Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 5 - Evidence
OTTAWA, Thursday April 1, 2004
The Standing Senate Committee on Agriculture and Forestry met this day at 8:35 a.m. to examine issues related to the development and marketing of value-added agricultural, agri-food and forest products on the domestic and international markets.
Senator Donald H. Oliver (Chairman) presiding.
[Translation]
The Chairman: Today, we continue our study of issues related to the development and marketing, both in Canada and abroad, of value-added agricultural, agri-food and forest products.
Before we begin, I would like to welcome honourable senators and observers. I would also like to welcome Canadians who are tuning in to these proceedings on CPAC and over the Internet.
[English]
In the previous session we began our study on value-added products and listened to various witnesses who explained to us the issues surrounding the development and marketing of value-added agriculture, agri-food and forest products. This morning, honourable senators, we have invited Pulse Canada to provide us with an overview of the issues that their industry is facing in relation to value-added products and opportunities for farmers.
Appearing before us this morning is the Chief Executive Officer, Mr. Bacon, and accompanying him is Mr. Froese, Chair of the Board.
I invite Mr. Bacon to make his presentation. After that, the normal procedure is that senators will have questions to put to you.
Mr. Gordon Bacon, Chief Executive Officer, Pulse Canada: I should like to turn the floor over to the Chair of the Pulse Canada Board, Mr. Froese.
Mr. Jack Froese, Chair, Pulse Canada: I am a producer from Winkler, Manitoba, and I have been a pulse producer since the early 1970s, when we had peas in our production program and later switched to beans. I am the producer representative to the Manitoba Pulse Growers Association, and as a link from there, I am the representative on the Pulse Canada board, where I serve as chair.
Pulse Canada was initiated in the 1990s to serve the interests of producers and the trade in Canada. We have members from Ontario, Manitoba, Saskatchewan and Alberta, as well as from the Canadian Special Crops Association, with linkages to government departments, such as Agriculture and Agri-food Canada, and Canadian universities as well as the provincial governments.
Pulse Canada initially came about as a market development and promotion group and to work on market access issues and eliminate trade barriers. In that work, we have seen tremendous growth in the pulse industry in the last 10 years. The industry has grown from relative infancy to one of the major crops when compared with grains and oilseeds.
There are two issues that we want to deal with today. One is the regulatory policy in today's environment; the other is research. I will turn it over to Mr. Bacon to deal with those.
Mr. Bacon: As Mr. Froese has said, the pulse industry has grown to be a major industry in Canada. The value of production exceeds $1 billion per year. On top of that, jobs were created in processing and transportation. Many of these value-added jobs have been located in rural areas of Canada that have limited employment opportunities. The pulse industry has been a real benefit to many rural communities.
The issue of value-added production is one of great importance to the pulse industry. In fact, four years ago we set out to establish a national research strategy for the industry. We have grown to become the world's largest exporter of lentils and peas and one of the top five exporters in the world of beans and chickpeas.
The growers and the industry recognized that we needed to remain strong for the future, and that the future would be built on research. By pulling together all of the scientific interests, whether at federal, provincial or grower organization levels, we were able to come up with a unified national strategy that laid the groundwork not only for production and plant breeding, but also for quality and utilization, or value-added production, as well as needed research for environmental protection.
Value-added processing is one of the four keys of the pulse industry's research strategy. It is in that area that we want to mention where we see some of the challenges and opportunities.
It is our view that any business has four cornerstones. Production and marketing are two. Successful businesses are always built around a strong research and development core. We believe that investments in agricultural research are an investment in the future of agriculture. We see research investment to be the key for our industry in Canada to blossom and grow through value-added processing.
Canada needs to develop a comprehensive agricultural research framework. That framework must look not only at value-added processing, but also the production systems that will be needed to feed that value-added processing in the future. We believe that a strong research community will be part of attracting investment to Canada and investment by Canadians.
I would like to give you one example of where this has proven to be true. As I mentioned, Canada has grown to be one of the world's biggest lentil producers. Within the last number of years, we have had a company located in Turkey invest in Western Canada. This Turkish company came to invest in Canada because of their belief that the Canadian research system was one of the strongest in the world and would provide them with the kind of raw material that they needed to produce a high-quality product.
I should like to add that the red lentil market, which this company is serving, is primarily located in North African and Middle Eastern countries. Clearly, Canadians can be competitive. One of the things we need to focus on is the environment to keep the industry competitive.
Capital will flow to wherever will provide the highest return. Canadians need to create a distinct environment for people to become interested. We feel that research is needed.
I mentioned a comprehensive strategy, because we also believe that to focus only on research and value-added without ensuring that our production base remains current would perhaps not provide the proper balance in research investment. The pulse growers, recognizing the need for research, have increased their research contributions. Saskatchewan, which is the largest pulse-producing province, and Alberta have recently increased their producer check-off, which is money collected at time of sale, to 1 per cent of the value of farm sales, putting the pulse industry at the top of all grower groups in providing funding to agricultural research. The provinces of Manitoba and Ontario, where high-value bean production is centred, have a check-off of one-half of one per cent.
These programs have gone a long way in meeting the research needs that the pulse industry has identified. Working with other commodity groups and the federal government, we would now like to develop a strategy to identity the role that the federal government would play in agricultural research, both at the primary production level and at the value- added processing level.
I would like to comment on regulatory policy in Canada. As Mr. Froese mentioned, Pulse Canada's role has been to foster the pulse trade around the world by helping to remove trade barriers, whether they are tax or tariff policies. Most recently, we fought sanitary and phytosanitary policies that were limiting, or attempting to limit, the Canadian pulse trade.
We looked at Canada's position on international trade policy. It is clear that our trade policy is to create a level playing field for Canadian exporters such that we do not have restrictions based on tax or tariff policies.
We also believe that perhaps the time has come for Canada to look carefully at its regulatory policy framework. As a small country that is heavily reliant on exports of primary agricultural products, we will also be reliant on export of value-added products. If the regulatory environment within the country is different from those in countries with which we are competing in that value-added area, it will put us at a disadvantage.
I would like to cite one example. Due to issues of food safety, Canadians have developed regulations unique in the world regarding the registration of new varieties that are different from the varieties currently grown. Our legislation with regard to plants with novel traits is unique in the world. While certainly this provides Canadians with a high degree of safety, it does put us in a regulatory environment that is different from that of our competitors. The required additional testing will delay, and add cost to, the registration of varieties, which could make our industry less competitive in a global environment.
I believe that just as we have tried to harmonize tax and tariff policies globally, we need to be looking at how we can harmonize regulatory policies. I use the example of Codex Alimentarius, a UN organization that sets international standards for food safety concerning things such as pesticide residues, heavy metals and micro toxins. While Canada is a contributor to the establishment of these international food safety standards, Canadian regulatory agencies also establish their own standards. In many cases, these standards are different from the ones that Canada has agreed would be appropriate at the international level.
