Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 5 - Evidence - Meeting of June 15, 2006
OTTAWA, Thursday, June 15, 2006
The Standing Senate Committee on Agriculture and Forestry, to which was referred Bill C-15, to amend the Agricultural Marketing Programs Act, met this day at 8:09 a.m. to give consideration to the bill.
Senator Joyce Fairbairn (Chairman) in the chair.
[English]
The Chairman: Senators, we are meeting today to consider Bill C-15, an act to amend the Agricultural Marketing Programs Act. Bill C-15 was given first reading on May 18, 2006.
Bill C-15 aims to enhance the Advance Payment Program available to producers. It aims to consolidate the Advance Payment Program and the Spring Credit Advance Program to improve the cash flow of producers at times when their expenses are higher; that is, when they are putting in or marketing their crops. Bill C-15 aims to expand coverage of these two programs to include most agricultural products, with the exception of supply-managed crops.
Our first witness today to brief the committee on this bill is Mr. David Anderson, the Parliamentary Secretary for the Canadian Wheat Board to the Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board, with whom we had a fulsome discussion a couple of days ago. Ms. Clair Gartley, Director General of the Agriculture Transformation Programs Directorate, and Mr. Bruce Langevin, Assistant Director, Agriculture Marketing Programs Act, Financial Guarantee Programs Division accompany Mr. Anderson
Our meeting is being televised, and I think we have a loyal viewing audience, just because of the nature of the difficulties in this industry.
Please proceed, Mr. Anderson.
David L. Anderson, M.P., Parliamentary Secretary (for the Canadian Wheat Board) to the Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board: Thank you, we appreciate the invitation to appear in respect of the proposed amendments in Bill C-15, which passed the House quickly last week. This was a good example of the cooperation that can occur in the House. We were able to work with Mr. Easter, Mr. Bellavance and Mr. Atamanenko to reach a quick agreement on the bill. We would love to see it passed as quickly as possible in the Senate.
There are five main changes under consideration to the Agricultural Marketing Programs Act. One is to change the Advance Payments Program by consolidating the Spring Credit Advance Program into the Advanced Payments Program. The two advance programs have operated semi-independently and we propose combining them. We would increase the advance limits from $250,000 to $400,000, which is a significant increase. We would increase the maximum interest-free portion for producers from $50,000 to $100,000, which would make a big difference for many producers. We would enhance emergency cash advances. Fifth, we would broaden the coverage of the combined program that currently exists under the Spring Credit Advance Program and the Advance Payments Program to include livestock and other crops, which excludes supply-managed products and breeding stock.
The amendments will strengthen and augment existing legislation to bring it more in line with the needs of modern agriculture. These amendments are necessary because of the intensifying economic pressure that our Canadian farmers are facing. As senators are aware, commodity prices have been in a long-term decline, while at the same time input costs have been rising dramatically. The cumulative effect has been that Canadian producers, particularly those in the grains and oilseeds sector, have been facing significant pressures.
The Minister of Agriculture and Agri-Food, the Honourable Chuck Strahl, spent a great deal of time over the past month travelling across the country to meet with hundreds of producers and agricultural organizations. The one message that he heard repeatedly was the need for governments to play a strategic role to help underpin farmers' long- term profitability from and ability to survive in the marketplace. It is hard to earn anything from the market if you do not have the cash required to put the crop in the ground in the spring or to harvest it in the fall. The SCAP and the APP have provided credit to producers as part of the business risk management of the agriculture policy framework.
During extensive consultations in 2003-04, there was general support from farm groups, to expand the programs to cover livestock and other crops. They felt that these programs needed to be expanded, that the loan limits on the programs needed to be increased and that there needed to be greater flexibility in the delivery of the programs. These amendments address those needs.
Today's larger farms have hit huge increases in net operating costs which makes it necessary to increase these cash advance levels. Implementing the changes will help improve the long-term growth and economic prospects for our farmers, aligning the program more closely with the comprehensive approach that we want to take that treats all producers similarly, regardless of the commodities they produce.
