Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 4 - Evidence - Meeting of February 14, 2008
OTTAWA, Thursday, February 14, 2008
The Standing Senate Committee on Agriculture and Forestry met this day at 9:07 a.m. to examine and report upon rural poverty in Canada.
Senator Joyce Fairbairn (Chair) in the chair.
[English]
The Chair: Good morning, honourable senators, and to all of those who have tuned in to watch these hearings of the Standing Senate Committee on Agriculture and Forestry on rural poverty and rural decline.
We are pleased to have with us this morning, by video conference, all the way from Paris, representatives from the OECD. I believe it is more appropriate to say ``good afternoon'' to you. Welcome. We are glad that you are with us today.
In May, 2006, our committee was authorized to examine and report on rural poverty in Canada. Since that time, the committee has released an interim report. It has travelled to every province in Canada, visited 17 rural communities and talked to over 260 individuals and organizations. However, the committee's work is not done. Next week the committee will visit the northern territories to listen to the concerns of rural citizens and organizations in those regions.
Canada is not alone among OECD countries to be concerned about the present and future states of its rural areas. Rural regions across the globe are undergoing change due to the effects of globalizing markets, new information and communication technologies, the changing nature of traditional rural industries, the changing migration and demographic patterns, and a growing concern about the environment. It is clear that rural communities must find new ways to adapt to their new surroundings, which may involve a new generation of rural policies.
We are pleased to have with us today representatives of the OECD, an organization that has recently devoted resources looking into the changing nature of rural economies and the future direction of rural policies.
We have with us this morning Mr. Roberto Villarreal, Head of the Regional Competitiveness Governance Division; Mr. Nicola Crosta, Head of the Rural Development Unit; José Antonio Ardavín, Administrator of the Rural Development Unit: Ms. Ilse Oehler, Economist, Public Service Delivery; and Ms. Betty Ann Bryce, Consultant, Rural Development Unit.
We thank all of you for giving us your time so that we can hear what you have to say on this very important issue.
We have one hour, colleagues, with these witnesses to cover a wide array of issues. I would invite all of you to keep your questions as brief as possible so that we can allow our witnesses to respond fully and for everyone to be able to contribute to the discussion this morning.
Roberto Villarreal, Head of Division, Organisation for Economic Co-operation and Development, Regional Competitiveness Governance: Thank you very much. It is an honour for us in the OEDC to have this opportunity to engage in a dialogue with the Standing Senate Committee on Agriculture and Forestry.
I would like to give public recognition to the important role that your country has in the Territorial Development Policy Committee in our organization. We are very proud that in particular, a Canadian heads the working party on urban development, and that the delegates that participate in our committee have always had active and constructive participation.
The work of our Regional Competitiveness and Governance Division in Canada has a long history of several years. We have produced, together with your people and your authorities; a series of publications that have been widely demanded by our constituencies that include in our national publication OECD Territorial Review a review of Canada; a review of the metropolitan area of Montreal; a new territorial review of Toronto is underway; and it is also very likely that a review of rural development overall in Canada could start this year. We are honoured to serve you with the best of our information and understanding on these issues.
For us, ``rural'' is not synonymous with ``agricultural,'' but encompasses a wide array of issues of development. Evidently, all countries are different. The specificities of Canada must be considered but, nonetheless, there are common challenges and shared trends.
We are in the best disposition that our knowledge is available to you now, and later, as you request, to serve your committee the best we can. We sent a PowerPoint presentation not with the idea of circumscribing this dialogue but just for complementary information. If later you wish to receive further written materials, we would be glad to do so.
Please tell us how you plan to organize this one-hour meeting.
The Chair: If we could, we will begin with questioning you. I am very glad that you gave us an introduction of the organization and the broad spectrum that you cover.
Canada is, as you know, a very large country, and agriculture is not the sole foundation; within our country, there are many other rural businesses including our fisheries. It is a very broad situation, as you have mentioned. Thank you for that observation.
Senator Mahovlich: I want to thank the witnesses for taking the time to be here. There has been a substantial increase in agricultural productivity over the last few decades. Farm operations use less labour and produce more than ever before. Agriculture in Canada is export-orientated. As a result, farm operations have had to grow in size to achieve economies of scale to compete and survive in the global environment.
Many witnesses expressed concern that small-and medium-size family farms are disappearing and being replaced by large-scale farm operations, changing the nature of our rural communities for the worse. What is your response to their concerns? Do you think we should accept the trend toward fewer but larger, more efficient farms? Should governments develop policies to encourage and specifically help small- and medium-sized farm operations? Those are my two questions.
Nicola Crosta, Head of the Rural Development Unit, Organisation for Economic Co-operation and Development: I will take a step back in order to answer your question.
