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Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 35 - Evidence - Meeting of May 9, 2013


OTTAWA, Thursday, May 9, 2013

The Standing Senate Committee on Agriculture and Forestry met this day, at 8:04 a.m., to examine and report on research and innovation efforts in the agricultural sector (topics: innovation in the agriculture and agri-food sector from the producers' perspective; and opportunities for youth in the agriculture and agri-food sector).

Senator Terry M. Mercer (Deputy Chair) in the chair.

[English]

The Deputy Chair: Good morning, ladies and gentlemen. I welcome you to this meeting of the Standing Senate Committee on Agriculture and Forestry. My name is Terry Mercer, and I am a senator from Nova Scotia and the deputy chair of this committee. I would like to start by asking my colleagues to introduce themselves, and I will start on the left with Senator Callbeck.

Senator Callbeck: Catherine Callbeck, Prince Edward Island.

Senator Buth: JoAnne Buth, Manitoba

Senator Eaton: Nicole Eaton, Toronto.

[Translation]

Senator Maltais: Senator Ghislain Maltais from Quebec.

Senator Rivard: Senator Michel Rivard from Quebec.

[English]

The Deputy Chair: The committee is continuing its study on research and innovation efforts in the agricultural sector. Today, we will have two panels. For the first, we will be focused on innovation in the agriculture and agri-food sector from the producer's perspective, and the focus of the second panel will be opportunities for youth in the agriculture and agri-food sector.

I draw your attention to the order of reference that we received from the Senate that the Standing Senate Committee on Agriculture and Forestry be authorized to examine and report on research and innovation efforts in the agricultural sector. In particular, the committee shall be authorized to examine research and development efforts in the context of (a) developing new markets domestically and internationally; (b) enhancing agricultural sustainability; and (c) improving food diversity and security.

With that, we will now move on to our two panellists for this morning. Mr. Art Enns is the Owner/Operator of Art Enns & Sons Ltd., and Mr. Jeff Yorga is Owner/Operator of J. Yorga Farms Ltd.

Thank you for accepting our invitation to appear, and I would like you to make your presentations. We will start with Mr. Enns.

Art Enns, Owner/Operator, Art Enns & Sons Ltd: I would like to thank the committee for giving me this opportunity to address some of the issues in our farming industry.

I have owned and operated a grain farm in Manitoba for more than 40 years. I have never been more optimistic about the future of my industry than I am today. I have been active in various organizations — Grain Growers of Canada, Prairie Oat Growers and Western Canadian Wheat Growers — throughout my life. Working within this industry, I have experienced many changes in the agriculture world, such as in the global market, in competition and in technology. We still have some barriers to overcome in remaining competitive.

Farming has always been about three things: innovation, adaptation and, of course, a little bit of gambling.

The entire agricultural industry is changing faster than any of us can imagine. New and innovative technologies are being introduced throughout every year. Plant varieties are being developed to target specific markets, catering to specific nutritional needs and dietary concerns. Today's farmers are constantly adapting to these new technologies, techniques and emerging markets when considering what to plant, when and to whom to sell their products, and how best to care for their land.

It used to be that farmers had to only be concerned with themselves and the local competition down the road. That is not the case anymore. Now, a farmer must be able to compete globally. Competition with farmers in South America, Australia, Eastern Europe and Russia is as real as competition with the farmers around the corner.

Access to current and accurate information is very important. It is no longer just about market prices; it is about what is happening in the industry today. A crisis in a different country affects you. If there is a disease in the poultry industry in China, it affects our soybean acres. If there is drought in South America, it impacts my prices. The changing Canadian dollar impacts the way my input costs rise and the cost of my machinery.

Technology has helped us to remain competitive. The widespread adaptation of satellite imagery and field mapping has allowed farmers to micromanage their crop production. Farmers now hire technical firms to assist in mapping their land's fertility to target the best possible yields. This allows farmers to program their seeding equipment for specific circumstances. I can adjust my equipment to plant using variable rates of fertilizer, depending on the fertility of the various parts of the field.

This mapping technology is also used for weed and disease control. By targeting only the affected portions of the crop, farmers can reduce application rates, lowering costs but, most importantly, using fewer chemicals.

These technologies have implications that go beyond crop micromanagement. There has been a growing demand from the food and the consumer industries to understand where their food comes from. Major grocery retailers have shown interest in using these types of technologies to track food products through the entire supply chain. Farmers wishing to capitalize on this emerging trend must be on the leading edge.

Farms are run like any business. We meet consumer demand in the most cost-efficient way. Farmers are constantly seeking new products to sell in emerging markets. It used to be that farmers had few options, but we have lots now.

Crops are continually being developed. Growing international demand and the development of high-yielding plants that grow in various environmental conditions have contributed to this incredible rise.

Despite the prominent rise in crops like soybeans and corn, many other types of crops, such as wheat, are being limited due to incompatible and restrictive regulations. Variety registrations, particularly for wheat, are very inconsistent, even in our own country. Regulations in Eastern Canada are different from those in Western Canada. In order for me, a farmer from Western Canada, to grow a variety of wheat licensed in Eastern Canada for international export, the variety in question would have to be re-registered in Western Canada. This process adds significant cost, but most importantly it takes a lot of time, which is something we do not have in a competitive world.

In order to remain competitive on the world stage, Canadian farmers must have access to the latest plant technology and variety types. However, due to incompatible international regulations, farmers here do not have access to these technologies, as our international competitors do. Our government needs to bring our plant breeders' rights legislation to the same level as those of countries around the world. UPOV 91 is an agreement for the protection of new plant varieties of grain. Ratifying UPOV 91 would ease much of the international inconsistency in plant breeders' rights and put us, as farmers in Canada, on a level playing field.

Farmers are also very challenging individuals. I belong to an organization called the Prairie Oat Growers Association, and we use funding from our producer check-offs and matching funds from the government. We are seeking new markets.

We have lost the equine oats market in the Southern U.S. We are doing studies and research to bring that back. We are also seeing an emerging market in Mexico with flake oats, so we will do a study later there. Farmers are very innovative when it comes to that kind of stuff.

With the fast pace of development in agriculture, farmers are constantly being challenged to find new solutions to new problems. The challenges faced by the farmer in the future will likely be very different from the problems faced today. Farmers are very good at what they do. They adapt to new markets, innovate new techniques and are constantly looking for ways to increase productivity. I encourage our government to help by giving us the tools we need to succeed. Farmers will take care of the rest. We are a very confident business group.

Jeff Yorga, Owner/Operator, J. Yorga Farms Ltd: Good morning ladies and gentlemen. Thank you for the opportunity to share my appearance with you today. The topic of innovation is wide-ranging and I will try to touch a number of areas in the time allotted. It is useful in talking about the future to briefly discuss the past.

Ten years ago, each segment of the beef industry — primary producer, feedlot operator, processer and retailer — operated in a silo. Each segment operated independently of the other, and each sector competed with the other for a larger part of the pie. When disaster struck and the border was closed, that pie shrank dramatically and some were forced to exit. However, out of the ashes, a new and vibrant industry is emerging. I would like to speak today about how we are regrowing that pie.

The first innovation was a forced innovation: mandatory premise ID. Canada is unique to the world's large exporting nations as we are the only country that can make a claim of full traceability. Other countries are years behind and, quite frankly, may never get there. The cost of this system has been borne by primary producers and can be leveraged internationally to help regrow our industry.

What excites me is that the possibilities presented by traceability are just being realized. The first attempt to unlock value has been the Beef InfoXchange System. This online data exchange tool is starting to unlock the silo system of our beef industry. For the first time ever, primary producers will have access to performance data from every link in the value chain. What is exciting about this is that if producers sign up at no cost and keep contributing data, the beef industry will finally be able to be proactive with its quality and consistency issues and take further steps to creating the perfect beef animal, one that adds value to every part of the value chain naturally.

