Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 4 - Evidence - Meeting of November 3, 2011
OTTAWA, Thursday, November 3, 2011
The Standing Senate Committee on Agriculture and Forestry met this day at 8:07 a.m. to examine and report on research and innovation efforts in the agricultural sector.
Senator Percy Mockler (Chair) in the chair.
[English]
The Chair: I welcome you to this meeting of the Standing Senate Committee on Agriculture and Forestry. We want to take this opportunity to thank you, Mr. Clarke and Ms. Cox, for accepting our invitation. There is no doubt that your presentation will enhance our report and we will have the opportunity to ask questions.
[Translation]
Honourable senators, we will take turns introducing ourselves, if you do not mind.
I am Percy Mockler, a senator from New Brunswick, as well as the chair of this committee.
[English]
I will ask the other senators to introduce themselves.
Senator Mercer: I am Senator Mercer from Nova Scotia.
[Translation]
Senator Robichaud: Good morning. I am Senator Fernand Robichaud, from Saint-Louis-de-Kent in New Brunswick.
[English]
Senator Mahovlich: I am Senator Mahovlich from Ontario.
Senator Plett: My name is Senator Plett and I am from Manitoba.
Senator Ogilvie: I am Senator Ogilvie from Nova Scotia.
[Translation]
Senator Rivard: Good morning. I am Senator Michel Rivard, from The Laurentides, in Quebec.
[English]
The Chair: The committee is continuing its study on research and innovation efforts in the agriculture sector.
Today we are focusing on understanding innovation in the agriculture and agri-food sector from the producers' perspective and point of view. Mr. Clarke, I am sure you have had the opportunity to look at our order of reference. We also want to thank you for the breakfast you sponsored on Parliament Hill. We have learned a lot and had the opportunity to sit with stakeholders and share information. You were invited so that we can have your point of view and vision on emerging markets, both nationally and internationally, food inspection and food diversity.
We want to officially recognize Mr. Clarke, Chair, Egg Farmers of Canada, and Bernadette Cox, Manager, Corporate and Public Affairs, Egg Farmers of Canada.
An interesting fact is that in 2010 Canadian egg farms produced more than 7.6 billion eggs. Canadian egg farmers range in size from a few hundred hens to more than 400,000. I am told Mr. Clarke will make the presentation. Thank you for accepting our invitation, and for sharing your knowledge and industry information with us.
Peter Clarke, Chair, Egg Farmers of Canada: Thank you for the kind comments in your opening comments and your reference to the breakfast we had on the Hill. It was a great opportunity for us as well as producers to meet fellow senators and other politicians from across the nation. It is a great way for us to interact. We take great value with it. We want to continue it and hope to in the years to come. Thank you for the opportunity to present to you this morning.
I call the Annapolis Valley of Nova Scotia home, where together with my son and family we produce eggs and started pullets. We have been farming there for five generations. Over that time we have seen a lot of changes and challenges. Most of those are for the better.
My family is one of 1,030 farm families operating regulated egg farms in all provinces and the Northwest Territories. These farm families and the graders and breakers that process our eggs employ about 10,000 people.
Egg Farmers of Canada works with provincial partners to fill the supply requirements for eggs. We operate industrial product, marketing and research programs, as well as on-farm food safety and animal care programs.
We have three recommendations for the committee's consideration. First, that governments enhance their programs to preserve rare and uncommon lines of poultry strains and to continue to emphasize the need to improve the way avian genetic material is preserved.
Second, that provincial and federal governments coordinate to ensure efforts to promote small, alternative farm enterprises do not outweigh the need for safe production and processing practices.
Third, that governments provide financial support for research into developing alternative livestock feeds and making better use of existing feed alternatives.
Before I get into the specifics of our recommendations, I would like to tell you a bit about our research program at Egg Farmers of Canada. Our research program is built on solid collaboration with our partners, which include farmers, processors, researchers and organizations such as the Ottawa-based Canadian Poultry Research Council and the Egg Nutrition Center in Washington, D.C.
We review priorities with provincial egg boards at least annually. Before granting research funds we ensure the proposed projects are consistent with those priorities.
Our application submission and review process is led by our board of directors' research committee, which provides feedback to the research community on areas of investigation we think are important to our industry.
One of our core sponsorship strategies is the development of research chairs to address industry challenges through long-term relationships with various Canadian university researchers. Through multi-year funding arrangements with these universities, we provide stability that permits longer-term study, while helping to develop graduate students who may become the poultry experts of tomorrow.
For example, we sponsor the Egg Farmers of Canada Chair in Poultry Welfare at the Ontario Agricultural College and the Economic Research Chair on the Egg Industry at the University of Laval. One in human nutrition is also pending.
The long-standing relationships among EFC at the national level, the egg marketing boards at the provincial level and egg farmers themselves facilitate the communication of our industry's needs to researchers, as well as results from research back to the industry as a whole. Our governance structure with a board of directors made up of producer, processor, hatchery and consumer representatives positions us to share information throughout the industry in a timely manner.