We would like to draw your attention to not just the role that agriculture, be it large or small, is playing in rural Canada. Let us take a wider perspective. What we observe in OECD countries is that one thing that has been fairly problematic is precisely this idea that rural development is largely synonymous with agricultural developments. The debate then becomes one that deals with whether or not we should support large or small farms. That is a debate that tends not to lead the rural countryside very far.
I would point out three classical policy failures we have observed in OECD countries. The first has to do precisely with what I mentioned, a sectoral approach that equals rural and agriculture. Let me remind you that, last year, OECD countries spent $270 billion in farm support. I believe that we can fairly say that this kind of support has been largely inefficient, ineffective and inequitable. We can get back to this later, if you wish.
Another typical policy failure that we see, and I can take the example my country, Italy, has a strong focus on infrastructure, the idea that the main problem with rural areas has to do with remoteness and therefore accessibility and that it is mainly through infrastructure investment that one can deal with the rural development. That, again, has been shown not to work.
A third mistaken approach tends to equate rural development with a matter of welfare or policies directed to certain individuals. I will take, for example, China, and the idea that rural development is about addressing poor individuals, so mostly welfare policies.
We have observed that the most effective approaches to rural policy today are integrated. They do not start from consideration of whether we should support farms and then what size of farms. They start from the consideration of asking, ``What kind of businesses do we want to support in rural areas?'' That is a completely different starting point. It is the starting point to a place-based approach to rural development, which starts with an analysis of the potential and needs of a given rural area and then the consequence of this analysis is tailoring policies to the specific potential and specific needs of that area. The approach is very different, and it does not exclude that the result is support of farms, whether it makes sense in a certain area to promote large farms, or small farms, if that is what makes more sense.
Possibly a more effective approach is to take it from the place-based perspective and start from there, analyzing the broader spectrum in terms of rural economy, and then eventually getting to a discussion as to whether or not we should support farms, and, if so, then whether it makes more sense to support large or small farms. It all depends on where you stand or where you are. It is difficult to draw consideration of this type in general matters, especially in a country as large as Canada.
Mr. Villarreal: I would like to add two comments. First, you are well aware that competition in international markets for agricultural goods has become very intense. Therefore, in my opinion, a country like Canada, with such rich natural resources and lands, should not lose the opportunity of using those assets to generate income for the country as a whole. Along that line of thought, efficiency is very much needed in terms of technology, scale, adequate regulations, services and infrastructure for the agricultural products to reach the international markets.
Second, for efficient industrial organization in agriculture, the size of farms is important, but this is not mechanically translated into implications about the welfare of households. This is why, as Mr. Crosta was saying, if we draw a distinction between agriculture as a productive activity and rural development as something having to do in a wider sense with the quality of life, the income and the access to public services and the satisfaction of needs and the expectations of the population, then we have two different considerations that perhaps can be addressed with different policy strategies.
In summary, I would suggest that for the purpose of exports and efficient utilization of Canadian assets and income generation in your country, efficiency should be sought in the agricultural sector. If that calls for newer technologies and larger scales, then I would recommend that. However, considering the important aspect of the welfare of households that inhabit the rural areas in general, one of the things we will discuss later in this conference is economic diversification. This is already a trend. In most OECD countries, rural households are already getting a smaller fraction of their total budget or income from agricultural activities, while in their budgets other activities that they also perform in services or manufacturing are representing more and more dollars, in this case, of their purchasing power.
We need to examine how to facilitate economic diversification; how training and education would also facilitate the continuous engagement of this population into productive employment; how to bring them services that enable them to efficiently produce those new activities or that go directly into their private consumption.
I think the destiny of rural households is not 100 per cent linked to the future of industrial organization in agriculture.
Senator Segal: I want to probe the panel's perspective on the issue of income security. Our poverty numbers in this country are fixed at about 11 per cent or 12 per cent. It is not the same people who are always beneath the poverty line as established here, but it is a fixed number of people who tend to be always living beneath the poverty line. The numbers in rural Canada are substantially worse, by a meaningful dimension.
You spoke a moment ago about a mix of policies, including policies concerning income stabilization. What policies across OECD countries have worked best relative to sustaining rural populations? To what extent is income security a part of that mix; is it central, tangential, peripheral? Is it tied to what we sometimes see, which is commodity-based stabilization for the farming community? Is it tied to straight income security under various categorizations? I would be interested in your perspective.
Could you perhaps add to that your sense of why our friends in Scotland seem to be reversing the trend with respect to depopulation? Is there any policy take-away we could get from that which would be of benefit to us here in Canada?