At the same time, producers who are raising better cattle will have real data to use fact-based selling to market them with. This database also allows for management information to be recorded, including vaccination records, type of feed usage and other on-farm management practices. Increasing our consistency with a quick look-up tool for management practices allows retailers to tailor marketing programs supported by data that grow the pie and add value to the traceability programs that we have already paid for. The real exciting piece of this system is that if fully adopted, it adds value to every link in the value chain.

The industry is also doing a great job of beginning to understand feed efficiency. Research trials are showing that this trait is genetic and something that we are able to breed into our cattle over time. Part of this research is in the field of genomics, which the beef industry is just starting to understand. Our hope is that in the future this data will allow us to improve efficiency and lower costs. Any type of cost saving improves the business of the primary producer and feeder immediately.

I would like to take this opportunity to mention the difference between research and innovation. Research is the study of a subject; innovation is when that research can be applied on the ground in real life. It is important that research be conducted in Canada for Canadian producers so that they can put that data to use and improve our industry.

The launch of Canada Beef Inc. will be a tremendous success. They are measuring performance in dollars and advancing the Canada beef brand worldwide. As much as we are comforted by branded beef campaigns, they are not growing the industry's pie. In the long term, the success of Canada Beef Inc. will grow, and it must be supported.

Young people are getting excited about the beef industry again as witnessed here today. The Cattlemen's Young Leaders Program is a world leader. As I see they are next on the agenda here, I will not steal their thunder, but I will mention that I am a graduate of the program and that other countries are coming to Canada to learn and copy that program.

As well, I have had the opportunity to spend time at the provincial level in Saskatchewan where they are applying this program to other agriculture sectors. In the beef business, the majority of the young people returning are forced to hold off-farm jobs to support their ranches. Some look at this as a negative for our industry as this is not the norm for our neighbours in agriculture. However, in the long run, this will be our great advantage. Young beef producers are forced to learn other businesses and have a variety of experiences that they can bring home and apply on their ranch or to their industry association. They are also learning to manage their business on tight margins. As we all know, learning to manage through the red ink makes a business even more profitable when in the black.

Sustainability is the focus of many sectors, and ours is not immune to that. Efficient, environmentally friendly land management is a priority for every beef producer. I have found it interesting when listening to retail that consumers want sustainability but do not want to pay for it. I feel very strongly that beef producers are at the forefront of environmental sustainability. We must remember that without economic sustainability, we will not be environmentally sustainable because we just will not be there.

Dialogue is beginning to open up between all stakeholders in the beef value chain as witnessed by the Beef Value Chain Round Table and the Alberta Livestock and Meat Agency, or ALMA, Straw Men discussion. The industry understands that the only way to grow our collective pie is to do it together. Also, any robust food system must have some type of regulatory oversight, but we must continue to work toward regulatory harmonization with U.S. equivalencies so that our friends at the CFIA are sitting at the table with us.

I would like to thank you for the invitation to be here today. I would also like to extend a personal invitation to every member of this committee to come out to Saskatchewan and see first-hand how we are implementing these innovations. I look forward to any questions.

[Translation]

The Deputy Chair: Thank you for presentations, Mr. Yorga and Mr. Enns. We will now begin the question period with Senator Eaton.

[English]

Senator Eaton: Being an easterner but a farmer at heart, I did not realize that there were separate regulations for wheat from east to west. We do not have nationalized regulations. Could you explain that a bit more and what you would like to see happen and how quickly it might happen? That would be an interesting thing in our report, obviously.

Mr. Enns: I do not know how it happened. Part of it was to do with the different marketing systems in Western Canada and Eastern Canada. In Western Canada we had the Canadian Wheat Board, which looked after certain varieties of wheat that they were pursuing markets for. Eastern Canada was more or less following the demands of the millers and industry people. They have a separate set of criteria.

Senator Eaton: You have an audience watching. Give me an example of criteria for different wheat varieties.

Mr. Enns: One criterion is that it takes less time to bring to the marketplace a new product that is licensed in Eastern Canada versus Western Canada. In Western Canada, it will take a couple of years longer. They have different requirements in terms of protein, agronomy and some of the characteristics that grains have to meet.

Senator Eaton: Such as water, all of those things.

Mr. Enns: Especially disease resistance.

Senator Eaton: Are we working on establishing a national standard?

Mr. Enns: The discussion started this past winter. I would like to see it move forward much more quickly to put us on the same level playing field. Some of those rules and regulations are a little outdated. Agronomy is important, but with some of the new technology out there in fertilization, chemicals and everything, some of the diseases are not as big a deal as they used to be.

Senator Eaton: Do you think, for instance, that it will get done in the next six months?

Mr. Enns: No. The people at CFIA have told me it will take years.

Senator Eaton: But it cannot.

Mr. Enns: I agree with you, totally.

Senator Eaton: Mr. Yorga, now that we are hopefully coming into the final stretch of our EU trade talks, is Canadian beef one of the obstacles, or how do you see those talks progressing?

Mr. Yorga: Personally, it is out of my scope of reference to speak specifically to a European Union trade deal. I would point out that the EU is not our largest trading partner. From where I sit today, it is important that we are doing business with the people who want to do business with us. We should be focusing on that. It is important to remember that other countries around the world do not necessarily eat beef the same way we do. We must try to deal with countries that add value to the beef that we do not necessarily eat.

Senator Eaton: Can you give examples?

Mr. Yorga: In Asia, for example, they eat shredded beef. Instead of eating a sirloin steak, they shred it and it goes into something they are already making. There is not a huge advantage to us to sell rib eye, tenderloin and steak there, but there is a lot of advantage for us to sell into that market products such as skirt steak, flank steak and other cuts that are of lower value in North America.

Senator Eaton: Sometimes when you go into a steak restaurant, certainly in North American, there is a great play on U.S. prime: "We sell U.S. prime." Why are we not selling Canadian prime? Is that because we have not worked on our brand strongly enough, or do we sell all our best quality to the States? Why is that?

Mr. Yorga: There is not a harmonized grading system right now. Beef that is processed in Canada is graded on the Canadian grading system, which is A, AA, AAA and prime. In the U.S., they have different splits, and I cannot speak to those specifically. However, because Canada and the U.S. are not integrated, we have different measurements. When you eat at a restaurant in the U.S., they will label it differently, whereas here it might be called Canada AAA. It is the same thing, but it is just being measured differently.

Senator Eaton: Is work being done in that regard?

Mr. Yorga: As far as I know, the Canadian Beef Grading Agency is covered under an act of Parliament, and they are doing their best to pull it out of that so that it can be industry controlled and harmonized.

Senator Merchant: You are from Western Canada and this pleases me; I am from Saskatchewan. We have been to Saskatchewan already. We took a different route; we went to the northwestern part. Where is your farm?

Mr. Yorga: Wood Mountain, Saskatchewan, south of Assiniboine.

Senator Merchant: We may come to your farm.

First, congratulations. Can you tell us something about your farming operations? You alluded to the fact you are a young person. Have you a family farm; is this a family business you are working in? I am glad to see you are working in the family business, because young people do not choose to make that their career. Tell me something about your farm.

Mr. Yorga: We are Canada's largest registered Limousin operation, so we are seed stock producers. My parents are there and they manage day to day, Monday to Thursday. I have a full-time job, so I am gone.

We have been able to keep up on automation to the point where we can put off large jobs until the weekend when we are fully staffed and can get that type of thing done. We have spent considerably on processing and handling facilities so that we are able to do that.

In agriculture, as in many different places, you have a choice between spending money on facilities or hiring people. As you know, in rural Canada, it is becoming harder to hire people. Therefore, we made the choice to invest in facilities, so we do not have to go that route.

Senator Merchant: You are strictly into the Limousin cattle.

Mr. Yorga: Yes.

Senator Merchant: You are a specialty operation, then.

Mr. Yorga: Since we are seed stock producers, we sell to the commercial cattlemen who use the bulls and genetics that we raise to raise the beef that you are eating. We are a subset of the primary producer.

Senator Merchant: Where do you work? Wood Mountain is a little farther from Regina or Saskatoon.

