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Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 30 - Evidence


Editor's note:

CORRECTION

At pages 30:26, 30:27 and 30:28 of the printed issue, all references to "Mr. Fraser" should read "Mr. Hunter."


TRURO, Wednesday, February 13, 2002

The Standing Senate Committee on Agriculture and Forestry met this day at 9:15 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, we had a very interesting tour of the Nova Scotia Agricultural College this morning. I wish I understood everything we were told about the scientific developments of this place; they are doing some wonderful work. One of the challenges for the Senate, especially the Agriculture Committee, would be to get some money for the school to do better work. The tour was very interesting.

We are pleased to be here in the Maritimes, especially those of us from the Prairies. Although agriculture is very diversified here, many of the problems are the same.

Our first presenter today is Dr. Garth Coffin. Welcome, Dr. Coffin. We look forward to hearing your presentation.

Dr. H. Garth Coffin, Principal, Nova Scotia Federation of Agriculture: Honourable senators, let me bid you an official welcome.

[Translation]

I would like to welcome you, using Canada's second official language. It is a great pleasure to tell you about the progress of our industry and of our work.

[English]

I should like to touch on a few highlights about the institution. I will leave it to others to talk about industry issues, except to set the context of where, I think, we fit in.

Sometimes I wear more than one hat, so let me just take 30 seconds to say, as President of the Agricultural Institute of Canada, that I am pleased to see this focus of your study. There is a lot of concern across the country with respect to agriculture. The industry has certainly faced big challenges, but the uncertainty of where it is going is perhaps the biggest issue to come to grips with.

As someone who represents the profession of agrology, let me say that in some respects the problems that we are dealing with are a result of the profession of agrology, the science of agriculture around the world, and the network of industries that supports that. We have, for the moment, been too successful in producing and increasing the supply of food. Nevertheless, the fact that there are still hungry people in the world is not because of production problems. While we have managed to increase production, we have created seemingly perpetually depressed market conditions, which is putting a lot of economic pressure on the production sector.

Hence, we have to keep in mind that we have had great success in expanding production. I know from FAO studies that there are only half as many people in the world today who are underfed as there were 50 years ago, in spite of the fact that there has been tremendous population growth in that time. The story is really quite remarkable, when you put it all together.

Mr. Chairman, you have already alluded to the diversity of agriculture here, that that diversity is found not only in terms of product and specialization but in terms of geography as well. The industry is scattered across the region, in small, intensive pockets; hence, it is not terribly visible in terms of its importance. However, at the production level, agriculture is a $1 billion dollar industry, and there are several thousand farms engaged in production in a wide range.

Of course, there are potatoes, as well as fruits and vegetables. Still, 50 per cent of farm cash receipts here are associated with the dairy and poultry industry, as the supply-managed commodities.

If we take our total food industry, which, of course, includes some fisheries, there is a large export activity here. I know that, as part of the committee's mandate, you are looking at international trade as one of the avenues of solution. I am told that our export activity in this region is about $800 million, and that is somewhere close to 18 per cent, apparently, of the total for Canada in this particular category. That is beyond our normal capacity.

Of course, we are facing the same challenges here as elsewhere, whether that is periodic threats of drought, depressed markets and environmental issues or the rate of change of technology that is causing so much restructuring and so on within the industry.

In that context, it is fair to say that education and research have never been more critical to the success of the industry in meeting global competition than at the moment. This is where an institution like the Nova Scotia Agricultural College comes in. You have seen an example this morning of the research work going on. We have talked a little bit about our academic programs.

Let me just repeat for the record that we have both technical and degree and graduate level programs in agriculture and in aquaculture, which is a new program here. We have programs in the traditional areas of plant and animal science majors. We have economic and business majors. We have the first two years towards an engineering degree, which feeds students into Dalhousie or other universities offering university degrees. We have majors in environmental sciences and we have a major in aquaculture, as I mentioned earlier. Our total enrolment at the moment is just over 700 students. It has been as high as 950. We are working hard at recruiting additional students because the job market offers continued growth and opportunities in these areas.

We have a career services office that reports 15 per cent growth in job opportunities last year for our graduates. We are trying to get the message out to young people — who do not believe, I guess, from the publicity surrounding agriculture these days — that this field can be exciting to work in. Hence, one of our challenges as an institution is to attract more young people; otherwise, we will not fill the requirement for highly trained people in the industry.

Of course, not all our graduates find employment in the region. For instance, in aquaculture, for example, although the industry locally is growing rapidly, we do have industry employers coming from British Columbia to recruit our graduates from the aquaculture program. I know this is not central to your issues today, but it is an example of new directions in which we have moved.

As I mentioned during our tour, our degrees are awarded in association with Dalhousie. By virtue of an agreement with the institution, our graduates are approved by the Dalhousie Senate, so we have the credibility of the Dalhousie name, if you like.

We have the mandate for providing agricultural education for the Atlantic provinces, at both the degree and technical level, and we try to attract students from all four Atlantic provinces as well as other provinces and externally.

We have a continuing and distance education department, which is developing distance courses for delivery via the Internet. We are still at a very early stage in that effort, and we are finding it to be a capital-intensive exercise, to do it effectively.

Over the years, whatever kind of programs the NSAC has been involved in, I think one measure of the contribution that this institution has made to agriculture in this region is the level of education of the farming community. This region and particularly this province leads the country in terms of the percentage of farmers who have had some degree of post-secondary education, be it technical or degree level. Increasingly, it is degree level. They are not all from here. Of course, there are those who have a bachelor's degree from another institution and have gone into farming. Nevertheless, the fact that 50 per cent or better of farmers in this area have some post-secondary education is, I think, an indication of the role that this institution and others have played in this region.

I will not say very much about research. You had an opportunity this morning to meet with a few of our researchers. You will be hearing later on from two or three of our very specialized researchers, and so I would leave that part of it to questions, except to say that our total research program is in the order of $3 million to $4 million a year. We do a lot of collaborative work. We have a unique arrangement with the Department of Agriculture and Fisheries and Industry here, in that we have a number of specialized research professors who are supported 50 per cent by industry or an industry association and 50 per cent by the Department of Agriculture. We provide labs and facilities and whatever support is required for that researcher to work. The researcher goes out and earns grants or contracts to support that research. We have some leading examples of that that were mentioned this morning, one being the fur research. You will be hearing about the blueberry research, which is unique to this area, and we have others as well in turf grass and cropping systems and dairy.

We have been awarded four research chairs under the Canada Research Chairs program, and we are very pleased about that. We will be recruiting for a position in applied molecular biology and resource management, and we do have two chairs designated for organic agriculture and aquaculture.

On the subject of organic agriculture, we were awarded nearly $900,000 through the Canadian Adaptation and Rural Development program, CARD, that was announced by Minister Vanclief last July to establish the Organic Agriculture Centre of Canada here at the NSAC. Our director of that operation, Dr. Ralph Martin, is currently in Europe meeting with people there. The chair of the board of directors of that new centre, Dr. Phil Warman, will be meeting with you later on to talk about that, so I will not go into details on that one.

I have talked a little bit about enrolment, and I think what I would like to do at this point, Mr. Chairman, is to conclude by saying that we recognize some opportunities for agriculture, and in this region we think that organic agriculture is one of those. This is why we are moving in that direction. We think there are important contributions that our kind of institution can make in contributing to the research needs, whether it is solving some environmental issues, doing some important research in that area or adapting to climate change. In that regard, we have a climate change research professor here who joined us from the University of Manitoba last fall.

Our institution is also promoting and pushing on the internationalization front, trying to internationalize our programs, draw more international students, expose our own students to more international experience, and we have a small international centre that manages several million dollars worth of international projects in half a dozen projects around the world. So we are doing a lot. Maybe we are trying to do too much, but we are working very hard at it.

With that, I would be pleased to answer any questions that you have.

Senator Wiebe: Dr. Coffin, research is of special interest to me. You say that your budget here for research is between $3 million to $4 million per year. What percentage of that would be private funding and what percentage would be government funding?

Dr. Coffin: If I used the term ``budget,'' that is perhaps a little misleading. Perhaps I should say our research activity, our program, and that is an estimate of whatever funding researchers are able to bring in from a variety of sources.

A significant part of that is coming from industry, through collaboration, matching fund arrangements and so on. We are trying to increase our draw from national councils like NSERC and SSHRC. At the moment, we have somewhere in the order of $400,000 or $500,000 of research work, maybe a little more than that now. We have had some recent success in NSERC funding. The remainder is a combination of government research programs and industry-supported research.

Senator Wiebe: If your scientists and researchers have a project, do they personally have to raise money in order to proceed with that project?

Dr. Coffin: Yes. We do not have any operating budget to support research. I think that is typical. Most universities depend on researchers to earn that money through a competitive grant application process.

Senator Wiebe: Is that the way it has always been?

Dr. Coffin: I would not say it has always been that way or that it is completely that way everywhere. I understand, for example, that the University of Guelph has a fairly large contract with the Ontario Ministry of Agriculture, Food and Rural Affairs, OMAFRA. OMAFRA supports some of U of G's research, as well as the extension work that they are involved with. The government here supports 50 per cent of those industry research chair salaries, and there have been programs in the past that have been fairly specifically geared to research, but it is not built in as an ongoing component of our operating budget.

Senator Wiebe: What happens in the event that one of your researchers or scientists discovers something wonderful and new? Who then owns the patent on that discovery?

Dr. Coffin: What we have found is that as part of government, the employer in this case, the government of Nova Scotia, would hold the intellectual property rights. However, if there are revenues to be generated from that patent, from that discovery, we are able to negotiate a sharing of the proceeds from that with the researcher and the institution, and if there is an industrial partner, with them as well. So we are not completely restricted from getting involved in that side of the operation.

We are members, I suppose you would say, ``co-owners,'' of an intellectual property protection and commercialization effort called NU-TECH. Dalhousie University and ourselves are the owners of that operation, which files patents, protects the intellectual property, and prepares the way for commercialization.

Senator Wiebe: Is research being done here that allows the scientist to say ``what if'' instead of concentrating on how we produce more and more and more of what we are already producing and making it better? Is any research being done, say, where a researcher might think, ``Maybe that sunflower plant could produce rubber; let's see,'' or like the scientist who discovered that we could make ethanol out of corn, and this sort of thing? Is that kind of research being done, something that is, say, not related to food but something that could be produced on a farm?

Dr. Coffin: At this point I would say that it is limited, but we are moving somewhat in that direction. Three of our research professors are involved with researchers from the University of Prince Edward Island in an application to the Atlantic Innovation Fund to do research on bioactive ingredients, I think they call it, from conventional or traditional products. That is an entry point. Some of our research is focused on other applications of knowledge. It is not all geared to simply increasing production or lowering costs. We are doing a little bit around the edges of trying to discover new applications, but I would say it is limited so far, in fairness.

Senator Wiebe: I am happy to hear that, and I certainly hope that kind of research increases dramatically.

Senator Oliver: Thank you for the excellent tour of the university this morning.

When I look at some of the other activities the students do here, I see agricultural technology, animal health technology, ecology, environmental chemistry and so on, all academic things, but one of the things that this committee is looking at are ways that we can help revitalize rural Canada because there are a number of farmers who, because of input costs, are finding it difficult to maintain the traditional way of farming. What is being studied at your university that will help to revitalize rural Canada and the rural community and add support to the people who want to remain on the farm?

Dr. Coffin: I do not know if I have a very good answer for that, except to say that any of the programs that we offer can provide a pathway for people, whether it be from a farming background or whatever. I read a presentation just the other day from someone who started out as a registered nurse, decided to pursue a change in career, and came here and did a degree in business and economics and is now running a successful interior decoration business. I think one of the traditions of agricultural programs throughout the decades has been the versatility of application of the knowledge that is gained here. One of the strengths of graduates of all agricultural programs, from any institution, is that they are very adaptable. I guess one of the things that makes us that way is the emphasis on the applied side, the hands-on experience, being able to witness, observe and experience the application of science and technology to real, everyday problems.

A popular program for us is our environmental horticulture program. It has attracted people from various backgrounds, not necessarily a horticultural background. One case that I know of involved someone who had been in the mining business for a long time that attended our institution and the technical program and absolutely loved it and was going out to apply that knowledge. So I think among our offerings, even though they may not be geared specifically to saying this is a pathway for people who no longer want to farm to take this program and do something with it, are opportunities there.

We do have a Rural Research Centre, headed up by Dr. Kenneth Beesley. Dr. Beesley, along with his colleagues, has proposed that we offer a Bachelor of Arts in rural studies. That one is still on the board for consideration, but we are certainly conscious of that and are looking at ways to respond to it.

Senator Oliver: One of the things we have heard from witnesses in P.E.I. and in New Brunswick is that farming problems are different in the Maritimes, and different from, say, Saskatchewan. Our chairman, our deputy chairman and Senator Tkachuk are all from Saskatchewan, where there is a lot of wheat and other crops and where the farming problems are different from those down east.

I should like you, if you would, to address differences that you see. What are some of the special problems that you, in your university, are trying to address that are regional? Do you feel that we are hamstrung in Atlantic Canada because of the lack of a national strategy for agriculture and farming that could be helping us?

Dr. Coffin: I am probably not the best person to address that question because, although I have worked at the national level as an agricultural economist, I may not appreciate all the subtle production differences.

Nevertheless, I would say that one of the problems facing agriculture in this region is that because it is so diversified we probably lack critical mass in some areas to really have a truly viable industry. There are some exceptions, such as potatoes, although some would argue whether that industry is viable or not these days. Clearly, the diversity of the industry means that when national farm programs are developed they are probably driven mostly by concerns, for example, in other parts of Canada, whether it is the West or Ontario, and as such do not always fit well in this region. It is hard, I think, to have a national program that really meets the needs of every part of the country. We are certainly learning that with the income stabilization programs and so on.

Are we doing something about this? I think we are working hard at exploiting the things that are unique to this area. A couple of those were mentioned this morning. An example is the fur industry. If I am not mistaken, 60 per cent of Canada's fur production is within the province of Nova Scotia. It has had a traditional close relationship with fisheries as a source of fish processing and a source of a feed. We do have a research professorship and a research centre concentrated on that area.

Then there is the blueberry industry. We call Nova Scotia, and particularly Oxford, the world capital of blueberry processing, Oxford Frozen Foods. We have a close working relationship with that industry and the research professor there.

Therefore, we are trying to exploit those things that are unique to this region, and I think we have made good progress in that respect. I am sure there are a great many other things that we could do.

Senator Tunney: Dr. Coffin, I wanted to ask you whether, in view of the fact that the Maritimes has a climate different from Ontario, which then again is much different from the Prairies, any work is being done on field crops that up to now will not do well in a climate where there is rain most of the time, and lower heat units? Is any work being done to develop strains of crops, say, grains and perhaps canola, that would flourish here — as opposed to strains that are being used in Ontario and maybe the West?

Dr. Coffin: I would defer that question to some of the researchers in the field. I do know that for a time we were doing some interesting work with canola here, but not for the purpose of seeking a unique variety that would do well here because canola does grow very well here. The beauty of this region as a seed producing area is that because there is not a large commercial production of canola in the region it is possible to have the isolation necessary to produce pure seed. That work was going very well, but the researcher we had working on that decided to pursue another opportunity with the International Rice Research Institute in the Philippines.

I know some work has been done on forage crops, and particularly clovers and alfalfa, but not too much looking for unique strains. We are certainly not doing very much here with respect to cereals, and since Agriculture and Agri-Food Canada has been doing less in that area, more of that work has shifted to the private sector. One of the problems we have, of course, with this region is that it is not really large enough to attract a lot of investment in developing those varieties. Therefore, I would say that we are not doing a lot of work in developing distinct types for this region.

Senator Tunney: You are aware that Andy Mitchell, the Secretary of State for Rural Development, is very active and aggressive and is a well-positioned minister. Do you interact at all with him or his department?

Dr. Coffin: I have not personally had interactions with him, but I know that Dr. Beesley, who I mentioned earlier, has been interacting with him personally and with his department.

[Translation]

Senator Day: Thank you for your comments in French. I believe it is very important for us to know how to speak both official languages in Canada.

I will continue in English, but we are prepared to answer questions or hold discussions in French, if you would like.

[English]

You have an engineering school here, in cooperation with Dalhousie. Is the engineering degree a degree in engineering agriculture, or what is the name of the degree?

Dr. Coffin: What we do is offer the first two years of the engineering degree, general engineering. Hence, students who take those first two years can go into civil or mechanical, or any field of engineering; and in fact, some do go into agricultural engineering. I think the name has been changed to bio-environmental, something of that order. Students who are going into environmental engineering, for example, must attend Dalhousie for third year. They may then come back here for one semester in fourth year, before finishing their degree, so we continue to work with them. Much of the application of the engineers in that department is in the environmental area, including the issues of nutrient management that are coming to the surface in agriculture.

Senator Day: Yesterday we met another Dr. Coffin, who was equally enthusiastic about research and work in the field of agriculture.

Dr. Coffin: Robert?

Senator Day: Robert. I cannot help but wonder whether there is a relationship.

Dr. Coffin: I think his father and my father were second cousins.

He was a member of the first class of students I taught at Prince of Wales College after I graduated from McGill in 1962. I am proud to say that 75 per cent of that first class went on to do a Ph.D. — three out of four.

Senator Day: You can be proud of that student, I can assure you.

My final question is in relation to the business of this institution and if you can provide us with some statistics. As we get together afterwards and reflect on the various presentations we have heard and places we have visited, it is very helpful to have statistical information — for example, the number of professors and researchers, the breakdown between women and men in your various courses, not a breakdown of the courses but overall. You have told us that you have 700 or 800 students. The derivation of revenue, the percentage from government, the percentage from industry, that kind of information would be very helpful if you could provide that to us.

[Translation]

Mr. Coffin: I would be pleased to give you the information.

[English]

The Chairman: A message that I as chairman would like to leave as we travel across the country and study the state of agriculture in Canada is that it seems the primary producer is not getting enough out of his product to cover the cost of production, and that is a very serious problem. Conversely, there seems to be an awful lot of money in the processing and in the end product, food.

For instance, I come from Saskatchewan, where, with respect to a loaf of bread, they tell us we have six cents in. Six cents is neither here nor there when it comes to buying a loaf of bread. We have not been able to find a fair approach to dealing with this problem.

In the last day or two, we have talked to producers in the dairy industry, the woodlots, and so on. There seems to be a serious problem right across Canada of getting money into the hands of producers, and yet we have problems in our cities. We have to get that message out to government. Somehow we have to get the message to them. I say that because I think it is important for this country. This committee has travelled in the United States and in Europe, where there is a much different approach to agriculture, to the rural situation and to keeping farms strong. This issue is very important to the national strength of this country. I would like to leave that message with you.

Honourable senators, our next witnesses are from the Nova Scotia Federation of Agriculture.

Mr. Fraser Hunter, Chair, Industry Planning Committee, Nova Scotia Federation of Agriculture: On behalf of the farm community of Nova Scotia, I would like to thank you for this opportunity. We, the farm community, believe that these hearings are an important part in developing a sustainable agricultural economy at the provincial and federal levels. The federation is the only recognized general farm organization in Nova Scotia. We represent the interests of nearly 2,000 farm businesses that are responsible for 95 per cent of the agricultural production in the province.

We are all part of an amazing industry. I have been farming in Nova Scotia now since 1990. I immigrated from the U.K. in 1978. I made my home in Mabou, on Cape Breton, for 15 or 20 years, before moving to the mainland of Nova Scotia. I am a dairy farmer. When I left England, I was beef and sheep farmer; however, to me, dairying offered a cash flow and a chance of survival. Canada offered me an opportunity I could not have received anywhere else in the world.

Let me assure the committee that our industry will do everything in our power here in Nova Scotia to ensure that the Government of Canada receives full value for its investment.

We would like to point out a number of opportunities that will enable development of the agricultural economy in Nova Scotia, and a number of constraints on the development of the industry, as outlined in your letter to us as the objectives of the hearings.

The strategies, it is hoped, will enable this industry to take advantage of opportunities that cannot always be considered mutually exclusive from the strategies required to meet the challenges facing the industry.

We have a lot of challenges facing the industry. Many of you are policy makers and want to reconcile twin roles to me as an agricultural producer. These twin roles are a real demand on modern farms. They want us to be environmental improvers and tough-willed traders. It is pretty hard to do both.

If we look at the agricultural industry in Australia and New Zealand, we see that they have no protection. If you look at the industry in Europe and in the United States, we see that they have lots of protection. Canada is in the middle: We have limited protection and are expected to trade out there. It is difficult to compete against things like the American farm bill and the CAP, the common agricultural policy of the European Community.

We have a vision for this industry. We want profitable, sustainable farms. We want the food to be of high quality and respected by the public, traceability. We also want to look after environmental concerns, which are also a concern to us. We have got to return money to the hands of the producer.

On my way here this morning, I stopped into a store and purchased three products. The whole milk cost me 65 cents, the water cost me $1.49, and the chocolate milk cost me $1.59. The chocolate milk is good Nova Scotia chocolate milk, Scotsburn Dairy — which is who I supply.

That 65 cents represents $2.40, $2.50 a litre. I get about 52 cents a litre. This milk came off my farm yesterday and is in the shop today, and it has gone up four times in value. This bottle of water — and everyone is consuming water today — costs the same as the chocolate milk.

We have some things to learn, however. We have to market our product better. For example, this milk carton is hard to open for someone who has arthritis or for a young child who cannot read the ``push to open'' instructions. No one gives a carton of milk to a child in a car. Why? Because it spills. Today, everything is sold in screw-top bottles, even beer, but we in the milk industry are still putting milk in cardboard cartons. Therefore, we have a lot to learn about what the consumer wants and how to market our product.

Whole milk is 97 per cent fat free, but we market it as 3 per cent fat. We do not emphasize the attributes. Whole milk is 97 per cent fat free.

Senator Day: You have to start pouring water into the bottle.

Mr. Hunter: We might have to.

Let me talk for a moment about changing lifestyle and demographic trends. Lifestyles are changing all around us. The whole market is changing, and as farmers we must become aware of that market, the market in Nova Scotia, the market in Canada, and the world market. People are getting older. There is a lot of unemployment. It is a changing marketplace out there. People are looking for ``eatertainment'' and entertainment when they are buying food. As primary producers, we have to become aware of that. We have to move away from viewing ourselves as commodity producers; we must add value.

We must change along with changing lifestyles and demographic trends, something that we have traditionally not done. I am a dairy producer. I get the truck into the yard and I get the truck out of the yard. We have a responsibility as agriculturists, as farmers, to market our product to our best advantage, to market to what consumers want.

I am emphasizing milk because I am a dairy farmer, but what I am saying relates to other products as well.

At what time of the day is the most consumer in a household?

Senator Oliver: In the morning.

Mr. Hunter: Morning, breakfast. We can tie in with some of the cereal companies. Everyone knows how much room cereal takes up on the grocery store shelves. We have to tie in with those cereal companies. We need to market our product alongside them.

Technology. Dr. Coffin mentioned technology. We have to move forward technologically. We are fortunate to have the Nova Scotia Agricultural College here. However, we need more than production technology; we have to get into marketing technology, preparing foods, and selling them in a way that the consumer wants. We have to find out what the consumer wants, and we will provide it. That research must be done and the technology must be developed.

If we look at the food industry, most grocery stores and many specialty food stores today offer ``food to go,'' prepared meals that only need to be reheated at home. Our industry has to prepare what the market wants, not what we think it wants all the time.

Technology and research are necessary because we have to control pests and diseases, and we need that technology and research to look after that.

Globalization. Nova Scotia is geographically in a unique position, with the New England states to the south, Europe very close to the east, and central Canada to the west. We are in the centre. We can provide for that marketplace, but we must not sell a commodity. We have got to sell a value-added product. We must add value to it here. Anyone who listened to this morning's news would have heard about the Liberal leadership debate taking place in this province. They were talking about adding value to our gas. We sell everything and let others add value. We have got to add value before we go into the global market. It is much cheaper to transport.

Nova Scotia is unique. In one way, we are a step behind, but it is an advantage. We have not gone into great factory farming; we have a high proportion of family farms. We are already looking after the environment.

Associated with the opportunities I have just referred to are a number of ways in which the Government of Canada can help. In terms of those opportunities, I mentioned changing lifestyles, demographics, technology, globalization, specialized markets, both domestic and international, where in Nova Scotia we have a competitive advantage due to geography. We must develop these markets. For years, farmers have been poor marketers. We are producers. We have not been marketers. Marketing is a new philosophy to us. We have to use our brains differently. We have to find out what the market wants. We need government help, both provincial and federal, to find those markets where we can sell a value-added product.

The blueberry industry is an excellent example. Tim Horton's sells a blueberry burst muffin. A lot of blueberries go into each muffin.

We need to enhance the tools to ship production quickly while at the same time keep production costs in line with the consumer's willingness to pay. We are small. Dr. Coffin has said that this could be a disadvantage, but it can often be an advantage. You can move in and out of things an awful lot quicker. We must have access to capital, market information and development of value-added opportunities.

If you look in any grocery store, Save Easy, Super Value or Sobeys, you will see cheese that has been imported from the U.K. The retail price on that cheese is $28 a kilogram. In that cheese there is $5 worth of milk. That is tremendous value added. Our plant here in Truro produces cheddar cheese. It sells for $11 a kilogram. So we have to look for these market niches. Nova Scotia has a big advantage being small, in that we can move quickly into those market niches.

We also need assistance in maintaining our environmental advantage, including nutrient-management planning, environmental farm planning, water management and infrastructure and food safety. The federation has been a leader in nutrient-management planning and environmental farm planning. We are trying to make sure that every farm incorporates both of these initiatives. We took the initiative probably two years ago.

Water-management planning. Drought. You mentioned drought in your brief to us. For the last five years, Nova Scotia has been badly affected by drought. Nova Scotia is a forage-producing province, and over the last five years there has been a lack of water in the summer.

In my own instance, July 11 will stick in my head. We had had a good first-crop silage. On July 11, it was dry, but the second crop was coming. We were hit by the army worm, and from July 11 to this time we have been feeding rations. The net cost to us this year of buying feed, buying grain, possibly reseeding pastures next year and also drilling new wells, will be $30,000 — and ours is only a small dairy farm, 60 cows. That money came from the bank, which means a higher debt-load situation. In Nova Scotia, we have 17,000 kilograms of quota, which has cost me $500 a kilogram. Hence, if every dairy farm were in the same situation I am in it would cost the industry $8 million, the drought alone. We have to get into water management.

I will ask my colleague, Mr. Nason, to talk about Prairie Farm Rehabilitation Administration.

Mr. Laurence Nason, Executive Director, Nova Scotia Federation of Agriculture: We recently were fortunate enough to have Minister Vanclief provide us with access to the expertise and 70-some years of experience that has been developed by Prairie Farm Rehabilitation Administration in Western Canada. They have come down and met with us twice now. We are quite excited about the kind of advice that they can offer us. We expect to be working with them over the next two or three months to put together a master plan to deal not only with drought but also to change our farm practices and our cropping practices, to fit in with what has become a pretty normal occurrence for us. For that, we appreciate very much the interest the Government of Canada has shown in our industry. This help will enable us to get started putting together a master plan to farm in the future under these kinds of conditions.

Our written presentation includes an outline. We have an environmental-management strategy that we are putting in place that begins to deal with these issues.

Mr. Hunter: We have enough surface water, if we can contain it and then utilize it during the summer. You have been in the Maritimes the last two or three days. You just have to get up in the morning and the weather changes. The temperature the other day was minus 16, minus 30 with the windchill. The temperature then climbed to plus 5, and now the water is running off. The forecast for tomorrow night is for the temperature to drop to minus 20. You might say that the climate in the summer is important, but the winter climate puts a lot of stress on the livestock. Jumping 20 degrees Celsius in 24 hours is unreal.

Those are the three ways that we feel the Government of Canada can help.

I shall now talk about constraints to development, one of which is meeting the expectations of the community. What does the community want? What does the Government of Canada want from its agriculture industry? What does the community at large want from its agricultural industry? We do not know. Therefore, there has to be a to and fro of information. We have to know what the Government of Canada and the community is wanting.

We talked about new technology, but there is a cost to adopting new technology. If the market is changing fast, there is a cost. Our capital investment in the farm is major. I have a beef farm next to me, but the nearest farm to me that milks dairy cows is 20 to 30 kilometres away, either way. In Nova Scotia, many of the farms are isolated, so cooperation between neighbours becomes limited in terms of use of machinery and new technology. Distance makes it impossible. So there is a cost, a constraint, although we are small enough to adapt.