It could take a while to implement the changes to AMPA and the government has introduced the Enhanced Spring Credit Advance Program, called ESCAP, which would provide producers with assistance early in spring. With ESCAP, we would double the interest-free loan maximum for spring credit advances to $100,000. It is proposed in Bill C-15 that the increase be permanent. We want to extend the repayment period for cash advances made under the program until September 30, 2007, which is a six-month extension of the repayment program. The previous program caused people to go into default at the end of the crop year. We did not want that to continue so we extended the repayment period by six months.
We expect that the AMPA amendments would provide an additional $600 million per year in cash advances to producers. These proposed amendments would make cash advance programming more responsive to the needs of the producers and more reflective of the current position of Canadian farm businesses. The existing programs are popular with producers, and by combining the programs, we would be creating a single, effective, and more powerful tool for them.
These amendments are about helping our producers to operate on a more profitable and sustainable basis, to which we are committed. Modern agriculture has brought many new realities to our producers, such as higher input costs and increased competition. Government and farmers need to adjust to those realities. These proposed amendments recognize the need to adjust to those realities and the necessity of being more responsive to producers' needs.
Mr. Gartley, Mr. Langevin and I would be happy to answer your questions.
Senator Gustafson: This is a good bill. Certainly, it would improve the situation of people trying to get the crop into the ground or harvesting the crop.
I have one question on livestock. One of the best points in the bill is the proposal to extend the program to livestock. How broad is the definition of ``livestock?'' I am thinking of buffalo and elk farmers.
Clair Gartley, Director General, Agriculture Transformation Programs Directorate, Agriculture and Agri-Food Canada: It includes all livestock production that is not supply managed. Certainly, buffalo and elk would be eligible. Hogs, cattle and any other commodities not in a supply-managed system would be eligible for the amended AMPA.
Senator Gustafson: Some of the farmers who went into those specialty areas faced some serious problems so I am glad to hear that.
Mr. Gartley: If I might add, senator, this would be livestock raised for sale for the purpose of consumption and not for the purpose of breeding stock.
Senator Gustafson: I understand.
Senator Callbeck: This is a good piece of proposed legislation that the farmers will welcome. You talked about expanding coverage to livestock. Will there be expansion to include other areas? For example, are blueberry and cranberry crops already included in the coverage?
Mr. Gartley: Currently, it has to be a production that is storable. That will hold for the future as well. The amended AMPA will include such crops as blueberries and cranberries provided they can be easily frozen and then stored. Both of those crops can be quick-frozen and stored. If they were processed into a jam, they would not be eligible. Perishable crops such as blueberries and cranberries that can be converted easily to a form for storing would be eligible under the amended AMPA.
Senator Callbeck: This is new with these proposed amendments to the act.
Mr. Gartley: Yes, senator, this is new.
Mr. Anderson: A significant portion of the loans are taken against the inventory, making the inventory the collateral on the loans. That is why there is a requirement for the inventory to not perish while the farmers have the loan outstanding.
Senator Callbeck: My next question is on program delivery. Have any of the financial institutions expressed an interest in delivering this program?
Bruce Langevin, Assistant Director, Agriculture Marketing Programs Act, Financial Guarantee Programs Division, Agriculture and Agri-Food Canada: At present, no, they have not done so. The main reason for that provision is to address an issue in the existing program. Some farmers, because of their location in the country, do not have access to a farm organization that would allow them to obtain an advance. The provisions in those special circumstances allow a financial institution to administer a program if the minister felt that would make advances available to a group that previously was prohibited from getting the help because of location.
Senator Callbeck: I know that a portion of the loan is interest-free but what is the interest rate? How is that calculated?
Mr. Langevin: Do you mean the interest rate that we pay on the outstanding amounts? The AMPA allows us to pay up to, and not exceeding, prime minus one quarter. We currently pay prime minus one quarter of 1 per cent.
Mr. Gartley: That helps producers access much more reasonable rates on these advances. Adding that to livestock results in more benefits.