Mr. Yorga: My title is Vice-President of Sales for Value Partners Investments Inc. in Winnipeg. As a result, I am on the road considerably, so where my house is —

Senator Merchant: You are not near the farm operation.

Mr. Yorga: Yes.

Senator Merchant: Mr. Enns, welcome to you, also. You are a neighbour.

I understand that there is a bit of a concern right now out in Western Canada about genetically modified alfalfa seed being licensed to farmers in Ontario. Are you aware of the controversy?

Mr. Enns: I am just aware of it. I am not an expert on that subject, but I am aware of the controversy, yes.

Senator Merchant: I understand that most of the alfalfa is produced in Saskatchewan and Alberta — it is like 80 or 87 per cent of it — and about 7 per cent is produced in Ontario. The seed travels through pollination and bees, so they are concerned that it will spread to Western Canada where it is more important.

Are you concerned at all about the genetically modified varieties that would grow? As senators have mentioned before, we have trade relations with certain parts of the world that will not buy genetically modified foodstuffs, like Europe, for instance.

Mr. Enns: I can only speak to the crops that I grow. I look at canola, soybeans and corn. It has been accepted very readily by the industry that I work in. I think 90 per cent of the crops in canola, soybeans and corn are genetically modified, and it has been working out very well. I think it has been proven safe, as much as we know. There have been no reported cases of it being an issue.

The important part is that we have a very good inspection agency in Canada. All these varieties go through a very tough screening before they are ever licensed in Western Canada. As with many other people, my family eats the same food out there, and I would not grow anything that I did not feel safe about, so I feel totally comfortable out there.

Is it a concern as far as the market is concerned? Absolutely. Before we go ahead, we have to ensure there is a market for it. That is not an issue for some of the crops we are growing in Western Canada. Canola, soybeans, corn and other pending varieties, such as sugar beets, as far my understanding goes, have all been accepted. Before we introduce them, we have to ensure there is a market willing to accept them.

Senator Merchant: You do not consider the European market one of our best markets — the one that we need to concentrate on. They do not accept it.

Mr. Enns: They are not.

Senator Merchant: I am not disagreeing with the things you say, that it has been proven safe. I eat it, too.

Mr. Enns: Sure, and I respect the European market. They have so far balked at accepting it, yet they do accept canola oil and soybean meal. Therefore, there are different forms of processing that they are willing to accept. We have to adjust and ensure we are compatible with what they are willing to accept.

Senator Buth: I would like to ask both of you to talk about the farmers' role in terms of research and innovation. Mr. Enns, you mentioned several farm organizations that you have worked in. Mr. Yorga, you talked about Canada Beef Inc. and the beef sides of things. Can you talk about how the systems work in terms of check-offs and your participation in research priorities?

Mr. Yorga: Producer check-offs are paid to our provincial associations, which then feed them to the Canadian Cattlemen's Association. The provincial associations, through the CCA, fund Canada Beef Inc.

When we talk about innovation at the farm, we find that much of the research done is a great idea, but when it comes to practical application throughout a large area, it becomes very difficult and the results are not always the same. It is important, therefore, for those industry associations to be able to share that data so that the producers in B.C. know what happened in Manitoba, and they can figure out if it is applicable, and vice versa; if something great happens in Manitoba, people in P.E.I. need to know that, too. The role of those industry associations is to share that research knowledge and outcome between all the producers.

Senator Buth: What would the check-off be for beef producers?

Mr. Yorga: Today, I think it is $1 per head. Half of that goes up the chain to Canada Beef Inc. or the CCA. The other half funds the provincial association.

Senator Buth: Mr. Enns?

Mr. Enns: Prairie Oat Growers is an association registered in the Western provinces. On each tonne of oats that a farmer sells, there is a check-off of approximately 50 cents a tonne. We have taken that money and have leveraged it with some of the federal government and provincial programs, AgriStability, Growing Forward and some of the other programs the federal government has used. Some of the provincial budgets also have in-kind help. We have been able to leverage a lot of funds that way and we have done it in two or three different areas. We have done it in marketing, agronomy and also in looking for new markets out there. One that I mentioned in my talk was the equine market, which is basically the horse market in the Southern U.S. It is a very lucrative market. In the mid-1980s we had a very large percentage of that market and for reasons such as price and other issues down south, we lost it.

We now see that the American universities have done a lot of studies where they find that oats are a very healthy product to feed to horses. They are using pelleted feed now, which does not require a whole lot of labelling. We are trying to encourage the horse equine market in the U.S. to consider using oats again. We are having some very good uptake on it and are spending some time out there because it is one of the largest markets that we could possibly recapture. The oats crop is really struggling to keep its acres in Western Canada. It is a very small crop if you compare it to others. I think some is grown in Ontario, Quebec and a little bit in the Maritimes, but even in Western Canada only about 3 million acres are grown, on average, so it is not a very large crop.

If we could get that, it is a good, high-quality market and it also allows us to have more options. Right now, most of our options are in the food industry, and it gives us another option out. It is something that we are pursuing actively, and Mexico has come back to us and asked us if we would be interested in looking at some potential markets there.

Senator Buth: You both mentioned regulatory issues and things that you need. In terms of the research and innovation, your organizations have check-offs. What do you need from the federal government in terms of research and innovation? Assume it is Christmas; tell me what you want.

The Deputy Chair: Or maybe what they do not want.

Senator Buth: Yes, or what you do not want.

Mr. Yorga: The first step is to support the initiatives that are already there. BIC, for example, is not fully funded. The Cattlemen's Young Leaders Program is not fully funded. The beef science clusters that they have developed are not fully funded. If we have unlimited funding and a wish list, there are things already in place that we are having a lot of success with that we are still looking for future funding on. Instead of reinventing the wheel, I think it is great to fund tools to give producers the opportunity to be innovative.

Mr. Enns: I would encourage the government to give us an opportunity to bring the latest plant technology into Canada. When I say that, I realize it takes a lot of money to develop new technology in the plant industry. It costs hundreds of millions of dollars. In all fairness, we have a very good public breeding system in Canada, but the government is restricted with the amount of money needed to fund these organizations. I would like the regulations to open up so that other companies can come into Canada and be protected under UPOV 91; it is a great start. It is not just the large companies that would have access to it. Many smaller companies are also doing breeding programs in conjunction with other countries. They are working with smaller breeding companies in Europe and South America. They face the same restrictions as the larger ones in bringing in some of the plant technology and breeding characteristics. We really have to make sure that we are on the same page.

Canada is one of two or three countries of the industrialized countries that have not signed on to UPOV 91. Italy and New Zealand are the only two other countries that have not signed on, and I do not think we are a Third World country. We need to get in there to ensure that we are on a level playing field. As a farmer, I really feel that we are being shortchanged on this.

Senator Buth: Why have we not signed on?

Mr. Enns: There are many reasons. I think some of it got caught up in red tape. UPOV was introduced a number of years ago, but the legislation was also introduced with another bill that made major changes to the CFIA regulations. There were also some funding issues. A bill was introduced and caused a lot of controversy. It died on the Order Paper. It was reintroduced a couple of times, but due to minority governments, it did not become a priority. Before we knew it, 10, 15 years had gone by and it is important that it is brought back in to the forefront again.

Mr. Yorga: When we talk about research and we have a cattle producer and a grain producer sitting side by side, some things are win-win for multiple industries. It is important to remember that industries affect each other. One thing that has happened — and Mr. Enns can probably speak to this — is that in the last 10 to 15 years there has been very little research into forage and feed grains, specifically oats. When seeded acres of oats go up, my feed costs come down. As seeded acres of canola go up, my feed cost goes up. It is important to remember that what happens in the grain industry affects the cattle industry, and what happens in the cattle industry affects the grain industry. When we are talking about what the government's role could be in research and innovation, there is an opportunity to design research and forage in the feed grain area that helps both groups.