The pulse industry currently faces barriers to markets because countries are using the differences between the Canadian regulations and their own to limit imports. While progress is being made on international trade barriers, we believe that there needs to be a discussion of food safety regulations or sanitary and phytosanitary regulations at an international level.
In summary, research will be the key that makes our agriculture industry — both at the primary production level and at the value-added level — an attractive investment to companies within Canada and around the world. The pulse industry has been striving to make progress in this area.
For example, a Japanese company is using pea protein in beer production — beer that is produced without barley. Pea starch is being used to make a type of Asian noodle. We know that we need to make some improvements to the starch's properties in order to make a high-quality product. We are looking to use starch from other pulses in Canada as an additive in other Asian food products, but we need to understand the intrinsic properties of the starch and whether, through plant breeding or some sort of treatment of it, we can make it more appropriate for that purpose.
As we look forward to many of the opportunities out there, the first necessary step will be additional work to understand the properties of the crops that we are growing and to develop that vision for the future.
My final point concerns the regulatory environment within Canada. Because we are a trading nation, and will always be a trading nation, we need to consider the value of working with some of our trading partners to harmonize regulations in terms of food safety, quality and the environment — first, to protect Canadians in the areas of health and the environment, but also to ensure that we have a healthy trade environment that allows companies to compete.
With that, I will conclude my presentation.
The Chairman: Thank you very much for a most exciting and interesting presentation.
We had the Minister of Agriculture before us a couple of weeks ago. One of the things that he said, when he learned that we were doing a study on value-added products, is that he certainly encouraged it as a way of trying to leave more money at the farm gate. With the research that you are doing as a result of the check-off and so on, you are showing that once again, Canada can take the lead, with its scientific research, in producing by-products from pulse crops to sell in Asia and around the world. It is most encouraging, and I should like to see similar developments in other areas of agriculture.
You said that we need the federal government to be more involved in the value-added processing level — to what extent and in what way? First, in what way is the federal government involved in assisting in research at that level now, and in what other ways would you like to see them involved, from a public policy point of view?
Mr. Bacon: Certainly the Agriculture Policy Framework, which was recently released by Agriculture and Agri-Food Canada, does include an element of encouragement for value-added processing. Back in the mid-1990s, budgetary cuts throughout the entire federal government affected the research branch of Agriculture Canada.
We would like to see consideration by Canadians and the department of what the future role of the federal government in agricultural research should be. That is in terms of both the level of funding and the level of involvement.
While we have a strong Agricultural Policy Framework, it is now time to develop a research framework that will define that level of investment and also where the funds should flow — whether it is to primary agriculture production and to what level. How much goes into areas of food safety and quality assurance? How much would go to value- added processing? Also, we need the federal government to play a lead role in bringing farmers into a discussion on a national level as to what role farmers should play in funding research.
I would use, as an example, a country such as Australia, which has a national agricultural research check-off program in which all producers are contributors in all commodities, and in which federal funds will match, up to a certain level, the amount of money provided by farmers through their research contributions.
The Chairman: What do you think of that model? Is that something you would recommend?
Mr. Bacon: I think our industry and our scientific research community have developed in a slightly different way from the Australians, so I do not think we could adopt that model directly. However, we are ready in Canada to have a discussion at the grower level about the value of having a national research check-off program and, at the same time, perhaps the federal government could re-evaluate its level of investment in agricultural research. Once a plan is in place, we will then know that we are making investments that have taken the broad needs of agricultural research into consideration.
Senator Fairbairn: Thank you very much for coming here today. I think it is fair to say that this is probably not an area of our agriculture industry that is well known to many Canadians. However, it is an area that shows great promise at a time when we are having such difficulty with other crops — our historically prominent crops such as grains and oilseeds et cetera. I can understand and appreciate your enthusiasm for trying to elevate the pulse crops with a more dynamic marketing program, both nationally and internationally.
You asked for broader discussion. The federal government is currently, and has been for some time, holding a series of round tables with various elements of the agriculture and agri-food industries. Has this been done with your industry? If so, was it done to your satisfaction, or is it something that should be expanded and given a higher profile?
Mr. Bacon: Yes, Pulse Canada has been involved in the round table discussions. We were participants in the special crops round table, including having a past chairman of Pulse Canada act as the chair.
The discussions need to go beyond sector-by-sector discussions — we need to bring all discussions together. We need to bring all commodity groups together. The special crop sector sitting around one table cannot make decisions on what would be the best national research strategy. The cereal sector, the oilseed sector, the horticultural sector — all of them — need to come together to decide what areas they have in common and what approach they want to take.
There has been discussion about expanding the round tables to include a focus on agricultural research. Certainly that will bring the industry's views to the table. I was trying to emphasize that from the federal government perspective, perhaps discussion on what role public sector investment should play in agricultural research is also needed. Those kinds of decisions — perhaps with recommendations from the industry — will be made here in Ottawa.
Senator Fairbairn: At this point, would you be thinking more of a kind of national conference on these particular issues?
Mr. Bacon: There are many ways to proceed. The key point is that we need to focus on the R&D sector in our agricultural industry. I do not believe that we have had nearly enough discussion on the future of our industry. For many reasons, we have been focused on immediate concerns. These are very important immediate concerns, most often related to financial problems.
However, it is only investment in agricultural research that will help this industry go beyond reacting to crisis after crisis. While these investments in financial areas are important for the short term, they have not provided a long-term future direction for the industry. Without research, we will continue to be the industry that we are today. That is not what will keep us competitive 10 years down the road.
Senator Fairbairn: Of the research stations across the country, in which area or province is the one most focused on what you are doing?
For instance, I know that we have quite a large research station in my hometown of Lethbridge. A few years ago, when the various stations were given priority assignments, in the case of Lethbridge, it was beef. In which area would your industry fall?
Mr. Bacon: There are federal agricultural research stations involved in pulse work in Ontario, at Harrow, with a bean-breeding program; in Morden, Manitoba, with a bean-breeding program; in Lethbridge, with a bean-breeding program; and there is also a pea program at Lacombe.
I would like to adjust your question slightly and say that it is not so important where federal research stations are doing pulse research, but where pulse research is done. Fifteen years ago, we only had a small lentil industry and chickpea research was non-existent. Most of the decisions on agricultural research were made 20 or 30 years ago, with minor modifications since. Saskatchewan tends to be one of the more important provinces in terms of production. The research on the crops grown in Saskatchewan is primarily done at the university.
The point we have been making at Pulse Canada is let us remove the institutional and provincial barriers and address the issue that if federal funds would best be invested at a university, then those funds should flow to the university; if they would be better directed at a research station, then let the funds flow there.
Let us start with identifying what needs to be done, find out where that expertise is and have the public money flow to that institution, rather than saying that federal money can only be spent at federal institutions.