I would like now to address the three areas of your terms of reference: developing new markets, enhancing agricultural stability and improving food diversity and security.
First, on the new markets, markets are evolving due to changes in consumer preferences. Marketing research, including the collection of analysis of consumption data and consumer attitudinal surveys, tells us how preferences and markets are changing.
Like others in the agriculture industry, we see a need to respond to a wide range of health concerns. For example, our work with the University of Manitoba is examining the potential of folate in eggs to reduce risks of developing heart disease or neural tube defects in babies, while work with the University of Alberta is examining the capacity of certain nutrients in eggs to reduce blood pressure.
We are learning through this research, as we did a generation ago in the development of the omega-3 egg, that the nutritional value of the egg begins with the nutrition of the hen, which underscores the importance of multidisciplinary approaches to research projects.
While responding to animal welfare concerns through research, we are establishing niche markets and preparing for future challenges. Research on furnished cages has been initiated at three universities to provide more information on best management practices, costs and willingness of egg consumers to pay.
Second, regarding sustainability, sustainability of the egg sector can be demonstrated simply by how successful the family farm is in the long term. Most regulated egg farmers are second- or third-generation farmers that are confident their children will be able to build on the culture of continuous environmental improvement taught to them by their parents, despite a wide array of production and marketing challenges.
Financial stability and key economic indicators for the Canadian egg industry are being investigated by Dr. Maurice Doyon at the University of Laval. His areas of research include cooperative structures for marketing cooperation and coordination, price discovery mechanisms and bottlenecks for dealing with economical and technological risk.
The field of poultry genetics has enormous potential for contributing to food production, food security and sustaining the industry. Maintenance of genetic material forms the basis for future opportunities and scientific progress, but requires systematic conservation. There are only a few breeding companies now generating the major strains of hens used in egg production worldwide, and the genes upon which today's highly productive poultry strains were developed are at risk of being lost.
We recognize that Agriculture and Agri-Food Canada has been doing important research on ways to reserve poultry genetic material and that universities are maintaining some rare or uncommon poultry lines. This brings us to our first recommendation: that governments enhance their programs to preserve rare and uncommon lines of poultry strains and to continue to emphasize the need to improve the way avian genetic material is improved.
I will now address improving food diversity and security. As the world's population continues to grow, the access to safe, healthy and domestically produced food becomes increasingly important. Regulated egg farmers deliver exactly that to Canadians by producing eggs that adhere to the national HACCP-based, on-farm food safety program, Start Clean — Stay Clean. As consumers become further removed from the farm, consumer education about sustainable commercial agriculture as a response to population growth and food safety and environmental challenges becomes essential.
There is an interest in urban or backyard agriculture. This seems to be growing, together with interest in local food security; but this needs to be tempered by the known and emergent health and public health risks. We are concerned that existing scientific knowledge is not being appropriately conveyed to both proponents and adopters of urban or backyard agriculture.
Therefore, we recommend that provincial and federal governments coordinate to ensure that the efforts to promote small alternative farm enterprises do not outweigh the need for safe production and processing practices. The policy direction of small business development and municipal food security programs must not be to the detriment of the food safety policies and programs found within agriculture and health ministries.
Another challenge is ensuring the affordability of food. Increased biofuel demand, while creating an important new market for crop producers, is placing upward pressure on the price of livestock feed, and this does impact consumer prices. As the need for alternative sources of energy increases, so too will the need for research into alternative feed sources for livestock and how to make better use of existing alternatives, such as the by-products of biofuel manufacturing processes. Therefore, we recommend that government provide financial support for research into developing alternative livestock feeds and making better sense of existing feed alternatives.
Mr. Chair, those are our recommendations and we look forward to the questions from the committee.
The Chair: Thank you, Mr. Clarke. I am aware that some senators will be leaving a bit earlier and coming back. Therefore, I will start with Senator Ogilvie, to be followed by Senator Robichaud.
Senator Ogilvie: Mr. Clarke and Ms. Cox, it is great to see you here. Your home location is one of the most beautiful parts of Canada. I have some knowledge of that area.
I was impressed with your presentation, Mr. Clarke, because I think it is probably the first one we have had that has truly emphasized the importance of research and knowledge into the fundamental nature of an important part of the agriculture sector. I thought you focused on three areas that, once you outlined them, seemed to be critical parts of the future.
I wanted to ask for a little more information as background on the genetic diversity. Clearly, your outline of how only a few producers of genetic material provide an ongoing supply to the industry raises that aspect.
To what degree is the research done on your behalf in the agricultural colleges and universities to inventory the major genetic characteristic of poultry in other countries so as to be aware of the widest range of genetic diversity?
Second, I think you mentioned four major producers of poultry — perhaps I have that number wrong, but it was in that vicinity. Are they active in pursuing this issue, in their own interests and on behalf of the industry as a whole, through your organizations, preserving genetic diversity and checking for characteristics that may be identified as being important to the future that may also be found in species in other parts of the world?