I have already talked about competing in a global economy. How do we do it? We cannot compete with commodities. I noticed in the press yesterday that Argentina's current economic and political woes make it a virtual certainty the country will devalue its peso. Argentina produces a lot of soybean, which means that it will be a lot cheaper next year. Other reports show that Brazil's exports of maize, and it is all non-GMO maize, will be record- breaking too. China, too, will export 5.4 million tons of maize in the year 2002. Those are the countries that we are competing with when we are dealing with commodities in the global economy. In that regard, we have to have a value- added product. We have to know what the markets want out there. Those are some influences that can have a great effect on us.

Let me talk about farm income protection. The farm income protection schemes of the present help Nova Scotia in one way, but we have a very diversified economy. Nova Scotia is ahead of the game because we diversified our agriculture, so we have spread our risks greatly, but this means in many instances that we do not qualify under the whole farm scheme. We are not a single-commodity farm, where if the commodity goes down we get advantages. We keep that steady level all the time. Some are up; some are down. We are always on the brink of poverty. I do not mean that literally, but we do not have those ups and downs, where some of those farm income protection programs come in.

My next topic is new entrants to agriculture. Dr. Coffin said that there were 700 students going through this place. Where are they going to find jobs? I have a family farm. We milk 60 cows. We cannot afford to employ anyone. Can I afford to give that farm to my offspring? Yes, as long as I have a lower standard of living when I do hand it over. Not that we have a fantastic standard of living now, since we have not been on vacation for about the last 10 years. If we got into value-added products, then there might be an opportunity because the farm would be more diversified. A farmer might pass on a part of his farm business to his offspring, but not all of it. Sometimes new entrants want to come in at a place where their father finished off his career.

I am reminded of people who are getting married these days. When most of us got married, we did not start out with a dishwasher, a dryer, a washing machine and a microwave. We washed our clothes in a washtub. Today, when people get married, they expect to have all those things immediately.

Hence, sometimes the expectations of young farmers coming in are that they want to take over the whole operation, move from where the father or the mother is at now. So there might be instances where they have got to cut back and move forward.

When I got into agriculture, I worked off the farm for 10 years; my wife milked cows and earned off-farm income. Should I have to do that? I do not know. Nevertheless, with respect to new entrants to agriculture, there is a problem. I still think I am young, but at 53, if I had stayed in the U.K. in the job I was in, I would be retired in two years' time. I certainly will not be retired here.

The next topic I want to focus on is consolidation of the retail sector. This could be a problem for us. At present, there are two retail companies in Canada, which means that we have two places to market our milk or our products. Fifty per cent of the output from this dairy co-op goes to Sobeys; that means that we are tied into one market pretty heavily.

Associated with the constraints, what would challenge the growth of the industry? There are a number of ways the Government of Canada can help — assistance with the development of ecological, sound market practice, including climate change mitigation and the delivery of the tools of sustainable agriculture. I said sustainable, not subsistence, and there is a difference. Forty or fifty years ago, we were talking about subsistence farming. It was sustainable. We want sustainable farming, producing a good lifestyle in rural Nova Scotia.

Let me talk about protecting the interests of Nova Scotia's industry at the international level. It amazes me, coming from the U.K., that a lot of our competition comes from the other provinces. It is not international. We are talking about trade barriers on the provincial side. If we can produce something here, why should we not be allowed to sell it right across Canada? We are not for milk, but ice cream goes from here to B.C. So there are barriers that need to be looked at from both sides.

We need nationally funded risk-management strategies that are flexible enough to fit our circumstances and programs to facilitate the entrance of new farmers to the industry. Those programs can be as wide or as broad as your imagination, depending on whether you want agriculture to be sustainable. One of the things that make it sustainable is people living on farms. If we have to put in inheritance packages, retirement packages, this type of thing, not at all costs, but to get time to get into it, fair enough.

In addition to enabling the opportunities and assisting with the challenges, the federation also asks the Government of Canada to recognize in its policy initiative a number of themes that make our industry different or unique and as such to provide for the uniqueness when developing agricultural policy. We are very dependent on labour. We produce 1.5 per cent of the national output, but we employ 2 per cent of the labour in agriculture. We have a high horticultural component in our industry. In Nova Scotia, about one third of our gross income from agriculture through the farm gate comes from horticulture.

My next topic relates to purchased feed grains. We are at the end of the line, apart from Newfoundland, and Newfoundland possibly can get it there cheaper by water in the summer than we can. We used to have feed freight assistance, which made grains competitive down here, but in my farm our gross output last year was $350,000. We spent $85,000 on feed grains. You might ask, ``Why do you not grow some?'' Well, at a yield of a tonne to just over a tonne an acre, it is not worth the effort to do it. We have a high level of diversification. We entered the first risk- management program. I already mentioned a high concentration of horticulture. A high concentration of the supply- managed sectors, approximately 45 per cent, I believe, of our gross income comes from supply-managed industries, that of dairy and poultry. Supply management is very important to us.

We would be pleased to answer any questions you may have.

The Chairman: We hear a lot about value-added. I think a potato farmer here who wanted to make potato chips would be in some trouble adding that value.

Mr. Hunter: I quite agree with you.

The Chairman: I have farmed all my life. I always believed that our farm was on the cutting edge, trying to keep things going, being positive and so on. If I wanted to make wheatlets out of my wheat, I would be in some trouble competing, with Kelloggs or other companies that are putting all the grains on the shelf. I know there are niches, and I can give you examples of that.

Senator Tkachuk was saying one that of his relatives is into buying up old combines and old tractors and selling off parts. However, if everybody did that it would not work. It is a niche, and there are niches. However, it is another thing to compete in added value with the big players; a farmer is bound to run into trouble.

Mr. Hunter: That is why you have to produce a product that is different completely from what the big players are doing. Let's look at the pie factory down in the Valley. They used to produce apple pies, and then they sold their company and started a new company. They thought their apple pies would go to a local retailer. The local retailer said no; that company is now exporting apple pies to Wal-Mart in the States.

We have to change our mindset. If we look at my own operation, we are not sustainable. The milk quota here is $25,000, $26,000 a kilo, so if I need to keep one extra cow, I have got to spend $26,000 on quota. I cannot afford to do that. It is not sustainable.

What can we sell? We can sell location. We are fortunate to be on the Northumberland Strait, looking over to P.E.I. We have a location to sell. We have to sell eatertainment and entertainment. I am not sure what the wheat grower does out West, but the advantage of being in Nova Scotia is that we can sell the location.

Traceability is going to be important to consumers. The consumer is going to want to know where the milk he is drinking came from. Presently, milk comes in a Scotsburn carton. However, if you are following what has been happening in Europe, consumers want to know where the product is coming from. Why should our milk cartons not have pictures of farms and locations? In that way, we would sell our location in the situation in Nova Scotia. I do not know what is happening out West, but we have an advantage in the possibility of getting into niche markets.

Dr. Coffin mentioned organics. Currently, almost 20 per cent of products in Europe are organically grown. There is a niche there. We have the whole New England market. Containers leave here and go to Iceland, through Halifax. We have sold cauliflowers and cabbages into Iceland at various times. The diversity here is an advantage that is not present in other areas. The Maritimes certainly has the advantage of diversity.

The Chairman: The niche word, if I may, of the last 20 years has been ``diversification.'' Believe me, we went through all that in the Prairies. We went from wheat, to durum, to canola, to mustard, to peas, to beans. We tried them all. It seems that as the yield increased the price went down, down, down. Canola was $10 a bushel. A year ago, it was $5. So while I am certainly not opposed in any way to value-added, maybe we have to form cooperatives or that type of thing to get enough investment capital to move things.

Senator Hubley: Thank you very much for a very interesting presentation this morning. I apologize for missing some of it, but I did have the opportunity while I was in the lobby to look at pictures of those farmers who, over the years, achieved a position in the Agricultural Hall of Fame. There were an awful lot of young men there, as well as some women. I think it reminds us of the great heritage we have here in the Maritimes through our agricultural industry. It was not a lost moment.

I want to speak just on new technology. It is going to be sort of a two-edged sword, I believe, for the farming community, and I am going to use Prince Edward Island and I am going to use potatoes as an example. This year, the potato industry on Prince Edward Island was down 40 per cent because of the drought we experienced. The tubers that were produced were very small, and there were fewer of them. That is a major problem for the industry there.

Those potatoes are grown for a processor, and the processor is demanding that we produce a particular type of potato, the shepody, which is the long, narrow potato that gives the consumer what he wants, which is the long french fry. Now when we were hit with this situation, we were hit with tons of GMOs. There are answers, technical answers to the problem, but unfortunately, jump ahead then to the consumer. The consumer is not as comfortable with that term, for many reasons. While we have the technology, and perhaps we need that technology, the consumer is going to perhaps be the person who puts on the brakes on this for us.

I do not want to load the question, but the same problem is in irrigation. Just as an example, and it does not have to be in potatoes, but this is the worst drought in 50 years. Very quickly, irrigation becomes a must for island farmers. In other words, there is no avenue in agriculture to fail, because of the weather conditions. We have to address, even if it is once in 50 years, an irrigation problem.

I would not like to decide or say what the Island farmers are going to do on irrigation, but I would say that they are going to ``rough it out'' and say that this was a difficult year and that we cannot afford the irrigation, a system that we will only use that often. We were not given the figures to see if there was a trend, but we certainly went from a high, and every year we saw a gradual decline in the yield. Of course, then irrigation, because now it is a technology, is presented.

I just wonder if you could comment for me on available technology, but the difficulty, perhaps, in using that if you want to meet the market demands. I am not sure if you can relate that to dairy, but it might come to that.

Mr. Hunter: Well, first of all, I do not mean this in a negative sense or to come back at you but it is what the market demands. Is the market the processors or the consumer?

If the market is the processors — it is much more efficient using big spuds. They have convinced the consumer that that is what he wants, long fries. Or is it taters, is it rolled-up fries, or what? I do not know. Do we know what the consumer wants in potatoes?

McDonald's now does a baked potato. Is that because the consumer wants a baked potato because it is ``more healthy'' than french fries? I do not know, but that is interesting.

New technology? The technology of irrigation from deep wells — and this is my view, not the federation's view — is not sustainable because you are going to run out of water eventually. We have got to look at technology. Ever since I moved to this farm, we have been in a drought situation. I moved to the farm we are now at in 1998. We have had four years of drought. Last year was the worst one. Is that a complete change in climate or will things get better next year? We are the eternal optimists; we say it will get better next year — otherwise we must change our management system.

So new technology — irrigation is there. I would love to irrigate with groundwater we collect over the winter. In P.E.I., we do not track groundwater here into reservoirs. One inch of rainwater is 22,500 gallons per acre. On my farm, an inch of rain over 200 acres is, what, four million gallons? If you could somehow create the technology to hold that water, then, yes, irrigate. However, if we keep drilling wells, the aquifer is going to go down. Plenty of rainwater comes down; we just need to contain it for irrigation in our situation here.

What I am saying to you is this: What does the market actually want? Is it the processors that want large fries? McDonald's do not change to baked potatoes overnight. That is a health-related issue; baked potatoes are a healthier food than the french fries. So you have got that technology. We have got to have sustainable technology that we know is going to be there in the next 20 to 30 years.

Senator Hubley: Just a comment on that. I am not sure if the consumer is dictated to; in other words, the processor says we have got some really big potatoes here, that will be really easy to process. Bang! We are going to advertise that every kid should be eating long fries. I agree, that is the way it goes. It still comes back to the farmer: He is going to be the bottom man again, the bottom man who has to put up with that.

Mr. Hunter: Oh, I quite agree with you. One of the phrases I did not use here is this: ``Is agriculture dead or dying, or does it need to be reborn?''

Senator Hubley: Right, yes.

Mr. Hunter: This new technology or new marketing strategy is going to cost money. We must have the capital available, but not just through handouts. Somebody said of the farm policy in the States, ``You plant a dollar in the ground and you get a dollar out.'' I have forgotten how many millions or billions of dollars are going to be dumped in under the new American farm bill, but that is who we are competing against.

The Chairman: I think it is $171 billion, in addition.

Senator Oliver: I have talked to a number of farmers in Nova Scotia and they have raised the same point that you have. In your brief, you say that what we really need is a long-term national feed grain policy. You say the following in your brief: ``The most significant intervention for agriculture in Nova Scotia was the Feed Freight Equalization Program or Feed Freight Assistance (FFA). This policy framework no longer exists.''

What Senate committees do is develop new public policies, and so my question to you is this: What are you recommending, if anything, to this committee that should be done in relation to long-term national feed grain policies? What is your recommendation?

Mr. Nason: If you are seriously interested in a recommendation, I would ask you to give me a few days to set it out more carefully than I am able to on the spur of the moment. Our recommendation would be to put a program in place that allows producers here to compete. Now as Mr. Hunter mentioned, we are at the end of the line when it comes to feed grains. That Feed Freight Assistance program did provide some assistance for livestock producers so they could remain competitive. That was dismantled, and I think it was alluded to earlier, largely because, if you forgive the terminology, Canada decided they wanted to be a boy scout in terms of world trade agreements. The U.S.A. and Western Europe did not dismantle their programs to the same extent.

To some extent farmers, here have adapted to that, but we still need some kind of a rationalization of the whole feed grain situation. As I say, if this committee is interested in that, I would be very pleased to put together a more detailed recommendation for your consideration.

The Chairman: Mr. Hunter, where do your feed grains come from?

Mr. Hunter: My feed grains come mainly from Ontario and Quebec, processed in Truro, with protein added in Truro, soybeans probably coming from there as well, and lands up on my farm. My 18 per cent ration is costing $335 a ton at the moment.

Mr. Nason: There are a number of little irritants too. We have a facility at the Port of Halifax that is capable of handling huge amounts of grain by water, but there are some impediments because of shipping regulations that mean that foreign vessels cannot unload grain or load grain unless they are — I am not sure of the details. There are a few things like that that would certainly help and should be part of the policy that we mentioned. The difficulty with developing that kind of a policy today, of course, is the rules that are imposed by the World Trade Organization and other super national governments.

The Chairman: After the Crow rate, of course, you lost your feed grain assistance and this, of course, was going to feed all the dairy cows in Saskatchewan where we do not have any milk quota. We have some pretty serious national problems when it comes to this. We have all kinds of feed.

Last year, in fact, the screenings, which is just as good as a feed and high in protein, the terminals were giving it away if the farmers would take it away. They had no place to go with it.

Ms Jennifer Melanson, Director, Atlantic Canadian Organic Regional Network: Besides my work with the Atlantic Canadian Organic Regional Network (ACORN), I have also worked at the Nova Scotia Organic Growers Association for the past two years, so I am pretty familiar with the organic scene in the Atlantic provinces.

What I am going to do first is just tell you a little bit about ACORN and what we do and who we represent, and then get into some of the issues that you wanted to hear about.

ACORN is an organization that has formally been around for the last year. We have funding from the four provincial governments, or actually, three Maritime provincial governments. We are still waiting on Newfoundland funding. Our mission statement is to consolidate all resources and stakeholders in the organic food industry in Atlantic Canada, to build a comprehensive organic food infrastructure and to increase the viability of Atlantic Canadian family farms in our communities.

Hence, we are a regional organization with Maritime provincial funding. We represent organic farmers, processors, retailers, distributors, NGOs, as well as interested consumers. Our objectives are to increase the availability of Atlantic Canadian grown and produced certified organic products for regional consumers by 30 per cent in three years, to act as a vehicle to raise funds to advance the development of the organic industry in Atlantic Canada and to maintain the support of regional certifying bodies and other stakeholders — essentially, to be the collective voice for the industry.

Previous to ACORN's formation, there was not a regional organization representing the Atlantic provinces. There were certification bodies that existed in each province, but they did not really come together as a region.

Senator Day: Are you a certification body?

Ms Melanson: We are not a certification body, no. Currently there are five certification bodies operating in the Atlantic provinces and ACORN, basically, at our formation, realized that there was not a need to have another certification body.

Senator Wiebe: If I can just interject for a second, we have had an opportunity to hear representations from various organic organizations throughout the country. One of the major problems seems to be arriving at some kind of a national certification. Are you working towards that end?

Ms Melanson: Yes.

Senator Wiebe: I mean, a national certification, so growers in New Brunswick, for example, will meet the same standards as those grown in Newfoundland and in British Columbia.

Ms Melanson: Yes, I will be getting into that a little bit later, but ACORN has a committee that has been present at the national meetings in Guelph and national conference calls. So that is one of our ongoing projects at the moment.

Senator Wiebe: Good.

Ms Melanson: I shall to outline our objectives: to increase communication awareness and information access within the region; to assist 3 per cent of conventional farmers with the transition to organic production within three years; to have ACORN recognized as a household word in Atlantic Canada as well as to have ``certified organic'' recognized, and to have small farm revitalization recognized as important.

Our strategies for meeting these objectives are as follows: develop a database of organic production and sales; assist in the development of a regional fair trade marketing and distribution system; encourage regional governments to purchase local organic food for provincial institutions; influence produce buyers in major chains to buy local organic products; educate and encourage consumers to request that local organic produce be available at their grocery stores, and encourage local organic food processors to set up in Atlantic Canada.

So far, to meet our strategies and objectives, our main activities have been the organization of an annual conference and trade show. You received our latest newsletter, which has information on our conference coming up in Moncton in early March. We have a very informative and comprehensive Web site, which includes a regional database. Anyone who goes onto our Web site can go in and find out contact information for all certified organic producers and processors in the region, as well as distributors, retailers, food services, media and government.

We have done reports on production research and marketing and have put together an organic resource kit, which is essentially a print version of our database, as well as maps like the one you received today, showing all the producers and processors in Nova Scotia, New Brunswick, P.E.I. and Newfoundland. As well, we are looking at doing marketing information and access projects.

What we are working on in the next year is facilitating a regional apprentice program to link potential farmers with existing farmers who have labour requirements that they cannot meet in other ways. We are trying to identify local, regional and export markets, particularly, the New England export market, and making that information accessible to growers, both the contact information as well as the supply and demand information.

We are also trying to identify allowable organic inputs and where they can be obtained. When new farmers are coming into organic growing, one of the hardest things is to find out where they can actually get the inputs that meet certification standards.

Along with our annual conference, we are developing a two-day training course, which falls just before the conference. That training course is for both existing organic growers and conventional growers, considering the transition process. We are also funding a pilot-mentoring program for growers making a transition to organics in Nova Scotia.

I just want to touch on why organic agriculture is important. I am not sure how much you have heard from other organic groups, but I think this is fairly important. Organic practices helps government address pollution problems and their costs. Adopting organic farming can reduce Canada's greenhouse gas emissions. Adopting organic farming builds consumer confidence by not using products, practices and processes seen to be controversial by some consumers. Adopting organic farming can reduce financial pressures on farmers and can help with rural community revitalization.

I will now talk about the state of the industry currently, both the national and Atlantic focus. The total number of certified producers in 2000 increased nationally by 34 per cent from 1999. The number increased by 50 per cent in P.E.I. and by similar percentages in New Brunswick and Nova Scotia. There is not as much of an increase in Newfoundland. Currently, we have 153 certified organic growers and processors in all four Atlantic provinces under five certifying bodies. The percentage of organic farms in each province lies between 1 per cent and 2 per cent; the total certified organic acreage represents less than 1 per cent of crop and pasture acreage nationally.

Statistics Canada reports that organic farms account for 1.9 per cent of commercial fruit under production and 1.6 per cent of commercial vegetable production, so at this point not really high percentages of either production or acreage.

Processors and handler numbers continue to increase — up 15 per cent from 1999, and this includes on and off-farm processing distributors, retailers and brokers.

Consumers are increasingly attracted to organic foods because they perceive organic to be healthy and better for the environment. Awareness of certified organic food is also increasing.

The general statistics for organics nationally is that there is a compounded growth rate of 20 to 25 per cent per year, and with these statistics, organics represents the fastest growing product category in the food business. Although the current market share held by organic foods is less than 2 per cent, this is expected to quadruple by 2010. So hopefully those numbers for production and acreage increase significantly.

Let me now turn to industry challenges. The Canadian market is 10 years behind the U.S. and Europe. Supermarkets have picked up organic foods in the last two to three years, and Canada's largest supermarket chain, Loblaws, introduced its PC Organic line last year. However, Canada's market share for organics is still in the 1 per cent to 2 per cent range, with estimated sales at $800 million. In the vast majority, 85 to 90 per cent of these sales are imported products from the U.S.

We are currently in negotiations with Superstore and other major grocery chains to have them buy locally. Part of the challenge is that there is not enough supply; the other challenge is that they do not want to be dealing with 150 different producers who may have, say, a tonne of carrots one week and none the next. We are looking at forming cooperatives, to bring farmers together so they can market their produce effectively.

Hence, we are still seeing that huge numbers of organics that are being sold in the Atlantic provinces are being imported. Clearly, there is an opportunity here for farmers in the region to not only increase the number of farmers but increase the market.

Another challenge is consumer confidence and certification. National standards are minimal; they need to be updated. Nevertheless, that has been a slow process. At this point, when you are going a farmer's market or a grocery chain and are looking to buy organics, you may see one of five labels. You will see Nova Scotia Organic Growers, Maritime Certified Organic Growers, OCPP, OCIA New Brunswick and OCIA P.E.I. So it is a challenging and complex system for consumers to understand. What does this mean? Different certification bodies at this point use different standards, so that is a concern for consumers.

Again, ACORN has a concern about the absence of a clear and affordable process for revising the national standards in a timely and regular fashion, and we are involved in talks nationally to try to address that.

Another challenge internationally is international accreditation. Canada's system for accrediting certifiers is not fully in place; it is also extremely expensive. The federal government is committed to assist certifiers with accreditation; however, there will likely be a loss of certifying bodies and potentially higher costs for those applying for certification. We have already seen that at a local level. One of the five certification bodies is dissolving because it cannot maintain the organization with increasing accreditation costs. As of January 1, Maritime Growers cannot export into Quebec and the States until we reach accreditation. So the local OCIA, which is an international certification body, does have accreditation. It is a challenge for the local certification bodies.

Still more challenges: barriers to conversion; barriers to transition from conventional to organics; difficulties connecting buyers and sellers, and that is because of the increasingly concentrated market in the hands of the few grocery chains.

Basically, there is centralized purchasing and distribution. At this point, Superstore and Sobeys are making changes. You cannot sell to their individual stores; you have to go through their distribution centres in Moncton. So unless you have the volume, the quantity and the quality to supply all of their stores, you cannot go to, say, the Sobeys in your neighbourhood and sell your excess produce. So this is a concern.

Another challenge is the lack of advisory services. There are currently organic specialists in New Brunswick and P.E.I.; however, there is one in each province for the whole province, and there are no organic specialists in Nova Scotia or Newfoundland.

In terms of challenges directly to farmers, again, there is lack of support for the transition process and there is a need to develop appropriate courses and manuals to support this process. There is a barrier to the entry of new young farmers wishing to start out organically; that is more of a financial barrier. There is difficulty obtaining inputs, tools, and services that are appropriate for organic farming. As I say, ACORN is trying to address that by pulling together a database of where we can supply those inputs. There is a shortage of organic feed. At the moment, there is only one organic feedmill, which is located in P.E.I. At this point, the majority of the feed is still being imported from Ontario. Up until last year, actually, you could not certify organic livestock here because organic feed was so inaccessible.

To continue with farming challenges, there is a lack of training and educational support of organic farmers. There are threats to organic production from chemical and GE, genetically engineered, contamination. There is a limited number of dedicated organic processing and packing facilities. As I said, there is one feedmill in P.E.I., and at the moment, because they have a limited local supply, they have to have the feedmills vacuumed out each time they are processing local feed. They might do that for three tonnes of feed, but it is not a system that they will survive unless they have more local supply of feed so they can actually do increased amounts at one time.

There are limited organic processing standards. We have seen in Nova Scotia that the new businesses that are coming on are doing more organic processing than growing, so this is a concern, that there are limited standards.

Let me talk about the state of research. In general, there is insufficient research on organic agriculture, especially organic processing. There is a need to establish effective collaborations between schools, research centres and farmers. We do have an opportunity and an advantage with the recently funded Organic Agriculture Centre of Canada, and they are providing on-line information and training resources for existing and upcoming organic and conventional farmers. There is still a need to support more informal farmer-oriented research and training.

Having been involved with ACORN and its Web site, I know that a lot of farmers are not necessarily comfortable with on-line resources. All of the training that is being done through the Organic Agriculture Centre is on-line at the moment. Hence, whether or not this will benefit existing farmers is a question.

For additional resources, there is ACORN's Web site, www.acornorganic.org. There is a national strategic plan for the Canadian organic food and farming sector as well. This strategic plan is in its second draft and soon to be completed.

I shall pause now for your questions.

The Chairman: Currently, in Saskatchewan, there is a lawsuit by the organic producers against Monsanto. The producers claim that the seeds of the genetically modified canola are being blown around and that it will be absolutely impossible for them to guarantee that the fields are organically correct.

Ms Melanson: Yes.

The Chairman: I see here that the problem is quite different, where you are going to have ship feed in, and yet it may even be more difficult.

Ms Melanson: Right. Currently, we are looking at GE legislation that has been passed in Maine and Pennsylvania. Part of this legislation is identifying and recording any GE products that have been sold and where they are actually being sold — in other words, where the farmers, suppliers and distributors. We are looking at that draft legislation, to possibly implement something similar here.

There have been similar cases in P.E.I., for example, where GE tests are being done and the location has not been divulged to anyone.

At this point, we are not sure how much contamination there is, but it is going to increase, definitely.

The Chairman: That raises the whole subject of labelling, of course. My observation has been that both the U.S. and Canada are very, very protective about getting into that whole area because of the cost and so on.

Ms Melanson: Yes. Recently — and I cannot remember which bill it was on GE mandatory labelling — only 9 of I think it was 50 MPs voted in favour of the bill. Hence, at this point there is not a lot of support for the labelling.

Senator Wiebe: I am a strong believer in what organic farming can do for rural Canada. It is one area where we can keep our farms smaller and keep the rural population out there.

However, I have a real concern — and I know that there is going to be a philosophical difference between myself and other members of the committee with what I have to say in this regard. I have a neighbour, a large farmer, 4,000 acres. His father did an excellent job and was very financially successful. He passed away. The son, the young man, inherited the farm, the machinery, the land, the whole works, so he was able to get started. He made the decision that he was going to go through the three- to four-year process of going organic; he decided that he was going to go organic. This was about 10 years ago.

His entire 4,000 acres now is organic. He is growing greens. He does the contracting and the selling himself; he moves all of his product. A lot of it goes to Europe; a lot of it goes to Asia. He is doing very, very well. Unless the organic organizational people find some way to develop standards, to develop marketing cooperatives, to develop these kinds of things, the big guys are going to move in. If there is any money to be made, you can be sure the big guys will move in. This really scares me, because certainly organic growing does have the potential and that was demonstrated to me by my neighbour. Not that many farmers are in the position that he was, because he had everything given to him and he was able to start. There was no great capital investment on his part. A big company like McCain, or someone like this, will move in if they believe the consumer wants an organic product. These big companies have the money to go ahead and do it. Then what we are doing is creating another problem like we have now.

In that regard, I would certainly urge your organization to look very seriously at setting up a way for smaller producers to get together and market that product and be the big supplier that the consumer is going to need. I wish you all the best; I think it is a great way to help agriculture.

Ms Melanson: Yes, and as I said, ACORN does not want to get into handling and moving food, but what we are doing is facilitating and supporting different businesses to start that process. Organic farmers have come to us, and they are actually initiating the process of forming a cooperative in conjunction with other farmers. We are simply facilitating that process by making that information accessible to all growers.

The Chairman: You have the advantage vis-à-vis transportation and containers. We were at the ports yesterday, and those containers are sitting there. It is much easier to get it in a container here and ship it than it is in Saskatchewan. So I see that as an advantage from this area.

Senator Oliver: I am concerned about the potential for the farmer who has 4,000 acres and is growing organic grains to have other grains being grown in the area, some of which might be GMOs, blown in. How do we know that his is pure and how do we know that it is organic? That issue concerns me.

Senator Wiebe: That farmer is also very concerned. He really has no way to protect himself from a hurricane, say, during swathing time where his neighbour's GMO canola is picked up and dumped on his property. He then has to start the four-year process all over again.

Senator Oliver: That goes to the whole root of this whole organic issue. How can there be certification? How do you know?

Senator Wiebe: It is a real concern for them.

The Chairman: The easiest way for that seed to move in our country is on the snow. A canola seed will roll on top of the snow for miles. Pigeon grass, for instance, is much like a seed of canola. The land right next to the roadside will be absolutely polluted with pigeon grass because it moves on the snow for miles as the snow and wind drifts along the top.

Senator Tkachuk: I am interested in whether you have done any work in Europe as far as what kind of a potential market we have for growing organic crops and products to ship to Europe.

Ms Melanson: So far we have not. That has not been the focus because we have not even met the local demand; that has been our focus. As well, there has been significant research on the New England market. The focus has really been locally in the Maritimes, Quebec, Ontario, and the New England market. There are private businesses that are exporting organics to Europe; but as an organization, we have not delved in that area.