Senator Fairbairn: That is really what I was getting at. I hope you have an opportunity to present this point of view to our new Minister of Agriculture and Agri-Food.
Senator Gustafson: I have a question about the Lacombe area in regard to the chairman's question about support from the federal government. There was considerable support in 1995. How much of that was withdrawn? How much research money was taken back, if any?
Mr. Bacon: Perhaps the most accurate estimate of the budget reduction would have to come from Agriculture Canada's research branch, but it is my understanding that there was a reduction of approximately 30 per cent in funding for agricultural research at that time, along with consolidation of programs and the closing of some stations.
The big challenge in research is to ensure that you not only have the facilities and the people, but also the money needed to run programs. Research has definitely been challenged. That is one reason why grower groups have increased their contribution, and that is a good thing.
The question now is where we go in the future and whether the federal government will choose to make a reinvestment in agricultural research as the economy and the financial situation improve.
Senator Gustafson: In our area, there is hardly a farmer who has not tried to grow peas, lentils or beans, especially peas, because it is environmentally good for the soil. It puts nitrogen in the soil and is a very positive crop from that aspect.
On the other hand, it is quite a difficult crop to grow in certain areas because of the height of the plant and so on. What research is being done now to get that plant out of the ground without wrecking your machinery?
Many farmers go into it, grow it for one or two years and then back off. They say that it is a good crop for the soil and the environment, but on the other hand, it is too difficult to grow.
The Chairman: Does it make any money?
Senator Gustafson: Sometimes, yes; most times, no.
The Chairman: Like most farm products, right?
Senator Tkachuk: If there were a guaranteed money-making crop in Saskatchewan, we would all be growing it.
Senator Gustafson: This is my friend from Southern Manitoba, where they have nice, level ground. He will probably refute my arguments.
Mr. Froese: If you look at the growth of the industry, that tells the tale. We have had such tremendous growth in the industry because it is profitable and fits into our rotations, and because of the supplemental nitrogen and pesticide usage that is encompassed by this production system.
There is a significant amount of work being done on developing semi-leafless varieties, and different agronomic factors involved in ensuring that we get the right pea varieties for the different growing regions, whether for the black or brown soils or whatever different soil zones will be growing them. The trick is to make sure that these varieties will then fit the markets to which we are shipping. We are getting the trade involved and making linkages, so that when the trade conducts their business, those linkages are fed back into our research systems to make sure that we are designing the right crops, not only agronomically, but also for the market.
Senator Gustafson: In Europe, and now in the United States, there is a trend to involve agriculture more in the environment, rural development and so on. Has there been any consideration of using, say, crop insurance, or other methods, to give some incentive to the farmer to grow these environmentally sound but more difficult crops? The easiest thing in the world is to plant wheat and nothing else, but you cannot make a living doing that. Should there be some consideration, possibly in crop insurance or other programs that are already in place, of encouraging more environmentally sound crops?
Mr. Bacon: On the international stage, Pulse Canada has taken the position that we did not want to see production- distorting or trade-distorting programs introduced. We were very vocal in opposition to the U.S. farm bill amendments of two years ago that included increased financial incentives for post-production.
We want crop insurance programs that work well, but we also want to ensure that the decisions that growers make are based, as much as possible, on market forces.
Senator Gustafson: I see Senator Tkachuk nodding his head, but on the other hand, you will not get the Americans to abandon subsides. We bought that lie for 20 years. If we continue, there may be an advantage in niche crops, but overall, we know that the wheat crop, for instance, is going down. People are planting less of it all the time because they cannot make a living at it and they are moving to other crops. You will not get the Americans off of subsidies. They put in an additional $93 billion in the last two years for a 10-year program. We have a serious global problem in agriculture that must be dealt with. Ottawa has told us for years that, if we can get the Europeans and the Americans to abandon subsides, then all will be well. That is not happening.
Mr. Froese: We would like to see the free market decide what we will grow. It takes more expertise and management to grow these special or pulse crops. That will be the differential in the future.
Senator Gustafson: I beg to differ.
Senator Hubley: Value-added agriculture is often referred to as a means for farmers to move up the value chain in order to obtain a larger portion of the premium associated with the consumer retail price, or as a means to differentiate their product in order to attract higher values.
What are the value-added products in the pulse industry today?
Mr. Bacon: There is such a range of products. Pulses are a staple food around the world. Canadians have brought in many of these developed or new products from around the world. To give you a brief idea of some of the exciting products out there, a company in Alberta is producing a peanut butter-type product made from peas. Because there are no peanuts in it, it avoids the allergy problem that some people have with nut-based products. We have flours produced from pulses, which people who have gluten allergies can use. There are many health-related products because of unique situations.
Pulses are valuable in terms of management of some diseases like diabetes because they are low on the glycemic index, which means they are slowly digested so you do not have peaks in blood sugar.
Some producers in Saskatchewan are producing lasagna made with lentils rather than beef. There are snack foods and value-added products from around the world containing components of the pulses, whether it is starch, protein or fibres.
We also see potential in other countries. The Australians are developing dairy substitutes for people with lactose intolerance. Pulses are a very versatile product because of their high protein and the digestibility of the starch.
Perhaps we do not have a huge value-added processing industry, but we have to remember that 15 years ago, we did not have much of a production industry. We are just now moving into the value-added sector.
Senator Hubley: Do the Canadian pulse farmers commonly have an ownership position in the value-added processing facilities? Are you seeing that happening?
Mr. Bacon: I think there are something like 140 processors of pulse crops in Saskatchewan alone. By far the majority of these operations are where individual farmers or groups of farmers have got together to make an investment. We also have some of the large national and international companies dealing in bulk product. It varies by market, but a large percentage of pulse crops move by container. That means they are often cleaned, bagged and containerized at the location and then shipped, so it tends to be an industry where the processing is done in smaller operations.
Other than canning, which is dominated by larger players, much of the other value-added processing is being done by small organizations as we move from a grassroots processing industry to one that is more mainstream.
Senator Hubley: The demands on our food chain now bring to mind words like ``organic,'' the use of pesticides, which you had mentioned, traceability and product security.
Are you dealing now with some of those things in the pulse crop industry?
Mr. Bacon: Pulses will be one of the first and easiest crops for which to provide complete traceability because they are being processed, bagged and shipped in 20-ton containers. We now have programs in place whereby processing companies are contracting with growers in terms of what products they will use. We have some very high-quality- conscious end users, such as some international canning companies and food manufacturers, who are demanding the product. The pulse industry is very well positioned to deal with the traceability issue.
As Mr. Froese mentioned, pulses have environmental value as part of a crop rotation, and as Senator Gustafson mentioned, are being promoted in Europe because of that. Legumes, which pulse crops are, fix their own nitrogen, which means some crops receive no nitrogen fertilizer. Other pulses receive less nitrogen fertilizer because they are of a different genus, species and family than cereals, which are in the grass family, or oilseeds. The kinds of pests that infect them are different; the kinds of weed problems are different, so rotating with pulses minimizes the disease or pest problems that can build up in monoculture. In organic production, pulses are not that different from organic cereal or organic oilseed production. There is a market for organic pulses and there are organic producers out there, but overall, the percentages are quite small.