Mr. Crosta: That is an extremely interesting question that allows us to remind you of the main ingredients of successful rural policies by way of serving across OECD countries. As I mentioned, there have been a number of policy failures, but fortunately there is also a great quantity and quality of innovation in rural policy across OECD countries, by both national and sub-national governments.
There is certainly not a one-size-fits-all approach to rural development and avoiding the decline of rural population. We have seen four key ingredients in all the case studies and policy analyses that we have conducted. The first ingredient has already been mentioned, namely, a clear, decisive move away from a purely central approach towards an integrated approach. In practice, that means that rural development is about the good functioning of a complex system of factors that are all interconnected, sometimes interdependent, in the territory. Rural development is very much about the capacity of policy to address the complexity of the system through a well-coordinated set of policies. This concerns integration.
The second big shift that we see is a shift from a compensation to a competitiveness approach. We observed that successful rural development policies are those that are able to move away the simplistic idea that rural policy is about compensating for structural disadvantages of rural areas. The starting point should be the potential of these rural areas. It is more about finding the competitiveness potential of rural areas.
The third point has a strong consequence, which is the move away from the pure use of subsidies towards strategic investments.
The fourth point is crucial in understanding the success of some policies, such as the one you mentioned in Scotland. It is about a radical shift in governance from an old-fashioned, government-based view of rural development policy, where the main relation we know is basically a relationship between the ministry of agriculture and the farmer towards a new system on which rural policy is based, which is a multi-level governance system having at least three key dimensions. We have good examples that are working in terms of innovative governance of rural policy.
The first dimension is the top level, horizontal coordination, how different ministries can best coordinate to produce an effective rural policy. We have some examples.
The second dimension is vertical, that is, how can the knowledge that is retained by different levels of government, and not just government, be assembled? What kind of mechanism can foster the pooling of that knowledge, which is essential to successful rural development strategy?
The third dimension is the horizontal, local dimension, which has to do with local partnerships and what kinds of partnerships have worked in rural areas, especially in the context of rural poverty.
The reference that you made to Scotland is a spectacular example of success. You may be aware that the most remote part of Scotland, which is the Highlands and Islands, was the area that was lagging behind the most several decades ago. If you look at the main social and economic indicators of Scotland over the last 20 years, all these negative trends have reversed. Today, this is a fairly dynamic area of Scotland that has been successful in reversing out- migration. The education level in these remote parts of Scotland, for instance, is similar to urban areas. This is a good example, and we can discuss others. Finland provides another example. It shows that even rural areas that were considered to be places that were supposed to deal with poverty forever were not only able to move closer to national averages, according to main indicators, but are now thriving and have become sources of national growth and development.
José Antonio Ardavín, Administrator, Rural Development Unit, Organisation for Economic Co-operation and Development: Let me complement what Mr. Crosta has said with two things. One is that, effectively, we see in all OECD countries that the GDP per capita — at least at the regional level, which is the level that we compare throughout OECD countries — is lower in rural areas than in urban areas, in general.
We have been analyzing these specific patterns and going beyond the averages. We know that on average, this is happening; but we wanted to look more precisely into the differences because we found a number of regions that are very rural but have — as in the case of the Highlands and the Islands — important developments in terms of population, income and diversification. We have provided a number of graphs on this, but if you would like more information, we can provide it later.
We found that there were some key variables. One is diversification from agriculture in general — regions that have been able to create a wide array of industries, or sometimes specialization in certain industries, that can provide value- added.
I am thinking of an interesting example we found when studying Finland, which is an OECD country that has more advanced aging among its population. In rural areas, this problem is worrying policy-makers. In response, Finland created a cluster of ``seniorpolis'' to take advantage of the fact they have a higher concentration of older people than the rest of the country and the rest of the world. Finland is specializing in the provision of services for adult populations. Now they are producing products and increasing the population of that zone by bringing in young people to work in seniors' industries, such as sports, health and housing for older people. There are many examples like this that are part of a strategy of countries to integrate rural policy with a long-term vision.
Regarding what you were saying about income support policies, obviously, as Mr. Crosta said, compensating is not the solution. It is only one factor that would improve the standards of living of rural populations, but it is much better to have jobs or something else.
In the case of Mexico, which has important income support policies in rural areas, we thought and they think of that as a necessary policy that has to be there because there are huge disparities. Again, we suggested, in the review of Mexico, that it should not be taken as the solution, but only as part of the solution in some cases, because we think of four blocks. If you give income support, then it is support for diversification, for infrastructure, and for taking advantages of all other opportunities. That is the way we look at this type of policy.