Senator Callbeck: Mr. Enns, you said that you have never been more optimistic about your industry, and that certainly is great news. One thing you mentioned in your comments was field mapping. I was recently talking to someone who is using that, and it is incredible how the yield has gone up. I want to ask about the cost. There must be a substantial cost initially and to maintain it. Is it just for the large producer, or is this something that the small producer can think of doing?

Mr. Enns: I think it is something that anybody can do. I am not a large producer. I farm around 2,000 acres now. I was up at 3,000 acres and am down to 2,000, and it makes sense for me. I have to work out the numbers. It has to be return on investment. Some of it is not all out there. As more people start using it, the technology is not that bad. If you can go ahead and save yourself $40 or $50 an acre and it costs you $7 or $8 and increases the production, it works. Farmers are very shrewd businessmen. They will quickly adapt it or throw it out, whichever works for them. I am not saying it will work everywhere, but there are certain soil conditions where it is much more lucrative to be used.

Senator Callbeck: You say you have 2,000 acres and it works well for you. If someone growing the crops that you grow had 1,000 acres, would it now work or would they have to wait for the costs of that technology to come down?

Mr. Enns: No, they can share it with some other people. Custom operators can come up there and do it for a reasonable price. You do not have to make all the investment in the machinery. You can also get custom operators that do it for a very reasonable rate. For the larger farmers, 20,000 or 40,000 acres, obviously it becomes a much more lucrative investment for them.

Senator Callbeck: You talked a lot about technology and innovation. Some witnesses have said that sometimes producers are slow to use innovation or new ideas. Why is that? Are they not aware of them? Is it the cost? What is holding them back?

Mr. Enns: I am not a young farmer, but I like to think that I am innovative and I like to change. It is always one of those things in that the older you get, the harder it is to change, but one of the things in my industry is that you have to change. You have to adapt or you get left behind.

I see a whole group of young farmers coming up through the stream. That is who I am really talking on behalf of here today. It is the next generation of farmers out there. They will not be as understanding about some of these regulations I pointed out. They want change and they want it tomorrow, not a year down the road.

I do not know; I guess maybe we travel in different areas. Are some farmers slow to adapt? Absolutely, but most of the farmers I associate with and get to see are very innovative and asking for it.

Senator Callbeck: Mr. Yorga, you mentioned that associations share information right across the country as to what works and what does not work. In your view, is that system work well and is that information getting out there?

Mr. Yorga: I believe so. One thing we have to remember with information is that when it is passed along, it does not ensure that people are reading it and are taking it to heart.

Senator Callbeck: Right.

Mr. Yorga: I believe that the industry associations are doing their best job to communicate to producers. Dovetailing on your last question, sometimes producers do not necessarily want to hear what they are being told.

Senator Callbeck: You also mentioned traceability systems. Are you talking about farm to fork?

Mr. Yorga: I am talking about pasture to plate, yes, definitely. Right now, we have the ability, through the RFID tag readers, to know exactly where an animal was born, every place it was fed, where it was processed and what retail location it went to.

Senator Callbeck: Can you give us an approximate idea how much that adds to a pound of beef that the consumer buys?

Mr. Yorga: I cannot give you that answer specifically. I can tell you that if we did not have that system, there is a good chance that our international trade would not be where it is. That was something that was forced on the industry in order to get the borders back open. We are now starting to leverage that technology so that we can actually use it to build value. I really do not believe that any of that cost has been passed on to the Canadian consumers, as the price of beef has not changed significantly in the last 10 years.

Senator Callbeck: The producers, then, have accepted the cost.

Mr. Yorga: Yes.

The Deputy Chair: Those of us in the East, such as Senator Callbeck and I, always find it amusing when the farmer says he has a small farm of 2,000 acres, which in our neck of the woods may not be a small farm.

[Translation]

Senator Maltais: Gentlemen, let me congratulate you on the quality of your brief. We have heard from many people here, and I think that you have — to your credit — a quality brief and extremely clear explanations.

You also said, in your brief, that you used satellite mapping for some of the work done on your lands and that this helps you assess soil conditions. Does it also help you avoid insect infestations? Can you use that technology to detect such infestations?

[English]

Mr. Enns: Yes, the technology is getting to the point. The problem is that often by the time you get the image some of the damage has been done. To give an example, the technology is such that you get a picture of your farm about five times a week, but it all depends; if it happens to be a cloudy day, like today, you will not get a clear picture. It depends a little bit what the satellite will give you. It will maybe miss the first field, but you will see the rest of it.

Disease and insects absolutely play a large role in this mapping and imagery.

[Translation]

Senator Maltais: Do you think that this technology can be developed going forward and that it would help you — in spite of clouds — detect insect infestations and immediately use insecticides in response?

[English]

Mr. Enns: Yes, there is technology being developed in Manitoba where they have little planes that you can get to fly above your fields. You can actually launch them yourself from the back of a pickup and do a quick scout around your fields and take your field pictures yourself. Unfortunately, right now it is still a little bit on the expensive side for a producer like myself to have, but those images will be real-time. If you will do it at five o'clock in the morning, by seven o'clock you will have the images on your computer and you will be able to see exactly what is happening out there.

[Translation]

Senator Maltais: So that new technology could be made more affordable in the coming years.

Mr. Yorga, you raise Limousin cattle in the West. Are there many such farmers out there?

[English]

Mr. Yorga: When you categorize the breeds of cattle, the top three right now are Angus, Hereford and Simmental by registration. Charolais and Limousin fall into the next category. It is interesting because by registration number our herd sizes have been relatively flat. We have seen a lot of focus on hide colour. That means that breeders are breeding for black hides. They are concerned about colour. We know that hide colour is not a predictor of quality. As technology comes on stream and as producers start to realize that there is a lot more to their margins than the colour of the hide, we feel that other breeds will see an increase in registrations.

[Translation]

Senator Maltais: Can you tell me whether the quality of the Limousin cattle has value added for a producer like you, compared with other kinds of livestock in your area?

[English]

Mr. Yorga: That is actually an incredibly long answer. When I look at the beef industry, I think it is important for every sector of the value chain to make money. In order for that to happen, the primary producer needs a calf that is born with a moderate birth weight, that gets up, has the will to live, weans heavy — because he sells by the pound — goes into a feedlot, is healthy, gains weight quickly, goes to the processor and yields and marbles, because we need both, and then goes to a retailer and has a cut size that is what food service wants. In order to do that, you need every breed because there are good cattle in every breed.

Because we have a predominantly British-based cow herd, which is Angus and Hereford, I believe that the Limousin breed crosses great with those cows because it adds the performance without changing the frame score. That is a very long answer, but yes.

[Translation]

Senator Rivard: Mr. Enns, allow me to go back to your brief. You stated the following:

Farmers choose their crop strategies to satisfy niche customer demand . . .

The last line of that same paragraph reads as follows:

. . . and wheat and corn crops used in the production of ethanol biofuels.

Experts have told us that the global population will have doubled by 2050. Three quarters of Africa's population and one third of Asia's are already starving to death. Do you think more should be produced — since you say that customer demand must be satisfied — or that a considerable portion of wheat and corn crops should be used to produce ethanol?

I agree with you about ethanol. Conversely, given the staggering population increase, do you think Canadian farmers can meet an increasingly high demand? Is our land of high enough quality? Do we have enough lands and producers to meet the global demand over the coming decades?

[English]

Mr. Enns: I think it is all about where the market is. Farmers look at it, unfortunately, in terms of whatever gives them the best return for investment. Right now, it is the food market. The shine is off ethanol foods over here. Just look at the way oil production has boomed in the U.S. and everything else. I think that has changed. We have had some developments of varieties to support the ethanol business.

I put it in there, but you are right: It is not number one anymore. My biggest returns are if I grow toward the food market because that represents my best returns right now, and that is what farmers are doing for the most part.

[Translation]

Senator Maltais: I forgot a quick question, Mr. Enns. You are a grain grower. Do you have any issues in terms of farm transfers from father to son? Farms are now companies, so they are no longer like the small family farms of the previous century. Are you encountering any difficulties? I see that you have grey hair like the rest of us around the table — aside from the chair. Do you have any minor problems when it comes to farm transfers, similar to the issues we are seeing in Quebec?