Mr. Clarke: Regarding inventories of poultry stock, I believe a fair amount of knowledge goes across the country now about what is being maintained in different universities. As to whether there is one common suppository for all that information, I am not sure. I do know that Dr. Fred Silversides, from Agriculture and Agri-Food Canada, could probably answer that question for both of us. He has been very much involved in knowing about genetics in the poultry industry to ensure that these breed lines are preserved.
I know that universities are finding it more challenging to take care of and to finance the taking care of these poultry lines. I believe from the general population's point of view there is not enough knowledge and understanding of how critical it is to keep those lines alive and well. In the industry, we do recognize that if a catastrophic event happens that wipes out a major portion of our genetics, we will have to go back to those lines. You have to go back to the jungle fowl, so to speak, to bring up those lines and bring them forward. Again, I believe the inventory is probably there, but I do not know that it is complete.
With regard to the small number of companies that are carrying on with breeding today, for the most part those are private companies, companies that we do not have a whole lot of knowledge about, such as what lines they are carrying on or to what degree they are maintaining a history of lines. I am sure they do everything to preserve what they feel is necessary to be able to project their lines going forward, but going back to the history of lines, I am not sure to what degree they are carrying that on. I believe they find it important for their own private interests to maintain it, but I do not know outside of that to what degree their interests are maintaining.
Senator Ogilvie: Thank you very much for that, Mr. Clarke. Subsequently, if you come across any information in the organization's file with regard to even the international listings of poultry diversity, we would welcome it, but it is not a must-do. If you do come across something, we would welcome it.
Mr. Clarke: Understood.
Senator Robichaud: Mr. Clarke, thank you for your presentation. You say research has been done, and I understand that the producers have contributed to that research. What is the method? Is there a check-off in that they have to pay for the production? Do they do so reluctantly or are they happy to be involved in research?
Mr. Clarke: I was involved quite a number of years ago in encouraging my fellow producers in Canada to recognize the importance of research and also to recognize that we needed to contribute in a way that was perhaps an ongoing method. At that time, a group of us from the research committee, with the support of our board of directors, put out a plea to our producers to have a line of check-off. It is in our levy formula, and it is a quarter cent per dozen produced in Canada that goes toward research. That money then becomes available for our research committee to fund research projects like the ones I spoke about earlier.
Did the producers do so easily? Perhaps not at the beginning, but I must also say that they soon recognized the importance of research and found out just how valuable it is with the return and how important it is to also help support our research facilities and our students across the country. They see value in it, and now they do not have an issue with supporting research in this manner.
Senator Robichaud: You mentioned students who do research. Are you having problems finding people to do research in your field?
Mr. Clarke: It seemed that a few years ago there were not a lot of students interested in poultry research. Again, this was another reason for us to try to find ways of providing incentive, as we do through the research chairs and those programs.
We are finding, and I believe the research chairs would support this, that young people are recognizing this is a real opportunity for them as students. In addition, we see it as a real opportunity for those students to become involved later on over the years in further research or in some aspect of our industry.
Today, I think things are shifting in that poultry research is now becoming more of an interest and more students are becoming involved.
Senator Robichaud: That is interesting. From your presentation and the emphasis you put on protecting genetics, in your line of business, that is quite sensitive, is it not? Whole flocks can be wiped out quickly if anything happens to a particular producer.
Mr. Clarke: That is correct. It is an issue that is not an issue until it happens. If for some reason our genetic lines become significantly threatened and there is the potential to wipe out a certain line, then you recognize how important it was to try to have all that background breed and genetic information at your disposal in order to try to bring those lines forward again. If it does not happen, it is not an issue; but if it does happen, then it is something you need to deal with.
[Translation]
Senator Rivard: Welcome and thank you for your very clear presentation. It was a great overview.
I am going to ask you a question I ask just about everyone who appears before us on the topic of agri-food, among others. Do Quebec's egg farmers belong to your association?
[English]
Mr. Clarke: Most certainly. All regulated egg producers across Canada are part of Egg Farmers of Canada.
[Translation]
Senator Rivard: I am happy to hear it. The dairy farmers have their own association, the UPA, and therefore do not belong to a Canadian association. That is why I wanted to check with you right off the bat.
You also said that annual production was in the neighbourhood of 7.6 billion eggs. Do you sell locally only, or do you export if you have a surplus? And if you do export, which countries do you sell to?
[English]
Mr. Clarke: Our markets for the most part are local, but when I say "local," I mean Canadian markets. We do regulate because of supply management; we regulate the supply and demand of our product to the industry. There are surpluses, but our surpluses are eggs that are destined for further processing markets. Those are the non-shell table market eggs.
We export very little egg or egg products mainly because of supply management and our border controls.
[Translation]
Senator Rivard: What about waste on your farms, be it manure or what have you? Do you reuse it in some manner? Or is it buried? How do you process waste, whether it comes from the eggs or the chickens?
[English]
Mr. Clarke: I believe there were a couple of questions there. With regard to waste — manure, for example — I believe that is one question you are targeting.
Most of the farming and agricultural communities across Canada today are involved in agricultural programs that identify their cropping activities and, therefore, what is necessary and what needs to be done with regard to fertilizing the land. There are nutri-management programs on most agricultural properties across Canada.
