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Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 20 - Evidence


OTTAWA, Thursday, November 8, 2001

The Standing Senate Committee on Agriculture and Forestry met this day at 8:30 a.m. to examine international trade in agricultural and agri-food products, and short-term and long-term measures for the health of the agricultural and the agri-food industry in all regions of Canada.

Senator Leonard J. Gustafson (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, as part of the committee's study, we will hear from eight groups. The submissions of groups that are unable to appear will be read to committee members.

We will hear from each group on the issue of genetically modified wheat, after which we will have a general discussion on rural farm communities. Following that, we will have an exchange of questions and answers.

I ask that all presenters to stay within the allotted time and that senators keep their questions short.

We will begin with the National Farmers Union.

Mr. Stewart Wells, Board Member, National Farmers Union: Honourable senators, I have some short introductory comments to make on behalf of the entire working group. I will also read the National Farmers Union's message as well as a statement on behalf of the Canadian Wheat Board, because they are unable to attend this morning. Mr. Arlynn Kurtz will read the statement on behalf of the Saskatchewan Association of Rural Municipalities.

Senator Wiebe: If I may make a suggestion, Mr. Chairman, there is an excellent handout in our book, and rather than have the presenters go left to right, perhaps they could follow the order in our book. Would that be suitable?

The Chairman: That will be fine. Mr. Wells, please proceed.

Mr. Wells: Thank you for inviting us to be here today. I am joined by the other participants in a press conference that we hosted jointly on July 31 of this year. After my few introductory comments on behalf of the group, the others will introduce themselves and make comments on behalf of their own organizations.

Over the past months, and in some cases years, the organizations before you have developed policy positions to deal with the new technology of transgenic plant breeding. For our purposes today, and for the purposes of this working group, we consider that genetic modification, transgenic and RDNA technology are one and the same. That is our definition.

As the policy positions grew, so too did our unease with the prospect of commercial production in Canada of genetically modified wheat within the next 36 months. After some informal discussions, we decided that we must make the Canadian public and the Prime Minister aware of our positions on the subject. Consequently, we held a joint press conference on July 31, 2001.

At that press conference, and here today, we represented an unprecedented collaboration of farm organizations, civil society organizations, environmental organizations and grain marketers. We represent diverse constituents from farmers to consumers and all the links in between. We are here today because we have concerns about the introduction of transgenic wheat into Canadian fields and food.

In July, we tabled a letter that we sent to the Prime Minister. A copy is included in the package. The letter was written by us, but we have had over 300 organizations and independent experts endorse the contents. In the last paragraph of the letter, we asked the Prime Minister to: "act immediately to prevent the introduction of genetically modified wheat into Canadian foods and fields, unless the concerns of Canadian farmers, industry and consumers are adequately addressed."

We then sent the letter to Mr. Chrétien and hoped for a response from him on the subject. We realize that international events have overtaken ordinary government business, but we are disappointed that the Prime Minister has not acknowledged our concern in any way. I have to include a short update on that.

As a consequence of being invited to this senate committee, and our presence here in Ottawa, we did have a meeting yesterday with a policy adviser from the Prime Minister's Office. However, we still have not received any written acknowledgment of, or response to, our letter of July, 2001.

We would like to take this opportunity to place four recommendations before the Standing Senate Committee on Agriculture and Forestry. The first recommendation is in respect of GM wheat. Farmers and grain industry participants are concerned about market loss and risks to Canada's distinguished reputation for quality wheat varieties. In addition, farmers are concerned about agronomic impacts; consumers are concerned about food safety and regulatory adequacy; citizens are concerned about environmental damage; organic farmers are concerned about negative effects on Canada's successful organic sector.

Our organizations recommend that the Standing Senate Committee on Agriculture and Forestry insist that the Government of Canada take immediate steps to prevent the introduction of genetically modified wheat in Canada, unless the concerns of the Canadian farmers, industry and consumers are adequately addressed.

Second, we recommend that the senate committee ask the government to introduce market impact analysis to the approval process for genetically modified crops, including genetically modified wheat, and that relevant government departments be directed to examine thoroughly all options to consider market impact. Where they identify possible barriers, they should be asked to develop creative solutions to overcome those barriers.

Third, we recommend that the senate committee ask the Minister of Agriculture and Agri-Food for a description and accounting of the money spent by the federal government for the promotion of biotechnology, or work in collaboration with the biotechnology industry, since 1990.

Finally, we recommend that the senate committee ask the Minister of Agriculture and Agri-Food for a description and accounting of money spent by federal government on public/private sector research on biotechnology since 1990.

The other participating organizations will now make their statements. I believe, if we go according to the notes, we will begin with the Agricultural Producers of Saskatchewan.

Mr. Ivan Ottenbreit, Vice-President, Agricultural Producers Association of Saskatchewan: Thank you for the invitation to speak with you today. Elected representatives of the Agricultural Producers Association of Saskatchewan, APAS, passed a resolution on June 14, 2001 to have government halt its approval of genetically modified wheat with herbicide resistant traits. The introduction of this GM wheat to Canadian fields will cause producers to lose existing, conventional, identity-preserved and organic markets.

Our representatives have serious concerns about the agronomic impact of glyphosate resistant wheat. This GM wheat as a volunteer crop in succeeding years will require the use of more expensive chemicals. The GM wheat may "outcross" with native grasses rendering glyphosate useless in the control of weeds such as quack grass. The approval of this GM wheat will facilitate the introduction of the "terminator gene" and hence control of the wheat seed industry. Hence, APAS has two major concerns - market impact and agronomic concerns.

Regarding conventional markets, to date, the Canadian Wheat Board, CWB, has informed us that consumers representing two-thirds of Canada's wheat markets have communicated directly to the Canadian Wheat Board that they do not wish to purchase or receive GM wheat.

Regarding identity-preserved markets, companies such as "Warburtons of England" have indicated that GM wheat cannot be used in their milling and baking processes. If GM wheat is introduced in Canada, they will take their business elsewhere.

Regarding organic markets, the organic grain industry is viable and growing, but it will be seriously affected by the introduction of GM wheat. Other members of this coalition will expand on this matter.

There are three agronomic concerns: The first is glyphosate wheat as a volunteer crop. Western Canada has adopted conservation agriculture as a means of saving the prairie soil. Zero-tillage and minimum tillage practices use glyphosate - "Roundup" for example - as a means of weed control. The introduction of glyphosate-resistant wheat will put these practises at risk. Glyphosate-resistant wheat as a volunteer in succeeding crops will require the use of tank mix chemicals that will increase the cost of soil conservation programs. This increase alone will cause producers to consider exiting the programs, thus halting their existence or their future growth. The net result will be a detriment to Canada's Prairie soils and the environment.

The second concern is "outcrossing." Crop scientists studying the "outcrossing" of the grass species have indicated the possibility of glyphosate resistant wheat outcrossing with native grasses. Losing glyphosate as a means of control for a problem weed such as quack grass would result in producers having to use tillage as their only means of control, thus putting the future of our prairie soils and the environment at risk.

The third concern is "terminator genes." Proponents of glyphosate-resistant wheat can foresee the problems and thus have an American patent and are working on a Canadian patent for tank mixes and premixes that control volunteer plants resistant to glyphosate. These tank mixes will only work under ideal conditions, temperature being the major one.

Spring planting conditions in Western Canada are not always favourable. Thus control by these means is questionable. The industry has been approached with this scenario that when these tank mixes fail to provide control, the only solution will then be to introduce the terminator gene. This glyphosate-resistant wheat with the terminator gene will only grow for one year. Producers will have to source seed supplies from the industry every year. Since only one company has the rights to the terminator gene, they would have a monopoly and would inevitably gain control of the wheat seed industry. This scenario has been neither supported nor denied by the industry.

In conclusion, our markets, conservation practices and environment will be at risk with the introduction of glyphosate-resistant wheat. The Agricultural Producers Association of Saskatchewan is opposed to the approval of genetically modified wheat at this time.

The Agricultural Producers Association of Saskatchewan recommends that Canada, the U.S. and Mexico work toward a continental agreement on the GM wheat issue. North America has to be seen as a leader with one vision, working towards a global resolve on all GMO issues.

Mr. Bradford Duplisea, Health Researcher, Canadian Health Coalition: Honourable senators, thank you for having me here today. The Canadian Health Coalition, CHC, is against the introduction of GM wheat due to concerns about inadequate regulation and potential impacts on human health.

None of the GM crops today have undergone independent, long-term health testing, and therefore, it is unclear whether these crops are safe. Endless claims of "safety" by government regulators and the food biotechnology industry are not scientifically founded. Endless preaching that GM food is safe will not change this fact. The reality is that no one knows for sure whether this food is safe. To compound matters, with no mandatory labelling and therefore no traceability through the system, we cannot even scientifically observe what is happening. Indeed, scientists at the prestigious Royal Society of Canada raised these and numerous other health and regulatory concerns in their GM food report.

The Canadian Health Coalition believes in regulation based on the precautionary principle, which is: In light of scientific uncertainty, precautionary measures should be taken. In the case of GM wheat and other new technologies, such precautionary measures would entail rigorous, independent, long-term testing prior to approval. It would also entail using a more sophisticated risk assessment than is currently practised by Canadian regulators. The process of identifying GM food as being substantially equivalent to non-GM food is deeply flawed. According to the Royal Society it should be replaced as a decision threshold by "rigorous scientific assessment of [the] potential for causing harm to the environment or human health."

Furthermore, scientific data submitted by Monsanto and other biotech companies is confidential business information and not even subject to peer review. The Canadian Health Coalition believes that such non-peer review data, supplied by Monsanto and others, is simply not trustworthy. These crops need to be independently studied and experiments need to be replicated. The process of peer review constitutes the very foundation of science itself.

Canadians deserve better than a "trust-us" regulatory process. The Canadian Food Inspection Agency, CFIA, should be focussing its resources on regulating these crops, not promoting them.

With many GM crops, the genie is already out of the bottle. While the CHC believes the situation is not irreversible, let's play safe and reject GM wheat. In conclusion, the Canadian Health Coalition recommends that the Standing Senate Committee on Agriculture and Forestry conduct public consultations on GM wheat to examine the full range of concerns on this tremendously important issue. Thank you.

Mr. Wells: The representative from the Canadian Wheat Board was unable to be here today. They asked that their statement be read in their absence.

The Canadian Wheat Board recognizes the potential benefits that biotechnology may provide to consumers and farmers. The CWB's ultimate goal is a positive market entry for products that can be demonstrated to have benefits for farmers and consumers.

Currently, customers in at least two-thirds of western Canadian farmers' markets have expressed a reluctance to accept genetically modified wheat shipments. That reluctance has been voiced through direct statements to the Canadian Wheat Board and by the institution of government-imposed moratoriums or restrictive import and labelling practices.

For example, domestic millers are, in most years, western Canadian farmers' biggest customers. These customers are also exporters, and much of the wheat flour produced here goes into what can be categorized GM-resistant markets. Domestic millers have expressed concerns about the premature introduction of GM wheat, and they are in favour of a market impact test for new products.

U.S. millers can be added to the category of markets worried about the introduction of GM wheat. The U.S. is another large market for Western Canadian farmers. The North American Millers Association has publicly expressed its position that crops that do not have wide market approval, should not be placed on the market.

Japan consistently rates in the top five of Western Canadian wheat customers and is a premium price market. The Japanese concern about the introduction of GM wheat in North America is well known. They have publicly and privately told the Canadian Wheat Board and U.S. marketers that they will not buy GM wheat - plain and simple.

The list of other wheat customers that have policies or practices in place that restrict GM food products is too long to cover at this time. However, the Canadian Wheat Board has regularly asked for and provides letters of assurance that there are no genetically modified varieties of wheat registered for commercial production in Western Canada at this time.

It is evident that under these circumstances, the grain industry cannot afford to rush a genetically modified wheat variety onto the market until it can be assured that it will be able to continue to meet customer requirements for non-GM wheat shipments, if necessary.

Two equal criteria must be met before the Canadian Wheat Board and the rest of the industry would be satisfied that it is able to achieve a positive market entry in this environment. The first criterion is net benefit to farmers. The potential agronomic and market benefits of the technology must outweigh any market risks and costs of segregation.