Senator Hubley: Where does Canada stand in world production? How large is our share?
Mr. Bacon: We are the world's biggest producer and exporter of lentils. Over 50 per cent of world exports originate from Canada. We are in the number-one position, or battling with France, in terms of being the largest pea producer, but we are also the largest pea exporter in the world. We rose very rapidly to become the number-one exporter of chickpeas in the world. Recently, largely because of lack of research, our production dropped off dramatically because we do not have varieties well suited for our production areas at this point. We are number four in terms of exports of beans, but relatively small in terms of production.
India is the world's largest pulse-producing nation. It is also the world's largest pulse-importing nation because of the size of the population. We are a major player, and we are emerging quickly as a major player on the trade side.
The Chairman: Those are fascinating statistics. This is a growth area for agriculture and value-added products.
Senator Tkachuk: I have always believed that food is our future. Canada is in a unique position because of how innovative the farmers are, at least in my province, and, I am sure, in all the others. We also have an amazing scientific community, and different cultural groups that understand cultures around the world.
I am glad we are doing the study. My question will follow up on some of the things you talked about in terms of regulation and food safety. There were a couple of things that bothered me a little. Maybe I misunderstood and we could clarify it. You said we have to harmonize regulatory measures, and you talked specifically, towards the end of your presentation, about food safety.
You talked about our food safety standards in Canada. Were you talking about bringing down our standards, or were you talking about other countries bringing up their standards in order to harmonize these regulations?
Mr. Bacon: I will use an example in which I do not think we can categorize it as bringing ours down or asking other countries to bring theirs up. I use the example of pesticide registration policy in Canada versus the United States. We have different regulatory agencies that look after the issue on both sides of the border and they have different ways of assessing risk. I do not think that the Americans would suggest they have a more risky registration process for pesticides than we do in Canada, and Canadians would not say that ours is more risky than the Americans', but they are different. The kind of information that needs to be collected is different.
This can be true of a number of different regulations because they are just done in different ways. The end goal is always to have safe, secure food for consumers. Consumers have to have confidence that the food they are eating is safe. That is the goal for all of us. My suggestion would be that regulatory agencies around the world need to, and can, harmonize some of the ways they evaluate that. For example, expertise from around the world comes together in Codex Alimentarius to review the research that has been done and establish what they believe to be a safe level of pesticide residue, or a safe level of a heavy metal. If the way in which Canadians are coming to that conclusion is different, they may come up with a slightly different answer and these slight differences can then be used as trade barriers.
The pulse industry has experienced that. In the last eight months, we have seen rapid growth in the use of these differences as a trade barrier.
The Chairman: What are the specific differences between our regulations and Codex?
Mr. Bacon: I could bring some specific examples. We will use one specific product that is used on beans to control a mould.
This product is registered for use in Canada but is not registered for use on dry beans in the United States. In the U.S., this product can be used on lettuce and onions — a wide range of produce. However, in Canada, it cannot be used on that produce.
As an example, I believe this product can be used on lettuce in the United States and have a residue of 10 parts per million. In Canada, our residue limit on dry beans is two parts per million. Yet, beans at 0.2 parts per million were blocked from the U.S. market. Even though the regulation on lettuce is 10 parts per million, because the registrant did not pursue a registration for dry beans, it is not on the label and therefore not allowed.
We run into the same problem with Europe. The Europeans are very food-safety conscious and are looking to reduce the number of active ingredients that are registered for use in their market. Some are very old chemicals and are not being used, while others are known to be a problem. We are reviewing those and phasing them out in Canada.
Let us use crop desiccants as an example of a product that is found to be safe in Canada. A desiccant is something that is sprayed on crops to speed the drying down of the produce. That product is registered for use, and if used according to label recommendations, health officials in Canada know it is safe. Yet that same product is not registered for use in Europe, either because they have no need for it or they have other chemicals registered, and the limit that the Europeans would allow on that product coming from Canada is zero. This is in spite of the fact that Canadian health officials have shown that it is safe at five parts per million.
The question then becomes whether this is a health issue or just simply a gap in regulations. Companies will register a product for use in a specific country. Increasingly, the issue of the residues on crops sprayed with those products is becoming a trade barrier.
I think it is difficult to argue it is health and safety related when you can spray a particular product on lettuce and raspberries at rates 400 times higher than you will find on Canadian produce, but that produce is found not to meet American regulations and therefore cannot be imported into the country. Is that making our regulations more lax or making the regulations of other countries better?
That is why I would rather characterize the situation as a harmonization to avoid some of these regulatory differences that I do not believe are health-based. They are simply because a company is meeting the registration environment in one country but not in an importing country.
The Chairman: What type of international agency do you think would be best to work on that harmonization? What do you have in mind?
Mr. Bacon: Codex Alimentarius has been in existence for some 20 to 30 years. It is the international body that Health Canada officials and others are involved with in working to set these international standards. One of the ideas was an international body that would set standards, in particular for countries that do not have the resources or expertise to set their own. It seems unusual to me — and I am not the expert in the area — that Canadians would participate in setting an international standard that they then say is not sufficient to be used at home.
Senator Tkachuk: To follow up on that, is there an organic pulse organization?
Mr. Bacon: There are organic organizations that include pulses as one of the crops that they produce and represent. I am not aware of one limited to just organic pulses.
Senator Mercer: Good morning, gentlemen. Thank you for coming. I must say that new products and new research in agriculture are pretty exciting for the country.
Are there new markets and new products that we should be pursuing and which the Government of Canada can facilitate through international trade? What are those new markets? I was really impressed by the fact that we are shipping to new markets that do not have the regulatory barriers with which we are dealing. We are trying to move away from some of the traditional markets so we are not subject to that.
Mr. Bacon: Canadian pulses are shipped to more than 140 countries around the world. It is overly simplistic to say that it is peas, beans, lentils and chickpeas. For example, lentils can be green or red. They come in different sizes and shapes. There are at least a dozen different types of beans. The type of product shipped is very specific to the end market.
Canadian companies have done a very good job in covering the globe.
We are always coming out with slight variations in products, for example, a different shape and colour of chickpea that makes it more suitable for milling, or a type of bean that currently is not commercially produced in the United States or Canada, yet is a premium-priced bean in Mexican or South American markets.
In taking plant breeders with Pulse Canada around the world, we are always looking for opportunities to grow a particular type of pulse. That does not so much address the value-added area.
In looking for new products and markets in value-added, we have gone to markets across the United States and Canada, to many ethnic communities, to see what types of products are on the shelves and where they are produced to investigate whether we can bring that kind of production back to Canada.