The Chairman: Would Saskatoon berries be covered by this legislation?
Mr. Gartley: If they could be individually quick frozen, they would be eligible.
Senator Peterson: Are these all entirely equity-backed loans and advances?
Mr. Gartley: There has to be some form of security on the advances. If the product is already produced and in storage, it is the value of the product. If the product is under production, that is, has been planted but not yet harvested, we would have to have another form of security, which would currently be production insurance, which is similar to crop insurance.
In the future, we will be able to consider other business risk management programs as security. For example, the Canadian Agricultural Income Stabilization program would be used as security in the future on a product that is still being produced and not yet in storable form. The security is broadened in order to allow for things like livestock. There is not currently production insurance for livestock, so we would take CAIS as part of the security for the livestock.
Senator Peterson: Who covers the exposure if the price of the product drops during the loan period?
Mr. Gartley: When the advances are calculated, there is an estimation of the future value of the product. The advance is based on 50 per cent of that value. Therefore, if the price drops, it does not have an impact on the advance per se, although it does have an impact on producers as they are paying back the advance, because they are still liable for the amount they were advanced.
Senator Peterson: It is more of a concern to the financial institution that is advancing the money. Is this back- stopped in some way? If financial institutions are not interested in making the loan, will the government provide the money? Who is the lender of last resort?
Mr. Gartley: The advance is guaranteed by the Department of Agriculture and Agri-Food Canada.
Mr. Anderson: The institutions do not lend at 100 per cent of the predicted value of the product. They will lend on 50 per cent of the value. For example, the Canadian Wheat Board has set prices and will lend at one-half of the predicted value. If the price drops, it closes the gap on what the farmers get when they haul the grain. You will get less if the price drops, but the loans are always guaranteed because they are only 50 per cent of the predicted value.
Senator Gustafson: How will the existing loans be handled? Will they have to reapply for the loans or will the existing loans remain in place?
Mr. Gartley: There are currently the Spring Credit Advance Program and the Advance Payments Program — which is the fall part that already exists — and for this year the minister announced in May the Enhanced Spring Credit Advance Program. Those programs will be phased out as the new Advance Payments Program provided for in this bill is implemented. Producers will pay out the advances they have under the existing programs and apply them to the new program.
Senator Gustafson: It is covered with the $50,000 existing?
Mr. Gartley: We put in place a transitional program called the Enhanced Spring Credit Advance Program for crop producers who are currently eligible so that they can get the $100,000 now. That program is being implemented right now so that crop producers can access that this year as we prepare for the new AMPA.
Mr. Anderson: We have tried to encourage the passage of this bill as quickly as possible because we were told that if it not passed until the fall, the regulations would not likely be in place until next spring or summer. No one on the House of Commons Standing Committee on Agriculture and Agri-Food was willing to wait that long. We would love to have this in place in its entirely this fall so that the producers will have access to it once the crops are in.
The Chairman: We are doing our best, and I am sure that no one around this table would want it to wait until the fall.
Senator Oliver: In your opening remarks, you said that there was great cooperation in the House of Commons and that you hope to have the same here. Now you say that you want this bill passed right away so that payments can start flowing to farmers at an early date. You also indicated, however, that it will be based upon the drafting of regulations. Has that drafting started and will the stakeholders, that is, farm organizations, be consulted and have some say in these guidelines and directives? Very often, the timing of a payment depends on the regulations, and very often, the stakeholders do not have a say in the regulations and are jeopardized by them. What is the procedure for that timeline?
Mr. Gartley: We have begun work on drafting the regulations. There is a great deal of legal work to do in preparing these regulations. There is a process to go through because these regulations have to be approved. Part of the process includes a public comment period, and it is expected that will happen. We do not know how many days that period will be, but it can be 60 days during which farm organizations, producers and the public can look at the drafted regulations and give us comments which would then be considered. There would be an opportunity for everyone to comment on the regulations.
Senator Oliver: What is the timeline for that?
