Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 15 - Evidence - May 1, 2003


OTTAWA, Thursday, May 1, 2003

The Standing Senate Committee on Agriculture and Forestry met this day at 8:35 a.m. to examine the impact of climate change on Canada's agriculture, forests and rural communities and the potential adaptation options focusing on primary production, practices, technologies, ecosystems and other related areas.

Senator Donald H. Oliver (Chairman) in the Chair

[English]

The Chairman: Good morning, honourable senators and friends. I would like to call the 28th meeting of this committee on the impact of climate change on Canada's agriculture, forests and rural communities and the potential adaptation options to order.

[Translation]

Honourable senators, we will be continuing our study on the effects of climate change. First, I would like to welcome you, my colleagues, and those who are here as observers. I also welcome the Canadians who are watching our proceedings on CPAC or on the Internet.

[English]

Over the past few weeks, we have listened to various witnesses who explained to us the science of climate change while focusing on adaptation issues. This morning, honourable senators, we have invited three distinguished scientists. We will hear from Dr.John Perez-Garcia, who is an associate professor in forest economics with the Center for International Trade in Forest Products at the University of Washington. Dr.Perez-Garcia's research at the centre includes analysis of linkages between international trade in forest products and the environment using international trade models.

Also with us today is Dr.David Burton, who is the Nova Scotia Agricultural College's first Climate Change Research Chair. Dr.Burton's research primarily focuses on the greenhouse gas nitrous oxide, which accounts for 60 per cent of all agricultural greenhouse gases produced, and how climate influences agricultural production, in order to adapt to climate change.

[Translation]

We will also hear Mr. Jean-Louis Daigle, the Executive Director of the Eastern Canada Soil and Water Conservation Centre. This centre is an awareness group working in co-operation with and supporting the private and public sectors stakeholders in order to promote sustainable agriculture.

[English]

Dr. John Perez-Garcia, Associate Professor, Center for International Trade in Forest Products, College of Forest Resources, University of Washington: Honourable senators, thank you for this opportunity to testify regarding the effects of climate change on Canada's forests and rural communities. I am an associate professor in forest economics with the Center for International Trade in Forest Products, CINTRAFOR, at the College of Forest Resources, University of Washington.

CINTRAFOR is a research centre established in 1984 by the State of Washington. The centre conducts research relatedto opportunities and problems associated with trade in forest products. It investigates policies that impact forest products, markets and the environment. Research conducted by CINTRAFOR results in publications, conferences and consulting services for industry, environmental organizations and members at large of the forest sector community.

My work with CINTRAFOR involves managing and using an economic model of the world's forest sector. The International Institute for Applied Systems Analysis, IIASA, in Laxenburg, Austria, initially developed the Global Trade Model, GTM, in the 1980s. During its development at IIASA, some of the most renowned researchers in forest economics from around the globe, including several from Canada, contributed their expertise to developing an econometrically based simulation model of the world's forest industry.

On completion, the GTM was distributed to various universities and organizations throughout the world. CINTRAFOR, representing the University of Washington, assumed the model in 1987.

Since then, Dr.Peter Cardellichio and I have improved the model through disaggregating further its world regions, re-evaluating its theoretical structure, updating data and further verifying its capability to simulate the behaviour of the global forest products sector.

Analyses with the CINTRAFOR Global Trade Model, CGTM, have provided input into a wide variety of environmental and economic assessments. Economic impacts of climatic change on the global forest sector were measured with CGTM in three studies. Impacts of U.S. carbon mitigation strategies on U.S. and global carbon accounts were also analyzed. The CGTM was used to study impacts of timber supply shortages on land use allocation. Trade policies in the U.S. and Canada were also analyzed. The model has been used to simulate the development of tropical hardwood markets, examining effective trade policies on tropical deforestation in Southeast Asia and the impacts of supply constraints and trade policies on global tropical forests.