Mr. Villarreal: If I may add briefly, we heard from you the importance of reflecting about sustaining populations in rural areas. I suggest that this issue be considered not on aggregate levels, but by different regions in your country — and particularly by age structures of the population. The situations faced by the young, by adults or by elderly people are different; and their incentives to leave the rural areas and go to urban areas are different.
Perhaps the young go in the short run to access better education opportunities, and also to look for jobs in the future that might be different from the ones their parents had. Adults may migrate for different reasons more connected with the current situation in the job market; and the elderly certainly need different special services.
This is a matter that perhaps we can address, with your guidance and orientation, when we pursue the rural review of Canada so that we can provide you with a finer grid of the aspects that these demographic trends have.
Let me add that 50 years ago or a century ago, the standard of living in rural and urban areas of most OECD countries was different. That difference has widened, mainly because of technological change. During the last decades, we have experienced a technological movement toward services being provided in networks that required larger numbers to be effective. This has affected electricity, telecommunications, particularly telephones and in transportation, even trains; everything tried to push to networks. Therefore, in urban areas where concentrations were larger, these things could be delivered more efficiently.
If you take only a few examples, such as cellular telephones, which occurred relatively recently in our history, that has drastically changed. Because of technological innovation, there is now the possibility of access to telecommunication services for inhabitants of even small towns.
The issue we still have to research more is how new technologies can be thought of for the efficient provision of services in rural areas. For example, if the young are migrating because of education, they can still, in some cases, receive very good education in rural areas. If the elderly need a specific service in terms of health care, they can also get that with new technologies.
I do not want to suggest that technology can solve all the aspects that we know are relevant, but this is an avenue that can bridge the gaps between rural and urban. It is important. It is not only the income, but also the access to public services. In that sense, technology can perhaps offer some possibilities of moving forward.
Senator Callbeck: You mentioned in your opening remarks that a review of rural Canada would likely start this year. I would like to hear you elaborate as to what would be involved in that review.
Mr. Crosta: Let me give you a framework for this review exercise.
A couple of years ago the OECD produced a publication called The New Rural Paradigm: Policies and Governance. In it, we tried to summarize the most promising directions we could observe across OECD countries in terms of rural policy. This book has been quite successful in generating a lot of debate. After that, we received a mandate from our member countries to review, country by country, all OECD countries at the national level to answer two questions.
These are the two questions we will be addressing if we do a rural policy review of Canada. First, what is happening in rural Canada? It seems banal as a question, but we realize, and central governments often agree with us, that they lack a strategic and holistic view of what is happening in their rural areas with respect to potential and needs. With this review, the first question we will try to answer through analysis, both quantitative and qualitative, will try to understand what exactly is happening in rural Canada and to compare those trends with what we observe in other OECD countries.
The second question is does Canada have a rural development policy? The answer is yes. It is a way to say, is the set of policies of the Canadian government today and of its sub-national parts appropriate to deal with the complexity and the heterogeneity of challenges that the analysis will highlight. This means looking at what we can all call explicitly rural development programs, but not just that because, as you know, they are often times a small part of the federal and sub-national budgets.
We are interested also in trying to understand, together with you, the impact of different sectoral policies on rural areas. For instance, how are rural proofing mechanisms working when we consider Canadian educational policy, health policy and infrastructure policy? What is the level of awareness of the different impacts these sectoral policies can have in rural and urban areas?
Finally, we will look at governance arrangements and try to understand the relevant factors impacting on rural Canada today. Obviously, we will not just focus on government, and certainly not just on the federal government. We will try to look at your government system and the contribution, which is very important in Canada and in most OECD countries, of NGOs, foundations, and, for instance, financial institutions. We realize that the role that financial institutions can play and are already playing in many OECD rural areas is very important. To take one example of a question with which we will deal under the governance chapter, many times there are difficulties of strategic communication between government and financial institutions which could work effectively together for rural development.
If we end up doing this rural policy review on Canada, it is likely to touch these issues. I do not know whether you would like to hear more about the methodology.
Mr. Villarreal: Mr. Crosta, please mention the usual methodology, how many months it takes, the role of peer reviewers and the contributions of the Territorial Development Policy Committee and the working party on rural development.
Mr. Crosta: The process is usually about 12 months and consists of four phases. The first phase is simple. We have developed a questionnaire, standard but then adapted to the country, where we ask the government to provide us with the information that the government thinks should be the base for this OECD rural policy review. This is an important phase because usually governments realize immediately that this kind of information, being very wide and touching many sectors, requires the formation of a team, usually called a national team, which puts together many actors. This is the first procedural aspect of these reviews.
The second phase is a study mission. We put together a team of OECD experts, external consultants and Canadian consultants, and we have a number of missions in the capital and in rural Canada.