In December, Pulse Canada accompanied Minister Vanclief on a mission to India. One of the stops was at a processing company for pulse-based snacks. There was some discussion about that company setting up an operation in Canada.
We are pursuing those kinds of areas. We would like to go beyond where we are now and find products that you and I have not even thought of today. That would be, for example, to use a particular type of starch in an industrial process, or as a food additive to improve products we already have.
Research will identify the opportunities for going beyond our current knowledge.
Senator Mercer: That leads me to talk a little more parochially. I notice that your membership is Western-based — in Alberta, Saskatchewan, Manitoba and Ontario. There is no mention of Quebec or Atlantic Canada. Is that because we in Atlantic Canada are not in this business? The environmentally friendly aspect of some of these products intrigues me. It might be helpful environmentally for those areas of Atlantic Canada where we traditionally grow potatoes or other products to get into this business. It could also help to diversify our crops and get more cash into the hands of the producers.
You mentioned three different research locations. You did not mention the research station in Nova Scotia. I assume that means there is none happening there.
Mr. Bacon: The provinces that are pulse producers are Saskatchewan, Alberta, Manitoba and Ontario. There is also cranberry bean production in Quebec. The Canadian Special Crops Association, which is also part of the pulse family group, has membership from marketers in Quebec.
There is no specific grower organization in Quebec or any of the Maritime provinces dealing with pulses because the production base is either quite small or non-existent in those provinces.
I am not sure why there is not broader commercial production of pulses in Atlantic Canada because I am not an agronomic expert. I can also say there is no research into pulse breeding and development being conducted in the Maritimes. Perhaps that has something to do with it. I do not know. We have not excluded anyone. It is just our industry associations obviously represent areas where the industry is most concentrated.
The Chairman: In Alberta, Saskatchewan and Manitoba, do you use no-till techniques, with air seeders and so on, so you are not disturbing the land so much when you are growing the pulse crops? Is that a standard technique?
Mr. Froese: It is multi-faceted. Some use zero-till and others use conventional tillage. In southern Manitoba we have to use conventional tillage because of the properties of the soil. We have excess moisture problems, whereas Saskatchewan and Alberta are different. They want to conserve the moisture and employ all the farming techniques.
Senator Sparrow: What is mustard? Is it an oilseed?
Mr. Bacon: Yes.
Senator Sparrow: Are your purchasers licensed, and if so, by whom?
Mr. Bacon: The people who purchase pulses from growers in Western Canada?
Senator Sparrow: Yes.
Mr. Bacon: There is a mix. Some, but not all, of the processors are licensed and bonded by the Canadian Grain Commission.
Senator Sparrow: There has been an indication that some producers are not being paid for their product. Is that much of an issue? When you refer to ``purchasers'' you are talking about processors, are you? A processor will bag the product, grade it and so on. That is a processor as well as a purchaser.
Mr. Bacon: Right.
Senator Sparrow: Why is there not some requirement that all of those processors and purchasers be bonded so that the farmer is not caught in the middle and left without any money?
Mr. Bacon: I will make a brief comment on behalf of Pulse Canada and then turn it over to Mr. Froese to comment from a provincial perspective. Pulse Canada has not gotten involved in the issue of licensing and bonding or taken a position on producer security of delivery. Certainly this is a major issue in the pulse industry, as evidenced by the fact that provincial organizations have taken it up. Pulse Canada focuses on the international scene and policies that affect international trade, while some of the more national issues are dealt with at the provincial level. I will let Mr. Froese address it from a Manitoba Pulse Growers' perspective.
Mr. Froese: We have not taken a specific direction in Manitoba. It is difficult, because if we asked for everyone to be bonded and licensed, the restrictions would force many of the establishments out of business and it would stymie the growth of new processing or value-added industry.
We also recognize that we need security for our producers. That is where the dilemma comes in.
Senator Sparrow: That is a partial answer. In the meantime, the farmer is being taken advantage of because there is not some type of a guarantee of those funds.
Will there be anything in the near future to protect the producer? Is there anything in the pipeline? It is crucial for the industry to get together and do something about that issue.
Mr. Froese: We have established a committee with the different pulse growers in Alberta, Manitoba and Saskatchewan and are presently working on developing a system. There are several options that we are open to and we are analyzing them to see where we will go with the issue of producer security.
Senator Sparrow: What would you suggest should happen?
Mr. Froese: There are different views on that, and my personal view might differ from that of the organization, so I would rather not delve into that at this point.
Senator Sparrow: That is one of the critical issues facing the industry. I am concerned that this morning, your group does not really have a firm stand on that issue. We are shrugging our shoulders and saying, ``Well, we have been screwed. Sorry about that.'' Something must be done about that.
Mr. Bacon: The Pulse Canada board, which includes grower and trade representatives from across Canada, must take a look at the staff resources, financial resources, and focus efforts on where they feel we can make the greatest contribution. We do have a division of responsibility. Some issues are dealt with at the provincial grower association level, and where common interest exists, they are moved up to the national level. It is simply a matter of our board of directors making a decision that the resources of Pulse Canada, being limited, will be focused on some other areas.
Senator Sparrow: Would both of you be prepared to take this issue to your boards and indicate that we are concerned about it, and that perhaps there could be more action taken?
Mr. Bacon: Certainly.
Senator Sparrow: Thank you.
The Chairman: Could you send a letter to the clerk of this committee to let us know the result of Senator Sparrow's request?
Senator Lawson: Talking about marketing — and I think you mentioned snacks and so on — I do not know how closely you are following the issue of the Atkins diet and the death of Dr. Atkins, but it seems that across this country, and in the U.S. particularly, thousands of outlets are springing up almost overnight selling low-carb foods at a high price. Should your producers be thinking about moving into the retail arm, where they could sell health foods made of pulses and thereby add to their income?
Mr. Bacon: We have not focused so much on moving into the retail side. We are trying to provide information that will allow health professionals to take a look at how pulses can best be used as part of a diet.
The Atkins diet, for example, is focused on low carbohydrates. Pulses are perhaps not one of Dr. Atkins's favourite foods, but our point would be that this type of carbohydrate, being slow to be digested, is really an important part of a diet based on the glycemic index. This makes pulses very attractive because you avoid spikes in blood sugar levels.
We are developing fact sheets for the Heart and Stroke Foundation of Canada and for the Canadian Diabetes Association. We are developing one now on folic acid as it relates to spina bifida and other birth defects. We are a small organization with a relatively small budget, and rather than take a front-line approach, we have developed tools to help health professionals. If you look at our Web site you will see an extensive recipe base and health and nutritional information. Not only are we doing this within Canada, but we are also trying to find collaborators at the international level. Just last week, Mr. Froese and I were talking to the American Dry Bean Board about joint efforts. We have close links with Pulse Australia, with the European associations, and so on. Perhaps we will not be involved on the front line, but we are working with those who are.