The CGTM was also utilizedto analyze market distortions and their impacts on the forest sector in Latin America, a region primarily possessing tropical hardwood resources. The trade model was used to analyze the importance of boreal and temperate forests in the global forest sector. This brief review of work with the CGTM illustrates the flexibility of the model to provide input into a variety of assessment processes involving the global forest sector.

The CGTM is an integrated model because it describes all aspects of forest products production, including forest growth, log supply, processing capacity and final demand. The CGTM divides the globe into 43 log-producing regions and 33 product-consuming regions. Log markets defined for important timber-producing regions include Chile, New Zealand, the U.S. Pacific Northwest, other U.S. regions, Coastal British Columbia, Interior B.C. and Eastern Canadian provinces, as a region; European regions; the former Soviet Union; and others.

The CGTM includes over 400 trade flows in its current specification. It summarizes changes in the forest sector using regional economic welfare measures. Nevertheless, while economic welfare measures are important considerations of forest sector policies, the model averages within-region issues such as the location of mills and other site-specific detail, which limits its ability to singularly help prescribe policy. As such, the model is a starting point for a more detailed analysis of any policy impact.

In 1993, I began to use the simulation model to analyze climatic change. My initial studies with the model were concerned with carbon flows and how policies that affect the forest sector also impact carbon flows, with their potential for climatic change. That work led to my testimony in 1997 before the Committee on Resources, U.S. House of Representatives, on how the United States should manage its forests to maximize the reduction of carbon dioxide in the atmosphere and achieve other objectives. That testimony stated three approaches for forests to help reduce carbon dioxide addition to the atmosphere: First, carbon dioxide can be taken out of the atmosphere by allowing the growing forest to absorb carbon and store it as wood; second, carbon dioxide can be taken out of the atmosphere by harvesting the forest before it decomposes or burns and storing the carbon in less rapidly decomposing forest products; third, carbon dioxide can be kept out of the atmosphere by using wood products as substitutes for aluminum, steel, concrete, brick and other products that consume more fossil fuels and release more carbon dioxide in their manufacture. The analysis concluded that by far the most effective way to keep carbon dioxide out of the atmosphere is to use wood products instead of substitutes that use more fossil fuels.

This conclusion is supported by recent research under the auspices of the Consortium on Renewable Resources and Industrial Materials, CORRIM. A recent study concluded that management of forests to produce products could reduce emissions of carbon dioxide by using more wood instead of steel and concrete in the construction of homes.

With the continued effort to use climate models in tandem with ecosystem models and economic models, a group of researchers began working on linking these models to account for simulated effects of climatic change on vegetation and what these changes may mean for the forest sector. Increased atmospheric concentrations of carbon dioxide and any associated climatic change will affect many aspects of forests, including their net productivity. Changes in forest growth, operating through timber supply mechanisms, will affect forest products markets throughout the world.

The overall net economic impact from climatic change is positive. More available wood lowers prices to consumers and leads to improvement in their economic well-being. The positive economic impact on consumers of wood products is larger than the negative impact that timber producers receive from lower prices. The study estimated the net present value of the benefits to the forest sector as ranging from U.S. $22 billion in 1993 to U.S. $32 billion over a 40-year period, depending on model assumptions. However, another conclusion drawn from the study was that uncertainty in the economic model appears to be at least as great as the uncertainty in the climate change models.

The process of linking the economic and ecological models — many model runs with alternative economic, ecological and climatic scenarios — provides useful information on the behaviour of the economic model under alternative assumptions, integrated economic/ecological results and the implications for policymakers. This work indicates that assumptions on economic behaviour and ecological interactions are important when estimating the economic effects of climate change on the forest sector. One gets different economic estimates of the impact when alternative paths of change in climate and carbon dioxide accumulation in the atmosphere are used. In addition, regional and market segment impacts are not uniformly distributed, and so they should also be considered when programmatic needs are identified.