The third phase is a drafting phase, putting together a report drawing on the input of different aspects and parts of the OECD.
The fourth phase, which is crucial, is a discussion phase, which starts with a discussion with you. Let me stress an important point of this rural policy review. This is not intended to be a normative exercise where the OECD has an ideal and measures the distance between you and the ideal and recommends where to go. That is far from our way of working. This has to be a joint exercise. The fourth phase is where we put the draft on the table to discuss it with you, to hear your feedback and to work together in order to make sure there is a fair consensus on the conclusions and recommendations of this report. It is then approved by OECD countries and it is made public, usually within 13 months.
Mr. Villarreal: It is not only the view of the OECD secretariat that is reflected in these reviews, but other OECD member countries during the discussion process provide experiences from their own policy background on what has worked or not, and under what conditions.
We would be glad to email to you a list of other rural reviews that we have done recently, for example, in Scotland, Finland, Germany, and Mexico. If you are interested, you can look at them and see their contents. If you have particular interest on subjects that we could incorporate in the review, we would gladly consider that in order to increase its relevance and utility for the Canadian people.
Senator Callbeck: I notice on your chart that in the second phase, 2005, you did a policy analysis on the Community Futures Program. Can you tell me when that was done, and what recommendations were made?
Mr. Crosta: I do not know what exactly it shows on the chart, but it was not an OECD analysis of this Canadian program. In the process of preparing the publication that I mentioned, The New Rural Paradigm: Policies and Governance, we asked countries to complement the series of policy analyses we did with what I would call a spontaneous input to the process. On that occasion, Canada, the delegates that represent your country in the rural working party, felt it was important for the OECD to take notice of this specific Canadian experience. We would not say that it was an OECD analysis with recommendations, but rather the Canadian government suggested to the OECD to share its experience with other countries. I hope that clarifies it.
Senator Callbeck: Yes, it does.
Senator Peterson: There are many dynamics in the rural-urban movement here in Canada. With younger people, it is seeking higher education and job opportunities. That can be slowed down or perhaps even reversed with facilities such as high-speed Internet and broadband.
With seniors, it is a lack of health care and public transportation. On health care, we tried a number of things, including first responders and air ambulance. I would be interested in observations you may have on that in other areas in the world, particularly if any other countries are providing any type of incentives for people to remain in rural areas rather than move to urban settings.
Ilse Oehler, Economist Public Service Delivery, Organisation for Economic Co-operation and Development: I would like to comment on some experiences that some countries have had with the provision of services.
Basically, three strategies can be grouped together. One is moving people to the services, such as air ambulances and so forth. For example, in Finland, having regular public transport has been costly for certain remote areas, so they have been joining in partnership with private taxis for providing this transport, and then having this provision as a private service. It is a combination; they are trying to combine different means of service.
Another strategy has been bringing services to the people, ``services on wheels,'' as they call it, such as libraries, shops, gyms, voting buses and other types of services.
Another strategy has been agglomerating services for people, such as multi-service-point outlets. That has made it easier for people to commute and to access those services on a one-stop basis.
Another strategy uses technological changes, as Mr. Villarreal mentioned, through information and communications technology to provide other types of services that have usually been exclusive to urban areas, more specialized services through this new means of provision, such as telework, more advanced education through the Internet, and telemedicine, X-rays being analyzed in urban areas. Multiple strategies have been addressed. That could provide some incentives for people to remain in rural areas, providing the services to enable them to remain in rural areas.
Mr. Crosta: As you may know, the OECD has an annual forum on rural development, which has taken place for the last five years. This year, the title is ``Innovative Service Delivery: Meeting the Challenges of Rural Regions.'' It is precisely about your question, about sharing experiences related to your concerns. This forum will take place on April 3-4 in Cologne, Germany. All 30 OECD countries will be represented. There will be four sectoral sessions, the first session focusing on educational services in rural areas; the second on health care and social services, particularly for remote and high-level poverty rural areas; the third on transportation and ICT services, or accessibility of rural areas; and the fourth session will be devoted to business and financial services in rural areas.
I would like to extend a very warm invitation to all of you to participate in the forum. It is a forum that is growing every year. In the past we have had a high level of speakers. When we had the forum in the United States, Alan Greenspan opened the conference. In the last three years, the Secretary General of the OECD and the minister in charge of rural policy has always participated in this forum. It is an interesting opportunity to discuss in detail and to share experiences with other countries. We have asked the speakers to bring to the table specific experiences with budgets, evaluation methods and results so that representatives from the different countries can go home with practical indications on measures that have and have not worked.