The manure from egg farms is either used on their own farms in concert with that program, or in some cases, the manure from our operations is sold to other farmers as well. That is for the most part.
The disposal of the birds themselves usually goes to a further processing-type facility.
I think you were also perhaps wondering about egg shells and so on as a by-product of further processing. That is a form of calcium that becomes available to certain entities across the country; as well, I believe some of the processing factories have ways to deal specifically with egg shells, which I am not completely familiar with or an expert to speak about.
[Translation]
Senator Rivard: What you are telling me is that things have always worked that way. Have there been no government investments to encourage producers to reuse waste or find new markets? Have you been handling waste the same way since the beginning of time or for one or two generations?
[English]
Mr. Clarke: Sure. There are certainly ways. Some of our producers across the country are involved in different types of manure projects that will generate power. There are certainly different ways of composting and using manure for different types of processes, such as for fertilizer.
Yes, definitely there has been investment on the parts of government for diversity with regard to waste products, as well as investment from our producers. Yes, there are definitely different ways it is thought about, and I am sure there will be new ways coming to us in the future.
[Translation]
Senator Rivard: Current government R and D programs usually have an average life span of five years. Is that sufficient, or should you have a program with a longer time frame, seven or ten years, for instance?
Where do you stand on that?
[English]
Mr. Clarke: Sometimes it is more difficult for some of our smaller producers to be able to have an uptake on some of the opportunities of the programs that are offered. Therefore, if we had a wider window for some of those producers I am sure they would find it an advantage. If the opportunity was there to have that wider window, that would be looked at as a good thing.
Senator Mercer: Mr. Clarke, welcome to the committee. It is always good to see another Nova Scotian.
The egg production in this country is a regulated industry under supply management that seems to be working very well and produces 7.6 billion eggs. We are not importing eggs and we are not exporting, but we are taking care of ourselves, which is a good thing.
You did mention in your presentation the Egg Nutrition Center, which is based in Washington. Could you expand on the role of the Egg Nutrition Center in Washington and the role of your association? Do you contribute financially or subscribe to the research that comes out of there? What is the connection?
Mr. Clarke: The Egg Nutrition Center is an organization that we as the Egg Farmers of Canada sought and looked into as an opportunity for us to be able to do things together. In many areas of research, there is not a need to duplicate some things, and the Egg Nutrition Center looks into things such as cholesterol in eggs and cracking the level of what is acceptable in the public forum today in regard to acceptable levels of cholesterol.
We financially support certain research projects at the Egg Nutrition Center because, in a way, we feel it is a very good investment for us because it saves the duplication of it happening somewhere else. This type of research would have the same outcome regardless of where it would be carried out. That is our involvement there.
Senator Mercer: Are there specific outcomes that you can refer to that have come out of the Egg Nutrition Center? Were they involved in perhaps developing the omega-3 egg?
Mr. Clarke: One of biggest ones they have been working on is the acceptable cholesterol level of eggs, cracking it and having it accepted as reduced level of cholesterol. I can provide that information, but I do not want to suggest what it would be and be incorrect.
Senator Mercer: I appreciate that, and anything you provide will be helpful.
I did not bring my calculator this morning, but 7.6 billion eggs are a lot of eggs. At a quarter of a cent per dozen to research, what is the total dollar amount that goes to research?
Mr. Clarke: I believe it is a little bit over $1 million a year, roughly.
Senator Mercer: That is a significant amount in that sector when you are focused purely on eggs.
You said in your presentation that there are only a few breeding companies generating the major strains of hens used in egg production worldwide, and the genes upon which today's highly productive poultry strains were developed are at risk of being lost. For the purposes of the novice like me and the viewers watching us on television, could you tell us why it is at risk, and how risky it is?
Mr. Clarke: The risk, as we see it, is when you bring your major production breeds down to a very few genetic lines and you rely on those genetic lines to go forward for your future production and genetics. If something happens in the world today that challenges that genetic line in regard to its resistance against disease and becomes such a significant challenge that it potentially has the opportunity either to wipe out or dramatically reduce the numbers of that breed, then, as I understand it, as a layman, farmer and producer, you have to go back to the previous genes and genetic lines to try to bring forward a strain that is resistant to that potential challenge.
Unless you carry on those genes and preserve the genes of those older birds, even way back to the jungle fowl of Africa, in a way to be able to go back and bring them forward again, if need be, then you cannot do that if you do not have them either stored or physically on site. That is the challenge.
As I said earlier, without something catastrophic happening, you perhaps do not see it as a potential challenge, but, truly, it could become a challenge, and we recognize that. That is why we say it is so important to keep the genetic lines in one form or another so if you need to you can go back to them.
Senator Mercer: One mistake and we could all be in trouble with this.
Mr. Clarke: Yes, a challenge is a challenge, and to what degree, it always remains to be seen, but we are raising our concerns that we need to keep these lines in case a challenge does occur.