Senator Tkachuk: Someone mentioned the problem of a product being certified, say, in New Brunswick and that not necessarily meaning it is certified in Nova Scotia.

Ms Melanson: That is right. Once a certification body has attained national accreditation, they are then recognized by all other certification bodies.

Senator Tkachuk: How do you see that ending up? What would you like to see as the system for doing that? Would you have the federation or Department of Agriculture do it?

Ms Melanson: COAB, the Canadian Organic Advisory Board, was involved in that until they dissolved recently. At the moment, there are discussions nationally with representatives from each region, and those are farmer and processor representatives. There is still a lack of funding to put into both, the national standards and the national accreditation.

For example, the local certification body in New Brunswick, Maritime Certified Organic Growers, is applying for accreditation with the USDA because it is affordable. At the moment, I am not sure what the cost is, but Canadian national accreditation is not only not available, but what has been proposed is something like $50,000 a year for certification bodies. A small non-profit certifying body is not going to be able to attain that.

Senator Tkachuk: Let's explore this a little bit; it is interesting. You are saying that it is cheaper for you to apply to the USDA and have that body certify your products? Is what you are saying?

Ms Melanson: Yes, OCIA, which is an international certifying body, is currently accredited with USDA and IFOAM, which is another international accreditation body. They are currently not accredited in Canada, and that is simply because an accreditation process is not yet available.

Senator Tkachuk: Okay, but all your organizations are not government organizations, right? You are talking about certifying bodies.

Ms Melanson: Certifying bodies are independent organizations, either for-profit or not-for-profit.

Senator Tkachuk: So you cannot get these four provinces together to come to a common standard for certification?

Ms Melanson: What is happening right now is that the region itself is coming together to talk about what we need to do to create a national standard — well, the national standard is created, but to update and maintain it and to attain a national accreditation system. The region's voice is then in consultation with other voices from different parts of Canada.

Hence, a process is taking place to try to address these issues, but it is not happening fast enough for the New Brunswick certifying body. As of January 1st, they have been told they cannot export to Quebec and the States. So what is the option? The option is to accredit with USDA.

Senator Tkachuk: I was worried that perhaps you were becoming infected with provincial government disease — and I did not want that to happen — where you could still be talking about this 10 years down the road and arguing about turf.

Ms Melanson: No. Most recently, the national committee got together at the Guelph Organic Conference, which is an annual conference, and there was a general consensus in terms of where things needed to move. Previously, I think the committee was more divided, but there is an urgency to this. Farmers are aware of that and so they are trying to move it along as fast as possible.

Senator Tkachuk: All we can do with provincial matters is influence them. However, in terms of federal matters, what is your top priority of what you think we should be dealing with, as far as your industry is concerned, with the federal government?

Ms Melanson: It is funding for national standards, to update and maintain them. As I stated in my presentation, the processing standards are very minimal — and that is a sector that is increasing more than any other sector in organics at the moment — as well as funding to facilitate this process of national accreditation. At the moment, we are footing the bill to have our representatives meet with other reps from across the country. At this time, it is a grassroots process that has a lot of merit, but it will even be able to continue and be sufficiently maintained is the question.

The Chairman: Very interesting. Some of the research we saw this morning along this line, to decipher what you are actually looking at, was tremendous. So the importance of what is happening at the school here and the research is phenomenal. I cannot explain everything I saw, but I got a little bit of it.

Senator Day: When you get back to your office, could you send us an outline of the existing accreditation certification bodies in the marketplace now? I have experienced the same process with private woodlot owners and wood sales internationally, and I can tell you that it is a very difficult situation. If you do not get control of it, you are going to lose your market. We have seen that happen. It is a consumer-confidence issue, and it is a marketing issue. If you allow the accreditation from a marketing point of view to be taken captive by extreme non-government organizations, the standards can get so onerous that the farmers cannot meet them. The public is demanding them, and it can become very, very difficult to participate in the game at all.

We need a national standard that is recognized internationally, and then we need a marketing program to get the public confidence in that. So if you could help us get started, we can then give a little push from the national point of view.

Ms Melanson: Sure.

Senator Day: You gave us a map, and it appeared only to have Nova Scotia. Could we have a map that shows New Brunswick and PEI's activity?

Ms Melanson: I did not bring one today but I will forward one to you.

Senator Hubley: Your presentation is an area that we seem to be trying to get more information on all of the time. I agree with Senator Wiebe that organic farming presents an opportunity, and especially for the young farmer getting into farming.

You suggested that there were barriers, perhaps more barriers to a young farmer trying to get into organic farming than would have been into traditional farming. Is accreditation the main one, or are there others?

The other item I would like you to comment on is your farm gate price as opposed to your price of production. It seems to be our information that maybe finally a farming community is getting return for the work they are putting into the production of that product.

Again, I am wondering if you might quickly comment on the opportunities for herbs and natural source medicines in organic farming.

Ms Melanson: In terms of barriers to young farmers, accreditation I do not think is on the mind of many young farmers thinking of getting into organics. However, as a young organic farmer myself, I can speak from more personal experience and general experience as well knowing a lot of younger organic farmers in the Atlantic provinces. I think one of the barriers is definitely the barrier to transition. If younger farmers are looking at taking over their parents' farms, they do have to wait the three years before they can be fully certified organics.

It is generally known that your production decreases initially when you start off, when you switch from conventional to organics. It can then build back up, to similar levels or even higher levels of production. However, during that transition time your production is down so you are not making as much and you cannot yet market your products as organic for three years. In addition, you have to look at switching equipment, looking for organic inputs. All of that requires not only a time commitment, but also a commitment of resources.

So I think, generally, the transition to organic is not well supported, whether it be provincial or federal.

In P.E.I., there has been some interesting provincial support in the last couple of years, where the provincial government has paid for the certification process for all organic farmers on P.E.I. Not only that, they have offered research grants for farmers to basically figure out a research project that they are interested in doing. That will help their production and they have received money to do that. Those initiatives are very helpful to organic farmers because the money is going directly into the hands of farmers.

Certification can cost anywhere from $300 to thousands of dollars. Three hundred dollars a year may not sound like very much, but if you are starting small and only making $10,000 or are under $30,000, then $300 is a significant amount. If you are doing the conversion, then again, it is an extra output of money.

What was your second point?

Senator Hubley: The second question had to do with your cost production and your farm gate price.

Ms Melanson: Right. I cannot give you any specific statistics. I can forward some of those to you; but again, it is in the National Strategic Plan for the organic sector. It does give some background on what conventional farmers are netting as opposed to organic farmers, and organic farmers, I think, nationally it was an average of $40,000. There was no negative net.

So some research that has been done here in Nova Scotia through the genuine progress index, which is an alternative to the GNP. They have found that conventional farmers are making nothing on a lot of the products that they are producing, whereas organic farmers, generally, while they may be grossing less, are netting. Their net is significantly higher. I can forward you some information on that.

Your third question related to herbs and natural sources. Again, it is an opportunity that has not yet been fully developed here in the Atlantic provinces. There are a number of herb growers producing herbs and drying them and importing them to then be repackaged. There are also some value-added businesses turning herbs into tinctures and creams and that sort of thing. There is an opportunity, but it has not yet taken off.

Senator Day: Are those two tied together — organic farming and herbs and natural products for natural medicines?

Ms Melanson: Definitely. At our upcoming conference in March, and at all of our annual conferences, we partner with health and wellness groups. There is a real direct connection between organic farming and health and wellness.

The Chairman: I want to add one short thing I learned on the airplane, sitting beside an organic farmer who returned from Germany to Saskatchewan. He said he was helping 200 farmers get certified just along the border. Those farmers in Saskatchewan were mainly those who had smaller farms, who had had a few cattle and were summer fallowing and were not using a lot of sprays, a lot of fertilizer and whatnot. He said it was much simpler for them to get certified and move in.

The second thing this gentleman told me was that they could sell all of the grain they had right to Germany, at $12 a bushel, and he was just on his way back.

I also talked to Mr. Kramer, a Caterpillar dealer, who started an organic grains elevator in Regina. He said that they could not get enough grain to supply what they were asked for.

Senator Tkachuk: There is subsidization in Europe, right? The chairman was telling us that they subsidize by unit price in Europe — for example, with wheat there is an $8-a-bushel subsidy. As a consequence, they pour the chemicals to the land, and they have been doing it for years. Why not pour the chemicals to the land? They get an $8-per-bushel subsidy, plus whatever else, so just pour it on.

Of course, they will never clean that earth. They have been doing that for 20 years. To certify to be an organic farmer there would take a long time, perhaps a generation.

Hence, we have a real opportunity. Europeans are very worried about health. They do not even want GMO food. They are very concerned. As such, there is a real opportunity for us.

Senator Tunney: I have a very brief statement, then I have four points I would like you to jot down. In the interests of time, I will not spend time on each one.

I have a neighbour who for a lot of years has grown spelt. Spelt is a grain. I do not know much about it, except that it is very much like rye. Spelt grown normally sells for $7 a bushel. For my neighbour, because he is certified organic, his contract price before he grows it is $17 a bushel. It is about two and a half times the price of regular production crop, which is a real positive, and not everybody can do that.

There are some other problems I want you to respond to. One is milk production. The problems with organic milk production is not a problem about the feed given to the cows; the problem is treating the cows, particularly for mastitis, where you have to use antibiotics to kill the mastitis. You cannot market milk that has mastitis. Hence, if a cow develops mastitis, a farmer has to take her out of production. That is one item.

I have a neighbour who has a large apple orchard, and he has irrigation for the whole orchard. He can grow apples of any size the market wants. There is not one single sign of scab on those apples. Of course, without chemical spray, those apples would be absolutely covered with scabs.

I am concerned about your labour costs as opposed to weed control with spray versus manual weed control, in mostly, I would say, vegetable crops. I am wondering if you are interested in developing large farmer markets for organic, mostly fruit and vegetables. That is my thrust here.

Ms Melanson: In terms of milk production, currently there is no certified organic milk production in the Atlantic provinces. Everything that is being sold at the moment is imported from either Ontario or Quebec. Part of the problem just has been the number of barriers that dairy farmers would face making the transition. It has been an issue in organics between wanting to certify livestock, whether it is dairy or beef or sheep or goats, and wanting to certify them so you do not necessarily de-worm them or you do not necessarily take care of them to the best of your ability. So there is a fine line between reaching certification and still maintaining a high level of animal welfare.

Senator Tunney: Animal health.

Ms Melanson: So it is definitely animal health. Yes, and it is definitely an issue that is on the table at the moment.

Orchard production? All I can say on that is that there a number of organic farmers who do grow commercially accepted apples, and part of that is looking at heritage and scab-free varieties and working with a system over a period of time using alternative methods to spray, so introducing beneficial organisms and that kind of thing. So it can be done, yes.

Labour costs. Labour is definitely an issue for almost every organic farmer because there is increased labour compared to conventional farms. We cannot go out and spray all the potato bugs off the plants. We can either use an organic pesticide or go out and, as we do at my farm, pick off all the bugs and the eggs. So there are increased labour costs. At ACORN, we are trying to address some of that by implementing an apprenticeship program. However, that does factor into the increasing costs of organic food.

Senator Oliver: My question was basically the same, because in your brochure you say that you want to grow food without the use of synthetic pesticides, herbicides, fungicides, hormones, irradiation, or generic engineering. So if you had a field, say, of five acres of cucumbers and you had the cucumber beetle and then you had some squash with the squash beetle, would you literally go around and pick off all the bugs?

Ms Melanson: One of the things that we do in organic farming is very complex crop rotation so that we are not growing the same thing in the same place year after year. That benefits the soil and the plants. The idea behind organics is prevention.

Senator Oliver: You are still going to have cucumber beetles.

Ms Melanson: We are still going to have cucumber beetles. There are organic pesticides that are acceptable under certification standards.

Senator Oliver: Do they work?

Ms Melanson: I have never used them personally, but I know that they do help, certainly. At my farm, for example, we farm three acres. The majority of organic farms in the Atlantic provinces — the largest one would probably be 25 to 30 acres. You are looking at the majority as under 10 acres, and the majority are mixed farms. Hence, you would not have someone growing 5 or 10 acres of cucumbers at the moment.

The larger conventional growers making the transition to organics will face different challenges when they try to convert, say, a large-scale potato operation to organics.

At the moment, yes, there are preventative methods, barrier methods. For example, on our farm we use a cloth cover as a barrier to the squash beetle or the cucumber beetle getting on the plant and reproducing. Those are the first steps.

Senator Oliver: As Senator Tunney said, it is incredibly labour-intensive to do that.

Ms Melanson: It is, yes.

Senator Tkachuk: Soap and water will not do it, will it?

Ms Melanson: No. Sometimes chili and garlic do, though.

Senator Tkachuk: They stick to the leaves, some of the bugs.

The Chairman: What is the state of our younger farmers, from your perspective?

Ms Melanson: As you know, the average age of a farmer these days is somewhere around 62 or 63; in addition to that, many family farms are not being taken over by the sons of daughters of those families. Organics presents an opportunity for young people, partially because of the market opportunity, with a 20 to 25 per cent increase. Organics also presents an opportunity to net more than conventional farming. Philosophically, I guess, as a young person, I want to support environmental practices and sustainable agriculture; organics allows me to farm and to do that as well.

The Chairman: Our next witness is Mr. Soucy, from the Federation of Francophone Farmers of New Brunswick.

[Translation]

Mr. Paul-Émile Soucy, President of the Fédération des agriculteurs et agricultrices francophones du Nouveau- Brunswick: I come from New Brunswick, Canada's only officially bilingual province. I am a farmer from northwestern New Brunswick, a region commonly known as the Madawaska Republic. People from New Brunswick know. This is a predominantly Francophone region. I am a potato farmer. I also have wood lots and a sugar bush. I am President of the Fédération des agriculteurs et agricultrices francophones du Nouveau-Brunswick.

It is important to mention the women farmers, as they are an integral part of the organization, and without the women farmers, we're nothing, and nothing much would happen.

The federation has been around for 17 years and was created following a review of farm management structures in New Brunswick and the desire of francophone farmers to provide themselves with an organization to better represent their needs and their aspirations. The federation is based mainly on three regions; the three large francophone regions of New Brunswick are at the grass roots.

The brief we are presenting to you today illustrates the fears, the expectations, and the hopes of Francophones in the province, as businesspeople and also as citizens. It also presents solutions or approaches that may seem strange or unrealistic. We carefully identified the problems in our industry to find the necessary solutions in a reasonable amount of time.

The state of francophone farming in New Brunswick is precarious. The province is going through a period of major environmental, social and economic turmoil.

As farmers we realize that the climate change of the past few years is only the tip of the iceberg, and that we will have to cope with this type of event regularly from now on, whether drought, flood or natural disaster.

Unfortunately, farmers are often the first to be affected by Mother Nature's whims, which is one of the main causes of the decreased revenue in our industry and one of the greatest causes of stress for farm operators.

Understand one thing about climate change and crop insurance: a farming business, even family run, is first and foremost a business like any other. It must turn a profit and manage a number of risk factors. Nonetheless, what distinguishes the agricultural sector from all other industrial sectors is its dependence on the weather, which is an additional and unpredictable risk that the farmer must manage without any decision-making power over it.

We are not asking for any favours, but simply for tools specific to agriculture to manage specific agricultural problems. For instance, the drought of 2001 resulted in financial losses of some 41 - 50 per cent of farm income for 24 per cent of farmers polled, for a total of roughly six million dollars. The federation feels that the current crop insurance policy in New Brunswick and in Canada is a major obstacle to our agricultural development.

For instance, the province of Quebec has a program that insures 55 agricultural commodities, whereas the New Brunswick program covers only six, which is a clear advantage to the Quebec farmer both in risk management and in market competitiveness. In addition, Quebec farmers are again at an advantage under various federal aid and advanced payments programs, such as cash advances for seeding, for which crop insurance rules are used to define eligibility. All these policies are considerably detrimental to our agriculture.

We recommend that a new crop insurance policy be adopted for the entire country based on the following criteria: universality — in other words, the new policy would cover all crops and farmers, regardless of acreage farmed and farm size; and uniformity, meaning that the new policy must cover all crops and farmers in all Canadian provinces.

Now I would like to touch on climate change and research. Future climate change will have numerous repercussions on the lifestyle of Maritimers. Most of us fear the future. However, it is possible that these changes will have a positive impact on farming in the Maritimes or in some of its regions.

These positive aspects are related to a significant increase in the growing season. This increase could allow us to introduce new crops that would have been impossible to cultivate in the generally cool climate of our region. In addition, this increase may lead to serious production problems for our closest neighbours, which would favour the introduction of our products to the North American market.

However, we must set up solid infrastructures for research and for adjustment to be able to transform the more favourable aspects of climate disruption into opportunities for growth for our industry and the entire regional economy.

We recommend that an adjustment research structure be implemented for all the Maritime provinces to improve our knowledge of the possible repercussions of climate change on the agricultural industry in the region.

Let us now discuss social upheaval. Farming today is constantly changing, which requires us to reassess our view of it more often. Now, and this is one of those rare occasions in the history of humanity, the process of defining what farming is may be out of the hands of the farmers who are involved in it.

Since the industrialization of the agricultural sector in the 20th century, we are called upon to socialize that process to allow the consumer to finally take part in the decisions that govern the composition of his food and the organization of rural communities.

At this time, we are experiencing the first repercussions of this transformation under various forms: the campaign for the right to farm; the numerous demonstrations against the establishment of mega-industries; the increasingly strict environmental regulations; the efforts made to ensure food safety; and the expansion of organic farming.

Man, in general, is becoming increasingly demanding of agriculture; he plays the role of consumer or fellow citizen. We see socialization of agriculture as a challenge. It is up to us to decide whether it is an obstacle to the growth of our industry or an added value to our products and to our quality of life.

The population of New Brunswick is composed of two major language groups: the mother tongue of 66 per cent is English, leaving a very geographically concentrated Francophone minority of 33 per cent.

In the Acadian Peninsula, the wild blueberry industry and related services is the fastest-growing agricultural sector. The acreage in wild blueberries was 13,500 in the year 2000, and the acreage harvested was roughly 6750 - growing blueberries requires an annual rotation; this produced more than 8.2 million pounds of blueberries, the value of which exceeds 5.7 million dollars. The region includes more than 200 Francophone farmers.

Among the services related to the blueberry industry with economic potential for this region is pollination, which we owe to the honey bee, the leafcutting bee, the alfalfa leafcutting bee and so on.

The implementation of a pollination service is closely linked to the success of the wild blueberry industry. The blueberry industry currently cannot meet its immediate pollination needs. In addition, the Acadian Peninsula region is undergoing significant expansion in its wild blueberry crop area.

The province of New Brunswick will soon be making 14,000 additional acres of Crown land available to farmers to lease for blueberry cultivation, increasing the total crop area in the region to 30,000 acres, of which close to 15,000 acres will be harvested annually. Note that for blueberries, two acres are needed for every acre harvested, as harvesting occurs once every two years.

Nonetheless, farmers in the Acadian Peninsula have a number of obstacles to overcome. The lack of adequate funding during the development of blueberry fields is the most significant. Financial institutions provide only a portion of the sums needed for development, and governments offer very little support. This has resulted, and still results, in businesses with little working capital.

Thus, farmers are unable to invest in the required inputs to maximize yield. A second obstacle is the supply of an adequate source of pollinators. Without pollinating bees, flowers cannot turn into fruit. In addition, the lack of research in this sector has a negative effect on yield per acre, which is often only average compared to other blueberry producing regions.

This region must also cope with other obstacles, such as the aging farmer population, the lack of succession, better financial management of farms, and so on. Overall, these obstacles are responsible for low farm revenue.

We feel that financial and technical support is essential to implement a network of pollination services to meet the needs of the blueberry industry.

We recommend that the research centres of Agriculture Canada pay particular attention to the Acadian Peninsula and look at fertility and pollination, in order to significantly increase the wild blueberry harvest.

Now let us look at the right to farm and the rural community. The federation feels it is unacceptable to pollute the environment and that everyone must work to preserve our natural resources. Thus, we do not define the right to farm as a right to pollute, but rather, as a right to exercise our profession, which requires a certain use of rural space.

It is precisely this use of space that troubles rural residents. In fact, no one wants to see a mega-business set up in his backyard. However, we must understand, and make it understood, that farming is composed of various operations that may inconvenience rural dwellers, but these activities are essential to human survival and to the economic development of our regions.

Farmers must learn to do their work while respecting others, as good citizens. Citizens must accept the agricultural potential of the cultivable land around them. To do so, courteous and positive dialogue must be opened up between the various stakeholders.

In this sense, we recommend that government authorities come to the help of farmers wishing to establish better relations with their rural neighbours; that government authorities adopt a mediation policy to help rural communities racked by agonizing debates between rural dwellers and farmers.

The federation believes that for environmental issues, the need to legislate for the adverse effects of agricultural operations on the environment is no longer an issue. What concerns us stems more from the little support that farmers receive in order to comply with new environmental requirements. We firmly believe that the government must become more involved so that sustainable farming that is healthier for the environment can be achieved.

We strongly believe that farmers must receive financial and technical aid as substantial as that given to municipalities and industries in the environment portfolio in the past. In addition, we believe that such aid could yield an excellent return owing to their importance in the economic development of rural areas, and owing to the positive effect agriculture has on greenhouse gas emissions.

We recommend that government authorities give more support to farmers in their efforts to comply with new environmental requirements.

Let us now speak of food safety. During the past few years, the issue of food safety has become increasingly popular with the media and with consumers. Among other things, this awareness is due to outbreaks of animal diseases such as foot-and-mouth, which has devastated herds in various European countries.

These diseases also brought to light a highly industrialized style of agricultural production that some describe as unnatural. This impression was reinforced by the development of genetic engineering, which has made it possible to bring a great variety of genetically modified vegetable products to market in a very short period of time. In short, there is a contradiction between the general perception of farming, which is closer to the family farm, and what it has now become. Thus, consumers are increasingly worried about the quality and safety of the food they eat.

Some are calling for agriculture on a more human scale; others, an agriculture that is more organic or natural. In a sense, we cannot blame this movement, as industrial agriculture, symbolized by mega-industries, is one of the causes of the current discomfort in our rural communities. In this sense, we must explain to people that it is not the farmer who decided to industrialize his job. Often, he is simply following the path of progress. The consumer must understand that the ridiculously low cost of food in Canada has adverse effects, as it is the smaller profit margins that have pushed farmers to produce more in order to meet their financial obligations.

The federation has supported the concept of the family farm since its creation. We are convinced that regular sized farms are at the foundation of a harmonious relationship between city dwellers, rural dwellers and farmers. However, to achieve this, the family farm must be profitable.

We recommend that the agricultural policy of Canada be reviewed and corrected to give more support to the family farm; that government authorities implement an aid program for farmers who wish to convert their business to a more organic style of production; that government authorities implement a sustained information program for consumers on Canadian agriculture and the quality of its products; that government authorities implement a campaign to develop appreciation for agricultural production in Canada.

The federation also feels that the federal government must reaffirm its commitment to Canadian agriculture and food safety by increasing the budget of the Canadian Food Inspection Agency, to keep the farmers' contribution at a reasonable level.

The agency is responsible both for the inspection of food, plants and livestock that cross our borders, and for the quality of products served in Canadian households. In this sense, it plays an essential role in the protection of the agricultural industry by preventing the entry and spread of serious animal and plant disease in Canada, and establishing high quality standards for our agricultural production.

The agency contributes to the good reputation of Canadian products on international markets, which helps increase our exports. Food safety is of major importance to Maritime farmers, since our access to national and international markets is at stake.

Unfortunately, food wholesalers increasingly are asking their suppliers to obtain certification acknowledging that their products meet various standards of quality, safety and respect for the environment. However, certification is often too expensive for the average farmer.

We recommend that the Government of Canada make a commitment to minimize the costs of commodity inspection for farmers; that the Government of Canada reaffirm its commitment and its responsibility to protect the agricultural industry, by increasing the budget allocated to the Canadian Food Inspection Agency; that the Government of Canada implement a financial support program for farmers who wish to obtain HACCP, ISO or other certification, attesting to the quality of their products.

Now let us look at economic upheaval. We are currently living in an era of market globalization, which changes our approach to agriculture and to marketing our products. This globalization has also had a significant impact on agricultural revenue, which pushes us to constantly increase our productivity, and thus, the size of our businesses. Oddly, however, the number of active farming operations is decreasing. Thus, there are fewer of us producing greater quantities of food and horticultural products. This concentration drives up the price of agricultural land.

All these changes lead to new needs for farmers. In fact, it is increasingly difficult to start a farm operation, owing to the sizeable investment. This results in a lack of succession and a lack of interest in farming among young people, as to them, it seems impossible to start a business in agriculture.

As for the financial needs of businesses in Canada, there is an agency dedicated to funding agricultural businesses: Farm Credit Canada (FCC), which gives farmers loans by routinely taking greater risks than conventional financial institutions. Despite the presence of this agency, it is still difficult to finance agricultural businesses, again, compared to Quebec. These are our neighbours and we have to compete with their farmers.

In Quebec, the province is equipped with a funding policy whereby loans are guaranteed by the government. Thus, financial institutions can lend significant amounts of money to farmers without taking any real risks. This policy stimulates the agricultural economy, as it gives businesspeople better access to capital.

We would like to point out that we use the term businesspeople to indicate farmers who owns their businesses. Farmers are true businesspeople, a reality that is often lost on government authorities, which is especially serious when you consider that agricultural businesses are not eligible for most government programs to assist business start-ups. In fact, managers in the various economic development agencies are not trained to help farmers develop their business. Unfortunately, we can only deduce that agriculture is not a growth industry that is able to breathe economic life into a region.

We recommend that the Government of Canada commit to implementing a guaranteed loan program for farm operators; that it commit to implementing an aid program for the establishment and start-up of agricultural businesses; and that it acknowledge agriculture as an engine of regional economic development.

The joint federal-provincial program and the Net Income Stabilization Account (NISA) provide farmers with a risk management program through annual voluntary contributions of a percentage of the farmer's revenue. The government matches that amount and allows the farmer to withdraw from the account during financial difficulties.

The federation believes that NISA is a very good program but, like most Agriculture and Agri-Food Canada programs, it is better suited to the Western and Central provinces than to the Maritime provinces. The size of businesses here is often smaller than in other regions of Canada. The climate and the diversity of possible crops is not of the same significance, which greatly affects the eligible revenue from our businesses.

Many farmers have also complained of a lack of knowledge of the agricultural realities of the Maritime provinces among civil servants who are working on the implementation of this program. A blueberry farmer had to explain to the account manager that he had not purchased seed that year simply because the blueberry is a perennial crop that does not require seeding.

We wonder about the agricultural knowledge of this manager who has to make important decisions for our New Brunswick farmers, especially when he is in Winnipeg or somewhere in Manitoba. This type of situation often causes certain reactions.

We recommend that the Government of Canada commit to establishing a NISA program service centre in New Brunswick to administer accounts in Eastern Canada. I said New Brunswick; not the Island or Nova Scotia, but New Brunswick.

Senator Day: In the Republic.

Mr. Soucy: Yes, Senator Day. We also recommend that the Government of Canada commit to reviewing the NISA program to adapt it to our regional realities. It is a good program but it needs to be reviewed.

One of the major obstacles preventing greater penetration of national and international markets by New Brunswick farmers is the poor state of the road system in this province. In fact, only sections of the Trans Canada highway have four lanes. Thus, some regions have limited access to the U.S. market, as they cannot access a decent road system quickly.

Furthermore, access to the province of Quebec and to the Canadian market in general is achieved by an almost secondary route, highway 185, that links New Brunswick to Quebec, and is one of the most deadly highways in the country.

This lack of highway infrastructure relegates us to oblivion on the fringes of a vast continent. It is a major handicap, as it denies us quick access to lucrative markets in the central provinces and the U.S. states.

We are doomed from the beginning, as agricultural commodities are often perishable and major clients need suppliers that are able to meet delivery schedules, in order to run their businesses. We are further denied the opportunity for growth, as the population of the Maritime provinces alone cannot support the agricultural infrastructures required for mass production and competitive prices. We remain unproductive for lack of a few kilometres of asphalt.

We recommend that the Government of Canada commit to expanding the entire Trans-Canada highway to four lanes in the province of New Brunswick, and highway 185, which provides the Maritime provinces with direct access to the Canadian market.

I will submit to you a document that was presented on Thursday to Mr. Collenette, the Minister of Transport. It had to do with a focus group that consists of mayors of municipalities in northern New Brunswick and all municipalities in southern Quebec that link the Témiscouata region. This document was presented to the Minister and outlined the poor state of highway 185, which has resulted in fatalities. Eight people died only two days after Christmas, including five young people from our region. You certainly do not want to know the details about these children who were accidentally crushed. It is very catastrophic.