A more recent analysis that considered three alternative climate scenarios and two economic scenarios found the potential responses in regional forest sectors ranged from decreases to increases in growing forest stocks, depending on the region of the world examined. Adjusting timber supplies to these changes in growing stocks leads to global positive change in economic welfare of about U.S.$2billion to U.S.$16billionin 1993 values. These are, however, smaller than those found in previous studies, i.e., the U.S.$22billion to U.S.$32billion.

At the regional level, the changes in economic welfare can be large and either positive or negative. In Canada, for example, losses range from U.S. $1.4 billion to U.S. $14 billion in 1993 values. The manufacturing sector losses are attributed to lost market share to other low-cost manufacturers. Gains to consumers are relatively small because the domestic market absorbs only a portion of the Canadian production.

Losses to timber producers and manufacturers outweigh small gains to consumers, leading to overall losses for the sector. Markets and trade and in forest products play important roles in a region's realization of any gains associated with climate changes. In general, regions with the lowest wood-fibre production costsare able to expand harvests. Trade in forest products leads to lower prices elsewhere. The low-cost regions expand market shares and force the high- cost regions to decrease their harvests. Trade produces different economic gains and losses across the globe, even though, globally, economic welfare increases. The results of this study indicate that assumptions within alternative climatic scenarios and about trade in forest products are important factors that strongly influence the effects of climate change on the global forest sector.

The last decade of the 20th century produced significant structural changes in the global forest sector. The demise of the Soviet Union had a large impact on global production and consumption of wood products. Efforts to sustainably produce timber in tropical forests and environmental restrictions on timber harvests significantly constrained timber supply. In addition, housing in the U.S. saw an unusually long cyclical upswing while Asian economies faltered, especially the economy of Japan.

These structural and cyclical changes are carrying forward into the new century.

In addition to the structural changes alluded to before, there are cyclical movements of consumption associated with the global business cycle. There have been several dips in consumption during the past three decades. Two dips in consumption were a response from wood using industries to higher energy costs in 1975 and 1982. A global slowdown in 1991 was also a factor in the observed decline in consumption, as is the more recent decline in consumption during the 2001 to 2003 period.

Yet these cyclical events tend to average out over time. For example, prior to 1990, the forest products industry was increasing its use of wood by 1.4 per cent annually with an average 3 per cent growth in the world economy. The collapse of the Soviet Union and environmental restrictions enacted in the early 1990s disrupted this average growth rate. Data for the last decade suggest that, on average, the forest products industry worldwide was increasing its use of wood as a raw material at an annual rate of only half a per cent, a sharp decline compared to its consumption rate observed during the previous two decades.

To summarize, estimating the potential effects of climate change cannot be considered as a precise science, nor can climatic change be considered in isolation. There is as much, if not more, uncertainty in long-term economic forecasts as there is in climatic predictions.

Many economic factors affect the forest sector, including the restructuring of Asian economies and the former Soviet Union. These economic factors can be as important, if not more so, to Canadian forest product manufacturers as climatic change.

The forest sector is composed of three categories of players— the timber producer, the manufacturer of forest products and the consumer of forest products. It appears that climatic change will benefit the consumer of forest products through more supply and lower prices.

It is ambiguous as to how climatic change may impact manufacturers of wood products. It will depend on whether lower product price, through lower wood costs, increases or decreasesmarket shares relative to other manufacturers. Timber producers are likely to seelower wood prices and less economic benefit unless they are in a position to expand market share at the expense of other timber producers.

Trade policies will be important for Canada's forest sector, since a large portion of production is exported.

The Chairman: That was an excellent presentation. You summarized that which we have been studying when you said, ``The potential effects of climate change cannot be considered as a precise science.'' A number of other professors told us that.

You can imagine how we, as public policymakers, are trying to grapple with that. I will leave those questions to the deputy chair of this committee, Senator Wiebe.