The second criterion is the ability to continue to meet customer requirements. To achieve this there must be in place appropriate detection technology, tight production and handling procedures, and a fair distribution of costs and liability. There must also be internationally recognized sampling and testing procedures and feasible tolerance levels.

There are a number of initiatives underway to meet both of these criteria. However, a significant amount of work remains to be done. The Canadian Wheat Board believes this work must be completed before transgenic wheat varieties are made available for production in Canada.

The farm community agrees that in addition to the current slate of safety, quality and agronomic evaluations, market impact and system readiness must be considered before new crops become available for commercial production.

We would appreciate the Senate committee's support to encourage government departments to generate creative solutions in dealing with market impact in the regulatory decision-making process.

Ms Holly Penfound, Campaign Coordinator - Environment Health; Greenpeace Canada: Thank you for having us here today. Greenpeace Canada is opposed to the release of genetically modified organisms, including genetically engineered wheat, GE, into the environment.

As a global organization with a presence in 45 countries and a worldwide membership of 2.6 million people, Greenpeace is uniquely positioned to know that people around the world are rejecting GE food. We also know that the commercialization of GE wheat will harm our markets. Canadian wheat importers have made this clear.

In a separate written submission to you today, we have outlined the multiple problems associated with introducing GE wheat, including economic risks, problems with segregation, harm to the integrity of the wheat varietal registration system, agronomic impacts, health concerns, ecological hazards, and inadequacies in the GE regulatory system in Canada.

Today, though, I will focus my remarks on the environmental impacts that we can expect from GE wheat. The pathways that lead to ecological harm can take both direct and indirect routes. Direct impacts on soil organisms and plants that disrupt their populations or place in the ecosystem may themselves be inherently characterized as harmful, but they may also trigger crop management changes by farmers, which can have a ripple effect on natural eco-systems.

Let us look for a moment at two anticipated GE wheat scenarios: The first is the outcrossing or transfer of herbicide- resistant traits of GE wheat to wild plants, specifically quack grass in Canada. The second is harmful effects on soil organisms, resulting from the increased application of the herbicide glyphosate in Roundup Ready wheat.

Crop management responses to these problems such as increased fertilizer use, shortened crop rotation and shifts in pesticide use that increase toxic loads in the environment could have devastating effects on natural soils, terrestrial and aquatic ecosystems. For example, they could cause shifts in food sources and habitat for insects, soil organisms and birds and their predators. Or they could result in contamination of soil and groundwater from pesticides. Ironically, as the environment suffers, the biotechnology industry's promised economic and agronomic benefits to farmers often fall short, or even, in some cases, increase costs and complexity.

It is our position that GE food is not proven to be safe, and because it is unproven, it is not wanted. The Canadian regulatory system for GMOs - driven by a pro-biotechnology agenda - is fundamentally flawed, leaving consumers, farmers and the environment at risk. Scientists like those at the Royal Society of Canada have expressed similar warnings challenging the government's dual and conflicting mandate to both promote and regulate genetic engineering. I refer you to the RSC report entitled, "Elements of Precaution: Recommendations for the Regulation of Food Biotechnology in Canada."

Greenpeace Canada makes four recommendations concerning GE wheat that we ask the Honourable members of the Standing Senate Committee on Agriculture and Forestry to support. First, we ask that you conduct a public consultation process - prior to consideration of approval of GE wheat - examining the full range of concerns on this issue.

Second, economic benefits should be embedded in the regulatory approval process for GE crops, including GE wheat.

Third, the Canadian government should adopt the precautionary principle - which essentially says that in the face of scientific uncertainty, precautionary measures should be taken - and take immediate steps to implement the recommendations of the Royal Society of Canada as they pertain to the regulatory system for genetically modified organisms.

Fourth, GE wheat should be subjected to a full environmental assessment under the Canadian Environmental Assessment Act, CEAA. Relevant triggers for CEAA are the involvement of federal lands, federal money or the requirement for a federal permit.

Genetically engineered wheat is an inadequately tested experiment that has no place contaminating our farms, food and wild ecosystems. Our government should call the shots. The biotechnology companies should not be pushing GE wheat on to the market.

Greenpeace is here today in solidarity with groups with different views on genetic engineering. That is the strength in our message to you today. We reflect the urgency of this issue by coming together on it. We all agree that it is time Ottawa listened to Canadians. It is time for the Canadian government to act. It is time for Canada to say, "no" to the approval of GE wheat, and we humbly ask your assistance in bringing that outcome to fruition.

Mr. Don Dewar, President, Keystone Agricultural Producers: I am the president of Keystone Agricultural Producers. We are democratically controlled, producer funded organization that represents the interests of over 6,500 farmers as well as all the major commodity groups, livestock, supply management and special crops groups in Manitoba. I am here to speak to you on behalf of that industry in Manitoba.

Before I state our case, I want to assure you that we are not against the development of technology, including biotechnology, which could benefit producers and consumers. Products of high technology have yielded great benefits in the pharmaceuticals industry. We do not want to stop biotech research; by doing so we could allow our industry and our country to fall behind our competitors.

However, Canada does have a good reputation for growing high quality wheat, which is exported to many countries around the world. We are concerned that the introduction of genetically modified wheat at this time will harm Canada's markets. Many of our customers have told us, as we have already heard, that they do not want genetically modified wheat. The customer is always right. Until there are procedures in place, which are acceptable to our customers, we ask that genetically modified wheat not be introduced into Canada.

Our membership has told us that they have two conditions that must be net. First, we need an international standard for admixtures of genetically modified wheat in shipments of non-GM wheat. There are currently no international agreements stating what levels of admixtures are acceptable in export commodities, including wheat. Domestically, we set tolerance standards for impurities in virtually all products. The Canada Seeds Act allows for levels of impurities in a seed lot to maintain genetic purity. In water, we set standards for health reasons. However, we need an international standard, acceptable to all, that will regulate the admixtures for all agricultural products, including those that are genetically modified.

Second, we need to develop a segregation system here in Canada that will assure our customers that the international standard levels of purity will be met. This would require an effort of cooperation and agreement among producers, handlers and marketers. We need to define clearly the areas of responsibility and liability to ensure that our customers receive the wheat that they want to process for their customers.

We presently have quality standards as part of the registration process for wheat. We include this requirement, so that our customers will receive the quality of product they want. Our customers need to continue to receive what they want, and right now, they do not want genetically modified wheat.

If a genetically modified variety of wheat is introduced into Canada before these two conditions are met, producers will lose markets, and producers will suffer. If a genetically modified variety of wheat becomes registered, it will not be acceptable in the export markets. Keystone is concerned that in the event that the GM wheat is registered, it will be virtually impossible to guarantee that future shipments of export wheat will be free of genetically engineered wheat.

We request that the Government of Canada, for the protection of our industry, not allow the registration and general introduction of genetically modified wheat varieties until the market acceptance for this type of wheat is assured by both the exporting and importing agencies involved.

In closing, I ask that you consider the future of the agriculture industry and the economy of grain production in Canada. We, as Canadian producers, are struggling for market share. We cannot - and you, as Canadians - cannot afford to jeopardize markets.

Mr. Arlynn Kurtz, Executive Director, District 1, Agricultural Producers Association of Saskatchewan: It is my pleasure to present on behalf of the Saskatchewan Association of Rural Municipalities. Mr. Bob Schulz who is unable to attend due to problems with plane connections.

SARM is here today because we have concerns that the introduction and registration of genetically modified wheat in Canada could have a serious negative impact on producers. We represent all rural municipalities and the farmers that grow the wheat in it. At the SARM annual convention in March 2001, we passed the following resolution:

WHEREAS, the growing of genetically modified (GM) wheats, also known as transgenic wheats, could seriously jeopardize present wheat markets; and

WHEREAS, GM wheat may be on the market as soon as 2003 and logistics and segregation systems may not be in place to deal with the introduction of these crops at this time; and

WHEREAS, testing of genetically modified organisms (GMOs) should be carried out by publicly funded research institutions;

THEREFORE BE IT RESOLVED, that SARM vigorously oppose the registration of genetically modified wheat in Canada; and.

BE IT FURTHER RESOLVED, that Canada ban the introduction of any and all GM wheats into Canada.

As you can tell, SARM's principal concerns surrounding GM wheats are about market access, not the soundness of the science behind the technology. If genetically modified wheat becomes registered in Canada, we are in jeopardy of losing some of our best export wheat markets. Producers cannot afford to lose these markets.

Wheat is an important commodity to the economy of Saskatchewan. It is one of Saskatchewan's largest exports, and Saskatchewan is Canada's largest exporter of wheat. In 2000, Canadian wheat exports were valued at $2.9 billion. Saskatchewan's wheat production made up nearly half of this value at $1.4 billion. It is clear that a loss of export wheat markets would have a significant effect on our producers.

Part of the concern and threat to wheat markets comes from the present inability to quickly and easily segregate wheat. We need assurance that there will be segregation and logistic systems in place that can identify and preserve GM wheat. Until there are proven segregation systems in place, concerns about the registration of GM wheat will remain.

The potential for market losses is clearly counter-productive to the federal government's objectives of increasing Canada's share of world agri-food trade. Not only would wheat markets be affected, but markets for other crops would be upset as well. For example, Heinz, the largest European importer of navy beans will not accept any beans that have come in contact with GM products. Heinz wants guarantees that even the trucks in which the beans are hauled have never carried a GM crop. Adding GM wheat to the crop mix would add to the potential for this type of post-harvest cross-contamination.

Although SARM's primary concerns about GM wheat are related to market access, we also have concerns about the potential agronomic impacts that transgenic herbicide-resistant wheat may have. Producers, especially those using conservation tillage practices, depend on glyphosate herbicides for weed control. Because glyphosate resistant varieties of canola are already in production, the addition of glyphosate-resistant wheat could create weed management problems for farmers using direct seeding systems. Furthermore, the possibility for cross-pollination between GM and non-GM wheat exists. In this case, no amount of post-harvest segregation will be able to provide GM-free material.

In conclusion, we could support a consultation process for GM wheat; however, we see very little justification for allowing the registration of a crop that has more potential to do harm than good to the Canadian agri-food industry. Thank you.

Mr. Marc Loiselle, Director, Saskatchewan Organic Directorate: Good morning Mr. Chairman and honourable senators. I have been an active farm producer of certified organic food crops for 16 years.

The Saskatchewan Organic Directorate is unequivocally opposed to any further introduction of genetically engineered, GE, and transgenic crops because of the threat that they pose to the integrity and viability of organic food and fibre production. Worldwide there is a zero tolerance level for genetically modified organisms in certified organic food as outlined by product certification standards and demanded by traders, processors and consumers. If a minimal tolerance level were to be established, it would be impossible to maintain due to the inevitability of steadily increasing contamination by GM crops.

Transgenic crops cannot be contained within specific growing areas, in research plots and farmers' fields, as genetic drift of their novel traits will occur by the spreading or outcrossing of pollen and seed by wind, water, animal and human activity. Contamination from GE wheat will occur just as contamination by transgenic canola has already resulted in the lost ability to fill the market for certified organic canola.

Despite requests to the Canadian Food Inspection Agency and provincial agricultural departments for the location of GE wheat sites, they claim that such information is confidential and location information will remain secret. Yet they want to know where all the organic farms are located. Government-approved secrecy surrounding the genetically engineered wheat test plot sites within Canada has already infringed on our rights as producers.

The proposed commercial introduction of transgenic herbicide-tolerant wheat and the consequent genetic contamination of other wheat varieties will make it impossible for farmers to have a clear choice about the type of wheat they grow. In addition, there are profound long-term implications for research and development of future wheat varieties due to the contamination of wheat seed stalks, seed collections, breeder lines and gene banks. There is no management practice, detection technology or segregation system that will prevent genetically engineered wheat from contaminating fields, food shipments and feed supplies.

[Translation]

Loss of certification for organic wheat, loss of market opportunity and income, adverse effects on food safety and environmental impact, loss of choice for consumers are all unacceptable.

Ultimately, the rights of consumers are paramount and must be respected. They are the market and create the demand. Adoption of certified organic food production to meet growing demands is being jeopardized by the uncontrollable use of and contamination by transgenic crops.