Senator Lawson: The only other observation is about the budget. You do not have a large enough budget. This has been a learning experience this morning. We have learned a great deal about the pulse industry and its benefits. It is a great story to tell. If we went out and picked a thousand Canadians at random, there would not be ten who would know what you are talking about. This is a great story and a great topic.
Mr. Bacon: Thank you.
The Chairman: You indicated that you are not involved in the retail level, but you told us a lot about Asian noodles, starches and so on. Are you involved in manufacturing? If so, where are the plants? Where is the starch from the pulse products made?
Mr. Bacon: The various milling operations in Canada tend to be small scale. We have a protein and starch separation company operating in Western Canada with two locations.
The Chairman: Saskatchewan and Alberta?
Mr. Bacon: This particular company has a plant in Manitoba and one in Saskatchewan. There are small operations, milling products. There is an Edmonton-based food company that produces a wide range of pulse products. We have canners in Ontario and Quebec. There are pulses in frozen products.
We also look around the world for ideas. We attend major food shows in Europe to see how we can further enhance this business.
From a research perspective, we have to find out how to make pulses better suited for quick food preparation. Lentils may take as little as a half an hour to cook, whereas beans will take considerably longer because of their size. We have to find ways to ensure that pulses are suited to today's consumer, who wants food that can be prepared from fresh as well as quickly.
Mr. Froese: I would like to add to that. We were in Mexico recently and saw that consumer desire there. With the economy and the population changing, we will have to develop products with a quicker cooking time, snack foods and so on, in order to maintain those bean markets. Otherwise, they will evaporate on us. There are so many food competitors that we will have to change. The research will have to be done to develop these products and allow us to maintain those markets.
Mr. Bacon: Canadian per capita consumption of pulse products is one of the lower ones in the world. Some of the countries that have much higher per capita consumption are seeing it drop in affluent areas, in part because of the length of time that it takes to prepare pulses. This is a concern of the pulse industry around the world.
Senator Gustafson: When Canadians first started growing canola and mustard, it seemed to move from north to south. We started to grow canola on our farm 15 years ago. It was not grown in North Dakota or Montana at the time. The Americans were not into it. They did not believe they could grow it.
What is happening in terms of competition? Today, North Dakota is yellow with oilseed products. There is great competition there for the market. There is no question about it. What is your experience with pulse crops in that regard?
Mr. Bacon: Due to the length of the growing season required, lentils tend to be grown in the dryer regions of Western Canada. Some are grown in Manitoba. Most are grown in Saskatchewan and the southeast corner of Alberta.
Chickpeas also tend to have longer growing season requirements and are grown in the hotter, dryer areas. Peas, on the other hand, started out as being considered suitable for cooler, moister areas such as the parkland areas of Western Canada. However, even growers in the dryer areas are now finding that peas can produce well.
Beans are also an interesting story. I will let Mr. Froese talk about that shift.
Mr. Froese: There has been a global shift to least-cost production. We have seen the shift from Eastern to Western Canada. We have seen shifts in China. There are huge bean production areas in China as well as in South America. These are big markets, and being tied to the U.S. dollar at 7 to 1, it is really competitive.
Senator Gustafson: What about North Dakota, that area south of Winnipeg in the U.S.? There must be a lot of beans grown in that area.
Mr. Froese: That is one of the bigger bean production regions in the world. It is a very competitive market.
Senator Gustafson: I would think so.
Senator Hubley: What is the shelf life of pulse crops such as beans or lentils, if properly dried? How long will they last?
Mr. Bacon: It can be stored for very long periods of time. There is some oxidation of seed coat colour with increased length of storage. Visual appearance is very important. One of the breeding priorities is to develop varieties in which the seed coat does not oxidize. In some types of pulses, the rate of water absorption drops as the product gets older.
In some European countries, pulses are stored as a food stock, for food security.
Senator Hubley: That is what I was thinking of. I have heard stories along those lines.
Mr. Bacon: Some types of beans oxidize quickly and the colour changes, such that they look best immediately after harvest.
Senator Hubley: The Culinary Institute of Canada is located in Prince Edward Island and trains chefs from around the world. It might be a good idea to contact them to see if you could present some of those pulse crops to that institution so these young chefs will learn more about your product. Perhaps new and innovative ways to present it would be identified.
The Chairman: I must say that your presentations are absolutely superb. The senators are showing great interest in what you are doing. I see this as having great potential to add value to farmers across Canada. That is why we are so interested.
Senator Fairbairn: I should like to return to the question that Senator Lawson raised, about the health benefits. Your presentation today shows exciting potential. We have talked about the innovative use of peas at a plant in Alberta to make a peanut butter-like product that would get around the peanut allergy problem. You mentioned the benefits that pulses offer in the management of diabetes. You also mentioned the prevention of heart attacks and strokes. You mentioned that the high folic acid content is important in the prevention of birth defects.
We live in an age in which we are confronted almost every day with the question of improving public health at all ages. It is a disturbing element in our society. The way we eat and the way we maintain health is important. People should be banging on your door to get you to produce more of your products.
How is your product distributed? It is not just through the eating of the fresh product. Is there a business developing to put this into capsules or syrups that would be readily available to ordinary Canadians?
Mr. Bacon: Given the short history of the industry in Canada and the lack of research funds, we are just starting to do some of the work on component analysis to know what is in our pulses. It is an exciting area.
As recently as six years ago, a major Asian food company asked me about the starch content of Canadian pulses. Regrettably, not only could I not answer, but we were not even doing the research in Canada.
As funds allow, we are starting to take a look at particular components of pulses that have a health benefit. We know there are such ingredients in our pulse crops but, again, we need basic research to be done so that we understand the component base of our pulse crops relative to those grown in other regions. Until we can identify where we have a competitive advantage — and research will tell us that — we will not progress in the development of that.
Senator Fairbairn: So it is not at a commercialized stage yet?
Mr. Bacon: Not in terms of a supplement or a concentrated form. I suppose that is why we have been focusing mainly on increasing pulse consumption and awareness.
Senator Fairbairn, I wanted to tell you about one thing that we are excited about and proud of. Pulse Canada and the provincial pulse grower organizations have provided financial sponsorship to a woman who is a member of the Canadian rowing team and will be competing in the Summer Olympics in Greece. We are proud to provide her with financial support, in part because she has recognized the nutritional value of pulses, the importance of this high- protein, low-fat food source.
We are equally proud because her brother is a pulse grower in southern Alberta and a former chairman of the Alberta Pulse Growers. Pauline Van Roessel is her name. She is busy training with the Olympic team, but she has agreed to speak on her approach to nutrition, setting goals and working toward a healthy diet and lifestyle, following the Olympics. We are obviously hoping that the Canadian rowing team does very well, and that she can come back and convey this message to Canadians from coast to coast.