Senator Wiebe: Thank you, doctor, for being with us. I appreciated your presentation because it dealt extensively with the economics of what will be happening within climate change. In part, we find ourselves in this dilemma today as a result of economics, because countries, especially Third-World countries, are using a lot of fossil fuels to generate their industries.

Do we just leave it up to the economic sector to solve the problem, or do we as governments have to step in and provide rules and regulations to monitor what is happening out there?

Mr. Perez-Garcia: Yes, there needs to be some policymaking in this arena. I approach that from the perspective of our economic sector creating pollution, and pollution is not a commodity that is easily handled by economics. In economics terminology, it is an ``externality.'' It is dealt with outside the decision-making of the economic sector — the mill producers or the consumers themselves.

When these externalities produce negative impacts, it is the role of government to regulate them. Among the regulations that can be enforced, there are some economic principles that you can pursue. I believe the Kyoto Protocol has trading of emissions as one of those economic tools.

You have a role in this. It is to regulate, because we are dealing with pollution, which is not a commodity. That calls for some regulations. You should consider economic tools to impose those regulations when developing the policies.

Senator Wiebe: You can choose not to answer my next question, if you wish. Our country has signed the Kyoto accord. The United States has made the decision not to sign at this time. I get the impression, from studying what is happening in the U.S., that as far as incentives from the national government, and especially some of the states, are concerned, they seem to be quite far ahead of Canada in developing programs to cut back on carbon dioxide emissions. Is that a proper assessment?

Mr. Perez-Garcia: I believe so. I am not too familiar with everything that is going on with the Kyoto Protocol. I know the U.S. government has not been in agreement with it. I know that a number of state governments, non- government organizations and environmental and industry groups are demanding carbon offsets, in spite of the fact that the U.S. has not ratified Kyoto. There is progress being made on that front.

Senator Day: Mr.Perez-Garcia, my apologies for being a little late. I had to receive another delegation, nothing to do with global warming or climate change.

I am very interested in the forest sector. I am concerned about your comment that timber producers are likely to see lower wood prices and less economic benefit. From the point of view of increased costs of land and producing and managing forests, this does not bode well for the forest sector in the coming years. How do we plan to lessen that effect?

Mr. Perez-Garcia: Use more wood. Basically, we are in an oversupply situation, but I do not think that climate change is the cause.

We are making the assumption with this model that the effect of warmer climates will increase productivity. It does so in different ways in different parts of the world.

Due to that increased productivity, we will see more supply. That is just exacerbating the oversupply conditions.

The model does not, however, focus in on catastrophic losses because of insects or fire that are beginning to appear in some of the climate models and vegetation models. If that were to occur, it would actually reduce the timber supply. This is all under the uncertainty umbrella that I mentioned and is not a precise science. We can deal with these issues using simulation models to get a heads-up in terms of what might happen, but we do not know what that will be.

I have been making forecasts for the last 15 years and not one has ever been correct. That is just part of knowing what the factors are that influence these model results.

The Chairman: You have been close on a number of them, have you not?

Mr. Perez-Garcia: I seem to work my way around that when people ask me why something has not occurred, which I am able to explain. These are little games that economists play with simulation models, because they are not meant to predict the future but rather to answer the what-if questions. When we ask that question, we know that there are many things that we assume may not occur.

Senator Day: You talked about many different factors in the balancing of the what-ifs. Are you able to say that over the next 50 to 80 years of a tree's full growing cycle, from seed to harvest, global warming or climate change effects will have more of an impact than the environment, to the extent that we can predict the environmental and political regime changes that will result in more or less harvesting? How do you put these things in balance to come up with any sort of prediction?

Mr. Perez-Garcia: We do that by making different scenario runs. We run the model twice. Each is done with one economic scenario that has all the environmental, political and other factors included and different levels of climatic change. That is what my presentation alluded to. When you start changing the economic assumptions, you get about as much change as the effect of climate change itself.