Introduction of the GE wheat will do nothing to reduce toxic chemical usage, to provide wholesome uncontaminated food or even to produce more food as is claimed; but will profit the GE companies at the expense of farmers, consumers, communities, and the common good of all Canadians. The right to farm and consume food free of GMOs and GE wheat is being threatened. It jeopardizes Canada's unique reputation as a producer of high quality food commodities. Because of the large area sown to wheat in Canada, its valued importance as a staple food and as an essential crop in maintaining necessary crop rotations; the approval of GE wheat would be devastating.

[English]

The introduction of genetically engineered wheat would pose a grave threat to the viability of the growing number of organic grain farms in Canada. Wheat is a major crop in organic grain production because of three important features: its relative drought tolerance, its competitiveness with weeds and its marketability.

The forced elimination of wheat from organic crop rotations due to contamination by GE wheat would therefore jeopardize the agronomic and economic viability of organic farming on the Canadian prairies. Organic agriculture is the fastest growing sector of the global food systems. In Canada, it has both small and large acreages, is diverse, is largely export oriented, and is successful without government subsidies. The introduction of GE wheat in Canada threatens this vital sector in Canadian agriculture, the brightest hope on the agricultural horizon.

Is the Canadian government acting upon the many good recommendations that the Royal Society of Canada Expert Panel on the Future of Food Biotechnology delivered in their February 5, 2001 report entitled "Elements of Precaution: Recommendations for the Regulation of Food Biotechnology in Canada" or is this important work being largely ignored?

Why has government moved away from public accountability?

Who will be held responsible for the biological pollution?

Will GE wheat be given comprehensive federal agronomic and environmental assessment reviews under the Canadian Environmental Assessment Act apart from the standard regulatory system, which is fundamentally flawed? Governments have demonstrated serious conflicts of interests as they simultaneously act as investors in and regulators of GE food.

Will government continue to provide public resources for the biotech industry to research GE wheat, then allow private companies to patent and then own it? In a democracy, governments are to serve the common good, but increasingly we are seeing the corporate agenda take precedence over the rights of farmers and consumers.

The Saskatchewan Organic Directorate recommends that this Senate committee conduct a public consultation process - prior to consideration of approval of GE wheat - examining the full range of concerns on this issue. Furthermore, the Saskatchewan Organic Directorate believes it is imperative that the Canadian government adhere to the precautionary principle and act immediately to stop further development, approval and commercial release of GE wheat.

Ms Nadège Adam, Biotechnology Compaigner, Council of Canadians: I am here today representing the interests of our members - 100,000 concerned consumers across the nation.

Genetically engineered foods were introduced into our food supply without our knowledge or consent. Today, they account for up to 70 per cent of processed foods found in our grocery stores. Though Canadians have expressed clear concerns over the lack of proper testing of these foods on public and environmental health, this government seems determined to continue releasing new GE products, such as GE wheat, into our food supply. Poll after poll has shown the growing unease and bafflement at the fact that we are being forced to consume foods that could potentially be harmful to our health.

On many occasions government officials have attempted to reassure Canadians about the safety of these products, yet several reports commissioned by this government, namely, the report of the Royal Society of Canada, have told us otherwise. The Royal Society of Canada released a study which, at the request of this government, thoroughly assessed the current regulatory framework for the approval of GE foods and found it to be grossly deficient. They issued 53 recommendations and every one of them has been ignored.

Wheat is of particular concern to our members because of its pervasiveness in our food. The thought of having our bread - the staff of life - genetically engineered in the midst of such controversy and uncertainty is absolutely unacceptable to us.

There is, for many in Canada, an undeniable mistrust of GE foods that must be addressed before more products, such a GE wheat, can continue to be released into our food supply. To ignore these concerns will serve to fuel a growing indignation among Canadians. We need public discussion, a thorough analysis of the implications with which we may be faced, and a democratic process wherein the rights of citizens will be respected.

We want this government to understand that consumer confidence in these products will not be established unless these concerns are addressed. Approving GE wheat in Canada would not only be a commercial disaster for the wheat industry but would exacerbate what is now becoming a general consensus among many, which is that the government is willing to continue protecting the interests of the biotech industry at the expense of that of the citizens it represents.

The Council of Canadians, therefore, joins with others in urging this government to stop the introduction of genetically engineered wheat. We also ask that the Senate committee conduct a public consultation process, prior to the consideration of approval of GE wheat, examining the full range of concerns on this issue.

Mr. Wells: I am a board member of the National Farmers Union and a farmer in southwestern Saskatchewan.

Some of you are well aware of the history of the National Farmers Union within Canada. We are a national farm organization with members from coast to coast. We are a direct membership organization, which means the members are farmers like myself and our elected officials are, therefore, farmers.

The National Farmers Union is opposed to the introduction of genetically modified wheat, based partly on our experience following the introduction of genetically modified canola. Within a few years, canola fields all over western Canada have been contaminated by transgenic canola, resulting in market loss of the organic and European markets. As well, the unwanted transgenic canola plants are themselves a new weed problem.

The introduction of GM wheat will result in similar problems of cross-pollination and contamination and will put at risk our export wheat markets around the world. Farmers could lose hundreds of millions of dollars per year as a result of market loss following the introduction of transgenic wheat. In addition, farmers will face extra weed control costs when trying to remove the unwanted GM wheat plants from their crops.

Other organizations here today are highlighting the real prospect that transgenic wheat will likely out-cross with other grassy type plants, creating more problems and expense for farmers. In some cases, this will lead to more soil tillage, something that most farmers are trying to avoid.

If GM wheat is introduced into Canada now, farmers will be left with the choices of growing transgenic wheat, transgenic-contaminated wheat, or not growing wheat at all. Consumers will have the options of eating products that contain Canadian wheat contaminated by transgenic materials or locating wheat products made from imported transgenic-free wheat. This scenario has grave consequences for anyone trying to grow non-transgenic wheat, especially the organic sector. These are not attractive options for farmers or consumers.

To avoid costly problems before they occur, much more thought has to go into the approval process for additional biotechnology crops. Our approval process must study each new proposal on a case-by-case basis and use the precautionary principle as explained by the Royal Society of Canada in their report of last spring. As was also highlighted in the Royal Society report, the National Farmers Union believes that it is inappropriate to have the regulation and promotion of genetically modified crops carried out by the same government department. Surely, the public's trust and best quality science are both served by rigorous, transparent and independent testing of genetically modified food crops. As we have seen with Canadian canola and "Star-link corn" in the United States, haste makes waste, and waste is something that Canadian farmers cannot bear.

The promises of good news for farmers and consumers from biotech companies are endless. The experience, however, has been different. The generation of biotech products up to and including transgenic wheat are designed to create markets for products like Roundup and to bring the control of the world's seed supply to a few patent holders. Is this an appropriate use for such a powerful technology?

A likely scenario in the near future is a world in which over 90 per cent of the food supply is genetically modified and controlled by a few companies. Is anybody thinking about that likely scenario? You can bet that the biotech companies are. What will this mean to seed availability? What will it mean to the cost of food? What will it mean to national security?

There are a few pivotal moments in the evolution of society that appear in all the history books. We think that the introduction of genetically modified crops will be looked back on as one of those pivotal moments. We can either control this new technology, or it can control us. The choice is still ours.

The National Farmers Union thanks you for your attention and urges the Senate of Canada to make the questions surrounding the introduction of transgenic wheat a priority.

That concludes the statements on behalf of the organizations and the working group. I have some very quick closing remarks on behalf of the working group.

Mr. Chairman, as you can appreciate, our concerns in this issue are many and varied. We sincerely hope that you will be able to act on the recommendations that we as a working group are making. As mentioned earlier, those recommendations include insisting that the government take immediate steps to prevent the introduction of transgenic wheat into Canada, unless the concerns of Canadian farmers, industry and consumers are adequately addressed. We recommend that the market impact analysis be introduced into the approval system. We recommend that the Minister of Agriculture and Agri-food Canada be asked for an accounting of the money that the Canadian government is spending on promotion and work in collaboration with the biotech industry since 1990.

Mr. Chairman, we will be happy to answer any questions.

The Chairman: Genetically modified canola is being grown very extensively. Have you any proof that Roundup will not kill genetically modified canola? What is your experience in that regard?

Mr. Wells: I am sorry, Mr. Chairman, but I do not exactly understand your question. It is clear that Roundup will not clear Roundup Ready canola.

The Chairman: Is there any chemical that will?

Mr. Wells: Yes, there are broadleaf herbicides that will kill Roundup Ready canola, but those herbicides could not then be used on Roundup Ready wheat, if it were to be introduced. That is because the wheat plant is in an entirely different class than canola. Wheat is considered to be a grassy-type plant while canola is considered to be a broadleaf plant.

The Chairman: For those around the table who are not farmers, I had phone calls as recently as yesterday indicating that a certain farmer had tried to kill Roundup Ready canola with Roundup and, of course, it would not work. As a result, he had no other options. He sprayed his fields three times and had no option but to take the Roundup Ready canola with the other crops.

Mr. Wells: Last night, several of the farmers here were comparing their own particular problems on their own farming operations in regard to this. Would you like to hear some of those stories?

The Chairman: I would like to hear a short example.

Mr. Ottenbreit: We have a unique situation on my farm where, three years ago, I seeded a crop of Liberty Link canola, which is another GMO canola. In the following year, I seeded barley. This past summer it was chemfallowed. Chemfallow is a means whereby we use glyphosate two to three times a year to control the weeds.

The Chairman: Was it Roundup that you used?

Mr. Ottenbreit: Yes. What happened is we burnt off the weeds in the middle of May, with a half litre of Roundup, or glyphosate. Then, in the middle of July, the volunteer weeds were growing were in full bloom, which is the time you have to apply another shot of Roundup. We applied .7 of a litre. Two weeks later, I noticed that the glyphosate had done a remarkable job except that for every 30 feet there was a huge clump of this beautiful canola plant. As a result of that, I approached the company Aventis to come out and have a look at it, and they did. The technician who came stated the minute he got there, "I've seen this before." So it is not unique.

I gave the technician two samples of the Liberty Link canola from Aventis. He called back and said, "You have a canola that is resistant to glyphosate, that is obvious. It is one of two things. It could be heterozygous, which means that it is resistant to either one of the two chemicals, Liberty Link or glyphosate."

They checked the seed out and found out that the Liberty Link seed had Roundup Ready seed in it. These are the two types of GMO canolas that are available right now. I had bought certified Aventis Liberty Link seed, and I ended up with Roundup Ready seed in it. I asked him how it happened, and he said that it could have been one of two ways. The first possibility was that when the seed was propagated it was too close to a Roundup Ready field and cross-pollination occurred; or else the processor of the seed did not clean out the mill properly and it got contaminated when it was bagged.

He told me that I might have a heterozygous canola that is resistant to both chemicals due to gene stacking. I asked him who owns this technology now and I told him that they should come and remove it. It so happens that a lawyer owns this field, and he is proceeding from here.

The Chairman: I have one more question. I was a member of the House of Commons when we fought for plant breeders' rights. I am sort of wondering if, perhaps, it has backfired on us. I would like to hear your comments on that. It seems to me that there is an awful lot of control on the part of some of these large companies over the farmers. Of course, it is stimulated by the fact that they strongly advertise greater production and, of course, clean fields. We have experienced that; we have seen it.

I would like to hear your comments on the plant breeders' rights situation because it seems to me that a lot of the smaller grain producers and seed growers are now out of the picture.

Mr. Loiselle: Mr. Chairman, with regard to companies and their promotion, it is particularly disturbing when you see advertising ahead of a product actually being certified for sale. We think we saw examples of that with Clear Field systems; that is, huge billboards around the countryside advertising something that did not have the necessary go-ahead, and yet it was allowed to happen. That is particularly disturbing.

On the plant breeders' rights, I always thought it was an improper thing to do. I do not agree that the control of seed should be limited to an ever-shrinking number of people. Seeds should belong to all people as a common good and the farmer should have every right and ability to preserve his own seed.

Mr. Wells: I want to compliment the chair on being so honest with us and taking some responsibility for the plant breeders' rights legislation. Mr. Whelan expressed the same sentiment when I met him a couple of years ago. Back in the early 1970s, the National Farmers Union was predicting this scenario. They said this would happen. However, they did not know how. No one knew the science, but they knew that this is where we were heading. Again, I compliment you.