I only have one copy of this document, Mr. President, which was submitted to the Minister of Transport. I am sure you could obtain others if you want.

I would like to address the subject of seasonal work. Agricultural work has always been done in the warm season, which forces farmers to hire seasonally, as needed. However, the need for skilled labour has increased with the globalization of markets. Today, farming requires technology and knowledge, and profit margins are slim. There is no longer any room for error. The farm worker has gone from labourer to specialized technician with a high school diploma. Many positions remain difficult to fill because the work we offer is seasonal, temporary, even precarious compared to the security of a permanent job in a factory.

Management at Human Resources Development Canada decided to gradually increase the number of work hours required to be eligible for employment insurance benefits, which will leave a number of our workers without revenue in the winter. It is referred to as the ``trou noir''[black hole]. I do not know whether there is a translation but the ``trou noir'' period is when benefits end before work begins in the spring. Thus, it is a period of time where people have no income. These employees, who are so important to us, have no other choice — can we blame them? — but to find a job elsewhere. That is how we lose our specialized, faithful workers, whom we have to replace year after year with new, underqualified recruits, which results in a significant increase in the cost of training.

In addition, we repeat, our industry is currently coping with the problem of a slim profit margin. We cannot commit any errors and yet we must hire the first person who comes along, for lack of choice and available skills. We do not understand the federal government's action in this case, when the employment insurance bank has recorded enormous surpluses and our elected members want to profit from agricultural businesses in Atlantic Canada. In the long term, this type of decision will be the death of our industry.

We recommend that the Government of Canada commit to not penalizing agricultural workers whose employment is seasonal, in order to support the development of this industry; that the government commit to establishing a system for pairing seasonal workers with potential agricultural employers; that the Government of Canada commit to eliminating the ``trou noir'' problem for all seasonal workers; that the government set up agricultural employment centres, as was the case in New Brunswick ten years ago, to facilitate hiring by farmers.

The federation would like to underscore another agricultural problem regarding seasonal work. By definition, to Human Resources Development Canada, a farmer is self-employed and is not entitled to employment insurance benefits, unlike self-employed fishers. We would like this situation to be corrected. Agricultural business owners whose activity is seasonal should be able to benefit from employment insurance programs on the same basis as fishers.

In this sense, we recommend that the Government of Canada commit to broadening Bill C-156, to allow farmers whose activity is seasonal to obtain employment insurance benefits.

For two years, a working committee has been reviewing this problem following changes in the employment insurance plan. This committee submitted a report to Minister Jane Stewart last June.

I will give you a copy of the report that we submitted to the Minister. It is rather lengthy. I only have one copy. I did not have the resources at the federation to make more copies. This copy is in English only but if you want to communicate with the Minister of Human Resources, all the necessary copies are available there and I am sure you will be able to get one. It is well documented; in colour, and the entire Employment Insurance Act is explained, the changes and the effects, which does not just apply to New Brunswick. These effects apply to all of Canada, because Western Canada even has problems with these changes.

Thank your for providing me with this forum. We are pleased to have ourselves heard and we hope this step we have taken here today, along with others, will promote a stronger agricultural sector that is firmly oriented to the future.

Senator Day: Mr. Soucy, welcome from New Brunswick. I too am from there. I do not know whether the senators are aware of the fact that the Republic is the region Senator Corbin comes from. It is far from here.

Mr. Soucy: Yes.

Senator Day: I greatly appreciate your making the trip. Monday, the committee was in New Brunswick, the trip began in Fredericton and then went on to Saint John and to Moncton. I hope next time it will start in Edmunston.

I absolutely agree with you about highway 185, we are working on that. I thank you for both the reports you submitted to us.

Who are the members of your federation? Do they have to pay to be members? What are your budgets, and where does the money come from?

Mr. Soucy: We have been representing francophone farmers from throughout New Brunswick for 17 years. We hold an annual regional meeting, and like any other agricultural organization, we represent most Francophone farm operators.

Money for the federation comes strictly from membership fees. That is how we operate; it is a grass-roots agriculturally based movement and it is farmers who contribute to making the federation work.

Naturally, we sometimes participate in projects, federal-provincial agreements, and various environmental projects. The federation is a vehicle to allow farmers to benefit from programs, either environmental or farm management, and to participate in seminars or exchanges, but funding comes from the grass roots.

Senator Day: You do not receive federal or provincial subsidies?

Mr. Soucy: No, never. The Heritage Minister announced a program or made an agreement with Agriculture Canada, that will allow us to participate for the first time, or to submit an application to participate. We filled out a form and sent it in the mail, but we will not receive a response before April to find out whether we will receive funds indirectly from Heritage Canada. This will be the first time we could benefit from the program for official languages and minority communities. I think this program is called IPOLC. This is the first year we have submitted an application and we have not received anything yet.

Senator Day: In your region, in the Republic, I know there are farms that grow potatoes.

Mr. Soucy: They are the best in Canada.

Senator Day: I am sure they are, but yesterday we went to Prince Edward Island and they said their potatoes were the best. They are both the best. We discussed a situation where they had problems with the potatoes. Did you have the same problem last year?

Mr. Soucy: There were problems with viruses, maybe less than before, but the problems we had were mostly with the winds that came from the south, so they were American viruses that did not stop at the border. Maybe the security measures they are implementing will stop these infamous viruses or insects that come from the United States. No, the problem was contained. The problem lasted a year or two and now it is under control.

Senator Day: Has it been resolved?

Mr. Soucy: Somewhat, but it is only the tip of the iceberg. I listened to your presentations and your discussions earlier this morning; environmentally, this is only the beginning and there are other measures to be taken. All the environmental regulations that farmers have to comply with on Prince Edward Island once every three years will complicate things greatly.

The same thing is coming to New Brunswick, but if we must practise sustainable farming, we must adapt; and the police cannot make us do so. Farmers must take charge and make it happen. We have been told far too long that we need to be more economically viable and profitable and we have done so to the detriment of the environment.

When we talk about Walkerton in Ontario, everyone knows what we are talking about. Farmers on the Island will tell you that it will be very difficult, and it is the same for New Brunswick. Farmers must take charge and resolve this problem.

Senator Day: And that depends on raising awareness within your federation, also.

Mr. Soucy: Exactly, this requires awareness, time and working together.

I know I am talking to politicians. It is not common to meet with the Minister of Agriculture, of Human Resources and of Health at the same time. It is a big problem. It is the same thing in Ottawa. Officials at the Department of Agriculture have great difficulty meeting officials at the Department of the Environment, for instance, and bringing in officials from Human Resources and the Department of Labour. Other departments, like Health, are also involved, and they must work together with these other departments.

They tell me that each politician has his own row to hoe and wants to mind his business, but at some point someone has to put his foot down and say: ``We must work together to solve this issue.'' It is difficult for us, but it is the politicians who have to do their part.

[English]

Senator Hubley: Mr. Soucy, I also would like to also compliment you on your presentation this morning.

Before I begin my questioning, I wish to say that I am not bilingual, and I apologize for that, but I am very interested in the arts. There is a very fine dance troupe from your region that I have seen, the Madawaska Dancers. I mention that because along with my love of agriculture, I love culture and the arts.

You have brought the question of infrastructure to the table today, and certainly your road system is important to Prince Edward Island as well, and indeed, to all of the Maritime provinces. It is something that perhaps we have not discussed in full, but it is a very important component to getting our produce to market.

I am going to mention Highway 185, because at our caucus both senators from the Maritimes and your MPs from the Maritimes are arguing very strenuously for some improvements to this highway, for very obvious reasons. It is not usual to make comments about what happens in caucus, but I wanted you to know that your people in Ottawa are working very hard, along with your community.

I want you to elaborate on the pollinization industry. I think there are opportunities in the Maritimes for this industry. As a point of interest, we have beekeepers on Prince Edward Island who do designer crops. They can produce designer honey by renting their hives to farmers who produce different types of crops. As a result, we can buy blueberry honey, clover honey, sunflower honey.

Mr. Soucy: There is no sense developing the acreage and surface area if you do not have the pollination capability to pollinate the flowers. You end up being a flower producer, but no blueberries. We have imported a type of bee that is found mainly in western Canada, especially Saskatchewan, I believe. They are called alfalfa leafcutter bees. These bees are much more efficient than the honey producing bees we had. We are in year one of this project.

The Chairman: It seems that in agriculture, in trade between the provinces, it is very difficult to get something right across Canada. Years ago there was talk about getting all of the provinces to agree on some kind of a safety net. It has almost become impossible, and it should not be. It has to be worked on. I appreciate your comments in that regard.

Senator Oliver: You made a recommendation that the government help farmers be better neighbours to people around the area. One of the things we are looking at, as you know, is the breakdown or the deterioration of rural Canada. You are making recommendations to try to bridge that. Could you just elaborate a bit more on that?

Mr. Soucy: New Brunswick is one of the most rural provinces, if I can say that, in Canada. We are spread out all over the place. It would appear that the people from town want all the benefits while living in the rural community, with space, nature, forest and the like. Against that is the agriculture issue, which is a business, and its resulting odours, dust and what have you. It gets rather complicated.

In society, we have a system of laws, which serve a purpose. As an extension of those laws, there is the police, the judge, and then a jail, to enforce those laws. It does not make sense to have speed limits unless there are police, judges and jails. Nevertheless, there still has to be communication. We still need to inform people about driving conditions; we still need to hammer away at drunk driving. In terms of agriculture, only through cooperation and open dialogue with the stakeholders will we ever arrive at some kind of solution.

Under the CARD envelope — the Canadian Adaptation and Rural Development fund — there are good programs, good initiatives, in place. I do not want them to be eliminated, but more could be done on that aspect.

In New Brunswick, major problems arise vis-à-vis large hog operations. You can smell these large operations all over. These are big operations, unlike the family farm operator, the smaller operator, who lives in the community. Yes, there is a smell from the small family farm, but it is not as pervasive. The small farmer spreads manure just like the large operator, but not to the same extent. As well, people in the community are more accepting of the small farmer, more so than they are of big operators. The small family farm operator lives in the community; he is on the school board, the credit union board. His children play with neighbourhood kids. The families meet in church. I know farmers who call their neighbours and say, ``I will be spreading manure next week; I just want to give you a heads up.'' The neighbours say, ``Yes, I know. Thanks for the call. I realize that spreading manure is part of the farming operation.'' This type of collaboration, or dialogue, is helpful.

We need to be sitting at the table with the people who are making the zoning regulations, the laws, with respect to rural areas. The Province of New Brunswick is working towards that now. It is coming.

I know that the hog industry is expanding in Western Canada. Down the road, 10, 20 years from now, they are going to be facing the same regulation as we are facing here in New Brunswick.

Prince Edward Island is facing tremendous regulation on its potato producers, environmental factors. We will have to live through the same in New Brunswick too.

Collaboration and dialogue are needed, and I think the government has a responsibility there. The Canadian Food Inspection Agency allows us to benefit from good, safe food. What I am talking about is a trade issue. I think we should maintain pressure on Agriculture Canada.

[Translation]

Senator Oliver: I have just finished an intensive three-week French course in Saint-Jean, Quebec. I am very nervous, but thank you for your presentation. It was very interesting.

Mr. Soucy: It was my pleasure, Senator Oliver.

[English]

The Chairman: Honourable senators, our next witness is Mr. MacDonald.

Please proceed, Mr. MacDonald.

Mr. Patton MacDonald, Executive Director, Potatoes New Brunswick: Potatoes New Brunswick is the marketing board for potatoes in New Brunswick. Rather than see ourselves as the potato police, we see ourselves as the best advocate for our farmers. New Brunswick has a unique geographic location. Ninety-five per cent of the potatoes grown in New Brunswick are grown along the U.S.-Canada border. However, they are grown in other areas as well.

We are between Maine and Prince Edward Island, and what affects any border affects us tremendously. Seventy per cent of our production goes to the U.S., and we have 56,000 acres of potatoes in production. We have about a 2.2 rotation. We are trying to lengthen that a little, but that is probably a truthful estimate.

With respect to the state of agriculture in New Brunswick, we are facing minimal provincial support, which in turn has made the industry work very hard to regain the strong profile that we believe we deserve. We believe that we are moving in the right direction, and I will tell you about that in a moment. The industry is facing a declining farm population, and succession is a challenge. We need an industry voice in program delivery. This is critical, and I would ask you to note that particularly, if you would. Nevertheless, farmers are determined to create better opportunities and work together. We are trying to be idea makers instead of just reactionaries, and I think we are succeeding. Food safety, the environment, and trade are also very critical.

Last year, our particular area in the potato belt was the third-fastest-growing economic area in Canada. As a result of the success of agriculture and forestry in this area, we have a fairly serious labour shortage. We cannot draw from the U.S., nor can we draw from the eastern shore, because there is nothing but woods in between us. There are no people to draw on. We have a serious shortage. We would like to see some changes with respect to this, and I will address those ideas in a moment.

In our area of the province, Employment Insurance qualifications are the same as they are for the Acadian peninsula, but we have a 4 per cent unemployment rate and they have a 23 per cent unemployment rate. It does not make sense to have that applied.

To help raise the profile of the industry we have created a new general farm organization, New Brunswick Federation of Agriculture. All the commodities and the major agricultural organizations are involved in NBFA but one, and that is Mr. Soucy's group. He has good reasons why he does not support this concept at the moment.

We are trying to do everything we can from the Potatoes New Brunswick stance. We are a bilingual organization, and we represent French and English farmers in two distinct areas as well, and we are determined to make it work. If it is not able to serve both communities, we will not be able to stay in the organization, but we are working hard to make it happen.

Potatoes New Brunswick has worked hard. We had three-year strategic plan to unify the potato industry. Prior to this, the industry spoke with several voices. Now we all belong to the same board, and we work together on many issues. There have been many economic advantages.

We recommend that the federal government ensure that federal-provincial programs allow real industry input. The province will have to prove to the federal government that the industry really does have a voice; the province must be required to show how companion dollars are being used, et cetera. We really do need more direct producer input in that, and it does not happen in every province. It certainly has not happened in New Brunswick for quite awhile, although very recently, within the last two months, it appeared to be getting through. Nevertheless, we want the federal government to set conditions for funding, much like they have tried to do in health care. For example, the province should have to provide proof of service to the people for whom the service is directed.

Another recommendation is that we would like to see programs upgraded for new entrants in agricultural education.

Our reaction to the new national agricultural framework is simple. There is very poor coordination in selling the new plan. Our province is having a separate set of meetings from the federal government, and we are not necessarily getting the same message. I have been to both kinds of presentations, and it is not so much that one is from a federal perspective and one from provincial, but they actually seem to be aiming in somewhat diverse directions. The message is different also depending on who does the presentation. I have had two federal presentations in the last two weeks and they were different. The slides were the same but the adjoining message was somewhat different, and I find that that is a little confusing.

Also, in terms of the new national agricultural framework, the vision seems to be for the consumer, not for the producer. It bothers me that the word ``producer'' is not found in the document that created the CFIA. It should read ``consumer and producer,'' because it affects us tremendously. If the word producer is not there, it seems that we are not being understood.

In terms of the safety net part of the new framework, we believe that is a strong move in the right direction. Somebody is doing something right. We are happy with that. The renewal issue is worrisome to me because it may be a method of having farmers removed. Someone who worked on this plan told me that it was actually designed for Saskatchewan, to reduce the number of farms in that province. Whether that is true or not, I do not know, but calling something ``renewal'' when you mean ``destruction'' leads one to worry.

In terms of our recommendations and actions with respect to the new framework, we believe there should be better written information available to those who have not attended meetings. Somebody should agree on a provincial- federal position, and do it within each province in that manner, so that we can get the same message. We should work with the producer groups to define whatever programs are going to be offered so that they have joint federal-provincial information sessions. That would certainly help to have a larger group understand the framework much better. We have just finished a three-year strategic plan for our industry, and we are starting on Sunday, this week, putting together another three-year action plan for our industry. We will be working around that framework in the future. We will look at our needs and how they can be met using the framework. We can work within that well, and that is what we are going to do.

I will not turn to the impact of the 2001 drought. We had a 25 per cent to 30 per cent loss in yield in New Brunswick. It depended on where you were in the province, but the potato belt itself experienced the second hottest and second driest year in its 25-year history. I think it is actually more than that, but we only have records for 25 years — and that has caused us some problem. The driest year was 1999, which tells us that there is something happening here.

The short crop in the potato industry has helped prices in North America, and since we are so tied to the U.S., it has helped us. However, most of the product in all of our potato sectors, seed, table and processing, are contracted, so there is very little real boon to the farmer when he is getting what was contracted. That is not to say contracting is a bad thing, because I think it is the right place to be in the long term. In any event, we had a loss in yield, but the quality happened to be excellent, so we were pleased about that.

We believe the drought needs stronger national attention. A lot of our farmers are also cross-commodity farmers. For them, the forage challenges are very significant, and they are concerned about that for the coming year.

In terms of recommendations regarding the impact of the 2001 drought, we think there should be a frank federal discussion about the current drought threat across North America. At a November conference, David Kohl talked to us about the decertification of significant areas of North America. It is like a swath across North America. He is very concerned, and he is one of the people who works with the President on the American farm bill, among other things. We need to have that kind of discussion, to see if we have to mitigate what we are doing and the way we are headed, and maybe change direction to accommodate that.

We think there should be some suggestions regarding planning and planting. As well, there should be a uniform format for monitoring and establishing crop results — by that, I mean in Nova Scotia. For example, our organization did an extensive survey about the drought. Some of the other commodity groups did a survey as well. I think the dairy and beef people both did. However, there is no comprehensive provincial program. Some kind of federal-provincial communication could help that along, if the federal government suggested that that take place.

I shall now turn to environment and food safety. Environment and food safety has low rates of assistance relative to other provinces and jurisdictions. There is increasing pressure on rural environments and increasing conflict with standard farming practices and the rural non-farm population.

On the issue of environmental concerns, the Clean Water and Air Protection Acts in New Brunswick are poorly planned. There are soils conversation and management concerns, pest management, climate change and variability, and biodiversity issues. We feel that it emotion and not science is directing regulations. More research must be done before some of those directions are taken, to make sure they work. The municipal wellhead legislation, for example, has in one part of the regulation that only 15 kilograms of fertilizer per acre can be applied because of the nitrogen levels. When we actually did a scientific analysis, we found that, in the forest, within 20 miles of where they caused this to happen, the nitrogen rate was half as high as it is in the heavy agriculture, and they are both less than half of what the federal requirement is. Are regulations being made on fact? It is a wonderful thing to say that we are going to save the earth — and farmers are great stewards of the land and agree with that principle — but we do not want emotions to guide those who are writing to regulations, as seems to be the case.

Food safety concerns include public perception, biosecurity — certainly since September 11th we are facing that a lot at the border — a level playing field regarding imports. There is the issue of changing links in the food supply chain — for example, the tremendous mergers that are taking place. Within two years, there will essentially be five purchasers of food globally.

I attended an agriculture excellence conference in December. One of the presenters was Mark MacAulay from McCains. He did a study of mergers over the last couple of years. David Kohl, again, in November showed some, and this week, Joe Gunther from Idaho was at our potato conference and essentially had the same message; that is, that the buying chain is closer and closer. We are seeing the consolidation of the grocery industry in our provinces here.

Another issue related to food safety concerns is that there is no indication of higher returns to farmers for the extra cost they are going to have to have for both environmental issues, environmental farm planning, and food safety. There is no way that they can count on a higher return if they do it, but there is a way that they can count on having no return if they do not do it. It is just that the margin is not there.

There is a lack of research, as I said before, to support good decisions and develop good practices. We need some help with that. You will hear about this tomorrow from Mr. Daigle. Essentially, his comments on research are the same as ours. We work together quite a lot.

I will now turn to recommendations and actions with respect to food safety concerns. We think there should be an industry strategy. We have one on environmental farm plans and on farm and food safety efforts. We have a series of programs — again, Mr. Daigle will go into this in detail, but we are very proud of this. We have a tremendous program that has been on the go since last spring. He will tell you tomorrow about some of our workshops. We believe it will bring us up to where we want to be.

There should be a dialogue regarding community concerns, of course. We want to expand the research and development initiatives in both of these areas. There has to be farmer participation in educating the public, and there has to be farmer participation in educating other farmers. Farmers talk better to farmers than other people do, and they are so busy in their industries it is very difficult to get farm leaders to have enough time to do it all. We are trying to do that. Our workshops are presented by farmers, for the most part. It takes a lot of their time and a lot of their commitment.

We would also like to see some action on tax and other support to compensate farmers for the costs of adopting some of these stringent environmental and food safety controls. There has to be some way to do that without direct compensation perhaps. Harmonization of federal-provincial incentives and programs would really help a lot. When we are trying to compare programs between provinces, when we are talking about national jurisdictions versus provincial and national programs versus provincial, it is very hard to compare them. It is hard to know what direction our industry should take, because our needs are diverse, depending on the province we live in. More harmonization of the initiatives would be beneficial, so that we could compare it for the sake of our industry and for agriculture on a more level viewpoint.

There has to reciprocity in standards for imported farm products. If we are going to import a Chinese apple that is grown in human waste and sell it here — we have to follow strict standards here, and are going to have to continue to do that. As such, we should be careful about the products we allow in.

In terms of marketing and international trade, we have market goals being established without direct participation by farmers. The trade professionals are experts at the trade process, and they often focus on that because that is what they are good at. They like winning in the process, but they should focus more also on the result of what they are doing to producers. Is what they are doing appropriate for the industry? It may be appropriate for a trade negotiation, for example. You can win; you can be right. You can be dead right, my grandfather used to say.

Trade agreements, right now we are on a ``rules based'' system, but today the trade barriers, as you well know, are often presented as hidden barriers in terms of phytosanitary or environmental issues. Both New Brunswick and Prince Edward Island have lost their seed potato industry to Mexico. New Brunswick was the largest shipper of seed potatoes to Mexico, until the last two years, and Prince Edward Island was growing as well, and we have both lost based on a false phytosanitary issue. That is why we are concerned, of course, with this.

These negotiations are being handled by phytosanitary and regulatory experts. Now I am talking Mexico specifically, as an example. Until we insisted — it took three years to get enough professional trade people in, and there are still no any industry people at the table. It is very difficult for them to know what they are negotiating. These guys are phytosanitary experts, they are regulatory experts, they are not trade people, and they are going against people that are professional trade negotiators. This is a very big issue, but I will not go into it at any length here.

Canada decreased farm income support while virtually all the members of the various trade agreements have rebuilt their farm income supports to 1986-1988 levels. We have recently been told by a person who wrote the farm bill in the U.S. that 65 cents of every net dollar is government money in the U.S.

At a recent meeting I attended in Washington, a friend of mine, who is a potato and onion grower from Washington, said to me: ``The boys are telling you that we don't get any support.'' He took a cheque out of his wallet for $28,000, and he said: ``I just got this. Do you know why? I got this cheque because I grew onions after potatoes.''

I will turn to our recommendations. This type of forum should become an ongoing part of developing Canadian agricultural trade policies. It is tremendously beneficial to let us come and talk to you people. We think it is very helpful.

Another recommendation is that trade teams should include input from primary producers, up to and during trade negotiations. We do not have to be at the table; we can be in the next room. If you are going to negotiate, you do not take all your team in. Also, government must provide the support necessary to this process or face the loss of primary agriculture in the very near future. By looking up at ideas such as set-asides, government could spend less and actually achieve more, with the added benefits of environmental stewardship.

We recommend that legislation be created to allow a national checkoff on imported potato products, such as the U.S. does to Canadian imports. The U.S. makes approximately $2.2 million annually on the surcharge on Canadian potatoes that go across the border, potato products. We have tried to do that; it is just a mass of regulation. We need some help, strong help, from you people and others to get those regulations re-done so that it allows it. We are not able to do that in Canada yet, and yet they ship as many potatoes in here as we do. We can be funded $2 million or $3 million for a national potato industry initiative, and we would not have to go to government for that. We could let the U.S. industry pay the same way we do.

We would appreciate your help in making the Canadian Partners in Quality Program succeed, by making strong representation to the USDA. This partners in quality system in the U.S. is being used extensively in the citrus industry and other industries now, with good domestic and export acceptance. The shippers essentially become USDA representatives and can issue and sign their own export certificates, once they meet certain standards.

The New Brunswick Potato Shippers Association, with the help of the other organizations, is leading an effort to set up a C-PIQ program, Canadian Partners in Quality, for shipping potatoes to the U.S. If this works, it will save millions of dollars and a tremendous amount of time. And I can tell you we spend $900,000 on export fees, inspection fees, in New Brunswick, and P.E.I. spends almost as much. They have a slightly different way of doing it and a smaller market in the U.S., because they tend to grow domestically more than we do, but at the same time they have people working on the Canadian Partners in Quality Program. They have two warehouses involved. So we would really appreciate you finding out more. We can tell you more.

I shall touch briefly on the issue of safety nets, Mr. Chairman. We have some problems. Primary producers have little or no input in how companion dollars are spent. I talked about that earlier. We believe that that leads to an inappropriate use and even a misuse of these funds, and we can answer the questions you might have on that either today or in the future.

Many of the safety net approaches reflect the one-size-fits-all approach. That may work for socks and kids' hats, but it absolutely doesn't work for agriculture.

You have probably heard some of these messages, but the federal government should insist that provinces have primary producers as part of the decision-making process for risk management and companion dollars. We want to develop a plan that works for specific farmers, regardless of their commodity or where they live. It can be done.

We want to replace the current crop insurance scheme with a self-directed risk- management alternative. I will say, based on the framework, that that appears to be happening. We are more pleased.

The only thing left me to say is thank you for being here. Regardless of whether you are a farmer or a senator, or senator who happens to be a farmer, or a senator who happens to be a lawyer, it does not matter. We are all in the same boat.

The Chairman: That is a very good report. We would agree with most of it, I think.

Senator Oliver: You talked about large farms and small farms. I would be interested to know the average size of the potato farms going up by the U.S. border and on the other side, on the east side of New Brunswick.

Mr. MacDonald: They are precisely the same size on both sides of the border. We are very much a mirror of one another. The average potato farm now is about 350 acres; however, the average farm in two years will be at least 500 acres. We have an older farming population who are selling to people that are consolidating farms. We do not believe we are going to ever go down to the smaller numbers of farms. The large farms in other areas of Canada are not possible here, because of our topography. If we could grow rocks instead of potatoes and get paid for it, we would be tremendously well off.

In order to farm properly, really, in a cohesive manner, I would say the average will end up to be between 500 and 700 acres.

Senator Hubley: I have a quick question on crop rotation. You were saying that the two-year crop rotation —

Mr. MacDonald: It was 2.2.

Senator Hubley: All right, 2.2. If you were to change, you would have to increase your acreage accordingly; correct?

Mr. MacDonald: Every year in New Brunswick, we increase our cleared land for potatoes by 1,000 acres. It is happening without any programs. That has been going on for a long time. Over the last 20 years, there has been a tremendous increase. We probably have 120,000 acres cleared in the potato belt, and we farm 53,000 in the potato belt, so we are going to continue to do that. I hope that answers your question.

Senator Day: I apologize that I was not here for the entirety of your presentation; however, you summed it up quite nicely when you said that senators are either farmers or lawyers. I guess you checked us all out.

Mr. MacDonald: Well, I just happen to know that that is true. We are all in the same boat.

Senator Day: The phytosanitary rules being used as barriers. You talked about trade with Mexico. I am not sure that I, first of all, fully understand how that is happening. What is being done to make sure that it does not happen in the future?

Mr. MacDonald: Perhaps I can give you a longer answer later. I will give you a shorter answer now.

CONPAPA is the Mexican potato grower organization. The head of CONPAPA is the brother of the President Fox. The previous head of CONPAPA was the brother of the previous president. They have the corner on the seed potato market. They charge $35 to $40 a hundredweight for their potatoes, U.S. dollars, and we can go in there for $30 or $25.

Senator Oliver: Are you serious?

Mr. MacDonald: Yes, and they do not like that. New Brunswick sold 9,000 metric tonnes of seed potatoes to Mexico three years ago. As soon as we hit that mark, we found that there were a lot of problems. They stopped us at the border. You could get across the border if you paid $500, so it was not that much of a quality issue. It was the people from CFIA who went down to handle it on behalf of the Canadian government. God bless them, they are friends of mine. They are regulatory people, phytosanitary people. They got wiped out. They did not understand what they were dealing with. I will give you an example.