Mr. Villarreal: On the topic of services, special attention should be paid to the issue of extreme dispersion in certain areas. That is very challenging. One can more or less find solutions to some of these challenges in typical or average rural areas. Nonetheless, all countries have small villages or towns that are very inaccessible and dispersed, and they merit special consideration.
You also mentioned ways of stimulating the population to remain in the rural areas. We insist on providing them with a diversified local economy. Allow me, for the record, to mention some measures that we in the OECD think are not good ideas, although I suspect that you are not thinking about this in Canada.
We are now conducting rural reviews in two different countries, one in Eastern Europe and the other in Eastern Asia. In Eastern Europe, we are finding that the subsidies they give to farms, particularly to small farms, are considerable. Nonetheless, the productivity of agriculture there, because of the small-farm problem you were mentioning, is very low. It is becoming very costly for those countries to continue subsidizing these farms, while there are other sectors of their economy, both in the rural and urban parts of their territory, where productivity is much greater.
For example, nowadays, construction services have an enormous excess demand that has not met with supply. However, people do not want to leave farms, where they are less productive, to work in higher-wage activities, because they would lose the subsidies. This is a problem of congruence in public policy, which we will be commenting on in further detail in that review. Other countries just prohibit people from migrating from rural areas to cities, but there is no need to comment more on that, you know what I mean.
Senator Meighen: Welcome, and thank you for joining us today. I wondered if I could get an assessment from you of a specific program of the European Union.
One of our government ministers has been singing the praises of the EU LEADER program. He asserts that this been a great success. I wonder whether you could give me some details of the program and your assessment as to whether it has indeed been successful.
Mr. Crosta: Yes. LEADER is possibly the most well-known program in this area. It has been widely considered as best practice in terms of rural development.
I would separate the discussion into two parts: the actual results that this program has had on the targeted territories and the value of the LEADER method itself.
I do not think it is fair to say that the LEADER program has always been successful. As you know, the program has been widely implemented in the European countries. However, since the LEADER program did not cover all the regions, some European countries have invented a sort of national version of LEADER. For example, Spain and Germany invented similar programs, so it basically covered all of Europe.
I do not think it is fair to say that they have had positive results everywhere. However, it is fair to say that evaluating the results of these types of programs, especially in quantitative terms, is difficult. It is difficult because these are programs that are supposed to have a positive result in the rural community in general and that usually function with very little funds. Most of the time, the results that they obtain — at least in the analyses we have done — have been in the way people act, for instance, in the governance sphere. How do you measure that? Even in the cases where LEADER has been considered successful, I do not think that we have seen much convincing quantitative evidence of that. I think that is fair to state. It is also fair to state that given the nature of this program, we should not just judge it based on quantitative evidence of success.
I would now like to refer to the LEADER method. This method is now accepted in the European Union and is the mainstream approach to other rural development activities. Why is this idea taking form? It is taking form because we all realize the independence from the measurable results LEADER has in different regions. In terms of methods, it introduced innovative features. These types of programs in local areas were able first to have a fresh look at what should be the target of rural development. As you know, LEADER does not address administrative units. It was created to target functional areas, which was already an important innovation in world development. As you know, rural development dynamics do not know administrative borders.
Second, the LEADER method is based — I do not want to get into a debate about this program — on the effectiveness of a strategy. The fact that a rural community sits around a table and starts talking about a strategy is a powerful change but, again, not easy to measure.
Third — this was the most successful element of LEADER — it created an enormous amount of partnerships that today network amongst themselves. The LEADER networks in Europe are extremely powerful and they are an extremely powerful means of knowledge and information sharing. LEADER groups in Spain communicate with LEADER groups in Italy and the U.K. These are people who live in remote rural areas and who exchange ideas on what they do. Again, I am not sure it is easy to quantify the result, but in terms of the method, we consider it extremely successful.
The Chair: Before I move to Senator Mercer, I want to tell our friends from the OECD that Senator Gustafson has joined us. Senator Gustafson is the deputy chair of this committee and one of the longest members, in the measurement of years, of this committee. He is also a very fine farmer in the province of Saskatchewan in Western Canada. We are glad Senator Gustafson arrived in time to ask his own questions.
Senator Mercer: Thank you to our presenters for appearing this morning.
I am interested in the older people that live in our rural communities. In many cases, they make up the majority of the people in the community. I am also interested in gender differences.
Are you finding in some of your studies that the populations in many rural communities in the OECD countries are becoming predominantly female? What effect does that have on rural poverty? As well, what effect does it have on their ability to access transportation to larger centres to take care of things like health care and day-to-day activities?
We met with a gentleman from Australia the other day, and we talked about the aging community and rural poverty in Australia. He talked about a program they have to attract young people back to the rural communities in Australia. Do you have any insight into that program? Are there other programs in other countries around the world that help attract young people back to the rural communities?