Mr. Dewar: As a seed grower for over 30 years, and at the time of the eight years of debate over plant breeders' rights, I was on the board of directors for the national association. Through that organization, we were supportive of plant breeders' rights. We were supportive of the fact that the farmer could keep his own seed; we were supportive of a process of funding the research, because we saw decreased funding coming from the government. However, we were also assured that the government would maintain public research. We have seen that virtually disappear.

They partner with companies, for example, with Monsanto. With the technology, the new variety ends up in the hands of the company that they have partnered with rather than in the public domain as originally started. CCAN association was formed in part to distribute public varieties. They have a decreasing number of varieties to distribute. It was initially government varieties; now they get private varieties from other companies.

There is a big difference with the Roundup Ready canola. It is such a broad-based chemical that they asked farmers to sign away their right to keep their own seed. Liberty is another chemical and Liberty Link canola is resistant to the chemical liberty. If you choose to grow that one, you can keep your own seed because they get their money out of the chemical. They charge you $30 an acre for the chemical, rather than $8 for the Roundup. They have their way of getting their pound of flesh.

The Chairman: There is no question that research funding was a major factor in the whole situation.

Senator Wiebe: It is difficult for me to resist from making a comment about the chairman's admission, but I will hold back. I want to thank you all very much for coming here this morning.

I agree with everything that has been presented here today and I congratulate and thank you. From my perspective as a farmer, it is tremendously refreshing to see a number of different farm organizations that are able to set aside some of their petty little differences and come together for a serious issue. For that, I want to thank you very much. We, as farmers, must start doing more of that if we are to address the problems that agriculture faces in our country today.

In today's submissions, I heard three definitions: genetically engineered, genetically modified, and transgenic.

Consumers are very confused about GM foods. The more different abbreviations we throw out, the more confused they become. Is there a difference between the three terms? If so, can you explain them?

Ms Adam: We deal a lot with consumers. We do info picket lines in front of grocery stores and make presentations in all kinds of little fora, so we have those kinds of questions. We at the council use the term "genetically engineered" because of the confusion about the term "modification." We have found that those who favour genetically engineered foods are bent on trying to broaden the definition as much as possible to encompass everything, for example, hybridization, mutagenesis, and so on, to muddy the waters.

When we talk about genetically engineered foods, we specifically talk about recombinant DNA or transgenics - that is, the crossing of species. That is what we take issue with. The people with whom we have had contact are clear that what is in question now is the new science that involves the crossing of species and the manipulation of rDNA. They do not have a problem with mutagenesis; everyone knows we have been dealing with this for a long time. Specifically, we are addressing that. To be clear for everyone present around this table, we are focussing on transgenic and the manipulation of rDNA.

Ms Penfound: I agree with that statement. I would add another aspect, namely, the possibility of genetic engineering within a species. The manipulation of the rDNA within a species also has the potential of causing problems because of the possibility of the instability that could be rendered in the particular transformation process that way.

Otherwise, I agree that the concern is not including all of those long-established, broad types of technology that proponents of biotechnology want to throw into the mix so that it is as if we are opposed to everything. We are opposed to the manipulation of rDNA. For the most part, it is interspecies manipulation.

Senator Wiebe: Everything we eat today has been genetically modified.

Mr. Loiselle: There has been a lot of debate about what exact standards organic growers have and we have been asked if we are against everything. I would like to read a quick definition. In the standards to which I adhere, it is listed as "genetically engineered organisms." They are prohibited. The definition states that "genetic engineering includes recombinant DNA, cell fusion, micro- and macro-S encapsulation, gene deletion and doubling, introducing a foreign gene and changing the position of genes." There is then a proviso that states that, "This does not include breeding, conjugation, fermentation, hybridization, in vitro fertilization or tissue culture." It is very specific and very scientific. Even I have trouble understanding what this means.

Mr. Wells: It is safe to say that the public relations battle over the definitions and the terminology used around the world has been waged ever since we got into the area of recombinant DNA.

The proponents of the technology first began by calling it genetically enhanced production. They were pushed off that by the public relations battle that ensued. This particular battle is ongoing, so the terminology is evolving.

Senator Wiebe: The new problem is genetically modified, engineered or what-have-you, wheat that is now in test plots in our country. It is my understanding that that kind of wheat will be resistant to certain herbicides. We have done the same thing with canola. I heard the horror story that Mr. Ottenbreit mentioned, and I would suggest that it would be tremendously helpful to have more of those kinds of experiences documented and presented in a form that we could use in the arguments that we will have. We do not have any background on what may or may not happen with wheat. We do have some idea of what has happened with canola.

Is there is some way that one could assess the cost factor to the individual farmer - cost being a drop in market, a drop in price, the cost of having to continuously buy seed every year? If you want to prepare a field for that canola, what additional cost will be there to seed durum wheat in that field? Is there some information like that that is available so we have some kind of ammunition that can be used?

Ms Penfound: In that regard, Greenpeace has produced a farmers' video with testimony from Canadian and U.S. farmers. We are arranging for the distribution of it. I can certainly arrange for a copy of it to be sent to this committee, although it is only in English, if that is acceptable to the committee. It was produced in part for the international audience as well, so that farmers around the world can understand the experience that is occurring everywhere, in different regions.

Mr. Wells: It is a disgrace that Canadian citizens are not allowed to know where these test plots are or what is growing in them. That became an issue this past summer with provincial governments in Canada who find this offensive as well.

As an organic producer or someone wishing to grow non-genetically modified crops, theoretically I could have a test plot right beside my farm and not be aware of it. We think it is a negative situation that should be changed.

As far as the gathering of information and testimony on behalf of farmers, many farm organizations and organizations here today would agree that that could be made possible if the Senate would conduct public hearings where farmers could come and give their testimony directly.

The Chairman: I might explain for the senators who are not directly related with agriculture that the seed is very small and it moves around in the wind very easily. When we first grew canola - not genetically modified - my son said, "Dad, I think we finally found a weed that will grow in this country." Canola will grow anywhere. It is amazing where this plant will come up.

Mr. Dewar: I think the experience with canola has shown that if people choose to use the technology, you do have the problem with controlling the volunteers, but it can be done because it is susceptible to a broad range of other herbicides. If you are in conventional agriculture and using pesticides in your rotation, you can probably control it. However, it is a real problem for people who have chosen not to use it - whether or not they are organic or conventional farmers.

One of our directors had a field of chemfallow that had never grown Roundup Ready canola. He asked Monsanto to come out and look at areas on his field that he could have swathed and harvested as volunteer canola. They attributed it to either the ducks and geese that passed through or the 200 deer that had been in the field that the winter. There is no reason to believe that the same would not happen with the wheat. We know it would be a much more serious problem to control the volunteers.

The agronomics is coming into it as a big problem, but the bigger problem in our mind is the fact that our customers will tell us, "We do not want a shipment of wheat if it has 0.001 per cent transgenic wheat in it." It is the market. If wheat is grown in Canada, we have no way of guaranteeing that it is pure as soon as there is one field some place. That is the disaster that we will see in the marketplace.

I was asked an interesting question. Why is Monsanto not doing this with the soft wheat in the United States, which would give them a much bigger market? They have chosen to come to Canada and destroy our markets.

The Chairman: How do you see the American government moving in regard to the Canadian government? What will happen down there will affect us.

Mr. Dewar: We know that the American farm bureaus, the American farmers' unions and every wheat organization or farm organization is opposed to the introduction of transgenic wheat in the United States as well. We all recognize that if it is introduced into Canada, it will be in the United States, and vice versa. That unprotected border is still unprotected. It is a serious problem. I do not know what their government is doing about it, but we do know that the producers in the United States are just as concerned, and they are also asking their government to take action.

Mr. Kurtz: We zero-till over 4,000 acres every year. That is a process you may not understand. We use no tillage. We go in the spring and spray off the weeds and seed, and that is it, one pass. I have grown Roundup canola. This past year we had 1600 acres in. It has been a good fit on my farm, but I have some serious reservations because of the horror stories coming out about it. I do not think that we can reverse that.

However, when it comes to wheat, I do not ever want Roundup wheat on my farm because it is devastating to a zero-till operation like mine. Canola is a broadleaf weed, as has been explained here. Wheat is in the grass family. Chemicals to control the grass family are very expensive. It would probably add to my operation $15 per acre per year each spring to take it out as a volunteer crop when I want to seed.

We need to go a little further. Test plots are being allowed. The scientific evidence that says outcrossing is possible. We could destroy the whole cereal crop industry in Western Canada. If it outcrosses with wheat, barley, oats, rye, triticale - and the list goes on - we could destroy the whole market. I urge you to urge the government to ban even the testing of glyphosate-resistant wheat in Canada.

Senator Oliver: Today I want to ask a general question that goes to the root of why you are here and what you are trying to say.

I was impressed that you all sang from the same song sheet. When I heard the various presentations, I heard many identical sentences and conclusions in your presentations. You said the Senate standing committee should conduct a public consultation process. You have certainly gotten together to determine what you wanted to say here. I wonder if that the right thing to ask us.

Ms Adam said that genetically modified foods account for up to 70 per cent of the foods in our grocery stores. We know that the cows have already left the barn, so there is no point in closing the door, because of what has happened with canola and some of the test plots. We know the effects of genetic drifts, birds, the wind, the rain and cross-pollination. It is already there.

We also know that the Royal Society of Canada has already done a study on the regulations and that they are found to be wanting. Why are you asking us, as a senate committee, to do yet another study? If I could go back perhaps to Mr. Loiselle and Mr. Ottenbreit to ask a specific question that will help to explain my general question. You said that contamination from GE wheat will occur, just as contamination by transgenic canola has already resulted in the lost ability to fill the market for certified organic canola. Could you quantify the value of this loss in the organic industry?

Mr. Loiselle: At present, we are in the process of quantifying the loss.

Senator Oliver: It has not been done?

Mr. Loiselle: There are individual cases, obviously. This is a very difficult thing to assess. Now, because of the fact that there is so much genetic outcrossing happening with the canolas, it has been almost impossible to find a source of pure seed. We need to have written, signed affidavits by the seed supplier from our certification organization that attests to the fact that the seed source is 100 per cent pure because we have zero tolerance for genetic contamination. As demonstrated in the U.S. especially with the corn and soybean issue, it has come to the point that no seed suppliers will sign those affidavits. Then where are we?

From square one, I try to fulfil the market, and there is one because I was offered a lucrative contract for organic canola. I just had to turn it down because many of my neighbours are in the zero-till position and are using that technology; I have a colony of honey bees on my land. It is obvious that those honey bees will not restrict their movements to my quarter section of land, for example.

Senator Oliver: Do you not agree that the damage has already been done? Are you really asking us the right question, in view of the damage that has already been done in terms of the GE issue?

Mr. Loiselle: Senator, you mentioned that the cows have been let out of the barn. In a sense, that is true in respect of wheat, but it has only been one year of unconfined trials in a three-year process toward being approved. It is safe to say, that if there has been any amount of contamination, it would be minimal in comparison to what has happened with canola.

I feel confident that if the decision were made to regulate that testing in the laboratory, where it could undergo extensive, long-term testing, for example, that would be fine. However, do not put it into the environment. We have extreme weather in Saskatchewan. Even with the existing regulations for outcrossing, studies have shown that it can occur up to an extent of 27 metres.

Therefore, the regulation, which was updated by the Variety Registration Office to 30 metres, is supposed to be adequate. We feel it is very inadequate. That is probably under ideal conditions in an ideal scientific laboratory setting. If this particular wheat were to be approved in a couple of years and put into commercial production, my conventional neighbour, who would want to buy into this technology, would be growing it with no restrictions.

I have a 25-foot border strip that my organic regulations require me to have on my side of the fence in case I have accidental spray drift from chemicals by my neighbours. Those regulations were put in place before the thought of a genetically engineered crop ever arose. The regulations and everything else are woefully inadequate.

Senator Oliver: Again, it is addressed by the Royal Society. Instead of asking us to have public hearings and consultations, why do you not have the recommendations of the Royal Society enforced?

Mr. Loiselle: That was a scientific panel. We need to have a cross-section of Canadian societies, from the consumers to the producers and everybody in between. That is what is important about this issue; - we do not want to leave anybody out of the loop.