[English]

Mr. Enns: I think the farmers in Canada will do their fair share, but we cannot feed the whole world ourselves. We will need a lot help from other areas, and there is a lot of new land. I call it new land, but it is farming land that is coming on stream. If you look at the Eastern Bloc countries, a great revolution is happening in the farming industry over there, and also in South America. I feel that we will be facing our biggest challenge from some of these people because their cost of production right now, especially the cost of land, is a lot less than ours. We will face some challenges coming from there, but we will more than hold our own with some of the technology that we are being offered.

Mr. Yorga: I wanted to comment on ethanol production. The grain that will be used for ethanol is often the same grain that would have been fed to cattle. Ethanol plants can take lower quality grains, so we are competing as an industry directly with the ethanol plants for our feed. I do not like to say it is not fair competition, but we are not competing directly with them because that grain is being forced to go there because of subsidy.

Senator Black: As a senator from Alberta, I understand not only the importance of agriculture but also how innovative farmers and ranchers are, in large part, because you have to be. What do you believe are the obstacles that you face to research and development and innovation? As well, do you view governments as effective partners?

Mr. Yorga: The biggest challenge in the beef industry is that there is so much variation. As I alluded to before, research that is done in Lethbridge, for example, might show tremendous results, but when applied in northern Manitoba, it does not. A couple of real challenges in the beef business specifically are that, first, it takes years to show results, and, second, often when we are discussing research and funding, we have short windows. We need to have an answer within X amount of time or we run out of money.

In order to have effective research so that it can be applied and producers can be innovative, we need to have long time horizons so that the data that was learned in Lethbridge and sent to Manitoba can be sent back to Lethbridge and they can redo the trial or make modifications on the trial.

Senator Black: Is that happening?

Mr. Yorga: When I speak to researchers, their common concern is that they seem to spend more time trying to get funding than they do actually researching.

Mr. Enns: Governments can play a large role in helping us on the farm. For example, the government of the day is active in opening up trade areas. To us in Western Canada, we are an exporting nation. Most of our grain products are moved off. If we have access to markets, it opens up the doors, especially if we can bring them in with lower tariff rates. To me, governments play a huge role in that, and that is the important part.

It is not always about subsidies. There are other ways that governments can help in changing and bringing in regulations that make it easier for us to go about and do our thing. That is where government has a huge role to play.

The only thing I would encourage government to do is move faster than we have up to now. It just seems to be a very slow process out there.

Senator Black: However, you believe your dialogue with governments, while possibly slower than you would like, is a meaningful dialogue?

Mr. Enns: Yes. We and some of the organizations I talked about have good relationships with government. The door has always been open, especially to the Minister of Agriculture and any of the other groups that we need to meet with. I think we have a good relationship, and it bodes well for our industry that we have been able to talk.

Do we always agree? Maybe not, but that is the nature of our business. As long as we can keep talking, I think we can make progress.

The Deputy Chair: We will get a very interesting perspective on this question because of the generation difference of our guests.

Mr. Enns: It definitely is a challenge. I am a third generation farmer. My grandfather came from Southern Ukraine and established a farm in Western Canada.

We are third generation, but I am not sure about the next generation. My sons have decided to choose other fields. Will they come back to the farm? I am not sure, but it is a challenge out there.

However, it is no problem finding other people to farm the land. I would like to keep it in the family, so we face our challenges. As farms get bigger, yes, there are challenges, but there are ways of working them out. Somehow they always work out.

The Deputy Chair: Perhaps, Mr. Yorga, you may want to wait until the next panellists. You will join us for the second panel as well. The subject of the second panel is very much focused on young people in agriculture. If you would like to comment now, though, please do.

Mr. Yorga: It is an interesting and challenging topic for a number of different people. I can say personally that I have been lucky, and we finished our succession plan three years ago. One of the major challenges to farm succession planning is that the farms are worth a lot more money than they used to be, and in some cases, specifically grains and oil seeds, there is a lot less debt than there used to be. In the past you used to inherit the farm and you inherited the debt. Now when you inherit the farm, you inherit millions of dollars in some cases. In the past, the siblings or the children who were not on farm did not want a part of that debt, so there was not a lot of discussion about succession planning. The farm went to the child that chose to farm.

Today, because there are potentially millions of dollars at stake, the children who are off-farm feel that they have an entitlement to that money. There are many different and creative ways to get around that. Life insurance, for example, is a way of meeting those obligations without having to split up the farms. One of the major concerns to a lot of farmers is that if it is not taken care of it gets into the courts. All of a sudden the farm gets split up, say, four different ways, and the one person who wanted to farm now does not have a farm big enough to sustain their business.

It is an incredibly important topic now, and when you read farm trade publication and spend time at producer events, how to do it is always a topic that is being discussed. I think that people in your age group are doing a very good job of having that discussion. There are still farmers a generation older than you who will not have that discussion. You have farmers who are 80 years old. They have a 60-year-old son who is farming and has no title to anything and cannot sign a cheque. In those instances, it is incredibly concerning.

The Deputy Chair: Mr. Enns and Mr. Yorga, thank you very much. On behalf of the committee, I would like to tell you that we sincerely appreciate your appearance today. When you leave here and are reflecting on your testimony and on the testimony of others who have appeared before the committee, if you have thoughts that you would like to share with us, please feel free to do so in writing via the clerk. Again, thank you very much.

As we begin the second panel, I want to remind everyone, particularly our viewers, that the committee is continuing its study on research and innovation efforts in the agricultural sector. Today, we will have a panel on opportunities for youth in the agriculture and agri-foods sector. With us today — and those who saw the previous session will see a familiar face — are Mr. Jeff Yorga, Owner/Operator of J. Yorga Farms Ltd., and Ms. Joanne Solverson with the Cattlemen's Young Leaders Program.

We would like to thank both of you for accepting our invitation to be here today. We will turn it over to you, Ms. Solverson, so that you can make a presentation. Mr. Yorga, if you want to add some things as well, you may. We will then go to questions from the senators.

Joanne Solverson, Cattlemen's Young Leaders Graduate, Cattlemen's Young Leaders Program: Thank you for inviting me to speak at this meeting. My name is Joanne Solverson. I come from a cattle ranch located west of Camrose, Alberta. Our farm is both a cow/calf and feedlot operation. We calve approximately 900 cows each year and bring the heifers and steers to market after feeding them for approximately 14 to 16 months. This differs from most cattle operations as we keep our cattle from the time they are born until they are finished and market ready.

I have been involved in the ranch operations from an early age. I was an also a member of our community's 4-H until I exceeded the age of membership at 21. I then took the role of general leader to stay involved with 4-H. As an active alumnus, I had the opportunity to participate in an international agriculture exchange program called Agriventure. I was privileged to work on beef operations in New Zealand and Australia. For the past nine years, I have been employed at United Farmers of Alberta, an agriculture retail chain. I recently completed my post-secondary studies at Olds College, where I graduated with a Diploma in Agricultural Management, and I plan to graduate with a degree in agri-business next year. I was privileged to be selected as a participant for the Cattlemen's Young Leaders Program in 2012.

One thing that you need to know about me is that I am committed to making agriculture and beef production my career because agriculture is my interest, my passion and my future. I am here to speak to you about the importance of youth in agriculture and the programs developed to support the leadership development of youth.

Research plays a key role in agriculture, especially for youth. It is research that drives innovation and innovation that helps to develop profitable farming operations. Profitable farming operations provide future career opportunities for young Canadians.

The Cattlemen's Young Leaders Program is designed to develop leaders. These leaders will drive innovation and research in agriculture for the future. Each year, young producers ranging in age from 18 to 35 are selected to participate in the CYL Development Program. These individuals typically represent the cross-section of values of contemporary agricultural youth. The successful candidates are invited to become participants and are then matched with a mentor by selection committee. Mentors are chosen from seasoned professionals from various disciplines in the agriculture sector. Once candidates are matched with the respective mentor, the journey begins.