Therefore, you can focus on trying to prepare or adapt for climate change, but that may be all wiped out, or it may be exaggerated, depending on how the economics work out; depending on whether you experience a strong global recovery; and depending on whether wood products consumption increases to that 1.4 per cent per year. Right now, it is low and we do not know if it is because of Russia's declining consumption. Industry is waiting for that sector to take off because they are in the dumps now. I think that they are more worried about those economic concerns than about climate change.

You will have to grapple with the uncertainty because it exists and cannot be avoided. It is a large part of whatever policy you formulate.

Senator Day: On balance, could you, as an economist, say that we should put much weight on the effects of climate change in global warming issues over the next cycle? Is that only one of the factors?

Mr. Perez-Garcia: It merits some discussion and some weight, but I do not know how much.

Senator Day: You would not overemphasize it.

Mr. Perez-Garcia: I would not emphasize it over certain trade or economic policies, for example. I would give them equal consideration.

Senator Day: I have one more question, if I may, that deals with the growing prevalence of various certification bodies throughout the world. Some of them put more emphasis on environmental issues while sustaining good forest practices. Have you had any indication that these various certification organizations that deal with forest practices are factoring in global warming trends and effects so they are able to suggest what trees should be planted and how to proceed with that kind of forest practice activity?

Mr. Perez-Garcia: I am not certain that they are factoring that in because I have not had enough contact with them to specifically ask that question.

Senator Fairbairn: I will ask you for an additional comment on the last point in your brief, that trade policies will be important for Canada's forest sectors since a large portion of production is exported now.

You come from the State of Washington and I am from the Province of Alberta, so we are in the same quadrant. You are probably more aware than many people in either Canada or the United States of the intensity of our discussions and our angst over the trade issue in softwood lumber. Could you indicate whether, in terms of economics, this is part of the trade issue? One week we may almost reach an agreement and then the next week we are not even close. For those who produce, particularly in British Columbia, is the whole issue of the trade dispute of much more significance at this time in the calculations of the industry than the focus on mitigating climate change?

Mr. Perez-Garcia: Actually, I do not recall the exact value of the trade in dispute, but I believe that it is in the tens of billions of U.S. dollars. We are talking today about climate change and economic impacts in the range of billions of dollars, but they are not that size. You could use that econometrics to weigh how important this is.

The losses to timber producers in Canada through lower market share, I believe, would be from U.S. $1.4 billion to U.S. $14billion. We are talking about roughly the same magnitude of negative impact on manufacturers in Canada. Which one is more important than the other? I do not know. Currently, I would say that the trade dispute is more important than climatic changes because the latter will occur over a period of time and the trade dispute is current and immediate, in that it affects people today. You can observe that.

Senator Fairbairn: It is on both sides of the border.

Mr. Perez-Garcia: Yes, it is.

Senator Fairbairn: You mentioned several times the collapse of the Soviet Union. Could you expand on that for us? It seems to be a major influence?

Mr. Perez-Garcia: The former Soviet Union, as it is named in my model, is the largest owner of softwood timber resources in the world. When the political infrastructure collapsed, their consumption and production of that resource also collapsed, although the resource is still there. There are indications that they are beginning to increase production again. At some time, that resource will enter the market and will have a major influence.

Senator Fairbairn: Do you see that influence coming from the various countries that used to be part of the Union of Soviet Socialist Republics? Where does Russia fit into that?

Mr. Perez-Garcia: It will be mostly Russia, from our perspective, because Russia is on the Pacific side, and it is closer to the trading region for Washington State. The Eastern European countries and the former Soviet republics on the western end of the former Soviet Union will impact the markets of Europe.

The Chairman: I have one quick question. I found it interesting that in 1997 you appeared before a committee on resources of the House of Representatives in the United States. You were making a presentation on how the United States should manage its forests to maximize the reduction of carbon dioxide in the atmosphere.