Mr. Gartley: We would like to do this as quickly as possible. It will take several months to get through all the processes. There is extensive work to do as well with the farm organizations because we expect that they will have new administrators, particularly for the livestock sector of the program. There are currently about 60 administrators who run the existing SCAP and APP, but we expect the number to increase due to the addition of production such as livestock.
We will be working immediately to develop administrators and provide training. They will have to set up their own processes to deliver the program. There are information systems to put in place and other such things.
We certainly hope that will be done this year, although I cannot yet give you a specific date.
Senator Oliver: If it is not done in 2006, does that mean payments cannot be made until later?
Mr. Gartley: Before any money can flow, the regulations must be in place. Under the transitional enhanced SCAP program, the crop producers who are in now will get these benefits. However, we cannot add the other production until the regulations are in place.
Senator Oliver: Am I correct that the advances under this bill can be up to $400,000?
Mr. Gartley: Yes.
Senator Oliver: If I get an advance of $300,000, is the first $100,000 interest free?
Mr. Gartley: Yes, it is.
Senator Mitchell: My first question is with regard to timing. What about this year? There was a great deal of concern among farmers that they would not have enough money even to seed. We are now past that point. How are farmers faring in that regard?
Mr. Anderson: The Enhanced Spring Cash Advance Program was put in place to give them access to that extra money this spring. The $50,000 has been raised to $100,000 on the Spring Cash Advance Program in order to get that money to farmers for spring.
Senator Mitchell: That is already in effect?
Mr. Anderson: Yes, it is in effect. The administrators need certain things in place in order to administer it. We have had some feedback. Farmers are still talking to the administrators so that they can get the money.
Senator Mitchell: They do not actually have their money yet?
Mr. Anderson: No.
Senator Mitchell: This has the effect, among other things, of increasing the amount of debt that farmers will be able to incur. Can you give me a rundown of the state of agricultural debt? Is it at a record high?
Mr. Gartley: The industry is facing challenges and net income projections for the coming year that are not that positive. However, the increase in the caps in the new bill are an adjustment to take into account the fact that production costs have increased over the past number of years. The cap of $250,000 ten years ago has some equivalency to the cap of $400,000 today.
Under the program, the debt is based on one-half of the value of the production. We are very careful to ensure that producers are not taking on debt that they do not have a reasonable expectation of paying back. The default rates for the existing programs are less than 1 per cent, so the program has managed to balance the need for this capital with ability to repay it. The administrators of the program, the farm organizations, have done a good job because they know these producers. They are members of the organization. They know how the markets work and they know when they can get payments back on the advances. It is done in that way in order not to overload producers with more debt than they can handle.
Mr. Anderson: Debt increase is not necessarily a bad thing when an industry is functioning well, but the concern in the farm community is that people are turning their equity into debt because they do not have cash flow to keep their operations functioning, which is a bad situation for an industry. Senator Gustafson has talked about this at length. It is important to remember that one reason debt is climbing is that people do not have the cash flow to see their way through, so they borrow money, and that affects their equity as well. That cannot continue in the long term or most producers will not survive.
Senator Mitchell: A common concern we hear from farmers is that the amount of red tape involved makes it extremely difficult to access these types of programs. Have you addressed that in this bill? Is there some way to streamline the administration for farmers?
Mr. Anderson: This has been administered fairly simply in the past. It has been fairly easily accessible to producers. We hope to maintain that simplicity.
Senator Peterson: We keep hearing about the debt and that much of it is leveraged. Is there any room left for producers to take advantage, or is part of the security future production? I would think that produce currently in the bin must be leveraged to the maximum.
Mr. Anderson: That depends on the producer. The program is not accessible without some sort of collateral in place, either through production insurance or through inventory in the bin. The producers must have one of those two things in order to access the program.
Senator Tkachuk: What would cause a default?