Senator Fairbairn: All the more reason to cheer the team on. I hope that some of the people I know in the Paralympic movement will get into this as well.
To me, the striking thing is that you are dealing here with three of the leading causes of death in the country — diabetes, heart attacks and strokes. It is more than exciting if these products can assist in that situation in some way. I certainly hope that in the commercial world, and through government, too, you will get more support in pursuing this, because it is very important for quality of life for the citizens of this country.
Senator Sparrow: Are there international markets that are not being filled that we cannot supply at a reasonable price presently? I am leading up to asking if can you recommend what crops should be grown this year to supply the market that may exist.
Mr. Bacon: No, I think that is a difficult thing to recommend. We can follow what is going on in different markets. We can look at the winter-season pulse production in India and get a sense of what effect that might have.
Pulse markets are very complicated. There are specific markets that have a known demand for a type of pulse — for example, canners of beans know year-to-year what their requirements will be in terms of quantity. However, in other markets — and I would use India, Bangladesh and Pakistan as good examples, where a large percentage of the population is vegetarian and to whom Canada supplies yellow and green peas and lentils — we cannot predict year-to- year what the demand will be.
In part, that is because the Indian consumer can substitute a wide range of crops, including ones not grown in Canada, like pigeon pea, which is more of a tropical pulse crop, or mat pea. We not only have to look at our competitors in terms of pea sales to India — which include Australia, France, Germany, Great Britain, Denmark, Ukraine; there is a long list of countries that have been supplying peas to India — but also what is going on in Myanmar, Tanzania and other countries that are producing some of these tropical crops. It is one of the areas where, in terms of forecasting demand, our organization relies on some of the private companies that do supply and demand analysis.
Senator Sparrow: How can the farmer access that information to know what products would be useful to produce — this year or year-by-year?
Mr. Froese: There are market services that provide all kinds of information and analysis, and most farmers or producers have access to that. If as a grower group, we recommended that they grow a certain variety, we would flood that market.
The pulse market is a true supply-and-demand market. If there is excess supply, the prices go down; if there is a shortage, the prices go up. It behooves the producer to be aware of what is going on in the world.
Senator Sparrow: It is difficult for some farmers to find that out.
Mr. Froese: It is.
Senator Sparrow: The information you have would be more readily available.
Mr. Bacon: That comment reminded me of something that we are doing. On our Web site, pulse growers who pay levies to any of the provinces have access to what we call a members-only area, which includes information on 40 different countries around the world — some of the major importers. It talks about quality requirements and has statistics on recent imports and the Canadian share of those markets. We are also planning to put a lot of trip reports that we prepared after some of our international travel onto that Web site.
Thank you for asking that question, because farmers are not aware of that service. At least, it is not evident that they are from the numbers who have signed up for it. Some of the information you are looking for is on the Web site, but we do not go so far as to make a recommendation on what you should plant.
The Chairman: A supply management system would certainly help. I just threw that out.
Senator Tkachuk: I want to clarify something Senator Sparrow alluded to in his first questions, about farmers perhaps not getting paid. Is it by certain brokers, or is it companies that would be purchasing the product? Could you clarify that?
Mr. Bacon: The Canadian Grain Commission has a program of licensed, bonded grain dealers. In the case of bankruptcy, they provide, I believe, 90 per cent of the money owing if a grower has not been paid after delivery to a licensed and bonded grain dealer. Some of the people who buy pulses from farmers in Canada are part of this Canadian Grain Commission licensing and bonding system, and some are not. The concern is that a farmer who delivered to an unlicensed facility that subsequently went out of business might be left without any way to get paid for the crop.
Senator Tkachuk: From what I gather — and correct me if I am wrong — the industry is trying to do something un- Canadian, in that it is trying to solve the problem on its own without government involvement.
Mr. Bacon: Yes, the grower groups have been working on this for probably 10 years. As Mr. Froese mentioned, they have been looking at a range of options, including self-insurance, which is something that corn producers in Ontario have adopted. They are looking at how a bonding or an insurance program could be run, either by grower groups themselves or in conjunction with the Canadian Grain Commission.
Currently, I suppose there are reasons why some have chosen to become bonded and some have not. These grower organizations are just trying to improve the current situation. We have a system in place now. They are just talking about how we can improve it.
Senator Tkachuk: No one forces the farmer to sell to a particular person. He makes that choice.
Mr. Bacon: That is correct.
Senator Sparrow: How does a farmer know if the purchaser is bonded or not? There is no big sign saying, ``We are not bonded,'' or ``We are not licensed.'' The farm producer is basically not aware, although he can search that information out. However, the assumption is that this industry is licensed and bonded and the farmers are caught through not knowing.
Mr. Bacon: Regrettably, some pulse processors have gone out of business and, of course, there has been coverage of the level of compensation that they received, whether it was from a bonded company or not. I believe farmers are aware of the issue and will probably be asking whether the person they are thinking of selling to is bonded. The Canadian Grain Commission would be the other source of information. You are correct though, there is no sign in the driveway saying, ``I am,'' or ``I am not.''
Senator Lawson: Following on from what Senator Fairbairn talked about, your Olympian and so on, you are not getting a lot of coverage on that. The whole issue with athletes is steroids, the negative impact of steroids, people dying from it, and all the studies indicating that while it helps athletes bulk up and enhances performance temporarily, there will be serious negative health effects later on. Perhaps there should be a challenge from your group — the coming Olympics is the perfect opportunity — indicating the negative consequences of steroids and the positive benefits of using your product. Maybe Senator Fairbairn and I should help you out with your marketing. There might be some merit in taking a look at that.
Mr. Bacon: I will take you up on that offer, because while we are focusing on the Summer Olympics this year, we are looking ahead and we know that the Winter Olympics in 2010 will be in Canada. The pulse industry is looking at how we can make what we know to be a very important food group part of capitalizing on the focus on lifestyle, goal- setting and healthy living that the Olympics will present. We need to take this to another level. We feel we have a great food product with which many Canadians and many people around the world can identify.
Senator Lawson: Twenty years ago, when Mexico opened those maquiladora plants, many of the growers in California relocated to Mexico to take advantage of the cheap labour and lack of environmental standards. Those companies were shipping back into the U.S., with no country of origin listed. People thought they were getting an American-made product produced with high environmental standards and fair wages, but that really was not the case. Now they are required to indicate country of origin, so that when that product comes from Mexico, they have to identify it as such.
That leads me to my question: When you ship to purchasers, are you required, legislatively or otherwise, to identify country of origin, that this is a Canadian product?
Mr. Bacon: The processing companies act according to the importing companies' demands. Some companies do require that ``product of Canada'' appear, but we are meeting the requirements of the importer, wherever they are.
Senator Lawson: If the importer does not need or want that, do you not insist? If they produce some kind of breakthrough noodle or a breakthrough peanut butter substitute, for example, with a product from Canada, can you not insist that the product be identified as coming from Canada?