CYL participants are at different stages of their careers, with diverse backgrounds in the beef industry. Participants in the program may be interested in learning more about a potential career choice in the beef industry, acquiring more knowledge or connecting with the leaders in their sector. Through the process, the participants learn more about what it means to be a leader. The program benefits both the participant and the mentor. For example, exposing a young person to elements of a potential career choice can be an extremely rewarding experience, which may result in an employment relationship with the mentor. Attendance at industry events, periodic meetings with mentors, and the completion of the Masters of Beef Advocacy Program are key activities that candidates use to build their knowledge base. The goal is to develop highly capable individuals who can represent and lead the beef industry into the future.

The beef industry is very diverse. This program has helped many participants to understand the sheer magnitude of the sector and to recognize opportunities for growth. For those individuals looking to specialize in different sectors of the industry, the CYLP works to match them with experts in their area of interest. Some CYLP graduates have been mentored by much respected experts in the industry. Although the mentorship is only an eight-month program, the relationships created will usually last much longer. For example, Virgil Lowe, a rancher and law student from the University of Calgary, was mentored by John Weekes, who was the chief negotiator for Canada during the NAFTA negotiations; Katie Wood, a research student from Ontario, was paired with Reynold Bergen, Science Director of the Beef Cattle Research Council; and Eric Buyer, a young producer from Saskatchewan, was mentored by Travis Toews, Past President of the Canadian Cattlemen's Association, who has been involved in many the recent trade negotiations. These are examples of a few of the approximately 40 graduates to date.

Members of the CYLP are also mentored in aspects of technology, such as production efficiencies, forage management, radio frequency identification, and the use of genetics to improve crop yields and animal health and production.

As a CYLP participant, I had the opportunity to participate in numerous events, including the International Livestock Conference, the Beef Value Chain Round Table and the CCA annual general meetings, to name a few. Attending these events provided opportunities to network with individuals from the beef industry. At the Beef Value Chain Round Table, we were able to work with some of the major companies and industry players, such as Cargill, McDonalds and multiple producers in the country. This round table focused on the sustainability of the beef industry. The program focus had three key areas: economic, environment and social. The role of youth was addressed within many of the topics. It was encouraging to see the extent of support the group gave the CYLP and, more specifically, the involvement of youth participants and young producers. It was clearly stated that we need more youth and young producers to become actively involved in the beef industry.

This program is also involved in the Five Nations Beef Alliance. At an event held left year in Banff, representatives from Canada, the United States, Mexico, Australia and New Zealand met to discuss the future of the industry. Two CYLP participants took part in this event. They found it to be a valuable experience to interact with and learn from beef producers from other countries. Other CYLP participants have traveled to the U.S. to attend events, such as the National Western Stock Show, the National Cattlemen's Beef Association annual meeting, which is the largest beef convention and an important part of Canada's advocacy efforts with the U.S., and a Canada-U.S. round table meeting.

I am not sure if many senators eat at McDonalds, but if you do, you may have seen my face on the tray liners this summer. My father and I worked with Cargill and McDonalds to find a way to connect with the customers. The goal was to inform them where their beef comes from and how it is raised. The tray liners were used across Canada and seen by thousands of people. This is an example of an innovative approach to connect with Canadian consumers to inform them that the beef they consume is safe, wholesome and nutritious.

Tyson and Virgil Lowe, two CYLP graduates, also worked with McDonalds. They created a video about contemporary methods of beef production to create consumer awareness of the commitment and hard work they put into raising cattle. They focused on showcasing how and where the cattle were raised. McDonalds received positive feedback from these promotions. They have indicated a desire to continue this type of work with Canadian cattle producers and the CYL Program.

Research is key to the beef industry's future. It is needed to ensure sustainability and growth of the sector. Research plays an important role by enhancing the safety and quality of Canadian beef. We need to ensure the integrity and high standards of animal health in the Canadian herd. We need to actively encourage the dissemination of knowledge throughout the industry. We need to support and encourage rapid adoption of new technologies to sustain competitiveness. The world's population is increasing and is expected to reach 9 billion by 2050. In order to meet the growing demand for beef, Canada will have to invest in research and innovation. With the average age of beef producers increasing year by year, we have to promote programs such as the CYL to help keep youth involved in the beef industry.

Youth in agriculture is imperative to ensuring our food supply.

The Deputy Chair: Thank you, Ms. Solverson. Your credentials are enhanced not by your picture on the McDonalds tray liner, but graduates of Olds College have a tremendous reputation in the sector. I continue to compliment the school on the quality of the students it turns out.

Mr. Yorga, do you want to comment or go to questions?

Mr. Yorga: Yes, I will comment on the program. The thing I find to be the greatest about it is that it brings together young producers of different ages from 18 to 35. They bring very different skill sets from very different areas of the country. They all sit down in a format just like this and have open discussions on just about everything in the beef industry. People are free to ask questions and debate subjects that in a normal circumstance they would not be able to do.

At the same time, they all have a commitment to lifelong learning. Anyone who has ever been a part of a mentorship program knows that you only get what you take from it. Your mentor is not there to teach you; you are there to learn. When everyone in a room has the same notion that they are there to learn, it makes for a very free and easy exchange of ideas.

The Deputy Chair: We will begin questions with Senator Eaton.

Senator Eaton: That was very interesting.

Mr. Yorga, how many animals does it take to make a viable beef farm? We are talking about succession and you are part of two generations on your farm. You are supporting two generations.

Mr. Yorga: Every farm's profitability varies by region. Various factors play into that, so it is difficult to give you a number. I would say that if a farm operation has no debt and can operate in cash, it does not have to be very large. In order to get to that level, farms have to be bigger and bigger to achieve economies of scale. For example, a chore tractor costs close to $100,000 but does the same amount of work whether you have 10 cows or 200 cows. It is difficult to say what size you need to be profitable because it varies by area.

Senator Eaton: What about in your area of Manitoba?

Mr. Yorga: Saskatchewan.

Senator Eaton: Sorry.

Mr. Yorga: Again, it is difficult to say. I have seen that the majority of commercial cattle producers in my area run in excess of 250 cows.

Senator Eaton: If I were a young person coming to you for mentoring and wanted to get into the beef industry but had very limited assets, I could rent land. What would be my optimum number? How does one start? What advice would you give someone?

Mr. Yorga: You need to rent land, lease cows and have a second job.

Senator Eaton: That is useful to know. We had the banks here last week, and butter would have melted in their mouths — they made it sound so easy. It is very interesting.

Mr. Yorga: After 10 years, you may own your cows. Once you own your cows and you go to the bank for a loan, the bank will not take your cows as equity, because they are livestock and can become dead stock.

The only way you can own real assets without equity is through a CALA loan — Canadian Agricultural Loans Act. They are the only people who will finance land, cattle or equipment without equity, and it is something that a young producer in their first five years of operation can access. You have to access that product through a bank or credit union, and you have to meet their lending rules. If you go to them with no equity and no business plan, you will still not qualify for a CALA loan. However, if you have a business plan and some type of track record, then you could potentially qualify for a CALA loan.

Senator Eaton: Is it business school or mentoring that helps you draw up a business plan to go to a bank or to get a first loan? Is that something mentoring would help you do?

Mr. Yorga: It could help if that was your area of interest. In the context of the CYLP, if you entered the program to ask for that type of knowledge and you came at it from the perspective that you are coming out of college, you have no prior assets and you want to be a cattle rancher, they would definitely pair you with someone who would be able to give you the knowledge and the tools to go and do that.

Senator Eaton: Are we attracting enough young people into agriculture, or are there too many financial hurdles?

Ms. Solverson: The input costs and people who are starting out are two of the biggest challenges. The CYLP introduces quite a few of the different programs that are available. Coming from Alberta, we also have the Alberta Feeders Association through which, again, you can get loans; they can finance the cattle for you and then you pay them back when you sell them. There is also the FCC, which has the Young Farmers Loan.