Mr. Gartley: Under the Spring Credit Advance Program, a hail storm or pest infestation may cause a crop failure. We ask that producers buy crop insurance so that there is some protection if such a disaster happens. When a crop is in storage, some sort of storage disease could attack it. Producers may have other financial difficulties as well. As I said, we have a very low rate for a lending program. That is because of the protection provided by production insurance in the spring and the careful calculation of the value of the stored crop and only advancing 50 per cent of that in the fall. It provides quite a bit of protection.
Senator Tkachuk: Are there penalties for default? The amount of $100,000, for example, is interest free at the moment. If a person defaults, is a penalty applied?
Mr. Langevin: The combined program or the enhanced AMPA program will run the same way as the current program. In the case of a default, the penalty is to repay the money originally advanced as well as the interest benefit that the producer received during the course of that crop year. Under the enhanced program, the Government of Canada pays interest on behalf of the producer on the first $100,000, and at present on the first $50,000. If the producer defaults, he is responsible to repay the interest benefit received during the course of that year, plus the principal.
Senator Tkachuk: Would the interest be calculated at prime?
Mr. Langevin: It is calculated at prime minus one quarter, which is what we paid on it. There is a provision for the administrators to apply a penalty interest rate in the case of a default. Administrators vary in application on this, but we calculate the interest rate at prime minus one quarter.
Senator Tkachuk: A bank could ask for more?
Mr. Langevin: They would have set that out in their agreement, and we would have dealt with that not at the time of default but at the time of contracting.
Senator Tkachuk: This is predetermined so the farmer knows what will happen?
Mr. Langevin: Absolutely.
Mr. Anderson: One other thing that can cause a default is the end of the crop year. If you have not delivered the product at the end of the crop year, that can put the loan into default. We have received concerns from the farming community about that provision. It can be dealt with in the regulations. As well, it has been dealt with in part by the extension from 12 months to 18 months. In a system where you cannot deliver your product as you choose, which happens in Western Canada, you can find yourself in a default situation through no fault of your own. We have put in the extension to try to allow the farmers to bring that product to market so the loan can be paid off. The penalty is pretty stiff. If you go one day over, you are back to repaying the full amount plus the interest, and we know the situation that most farmers are in.
Senator Tkachuk: Is the interest calculated at the time of the loan?
Mr. Anderson: Yes.
Senator Mitchell: If the government pays the interest on the first $100,000, then payment of any interest on an amount over $100,000 is the responsibility of the farmer. In such cases, this program would offer farmers a guarantee that would make it easier to get the money from the bank. You are saying that the risk is managed so well because you are using only one-half of the production as collateral. Why does the bank need that extra reassurance from the government if the government is quite convinced that there is no risk?
Mr. Anderson: The banks have not administered the program up to now because farms groups, such as the Canadian Wheat Board and the Canola Council of Canada, have been doing that. The banks take one-half of the value as protection in case there is a decrease in the value of the crop.
Senator Mitchell: They collateralize only one-half of the value of the production. The government is saying that if the value collapses, it will cover the loan and backstop the bank. Therefore, why does the bank need that extra backstopping if the collateral is so well managed, as you are saying? Perhaps I am missing the point.
Mr. Gartley: We mentioned the interest rate benefit contained in the program but the other thing is access to more capital. With the program, the banks are more willing to provide extra capital to the producer and they would expect a well-managed program. They would probably be nervous if they saw the default rates take a big jump, as we would be nervous. I believe that your question is: if the program were not in place, would the banks still provide the capital? Perhaps they would provide some but our understanding of their situation is that it would not be anywhere near as much and many producers would have difficulty securing the capital they needed to produce the crop or the livestock.
Senator Mitchell: Is one of the concerns that, while we are taking only one-half of the production as collateral, this is not the only loan the farmer has. That production also goes against paying off any other loans that might be outstanding? Is there any relationship between the total amount of other loans that a farmer might have outstanding, the program loan amount and the production amount in order to repay all the loans?
Mr. Gartley: Again, we look at whether they have security through production insurance through a CAIS-like program or a business risk management program or the value of theproduct. We have a first position. As they market the crop, they pay the advance back in the same way that they obtained it. If they sell $1 worth of production, then they repay 50 per cent to the program administrator. That would then go to the banks.