Senator Mercer: Having 1,030 farm families in egg production in Canada is a significant percentage of the people in the agriculture sector. It is not chicken feed, if you pardon the pun.
The government is anxious to enter into agreements with other countries and groups of countries in free trade, and when we get to those talks, one of the things they always bring up is supply management. Are you concerned, as the head of the egg producers in Canada, that in the discussion, particularly with the European Union, as we talk to them about free trade, that supply management may be part of the negotiating and something that the government might consider giving up to get that free trade agreement with the EU?
Mr. Clarke: All political parties have supported supply management, even going back to the house motion. Therefore, I still believe that there is significant support for supply management in Canada. I have to understand that what I am being told and what is indicated to us that supply management is not part of a trade deal, and it is not on the table for negotiation. Therefore, I need to respect that.
You ask whether I am concerned. I have always been concerned about keeping supply management because it is such an awesome vehicle for our farmers in supply management to have an opportunity to get a return on their investment and for the younger generation to continue in the enterprise that has been very good for all of us.
Therefore, I am always a strong supporter of fighting for that, regardless of what forum I am in, and wherever I have the opportunity to support it, I will. I believe it has been a vehicle for us in agriculture that has added significant stability, not only to the farm but also to many spinoff communities across the country, in every province and territory.
Senator Mercer: Thank you very much.
Senator Plett: Thank you, Mr. Clarke, for being here today and for your report. Most of my questions have been answered, either through your presentation or through other questions that were asked.
To carry on a little with what Senator Mercer was asking about supply management, I know that there are quotas and so forth, and we have a number of good poultry farms in the province of Manitoba. I would like the quota system explained a bit. Does a quota system work on a hen or the number of eggs? How do you obtain quotas? Could you walk us through that?
Mr. Clarke: In the egg layer industry, the quota system is on a per-bird basis but is also related to the number of eggs produced from the bird. We always keep in tune with supply management, what the industry needs to produce and what the consumer public is demanding of eggs.
Quotas are established on a national basis and are distributed to the respective provinces and territories across the country. Those provinces and territories then distribute to producers. Quota is owning, and having quota is a privilege of a farmer. Production levels are allocated from each province to that quota holder, and then it becomes his right to produce the eggs from that particular number of birds.
Senator Plett: I could not buy your quota and have those birds in Manitoba? I could not move that to Manitoba?
Mr. Clarke: Probably not. You could purchase my quota, but my province — like any other province — would say, "We want those produced in that province." It is an economic generator in that province. Manitoba would not want the quota to be moved to Nova Scotia for the same rationale. However, you could purchase my quota and operate the facility in Nova Scotia.
Senator Plett: Senator Rivard was concerned that Quebec be part of your organization. I am concerned about the share of quota that Manitoba receives. Could you tell me what percentage of the national quota Manitoba has?
Mr. Clarke: No, I cannot because I do not know off the top of my head. I apologize for that. The allocation is in regard to when we first struck as a system across the country, and all provinces were then part of the system. At that time the amount of birds in your province, like every other province, was identified. We now have a formula. If a new quota needs to be allocated, it is allocated on a formula that all provinces and producers agreed to at a time. That is maintained and followed today. On a new allocation, Manitoba would receive a certain share as would any other province.
Senator Plett: Would you be able to provide us with that information?
Mr. Clarke: Absolutely.
Senator Plett: Thank you. You mention in your presentation that some of your research is done at the University of Manitoba. Will you explain to me what research is being done there?
Mr. Clarke: It would be nutrition or human health nutrition. I believe Manitoba is also involved in feeding nutrition for the birds. Those are a couple of areas they are specifically involved in.
Senator Plett: My last question: Every now and again you see people who are very concerned about the well-being of our animals, and I sometimes think more so than the well-being of us. You hear about people wanting to go back to free-range. I walked through some barns and think some of these laying hens have a pretty good life, but not everyone agrees. Could you tell me what pressure is being put on about going back to free-range? Is that a factor?
Mr. Clarke: It is a factor and consumer choice drives a lot of what we do. If consumers demand eggs from a housing type of facility, producers will try to provide that. If a certain group of consumers want them from free-run, free-range or enriched-type housing, producers will try and fulfil that requirement. There are opportunities and challenges in all different housing systems, which needs to be recognized from producers' and consumers' points of view. If you become informed — about the gives and takes, pros and cons — then the choice is up to the consumer as to what they want.
Senator Plett: Would I be able to walk into Safeway and identify eggs that came from free-range versus in cages?
Mr. Clarke: To speak of Safeway specifically I am not sure, but for the most part you should be able to identify that.
Senator Plett: Interesting, and I would like to try the difference between the two eggs.
Mr. Clarke: From my point of view, you will find zero difference in regard to the flavour or nutrient value of those eggs.
Senator Mahovlich: Which country in the world is most in demand for eggs? Are they all looking after their own egg supply? I was in Croatia with my wife. I was in my uncle's living room and a chicken crossed the floor in front of us, went out the door and into the barn. About five hours later we came back for dinner and had a kind of Colonel Saunders breaded chicken. It was very fresh. It was that chicken we had for dinner, so it was free-range and tasted pretty darn good. In the world's supply, I was wondering if there is a demand for eggs where the populations are in Russia, India or China? Should we look toward exporting chickens and eggs?