Mr. Wells: I will try to respond to some of those questions. It is my understanding that the Royal Society did not do any interviews with farmers and that they concentrated on the science of the issue.

Again, with that procedure of public hearings, if any of the organizations had the resources and the time, the human component, to go across the country to collect, compile and present the data, I think we would be doing it now. However, these are very tough times for farmers and for agriculture across Canada.

We were looking at the senate committee as a group that might have the resources to do that kind of work and compile the data that Senator Wiebe was talking about earlier.

On the issue of whether the cow is in or out of the barn, we are trying to stress that that cow is out, in respect of Starling corn in the United States and canola in Canada. We are hoping that we can learn from those two experiences. The cow is not out of the barn on genetically modified wheat.

Senator Oliver: It is partly out.

Mr. Wells: On that point, which brings up the issue of liability, the Saskatchewan Organic Directorate is talking publicly about the possibility of having to take biotechnology companies and, perhaps, the federal government to court over this next year to determine where the liability will be attached for the problems that are incurred.

Putting the dollar value on the problems is extremely difficult. On my farm close to Swift Current, we have dropped canola from our organic rotation. I know that some of my neighbours, especially to the west, from which the winds prevail, have grown genetically modified canola in the past. Therefore, we have taken that from the rotation. We have taken it off the list of possible crops that we can grow.

Since we have done that, I have had calls of interest from buyers around the world looking for organically grown canola. I have to tell them that I cannot supply it. It would be difficult for me to put a dollar value on that rotational loss. Obviously, I have filled that spot with another crop. It is hard to quantify the loss, but there is no question that it is a loss to our operation.

The Chairman: On the point you make, one thing should be explained. The seeds, especially fine seeds, move around by drifting with the snow. Out on the prairies, when that wind comes up and the snow drifts, seeds like Pigeon grass will spread quickly. You may wonder where all the weed in your field came from. It drifted along with the snow, and it will go for miles.

Mr. Dewar: There was an example last summer of a canola field that had been freshly swathed near Wawanesa, Manitoba, and a tornado picked it up. It was freshly swathed, but it was deemed that it was ripe enough that it would fully mature in the swath. That was spread for who knows how far when it got sucked up in the tornado.

Ms Adam: I would like to respond to your comment about the cow being out of the barn, and why we are coming to you. It is important to note that we have not had any form of public debate in Parliament on this particular issue. We have had so-called consultations with stakeholders, recommendations have been made to the government, and all of them have been ignored. The Royal Society of Canada released their report in February, and to date, there has been no acknowledgment by government as to whether they would even consider any of those recommendations.

We are coming to you because we need to have this discussion in the public setting, where Canadians will be able to have an input, or actually hear from you, about ways to address this issue. As far as the cow being out of the barn, we, at the Council of Canadians, do not want to accept that.

We understand contamination to be a pollution problem, and that you do not accept it as a fait accompli. Have these companies made accountable and have them clean up the mess that they made out there.

Mr. Loiselle: Mr. Chairman, may I comment on the point that Mr. Wells made? I cannot discount the possibility of legal action because I am part of that organization. I want to publicly state that it would be very unfortunate that a policy decision could be made via the courts. We feel that would be very irresponsible. However, if that is what it takes, those are the actions that some of the producers are prepared to take.

Mr. Wells: We have had no acknowledgement whatsoever of our request to the Prime Minister from last July. This statement as completely sincere: Canadians and the organizations here trust the Senate.

Senator Oliver: I was trying to flush out and be more specific about what they are asking.

Mr. Dewar: Not every organization here asked for public consultation. We are a group that did not request it. We are asking the Senate to help stop the introduction of GM wheat.

The Chairman: I should mention that our office receives more mail on genetically modified grains than on any other topic with the exception of gun control.

Senator Hubley: I have a question for Mr. Loiselle on the subject of organic farming. I come from the other end of the country, where we do not think in the land scales that you do in the west. I would like to know a couple of things.

What is the number of organic farmers that have large operations? As your brief indicated, organic agriculture is growing very fast in the global food systems. What kind of growth is taking place in Canada, and perhaps globally as well?

Mr. Loiselle: I cannot say how many large organic farms there are. I happen to co-own 960 acres with my parents. We also rent from two landlords. We farm in total approximately 1,400 acres. That is under various grains, including forage seed, alfalfa and pasture. In my estimation, that would be a moderately sized organic farm. Some organic farms are as large as 3,000 acres or more.

Could you rephrase the second part of your question?

Senator Hubley: I wanted some indication as to the rate that organic farming is growing within Canada and globally.

Mr. Loiselle: We are growing at approximately 20 per cent per year. There were statistics done in Saskatchewan last year. I am also the president of one of the farm certification organizations in the province. Indicative of our growth is that we almost doubled in size in 2000. This year we had a moderate size increase as well.

Much of this is being pushed by the fact that producers are in a position of financial straits, and they seem to have no options other than to take some action. It seems that the obvious action they can take is to drop the inputs. We are talking about no or little fertilizer or pesticides. That puts them de facto into the position of becoming organic farmers.

You must become organic over a transition period of three years. Those people need to be thinking far enough ahead to think that you do not get an economic benefit from the organic sales during the transition years, but there may obviously be benefits from reducing and changing the methodology that you are using in your farming systems.

Senator Chalifoux: I have been interested in this issue for some time. First, if you could give us a copy of the letter that you sent to the Prime Minister, the deputy chairman of our committee and myself will enquire as to why you did not get a response. If you have a copy of that letter, I would appreciate it very much.

Mr. Wells: It should be included in every package.

Senator Chalifoux: I have had this concern for a long time. Monsanto is a big concern, especially with canola. They make contracts with the farmer. We had one farmer in our Peace River country who wanted to break that contract because he found that the canola seed was three fields down after a year. He wanted to break the contract. Monsanto is taking him to court.

Are we going to end up having nothing but a bunch of sharecroppers because Monsanto has a total monopoly on the seed in production and our farmers must sign these contracts.

I would like some comments regarding the terminator gene.

Mr. Wells: It is not our intention to be picking on any one biotech company. Monsanto happens to be in the forefront, and is currently the major player in the industry.

As far as the conversation about communities and how we want that situation to evolve, we are locked into a situation where we are moving toward totally contracted production. A lot of people will tell you that is the way of business, make a contract and everyone knows what is in there. It turns out in real life contracts are not worth the paper that they are printed on unless you are willing to take the opposite partner to court when they do not fulfil their part of the contract. It creates this huge power imbalance between a single, individual farmer and the contracting company on the other side.

There are an increasing number of horror stories coming from farmers who are getting into difficulty with contracts that the user did not understand or contracts that had implications for them down the line that they had not anticipated.

Senator Chalifoux: When we did the study on rBST. We had Monsanto appear before us. They almost threatened us. The arrogance of that organization was terrible. They almost threatened that if we did not back off on that rBST issue, that they would see to it that we were really penalized. How, I do not know.

It what concerns me is that when you get the private industry doing all of the research and then bringing it back to the farmer, you are ensnared in this whole thing. You could lose your farm or end up becoming a share-cropper.

I am very concerned about the terminator gene, and I would like some comments on that.

Mr. Ottenbreit: Our company met with Monsanto, and we discussed the terminator gene. I approached them with the scenario that I presented to you here today. They informed us that they were in a share arrangement with Delta Pineland but are now the sole owners of the terminator gene. They say that they are not going to use it, but why would they purchase an expensive technology like that and put it on the shelf? If I were an official of Monsanto, I would definitely not spend that kind of money and have it sit idle. I would intend to use it.

The Chairman: We will cut this discussion off in five-minutes and go to the discussion of rural life in Canada.

[Translation]

Senator Biron: I am not a farmer, but I found your presentation very interesting. According to forecasts, in 2050 the world population will have grown by 3 billion people, from 6 to 9 billion. This growth will come mostly from the Third World. Is it not the purpose of transgenic grains to enable us to face this population growth by reducing the cost of inputs and increasing productivity to avoid future famines?

Ms Adam: Before working in the area of biotechnology, I was working in the area of hunger. I can assure you - and all those who work in this area will confirm this - that the hunger issue is not a production problem - there being supposedly not enough food to feed the world - but one of access. There is enough food produced all over the world to provide for everybody's needs. We are talking about people who live on a salary of less than $1 a day. We can double production but we know that they cannot afford to buy these products. So it will not solve the problem. These comments are rather marketing strategies to promote their products on the back of the poor.

Mr. Loiselle: It is supposed to cost less with these technologies. This has not been documented. Studies made by the Universities of Saskatchewan and of North Dakota demonstrate that, considering the technology and the production aspect, there may be a negligible benefit. If we consider the risks for the market and contamination, it is a disadvantage. It is an illusion to think that we need biotechnology with its transgenic effects to produce more food. It is a problem of access and distribution, Organic producers have a limited access to seed varieties. These are varieties coming from conventional systems and the new varieties are not designed for organic farming. We believe that older varieties we could obtain a better return with would be better for organic farming. The return is not the only criteria; the nutritional value would be as important. You can feed as many people with the inferior quality seed which is productive as with a large quantity which may be deficient.

[English]

Ms Penfound: I apologize that I must respond to your question in English. Greenpeace has produced a booklet - I will leave a copy of it with the clerk - called "Recipes Against Hunger: Success Stories for the Future of Agriculture." It was funded by Greenpeace, Bread for the World, and the U.K. Department for International Development and researchers from Essex University. This undertaking is the largest-ever study of environmentally and socially responsible farming. This study includes projects on more than 4 million farms in 52 countries. It explores how the world's poor can feed themselves using cheap, locally available technologies that will not damage the environment.

The three documented examples in this report from India, Kenya and Bangladesh show how creativity and ecological understanding lead to an agriculture that fosters biological and cultural diversity.

In closing I will say that I think there is an incredible arrogance on the part of biotechnology to suggest that they are the solution in developing countries when, in fact, they are the cause of absolutely devastating harm to farmers in the developing world and in countries with emerging economies.

Mr. Dewar: We all know that the technology that Ukraine needs to feed Europe is not biotechnology. I am told that Ethiopia with their rich soils could feed all of the continent of Africa if they could stop fighting. Biotechnology is not the answer to feeding the population.

The other side of this is that, since I was in university, we have talked about having trouble feeding the world. We seem to be growing the supply, but we are not getting it to the people.

Senator Day: I have resisted asking questions because, as a non-farmer and as a humble consumer, I find all of this quite confusing. I had hoped I would be assisted by the definitions given by our organic farmer friend of "transgenic" and "genetic engineering" but I have not. I am trying to come to grips with this as a consumer.

In talking about the wide range of products - not just wheat but the 70 per cent of food products that already have some sort of genetic modification - do you want to see that reduced? We have a chance to do something with respect to wheat. Back on the East Coast, we are so far removed from you that we talk about horses getting out of the barn, rather than cows. I am familiar with trees and potatoes but there is not a lot of wheat or barley grown back our way.

Is canola a natural product? Is canola a rapeseed that had something happen to it?

Mr. Dewar: Canola was developed at the University of Manitoba in the late 1950s as an oilseed crop. It was called rapeseed at the time and contained high levels of erucic acid which was a bad health quality. They kept breeding it until the glucosinolates and the acid were reduced to double zeros; then they changed the name to canola. It was called the "Cinderella crop" because it was an economic boom for us.

Senator Day: Is canola then a genetically modified product?

Mr. Dewar: That was done through conventional genetic breeding.

Senator Day: Conventional genetic breeding? This is really helpful.

Mr. Dewar: They were using the genes from canola plants. They were not bringing in fish or peanuts.

Senator Day: Does "transgenic" then refer to bringing in genes from fish or some other species?

Mr. Dewar: Yes, or it could be from a different species of vegetation.

Senator Day: So we are not objecting to the science, but to the transgenic type or the far out kind of science. You would not object to using science to help improve the yield of a crop?

Mr. Dewar: You are hitting on some of the differences. My organization does not challenge the science, but our customers are challenging the science and that will ruin our marketplace. Other people at this table do challenge the science.

Senator Day: I have many questions left, but I will ask this one. Is there a consensus that this is a market-driven as opposed to an anti-science movement? From your point of view as a producer, is this a response to market demand? The producers want to meet their customers desires?