Senator Gustafson: For clarification, the bank assesses the customer, does it not, as to ability to repay?
Mr. Gartley: In this case, the administrator does the business with the bank; the individual producer does not do that. The individual producer works with the commodity organization that is administering the program. The bank signs an agreement with us and with the administrator to flow a certain amount of money into the administrator for this particular program. The administrator then flows the money to the producer. It is not the direct relationship.
Senator Tkachuk: Senator Mitchell was onto something but I do not think he received an answer to his question. I believe that Senator Mitchell was saying that the government guarantees the loans and if a farmer defaults, the bank would demand all the money or come to some arrangement and settle at 80 per cent or whatever. However, because the government is involved as a backstop, if the farmer defaults on the loan, the bank gets all their money. Is that right?
Mr. Gartley: Yes.
Senator Tkachuk: The banks take no risk whatsoever and they are backstopping the interest rate, for which they have already been paid. They are being paid an interest rate from the government with its subsidization of a portion. The banks are taking a penalty in addition to that. Is that right? I do not understand why the farmer has to kick in on the default end. Does that money go back to the government? How does that work? On the first $100,000, the government pays the interest rate. When a default occurs, the farmer is then charged that interest rate, although the government has already paid it. Who receives that interest payment made by the farmer?
Mr. Langevin: You are correct, senator, the guarantee provides that in the normal default situation the bank would demand its money right away. However, in the case of farmer default, the government provides an opportunity for a producer to repay that money over a number of years. The government's guarantee with the bank allows them the comfort, if you will, to allow us to work with the farmers and to not demand the money back. We enter into repayment agreements in default cases that could last two or three years. We do everything that we can to work with a producer so that he or she is not burdened with repaying it all at once. That guarantee with the banks allows us to do that.
Senator, you are right that in the case of the penalty, the government would pay the interest on the first $100,000 under these proposed amendments, whereas it currently pays the interest on the $50,000. That money is repaid to the government by the producer and it does not go to the bank because the government paid it on behalf of the producer. The principal is paid to the bank before we would honour the guarantee, or to us, were we to honour the claim — the Government of Canada. The bank does not profiting on the penalty. The bank receives the principal and the Government of Canada repays the interest. In the case of a default, it is paid on behalf of the producer.
Senator Tkachuk: In the case of repayment over a two- or three-year period, is the farmer forgiven the interest rate penalty on the first $100,000 when he writes a cheque at the end of the term or is he charged the interest rate?
Mr. Langevin: The AMPA currently stipulates that the penalty must be paid as part of the repayment process.
Senator Tkachuk: There is much incentive to pay it on time, obviously.
Mr. Langevin: Yes. Our default rate is so low because we try to work with incentives to repay.
Mr. Anderson: It also works in terms of the repayment because as the farmer delivers product, the repayment to the program is deducted from the product. When a farmer delivers grain, 50 per cent of the cheque goes to repaying the program. The farmer does not get paid and then write a cheques to the program. That helps to keep the default rate as low as it is.
Senator Callbeck: You mentioned that producers have not received any money under the Enhanced Spring Credit Advance Program. When do you anticipate that money will start to flow into their hands?
Mr. Gartley: This is the transitional SCAP. We are now signing agreements with administrators of that program. We expect to have many of them signed in another couple of days. The administrators will then have the ability to start providing advances to producers immediately. I believe that we signed with the Canadian Canola Growers yesterday and other administrators are getting their agreements finalized and their position ready for signing.
The money will be flowing as soon as those agreements are signed with administrators and the producers apply for the advance.
Senator Callbeck: Once the agreements are signed, the money can flow as soon as the producer puts in an application?
Mr. Gartley: Yes.
Senator Mitchell: We recently met with the Grain Growers of Canada and the Canadian Wheat Board. As difficult as their circumstance are, it was interesting to hear that they both had some optimism about structural improvements in markets. They were both saying that they are focusing on these programs that can bridge them through to better times. I am encouraged by that optimism. I would like to hear your comments. How long will these programs continue? Are we really looking at bridges to get us to a circumstance where markets are actually improving for our farmers? Have you thought that through? What is your projection? Farmers cannot borrow forever.