Mr. Clarke: Some countries have an excess of production of eggs and perhaps poultry as well. I am certainly not going to be able to speak about chicken. However, certain countries would be net importers and net exporters. Different countries in the world are definitely of that nature.
In regard to looking at the opportunity to export eggs, I go back to again the program we have in Canada of supply management, ensuring the food is safe for the Canadian population or anyone who visits. We are not looking to have the opportunity to export our fresh egg products.
Senator Mahovlich: Was there a time in history when eggs were a problem here in Canada? Such as whether or not they were good for you for? Was there a disease?
Mr. Clarke: There have been challenges for poultry flocks with avian flu, but I am not aware of a time in history when our eggs have been unsafe.
Senator Mahovlich: Since I was a young boy — which is going back quite a while — has the egg today improved from the egg I was fed? Is there less cholesterol?
Mr. Clarke: There would probably be a little reduction in the level of cholesterol. Is it much improved? There are eggs enhanced with such things as omega-3. The point to remember is the egg contains all the nutrient values that are necessary to sustain and grow life. In that respect, the egg 30 years ago and the egg today are the same. Unless you make significant changes to a feeding program, the nutrient value of that egg — except for the reduction of cholesterol — is for the most part the same as it was when you were a boy.
Senator Mahovlich: The way my wife goes about solving the problem of cholesterol is that she has an egg white omelette, which they serve now. Does the egg have that much cholesterol in it? Is that helping her?
Mr. Clarke: I am not sure exactly what she is doing or how she is handling things in order to reduce cholesterol levels.
Many years ago, cholesterol in eggs got a bit of a bad rap. Today, research will tell you that cholesterol levels in eggs are acceptable. The number of eggs per day that dieticians and doctors would say an uncompromised individual of the public could eat today is a well-established number for any consumption to be had.
Senator Mahovlich: Thank you.
Senator Robichaud: How much cooperation is there between egg producers and chicken producers in research, let us say on feed or any other matter that might affect the birds?
Mr. Clarke: Where there are opportunities for us to work together we certainly will, except with nutritional concerns. Feeding values and nutritional formulas for say the broiler industry or the turkey industry and the egg layer industry are significantly different. Therefore, there is probably not much collaboration with regard to the same types of formulas.
Where there is collaboration is on the feedstuffs themselves that are going into the programs and in us recognizing where there are opportunities for potentially new or improved processes, to come up with different alternatives that might replace some of the mainstay alternatives in our formulas today. Those would offer opportunities where we can and would work together to look at avenues that would suit both industries' needs.
Senator Robichaud: With respect to egg producers, do any of them produce their own feed, or do they have to go to the feed market to get the particular formula they need? Can they develop feed at their own operations?
Mr. Clarke: A number of our producers across the country have their own farm feeding mills. It is amazing the technology today that is involved in those operations; it is truly astounding with regard to their ability to make absolutely top-notch feed, even when compared to commercial mills. It is readily done on an ongoing basis. The technology and the ability for them to do so is almost second to none.
[Translation]
Senator Rivard: You will have to forgive me for lingering on this, since we are here to discuss research and innovation. My question is not so much about that, however. Instead, I would like our witnesses to provide a statistic. You said you produce 7.6 billion eggs a year, and I would say Canada's population is around 35 million. If we assume that a person consumes up to 100 or so eggs a year, that amounts to 3.5 billion eggs. Is it possible to say that direct consumption accounts for 50 per cent of the eggs produced, while cake, pastry and other manufacturers account for the other 50 per cent? Could we draw a rough comparison and say that direct consumption accounts for 50 per cent, while industry accounts for the other 50 per cent?
[English]
Mr. Clarke: I believe our processing industry makes up about 30 per cent of our market, and the rest of course would be the shelling market. Therefore, further processing of product would go into that aspect of the industry.
To go back to the egg numbers, for clarification, we have roughly 20 million birds in Canada, and they produce close to 25 dozen eggs per bird.
Senator Robichaud: Eggs are also used in the production of vaccines, are they not?
Mr. Clarke: Yes.
Senator Robichaud: Are there a significant number of eggs going that route, and are they supplied by your producers?
Mr. Clarke: There is what we call vaccine quota, and a significant amount of that would be in the province of Quebec because it is a bit of a consolidated type of industry. With the production being handy, the laboratories that actually make the vaccine are a positive thing.
Yes, we are involved in a fair amount of egg production for vaccine purposes, and it is a quota system that we also link with the needs of the vaccine company. Obviously, we are working with Health Canada in their demands for vaccine in the future and what will be required. It is a regulated type of system that we are very much involved in.
Senator Robichaud: Thank you. We are looking at research and innovation as part of our study. How much room is there for innovation in the production of eggs?