The Mexicans presented a potato, about which they said: ``This is from New Brunswick, or PEI, we are not sure, and it has PVYn.'' Our people asked them when they found it, and the Mexicans said they found it a couple of days ago. Our people decided they wanted to inspect the load, so they went to Mexico. They were not allowed to inspect the load for two days. When they were finally allowed to make an inspection, they were showed to a boxcar with Canadian potatoes in it, to be sure, and some bags ripped open, but there was no proof whatsoever of any kind that the potato came from Canada. CFIA accepted that potato, and brought it back and tested it here, and indeed it did have PVYn. Our people should have said, ``I'm sorry, you need to have better proof than this.'' What we did then was negotiate a new plan, that from 1998 on we will test potatoes in New Brunswick, Prince Edward Island, before they leave, to make sure there is no virus. We did that, no virus was ever found in anything we sent to Mexico, yet our potatoes were stopped again this year with PVYn listed as one of the reasons. So that is an example. That has killed our trade.

The Chairman: I want to thank you, Mr. MacDonald, for a very enlightening presentation.

Our next witnesses are Mr. Buchanan and Mr. Howard.

Please proceed.

Mr. Alan Buchanan, Director, Government Relations, Aliant Telecom: I will begin by apologizing, because we are a bit off the theme of today's discussion. Nonetheless, we feel that our presentation has some relevance to the work of the committee, in that, despite all of the laws of nature and economics that appear to be conspiring against the preservation of rural Canada, we feel that technology and, particularly, telecommunications and information technology provide an unprecedented opportunity for those of us who choose to live in rural communities. We want to talk to you today, first, about technology being an enabler to enhance the quality of life in rural Canada and, second, about our current infrastructure investment here in Atlantic Canada and some of the challenges that we see ahead.

Our company was formed in 1999 as a result of a merger of the four holding companies that had among their assets the four Atlantic telecoms, MTT, NewTel, NBTel and Island Tel. By coming together, we formed the third largest incumbent telco in Canada, third only to Bell Canada and Telus. We also became the third largest Canadian-owned IT company, in xwave. We also have a major ownership in the largest mobile satellite communications company in Canada — in fact, in North America — Stratos Global, which has just recently moved into the United States as well as into the U.K. We are the largest supplier of satellite communications in the Gulf of Mexico, the oil and gas industry there, to the cruise ship industry, and most recently have taken on a major client, the U.S. Navy. We also play a significant role in Atlantic Canada in commercially based research and development: LivingLAB, which is located primarily in New Brunswick; Innovatia; and through partnerships with other governments, including the Government of Nova Scotia, in TARA.

We have four lines of business in Aliant: telecommunications, which is the largest line of business; emerging business; remote communications; and information technology.

The one that we will talk mostly about today is Aliant Telecom. You will see that, even though we have a very worldly outlook, we are very much a local company. We have in excess of 10,000 employees, the bulk of those, in excess of 9,000, located here in Atlantic Canada. Many of those are employed in Aliant Telecom, approximately 6,500. We have roughly 3,000-plus employees in New Brunswick and Nova Scotia, 2,500 in Newfoundland, and about 350 in PEI. As I say, we employ over 9,500 employees in Atlantic Canada. We also have 4,000 retirees, who are still very much part of our organization. They are very much connected through our Pioneer program, among other things. Our employees live and work in 500 communities across Atlantic Canada, including many rural communities, and we have a total payroll of $429 million. So if you do the quick math, you will see that we are a provider of well-paying jobs in Atlantic Canada.

In 2001, we invested $438 million in our network, primarily in the expansion of information technology services, broadband, high-speed Internet, and our digital wireless networks. I will be showing you more detail on that later on. We have had a launch of TV services in Halifax, building on programs that we had already launched in Saint John and Moncton.

We intend to approximate that $438 million investment again this year. I believe we intend to invest somewhere around $425 million in Atlantic Canada in this year — expanding our high-speed and broadband networks as well as our digital wireless network.

In terms of business and economic development, we see ourselves as agents of economic development in the region. We have partnerships with all four of the Atlantic provinces in terms of encouraging call centres in each of the provinces. We have investments in e-learning and e-government, as you will see later on. We undertake a lot of research and development through our LivingLAB operation, as well as through our wireless R & D program. We export primarily through Aliant Energy Services, through our international consulting business, through xwave, which is our principal IT company, and through Innovatia, which has, among other things, developed e-learning modules for Nortel and other major customers around the world.

We also see ourselves as responsible social agents and good corporate citizens. We spend $400 million in direct investment in primarily tourism-related sponsorships and events around the region. We also donate generously to health education, arts programs and civic groups around the region. We aspire to be an Imagine company; we aspire to the Imagine formula. We are not there yet, but that is our aim and that is our goal.

We have supported the Computers for Schools program through our Pioneer program, which is our volunteer program associated with the telecommunications industry. We have supplied 20,000 computers to area schools.

We encourage employee volunteerism. It is very much a part of our HR practices. Volunteerism has been built into our performance review, as well as into our compensation programs.

We like to think that we are keeping skills at home. We hire a lot of young graduates. We are also one of the principal employers in terms of repatriating Atlantic Canadians. Aliant purchases $250 million in good and services from Atlantic Canada. Business activities of Aliant generate $70 million in goods and services tax. Aliant spends $186 million in corporate taxes annually, $28 million in exchange revenue or utility taxes, to repay the provinces or municipalities, and our employment generates more than $120 million in income tax.

Really what we are here today to talk about is technology as an enabler, technology and its potential for rural Canada, and rural Atlantic Canada in particular. My colleague, Mr. Howard, will take over here.

Mr. Michael Howard, Senior Government Relations Advisor, Aliant Telecom: From a technology and an enabler perspective, one of the big issues we are facing across Atlantic Canada — and it is faced by the agricultural and forestry community — is the issue of sustainability, and rural sustainability. We do not want to present technology, the wires on the poles, the fibre optic cables, or the satellite or wireless technology as the saviour for rural Canada, but it does play a role.

An earlier presenter talked about the shortage of labour in agriculture, and how that is a major challenge. A big part of that is the out-migration of the younger demographic to the more urban centres.

What we are trying to do with technology and with information technology is to provide more services to the rural areas, and that is what we will focus on today. We will look at e-government, e-health, e-learning, e-commerce, and the whole area of ``infotainment'' — which is a buzz word from the industry. Infotainment is the merging of entertainment and information technologies, whether that is through the television, through the Internet, or through whatever technology you want to use. It is a new theme that we are actively embracing.

The slide I am showing you is a breakdown of the levels of electronic government, the levels of electronic health, the levels of electronic education. The applications or the services that you see in the smaller bullets on this slide are all available in some form today. This provides a lot of flexibility in terms of how services are delivered, particularly out to rural Canada.

For example, in New Brunswick, licenses — for example, drivers licences and marriage licences — and permits for hunting are all available online. Those matters can be dealt with either via telephone or via a PC. Municipal services and taxation are other areas. There is a lot of activity in all of the municipalities, and as such an opportunity to improve both their internal processes — that is, how they do their own financial reporting through to the provincial governments — and how they interface with the constituents in their municipalities.

The next slide deals with health. There are many opportunities there, particularly for rural Atlantic Canada. Memorial University in Newfoundland is very much a leader in the area of tele-health and tele-medicine. In Nova Scotia itself, we connected 43 hospitals and clinics with a tele-health connection. Today, they are providing radiology, radiology consults, out there, which is a big issue because it is a challenge to get radiologists and specialists out to rural areas. Hence, it is a way to augment or support delivery of health care in rural Canada.

An interesting application has just been started with the IWK Health Centre, which is the regional health care provider for all children's health issues. They have connected to about 22 hospitals across Atlantic Canada. They are actually doing remote child psychiatric consultations. What this means is that a child can be seen at any of the 43 sites in Nova Scotia, or indeed the 22 that are spread out across Atlantic Canada, for a psychiatric consult. In that way, the family does not have to travel to Halifax.

Our next slide focuses on education. You can read the slide in more detail at your leisure. Let me just say that what you see on here is active today in Atlantic Canada in some form. Let me give you an example. There is a high school in Mabou, Cape Breton, which is a very small community. There are three kids in the grade 12 class. They do not have a calculus teacher. The only way that they can take calculus, and therefore be eligible for university, is through distance education. We are able to provide those three students in Mabou with connectivity to take the calculus course.

The requirement for an educated workforce is going up. Good friends of mine, the Beckers family in Antigonish, have got a fully computerized farm, in terms of waste disposal and waste management. There is a constant need for the farming community to increase its knowledge. There are always new technologies to learn about and access. The concept of lifelong learning is possible through distance learning or e-education.

The community colleges in all four Atlantic provinces are active in this field. They are obviously embracing the energy sector. The agricultural college and the community colleges, as well as Holland College, are capitalizing on the areas of e-education in support of lifelong learning.

Given all of these applications, how are people in Atlantic Canada accessing these services? Mr. Buchanan will now talk about our infrastructure, which is enabling some of this to take place.

Mr. Buchanan: As Mr. Howard said, all of this is predicated on a network to make it happen. We gave you some indication of our global investment in our network on a yearly basis. It generally runs in excess of $400 million, $438 million last year, $425 million this year. Some of the information that I will be showing you here is sensitive. We would ask you not to broadcast it broadly, as it speaks to some of our investment plans as well as our assumptions about what some of our competitors are doing. Nevertheless, we wanted you to have the information. We do not want to put an embargo on it; we would just ask that you treat it with some discretion.

The map in front of you shows our high-speed Internet coverage here in the province of Nova Scotia. We estimate that there are 370,000 homes in Nova Scotia. We currently have high-speed passed in 66 per cent of those homes, 244,000 homes. Our competitors are also pretty active. They are passed in 62 per cent of the homes in Nova Scotia. In Prince Edward Island, our coverage is even more ubiquitous, 51,000 homes. We have high-speed Internet in 39,000, or 80 per cent of those homes already. In New Brunswick, 282,000 homes, we have high-speed Internet in 55 per cent of those, 156,000 homes.

With respect to Newfoundland — I apologize, I do not have Labrador shown on here. We do have some high-speed in Labrador, and we are supporting the Smart Labrador program as well. However, Newfoundland and Labrador is Canada in a microcosm — a land with too much geography and not enough people. There are 190,000 homes, and we have high-speed Internet in 35 per cent of those, 66,000 homes.

Therefore, we have high-speed Internet currently in 57 per cent of the homes in Atlantic Canada, and we estimate high-speed Internet access to at least 80 per cent of the businesses in Atlantic Canada. We have plans for another 13 per cent, which would bring us up to 70 per cent.

Bringing the high-speed Internet to the remaining 30 per cent of homes in Atlantic Canada is the real test. That is where the partnership between ourselves and governments will have to kick in, to ensure that we do not have some form of digital divide in those communities. The simple matter is cost. To bring high-speed Internet to that final 30 per cent would require an investment of somewhere between $6,000 and $12,000 per customer, we estimate. There is a 12- to 15-year payback on that, even at the minimum of $6,000 investment.

When you consider that most of this equipment is obsolete after five years, it is clear that the business case is not there for DSL technology, which is the current technology that we are using to deliver high-speed Internet.

Therefore, we will have to do a couple of things. We will have to explore other options — perhaps satellite communications. We will certainly have to explore relationships with the federal and provincial governments if we are going to service that final 30 per cent of communities in Atlantic Canada. I expect the same is true right across the country and that you get the same story from other telecommunications companies.

On the map you are looking at, you will see our digital coverage. The purple represents our digital wireless coverage in Atlantic Canada. As I said earlier, much of our investment over the last several years has gone into our high-speed Internet capability and our digital coverage.

We are undertaking a major program in New Brunswick, to track the new highway that has just opened up between Moncton and Fredericton, to ensure that there is complete digital coverage along that new highway. Much of Nova Scotia, particularly the coastal areas, is covered. We still have work to do in the interior areas in most of the provinces, in particular in Newfoundland, where we are concentrated around the St. John's area.

We like to think that we have the interests of Atlantic Canada in mind, and we like to think that we are building the kind of network that can sustain rural life here in Atlantic Canada, and we have strong commitment to that.

Senator Oliver: You say there are 370,000 homes in Nova Scotia and that 224,000 have been passed. I suspect that the majority of the homes that have not been passed are in rural areas, which is where the farms are. You say that the test will be to roll out to the rural areas, that it is so expensive.

Hence, you have not addressed our concern, that is, trying to find a solution for people living in rural areas. I live on a farm in Nova Scotia, for instance, and I cannot use high-speed Internet. My cell phone does not work. My digital does not work. I cannot take advantage of those technologies at my farm, because you people will not go out there.

Mr. Buchanan: Let me just give you some idea of the cost. One of the difficulties with the current technology, and maybe that technology will change within the next several years, is that DSL technology will only allow what is referred to as a loop length of four kilometres. Hence, if you are more than two kilometres away from a central office, one of two things has to happen: either you will be without service or we will have to install what is referred to as a WIC, a walk-in-cabinet. A WIC is a mini-central office within that two-kilometre area. We can then re-broadcast out from that.

Each of those WICs costs $260,000; line re-arrangements cost another $20,000; DSL costs $80,000; and general access and power cost another $40,000. Therefore, we are looking at a total install cost of $400,000 per office.

In many of those areas, we are talking about fewer than 400 customers. If we estimate that only 20 per cent of those homes will subscribe to high-speed Internet, we are looking at a cost, as I said earlier, of $6,000 to $12,000 per customer. We just do not have the payback on that customer base to justify that kind of expenditure. Obviously, our competitors are not going to do it either, because the business case just is not there.

That is why I say we have to explore new technologies. We have to look at satellite as an option, or we have to look at partnering with other levels of government or finding other partners so that we can deliver that last 30 per cent of homes, to enable them to take advantage of this great technology, which can open up a whole brave new world for us.

Senator Oliver: I do not think that answered my question, but I know you want to move on Mr. Chairman, so I will not ask any more questions.

Mr. Chairman: Whether we are talking about oil, gas, lumber, potash, agriculture, you name it, it comes out of rural Canada. Resources keep this country going. They are sold into the United States, for the most part. Millions of dollars cross the border everyday. Urban Canada seems to be the beneficiary of all of this; rural Canada seems to get the short end of the stick. I know there is no quick solution for that. I understand that, but I think it is our responsibility to make it known.

Senator Day: Technology in the rural area is an economic tool. One of the mandates of this committee is to ensure that the rural way of life be preserved, try to work on some of the challenges there. Hence, technology is a very important one. Maybe cell technology and land-based towers is not the way to reach all of these farmers in the rural areas. Do you envisage satellite communication and wireless communication, or some other type of communication, in addition to your DSL, which is hardwire-based.

Mr. Howard: To respond to your question, Senator Day, and to pick up a little bit on Senator Oliver's point, I just came off providing support to our CEO who sat on the national broadband task force. It is very much an issue that we are all aware of, in terms of getting to that last 30 per cent of the homes. We want to work collectively with all levels of government to try to achieve that goal.

I agree with you wholeheartedly about the technology. Satellite is going to be an alternative for a lot of areas, particularly in the Far North, and also in very rural and remote areas, where fixed wire line is just not going to be an option. Our challenge today with satellite technology is that the bandwidth is not where it should be in terms of providing some of those high applications, and also it tends to be a little bit cost prohibitive. What we are seeing is that changes in technology are happening so fast that we see the cost of that access declining. We also see the bandwidth capability, or the speed, or the amount of information that can travel through the airwaves increasing. So it is just going to be a matter of time before it becomes a better tool for those rural and remote areas, as well.

In addition, we are continuing a pretty aggressive rollout of the fixed wire line service on our own, but we would like to work closely with all levels of government to try to close that gap, the remaining 30 per cent for sure.

The Chairman: Let me thank you for appearing and for a very interesting presentation.

Our next witnesses are from the Nova Scotia Christmas Tree Council, Mr. Lacey and Mr. Giffen.

Please proceed.

Mr. Shawn Lacey, President, Nova Scotia Christmas Tree Council: Thank you for the invitation to present a paper. My colleague, Mr. Giffen, will read our presentation.

Mr. Len Giffen, Coordinator, Nova Scotia Christmas Tree Council: Why, you might ask, is the Christmas Tree Council appearing before you today? We are trying to dispel the myth that Christmas tree production is a small add-on farm cash crop. The fact is that this industry brings $32 million into the province annually — more than 90 per cent of that is in new American dollars.

Each year, almost two million Nova Scotia balsam fir Christmas trees are harvested and shipped throughout North and Central America and the Caribbean Islands by some 3,000 growers, covering over 35,000 acres. That results in some 500 permanent jobs and a significant level of seasonal employment for another 2,500 Nova Scotia workers.

The myth that most of the people who work in the Christmas tree industry are high school dropouts is equally untrue. To achieve success in this industry today requires skill and technical know-how in silviculture, pest management, marketing, business management, and interpersonal relationships. In addition, since most of the harvest is exported, there is also a need for knowledge regarding foreign exchange, export procedures, and health and safety regulations in a variety of jurisdictions.

In short, our business is as complicated as most, highly competitive, and 100 per cent of our sales take place over a six to eight-week period which means the timing is everything.

From the point of the view of the general public, our product is highly desirable, completely renewable, 100 per cent recyclable, reduces carbon dioxide in the atmosphere and brings new money into the country and the province. Given all those positives, one would think that everything possible would be done to ensure that the process of harvesting and getting our product to market is smooth and efficient. Unfortunately, that is not always the case. We have a few suggestions concerning how the government can help.

For a number of years, the western half of our province has had incidents of gypsy moth infestation while the eastern half of the province has not. This means that shippers of wood products from western Nova Scotia must have inspections and receive certification that their shipments are free from infestation while those in eastern areas do not.

Recently, Agriculture Canada suggested it might be more convenient if the entire province was designated as infested. Convenient for whom? It is certainly not convenient for Christmas tree exporters in eastern areas where it means more inspections, more delays, and greater expense.

While the gypsy moth enjoys many trees, the balsam fir is not one of them. In fact, there has never been a gypsy moth egg mass found on a balsam fir Christmas tree. It would be far more convenient to exempt Christmas trees from the entire province to gypsy moth inspections altogether.

Gypsy moths aside, there is still a requirement for inspections for other insect pests. Currently, the requirement is that each load be inspected if its destination is an area requiring a phytosanitary certificate. With flourishing exports and fewer inspectors, delays are increasing along with fees and overtime payments. As well, a qualified inspector must currently accompany an in-training inspector for two years before being able to work alone. This apprenticeship period seems to be a bit excessive. Further, if field inspections rather than load inspections were permitted, time and expense would be reduced substantially for all.

We mentioned at the outset that our industry and the related components of wreath making and brush production provides significant part-time employment opportunities. As a result, the industry relies heavily on access to a well- trained seasonal workforce. Unfortunately, the industry, itself, cannot function effectively or efficiently if it must be training its workers in the heat of a very short harvest season. Programs that would provide fully trained and qualified workers to the industry would be helpful.

A third area where government can assist the industry is in a definitive assessment of safety as requested by the Canadian Christmas Tree Growers Association. For years, our product has been unfairly labelled as a fire hazard in the home. There have been subtle implications that artificial trees are safer. The fact is that like any product brought into a home, if it is properly installed and cared for, a real Christmas tree is perfectly safe.

Christmas trees do not start fires; people start fires through carelessness. Like most products when a fire is started, Christmas trees — whether real or artificial — will burn, the latter with much more toxicity than the real tree. The industry, itself, cannot afford the research effort needed to complete this work and it, therefore, may be timely and appropriate for government to undertake it in the interest of public safety.

In conclusion, I would like you to note that at the end of its cycle, 100 per cent of a natural Christmas tree is returned to nature while an artificial tree stays in a landfill forever.

Senator Oliver: Thank you both for your presentation. Few people know little about the Christmas tree industry and its importance here in the Province of Nova Scotia. I was delighted to hear your statistics and employment figures. That is very useful.

I have two questions. This committee will be going to Europe soon and I would like you to tell us about the problem that Canadians have in selling Christmas trees and wood products in Europe and the steps that you have taken over the years to try to break down that barrier. I know, for instance, people like Ireland Turner have had offers from Germany to buy 15,000 trees and would love to be able to fill an order like that however, embargoes make it difficult to get through. Could you speak a little bit about that?

Second, a number of growers have had problems with their trees and the U.S. border. Can you tell us what, if anything, this committee might want to recommend in relation to these border problems?

Mr. Giffen: On the first question, England used to be a big market for Canadian Christmas trees. They went by ship overseas. As the European Common Market has become more of a trade block, they are using phytosanitaries as trade tariffs where straight out tariffs can be challenged. I heard a similar discussion from the people in the potato industry.

Our previous went on a fact-finding mission to England to find out why this situation is as it is. He discovered that it was strictly political. They had set standards for shipping trees. For example, we cannot ship a Christmas tree over there with bark on it. It has come down to that. They ban a pest, we find a way to get around that, and they select another one. They are using phytosanitary certificates issues as border issues.

With respect to Europe, we do get a lot of requests for orders through the internet and through e-commerce. On our own farm, we do quite a bit of that.

With respect to the U.S. border issue, Nova Scotia has become the first body outside of the United States that has joined the ECTA, the national Christmas tree association in the United States. We have been longing to join this group for years. We did that so we could work on both sides of the border on issues of border crossings and compliant issues.

Following September 11, we were worried about going across the border with our product. Christmas trees, unlike most other products, cannot be easily unloaded and loaded. If anybody has any dealings with Christmas trees, unloading them and loading them exactly the way they come off is nearly impossible.

Another problem is that once the shipment crosses the border into U.S. territory, only U.S. citizens can unload and load the trees. Therefore, we are unable to send our own crews to handle problems when they arise.

This year has been a bit different. This year there were no border stops and after talking to some growers who have dual citizenship, my understanding is that the Americans got rid of the compliance issues because they had other bigger fish to fry.

Senator Oliver: Since September 11?

Mr. Giffen: Yes. We are not sure whether that is going to be a permanent or temporary situation. We would hope it would be permanent because we have good compliance results. In the past, we have worked with the trade consulates and through our Canadian group to the federal government. We are not expecting any special privileges for Christmas tree growers, just business as usual. We want to be treated fairly in all issues. After all, it is a sovereign issue and we have no influence over that; we can only express our concerns and what it costs our industry.

We have about 10 per cent of the market in the United States. There are some states that would love nothing better to keep all the Christmas trees from Canada out of the States. It is an important issue. As I mentioned, we overproduce for our own local market and the trees have got to go somewhere.

Senator Hubley: Would you provide us with a quick overview of the work of the Christmas tree grower? How long does it take to grow a tree? How many trees have to be planted? How much time passes before you can harvest the trees? You just mentioned that we produce more than we can use in Canada, so they do have to be exported. What future opportunities do you see in the Christmas tree business?

Mr. Giffen: I start with the last part of your question and work backwards. The Christmas tree industry has multiple components: trees, brush, and wreaths. While sales of trees are starting to pick up again, business in brush and wreath making has outpaced that of trees. There is currently no limit to what we can sell across the border and elsewhere. The sky is the limit with respect to wreaths and brush.

Christmas trees, for the most part, are naturally regenerating. On our own farm, we just move trees around. We do not buy anything. We just move them around. God does not put them all exactly where we would like to have them, so we have to move them. It takes about 10 to 12 years to grow a fully marketable Christmas tree — a heavy sheared tree, seven feet tall. A lot of people are surprised at that.

Our season starts as soon as the ground thaws. We go through planting, shearing, and the different cultural practises. On our farm, we have 210 acres in cultivated Christmas trees. We have a payroll of 16 individuals at most times on that farm.

What does it put back into the community? I will compare it to red spruce for logging. It takes 100 years for the nice big red spruce everybody would like to see. You get one rotation and you probably put about $1500 on the ground for that rotation. In the same period of time, you get about 10 rotations for Christmas and you put about $7,000 an acre. The Christmas tree is putting about $77,000 more on the ground per acre than a stand of red spruce. We put a lot of money back into the community on wages, payroll taxes, purchases of services, and so on.

Senator Hubley: How early do you cut Christmas trees to have them ready for the market? Is there a time when you are making the wreaths and the sprays? How much time do you have to make those before the tree starts to naturally drop its needles?

Mr. Giffen: It depends largely on the season. The last number of years have been really dry. The brush season usually starts before the Christmas trees are in. Often, unless you got a really large workforce, the two enterprises do not go well together. You have to treat them as separate companies.

Customers are demanding their trees earlier and earlier. This year, the American Thanksgiving was very early and they wanted the trees prior to that. We had loads going out at the beginning of November. That is unusually early.

We are trying to educate our customers to hold off because the trees start shedding. If our climate is warm when we are loading the trees, they tend to heat because we pack them so tight in their refrigerated containers that they do not get a chance to cool down so they do not shed. It is a real problem.

We had the same problem with wreaths this year. Generally, our buyers want the trees early because they want to be the first ones on the market selling their product.

The other problem with the wreaths and the brush part of the business is that there is so much work to do and not enough people to do it. You have to start earlier and earlier and earlier to fill those orders.

Senator Wiebe: This is not a criticism but you on the last page of your brief you say that government programs that would provide fully trained workers to the industry would be helpful. Would the industry, itself, not be in a better position to train workers rather than the Government of Canada?

Mr. Giffen: Well, we are doing that. We have a program in Nova Scotia that is a partnership among HRD, the Nova Scotia Christmas Tree Council, and a community college in Bridgewater that sponsors a course in training wreath makers.

However, I have tried to get people to come to work for me from the employment office in the area and they send me people that have no clue what is required. I have had people who come out in sneakers in November or December to work. For example, they sent a young 20-year-old fellow out to the Christmas tree farm. The employment service bought him work boots and a rain jacket and he lasted and he lasted two hours but he kept the suit and boots. That is not a bad day's pay. He said he did not realize he had to do any lifting. Now I have two grandmothers that work for me, they are in their mid-40s, and they are a part of my steady crew. This young 20-year-old had the easiest job on the operation crew and he lasted two hours.

Senator Wiebe: I suppose someone who is trained and will do a good job is probably someone who wants to continue to work and goes and finds himself a full-time job somewhere else. I guess that is what the other problem is.

Mr. Giffen: That is the other problem we have. Our particular farm was 55 kilometres from Halifax and so our wage package is not minimum wage. You cannot hire people for minimum wage that close to Halifax. We pay good wages. I have a crew of five or six steady people and a large part of that is female. I have always provided flexibility for them so they can be home for their children. Now one or two of those children are working for me full time. That is a good thing.

We try to give them the full-time crews as much work as we can from when the snow disappears at the beginning of April through until the end of December. There is not enough money in the business to provide work for the three months at the beginning of the year.

Senator Day: Is your Christmas tree farm on a clear-cut logged area, or was it farmland?

Mr. Giffen: A clear-cut logged area.

Senator Day: Is there some marginal farmland that is being planted in Christmas trees in this province or is it mainly the clear-cut?

Mr. Giffen: It is clear-cut stands, but it is a little misconception that even clear-cut stands are designed for us. We design our clear-cuts now with road systems just like a plantation field in Quebec, only it is a bit rougher between the roads. This is one industry that is sort of a little mixed here. It is covered under agriculture and forestry.

Senator Day: Exactly. You are sort of an orphan or you are both.

Mr. Giffen: Yes. The Christmas tree industry is not a fibre-growing enterprise. It is a foliage-growing enterprise just like any other horticultural activity. I want to just touch on that. The complexity of that is that we have an insect problem that must be controlled with a chemical. We are very, very restricted because we are forestry related.

If we were in agriculture, we would have a wider range of chemicals. Agriculture Canada controls all the inspections. It is really mixed-up.

Senator Day: The worst of both worlds.

Mr. Giffen: Yes. As an industry, we would love to be entirely recognized under Agriculture.

Senator Hubley: Do they every use fire retardants on Christmas trees or is that a myth? Is there such a thing?

Mr. Giffen: They have tried it but the only thing that works is a fresh tree with lots of clean water, nothing added — no aspirins, nothing — only fresh water.

Senator Hubley: Hypothetically, can a really good farmer with about 250 acres growing trees make a good living?

Mr. Giffen: He can make a fair living, but things can be tough. For example, I graduated from this institute in 1975 and we started selling cultivated Christmas trees here in Truro for $18 and $21 apiece the following year. In 2001, we were selling a Christmas tree the same size, better quality for $24 to $28, including the HST. Our margins have shrunk by that much.

That is a result of the competition — cheap artificial tree that have been made in the Orient are competing with us in Canada. We have been having quite a battle. We have started campaigns through the NCTA and the Canadian group with the goal to dispel the myth that artificial Christmas trees are good for everybody. They are not. They are a non- renewable resource. The money goes out of the country. In many cases, these trees are toxic when they burn. Every once in a while the federal fire marshal's office asks us to do some research. We are trying to work with the NCTA because it is quite expensive to get the fine detail tests that are required.

The Chairman: Our next guest is Dr. Philip Warman, with the Organic Agriculture Centre of Canada.

Dr. Phil Warman, Professor, The Organic Agriculture Centre of Canada: Thank you for the opportunity to talk about the centre and other things related to the transition from conventional to organic agriculture. I will be brief and hope there will be lots of time for questions.