Mr. Ardavín: We have been analyzing general population trends in rural areas using the categories that you mentioned, such as age, young versus old, gender, male versus female. This is ongoing research because we do not yet have detailed information for all countries; however, the research has provided us with very interesting insights.
First is the problem of aging. In one of the graphs from our brief, you will see that aging is a major trend in most OECD countries, but it is particularly visible in rural areas.
What is the problem with aging in rural areas? The problem is mainly when we talk about the separation of population. When aging is combined with separation, we have a conflict of policy. There is no scale available for providing health care and social services to the aging population. This was one of the main issues that Finland was interested in knowing. They have been active in pursuing, as Ms. Oehler told us, many options so that if people want to stay in rural areas, they will have the opportunity to be connected or to have these services become mobile. Sometimes we try to concentrate them in perhaps rural populations, but at least where the scale is used to provide them with a good retirement and good life as senior citizens. That is one issue.
Concerning the gender issue, we have found in many countries — at least, this was the case in both Scotland and Finland — that the proportion of males is greater than the average national level. It is clear that Finnish women have a propensity to migrate while Finnish males are still much more engaged in primary activities such as forestry, which in Finland is very important. Women who have a very high level of education, for example in Finland and in Scotland, move more easily to urban areas. This creates a lot of problems for males in those countries because there is also the social inclusion problem, and they do not find enough opportunities in other sectors.
The final issue is about attracting young people back to communities. We have found that we cannot stop the trend of the younger population moving to urban areas, nor should policy stop this trend because it is part of the general expectation that the young population in rural areas have about their futures. However, we have found that in many of these regions, they do come back when opportunities in terms of services and diversification of the economy allow for living outside of the city with a better quality of life. Rural populations are used to having a higher quality of life related to nature. Therefore, if they receive these opportunities, they will probably not return to very remote places, but they will return to rural communities that are close to urban areas.
Mr. Villarreal: I have a few additional comments. We will go more in depth on the situation of women concerning the demographics of Canada's rural areas in our review.
Mr. Ardavín referred to a well-developed country like Finland. Let me mention a different situation; namely, Mexico. Among the elderly in Mexico, you would expect to have a growing proportion of women because life expectancy among females is higher.
The problem in Mexico is that because of migration, both domestic and international, in small towns of about 10,000 to 15,000 inhabitants, the proportion in the age group of ages 19 years to 25 years indicates that there are 121 women for every 100 males. That poses an entirely different situation than among the elderly. This is still the reproductive age and when households are forming. All the support networks that were traditional in communities are altered. The empowerment of women is an important issue. We do not know about that specific gender issue on the demographics of rural Canada. We promise that we will study that more.
The issue of transportation is important: Providing opportunities for commuting for the rural population to contact other centres where agglomeration intensity can satisfy some of their needs is important. Vice versa, it is useful to economic diversification. You can then produce different things in rural areas that can be transported more easily or, for example, facilitate tourism. That is another issue to be considered. However, if a population is aging rapidly, you need to make careful calculations on the social rate of returns on these investments in roads and other means, because they are not marginal.
In the case of schools, for example, in many countries where the number of younger children is diminishing, they are facing the problem of how to adapt the existing infrastructure in schools to different needs when the youth are also of different ages. When facing demographic changes, perhaps you would not like to over-invest in road transportation while other means like air transportation to far away towns can serve. This can be studied in terms of the specific situation and rates of return.
Senator Gustafson: I have one question about older farmers who are having a major problem making the transition, especially those farmers in their late fifties and sixties. If they end up selling their farm because the farms are getting bigger, or turn the farm over to their son or whatever, in Canada we do not have a good program to help them make that change in their lifetime.
Do you have something that works for them, some form of insurance? We had a NISA program here that worked well but we have been changing programs so often that none of them are stable enough to deal with the problem. It is a major problem. They find that they are not suited for other jobs, and there are real difficulties in that area. I would like to hear your comments on that.
Mr. Villarreal: You are absolutely right, senator that not many countries have put in place programs to specifically address this problem.
Two examples come to my mind now. In some countries in Northern Europe, the governments are facilitating farmers who are growing older. They can shift their production, for example, into renewable energy generation, not necessarily biofuel, but solar, wind, and so on. They have adapted the regulations in the electric sectors so that the surpluses of energy that they produce beyond their own local needs can be sold to the villages or other networks. Therefore, they have a sustainable income while, at the same time, their labour effort is lower, matching their biological possibilities.