Through the CYLP, we are made aware of quite a few of the possible options that exist and we can get coaching and advice from many of the mentors. It is not necessarily from the one mentor we are paired with, but there are so many who work together with the different participants' mentors, as well. It is much easier to find the resources you need or the people to find the advice and resources needed to get in and to start.

Mr. Yorga: I will speak to the question of whether young producers need help getting in or if they are encouraged to get in. I think that young producers would like to come back, and the producers who do come back understand the challenges.

We have to be very careful when we try to design programs to specifically bring them back. When you have many buyers in a pool, it inflates prices and makes things difficult for everyone. Therefore, making financing easier to get is a challenge.

Other countries have taken a model where instead of making financing easier to get, they change the terms. Instead of having to pay a CALA loan back in 15 years, I could pay it back in 30. My problem is not necessarily paying that back, but that I have a variability in my cash flow. If I am able to stretch those payments out over time, it lessens the impact on my cash flow, making the business more sustainable for a young person to get into.

Senator Merchant: Mr. Yorga, you just mentioned that other countries had programs. What countries are those?

Mr. Yorga: Australia specifically does that. You can get 100-year loans on land. It is something of a challenge there because the land is not as productive as it is here, so you need more of it. Since you need more of it, it costs much more. That is why the loans are a lot longer.

I believe it is similar in Europe. They allow amortization over a longer period given the cost of land.

Senator Merchant: With Australia, do you know if they are able to attract more young people to the land? Do you have any idea of their success rate?

Mr. Yorga: I do not know the answer. I know that Australia is part of the Five Nations Beef Alliance. That is something we can raise with them and see what the CYL's discussions are. The CYL is putting together a sustainability paper for the Five Nations Beef Alliance, and that will be something that will be asked. We can report back.

Senator Merchant: Ms. Solverson, regarding the programs you have been in, such as the CYL, are most of the people in these programs interested in starting their own operations? What other opportunities are there for young people to work in the industry without having to have an operation?

Ms. Solverson: Exactly. For example, Katie Wood is not necessarily working right on her farm; she is more looking into the research sector of it. I know there have been people involved in Agriculture and Agri-Food Canada. Quite a few have even done the lending thing. There have been different participants who are not necessarily involved straight on farm operations but who are still involved in the beef and agriculture industry through more office positions.

Through this program, we have also seen quite a few young people employed in this and quite a few people want to follow in their footsteps. As we have seen, quite a bit of the work happens behind the scenes, such as from the producers. There is Ryder Lee. We have Fawn Jackson and Jill Harvie, who was a program coordinator. They are all still considered young individuals involved in the beef industry who work in the industry but who are not producers on the farm.

Senator Merchant: Would you say, then, that a larger portion of the young people do not go into the actual working —

Ms. Solverson: We have had both. There are straight producers and training producers, and then quite a few people have to take on a second job. I am involved on the farm, yet I do work full-time at the agriculture retail store as well.

I could not say that most are one way or the other; quite a few do both and need a second job, especially coming out of school. They do not have the operation or funds available to farm full-time, so they do need their second employment related to the agriculture industry.

Senator Merchant: Do they sometimes have more than two jobs? Maybe they have not just a second one but a third. I think we have heard that.

How many people were in your class at Olds College?

Ms. Solverson: During my diploma year, there were close to 60 in the two-year program I was in. Thirty-four graduated. During the two years, more than one third of the class dropped out, could not make it or had to return to the farm. There were 32 students in the degree program I just completed. It was a little surprising that there were 17 from Ontario.

Senator Merchant: They all graduated?

Ms. Solverson: We still have our second portion of it. We finished our in-school studies and we now do our directed field study. Again, it is almost like working on-the-job training, doing your practicum. Through this program, I think there was one person who had to leave due to medical reasons. However, there was the full amount of students from the beginning to the end.

Senator Merchant: Do students graduate with debt? As with many university programs, when students get out they have a debt to repay. You talked about putting financing together to start an operation. Do you also have a debt to repay? Are these expensive programs?

Ms. Solverson: I had to take out a student loan during the three years I was in school. I have my debt from school.

Some of the students there, I am sure, had the funds provided to them, but the majority received student loans or funding of some sort to provide them access to post-secondary schooling.

The Deputy Chair: For Ontario students going to Olds College, we are going to take some of the credit because for our continued patting on the back of Olds College.

Senator Buth: I am really curious about the young leaders program because my take is that it is tailor-made so that it is not one-size-fits-all, essentially. Who is your mentor?

Ms. Solverson: My mentor through the program is Toby Oswald-Felker. She is a consultant with Kaleidoscope Solutions, but her previous employment was a grocery retail chain. She was working with Safeway for close to 14 years, and I got to see the second side of it from the customer's perspective and the retail chain.

I have my father in our operation; he is a perfect mentor for me. They looked at the consumer side, connecting with the consumer and the decisions they make on what they purchase, who they purchase from and how they deal with the public when issues arise, such as the BSE crisis or if there is an outbreak, how that affects their sales, what they do and how they keep connected with their consumers. What we covered on our road map dealt with activists and everything, and so there was quite a bit on the communication side of that. After my involvement with McDonalds and the tray liner, it was easy to see how different initiatives or methods of connecting and sharing the story with them had positive feedback. They understand that consumers are becoming more health conscious or more focused on what they buy, as opposed to just buying the lowest price.

Mr. Yorga: I have a quick comment on that. During the selection process, there are two rounds of interviews. During the interviews, notes are taken and a selection committee looks at those notes after the fact to pair the mentee with the mentor, not only by area of learning and knowledge but by personality. It is someone you actually will get along with and want to learn from. There are many people with a lot of knowledge, but people do not always get along, so they have done a very good job of trying to pair mentees with people from across Canada who are able to get along and facilitate that learning.

Senator Buth: How is the program funded?

Ms. Solverson: There are quite a few CYL foundation sponsors. We have had ALMA's funding for the past two, three years as we are currently on our third year of full program. There was one pilot project they had the first year with just five participants, and after that there is the full 16 participants. The foundation partners are ALMA, UFA, Cargill and CCA, Canadian Cattlemen's Association. There is also the gold sponsor that came on, Farm Credit Canada, and the official sponsor is Canadian Cattlemen's magazine. It helps sponsor and promote this event.

There are companies interested in mentoring the next generation. Quite a few companies are saying, "I would like to step up, step in and mentor some of your participants." These companies include Cargill, CCA, and the Canadian Western Agribition,only to name a few, as there have been three years with 16 participants, all with individual mentors from companies to producers to veterinarians.

Mr. Yorga: Currently, Alberta is the only government that has actively supported this. Others are having that discussion. The Saskatchewan government recently announced funding through Growing Forward 2 for Saskatchewan participants, also hosting an event at Agribition. As of yet, they are not a foundation sponsor. I will leave it at that.

The Deputy Chair: I would like to remind our viewers that if they would like to contribute and participate in support of the program, I am sure that they would be happy to hear from you.

Senator Callbeck: It is great to have youth as witnesses here this morning.

I am interested in this CYL Program, too. My home province of Prince Edward Island has a five-year future farmer program, and I understand that it has been extremely successful. I think you said you had 40 graduates the first year.

Ms. Solverson: I would say close to 40.

Senator Callbeck: The first year there were five in it, and it has been 16 since.

Ms. Solverson: Yes.

Senator Callbeck: How many years does the program go?

Ms. Solverson: Your mentorship is for an eight-month program. We have had additional funding from ALMA to go into the CYL phase 2 for some of the graduates from the program, so it does not end once you are finished your eight- month mentorship program. Quite a few of the graduates still are involved in creating the sustainability. We try to attend some of the different events and conferences. It is set out to be an eight-month program for the mentorship part, but most of the graduates stay involved and are included in quite a few of the events and discussions for forward years. So far, we have just been funded for phase 2, and this is trying to keep them involved once they have completed their first year.

Senator Callbeck: What was the first year? What year was it?

Ms. Solverson: The first pilot project was 2010.