Mr. Clarke: That is a very good question. I am not sure if I can answer properly, but today a lot of researchers are looking at the micronutrients of eggs and trying to decide what would add value to the public health of today with regard to such things as heart disease or high blood pressure. If researchers through this type of research come across something that can potentially be enhanced or altered somewhat and that would contribute to a higher market or create more interest to the general public, then that becomes an opportunity for them and for us as potential producers to produce that and fill that demand.
Sometimes you do not know what the next idea might be or what the research will find, but we have supported and continue to support researchers looking for that next almost serendipity thing to occur.
The Chair: Before we go to Senator Mercer, while watching or listening to our mandate, when we have further witnesses appear, if there is anything you wanted to add, Mr. Clarke, please do not hesitate through the clerk to send us your opinions as we progress toward our final report.
Mr. Clarke: I appreciate that. When specific questions are asked to which I cannot provide a definitive answer, it is often helpful to have that opportunity so you have the correct answer to the questions you have asked.
Senator Mercer: I would encourage you to follow up on that, Mr. Clarke.
To follow up on Senator Mahovlich's question, I understand the premise of supply management and the fact that we are not into exporting eggs in any significant way, but are we into exporting birds or technology related thereto that we are developing here in Canada? You guys are doing some good work on the research end; you are putting money into research and something is coming out of that research. Are we able to turn that to your advantage and to our advantage by exporting it from a technological point of view? Is there a market for exporting birds themselves?
Mr. Clarke: Not so much for birds themselves, but as our potential involvement continues with the research chairs, if in fact some of the research comes up with something that we might be able to market, we have the ability in the agreements to potentially take that and market it on behalf of our industry.
We see that as an opportunity that has yet to bear fruit, so to speak, but it is an opportunity that we are holding secure.
The Chair: I would like to ask a few questions. Mr. Clarke and Ms. Cox, if you want to come back to us in writing to answer these questions, please do so.
We looked at bio-energy, and you have touched on it a bit — the waste in your farming community. Do we have bio-energy production in Atlantic Canada? We have seen it with the milk producers; they have bio-energy production from agricultural waste. In your industry, do we have a specific area where this farmer is producing energy that he uses in his own production capacity?
Mr. Clarke: Yes, and you will find the name interesting; it is a farmer from Quebec named Maurice Richard, No. 9.
Senator Robichaud: Senator Mahovlich does not know him.
Mr. Clarke: Actually, I think he did know a Maurice Richard at one point in time. In any case, this Maurice Richard recently had an open house on his farm where he was demonstrating some new housing techniques. I understand he is also working on a type of bio-digestor for poultry manure for his operation.
To specifically answer your question, yes, there are some farmers that are targeting that opportunity and seizing it as well.
As far as Nova Scotia goes specifically, there is none that I am aware of. That does not mean that it may not be happening, but I am not aware of anyone in our agriculture industry that is using manure for that purpose.
The Chair: Could we ask you, through your production system in Canada, to come back to us and maybe give us more information on that particular side of the industry?
Mr. Clarke: Certainly, we will do that.
The Chair: We see Walmart and the Costco super chains across Canada.
Senator Robichaud: Tim Hortons and McDonald's.
The Chair: That is right. Did that have an impact on increasing your production?
Mr. Clarke: Do you mean the use of eggs in those chains?
The Chair: Yes.
Mr. Clarke: It certainly has affected our industry because a lot of that would be a further processed product. Therefore, we do supply that side of our industry with those eggs, so it would have affected the overall consumption of eggs.
One must recognize that if you take an egg for this purpose here, you sometimes take it away from over there. Sometimes you do not actually see an ultimate increase in eggs; you see a displacement from a shell egg to a processed egg. You have to understand that takes place in our industry as well.
The Chair: We see it with chicken, potatoes and other produce, where stores like Walmart and Costco have put quite a demand on the production side of the industry. Have you seen that impact in your industry?
Mr. Clarke: Not to the degree that it has had an impact in other countries, particularly in the United States. We are mindful of that potentially happening. Again, if it becomes a driven demand from consumers and they work through the retail industry to affect change, we are mindful that we have to be aware that may affect change for producers as well.
The Chair: One question was asked last week by a person that I met in Tim Hortons; he was asking what the market was for your laying hens after their production cycle.
Mr. Clarke: A lots of our laying hens, once they are through their production capabilities, will go to a further process type of product. They may end up in food for pets, for example, but it would be a further processing that would take place for the fowl.
The Chair: Could you comment on that further processing, Mr. Clarke, or would you like to come back to us and tell us the percentage of your hens in Canada that goes for processing in that sector vis-à-vis another sector?
Mr. Clarke: Okay. We will come back to you, sir. It would be a significant portion, but we will try to come back with a more definitive answer.
The Chair: What we want to establish in the report for your industry is similar to the potato industry. There is a percentage that goes for processing, a percentage that goes for seed potatoes and a percentage that goes for table stock potatoes. If we could have that information, if it is available, that would be helpful.
Mr. Clarke: Okay. We will certainly try to provide that.