Mr. Dewar: Our international marketplace is demanding it. As well, the people at this table are customers and consumers. They are part of our customer base, and they are questioning it.

Ms Penfound: I will take off my Greenpeace hat for a moment and try to represent the diverse views of our organizations. We do have different views about the merits of some of the technology that we talking about with GE. I do not propose to provide you with the views of our particular organization in the minute or two that we have left.

The strength of what we are saying to you here today is that despite that diversity, we have unanimity on the issue of the introduction of GE wheat for a variety of reasons that we have outlined in our presentations. That is the key message that we are trying to convey to you today. Regardless of our differences of opinion, we agree consistently across this panel that GE wheat must be halted at the present time.

Mr. Wells: We are in a situation where the technology of the transgenics or the recombinant DNA has completely outstripped the ability of our regulatory and approval process. We are asking that our approval process be updated to catch up to the new technologies, whatever they may be.

When it comes to various crops, there was quite a situation with potatoes in Eastern Canada and a potato product called "New Leaf" potatoes. These were introduced and grown. A researcher from Scotland did some work on them and found significant medical problems with that product. Subsequently, the company withdrew the product. Researchers have now told me that it is impossible to replicate the research done by the initial scientist because the seed stock is no longer made available by the originating company. They withdrew it. Research cannot be replicated because they will not allow it. If that is true, then that is a terrible situation.

Mr. Loiselle: Senator Day spoke about the 70 per cent thing. We must be clear. I understand - perhaps someone can correct me - that we are not talking about 60 or 70 per cent of our food supply per volume being genetically engineered. Frequently, a particular food item, because of the processing, will include something like corn syrup, cornstarch or flour. Essentially, many of these products are processed south of the line in the U.S. and then returned to us as the finished product. The enormity of the contamination with the corn and the soybean issue indicates that a certain percentage of those 70 per cent of the foods do have this, but we are certainly not at an unholy level of 70 per cent of our volume. That would be horrendous. It is fair to say that certain foods do have it, and of course we do not have any labelling to tell us that. Our organization is very upset about that as well. I will leave that for another day.

Mr. Wells: Canadians are already in a situation where many of them have been subjected to eating food that was not licensed or approved for human consumption. This comes through the Star Link corn from the United States. Canadians did not know it was in the Canadian food supply. When they found out, it turned out that it has never been approved for human consumption, but we have been eating it, or some Canadians have been eating it.

Senator Day: Or some derivation of that, such as an oil or something.

The Chairman: I assure you that the Senate committee as a whole will certainly take your representations here today and discuss them. We will act upon those discussions. I thank you for all appearing here today and for a very worthwhile discussion in this area.

The mandate of the Standing Senate Committee on Agriculture and Forestry is to look into the short- and long-term situation of agriculture, which goes without saying. We want to hear from you in that area.

I will ask Mr. Wells of the National Farmers Union to begin. I would then ask each of you to make a short statement on how you view the agriculture situation in the area you represent.

Mr. Wells: There is no question that we are in a new situation in agriculture in my part of the world, which is Saskatchewan. From the end of the Second World War, up until about 1985, farmers had a constant realized net farm income that varied between $10,000 and $30,000 per year. It was relatively constant. In those days, people talked about being in a "cycle" - for example, a grain cycle, when prices would cycle up and down - but they were always within a certain range.

About 1985, that cycling seemed to stop and become totally disconnected. In the 1990s and into the first part of this centure, we have been into an unprecedented time of extremely low incomes for farmers. The so-called cycling effect of prices, especially in grains and oilseeds, seems to have stopped. On the one hand, we have enjoyed tremendous increases in exports out of Canada, along with tremendous increases in production, but none of that money has gotten back to the farm gate. Canada has met its targets for increasing production and exports, but the money is not showing up at the farm gate. That money is being captured elsewhere in the system.

The farmers union has spent quite a bit of energy and resources trying to understand this situation. From our perspective, it boils down to a complete lack of any market power on behalf of the farmers. We look at the whole of agriculture as an industry that has the input suppliers to the farmers on one side - banks supplying capital, and fuel, fertilizer and seed companies - and the farmer is in the middle. Downstream from the farmers are the retailers, handlers, processors and marketers.

It turns out that most players on both sides of the farmers are making a decent return on investment. Some of them are making more than a decent return, but the farmer in the middle is not receiving that return on investment. We have extensive documentation on that for anyone who wants to look at it.

The only thing that explains that situation is the complete lack of market power for the farmers and the huge market power that the other players in the industry have. We have a situation where, in each of these sectors - fuel, fertilizer, finance, marketing, handling and railways - between two to five players, usually international, although they are sometimes domestic, who have a virtual lock on the industry.

In Canada, we have hundreds of thousands of farmers spread across the country who do not individually have the kind of market power that the other players have. Since 1985, we have constantly heard the so-called corporate players talk endlessly about the need for increased competition. We have heard it over and over again.

It turns out that those players do not actually compete with each other. They have a rivalry, but if there is any actual competition in the marketplace, the big players buy up the small ones. We have mergers and hostile or friendly takeovers. We always end up back in the situation where that sector of the agriculture economy is dominated by the two to five huge players. Until we address that fundamental problem of the market power imbalance, it will be very difficult to improve the situation for farmers.

I will take another minute to look at the policy framework we feel is driving this. The agricultural policy framework under which the world, especially Canada, is operating, is dictated by the World Trade Organization and international agreements like NAFTA. Whenever our government goes to do anything or look at how they can help farmers or programming for farmers, they first look to WTO and then to NAFTA to see that things will be all right.

I have a question about those international agreements. If that truly is the policy framework we are in, where in those agreements does it talk about the need to have farmers in the countryside or towns or communities or schools or hospitals? It is not in those agreements. Those agreements focus on many factors. First is production for exports, and that is what we have been talking about in Canada. There is a focus on cuts in government spending, and we have been through that since 1985. They look at deregulation and we have been through that and are still going down that path. They highlight the need for increased foreign investment, and my province of Saskatchewan is thinking about changing the land ownership restrictions as a method of trying to bring foreign investment into the province. They focus on privatisation, which we have seen that in every area. Finally, they talk about removal of subsidies and other supports for farmers and the adoption of the free-floating currencies.

Until we address the underlying policy framework here, it will be very difficult to resolve situation we are in now where each year we have fewer and fewer farmers. The infrastructure cannot be maintained by the people we have out there in the countryside. That is a good starting point for a long discussion.

The Chairman: Do you have any numbers on farm income and what the average farmer's net income is?

Mr. Wells: I do not have those numbers here today. We have extensive documentation on that. I will ensure that the committee gets a copy of that.

Mr. Dewar: Mr. Chairman, you will be receiving a version of what I will present to you today. We are concerned with what we are seeing happening. This complements very much what Mr. Wells has said.

In the early 1980s, the banks started consolidating and closing branches in the small communities. A friend of mine bought a business in a small town in Saskatchewan. There was a good set of books there, but he did not realize that the bank had just closed. People had to go to Moose Jaw to do their business or to do their banking because this was before ATMs. He bought the business and ended up going bankrupt because people were leaving town to do their other business.

The banks were among the first, but they are an example of what happened. The banks went into fewer communities. When they moved, the businesses, people moved with them, which started the domino effect. This mirrors what has been happening in rural community disintegration. As I said, when they left for banking, then they would do their grocery shopping in the other town, so the grocery stores ran into trouble, and then the hardware stores, et cetera.

Soon, people were gone, and the day care classes did not have enough kids. The schools do not have enough to operate. "Making a day of it" became the terminology, and the local community was virtually gone. All that was left was a post office, and the few people who stayed in the town could not support the community centre, the local church and the curling or skating rinks. Larger business centres were more diversified and could provide the services. Now these larger centres are going through the same process.

The stagnation of rural communities has roots in technology, federal policy and the infrastructure. Technology has allowed farmers to do more. I might add, in Western Canada, we do not farm all these acres because we want to; it is because we have to. We farm more land, and we raise more livestock with the technology, and we work more hours.

The technology debate in the late 1940s was whether they should allow tractors to have lights because then man would just work forever and would not stop. We know who lost that debate. Fewer people were needed to produce more. Now we do our banking right at our home computer, no people required. It is easier to travel quicker and farther, and virtually every job has become more productive and efficient. Fewer hands mean less cooperation and bonding between neighbours, which results in fewer volunteers. Ultimately, the essence of the small town community is destroyed.

In our presentation to the Prime Ministers' Task Force on the Future Opportunities in Farming, we included a graph that demonstrated the effects of the federal spending cuts in farm supports. When I raised this with the chairman, he said that agriculture paid the same as every other department in the federal government. This one shows that in Western Canada, we shouldered the brunt of those cuts. In the non-prairie region, federal support dropped about 30 per cent - about $250 million - between about 1989 and 1999. In that same ten-year period, the Prairie region lost over 75 per cent of their support - $2 billion a year. That had an impact. Whether the policies were right will be debated forever, but taking that much money out of the economy of rural, Western Canada had a significant impact on how Canada developed.

With the transportation policy of the day, it was cheaper to move the grain than it was to move the flour. It was cheaper to move the grain than it was to move the animals. The further processing, whether it was livestock or food processing, was done closer to population centres and not in the Prairie provinces. Now we have trouble trying to move that back.

In Manitoba, we have lost $1 billion of equity in agriculture in the last five years, and land values remain constant. That $1 billion was depreciation and decaying rural or farm infrastructure. How are those farmers to invest in something else to complement their present farming operation if they do not have the capital base available?

The Western Canadian rural economies are based, for the most part, on crops. Those crop farmers have had very little money to spend beyond their own basic consumer necessities. Again, it has a spiralling effect. You cannot support the communities. The tax base is there, but there are fewer people paying it. Therefore, there is less money available for donations or time. The community suffers, and this is what we see is happening.

With regard to the infrastructure, the roads in Western Canada are notorious. Saskatchewan has the distinction of having the least desirable roads on which to travel. However, we are also seeing our schools, hospitals, recreational facilities, become rundown. The entire infrastructure and the amenities of life in Canada are decaying. We are not able to support them.

Young people are not staying in town, or even the cities. We try to create employment, but the farmer is taking the jobs. It is very often that the farmer has a second job of pumping gas or working in the community. Those would normally be the kinds of "starter" jobs for youth in the community while they decided what to do in life. I know a town 20-miles down the road from home had a graduating class of 12. Not one of them had any hope or desire to remain in their own community. That is scary when you look at what it is doing in the bigger picture.

Until the farms can again become self-sustainable, we have to get away from the thinking that we have 20 per cent of the farmers doing 80 per cent of the production. Therefore, we have to get rid of the remaining 80 per cent of the farmers. I have heard that from some very influential civil servants in the Department of Agriculture in Canada.

There will always be that 80 per cent; when we get down to 20 farmers, we will have 16 too many. Where does it stop? What do we see happening unless there are steps taken?

It is difficult to suggest what those steps are. However, we envision rural Western Canada becoming similar to the Australian Outback because the communities will not be there. Someone will be doing some production in some areas, but it will be a very remote instance.

Having painted that picture, I would like to point out that south of Winnipeg, east of the Red River, there is one grain elevator in that whole region. They are feed deficient. They have industry, which is thriving. Part of it is accredited to the ethnic background of the people in the area. It is also contributed to a philosophy that they have developed.

They have small farms. They live with livestock. Their neighbour has livestock. Yes, some of them are the bigger barns. Many of them are the smaller type barns, cattle and feed lots that the family has diversified over time. You see when you drive in that country, there are numerous farms and houses. Every quarter section will have two houses, in some cases.

How can we do that with the rest of the Canadian Prairies? It is a real challenge, but we need to have a migration of people. We need to have a different mind set.

Mr. Wells talked about some of the problems. As soon as the producers get some market power, it is considered wrong. Two of our Western provinces had a hog marketing agency. The buyers had one place to buy. There were no production controls. The governments decided to remove that so that they could attract big industry. Has it helped the hog producer? It has helped the industry and the province but has it helped the hog producer? Our hog producer would say no.

The Chairman: Could you tell us what the follow up would be in terms of the loss of farmers with the drought and the economic situation that exists?

Mr. Dewar: In 1999, southwestern Manitoba and southeastern Saskatchewan had the equivalent of the drought because they had zero income and were unable to seed their crops.