Mr. Anderson: If I could make those projections accurately —
Senator Mitchell: You would be a very rich farmer.
Mr. Anderson: Yes. These two programs have been good in the past, as Senator Gustafson knows. They have been useful tools for farmers to be able to access credit and repay it on an annual cycle. It has worked well. I think it will be a great advantage to producers to have this in one program and to be able to access both the spring and fall cash advances in this way.
There was a call to increase the limits. People felt that $50,000 was too low. Some people have fertilizer bills that are several times that amount. We studied that and decided that it was necessary to increase the limit. The farm community seems to be strongly behind us. Of course, people would love to have much more profitability from the marketplace, but this is one tool we can give them to help them through this time.
Senator Peterson: I thought I heard at the outset that the Department of Agriculture and Agri-food Canada administer these loans and the program. Why will FCC not do that, or do they?
Mr. Anderson: I assume that FCC could be one of the administrators of the program if they applied.
Mr. Gartley: The program does not involve us directly giving a loan to the producer. The government provides the guarantee and the interest benefits, as we discussed this morning, but we do not actually provide the direct loans. We still work with financial institutions to provide the capital to the program administrators, and those administrators provide that capital to producers.
The Farm Credit Corporation provides capital directly to its clients. It is not currently involved in administering or supporting the program because there have been enough financial institutions willing to work with administrators to make it happen that it has not been necessary, to this point at least, to use the Farm Credit Corporation.
The role of Agriculture and Agri-Food Canada is to work with the program administrators that provide the funding, the interest subsidies and the guarantee on the advances, but the department is not actually providing the hundreds of millions of dollars.
Senator Peterson: As a producer, do I start with you?
Mr. Gartley: No, you go directly to your commodity organization. If you are a canola grower, you go to your canola organization. If you were a potato grower in Prince Edward Island, you go to the P.E.I. Potato Board to access the program.
There are currently about 30 administrators of the SCAP program and about 60 commodity organizations across the country involved in administering the APP.
Senator Peterson: The administrators do not have to go back to you for your blessing?
Mr. Gartley: No.
Senator Peterson: You assume that they understand the program and are evaluating it properly?
Mr. Gartley: Yes, we rely on the administrators. From our perspective, we have 50 or 60 clients, although that number will increase with the addition of livestock. Those administrators sign agreements with us and then they, in turn, deal with the approximately 35,000 producers who currently access the programs.
The Chairman: Thank you very much, Mr. Anderson, Mr. Mr. Gartley and Mr. Langevin for appearing here this morning. We in the Senate are as eager as you are to get this assistance to farmers. As a result of that eagerness, we will be moving quickly into clause-by-clause study of the bill.
Mr. Anderson: Thank you for the opportunity.
The Chairman: Senators, shall we move to clause-by-clause consideration of Bill C-15, to amend the Agricultural Marketing Programs Act?
Hon. Senators: Agreed.
The Chairman: Shall the title stand postponed?
Hon. Senators: Agreed.
The Chairman: Shall clause 1 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 2 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 3 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 4 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 5 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 6 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 7 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 8 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 9 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 10 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 11 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 12 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 13 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 14 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 15 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 16 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 17 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 18 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 19 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 20 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 21 carry?
Hon. Senators: Agreed.
The Chairman: Shall clause 22 carry.
Hon. Senators: Agreed.
The Chairman: Shall the schedule carry?
Hon. Senators: Agreed.
The Chairman: Shall the title carry?
Hon. Senators: Agreed.
The Chairman: Shall the bill carry?
Hon. Senators: Agreed.
The Chairman: Shall I report the bill to the Senate?
Hon. Senators: Agreed.
The Chairman: Thank you very much, senators. I will proceed to do that. It is clear, after listening to the discussion today that will be much appreciated.
The committee adjourned.