I have distributed a copy of a document entitled ``Organic Agriculture Centre of Canada.'' The back page has a description of the OACC. I am speaking on behalf of the Centre for the Director, Dr. Ralph Martin.

The board has eight members, including myself, responsible to the principal. Dr. Martin is an ex officio member. The board's responsibility is to receive, review and provide feedback on policy and project initiatives, and recommend new initiatives. Our organization is less than six months old; we had our first meeting last fall and a second one just about two weeks ago. However, in this short period of time, we have made tremendous progress.

We have recently added other members, including a research coordinator, Mr. Derek Lynch who will soon finish his PhD. We have an extension coordinator, Dr. Av. Singh. These individuals will start work for us in a few months.

Our board members come from across Canada. We have two members, Robert Guilford and Martin Entz from Manitoba. We also have representatives from Agriculture and Agri-Food Canada. Our member-at-large happens to be from the food industry where, of course, organic is definitely where things are increasing.

My data indicate that food products are growing at 15 to 25 per cent per year. In many cases, the supply does not even meet the demand for certain items. Apparently, the dollar sales have increased 1400 per cent over the last 10 years. The Grocery Product Manufacturers of Canada identified 25 per cent of consumers willing to buy even at a higher price for organic products. It is helpful to have a member-at-large from the food industry who can interact with the consumers.

Our appointees also include provincial organic agriculture specialists for New Brunswick, Prince Edward Island, Alberta, British Columbia, and Saskatchewan.

Senator Day: Not Nova Scotia?

Dr. Warman: No. Susan MacKinnon represents that broad group of individuals and P.E.I. Adrian Vermeulen represents Farmers in Transition who is representing individuals making the transition from conventional to organic agriculture.

I would like you to note the pamphlet, which says, ``OACC accepts the definition of `Organic' by IFOAM, International Federation of Organic Agriculture Movement.'' I do have the wording for the definition, but I will not read it to you right now. As there are various organizations around the world that each have their own definitions of ``organic, we decided that the IFOAM group's definition seemed to have the broadest base.

The National Standard of Canada, of which I was a voting member, came out with a definition of organic agriculture in 1999. This definition is much longer. I just wanted to illustrate that even within our own jurisdiction across the country, we have somewhat different definitions that apply in terms of standards.

As we were only established last July through support under the CARD Agreement, we have a very brief history. Note that other provincial institutions or jurisdictions have made commitments towards the Centre so that we can make use of some matching fund initiatives.

We are very pleased to have an NSERC Strategic Grant, which was awarded to about six of us to look at issues outside of what the Centre's mandate is. It works in very nicely because the Transition and Sustainability Strategies for Organic Farms works very nicely within the overall concept of what the Centre has to do.

There are various projects under the OACC's mandate. The first project, Web Course Development, includes four different courses within the project. We expect to put these courses forward this fall. I am involved fourth course, composting, and have been peripherally involved with some of the others. I understand this morning there was some concerns about Web-based courses. This will be my first experience with a full Web-based course and I do not know what to expect.

The idea is that you have people in, for example, Alberta, Saskatchewan, British Columbia doing some of the same things that we are hoping that they will be familiar with and without having to come here and the travel associated with that.

Do you have any questions on this particular first project? This is the project we will be focusing on until some of the other staff members come online.

Senator Oliver: What do you mean by organic dairy production?

Dr. Warman: That term has actually been changed to more encompassing organic livestock production. The course we will offer focuses on organic livestock. There are organic agriculture standards for producers who want to label their product as organically produced meat. Much of it has to do organically produced feed, which is in short supply in many areas. Then we will address some of the other policies and strategies related to organic agriculture.

Senator Day: I understand what the animals or the livestock eat. Are there specific regulations required to be certified as organic, for example, the manner in which you manage or you bring up, you use your livestock?

Dr. Warman: Yes.

Senator Day: I would like to have that definition.

Dr. Warman: It is more than a definition. The standards are related to individual commodity groups and sub- groups. For example, livestock is broken into the sub-group of poultry, dairy, beef, hogs et cetera. With respect to what are the best procedures, much of it is common sense. However, where it comes to organic, the type of feed provided or how the manure is handled are part of an issue in that constitutes what things are allowed as supplements. That is a big issue. For example, how is the feed produced? Did it come from a certified organic farm? All these kinds of things are in there. It is, obviously, quite complicated.

Senator Tunney: Can you briefly explain the procedure required to become certified and then describe the obligations or regulations that must be me to remain certified?

How is a consumer assured that the producer is not just certified but is observing all of the rules and regulations to produce organic?

Dr. Warman: The short answer is that there are certifying bodies established in all provinces throughout the country. Some of those, of course, get together to make sure that P.E.I. and Nova Scotia is talking the same thing. To go through the certification process and have their farm certified, a farmer must contact these bodies to find out what he needs to do. He is provided with a list of rules and recommendations and a representative from the certifying agency checks in on a regular basis. The farm pays a fee to become a member. That is the short answer.

Senator Tunney: Is there not a requirement for farm inspections? Are there any undertakings of some sort that indicates clearly that the farm does not use, for example, any spray materials for week or insect control or any antibiotics?

Dr. Warman: Yes, there are inspections. Perhaps I did not make that clear.

Senator Tunney: I did not hear ``inspection.''

Dr. Warman: There are definitely inspections. In fact, for Nova Scotia, I was the first inspector about 10-11 years ago. I was very critical of a lot of the operations — not that they did not follow the guidelines given, I had concerns with some environmental things that were not in the guidelines at that time. The guidelines, of course, have since been upgraded. Again, yes, there are inspectors who make on-site visits. Perhaps I did not make that clear.

Senator Tunney: I am still very concerned about, I guess, honesty or the matter of violating some of the obligations to remain certified.

Dr. Warman: I do not know of the circumstances that you may be thinking of or you may be aware of. I know I was overly critical if nothing else. No doubt, that is why I am no longer doing it.

Senator Tunney: If I had a dairy cow worth $4,000 and she had a temperature of 105 degrees, I would want to needle that cow with a pin strap that would bring her temperature down and probably save her life. However, who is to say that I am still certified or that I am not a bona fide organic farmer if I do that? Nobody would need to know that I did it; I could cover my tracks.

Dr. Warman: I do not have an answer for you. I am not as familiar with the livestock field. I was an organic fruit and vegetable grower in the 1970s in Ontario and I just brought in manure. I did not raise animals, myself. It is out of my field.

Our second project deals with ``Assessing Organic Research Needs.'' To date we have set out the priorities to be addressed. We will look at the concerns of the growers and potential growers — not only those in the organic industry because that is still a small number in the Atlantic Provinces.

What are their concerns? Perhaps this addresses your concern, senator. I do not know enough about, let us say, dairy production to know what is possible and what is not. I do know enough about fruit and vegetables to know what is allowed and what is not allowed. How do you compensate for a lack of Boron in your soils and that is just an example, but those types of things. Is this an issue? Is this a concern to the producers? That is why there is an ongoing thing with project number two.

The third project, ``Transition Strategies,'' focuses on transition to organic farming. My colleagues and I have had probably undertaken one of the longest continuous projects in Canada — for 12 years we have compared organic versus chemically fertilized vegetables, for example. This project is just coming to an end. There is really very little funding to keep it going. We did receive funding in the third, sixth and eighth years. One important question is, ``How long does it take to appropriately make the transition from conventional to organic farming?'' How many years does it take? What do you do to do that?

People do not want to go out of production entirely and, yet, they are not considered organic within the first three years or so. It takes at least three years and that is where the certifying bodies come in. It does vary quite dramatically around the country in terms of what you can do and what you cannot do and a lot to do with your soil resource, your climate base and so forth. Perhaps you will have questions on that.

Our fourth project, ``On-Farm Research,'' relates nicely with some of the work we have been doing and some of the work we will be starting in Nova Scotia, Manitoba, PEI, and possibly New Brunswick.

Our fifth project will involve our new personal with information access. There are many questions: How do you do this? How can you handle this situation? With a full-time extension person and a full-time research person, this area will be handled quite nicely.

Market Research and Environmental Horticulture are other areas that we would like to develop. We do not have to go very far from where we are located right now. The City of Halifax has initiated regulations as to what type of pesticides can be used in home environments and so they are interested, I am sure, in the environmental horticulture end of it.

Do you have any questions?

The Chairman: I would like to say that this particular venture is exciting. From my perspective, it is great news. I think that there will be a wonderful opportunity to encourage people — especially some of our younger people — to get established in the field of agriculture and organic farming is certainly one of the ways.

The idea of the web course is excellent. I imagine the definition of ``organic'' will be on the Web site so that those of us who are interested can read the guidelines there. Is that correct? Will that information be on the Web site?

Dr. Warman: I believe so. I will certainly ensure that it is put up if it has not been already.

The Chairman: What kind of progress do you see in Canada and all the provinces and regions within Canada coming up with a specific set of definitions of what is organic and what is not? I am rather concerned that this could have a delay effect on the impact of the industry. It is my understanding that there are seven different certification bodies right here in the province or in the Maritimes. I think there are two in the Province of Saskatchewan. Is everyone trying to protect their turf or is there a way in which the certification guidelines could be standardized and agreed upon right across Canada?

Dr. Warman: The members of those bodies are either voting members or involved somehow with the national standard. Let us look at the national standard. It certainly was the most democratic process I have ever been involved with.

We went through six or seven complete revisions to ensure that all points of view and concerns were addressed. It was a feat to get 55 people to agree on the definition of ``organic.'' I do not know if 55 people agreeing on what water is might be just as difficult. I would think that certifying bodies should be looking at the national standard and everybody following that.

The Chairman: Following those guidelines?

Dr. Warman: Yes, that is why we have a national guideline: so commodities can move across the borders. We looked at guidelines outside of the country, to look at what is defined as ``organic'' in California because we import so much of our produce this time of the year from California or Florida. I would certainly hope that the certifiers would look at the national guidelines.

Senator Day: We had Jennifer Melanson in earlier today and she indicated to us that organic product certified as organic in this province will not be able to go into Quebec and Maine next year because it does not fit their definition of organic. I think that is what our Chairman was getting to.

This national standard indicates that the certifiers in this province are not following the same standard as those other areas. Now it might be that Quebec and Maine or the United States are following a different standard from the national standard that you have developed. It is important that not only we have a national standard, but also do we have an international standard. Once you get geared up for this it is devastating if your product cannot be sold because it is not accepted as organic in that particular area.

Dr. Warman: I agree. I was not aware of what she would have said this morning. I was not aware of that and I do not know what the difference would be. I do not know how fine-tuned that is.

Senator Day: Do you know if the centre here will provide some leadership in what I consider to be a very critical part of all of this? For example, if someone makes a commitment and then — we are hearing this from every submission in other areas — regulations mean all kinds of perceived international gains going on that prevent trade even though you think you are fitting in within the rules. I think that leadership is critical here and we will certainly take that message back to Ottawa. However, I would think that you might be able to provide some leadership here through the centre.

Dr. Warman: I agree. I think that would fall under the direction of marketing. We are really looking at marketing a product and making sure that the product can move across provincial and national boundaries. I was not aware that there were those differences provincially. The answer to that is, yes, I would definitely remind Ralph about this issue. How are we going to deal with that and can we act in that capacity and can we add as leaders in that?

The Chairman: Dr. Warman, thank you for the presentation. Please rest assured that you have got a champion in the senator from Saskatchewan and I think maybe a few others from that province, as well. All the best in your venture and thank you so much for appearing before us today.

Our next witness is Dr. Robert Gordon.

Dr. Robert Gordon, Professor,Nova Scotia Agricultural College: I appreciate the opportunity to speak to you about some of the programs that we are involved with through the Agricultural College and the Department of Agriculture and Fisheries, specifically related to the emerging issues of environmental management for the agriculture sector.

I would like to talk about some of the real environmental pressures that the agriculture industry is facing, specifically here in Atlantic Canada. However, you will see that a lot of these issues are of national concern as well. We have, through our adaptive research program through the college and our outreach activities tried to integrate some of these problems into solutions.

In the last few years, we have been successful in developing a strong and internationally respected research and outreach program through the Department of Engineering and the Department of Environmental Sciences here at NSAC. We work in close partnership with the Department of Agriculture and Fisheries, Resource Stewardship Division. We have fostered strong relationships with provincial and regional commodity associations such as the Federation of Agriculture as well as national commodity organizations and environmental regulatory agencies to help the industry adapt to some of these emerging issues of environmental management.

Our program emphasizes issues related to manure management, waste water treatment technologies for the farm, water and air quality management. I would like to give you an overview of the projects in which we are involved and present some of the pressing issues that the agricultural industry is starting to face.

Senator Hubley: Just before you change, could you tell us what the slides show, what you are showing there?

Dr. Gordon: Yes. I will be pointing out some of these things as I progress through the talk. For your information, the top left corner is a research site that we have established here on the campus of the college, focusing mainly on dead stock management. I talk about that shortly. This is a significant issue for the industry: how we deal with on-farm mortalities in a safe and a biosecure way.

Next to that is the issue of groundwater quality and wells. We are focusing more of our research on simple economical solutions for waste water treatment and part of that involves using things like aeration systems, shown up in the top right-hand corner, for better assessing or better treating manure waste water streams.

On the bottom right corner, you can see another big part of our program. It is a natural type of treatment system called ``Constructed Treatment Wetlands.'' We are nationally recognized as one of the leaders in the agriculture sector in developing, designing, and implementing on-farm waste water treatment systems such as constructed wetlands for the agri-food industry.

Another significant portion of our program involves looking at issues of manure management. These are pathogen issues that are becoming increasingly prevalent in terms of human health issues, food-borne illness and environmental quality. There are also historical nutrient issues that need to be addressed. Phosphorous management and nitrogen management from agricultural systems constitute a large part of our research activities, as well.

The program we have established in coordination with the Department of Agriculture and Fisheries has a mandate of three main activities. We stress these activities for all of our research projects and we are committed to providing our agri-food industry with innovative solutions to environmental management problems. The word ``innovative'' is important because, again, the industry needs to develop technologies that are innovative and work but are not cost- prohibitive to individual producers and farmers.

We also see a need for continuing on developing opportunities for our young scientists through NSAC and other institutions, and providing them with hands-on training in rural communities at the graduate level. Our program stresses high-quality, highly technical research in addition to looking at adaptive on-farm solutions. As always, we work in partnership with the Atlantic Canada Agri-Food industry and most of its stakeholders.

With respect to the key environmental issues, I like to think about it in three different terms. None of these issues are new to you. Key water-quality management issues that the industry must address in the future as well as what we have already accomplished include nitrate nitrogen, or the movement of nitrate from inorganic or organic fertilizers into groundwater systems. This continues to be a pressing issue faced by the industry.

We are seeing increasing issues of phosphorous management becoming a water quality issue and in our surface water systems. Furthermore, we are starting to see some signs of phosphorous eutrophication in groundwater systems, as well.

The Walkerton issue brought attention to the issue of pathogen management — not only in groundwater, but also in surface water systems. Our producers are trying to find solutions to better manage pathogens from their agricultural systems in addition to addressing the historical difficulty of pesticide leaching and run-off from agricultural systems.

The issue of air-quality management is starting to draw more attention. A lot of our management systems in the past have focused more on water quality; however, we are feeling increasing regulatory pressure to deal with air quality issues. You hear a lot about greenhouse gasses, CO2, nitrous oxide, one of the main greenhouse gasses being produced from agricultural systems. Methane is getting a lot of attention. I will touch on that in a few minutes.

Odour abatement technologies relate to nuisance issues associated with odour from manure spreading and livestock housing facilities as well as manure storage facilities is recognized as an increasing problem within rural communities. An emerging issue that will undoubtedly draw more public scrutiny in the future is the issue of ammonia levels and ammonia emissions from agricultural systems. It has already received considerable attention in Europe to date.

One of the key environmental issues associated with these water and air quality issues is public attitudes. We are seeing heightened public interest and increased expectations about the environment. We are seeing significant issues and changes in terms of our rural demographics.

For example, in Nova Scotia right now, only 15 per cent of our rural population is directly employed in the agriculture industry. We are seeing considerable urban encroachment into historical agricultural lands. The trend towards fewer but larger farms in occurring not only in Nova Scotia but also throughout the rest of Canada. These, together with the previous two slides, are all forging a greater emphasis on the agriculture sector to better manage environmental issues.

I will quickly outline some of the environmental pressures that I see facing the agriculture sector. Many of these issues are activities in which we are currently involved through our research and outreach initiatives at NSAC.

Certainly, we are seeing increasing concerns about farms having sufficient manure storage capacities for liquid manure storage. Right now, for example, in Nova Scotia, we are developing new manure management guidelines requesting that all farms have at least seven months' storage capacity.

A recent survey for our province demonstrates that only about half of our farmers that are using liquid manure handling systems meet that seven-month guideline. We are seeing more restrictive manure management guidelines and codes of practice in other jurisdictions, as well. For example, provinces such as Quebec have an October 1st shut-off or cut-off date for spreading manure. They are also implementing greater separation distances from locations at which you can store or spread manure and domestic residences.

We have a significant problem in terms of groundwater and nitrate nitrogen management. For example, some recent studies that we have done in rural Nova Scotia indicate that in some of our highly susceptible leaching soils we are seeing about 18 to 25 per cent of our rural wells — those are domestic wells — exceed maximum allowable concentrations for nitrate nitrogen. In other words, they are greater than 10 parts per million. There are health risk issues associated with that. We have to recognize that agriculture is not the sole source for these issues and this involves an integration of domestic on-site waste water treatment as well as better public education programs about inorganic and organic fertilizer use.

We are seeing, also, in some jurisdictions a greater reduction in right-to-farm legislation for nuisance protection. In other words, farmers do not have the ability to practice some of the historically recommended agricultural activities. We are seeing a greater intolerance to manure spreading at certain periods of the year, on weekends, on holidays, on Fridays and so forth.

Farmers are having to develop more sophisticated yet costly odour abatement technologies. We are seeing several areas that are requiring nutrient management plans for all farm operations exceeding certain manure animal unit numbers. That means that farmers must adhere to long-term record-keeping structures to meet regulatory needs as well as provincial quality control mechanisms, certification and legislation requirements being in force.

The other issue is how these plans are being developed. Often, we are looking at phosphorous as being the limiting nutrient in a lot of cropping systems and that is posing significant pressure on producers to find more land to spread existing manure production amounts.

We are seeing greater requirements for programs such as environmental farm planning. Again, we have taken the lead here in Nova Scotia through the Department of Agriculture and Fisheries, NSAC, and the Federation of Agriculture in implementing one of the best environmental farm plan programs in this country. However, we are seeing more focus on programs like this being linked with cross-compliance for on-farm assistance dollars as well as possible farm loans in the future. There is a significant need to better understand and develop coordinated approaches to environmental farm planning.

A lot of the environmental technologies that have been implemented on farms in the past have often considered water quality in lieu of air quality and there is a real need to reassess some of our historical management systems. Anaerobic lagoons are a good example for dairy farms and for hog operations where probably most of the treatment of that manure and waste water is through ammonia revitalization into the atmosphere. Again, we have to look at systems that manage our water resources but, at the same time, maintain high quality air systems. This requires integrated research that involves studies that are looking at a lot of historical activities and putting them in perspective.

At the federal level, there is significant focus on the agriculture industry to better find mitigation strategies for greenhouse gas emissions reductions. Based on the Kyoto Protocol, we are required in this country to have greenhouse gas emissions reduced by six per cent of those levels that we had in 1990 by the year 2008 to 2012.

With business as usual, this amounts to about a 21 to 25 per cent reduction in current emission rates. This does not just include agriculture; it includes all sectors. The agriculture industry is getting a lot of attention and being asked to find ways at mitigating some of the emissions from agricultural production systems.

We are seeing phosphorous management becoming a major issue for all livestock producers, in particular for those manures that have high phosphorous content such as poultry and some dairy livestock. A fair quantity of our surface soils are high to excessive in phosphorous concentrations. Some studies are suggesting that there are some intensely cropped fields that cannot receive any manure applications for the next two to two-and-one-half decades because of the high levels of phosphorous existing in these soils. This is posing a greater pressure on producers to find a greater land base to adequately manage this manure. A lot of jurisdictions are using phosphorous because it is such a slow- release nutrient and in some places very high in concentration. It is used to limit and restrict farm expansion in some areas across the country.

I referred to dead stock management and biosecurity. A lot of the historical options for on-farm mortalities have become limited. For example, rendering facilities are restricting many livestock types. Burial, incineration options really do not exist because of their environmental and health risks, as well as the cost associated with them. Hence, there is a real need to develop on-farm methods that provide environmental management as well as biosecure systems. One area on which our research is focused is composting technologies. However, that requires considerable on-farm training and — in some jurisdictions — certification for individual producers.

Many commodities are being required to develop feed-additive requirements in terms of all their feed stocks to reduce odour, to reduce phosphorous excretion from the animals. Again, here is another issue that is being addressed but has some significant costs associated with it.

In this province, we have some irrigation water-quality problems. Some of our main surface water systems that are frequently used for irrigation often exceed maximum advisories for pathogens — for fecal coliform levels. Again, that is sometimes linked with food safety.

The difficulty is a lot of the analytical techniques for monitoring coliforms and e-coli are very slow and costly. No real integrated programs have been established to make sure that the water systems are safe and that the food systems are safe at the farm level. It is important for us to recognize that the producers that are typically using those water systems for irrigation are not the real reason for the poor water quality. We have to develop integrated programs to make sure that we are cleaning those water sources. I will talk about that shortly.

There is also a shrinking tolerance to pesticide use within rural areas. Certain municipalities are encouraging pesticide bans. We are seeing tile drainage systems. This has increased the visibility of our agriculture sector here in Eastern Canada in terms of it being seen as a point source pollution system. There is more pressure from non- agricultural associations to limit their use or implement waste water systems prior to any discharge of tile water into aquatic systems. Again, there may be considerable retrofitting costs associated with existing tile drainage systems that have been encouraged for land development for the last three or four decades.

We are seeing more requirements for waste water and run-off management within agricultural systems. There are $100,000 solutions out there but they are not feasible for small, single family farms. This also raises a pathogen management issue. We have to develop waste water treatment technologies that provide effective environmental and health management, but are not exceedingly excessive in terms of their cost for implementation and long-term use.

Managing climate change has become a pressing issue and soil conservation continues to be a major issue. We are seeing significant depletions in our organic matter levels within some of our intense crop fields. We are also seeing greater non-point source pollution from sedimentation and phosphorous transport.

Finally, there is more pressure on rural farmers in terms of bio-solids utilization. In other words, the bio-solids produced from urban centres being spread onto agricultural land. There are short-term incentives for this but there may be long-term ramifications relating to the use of these bio-solids and agricultural production systems in terms of food quality and safety and environmental safety.

We have been focusing our research programs on adaptive solutions for the farm level. For the last several years, we have been addressing the issue of pathogen management from agricultural systems, mainly in terms of manure run-off, manure tile drainage effluent and integrated watershed management.

We firmly believe that NSAC is a leader in providing the Atlantic Canada Agri-Food industry with a better understanding of the persistence — transport survivability — of these pathogens. It is a very complex issue that requires more research, but we have been successful in terms of trying to better understand their survivability and develop management systems for the industry to try to implement.

We have also taken this integrated approach to water quality management through our watershed monitoring initiatives. The Canadian Foundation of Innovation has provided some substantial grants to help us in our infrastructure and we are also currently recruiting for a Canada Research Chair Tier Two position in watershed management. This will be a unique position that will integrate our existing strengths in water quality management to the watershed scale.

As I have mentioned, we have an active waste water treatment program that involves monitoring of these innovative waste water treatment technologies both on-farm and at our research facility here on the campus of the college. We believe that NSAC is a world leader in the on-farm application of treatment of wetlands and other waste water treatment technologies and we are presently part of the recently named National Centre of Excellence — the Clean Water Network — that is being driven through the University of Waterloo.

NSAC has also been active in the area of climate change in terms of greenhouse gas mitigation as well as impacts and adaptation to climate change. This past October, NSAC hired Dr. David Burton as a senior climate research chair for our faculty and we believe it is, to date, still the only full-time dedicated research chair for climate change in an agricultural faculty in this country.

We have also been fortunate to receive assistance from the Canadian Foundation for Innovation to purchase a state-of-the-art laser system for better understanding emissions of nitrous oxide, methane and CO2 from agricultural systems. This will be a large part of Dr. Burton's and my research program in the coming years.

In conclusion, I have mentioned a lot of environmental pressures. The solution has been to focus on low-cost and adaptive technologies for farmers. This is how we have worked with industry, commodity associations and the private sector. As I have pointed out, there are expensive solutions out there but they are really not an option. We have to look at seeing and identifying technologies that are viable for individual producers.

All solutions can not be applied across-the-board. Therefore, we have to look at innovation as well as selective solutions for individual farm systems. The industry in Nova Scotia has demonstrated that. We hope it continues to be pro-active in terms of adhering to environmental management systems and developing programs such as the Environmental Farm Plan Program, sponsoring and actively partnering in environmental research, and developing strategies for dealing with manure management and treat management planning in the future.

For a lot of our larger livestock operations there is a need to look at other markets and value-added products for potential spin-offs for manure. We would like to increase the focus on that part of our program. We would also like to explore means of identifying options for better utilization of our waste products from agricultural systems for other industries and associations.

There is a need to continue public and producer education in partnership programs. We must focus on the lack of agricultural awareness in some areas and ensure that individuals within those communities are better aware of the role that agriculture plays, not only in our world communities, but also in maintaining the environmental quality that we have within those same areas.

Finally, I would like to stress that with respect to all of our research activities, there is a continued need for our researchers to work closely and in partnership with the agriculture sector in this region.

Senator Hubley: Thank you for you presentation. We discussed manure management earlier. What are the ways that you are looking at that are new and innovative?

Dr. Gordon: There are many things. A large part of our program involves taking feasible off-the-shelf commercial products and evaluating them in the context of different livestock sectors. We are working with producers on evaluating things like enhancing the solid-liquid separation of manure to handle the different fractions separately. We are looking maximizing the resource potential of manure through using treatment of wetlands, using improved manure spreading systems. We are trying to optimize the performance of manure spreading to minimize ammonia loss — the atmosphere odour.

The pressing issue related to manure management is the aspect of trying to take it from the farm to effectively put it onto a land base without causing any significant environmental concerns whilst adhering to some of the issues associated with pathogen management and phosphorous management. We must also deal with the waste water issues because we are dealing with a product that is produced 12 months of the year but the window of utilizing that effectively is only about half that.

Senator Oliver: When you mentioned phosphorous earlier, you said that there is so much there now that it will be a long time before it can be changed. Is there no chemical agent that will neutralize it in the same way that we use limestone and other things to neutralize?

Dr. Gordon: That is a good question. Certain research programs are trying to address that. There are also a lot of questions regarding some of our heavier, more stable land bases, for example, is there potential for phosphorous to get into water systems?

We are focusing more of our research on phosphorous leaching. Is it getting into tile systems? The data that we have collected for a few sites here in this province has demonstrated that we are not seeing anything to date. I think that that is going to be more of an issue.

The hog sector, for example, is encouraging its producers to use feed additives such as phytes, which have been demonstrated to reduce the phosphorous output from the animal. Again, that is being more widely practiced. However, the phosphorous issue will draw more attention in the coming years as environmental farm planning becomes legislated in most countries.

There is much research to be done in terms of answering that question. However, to date there are no simple, economically viable systems that can help reduce those phosphorous limits.

Senator Oliver: I am not interested in new laws and new regulations because I think the farmers should be able to go about their business without regulations. I do wonder if there should not be some type of requirement that people should have their soil tested on a very regular basis to determine the level of phosphorous and nitrogen and nitrate in the soil.

Dr. Gordon: That is a great suggestion. The nutrient management planning initiatives that we are spearheading here in Nova Scotia would include that. Legislation in Ontario and other provinces requires nutrient management plans that involve better understanding of soil field sizes or field sizes, crops being produced, identifying rotations, and developing a frequent soil analysis program.

Senator Day: Would not the soil tested as part of benchmarking on an environmental plan for a farm so you know what you have got?

Dr. Gordon: Some environmental farm plans do soil testing. In most jurisdictions, environmental farm planning is slightly different from nutrient management planning. However, accurate nutrient management plans, which are legislated for different provinces right now, will require that you have a frequent soil fertility assessment done on each and every farm field.

Several agencies in the private sector have implemented programs to do that exact thing working with producers and regional soil and crop associations.

Senator Day: Is this benchmarking? You have to know where you start on these things, I would think.

Dr. Gordon: Yes. That aspect of benchmarking and understanding what you have in terms of your soil resources is exactly what nutrient management planning is: identifying where you are and where you have to go in the long term.

