Witnesses 

ISSUE NO. DATE WITNESSES
     
1 December 9, 1999 From the Alberta Soft Wheat Producers Commission:

Mr. Peter Pepneck, President;

Mr. Everett Tanis, Treasurer;

Mr. Lynn Jacobson, Marketing Chair;

Mr. Andrew Kovacs, Executive Director.

2 December 16, 1999 From the Canadian Dehydrators Association:

Mr. Garry Benoit, Executive Director.

3 February 10, 2000 From Wild Rose Agricultural Producers:

Mr. Keith Degenhardt, First Vice-President;

Mr. Benoît Basillais, Policy Analyst, The Canadian Federation of Agriculture.

4 February 17, 2000 From the National Farmers Union:

Mr. Darrin Qualman, Executive Secretary.

6 March 23, 2000 From Keystone Agricultural Producers:

Mr. Don Dewar, President.

7 April 6, 2000 From the Saskatchewan Rally Group:

Mr. Lloyd Pletz, Director.

8 April 13, 2000 From the Canadian Federation of Agriculture:

Mr. Bob Friesen, President;

Mr. Benoît Basillais, Policy Analyst.

9 May 4, 2000 From the Saskatchewan Association of Rural Municipalities:

Mr. Sinclair Harrison, President;

Ms. Arita Paul, Manager of Agriculture Services.

10 May 11, 2000 From the Western Canadian Wheat Growers Association:

Mr. Greg Douglas, First Vice-President;

Ms. Sharon McKinnon, Policy Manager.

11 May 15, 2000 From the Saskatchewan Wheat Pool:

Mr. Gary Wellbrock, Vice-President.

From the British Columbia Federation of Agriculture:

Mr. Jim Smolik, Director of the British Columbia Agricultural Council and President of the British Columbia Grain Producers Association.

From the Ontario Federation of Agriculture:

Mr. Jack Wilkinson , President.

12 May 16, 2000 The Honourable Lyle Vanclief, P.C., M.P., Minister of Agriculture and Agri-Food.

From Agriculture and Agri-Food Canada:

Mr. Samy Watson, Deputy Minister;

Mr. Doug Hedley, Senior Executive Director, Policy Branch.


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