Senator Robichaud: Some witnesses who have come forward have mentioned that sometimes there was a communication problem between the researchers and the producers. There was a problem in communicating research results to the producer. Are you experiencing that difficulty in any way?
Mr. Clarke: With our industry, it is one of the great things about supply management and the effect that we have across the country. We are involved in talking to grassroots producers and asking them what they would like to have or need for research going forward. We have the ability to project that to the researchers across the country, as well as the ability to help support that financially — have that research done and work through our research committee at Egg Farmers of Canada. We also have updates, and the flow of the outcome of that research can come back through us right down through our provinces, and be dispersed to our producers.
We have a tremendous vehicle for both information out and end results back. We will even publish it on our website at times so that our producers can easily go and access it. I believe we have a tremendous vehicle for that information flow both ways.
Senator Mahovlich: I have a supplementary on Maurice Richard. He asked me once, what came first, the chicken or the egg? You do not have to answer that right now.
The Chair: One question that we would like to share with you concerns the Canadian Agri-Science Clusters Initiative. To what degree has it helped in establishing a national research priority, when we look at your priorities, to enhance your industry's priorities?
Mr. Clarke: We see a significant benefit in cluster-type programs in agricultural research because it enables people to come together to focus on what the needs are, and to have a forum that can access those needs and then propel them forward with regard to the research community as to what has been done, what can be done and what opportunities are there. We are very supportive of the cluster-type program.
The Chair: We do understand the quota system, and the questions that were asked by the senators this morning have certainly enlightened us on the system that you have. I believe it is a good system of supply management.
Senator Robichaud: Would you say that a little louder, chair?
The Chair: Supply management. With the knowledge that you have and the experience that you have in the agricultural industry — and we know what all parties have supported when they were working with the WTO — would you comment on the impact of NAFTA in the agricultural field? Has it enhanced it? Feel free to answer or not; I will respect that.
We have different comments made by industry, processors, producers and, yes, politicians at different levels. Would you comment on the experience that we have with NAFTA — if it has increased, innovated or helped us participate in emerging markets and getting shares of emerging markets?
What would be your vision of what is coming when we look at the role that Brazil is playing in world economics, and when we look at emerging markets such as China and India? Would you comment on that, Mr. Clarke?
Mr. Clarke: From my perspective in supply management in the egg industry, the NAFTA circumstance has not affected us too much, either negatively or positively. Mind you, it is because of our system that I can make those comments. I am not able to answer in a broader sense for agriculture. You would have to ask the people that are involved in that type of industry to comment.
With regard to emerging markets — and there certainly are emerging markets — my position would be that for those who have the opportunities and who seek tremendous value in being able to access those markets, that is fine. However, for us in supply management, in order for us to maintain safe and complete food for Canadians, we are really pleased with the system that we have. We do not, nor do we need to be able to access other markets.
Our food security is very important to us as egg producers. We want to maintain not only the security but the food safety. We believe we will be able to do that as Canadians by producing that food under the programs that we have — that we are the people that have the best ability to do that.
Again, for those who want to access those markets, with all the positives and negatives there are in regard to that opportunity or challenge, that is a decision they need to make on their own.
The Chair: Thank you very much, Mr. Clarke. Before we conclude, could you comment on NAFTA's impact on the industry with respect to input prices?
Mr. Clarke: Our prices for our inputs with regard to the egg industry are significantly driven by U.S. markets. Therefore, if NAFTA has an influence on the U.S. over the prices of our raw materials, that would affect us in some ways, positively or negatively.
One of the things that I found has been a significant change for us is the opportunity for corn, for example, to go into the ethanol market. In my opinion, that has affected the price of that product in both Canada and the U.S., mainly because of supply and demand. Other than that, other than what I spoke about — the NAFTA having an effect on the mainstay of the main feed ingredients in both Canada and the U.S. — it would not have affected us too much in our industry.
The Chair: In your industry we talk about —
[Translation]
In French, the term is "relève agricole."
[English]
I would translate that as the next generation of farmers. In your industry, do you have that problem of passing it to the next generation — your particular farming community?
Mr. Clarke: Actually, no. It is a great opportunity that we have had; it mainly goes back to supply management and our ability to get a cost of production on our farms. It is recognized that the younger generation sees the opportunities that are there. In a lot of other agricultural production — perhaps not all, but a lot — there are more significant challenges because they are not always able to get the cost of production in a formula for pricing the product.
Our sons and daughters are looking at farming as an opportunity for them, versus "I do not want to work as hard as my mom and dad did before." My son is a prime example of that. It is not just because he is my son, but he recognized early on an opportunity to be involved in the farm and chose to do that because it truly was his choice — as I believe it will be the choice of many of those in the next generation of our agriculture.
It is a great thing for us to be able to be involved in agriculture and have a true cost of production that has some financial stability; and then to see the younger generation recognize that and say, "This is something I want to be part of."
The Chair: Are there any other questions from the senators? If not, Mr. Clarke and Ms. Cox, thank you very much for sharing your opinions and your knowledge with us. On behalf of the committee, we sincerely thank you.
(The committee adjourned.)