The Chairman: Where I farm in Saskatchewan, for instance, our biggest need is phosphorous and nitrogen.

Dr. Gordon: The same thing happens here in some areas.

The Chairman: Yet, where we use 150 pounds per acre here, in Europe, for example, they are using 400 pounds and they are using additional sprays on top of that. With respect to organic farming, how long will it take to get the soil to some point where it is not a factor?

Dr. Gordon: That is a great question. A few decades ago, we saw a shift in the livestock sector away from solid manure management systems or handling systems to liquid systems. The benefit of that at the time was reduced labour costs and reduced manure-handling costs. Today we see an artifact of that is poor organic matter levels within intensely cropped soils. We are also seeing excessive manure spreading costs and some fields that are probably getting too heavy a dosage of manure. Ultimately, this results in higher phosphorous levels and higher ammonia emissions.

Senator Tunney: I do not agree that we need laws to force farmers to soil test. Farmers soil test because it is the most efficient way for them to use fertilizer if they need fertilizer. This matter of concentration is the biggest problem that we are creating for ourselves; that is, far too great numbers of livestock in far too small a geographic area.

In Ontario, our government and the provincial, county and municipal governments are at their wit's end trying to develop regulations that will prevent this. Yet if you want to build a hog barn for 4,000 sows that will have something like 18 or 22 piglets a year, you can only bear what the concentration is there. Unless you have a very large land base, then very soon your manure build-up will almost sterilize the whole thing. Yet, we always used to say farmers used to want more manure, but because they were in always a hurry, the back field never got manured. It got concentrated in the handier area around the barn. In my area, the real problem is liquid manure. Farmers who handle dry manure in the proper way have no problems. However, this liquid manure has an odour that will pollute and flow across a township if the air is just right.

Senator Wiebe: I disagree with my colleague. If farmers are not prepared to manage their operation, then we have to legislate. I think that legislating soil tests would be darned good farm management. I had a farrow-to-finish hog operation in my farm. It was liquid manure. We injected that manure into the soil. We soil tested and I am producing crops off of that land like you would not believe. It is a tremendous advantage.

The problem that we have created is the hog producer or the livestock producer who wants to move his operations closer to the centre where he can market them, which is closer to our cities. People living in our cities want to move out into the rural areas. We are clashing.

We have a tremendous vacant land base in this country and if we want to legislate, maybe we should legislate agricultural areas or livestock areas. Once you designate that area, you allow a certain size a number of hog barns or whatever to be built in that particular area, but you do not allow someone to set up their summer cottage there.

I think this is the problem. Society has decided that we want to all live around our larger centres. Statistics Canada is showing us that populations are growing within 50 miles of our large centres.

Perhaps our intensified livestock operation should be beyond that 50-mile radius. It can be managed quite easily in this country. I can see where they would have problems in Europe because they have a far greater concentration of population.

Could you give us a copy of your presentation?

Dr. Gordon: Yes.

Senator Tkachuk: I have a couple of comments to which you may respond.

Were departments of agriculture and scientists not telling farmers to use manure in the fields, practice continuous cropping, chemicals, and fertilizer, and so forth 30 years go? A lot of the problems we have today are because that was the exact norm of the time and that is what people were told to do.

Senator Wiebe: But they were also told to do soil testing, too.

Senator Tkachuk: I understand that. However, I do not remember a lot of soil testing controversy around at that time, but there certainly was a lot of discussion about whether continuous cropping should be used and the amount of chemicals put in the land.

Now we seem to be addressing this all of a sudden. I am concerned about putting too much responsibility on the family farm. The family farm is not responsible for the reason that we have the Kyoto Conference — which I think is a blot of nonsense anyway and we should not even worry about it. Yet, all of these things are going to result in increased pressure on the farm. There will be legislation.

You know, the City of Montreal throwing raw sewage into the river and they are worried about the farm next door, about some pig farmer out there. There must be a set of priorities and I think the agriculture communities and people like you have got to ensure that we have our national priorities right. We have a lot of myth in the environmental business — and it is a business. Professors and scientists are just as susceptible to business as anybody else. It is a business.

I would like your comments on the other side of the issue. I believe our water is cleaner than it was 30 years ago. I believe our air is cleaner than it was 30 years ago. I believe we have made tremendous strides in cleaning up our environment. I believe our food is safer than it was 30 years ago. People have the impression that it is less safe.

There is a lot of industry building around here for which the family farm will have all the responsibility. All the cash is going to be put on the family farm and greater pressure and greater cash out by the farmer. There is a lot of danger in that.

That is my bit of manure. I would like to hear someone who knows something about it to speak up and maybe rid me of some of my prejudices. The reading I have done makes me very concerned.

Dr. Gordon: I certainly agree that individual family farms are having, at times, to bear the weight of all these issues on their backs. It is important for us to recognize that a lot of these larger concentrated farm systems are not there because they want to be there. They are there because with the requirements for reducing input costs, they have had to either expand or go out of business. We have to recognize this is a societal problem.

It is important to recognize that, within this province other jurisdictions, that the agriculture community does not have the political voice that it once had in this country. In this province right now, only 2 per cent of our population are farmers. Only 15 per cent of our rural residents are farmers. This tells us that 85 per cent of the rural community out there that wants to be there because it is a nice place to live. They have a nice lot and they have peace and quiet. We have to look at what built those rural communities the way they are. It is because of the agriculture industry.

We also have to make sure that agriculture awareness continues to be stressed in terms of better educating young children and students at NSAC who will not necessarily be working on farms, but they will be working with producers and with rural communities to better educate issues associated with agriculture and environmental management.

The environmental legislation that is being forced on the industry is causing the producers to find more ways to reduce their input costs. That is my real concern about the future of the industry in terms of dealing with some of these environmental management issues.

Senator Tkachuk: You should be trying to get money out of the provincial government. I smoke and I know that the cost of a package of cigarettes is all tax. However, the tobacco comes from the family farm. I am on the Board of Directors of a pub business, malt and barley, $3-$4 a bushel. One of our pubs will write a cheque to the provincial government for $20,000 in one month: tax. They are all collecting. They are all talking about helping the family farm. They are collecting huge revenues off farm products. Fifty per cent tax is what they charge. Like thieves in the night, both governments will charge McCains and everybody else — every company that is making money off farms — 50 per cent tax. Then they are worrying about whether the farmer is going to get more money.

I am a fan of the farmer. I do not like to see people make money off farmers. I like to see farmers make money. Therefore, when you are going down there and the treasurer says he has no cash, remember that there is a lot of statistical evidence and there is a lot of data that shows the provincial government is making much more than it is putting into farms.

I would like to know what they make off liquor in my province and what they put back in the farms. They say it is for health reasons, but that is all poppycock. I am tired of the farmers being so poor. A lot of people, including governments, make money off farmers. Governments are big-time cash-takers, all farmers' money.

The Chairman: We welcome Dr. Ogilvie from the University of Prince Edward Island and Atlantic Veterinary College.

Dr. Tim Ogilvie, Dean, University of Prince Edward Island Atlantic Veterinary College: Thank you for the opportunity to speak. I am sure you have heard it before, but welcome to the Maritimes. It is a great place to live and raise a family and I have enjoyed my 25 years here.

I am representing three groups today: the University of Prince Edward Island and the Atlantic Veterinary College, and the four colleges of veterinary medicine across Canada. I have distributed my brief to you. Please be assured I will only speak to the first four pages and so I will be fairly brief. I welcome questions.

We have three ongoing initiatives that address several of the topic areas in your review — namely, how to position Canada as a world leader in food safety, innovation and agriculture. What can we do in the present economic and public environment and how can we position ourselves as a world leader? We also look at issues surrounding international trade as well as and preserving and enhancing that trade. I will talk a bit about the state of agricultural research.

I have seen some recent reports that indicate that the greatest payback for research happens to be that research which is invested in agriculture. The return on investment for the research dollars spent on agriculture for the consumer and the producer is astounding.

As I listened to Dr. Gordon talk, I was reminded of what a great place Atlantic Canada is to work and undertake teaching, research, and service to the agricultural sector because of the partnering that goes on here. There are tremendous opportunities for cluster building, partnering, and working with other associations and organizations. The Atlantic Veterinary College, while it is in Charlottetown, is funded by the four Atlantic Provinces to train veterinary scientists, to train veterinary students, and to conduct research. We partner with NSAC in some of that research and other organizations.

Our first initiative is ``The Vision in Bioactives.'' The goal is:

To establish a world-recognized regional technology cluster of excellence centred in the area of the discovery, the development, and commercialization of bioactive compounds for human and animal health.

Bioactive ingredients and their precursors are used in the manufacture of pharmaceuticals and nutraceuticals. We think that many of these products can be derived as a value-added product from agricultural commodities so that we are no longer treating a certain subset of agricultural product as commodities. Get the value added on to them.

We can use resources to add value to products. For example, chitin, which comes from sources of calcium such as lobster shells, used to be put on the land for fertilizer. Get it into a product that is used as a nutraceutical undergoing testing at, for example, the Atlantic Veterinary College. There are all kinds of examples of marine and plant products and animal by-products that can be used for bioactive compounds and then as a bioresource for the nutraceutical and pharmaceutical trade.

There is a need to do research in that area. However, it does not stop there. I we need to do research in that area and then undertake the production of those items in a sustainable fashion. I am talking about two types of sustainability: One is the sustainability of the product production; the other is the value added to the agricultural sector and sustainability of agriculture because you are getting more out of the product and it is no longer simply a commodity.

That is our first initiative. Much of the information on that is in appendix numbered one and two and I will leave it at that. I expect that you will hear more about this initiative. We are working very closely with the commercial sector in Prince Edward Island, the pharmaceutical companies, and the nutraceutical companies. We are also working closely with the National Research Council and other groups that are interested in clustering with this activity.

Turning to initiative number two, I will replace my University of Prince Edward Island hat with my veterinary hat. We are all aware that society is increasingly concerned about a number of issues related to agriculture. You have heard many of them in the course of your hearings.

In veterinary medicine, some of the foremost issues are those of safety in the food chain, animal welfare, antibiotic resistance, public health, and so forth. The examples are almost self-evident, the Mad Cow Diseases, West Nile Virus, Foot and Mouth Disease and so on.

The four veterinary colleges in Canada undertake most of the animal health research in Canada. I would like to stress that we do not do most of the production animal research; we do not do most of the commodity research; and we do not do most of the research that is undertaken for named diseases that the Canadian Food Inspection Agency has a mandate to deliver on. However, in terms of animal health — diseases of animals — most of the nation's research is undertaken at veterinary colleges.

Like many organizations and universities, the colleges of veterinary medicine are facing serious infrastructure problems, insufficient numbers of veterinary scientists and a lack of research funds targeting those areas to allow us to train professionals that the nation needs to undertake this kind of research.

There is not enough collective research space available to undertake the animal health research we think that the country needs to address those issues. It is not so much being concerned with the inadequate infrastructure to educate our veterinarians. It is doing the research that gives consumers and the public the confidence that we are protecting the nation from devastating animal diseases or incursions of foreign animal disease or problems with food security and food safety.

I can remove myself from that a bit because the Atlantic Veterinary College is the newest of our four veterinary colleges and we are not in danger of falling down infrastructure. We have a wonderful facility there and I would be happy to show it to you sometime. Built by federal dollars, shared with provincial dollars, it is a wonderful story.

While we are not in danger of failing infrastructure, collectively, the four colleges are. It has reached the point where two of the four colleges are very, very old. In fact, Montreal and Guelph are the oldest colleges in North America. They are in danger of losing the accreditation. This same international body has just reviewed a third school and we await the results.

Senator Oliver: Why are they in fear of losing accreditation?

Dr. Ogilvie: Because they have been put on limited accreditation notice by the Council of Education, the American Veterinary Medical Association and the Canadian Veterinary Medical Association because of failing infrastructure and failing facilities, most commonly.

The St-Hyacinthe Faculty of Veterinary Medicine at the University of Montreal is on two years' limited accreditation. If they do not receive the funding to upgrade their infrastructure, they could lose their accreditation, which then means that even if they could attract students into the program, every student that they graduate is not eligible for license to practice in Canada and they are not eligible to sign export certificates. They are not eligible to work for CFIA. They have to undergo a series of further examinations.

In Saskatoon, the Western College of Veterinary Medicine is on slightly different — not a limited accreditation but a shortened accreditation — also two years in length. The maximum length of accreditation is seven years.

Conversely, while we are at the risk of losing accreditation at some of our schools, there are schools in Europe — Continental Europe and the U.K. — and Australia that are rapidly seeking accreditation and gaining accreditation from this same North American accrediting body. Hence, it is a global environment and it is a global atmosphere. I wanted to bring this to your attention.

We are looking to find solutions not just to identify the problems. We presented proposals to the federal government through Agriculture Canada to increase the infrastructure at the four veterinary schools through a reinvestment in facilities. The facilities upgrade is just the first part. If the colleges have the facilities to attract researchers and to attract the Canadian Foundation for Innovation grants and those types of research dollars, we can flourish.

Senator Tkachuk: Is it a problem with the structure? Is that human infrastructure, too, the scientists and researchers?

Dr. Ogilvie: Yes.

Senator Tkachuk: They just built that college in Saskatoon 15 years ago, so the problem is not falling buildings. It could be attracting talent.

Dr. Ogilvie: Time has a way of slipping away on you and it is going faster for me all the time. Saskatoon opened its doors in 1969.

Senator Tkachuk: For the veterinary college?

Dr. Ogilvie: Yeah.

Senator Tkachuk: Was it really that far back?

Dr. Ogilvie: In fact, I stand corrected. They graduated their first class in 1969, so they opened it in 1965 or 1966.

I have a story for you. The autoclaves — the equipment they use to sterilize surgical tools — are so old at Saskatoon that the only models that they could find to salvage parts from to keep them going were from the University of Mississippi in the United States. That is probably one of the poorer schools in the United States. They are cobbling their equipment together to keep going.

You need the facilities to attract the research scientists. Now research scientists just do not come only for bright, shiny facilities but it is a start. We can attract more research scientists starting with the infrastructure.

The veterinary colleges' other need is for biocontainment facilities. None of us have level three laboratories; even the new school does not have level three biocontainment facilities.

Senator Oliver: Is that a sterile facility?

Dr. Ogilvie: That is a facility that allows us to examine agents which have a level three pathogenicity standard or level to them such as Foot and Mouth Disease, which is level four and is handled in Winnipeg. Some level three pathogens affect humans — West Nile Virus, escherichia e-coli 157 are examples of that. When veterinarians and farmers diagnose disease, they send the specimen, a dead pig, for example, to a lab. That lab will open it up and diagnose the disease. If it seems to be a level four disease such as Foot and Mouth Disease, they send it to Winnipeg. The chain is not strong at the veterinary colleges because there are no level three labs. We would be running the risk of not being able to contain those diseases and contaminating them even with a strong, strong, surveillance program.

I wanted to bring that to your attention because it is critical if we want to maintain favoured nation status for trade, if we want to continue to assure the public that they can have confidence in their food, and to ensure that diseases emerging from animals do not endanger the public health. Of the emerging new diseases — the e-coli, for example — 70 per cent have an animal host. That is very, very important.

I do not want to harp on that too much. The solution is in a series of presentations has been made to Agriculture Canada with the support of the CFIA, the Canadian Veterinary Medical Association, industry, the commodity groups, and the Association of Universities and Colleges of Canada. These bodies all say that this is a great idea.

This transcends the provinces. This is not a question of asking for more money to allow us to educate students. It is for infrastructure investment. It is to allow Canada to protect itself to cover the nation. It is very important national story.

Our third initiative deals with the issue of animal health research. The four veterinary colleges have an ongoing initiative asking the federal government to consider if there is not a better way for NSERC perhaps to fund animal health research.

As one of the three councils that fund research grants, the Natural Sciences and Engineering Research Council includes animal health research within their mandate. They will fund animal health research, but the grant selection panels are populated mainly by physiologists, biologists, and scientists who, while they are excellent scientists, probably do not understand systems research, production research, animal health research and the needs of agriculture. There are no agriculturalists on those panels.

As well, the NSERC Panels are not set up so that animal health or those issues of public health that meet with animal health have a home. We have an ongoing presentation to NSERC asking them to consider their reallocation exercises with focus on animal health research much the way that CIHR, when it was reconfigured from MRC, put some focus on population human research because that is really what health is. It is maintaining health within the population.

While healthcare focuses on individuals, I believe the best investment for our time in healthcare would obviously be prevention in the population rather than the last few days of investment. The same thing applies to animal health.

If NSERC would invest in production animal health and set up an appropriate selection committee to review those submissions from our good, strong research scientists, whether they be at NSAC or the Atlantic Veterinary College or wherever, it would be funding well spent. We have been trying hard to convince NSERC that there may be a better way to do business.

I am very pleased that you are willing to receive my brief and I hope you have a chance to read it. I have included some interesting figures and some compelling issues that are very important to the nation.

Senator Day: What size population do you have full time at UPEI?

Dr. Ogilvie: At the Atlantic Veterinary College?

Senator Day: Yes.

Dr. Ogilvie: We have 65 tenure track faculty and we have another 15 professional staff who are funded out of contracts or as research chairs or things like that. In total, we have about 80 professional staff.

Senator Day: How many students?

Dr. Ogilvie: We educate 240 students in the four-year program and we have 50 graduate students: 15 PhDs and 35 Masters of Science.

We would like to graduate twice that number of graduate students because we are told that, for example, in the next five years, CFIA will need 300 veterinarians. Industry will need veterinarians and pharmaceutical companies. It is a huge, huge need for research in public health.

The genomics research that is ongoing and the need for veterinarians to be involved in care and maintenance of research animals, genetic mice, SCID mice, knockout mice, those kinds of things, will create a demand for graduates.

Senator Day: This is helpful. Are there seats reserved for each of the four Atlantic Provinces?

Dr. Ogilvie: Yes, there are. That is how the funding formula is based. Nova Scotia supports P.E.I. and Newfoundland and New Brunswick all with different amounts but in the same proportion on a per seat basis. 41 students are funded through the interprovincial funding agreement and we have 19 seats for international students. Internationally, most students come to us from the United States because we charge a very high differential fee comparable to out-of-state fees for veterinary students that do not have a veterinary school in their home state.

Senator Day: To conclude, are the 41 to which you refer reserved for the Atlantic Provinces?

Dr. Ogilvie: Per year, yes.

Senator Day: The rest are open to anybody?

Dr. Ogilvie: Yes.

Senator Day: You said that 19 seats were reserved for internationals, so presumably the balance would come from other parts of Canada.

Dr. Ogilvie: No.

Senator Day: No?

Dr. Ogilvie: No. We are one of the few schools with a business plan. Provincial government investment in education has declined over the last while. We were asked how we would maintain program in the face of declining government grants for the period 1996 — 2001. We suggested one way to do that is to increase revenues from sources other than government; we would increase tuition, increase sales and services, and increase research contracts. We have done that. We have delivered famously on our business plan. I would love to show it to you some day.

However, part of this deal means that we cannot accept Canadian students because part of our sustainability depends upon the fees that we charge for international students. If we accepted Canadian students and we were not allowed to charge them the international fee, then we would be jeopardizing our program.

We cannot charge Canadian students foreign fees because it runs counter to agreed to mobility in education opportunities across the country. Manitoba is short of 20 rural veterinarians as I speak; it is very difficult to get practitioners in rural Canada. I would love to go to Manitoba and ask if they would like to pay for some seats in Atlantic Canada, because we can train good quality students.

By the way, we have programs that none of the other colleges have in aquaculture and population health on a small family farm.

Senator Day: What could we do to help facilitate that for you? What could the Government of Canada do?

Dr. Ogilvie: This body could facilitate a province-to-province dialogue. You see, education is a provincial jurisdiction and it is very touchy. I would not want to send you into a minefield.

However, the provinces would have to come together to discuss this. For example, Manitoba would make an offer to Prince Edward Island that they would support so many students per year to gain access to the PEI college. Manitoba might also offer to pay them and become part of the interprovincial funding agreement. That is probably the way it would have to go, Senator, but I am not really well versed on that.

Senator Oliver: I found your presentation interesting. I would like you to tell us for the record, about the certain diseases that animals can get that are a danger to the public and to the environment and so on.

You gave a hypothetical situation in your remarks. If a farmer in Prince Edward Island brought a dead cow into your lab and you opened it up to find that it had Mad Cow Disease, what would you do today since you do not have the proper facilities to avoid contamination?

Dr. Ogilvie: That is a reportable disease, so we would first notify the Canadian Food Inspection Agency. We would then take all due precautions to seal off the environment. There is no known transmission of that disease, particularly to people aerosolized or in a confined area.

However, the public concern is so great that we would seal off the area and we would talk with Transport Canada and find out how we could get proper specimens to either Winnipeg where there is a level four lab or to the Centres for Disease Control in Atlanta.

Senator Oliver: There is only one lab in Canada?

Dr. Ogilvie: That would handle level four pathogens, yes.

Senator Oliver: Oh, my.

Dr. Ogilvie: It is a combined Health Canada and CFIA lab. A less sensitive example might be tuberculosis. Tuberculosis in cattle exists in Michigan and it came from the wild deer population. People and animals contract tuberculosis when they are under confined situations. Tuberculosis occurred many, many years ago when people were brought into classrooms, when students got together, damp, moist conditions, poor hygiene, all of those things.

The hunters in Michigan would feed the deer on piles of corn to fatten them up for the hunt in the northern part of the state. Those deer broke with tuberculosis and they were nose-to-nose in contact with dairy cattle in Michigan, so it got into the dairy cattle population.

That is not an unrealistic story. It could happen any place in Canada. What if tuberculosis were identified in our laboratory? It would be handled the same way. We do not have a level three containment lab.

Our faculty would be very concerned with the transmission of tuberculosis because it is aerosolized. It is transmitted through the air. We would suffer some consequences. We would have to close down for a while. Our students' education would suffer while we disinfected and fumigated the place, while we cleaned all the fume hoods and all of the things that would have to be recleaned.

Senator Oliver: Right now in your manuals, you have all those safety procedures in effect?

Dr. Ogilvie: Yes, we do. Oh, yes. I think that more at risk rather than a problem with disease transmission to people is the lack of our ability to go to our trading partners and assure them we have a good surveillance system or a good biosecurity system, a good prevention system, and a good response system in this country. I do not think that we can say all of those bases are covered to our trading partners.

Senator Oliver: Could you tell me about three or four of the special research projects that some of your PhDs are doing in their labs now?

Dr. Ogilvie: Yes, there are some very interesting projects. We have a laboratory of pharmacogenetics where one of our faculty members, who happens to be our first Canada Research Chair attached to the Atlantic Veterinary College, is doing pharmacology research on adverse drug reactions. The adverse drug reactions in dogs are very similar to adverse reactions in people.

Penicillins, sulphonomides and so forth get back to antibiotic resistance and the use of sub-therapeutic levels of antibiotics in animal feed. Some people are very allergic to very small levels of antibiotics in feed. What type of reaction do they take? How does that compare to animals and what are the genetic markers that would predict, for example, a sulphotomides allergy? We try to map out those kinds of things.

Senator Oliver: Fascinating.

Dr. Ogilvie: We are also doing research in aquatics. You are talking about agriculture, but I think that there is more of a mix and linkage now between aquaculture and agriculture. We are seeing provincial departments of agriculture and aquaculture combining. Foodstuffs are now being used to feed fish. We used to rely totally on fishmeal. Now we are trying to find ways to use plant-base products for fishmeal. Therefore, we are doing lots of work in fish and studying diseases in fish.

Senator Oliver: Fish eat some plant-based materials now, though.

Dr. Ogilvie: Yes, they do. Do you want an agriculture example? We belong to a network of centres for Swine Diseases. We are doing some good work in rapid diagnostic tests for diseases of dairy cattle in which the public is very, very interested. An example would be Johne's Disease.

Is there a better, more rapid test for Johne's Disease? Right now, mycobacterium johnii is a slow growing pathogen just as tuberculosis bacilli are slow growing pathogens. It takes us probably six weeks to diagnose whether a cow has Johne's Disease. Johne's Disease is of concern because acid-fast organisms similar to Johne's Disease have been found in biopsy specimens from people with Crohn's Disease.

The public are starting ask whether there are acid-fast organisms in milk? Is this cow that is shedding acid-fast organisms contributing to pathogenic diseases in humans? We are interested in trying to eliminate shedders of acid-fast organisms from the dairy herd as quickly as we can. Our people are working with Diagnostic Chemicals Ltd. on PEI to develop more rapid bedside tests for diagnosis of disease.

Senator Oliver: That was fascinating.

Senator Wiebe: Thank you, Mr. Chairman, and thank you, Dr. Ogilvie, for being here. I do not know whether you recall but I had an opportunity to spend some time at your college last summer with the task force. I must commend you on an excellent college. I was very impressed with it.

I can certainly understand your desire for infrastructure and more funding because that is what is happening right across Canada in terms of everything at our universities and our colleges. Even to put them back to the level that they were when they were built will take a tremendous amount of money. As government, we have to recognize that and to start to deal with that.

In the 1970s, I went into a farrow-to-finish hog operation and at that time, it was considered one of the largest in the province. Today, you could not make a living with that size of an operation. We had the veterinarian visit the hog operation once a month. We were pretty proud of what we produced. In those days, we even put stamps on what we produced on the farm as ``Made in Canada'' and the food was safe.

Why now all of a sudden in the last number of years are we putting so much emphasis in food safety? What are we doing wrong today that we were doing right back then?

Dr. Ogilvie: Did you inject antibiotics?

Senator Wiebe: Yes, we certainly did. Is the concern that we have developed new breeds, new strains? We are getting more milk out of each cow and our operations are becoming more intensified. Is this putting too great a strain on the food health safety in our country or worldwide? I know it is a tough question. It is one that I have been trying to analyze, myself.

Dr. Ogilvie: I do remember you from the task force. Thank you for your compliments about the college. We are very proud of it.

I do not think our food is any less safe than it once was. I think that the public perception is that farmers are becoming increasingly removed from the production of food. I think the public likes to know — even though you might say they never did know — where their food comes from. If we start to brand food, it is incumbent upon us to make sure that we can say that it remains safe, it is produced according to a certain standard, and the HACCP program exists.

My vision is that a either a small family farm or a large integrated operation could find a home within a Hazard Analysis and Critical Control Point, HACCP, system that allows them to certify that their food has gone through a series of checkpoints. The sign off of people who have the credibility — perhaps a veterinarian or an agriculturalist could validate this. I am not trying to skirt around your question.

There are many ways to look at it. I think branding comes into play. The public does not know how to cook a chicken anymore. It really does not. You do not see many whole chickens in urban centres anymore. You see parts and you see full meals. I do not know. I just think we have to be able to assure people that their food really was always safe but it even is still safe within the production systems that they might not recognize as white fences, laneways and apple trees anymore. It is a different thing we have to convince them of.

Senator Wiebe: Thank you. That is encouraging.

Dr. Ogilvie: I did not provide a very scientific answer to your question. I could not put on my science hat and come up with an answer.

Senator Tunney: I would like to take you back to your earlier days. I was involved when there was a big tug of war over whether Prince Edward Island was going to get the Vet College or whether it was going to be on the mainland. Shortly after that, you recall probably you might have been a student then, brucilosis became a very serious cross- country disease. I remember being quarantined with my dairy herd for 18 months. I also remember when we were able to declare Canada brucilosis free. Are you in favour of protection that leaves it titre or would you not vaccinate for brucilosis?

Dr. Ogilvie: It would depend on what market your product is going to. It is the same debate for Foot and Mouth Disease. The reason that the U.K. slaughtered more than 10 million animals and bore the brunt of $22.5 billion was that they wanted to protect their trade market. They could have vaccinated.

I do not want to sound like a fool making a prediction, but they could have stopped that a lot sooner with ring vaccination or any form of vaccination. However, it leaves it titre and you cannot tell the difference with our research to date. This is something we should be researching: what caused the titre and what are the concentrations of protective antibodies — that is called ``titre.'' You cannot tell whether the vaccine or the raw virus produces titre. A country might refuse imports of product until our animals are free of titre to brucilosis or Foot and Mouth Disease. We would be faced with that decision.

Luckily, we have eliminated brucilosis. The money that was invested in the brucilosis program is now invested in cattle identification across the country. There is a direct link now in the meetings I attended in Ottawa. Several years ago, we decided that since brucilosis was eradicated, we would put the money in identification program for cattle. That was money was well spent.

In conclusion, I remember those days when the school was built and, yes, there was a lot of discussion on where it should be and you should not name names in a mixed committee, but there were some very good people on both sides of the political table. They all pulled together and made sure it was built. It is a real credit to the region.

Senator Hubley: It has been wonderful to have you, Tim. I certainly enjoyed your presentation and it just gives us so much more information.