Mr. Froese: Most of our processed products are shipped in 100-pound bags, and it says ``product of Canada'' on the bag, but we have no control when it moves into the value-added chain.
Senator Lawson: You do not get the benefit of the value-added for which Canada is responsible.
You have to find a way around that, too.
Senator Fairbairn: I do not believe I am being foolish in wanting to take this further, because you have said something fascinating today that has us thinking about not just public health in general, but people who can promote public health. There are no more potent Canadian images of health and strength than those of the athletes who compete in the Olympic and Paralympic Games. There are several games before they come to Canada. We are going to Athens in August, but then, two years later, we will have winter games in Turin, Italy, and then summer games in China for the first time. There will be several Olympic Games held before 2010. It seems to me these athletes are always looking for ways to improve their health. Also, they provide whoever is producing them with a tremendous image for Canadians, and for themselves.
I would not take that angle lightly. It is very well worth pursuing, and I am quite sure that many of our athletes would think so too.
Mr. Bacon: Senator Fairbairn, perhaps I can suggest that this committee ask our Olympic athlete, Pauline van Roessel, to appear before the committee following the Olympics. She can give you firsthand her message on her approach, and how goal-setting, healthy living and consumption of pulses have contributed to her success as an international athlete.
Senator Fairbairn: That would be great, and it is also important to get the message out to those who are in training that this is an option.
The Chairman: We will be looking to see ``Pulse Canada'' on her toque.
Senator Mercer: I want to pursue the area of new-market development in terms of Asia and, in particular, China and Southeast Asia.
Have you talked to the people at CIDA about using these products in our food-aid program, particularly in Asia and North Korea? I am talking about future market development. These people will not be poor and starving forever, but they will always be hungry, so we might develop markets for this type of product that seems to fit their culture.
Senator Hubley and I, in other committees, have talked about ways of moving potatoes into North Korea because we have excess product. Obviously, it would be nice if we could sell beef there as well.
Have you talked about that? Is there a way that we could develop that? To tie it in with what Senator Fairbairn and Senator Sparrow said, that healthy lifestyle aspect is a good one, but it is a long-term one as well.
Mr. Bacon: Yes, we have spoken with CIDA. We also make a point of visiting with the World Food Program in Rome at least once every two years. We visited the International Committee of the Red Cross in Geneva, and, of course, we are working with some of the NGOs in Canada. Certainly the World Food Program in Rome has increased its purchases of split yellow peas significantly.
As recently as yesterday, I was in the CIDA offices speaking with one of the minister's assistants and promoting something that we have seen in countries around the world, which is using our scientific expertise that has allowed us to become a leading pulse-producing nation to develop capacity building in the scientific area in some of these poorer countries. Looking around the world, you can see that many human diets consist of a cereal and a pulse crop. In Asia, it might be soybean as the pulse crop and rice as the cereal crop; in Mexico it will be corn and beans; you will see pulses as a staple in the diet in the Middle East.
We feel that there are benefits for some of these poor countries in tapping into long-term solutions to some of their problems through research. Also, these kinds of activities can be beneficial to Canadians as well. This is an approach that some of our competitors have taken successfully, helping countries around the world in further developing their expertise, because we share many of the same concerns, whether it is disease resistance, yield, plant architecture or a number of other things.
To the extent that we can, we have promoted our product with CIDA and other aid agencies.
Senator Gustafson: Price is very important to farmers. What is the average price of a bushel of peas or beans today?
Mr. Froese: You are putting me on the spot with regard to pea prices. I can tell you what the bean prices are because that is what I grow. The price of beans is mostly in the 20- to 22-cent-a-pound range. Kidney beans or cranberry beans are 28 cents a pound.
Senator Gustafson: Put that in bushels so we can understand.
Mr. Froese: That is roughly $14 a bushel.
Senator Gustafson: What about peas? The last peas I sold were $6 at Yellow Grass, Saskatchewan, two years ago.
Mr. Bacon: I do not have a current price. I checked three days ago, and the price of Canadian feed peas, Vancouver, U.S. dollars per ton, was around $161. I was interested in this because a Pulse Canada staff person is currently in Asia promoting feed peas in the Asian market because of high corn and soy prices. We are trying to see if FOB price Vancouver, plus ocean freight, would allow Canadian peas to be competitive in that market.
Senator Gustafson: That would be about $4 a bushel if you took the freight off?
Mr. Bacon: Perhaps a little higher. I have not converted it to Canadian dollars per bushel.
Senator Gustafson: This is an important angle for farmers. I did some research on wheat. At Crosby, North Dakota, a bushel of wheat brings $5.66 Canadian. In Ontario, a bushel of white wheat, according to the Ontario wheat board, brings $5.10 a bushel and they can ship directly into the U.S. Weyburn Inland Terminal price, with the additional interim payment, was $3.46, but I recognize that there will probably be another interim payment and a final payment. Price is very important to farmers. They make their planting decisions on what the price is. Right now, for instance, canola is high. Whether it will stay there or not, I do not know. One more question: What can this committee do? You have sold me on the importance of research and development because I think you have an exciting industry. What can this committee do, and what should we do, to help get this done? This is a good committee here, in my opinion.
Mr. Bacon: From a public policy perspective, the questions that we as Canadians need to answer are what role does the federal government play in providing funding to agricultural research, where that research dollar should be invested, and what the commitment of the federal government to agricultural research will be over the long term. I think the government, as the largest funder of research in the country, can also play a lead role in coordinating input from growers across Canada in answering the questions, because they are questions that government alone cannot answer. We need to develop a strategy with input from the industry and define the partnership that will exist between government, industry and growers. It is really an exciting challenge for all of us. With that framework in place, we can say confidently that public investment in agricultural research is focused on the areas that will provide the greatest return.
The Chairman: That is an excellent answer.
Senator Sparrow: What percentage of Canadian production of peas is sold as split peas? How has that increased in the last few years? I am talking about breaking it down into cattle feed and human consumption.
Mr. Bacon: It is difficult to come up with accurate statistics, in part because of how data are captured at time of export. I could tell you what tonnage the World Food Program has purchased, or other specific agencies, but perhaps one of the indications of the growth has been the increase in splitting processing facilities that has occurred in Western Canada.
I can provide you, when I get back to Winnipeg, with the information that I have, but I do not have it with me here today.
The Chairman: Mr. Bacon and Mr. Froese, I want to thank you sincerely on behalf of the committee. Your presentation has been superb. It touched the very nub of topic in which this committee has a profound interest. You are, with your research and check-off and so on, really leading the way. Your entry into 140 countries with these value- added products is something that can be used and added to, to help bring Canadian farmers into this modern age. We appreciate what you have had to say and we will continue our study on this important topic. Thanks for your contribution.
That brings this part of the meeting to an end. The committee will continue in camera to discuss the BSE report.
The committee continued in camera.