Senator Callbeck: That would be three years ago. The first year you had 5, and then 16. Are all those people still in some aspect of the agriculture business?

Ms. Solverson: I could not say for sure, but as far as I am aware, the ones that I have kept in touch with or have been in contact with, yes.

The Deputy Chair: Mr. Yorga, you are a graduate. Are you able to comment on that?

Mr. Yorga: Phase 2 of the program is really interesting because it brings everyone together again. What I spoke of off the top is that this is a place to facilitate lifelong learning, and so adding to that group, making the group bigger and expanding the size of the table just adds to that discussion. With ALMA's contribution to the second phase, we have been able to build the group, keep the group together and make it bigger. It has become an alumni organization. If I am in Grande Prairie, for example, I can call someone from CYL and go and tour their place. The same thing in Prince Edward Island now, as our first CYL participant from P.E.I. is in this year's group.

Senator Callbeck: Mr. Yorga, you spoke about amortization and that it may be helpful if it is over a longer period of time. Do you have any idea as to how federal government programs can be improved to support the next generation?

Mr. Yorga: The federal government program, the Canadian Agricultural Loans Act that is already in existence, has a 15-year payback period. If I go to Farm Credit Canada for a loan, their payback period is 25 years. The banks can do different things with it, but if it was set out from the start as a longer period, or at least matched what is out in the industry, it makes the understanding of the program a lot better. What young people do not understand is if you go to the website and it says 15 years and you do your math, it scares you off right away.

If people know that there is a longer window, it gives them the opportunity to use a program like that because, unfortunately, many young producers do not know that that program exists. From the perspective of what government can do, as I said in the previous discussion, if we take a really hard look at the tools that are available, they will be there to help us.

Senator Callbeck: The tools are there. Do you see any way they can be improved?

Mr. Yorga: In my opinion, changing the payback period is the important part. If you change that, the CALA loan is a fantastic vehicle.

Senator Callbeck: Ms. Solverson, do you have anything to add?

Ms. Solverson: I agree with Mr. Yorga's comment, and also to make the young producers aware of some of the tools that are out there. There are many tools out there, but many young people do not even know about the opportunity to use these tools. Finding ways to inform them and making it feasible for them to invest would be desirable.

Senator Black: In respect of these two witnesses, it proves the point. When I was last at Olds College I was speaking with the president, and he told me that years ago it was the children of families with the least prospects who returned to the farm. Now what they have seen over the last number of years, it is the children with the highest prospects, the highest ambition and the highest intelligence who are returning to the farms or the ranches. I would say that both of these witnesses make this point in spades.

I have a different question to ask you both. What is the impact of large commercial farms? We have been talking about family farms and interests, but there are what I would call industrial farms. What role do those play and how do they impact on your futures?

Mr. Yorga: There are two different ways to answer that. A large farm gives a young person the opportunity to work and to learn first-hand exactly how these things operate. It is a benefit and it is an advantage. Where I am cautious is on absentee landowners. Because the value of land has gone up, people see it as an investment. People who do not understand agriculture are buying agriculture land and then trying to rent it out. Unfortunately, many of the people who are taking those rents are younger people who need land. What will happen and what could happen is that when commodity prices change, those young people all of a sudden cannot afford to pay those rents because the land was purchased at an inflated price. All of a sudden those absentee landowners are the ones left holding the bag. Because people are moving into it and spending money on land, it is driving the price up, which makes it difficult for someone new to get into the business, someone who actually wants to be part of the business and not just invest in it.

Senator Black: You see this, though. Do you see this phenomenon in Saskatchewan, and I suppose in Manitoba and Alberta as well, where large commercial interests are buying land and making it difficult — I do not want to prejudge — for family farms and your generation to return to continue the business?

Mr. Yorga: I hesitate to paint everything with one brush. Yes, I have seen this happen. Yes, I have seen them pay more than the perceived value.

Do I feel that this will be a long-run problem? No. I feel that the market will sort this out itself. Land prices go up and land prices come down. When you have "dumb money" in an industry, when the price comes down, those are the first to get out. That presents a huge opportunity to young people who are smart and ready for it, because when the price comes down, there will be a lot of acres for sale.

Ms. Solverson: I agree with Mr. Yorga's comments there.

I also like to look at corporate farms in different ways. Our farm is a corporation as well. It sometimes presents opportunities for larger families to expand. Rather than just the two generations, if you are getting into the uncles and the brothers-in-law, sometimes the corporation is an easy way to maintain a large enough operation with multiple partners involved in it, more than a partnership. However, you are able to keep it within the family or extended family by moving to a corporation rather than just your family farm or your partnership.

Some corporations are just ways to keep it within and expand within the family as opposed to branching off, splitting it four ways.

The Deputy Chair: The final question of the day will be from the chair of the committee, Senator Mockler.

Senator Mockler: You are the farmers and leaders of tomorrow. We have heard you make the statement that you would like to look at amortization over a longer term. We have emerging new markets, and the young farmer needs better technology, more modernization to produce his or her product; and we have emerging niche markets because of immigration. Should governments, provincial and federal, be looking at forgivable loans for the young farmer? You bring in your strategic plan of production and meet your plan of production, creating jobs and better product on the market. Would that be an initiative to bring young farmers into the Canadian farming community?

Mr. Yorga: I am always concerned when I hear about forgivable loans. Given the asset values we are talking about, in some cases it gives people the incentive to take on risk that they are not prepared to pay back.

If we were talking about forgivable loans and it was after, say, 15 years, that is an interesting discussion. I feel that it would be important to have any timeline on that type of thing so that you do not have people going in knowing that their loan will be forgiven and being delinquent on it right away. It has to be over a longer period of time to prove that they are serious about what they are doing.

Ms. Solverson: I do not have much to add to that. I would agree that there are some risks to be aware of if you make that an option. I agree with what Mr. Yorga said on that as well.

Senator Mockler: I live next to a border town in the State of Maine, and a couple of months ago I had the opportunity to go to urban centres in the U.S. As I went to different stores, such as Costco, Sam's or Loblaws, and their big superstore, Publix, I noticed that they had a section for agri-products grown by local producers, and then they had California and so forth. Would that initiative work in Canada, namely, putting locally grown products into a section? For example, if you are in Atlantic Canada, Quebec, Ontario or Western Canada, you would have a section. Would that encourage younger farmers to join? Too often we hear that it is corporations that are producing, and the presence of locally grown products is just not there. As young farmers, what is your comment on that?

Mr. Yorga: My initial concern is one that I shared in the previous discussion. It has been proven that branded programs in the beef industry do not necessarily add value to the industry. It is something that, at the local level, may increase value for the local producer that is 10 miles away. At an industry level, though, it is difficult to prove that it is growing the pie.

What I perceive to be important is the Canada beef label: This beef is Canadian, this beef is grown in Canada and we have an awesome story to tell about that. We know where it came from, we know everything that has happened to it and we can promote that. When we have a unified message, consumers find consistency in it, and they are able to go from a grocery store in P.E.I. to a grocery store in B.C. and find the same thing.

Senator Eaton: I would like to pick up on what Senator Mockler was asking you about. We talk about the Canada beef brand. When looking at free trade, are you thinking of adopting a no-hormone approach? Do some countries in the EU, for instance, not want hormones in their beef?

Mr. Yorga: That would not be something that the industry would do. That would be something that a private individual or company decided to do. If they chose to process hormone free and sell to the EU, it would be a branded program that they would run themselves. It would be under the umbrella of our organizations, but it would not necessarily be marketed by Canada Beef because it would be a separate program.

The Deputy Chair: Our guests this morning have been Joanne Solverson and Jeff Yorga, both from the Cattlemen's Young Leaders Program. I want you to know that this is a refreshing session we have had with young people in the industry. We thank you for being here and encourage you.

As I said to the previous panel, if when you leave you have thoughts such as "I wish I had have told them this," or comments on other witnesses who may appear before the committee, please feel free to pass those ideas on in writing to the clerk.

(The committee adjourned.)