You had mentioned that there was a need for 20 practitioners, I believe, in the West. What do you see as the number that could be trained at the Veterinary Clinic? You were mentioning 240 in the four-year program.

Dr. Ogilvie: Without reinvestment in infrastructure — increasing the classroom sizes and the laboratory sizes and those kinds of things — we could not train anymore. We would have to simply replace the ones we were training from, mainly the United States with Canadians.

Senator Hubley: You are at capacity now?

Dr. Ogilvie: We are at full capacity. Every student in veterinary medicine in Canada gets a broad-base background. They learn all about companion animal diseases and large animal diseases alike. However, 70 per cent of our students who graduate go into companion animal practice because that happens to be how they can best pay off their debts.

Debt-load for students is another issue. I will not go there except to say that they have got to pay off their debts, so they go into companion animal practice. The lifestyle for rural practitioners can be pretty tough. You are either a lone practitioner or you are working 24-7 with somebody else year round. The lifestyle does not attract a lot of students into rural animal practice.

Senator Hubley: My second question was in what area do you see the most activity and in what directions are your students moving? I think you have answered that.

Dr. Ogilvie: Until the great economic boom is over in the United States — maybe it is over now — there are people with a lot of disposable income who are buying huge numbers of pets. I cannot describe to you the human/animal bond. You have to live it. If you have a dog, a cat, or a horse of your own, it is a true, family member.

Senator Hubley: Tell me about that.

Dr. Ogilvie: People who care for dogs or cats or pocket pets such as iguanas and hamsters want the same technology available to their pets as is to humans. We send dogs into the Queen Elizabeth Hospital in Charlottetown for CAT Scans. There are MRIs available in vet schools.

People demand this technology and that is where the draw is for many of our students. As educational institutions and as a national organization of veterinarians, we have to find a way put the people back in rural practice and find a way to support agriculture.

Senator Hubley: Our family always had pets plus children. I could not have done without either of them because they complimented each other so well. We did have a very dear animal that we had to refer to the veterinary clinic. I was impressed because the information that we received on her condition at that time was just amazing, the tests that were done on this animal.

I must say that you have that kind of friendly rural feeling at the school and I know that you have had many heartwarming experiences saving animals that have been in abusive situations. We are equally excited about having you in our community.

Senator Tkachuk: No waiting lists.

Senator Hubley: I must say that people are very willing to spend money on their children and on their pets. I thank you.

The Chairman: The interesting thing about the mail we get in the Senate, we got more mail on recombinant bovine somatropin. We are getting more mail on genetically modified. The only thing that even came near it was gun control and still getting that. That is where the mail is coming from.

That indicates something about our public and our consumer and the concern that the responsibility that is going to be thrown in the hands of government in regards to deal with these things. Farmers and agricultural producers in any field know that if the consumer does not buy it, you cannot sell it. There is no point in raising it or growing it.

I wonder if there should not be teams of scientists that oversee the whole thing beyond the political sphere to deal with the situation before us. It is moving very fast.

Dr. Ogilvie: We need veterinarians better trained in public policy and better resources to be able to stand up and answer the hard questions that deal with ethics and policy and issues of perception — not just science. I think that we have a role to play there. Do the good research and then turn that research into good public comment for the development of strong policy.

Senator Day: Are you teaching your students? Are you preparing your students?

Dr. Ogilvie: We are trying out best. We get good credit on our students, but you can imagine teaching them a lot of different animals. It takes a lot of time. You know that a human physician is just a veterinarian who chose to specialize, do you not?

The Chairman: We will call before the Senate committee, Heather Anne Grant and Ralph De Long, is it? Yes. They both have short presentations and then we will go to questions.

Ms Heather Anne Grant, Special Projects Researcher, Agricultural Development Institute: This is a bit of an impromptu and on behalf of my team at the Agricultural Development Institute, I want to thank you for taking interest in the Agricultural Development Institute and inviting me to come and speak this afternoon.

My formal education is as an economist both here at the Nova Scotia Agriculture College and at the University of Alberta in Edmonton. I am the Special Projects Researcher at the Agriculture Development Institute, ADI, is the Special Projects Researcher.

In the spring of 2000, the provincial government here in Nova Scotia cut funding to its Department of Agriculture and Marketing. With that, disappeared a portion of traditional extension services that were provided to producers at the farm level. After that, the government went to the industry and said, ``If you value these services, please find a different way to deliver them to yourselves.''

A committee was formed to look at land grant universities. They looked at just taking a bunch of money and providing subsidies. In the end, what came about was this Agricultural Development Institute, which is very unique — the first of its kind in North America.

Some of you who may be familiar with New Zealand agriculture may see some comparisons. A Board of Directors, the majority of whom are primary producers of various commodities, runs it. That is a bit of background information.

I would like to provide you with an outline of our vision and milestones; our service areas; our activities and accomplishments thus far; our Web site at ``Agri-ville.com;'' our resource contact centre; an upcoming conference; and, finally, our evaluation process, how we are being accountable to the industry.

The Agricultural Development Institute's mission statement is ``Providing innovative development services that empower the agri-food industry to create new value.'' I think we have the best mission statement in the agri-food industry. There are two elements that I really love about this, the first is ``empower,'' and the second is ``create new value.'' Everything that we do at ADI reflects this.

We are going to empower the agri-food industry, producer, processor, retailer — whoever it may be — to create new value, to be more profitable, to be more successful, to bring more to the agri-food industry. We will give them the tools to do what they need to do.

With respect to our timelines and milestones, I already mentioned that an industry steering committee was formed in the spring of 2000 to look at how to fill a gap that has been realized here in the industry. It was that group who decided to develop this Agricultural Development Institute.

Our first official board meeting occurred on January 11th of 2001. The following March the board decided on its strategic planning. With this, they held a bunch of consultations and workshops around the province and asked producers and producer organizations what they valued in traditional extension services. What did they see Agricultural Development Institute doing? At this time, I should add that our Executive Director, Mr. Dale Kelly, was hired on. He is a phenomenal individual with great vision. I learn a lot from him.

In May and April of last year, we began hiring our staff and we opened our two offices. We have one in Kentville, Nova Scotia, on Webster Street, and we have one here in Truro, which is where I am located, just down the road at Agri-Tech Park.

I believe you have our brochure. That document contains a list of all of our staff and our areas of expertise and what we provide to the organization, the agri-food industry here. I will not get into that, but we have a variety of expertise from agronomy and plant science to animal science and integrated pest management.

I believe that, apart from our organizational structure, what sets us apart is that the people who work for ADI are dedicated, motivated and passionate about the agri-food industry. That is what makes us unique. I learn a lot from them and I enjoy going to work every day.

June 5th of last year, our Board approved our business plan. In October 2001, we launched our Web site and opened our resource contact centre. I will talk about that in more depth shortly. We have a conference coming up and I will talk a bit about that later, too. Although we have not yet operated officially for a year, we are proud of our achievements. This time last year, we did not even have an office.

I would like to talk about our service areas. Because we are a new concept, people frequently ask us what we do. All of our activities can be summed up into four broad areas. The first is knowledge and information brokering. This does not mean we are just going to talk to producers. We are talking about the whole agri-food industry here — the whole supply chain. If a processor, manufacturer, or retailer wants to come talk to us, our doors are open.

With respect to research facilitation, we are not going to open up labs and start doing soil analyses. We will not be dispersing research dollars. We are going to be that middle agent who will interpret the research, take it back to the farm level and vice versa. Talk to the researchers and the people out there who are giving research dollars out to firms. What are the priorities of producers?

Our third function is alliance building. If there is an issue, we are going to bring the players together to solve it. That could be something on a very individual farm basis or on a whole industry level. This is a key component because here in the Maritimes we are really small, so we have to work together.

Fourth is innovation development and value adding. This is where the majority of my work takes place. That goes back to our mission statement. We want to know about anything that creates new value or is going to grow our industry and test it out.

We have purposely made this broad because we are going to evolve as the industry evolves. We just want to be the first point of contact for anyone in the agri-food industry. We do not want them to see a checklist and feel that they are limited or our resources are limited. If they call us with a question, we will help them out.

With respect to our activities and accomplishments, we conducted 852 farm visits between April 16 and December 31. In this period we also held, hosted, or partnered 24 workshops and field days with other 650 participants. We have produced over 50 fax sheets and articles that are for producer groups, certain events, or posted on our Web site. We are working on 16 different research and development partnerships.

Our staff has attended close to 150 industry meetings and conferences across North America, not only for information gathering but also for information transfer in the sense that they are presenting their ideas, also.

Next are Agri-ville.com and our Resource Contact Centre. Agri-ville.com is our official Web site. We have partnered with a firm out west that was developed with seed money from the federal government and I believe Alberta Agriculture.

When we first came together as an organization, we had long discussions about what to do with a Web site. A Web site is a marketing tool as much as an outlet for information for our producers. With Agri-ville.com, we were able to provide producers in this area with information on a national scale. The site has chat rooms where producers can speak to other producers across the country. We have a few British producers that join online. There are discussion groups, articles, daily news and links. We have over 150 Maritime registrations and counting.

Our Resource Contact Centre, RCC, is located in our Truro office. This centre is really unique to the industry. We have two full-time staff and we hire part-time students from the A.C. to work evening shifts. The centre is open from 7:00 a.m. to 9:00 p.m., Monday to Friday, and we have a phone, toll-free fax, and e-mail. Those in the agri-food industry can send in their questions and we have a 24-hour guarantee. We will get that information out to them and answer their question. That has been very well received. We have handled more than 300 requests since October 1st when it opened.

Our upcoming conference will be held February 27 to March 1. We are very excited about this. Frank McKenna and Dr. Lowell Catlett are our two keynote speakers. Everyone knows who Frank McKenna is. Dr. Lowell Catlett is a PhD from New Mexico State University. He is a futurist and who will be giving his predictions and challenges for the agri-food industry in the years to come.

We will offer six different sessions that deal with new opportunities, function of foods, alliance building, on-farm food safety, and consumer trends. Our producers or participants can choose four of the six sessions that are going on.

We have worked hard to make this a different format. They are not simply going to passively listen to people speak. We have speakers each giving a 15-minute presentation, and we have matched each of them up with a local producer case study that demonstrates the theory or the concept that the other is talking about. Then we will have facilitated discussions. We are quite excited about this format. It is something new.

Finally, I would like to mention our evaluation process. Typical of anyone who conducts a workshop or survey we ask for feedback. In the last month we have had an outside firm conduct focus groups with the industry to get their feedback on how they feel we have been responding to their needs. We have an annual report that will be distributed.

As a parting thought, I will leave you with this one quote, ``Do not go where the path may lead but go, instead, where there is no path and leave a trail.'' We, at ADI, believe that we are doing something that has never been done before, and we feel a bit like pioneers. Thank you very much.

Senator Day: Mr. Chairman, I invited Ms Grant and another one of her colleagues who is hiding in back and should be up here, as well. They were both at the reception last evening and were telling me about what they were doing in this new initiative.

Senator Hubley and I thought it would be a good idea if they came here today to tell us a little bit about this exciting initiative. I must say the enthusiasm that I felt from the both of you in our discussion last night is reflected here again today. I would like to compliment you for your presentation. Well done.

Mr. Ralph De Long, Chairman, Nova Scotia Egg Producers: Thank you, Mr. Chairman, Honourable senators. I would like to thank you for squeezing me in at the end of your day today. My brother and I have a farm in Lunenburg County. We have egg production, grading, and sales. We have replacement pullets. We have beef cattle, Christmas trees, and we also have a mail-order wreath business. On top of that, I am Chairman of the Nova Scotia Egg Producers, so I am presenting here on behalf of that group. I would like to thank the committee for the opportunity to make this presentation.

The Nova Scotia Egg Producers, formerly the Nova Scotia Egg and Pullet Producers Marketing Board, represents the egg and pullet producers of Nova Scotia. The industry has a farm gate value of over $31 million. The Nova Scotia egg quota is equal to 757,000 laying hens or approximately 4 per cent of the national quota.

Agriculture in the Maritimes as in the rest of Canada and throughout the world is facing many challenges. Reductions in the support from the provincial and federal governments have left agriculture in an impossible situation. On the one hand, governments are reducing their support for agriculture through specialists, research, and development. On the other hand, governments are increasing the burden on primary industries with more stringent environmental requirements, food safety assurance, labour standards, reports and record requirements, and by downloading of costs. As primary industry faces the changing environment, smaller producers and smaller regions are less able to survive or to be sustained in the long term.

The egg industry in Nova Scotia operates under the national supply management system. This system has allowed egg producers to maintain modern farms, utilizing world-class technologies. The stability that the supply management provides the egg industry has made it possible for us to be proactive in the areas of food safety and animal welfare. Our on-farm food safety program is a world leader and the guidelines in the industry's code of practice set high standards for animal welfare and husbandry that even now are being reviewed for the possibility of setting them higher still.

As well, egg producers view supply management as our safety net. It allows us to obtain our income directly from the marketplace rather than looking to government. Very simply, supply management has been good for not only egg producers but also for their hens, the consumer, and the public purse. To ensure this continued success, we ask the federal government to continue to remain committed to maintain the legislative and regulatory framework under which supply management functions.

Many see prosperity of Canadian agriculture as increased exports. For many commodities, this may be true; however, for commodities such as eggs, which can be produced anywhere, the export market is characterized by oversupply and prices below production costs. There is no prosperity in this type of market. As well, the removal of Canadian border controls would be extremely detrimental to the egg industry in Canada. Countries with lower costs of production could flood our markets with low cost eggs that are not subject to food safety and animal welfare standards that both our consumers and our governments have said they want. We ask the federal government to defend our right to a domestic supply management system and to enforce the access rates and tariffs for effective Canadian border controls.

Probably the greatest restraint for Maritime agriculture is our deteriorating infrastructure. Our road system deteriorates further each year. Power outages appear to be more common and for longer periods. I finished this report last night after 10 hours of no power all day. Air travel to and from the Maritimes has always been expensive. The cost of business travel to and from the Maritimes has to be a deterrent to businesses moving to the region or expanding into the region. We often hear about the growing importance of tourism within our economy; however, tourists will also stop coming if our roads are allowed to deteriorate further. The federal government must make the repair of the Maritime infrastructure, especially road repair and construction, a top priority.

Nova Scotia Egg Producers put a high priority on research in our region for two reasons. The first is the ability to have researchers respond to local issues. Such issues might be utilizing specific feedstuffs or micronutrients; dealing with local pathogens or toxins; responding to husbandry problems such as manure utilization, downgrading meat birds because of breast blisters, introducing new technologies; or developing and improving food products produced from eggs or poultry.

The second reason for having researchers in the region is that they can serve as educators for the students at the agricultural college. Their vision of up-to-date technical knowledge for future employees, resource and support personnel for the poultry and related industries, as well as to the future producers is essential if we are to sustain our industry. As well, existing producers are constantly seeking continuing education on the latest technology and production management methods to allow them to remain competitive.

Our board works with the Atlantic Poultry Research Institute or APRI to promote research in the region. We have worked hard to gain the support of the other ``feather boards'' both in the province and throughout the Atlantic Region. Efforts through APRI have resulted in two poultry researchers being based in the Nova Scotia Agricultural College. One, Dr. Rathgeber, receives industry support for his poultry products research, while also serving as a part- time teacher at the college. The second researcher is Dr. Fred Silversides, who is a poultry nutritionist supported by Agriculture and Agri-Food Canada. Now that these researchers are in place, efforts are focusing on replacing the poultry research facilities at the NSAC. The present facilities were built in the 1960s and are no longer usable. We are hopeful that with the help of the federal government, these facilities will become a reality.

The long-term survival of the poultry industry in the Maritimes requires that poultry research continue here. If local egg and poultry producers' specific problems are not addressed, they will not continue to be among the best-educated farmers in the world. If that were the case, one of our important competitive advantages in this region will be lost. The federal government must continue to recognize the importance of regional research and continue to support poultry research in Nova Scotia.

While we have regained most or a lot of the lost ground locally, the state of national agriculture research for livestock is alarming. During the 1999-2001 period, only 10 per cent of Agriculture and Agri-Food Canada's research budget went to animal and poultry research, while 47 per cent went to plant research. In addition, the program designed to conserve breeding populations of poultry unique to Canada has ceased. This puts us at risk of losing genes that could be valuable in the future. We urge the government to increase support of poultry research in consultation with the newly formed Canadian Poultry Research Council.

Finally, a long-term restraint to agriculture in the Maritimes has always been the price of grain here compared with the rest of Canada. The price of corn in Truro, Nova Scotia is consistently $30 per tonne higher than in Quebec. Several years ago, the federal government removed Feed Freight Assistance. They were no longer willing to subsidize livestock agriculture in the outlying regions of Canada. The result has been that livestock production in the Maritimes is slowly dying.

The red meat sector has suffered most acutely. If this sector deteriorates further, the infrastructure surrounding the entire livestock sector in the Maritimes could ultimately collapse. If the red meat sector were lost, the present cost of feed would have to rise to the remaining livestock industries in the Maritimes. The federal government must re-examine the mechanisms for equalizing grain prices in the Maritimes with those in the rest of Canada.

On behalf of Nova Scotia Egg Producers, I thank you again for the opportunity to take part in these hearings.

The Chairman: You mentioned the feed assistance or the CROW as we called it. That was the longest sitting debate in the House of Commons. I was right in the centre. We sat until 3: 00 in the morning on that. It has not been good for the farmers at either end of the country.

Mr. De Long: No. It has not been good in the north either.

The Chairman: That is right.

Mr. De Long: The repercussions are still being felt.

Senator Oliver: Do you recommend a solution?

The Chairman: I will tell you the problems we have had. Because the CROW is gone, it has taken 90 cents to $1 a bushel off our grain as we ship it. Another problem is the weed seed that comes from cleaning the grain on the Prairies that last winter they gave to the farmers and they would come to pick it up. Of course, this was to create large feedlot operations in Saskatchewan and so on.

You have a problem with getting feed in here. It was not very well thought out, in my opinion. I fought it all the way. I know that a lot of people in our party did not, but it has not turned out well in either end of the country, in my thinking.

Mr. De Long: The repercussions, Senator Gustafson, have not been fully felt yet. They are quite devastating to agriculture right across Canada. Saskatchewan is trying to develop livestock to value add. I do not know how the grain producers survive out there if they are at all. The margins just are not there.

The Chairman: Well, Senator Wiebe is trying to work on that.

Senator Wiebe: One of the big advantages that the Nova Scotia Egg Producers have, of course, is their marketing board.

Mr. De Long: That is right.

Senator Wiebe: They are able to factor in that higher cost of feed and pass that on to the consumer so that their margins still remain the same. Whereas Senator Gustafson and myself in the West, who do not have the luxury of a marketing board, and those in Eastern Canada who do not have a marketing board have to eat those high costs.

It is having quite an impact on agriculture right across this country. There is no doubt about it. It is my own little way of saying ``yea'' for marketing boards. Marketing boards have been a tremendous asset to agriculture in this country.

I hope you do not mind my little presentation here. On one side, you have got the beef producers, which is non- marketing. They believe in the free market system and they are doing extremely well. On the other side of the spectrum, you have the marketing boards and they are doing extremely well.

In the centre, you have the grain and oil seeds producers, basically in Western Canada, who are struggling extremely hard to hang on. I hope you do not mind this little commercial for marketing boards, but I think they are good.

My question is for Ms Grant. Thank you for your presentation. Perhaps I missed it in your presentation, but I imagine that you are receiving a salary, your offices, and this sort of thing. Do you charge your customers a fee for service? How do you get your funding?

Ms Grant: Well, it is no secret that the majority of our funding currently comes from the provincial government to $.3 million for three years. After that, nobody knows. There will be a change in government and priorities may change. However, we are not banking on that. One area that I am working on is at the development end of things. We plan to work at the processor/retailer level and on special projects where there will be a fee for service there in the sense that we partner with people and we work on projects. We want to become self-sufficient.

Currently we do not charge user fees to our producers. They can call us. They can access our specialists at no cost. Down the road, that may change. That is up to our board of directors.

Senator Wiebe: Do you or are you anticipating looking to private sector funding in any way or are you strictly relying on government?

Ms Grant: Private sector, if they partner on a project with us that would move our mission statement into the industry, create new value, and empower the producer, for sure. We are open to anything that will benefit our agri- food industry.

Senator Oliver: As the only Nova Scotian on this committee, it makes me feel very proud to hear the excellent reports that you two just gave. I am sure that we will take them into consideration when it comes time to draft in the report.

My question is for Mr. De Long. You said the long-term survival of the poultry industry in the Maritimes requires that poultry research continue here. My question is, if the federal government decided that as of tomorrow all research in poultry is going to be done at the experimental farm in Ottawa, in what way would you suffer?

Mr. De Long: Senator Oliver, there were a number of things in the report there. Specific problems such as certain diseases that might arise would be more difficult to be dealt with at a distant research station. We spoke about the cost of feed here. We utilize or try to figure out what feeds we could use.

It is probably cheaper to bring feed in from Venezuela than from Saskatchewan here. That has never happened that I know of but, nevertheless, being able to respond to those possibilities, the greatest advantage that Nova Scotia Egg Producers have had is the level of education of our egg producers.

Most of us — probably all of us — have at least a diploma and most of us have university degrees here from the college, from Guelph, MacDonald. Not having the poultry researchers here to teach our replacements, our sons and daughters or employees, that advantage would be lost and our ability to utilize new technologies, understand nutrition, pathology that we have to down on the farm would be lost. If that advantage were lost, the competitiveness of our industry would be lost.

Senator Oliver: It was important to get that on the record because that really elaborates on what you said.

Mr. De Long: Yes.

Senator Oliver: As we have had these hearings, we have been looking at what can and what should be done to try to revitalize the rural parts of Canada. Someone said that the way that we farm in Atlantic Canada is very different from the way that they farm out West. Senator Gustafson, for instance, has 10,000 acres of wheat and there is no farm in Nova Scotia that big. You have indicated that you are in eggs and Christmas trees and beef cattle. Many farmers in Nova Scotia are very highly diversified.

Mr. De Long: Yes.

Senator Oliver: Do you think that we really need a national agricultural policy that would deal with your needs and with Senator Gustafson's needs and other farmers' needs all across Canada, or should we be looking at something that is highly diversified because of your special needs?

Mr. De Long: I would have to think about that a bit. I am not sure whether or not you can develop an all-inclusive national policy. We are a lot different down here because we work on a smaller land mass and our economies are quite different, concentrated — capitalized on a smaller land base. We are trying to supply our local markets.

In the case of Christmas trees, we are dealing with the New England market down through Virginia into Florida. We have diversified at home into the mail order wreath business, which is all across North America. How one responds to a local economy is quite different. Our risk management is different.

Out west, they are based on a world price for grain and red meat, whereas down here supply management is much more high profile and more important to the total dollar basket in the economy. Our safety nets are based on maintaining that governmental infrastructure. The push from producers from the Western region versus the Eastern region is different and the answers are different, in fact.

Senator Oliver: Is there any one thing you would recommend to this committee as a way to revitalize rural Canada to bring more people back to the country?

Mr. De Long: There is no magic way to put more money into the farms. Someone came to our farm and asked about buying a local farm. He wanted to know how much money the governments send us at the end of every month. There was a short answer to that question. We do not expect that the federal government is going to go subsidize every farm in Canada and make them viable that way.

How do you do it? I think it is important that you maintain an infrastructure that will allow us to do our business and make the rules by which we can work. It is better to have bad rules than no rules. Make the rules clear and support us in what we are doing.

If the government wants to listen only to the public opinion, then we will be answering questions about food safety and environment and GMOs. As long as you need the public perception, we cannot win that battle. We need the support of the government itself so that we can do our job well.

Senator Hubley: Thank you both for excellent presentations. I have a question for Ms Grant regarding the success of their program to date. You have had 313 requests to your call centre. I am wondering value-added is an important thing that everybody should be thinking about.

Obviously, that message is getting through to the primary producers. You have obviously addressed a void. Having accepted that, there may be an information overload. There must be ways and means of putting a farmer with a particular commodity in touch with possibilities for his improving that commodity. I am just wondering how you see your role there and if you might give us an example of some of the requests that you have already addressed in the number of 300 plus.

Ms Grant: Value adding is one way to create new value — one avenue through which a particular business may be profitable. We have to be careful not to overuse these buzz words and make it sound like everyone should start value adding because we know that the market will not sustain that if everyone starts doing the same thing.

Value adding is also very much geared towards niche markets, so we cannot have everyone doing that. Indeed, we must be careful that we are not getting on the theme and telling everyone to do the same thing. We are about empowering the producer and at the end of the day, they make that decision.

The real issue is the fact that in agriculture today, we are dealing with bulk commodities, raw commodities. There is just no money in that anymore. We have to start thinking of different ways to get more of that share of agriculture.

I attended the Canadian Farm Business Management Council Excellence 2001 conference in Montreal last fall. One of the speakers showed us a bunch of stats on the value of agriculture to the economy on a global level. It is going to be increasing 10 and 12-fold over the next few decades. However, the producer's share of that is decreasing by that much and it is because it is raw commodities.

Producers come to us with very specific questions. Most of the requests that we have received were very specific to production. That is another issue that relates back to the raw commodity mentality in agriculture today: production- oriented industry. We have to think more about market driven and consumer driven.

These are challenges that we face. As well, we have to deal with attitudes and perception — we have our work cut out. There is more to it than just being involved in that transition.

The Chairman: Do you have an example where that has worked? Do you have an example of a farm that has become more profitable following your advice?

Ms Grant: I am not a production specialist and I do not usually deal with producers one-on-one. I would not want to give a specific example on behalf of my colleagues, but it is about us being there. We will give them the information and the research that they want and then they make the decision. We do see it in our industry with our blueberries and roadside markets, and things like that. I mean, there is value adding going on out there, but I cannot think of an example right now.

The Chairman: I would like to thank both of you for appearing.

Senator Tunney: I come from supply/management, too, in the dairy industry. I was paying particular attention to the statements you were making in an excellent presentation here. I have two comments.

First, every day of my life, I am thankful that I was fortunate enough to land into the dairy business. I did that at a time when supply management was just coming into being. I would not be here if it had not been for supply management. You would not be here either. There is not a week goes by that I do not talk to Lyle Vanclief at a meeting or at caucus about preserving supply management because we are always under attack.

I am also concerned at what is happening in Europe where the governments have legislated poultry cages out of existence. This is the craziest dream or nightmare that anybody could have.

I have a close neighbour with 43,000 acres and he is a professional producer. Even then, things can go wrong. His feed company put substitute flax instead of soy in the ration. The hens started dying and the production dropped right off.

Luckily, there was a lab in our neighbourhood that took control of that within five days they located the problem. They had to get rid of all of the feed. If you do not have that kind of a service and you have to go to Guelph or someplace else for it. You could have a big loss, and other producers as well, other egg producers as well. You are right about it the need for it being located somewhere in your part of this big country.

Mr. De Long: Thank you. That cannot be over-emphasized. I appreciate the number of people of agricultural background on this committee who are supporting supply management because it is the cornerstone of much agriculture in Canada. It is pretty scary when you start seeing chickens die. You want to know immediately what the problem is; you cannot wait a few days. You need to know where to go and you need to know now.

Senator Tunney: We do well to take that into account.

Senator Day: I just have a brief question for Ms Grant, which flows from Senator Wiebe's question about your revenue. I am pleased to hear that your Board of Directors has a program to become self sufficient over time. There are a lot of those phase-out programs where you become self-sufficient. Currently, are your various experts who advise the producers being paid for their services?

Ms Grant: No.

Senator Day: My other question is equally short in relation to value added. It is really more of a comment, but you can respond if you like. I see things in the marketplace and I am not sure if these are value added, Mr. Chairman and Ms Grant, or if these are just marketing.

If you take a potato, for example, and wash it and wrap it with aluminum foil, then sell it for twice as much as you otherwise would, I am not sure that that is adding value but it is certainly adding money to it, anyway.

Ms Grant: Yes.

Senator Day: Are we including that kind of marketing?

Ms Grant: It could be as basic as that, yes. Definitely.

Senator Day: Is it the same thing to take an apple, shine it up and put a seal on it?

Ms Grant: Yes, most definitely, yes. It goes back to that raw commodity mentality. Maybe it does not take much to really add value because we are so used to dealing in bulk commodities.

Senator Day: There are people out there who are prepared to pay a lot of money for perceived quality.

Ms Grant: It is all about presentation. Right?

Senator Day: Precisely. You are involved in that kind of thing?

Ms Grant: Yes. We move with the direction of the producers who call on our board of directors and us. We are open to everything. We have a lot of projects underway that deal with many issues, but those are certainly the type of things that we see as moving the industry forward. As I said, that is one avenue. For certain businesses, there are other ways to create value, too, but value adding in all its dimensions is one specific example.

The Chairman: I want to thank you again for appearing and for an interesting time.

The committee adjourned.