We as a committee are interested in new public policies. I am interested to know if there were some new pieces of legislation or new public policy flowing from the presentations that you and others made to that particular committee. If so, what were they?

Mr. Perez-Garcia: I do not know exactly which ones they were. New pieces of legislation did come out. I was only one of a large number of people who testified.

There were several issues being discussed. One was whether national forests should be managed in some way as to recognize their value in the carbon cycle. That arose from the problem of forest fires.

Therefore, as a result of recognizing forests for their contribution in terms of carbon, there was much interest in managing forests for health issues, i.e., reducing fire and insect risk. I believe legislation has been passed.

I must apologize, as I sometimes do not follow through and figure out what you politicians end up doing. I do believe there were some things that came out of that.

Most of the committee members recognized the contribution of forests in terms of carbon. Most recognized that we could use forests in terms of wood products, and that it is still carbon. However, many did not recognize that there is a trade-off when you use wood products versus steel, concrete and brick. Steel, concrete and brick use more fossil fuels, sending carbon into the atmosphere.

Senator Wiebe: Industry will pass their costs on to the consumer. Governments, if they provide incentives, derive money from the consumer as well, through taxation. It is the consumer, the taxpayer, who will foot the bill.

As an economist, what would you say is the best way for a government to direct its incentive money to slow down the problem that is out there? Is it better to provide incentives to industry, or to the general population, to encourage more production of trees and better use of the land base?

Mr. Perez-Garcia: There is no single best direction. Probably, a portfolio of different policies will have to be enacted.

I would encourage the implementation of any policy that uses market forces. I do not want to provide incentives to industry by handing them cash to do something about climate change. You would want to use a market force. If they are creating pollution, try to make the industries recognize that, and that its reduction should be incorporated into their cost structures. There are market tools that you can use.

I do not believe that there is a single best policy that will save everything. It will be a combination of different policies. That will be your work.

Senator Day: I am still concerned about your prediction that the timber producers are likely to see lower wood prices at a time of extra demands on them in terms of forest management, environmental issues, et cetera. You are doing economic modelling and socio-economic modelling, along with modelling for climate change. You have given us a number of suggestions on mitigation. Use more wood and wood products as substitutes for other products to keep carbon in check. Other than mitigation, is your modelling exercise able to predict any precise adaptive measures that the forest industry might take?

Mr. Perez-Garcia: No. Adaptation is probably a weak point in the model. You can adapt slowly by changing the source of your supplies. You might want to plant more drought-resistant seedlings and things of that nature. I do not account for that type of adaptation.

Regarding lower prices, the model is saying that prices will be lower from a base number. The lower prices do not force the industry out of business. Businesses still interact, make profits and continue on.

Senator Day: Maybe not all the same players.

Mr. Perez-Garcia: That is right. They will suffer a loss relative to that which would have occurred without climate change, but they continue functioning as a business.

The Chairman: Professor Garcia, thank you for coming today and presenting such an excellent paper. Next week, we will be talking to some professors from the U.K. who are using the Hadley Model. Some of your answers will help us prepare questions for them.

The Chairman: We will now hear from Professor Burton.

Dr. David Burton, Climate Change Research Chair, Nova Scotia College of Agriculture: I would like to begin by saying what an honour it is to have an opportunity to present before the members of this Senate committee.

Today, I will speak to the adaptation to climate change in agriculture from an Atlantic Canada perspective.

We have spent the last several decades grappling with the issue of the sustainability of agriculture in Canada. Indeed, a report by this committee, ``Soil at Risk,'' brought this issue to the forefront. ``Soil at Risk'' identified the need to improve soil management practices to ensure the sustainability of our soil resources. This committee's mandate is not dissimilar; it is examining the sustainability of our agriculture production systems in light of a changing climate. The ability to develop management tools that will allow the economic production of our food and fibre without compromising the fundamental resources upon which agriculture depends lies at the heart of both issues.