The Chairman: With the wet weather.

Mr. Dewar: The town of Souris has a net of minus 12 businesses. They had one new one start and 13 close. That is happening in other towns. As soon as the spiral starts, it is will keep going.

Our membership has been dropping by about 500 farmers each year. Crop insurance has been losing about 500 contracts a year. That tells us that those people are not on the farm any more.

Mr. Ottenbreit: APAS, from Saskatchewan, is perhaps, myself included, more optimistic. I know that doom and gloom exists in Manitoba, but it also exists in Saskatchewan. I am always optimistic. There is a ray of hope, and there is a solution to our problems in Saskatchewan. We believe we have identified some of those solutions.

Usually groups come to you and say we have nothing but grief and problems. We offer solutions. One-third of producers in Saskatchewan have joined our association. We decided that if we do not get youth involved in our association and in agriculture, the industry is dead.

We have a solution for that. We have a START program with which you are familiar. In June 2001 our association was here with a proposal. We have submitted copies to the clerk. We have an update from Mr. Kurtz, who is one of our executive directors.

Our START program - Strategic Transition and Agricultural Revitalization for Tomorrow - is a viable program, and we hope you will look at it once Mr. Kurtz has provided an update.

I must admit that Mr. Goodale in Saskatchewan, is probably as optimistic I am. I am excited because the ethanol industry is a viable industry. If we update our infrastructure and increase cattle production, then ethanol and cattle production in Saskatchewan will have a fit. I see it as a bright spot. I must commend Mr. Goodale for recommending that perhaps Saskatchewan could become the ethanol capital in Canada.

The Chairman: If it did, would that solve all the ills of agriculture?

Mr. Ottenbreit: We must diversify in Saskatchewan. We will always have a certain amount of grains and oil seeds, there is no way we can take all of our land out of grain and oilseeds. We have 50 per cent of all of the cultivated land in Canada. I want my products to leave the farm on four legs or be slaughtered in slaughter plant and frozen. My grains should leave Saskatchewan in a tank car or a pipeline as ethanol. I do not think that we have to ship the grain out of Saskatchewan. The ethanol industry would be viable, but Canada would have to come on board with a 10 per cent initial use of ethanol. California could consume the first ethanol produced as well.

Senator Wiebe: The provinces have to dictate the level of ethanol in our fuels.

The Chairman: If the provinces buy in, they will have to take tax dollars that they do not have. The Saskatchewan government is broke.

Mr. Ottenbreit: That is true.

The Chairman: We all know that.

Mr. Ottenbreit: Our program requires that the federal government fund this.

Mr. Kurtz: Thank you for allowing us to speak to rural development. I am a mixed grain farmer from Stockholm, Saskatchewan. I am also an executive director with the Agricultural Producers Association Saskatchewan, APAS.

Senator Oliver: What part of Saskatchewan is that?

Mr. Kurtz: It is in the Southeast near Esterhazy the potash capital. We are just a few miles from there.

Rural development is the key to revitalizing Saskatchewan, a unique province that has 47 per cent of the arable land in Canada and 20 per cent of the Canadian agricultural producers. APAS, the largest agricultural producer-funded organization in Saskatchewan has developed a program called Strategic Transition and Agricultural Revitalization for Tomorrow, START.

START is a three-phased program, with Phases 1 and 2 recognizing the legitimacy of the grains, oil seeds and pulse crops sector. Therefore, it proposes an annual 20 per cent rotational set-aside of land transferring support money to the producers, enabling them to continue producing grains and oil seeds for our proposed value-added projects.

It also recognizes the value of the existing environmental grain, and would pay landowners an annual environment rent of $25 per acre into perpetuity, thereby stopping environmental degradation. This would also leave the control of these lands in the hands of producers, who are the best stewards of the land, and with a cost shared by all Canadians, who value our great environment.

START also promotes a transition of marginal and lower class land into permanent cover by the planting of trees and/or grass. The year that the land is planted, the producer receives $50 per acre. In the following four years, the producer receives $25 per acre in a set-aside, and is eligible for a $50 per acre Agricultural Diversification Bond, ADB. The bond would be available to the producer when the set-aside is confirmed, and when the producer enters an approved project, such as an intensive livestock operation, or a joint community project, such as an ethanol plant. These bonds must be bankable, so that a producer can borrow against them, thereby making available the 20 per cent equity needed to start a project. Last winter, a survey conducted at more than 100 town hall meetings in Saskatchewan, indicated the start-up equity was the obstacle stopping most producers from diversifying.

What would be the benefits of the ADBs, assuming that we took 10 million acres, which is marginal land, out of production to a set-aside program in Saskatchewan? This would allow primary producers to acquire the seed money, or the 20 per cent equity, for capital diversification projects. Grants could be available to producers who have already gone into the land set-aside program. The balance of the capital portion could be filled by co-ops, corporations, borrowed capital or Agri-Vision. Producers who have the technology and expertise take control of the projects that will result in agricultural renewal and the return of families to farms and to communities. The START program takes producers further up the value-added chain.

We have also done some cost benefit analysis on large, capital projects. The federal government's cost would be $0.5 billion. The producer investment would be $2 billion. This would result in 216 large, community-based projects. It would produce 6,846 primary jobs, and a payroll of about $29,000 for each job.

There would be 10,260 spin-off jobs, or 1.5 times each primary job. The yearly payroll for primary jobs would be $204 million and the yearly payroll of spin-off jobs would be $295 million, for a total payroll per year of $499 million. Total yearly revenue from such developments would be $2.4 billion, and total yearly profits from this diversification would be $241 million.

The ADBs would also produce on-farm diversification with federal government investment of $0.5 billion. Again, producer investment would be $1 billion. This would create a total number of 23, 500 jobs, with the yearly accrued wages of $470 million, averaging about $20,000 per job. Total taxes from payrolls and profits would be $353 million. The total number of jobs created would be 40,600.

These projects would double our cattle numbers from 1.2 million to 2.4 million in a six to nine-year process, barring severe droughts. That is only a 1 per cent increase in the total number of cattle in North America - approximately 109 million cows.

The feed grain consumption would more than double, because we would finish cattle in Saskatchewan, thereby no longer sending calves, grain and young people to Alberta. Our gross agricultural production would increase by 50 per cent, returning $300 million in tax returns at a rate of 29 per cent.

START is the only proposal that keeps producers viable and in control of the land, thereby ensuring a supply of grains and oil seeds. It stops rural population decline and starts a transition program, which allows other businesses to diversify in the community rather than die. The program adds value to the agricultural industry with a one-term cash injection and rewards governments with tax returns, because of a healthy 50 per cent gross agricultural products increase. These initiatives would revitalize rural communities in Saskatchewan and safeguard the habitats and existing greens. START would push Saskatchewan agricultural production over the stalemated $6 billion and intensify the livestock operations, which are a good fit with ethanol production as envisioned by the Honourable Ralph Goodale. Finally, the program would and would thus make Saskatchewan the ethanol capital of Canada.

Representatives from Ducks Unlimited recently attended our board meeting to make a presentation. I do not know if you have seen the presentation, but they have funds to match the federal government, but they will take control of the land. They are proposing to take about 25 per cent control in every municipality.

You asked for some numbers. I heard that in Saskatchewan a family will live on a projected net farm income of $5,000. That indicates the severity of the problem. If we were to have this kind of diversification, and if the spouse does not work off the farm, consider the number of jobs that would then be available for other city people.

The potential is far beyond what we have explained. We have done the research and we have come up with this project, because of what was in the Throne Speech last spring. We feel it is an area where the government may be willing to spend some money so that we can finally kick-start Saskatchewan.

The Chairman: I thank you for your presentation. I have seen some of the farm leaders here shaking their heads somewhat over this information because it has not happened before and would be good to happen.

I just spoke to some cattle producers from Alberta where the opposite is happening - there is still more cattle. The barley in our country is shipped right off the farm to Lethbridge. It is not happening. The dream alone will not make it happen. We are in a deep, serious crisis situation in the Prairies.

Mr. Kurtz, you were here with your wife two years ago. I entertained you when your wife was on a hunger strike. Things have gotten worse.

Mr. Kurtz: Absolutely.

The Chairman: We should get $2 billion to keep the thing moving.

Mr. Kurtz: That would be over a period of 10 years. If you look at the returns to the government in taxes, it would be money well spent. Agricultural producers are the best business people in the world. The poor business people are gone. They have been gone for some time. If we put the control back into the producers' hands, and we give them guidance and expertise, we will not find the projects fail as they do when someone is involved who has the wrong interests.

The Chairman: We have tried diversification with canola and other grains. We have found that the commodity prices just are not there. I have a news release dealing with the trade talks that are going on as we speak and the world trade situation. There is a chance they might even undermine the marketing boards of Ontario and Quebec. The government is saying in this release that they will not allow that to happen.

If there are tariff changes, it will happen. The milk producers and the chicken producers have had a pretty good run and have had government protection. We have not had that in grains and oil seeds.

Mr. Dewar: Mr. Chairman, I must leave. May I make a comment before I go? I thank you very much again for having us here today.

Some of the comments you just made are very important. If you are going to produce the grain, whether it goes into an ethanol plant or directly into a hog or a cow, you must be able to produce it at the margin. You must have a margin. I was at a conference in North Dakota last week. They are talking about the ethanol E-85, not E-10 because a $1.50 bushel of feed corn is worth $6.00 in ethanol. A bushel of corn at $1.50 is not sustainable. Why would you even grow it?

Senator Oliver: What about growing corn for food, and not ethanol?

Mr. Dewar: We have lots of corn. Some places in the world think that is for animals.

We have been trying to fix rural communities with our agricultural policy. Perhaps we should be looking at our rural development policy to fix agriculture.

I would hope that the ethanol plant would pay a higher price for that grain. That is the key to it. I want to thank you very much for the time, and I am sorry I must leave.

The Chairman: Thank your for your presentation and we appreciate you coming.

Mr. Loiselle: I thank you for the opportunity to speak and I apologize, I do not have any prepared documents but I will forward them to your clerk. This presentation will be rather different. It is an overview and a critique as compared to money and dollar figures. Perhaps that is just my nature. I have been so engrossed on the genetically engineered issue that this was kind of an afterthought, but it is a very important issue.

I have a quote from an unknown author hanging in my office. It says, "Condemnation without investigation is the height of all ignorance." That reminds me to be cognizant of the fact that you cannot critique something until you really understand it.

My understanding of rural communities is that as an individual farmer, I am inextricably connected to the people around me and influenced by them. Conversely, they are influenced by my actions or inaction. The rural community has as its base, the stewards of the land and the water, be they farmers, fishermen, miners, foresters, hunters, trappers, gatherers, et cetera. My family and I are connected to our local town, as are my neighbours. We consider that to be the community.

Gains in agricultural productivity seems to always be the buzzword. We have to get more yield, and I have a problem with that, as does our organization.

Gains in agricultural productivity come with costs that have largely been ignored and externalized. However, we hope that institutions - from the United Nations to national and provincial ministries of agriculture - are beginning to recognize that we must rethink the way in which we have organized farming to meet the new challenges of the future. Many trends in agriculture indicate that farming is generally not sustainable. We were hearing this today. Many farms have lost their economic viability. Many forms of environmental degradation give cause for concern. Established social structures break apart, and society is increasingly unwilling to support practices they perceive to be not in their best interest. Consequently, young people leave their farms in rural communities in which they see no future for themselves.

The current trends in agriculture are many. They will likely increase the problems in the farming sector and contribute to the recurring farming crisis. We will experience further demise of rural communities.

The major trends of the problem are economic, social and environmental. Under economic, we have increased production and productivity. That is the trend. There is a decline in farm gate prices, however. There is the decline in the share of the primary production sector in the agricultural economy.

The market share that the primary producer received in the 1920s was much higher than it is now. It is horrifying. It is incredible. Who is picking up the slack? It is the person in the middle, the marketing system. The consumer is essentially paying what we call a cheap food policy, but the farmer is not benefitting. We have shrinking farmers' share of the consumer's food expenditures. We have increased average age of farmers. We have decreased farm net incomes.