A different example is from Mexico. There, because of migration, many elderly people in rural areas are left without younger children. When looking at the future they may consider that the only thing to do is to sell their land, as you mentioned in the case of Canadian farmers. Often, that is a painful decision. The people in Mexico are considering creating a fund for commercial, sustainable forestry production. The farmers do not sell the land but put it up as capital or ``shares'' as they say in Mexico, to the fund. The overall production of wood and forestry products, in a sustainable way, when sold, is distributed to those who put up the land as capital.
We would like to research this more, now knowing your interest. I am sure that other countries have other interesting experiences. If you agree, we would like to include a section in the rural review of Canada. That is certainly important, not only for you but for other countries as well.
Mr. Ardavín: Although we have not studied this in particular, in the case of Finland, when we were studying the LEADER program there, to some extent it does facilitate the transition for older people. Seniors run that program in Finland, considered one of the best practices among the LEADER community. They have many young people involved, but since the majority of people are older in the rural areas, seniors are engaged.
In Finland, one of the things that make this particular program successful is that they involve the business organizations in the LEADER committee. These business organizations, with money from LEADER, help some of the farmers or the people to engage with the community to improve the quality of facilities for tourism or things like that. That provides incentives for the older population not to lose their land but to transform it into a different activity. It seems they have been quite successful in helping with this transition with small money amounts. As we heard, the LEADER program does not have a lot of money; however, it does provide small amounts of seed money that can help a community change into a diversified product.
Mr. Villarreal: In the two examples I provided from Northern European countries and Mexico, let me highlight some underlying aspects that are consistent with what Mr. Crosta explained before as the new rural paradigm among OECD countries.
First, the two examples to provide sustainable income for the older farmers highlight that it is productive activities as the source of income and wealth that are to be encouraged in those cases. It is not a direct subsidy to a farmer who is less productive in agriculture, and because of age we are considering that. It is a way of generating, through production activities, the income to pay for that.
The other thing is that if subsidies are to be used, perhaps they are more valuable to provide other types of support for rural communities. This support could be for health care for elderly women, which is very costly and medical interventions and treatment for the elderly, which is far more costly than for younger people. It is difficult to finance that from personal fees. That is a more appropriate way of directing support to rural development. Again, we should highlight that rural development is not only production but also community development and sustaining a way of life. We do not necessarily make an equation that ``agriculture equals welfare'' in rural communities.
Senator Gustafson: The problem is if you work for General Motors and you get a pension, it is clearly indicated that you earned it. If you farm all your life and you sell that farm, that is just another farm out of the system. You may live pretty well on that, but I am thinking about the ongoing possibilities for agriculture.
Worldwide, I think we have not taken a good look at that issue. In Canada, there is no retirement system unless you prepare it for yourself. Certainly, some farmers live poor and die rich when their land is sold, but that is the end of the farm, and that is moving us to bigger and bigger corporations all the time. We might have to accept that — I do not know.
Mr. Villarreal: Coming back to the example of facilitating how some of these farmers, as in Northern Europe, go to renewable generation from solar or wind, your argument — which is very valid and realistic — translates into how to finance the equipment and the investments for that energy generation. That is something that certainly needs to be considered.
In general, the lack of pensions for many workers that have worked independently in many countries is enormous. You are pointing out a real fact. In those cases, some countries, at least as a goal, want to provide a safety net to avoid these people falling into poverty. If the finances of the country do not allow them to provide a pension that reflects the income of a person's productive working years, at least a safety net to avoid poverty is necessary.
You are correct. These are very real and dramatic problems in many countries.
The Chair: Thank you very much. Senator Mahovlich, did you want a final word?
Senator Mahovlich: I wanted to mention that a positive note in Canada is Elliott Lake. It is a retirement community that used to be a mining community, with uranium mines. Because the demand for uranium went down, they had to close all the mines. They did not know what to do with the town, so they turned it into a retirement town and built a few golf courses. I think your people should look at it.
Mr. Ardavín: What is the name of the place?
Senator Mahovlich: Elliott Lake in Northern Ontario.
The Chair: Where Senator Mahovlich comes from.
Senator Mahovlich: That is right, and it is very rural.
The Chair: This has been an extremely interesting morning for us and afternoon for you. I want to thank you all very much for joining us on this subject.
We are coming close to putting out what will be a very large report, because we have been at this for some time now. It was important for us to hear not just from people within our own country, but from those like yourselves, who are in a part of the world that is very engaged in this activity.
We thank you and wish you all the very best. We will make sure that we send you copies of our report.
Mr. Villarreal: Thank you very much. We will continue to be at your disposal for whatever information or views you need.
We had an opportunity to read the report that you produced. It is very good. We also learned a lot from that. We look forward to maintaining a fruitful collaboration with you.
The committee adjourned.