In the social category, we have increase in farm size and decrease in numbers. We have difficulties in attracting young people to farming. Under health, we have increased stress in farm communities, which is being recognized more and more. Environmental concerns include a number of species that are resistant to pesticide, a decline in biodiversity and in water and air quality, and continued soil degradation.

Rural communities especially feel the impact of the recurring farm crisis, that climate conditions notwithstanding, has its roots in the ever-increasing economic and political powers of transnational corporations. Unless these trends are broken and reversed, a revitalization of rural areas will be difficult, if not impossible.

Fortunately, new trends are emerging. We have, for instance, international organizations calling for a change in agriculture. The United Nations Environment Program wrote in 1992 - Agenda 21, Chapter 14 - that:

Major adjustments are needed in agricultural, environmental and macroeconomic policy at both national and international levels, in developed as well as developing countries, to create the conditions for sustainable agriculture and rural development.

Although Canada is beginning to consider policies in the areas of sustainable agriculture, via the Agriculture and Agri-Food Canada document "Agriculture in Harmony with Nature II - Agriculture and Agri-Food Sustainable Development Strategy." This is a new report that outlines sustainable food policy for the next four years.

Despite that, we have many thousands of farmers who have already adopted more sustainable practices. They have done this without public support to become less dependent on the input and marketing sectors, as well as to be less dependent on financial supports from governments.

As farmers, we realize that sustainable agriculture presents a goal that many want to attain. That would lead to positive things such as longer crop rotations; more crop diversity; integrated livestock operations; drastically reduced external inputs; improved knowledge of natural ways to enhance soil fertility and crop protection, as a form of holistic management. There would be new forms of cooperation - formal and informal - and innovative marketing strategies.

There would be all kinds of benefits to rural communities, such as improved economic viability for the individual farms. The towns depend on the life-blood of the farmers in its rural municipality. There would be improved economic activity in rural communities through improved economic multiplier effect. Additional improvements include improved quality of soil, water and air, recovery of biodiversity, reduced stress levels, and improved social and health conditions of people.

Our organization communicates with other groups about the sustainable issue, and there is a fundamental principle throughout. Everyone in the world has a fundamental right to pure air, water, land and food. Agriculture can play a pivotal role in providing these basic rights. It can improve the quality of life for all humankind.

We believe that certified organic farming in Canada is an agricultural system that is currently successful, runs largely without government subsidies and contributes to furthering community development. Part of the Saskatchewan Organic Directorate's vision statement is "food for life." The SOD takes this vision statement seriously.

Organic producers believe that in the process of making a living, we must treat the land, the flora and the fauna with the utmost respect. We mean "Life" in its most positive senses. We mean that the food we produce must be life-giving and it must promote health and longevity. We also believe that the system we use to produce that food must not be a threat to ourselves, others or species. It must be sustainable, not just for the short term but for the foreseeable future.

This is a direct link with our discussion here this morning. In agriculture, it is recognized that there are independent systems in primary production: the input sector, the processing sector, the marketing sector and the nutritional needs for all people. These influence all aspects of the economy, the environment and social interaction.

Farmers are recognized as the stewards of the resource base. Farming entails the responsibility to manage one's life and environment with proper regard to the rights of others. This is a stewardship issue. Farmers have modified the ecosystems and they have a responsibility to manage them for the benefit of the present and future generations. This task for society must be supported by society.

We also embody the precautionary principles, as well. This is our vision for rural communities: Rural communities are safe and vibrant places that attract businesses and people. They can rely on an infrastructure that is comparable to that in urban areas. Sustainable development is linked to local and regional resources, harmony with nature and improvement of quality of life. The emphasis in all development is based on investment in people and based on the virtuous cycle of education, increased innovation, increased investment, increased value and higher wages. The improved quality of life and attractive opportunities in these communities make young people want to stay, or return. They draw people from urban areas to relocate and new immigrants to settle. Cooperation and volunteerism are active ingredients of all communities.

When you consider sustainable agriculture in a global perspective or organic farming more particularly, Canada is obviously falling behind. I have a document entitled, The Copenhagen Declaration, which was signed on May 11, 2001, by the majority of European agriculture ministers. Signatories to this declaration include, the Committee of Agricultural Organisations in the European Union, the European Community of Consumer Cooperatives, the European Environmental Bureau, and the International Federation of Organic Agriculture Movements. That parallels what we are doing today. There are farm groups, consumer groups and environmental groups. This is an impressive document that I reference.

Those farms that seem to be weathering the storm, seem to be smaller and more diversified. They may have on-farm cleaning or processing and they most likely have livestock. We have examples of that within the organic community. One that comes to mind is the Bauml family at Marysburg where five families are dependent on the same land base upon which only one or two families were dependent on 15 or 20 years ago. It is an interesting and impressive story. They have incorporated livestock, cleaning and helping other people to build in their community.

Is the agriculture framework as developed by the International Monetary Fund, by NAFTA, by the FTAA and by the WTO, leading to sustainable agriculture? Rural citizens, as was noted before, are asking: "Where are the services our community needs - the banks, the schools and the hospitals, et cetera? Where, in the federal government's policy, is support of family farms and sustainable agriculture in organic farming?"

There is plenty of talk. We have seen money coming out of Mr. Goodale's office - $600,000 here and a little bit there - in a piecemeal approach. I am not familiar with the sustainable policy that they have, but there is a disconnect when you have policy decisions and when you actually pass to action.

Voltaire once said something to the effect that history does not repeat itself, man does.

Ms Penfound: I had not originally envisioned that I would be speaking in this section. I do not have prepared notes. However, it occurred to me as I was listening to the other presentations, that it is important to say that in the work we have been doing together on the GE wheat issue, there is tremendous overlap and harmonization of some of the concerns of farm groups that represent farmers, environmental organizations, health organizations and consumer groups.

The Greenpeace document I referred to earlier, "Recipes Against Hunger: Success Stories for the Future of Agriculture," expresses some sentiments that sound very much like some of the comments that were being made by the farm groups in the last few moments. I will read a couple of short passages:

The time has come to recognise the false promise of GE and the agriculture industry. It is finally time to support the real revolution in farming that meets the many needs of local communities and the environment, restores the land de graded by the agriculture industry and helps the poor to combat their own poverty and hunger. To do this, it is also time to acknowledge that farming - and the technologies that are now part of it - must belong to the communities and culture in which it exists. Culture and agriculture are related.

Another part of this document states:

The challenge of the coming agricultural revolution is to help provide the support to allow those farmers both to feed themselves and their communities and to protect their environment.

There is a tremendous overlap in terms of an expression on our part, for example, about the market impact concerns on GE wheat to the farm sector and the environmental concerns expressed by the farmers. Mr. Ottenbriet has championed the environmental concerns that I had expressed in my presentation.

Some critics, including one MP whose name I will not mention, have made an unhelpful and irresponsible characterization of our initiative. Our work has been characterized as the farmer being in bed with the enemy in being involved with Greenpeace, the Council of Canadians and other organizations. It is an affront to the farm groups and to groups such as Greenpeace, the Council of Canadians and the Canadian Health Coalition to think that there is that kind of divide between our interests and their interests. We have these shared interests.

The Chairman: You have made a very good point has been made. Farmers are environmentalists, if they have the wherewithal to do it. Farmers have had to take every inch out of the land to try to survive and they have not been able to use the kind of practices that they should have, simply because there has not been the return.

I certainly could not agree more. We must look at this entire package.

Senator Tunney: I will take the transcript of the first two presentations and put them in my favourite file for use in many places when I speak or have discussions.

Have any of you ever thought about trying to take a cue from the dairy and poultry sectors in Canada, which operate under supply management? Have you taken into account the cost of producing a bushel of wheat or grain when you are pricing it to a broker or offering it for sale? I hope that you know more detail about supply management than some people in the public. The price of milk is determined by the cost of producing it with a small margin of profit that is added on top of that actual cost.

It might be surprising to you to hear that, given the system under which we operate in Canada, we hear a lot of criticism that we are controlling the market to force the price up. That is not true. Dairy farmers do not want the price increased. They want the board members to hold that price down and have a larger market.

If you go to a Canadian supermarket and purchase a basket containing the entire range of dairy products, then make the same purchase in the U.S., you will find that the price of that basket here will be slightly less than in the U.S. Why should a producer of food not be granted a reasonable profit, enough to live on?

I have a neighbour who is farming about 1,500 acres. He is young, smart, and hard-working. He was trying to buy an additional 50 acres or 100 acres each year and renting as much as he could add to his cropland. Of course, he was obtaining the machinery storage and drying facility that goes with more land. He is in a horrendous financial position. He tells me that he can last, with government programs, two more years. He will then be gone. To last that two years, he traded a two-year old combine for another new one. Why did he do that? He did that to save himself for another year. When he traded the used combine - still as good as new - the deal paid up the payments on the two year-old, so he was free of that. The deal on the new one was that he does not have to start making payments until next September. That is a sick way of trying to run a business; he is losing money on every single bushel of wheat, soy and corn that he grows. This man is a good farmer.

Senator Wiebe: Is that a question or a presentation?

Senator Tunney: It is both. I hope that you will give this more study. That is my point to you. We cannot survive as an agricultural industry on the prices that we are getting for the major portions of our commodities.

The Chairman: That is an excellent presentation. I have some disturbing news in front of me that came across my desk just this morning. This comes out of the rural municipalities of Saskatchewan meeting this week. Apparently, hundreds of Saskatchewan rural leaders voted in favour Tuesday of a bid to study separating from the rest of Canada, and it was voted down. However, a third of those who voted supported it. That is happening not because they are poor Canadians, but they are desperate. That is how serious the situation is.

Mr. Wells: I would like to respond to Senator Tunney's remarks. The Farmers Union has a long history of supporting supply management within Canada for all of the reasons that you expounded on there. We have been chastized and isolated in the larger political debate because of that position. The provincial and federal governments have moved to the policy framework that I talked about earlier, the WTO and the NAFTA.

The whole idea of increasing trade is paramount. The supply-managed industries do not lend themselves well to operating under those types of rules because it is considered production for domestic consumption. Your production can only grow as fast as your population and your demand if you are to sign those agreements and NAFTA. It presents a severe problem.

In these larger trade agreements, rather than promote or build the local economies within the country, we have literally traded good Canadian markets in Toronto, Vancouver and Winnipeg for markets in Tehran, Indonesia, or somewhere else in the world. That has created this huge industry in transportation, packaging and processing all over the world, but it has not done anything for Canadians or Canadian farmers. That is the real disconnect there.

I have a quick comment on the SARM resolution. I was down here two years ago with a farm delegation headed by Mr. Romanow and Mr. Dewar. At that time I made the statement to the press that an increased sense of Western Canada alienation was being sowed in the minds of the public. It is terrible that that is building.

Senator Wiebe: I have a bit of housekeeping. Some of us must run to another meeting. I am interested in that the letter you sent to the Prime Minister. I would like to have some idea of the response from those to whom you copied that letter.

I would like to move that this particular letter become a part of our record of our documents for the committee.

The Chairman: All in favour?

Hon. Senators: Agreed.

The Chairman: Carried.

Senator Wiebe: Do you have any idea of what kind of response you have had from the others?

Mr. Wells: Yes, we have not had any response.

Senator Wiebe: You have had no response from provincial premiers, the Minister of Agriculture, or the minister responsible for the Wheat Board?

Mr. Wells: We had a response from Ms Wowchuk, Minister of Agriculture in Manitoba. However, I am not sure if her response was to our letter or to our press conference. The minister sent a letter congratulating us on the position that we took. She copied a letter that she had sent in May 2001 to Mr. Vanclief regarding the agronomic, contamination and market problems. Her position is very similar to the position that we took later without the knowledge of her position. That is the only communication we have had in writing.

The Chairman: We will have to wrap this up. It has been a good morning. We have certainly heard many views from a diverse group, if I may say that. Yet, this group is quite unified on the need for change, especially in regard to genetically modified foods.

The committee will certainly review your requests and try to respond in as positive a way as we can. It is certainly an area of concern for the consumers of Canada, which is evident by the mail that we received.

Mr. Wells: On behalf of our working group I would like to thank you. It has been a pleasure to be here this morning.

Mr. Loiselle: I am sure that any of us panel members would be available to address any further questions.

The Chairman: Thank you very much.

The committee adjourned.