Adapting to climate change is about developing better tools and practices to respond to the socio-economic and biophysical environment. Agriculture is fortunate in that many of the tools and practices required to respond to the potential impacts of climate change are also of value in the mitigation of greenhouse gas emissions and in the protection of our soil, air and water resources. Indeed, the practices that address a broad spectrum of these issues on the farm will include the issues of profitability, and will be those with the greatest likelihood of being adopted by the agricultural community. Agriculture producers are not interested in single issues, but they are interested in approaches that will address a multitude of issues.

What are the issues that agriculture in Atlantic Canada faces in addressing the climate change issue? One approach is to do an analysis of the strengths, weaknesses, opportunities and threats. That is what I propose to do today. My focus will be from an Atlantic Canadian agricultural perspective.

One of the strengths of agriculture in Atlantic Canada is its diversity. Atlantic Canada is fortunate in possessing a diverse agricultural sector, which, as in natural ecosystems, brings stability and the capacity to respond to change. While beef and dairy are dominant in the Atlantic region, there is also representation from vegetable production, fruit production and field crop production. This diversity is expressed both regionally and locally, with a high number of mixed farms.

This diversity is also reflected in terms of the resourcefulness of the producer community. Atlantic Canada enjoys one of the most highly trained groups of producers in the country, with 43 per cent of producers in Atlantic Canada having education beyond high school. That is the highest for any of the regions in Canada.

Interestingly, producers in Atlantic Canada are also the most aware of climate change issues and are the most willing to address them. A larger percentage, 68 per cent, believe that they should be taking responsibility for reducing greenhouse gases and for supporting voluntary action to respond to the climate change issues.

These figures come from a report by Agriculture and Agri-Food Canada that surveyed attitudes of agriculture producers to the climate change issues and the mitigation of greenhouse gas emissions. It is referred to as Aubin 2003, and is cited at the end of my presentation.

Atlantic Canada is one of the most aware regions on the climate change issue. The region also enjoys a strong linkage between the rural community and agriculture. Agriculture is still a strong force in the rural community and is well respected. A large percentage of the population remains aware of the agriculture enterprise and its role in the production of food and fibre. As a result, agriculture is still viewed by most as a desirable and productive component of the community.

I would like to move on to some of the challenges or weaknesses that may lie before us. One concern, which is true across the country, is profit margins. In Atlantic Canada, this is of particular concern because in four of the last five years we have had lower-than-average rainfall and drought has challenged some of our field crop production systems.

Input costs increase annually but returns do not always keep pace. The increasingly small difference between input costs and returns increases the vulnerability of the agricultural sector and limits its ability to respond to other environmental issues. This is compounded by the high debt ratios that burden many of the younger producers, who are often the most innovative in providing leadership in the response to climate change. Their high debt ratio will limit their ability to innovate and reduce their desire to take on risk.

Another concern is the age of the agricultural community. Who will be our future producers? The average age of producers in Atlantic Canada is 53 years. In this survey conducted by Agriculture and Agri-Food Canada, 36per cent indicated that they were intending to retire within the next five years. We may well lose a considerable body of expertise and I think that is of grave concern. That number is not very different in the rest of the country.

Another concern from an Atlantic perspective is that we are a small piece of the pie. Based on the 1996 Statistics Canada Agricultural Census, gross revenues in Atlantic Canada represent approximately 3.5 per cent of the total gross agricultural revenues in Canada. When national programs are being considered or when industries look to their strategic opportunities, Atlantic Canada is not necessarily one of the big players that appear on the to-do list.

Another observation, which is either a strength or a weakness, is the concentration of the agricultural sector in Atlantic Canada. Atlantic Canada has the second highest degree of concentration, second only to Quebec. In Atlantic Canada, 23 per cent of agriculture producers are corporate owners, compared to 27 per cent in Quebec. Across the country, the average is 17 per cent. There is a much higher degree of corporate ownership and a move to a higher concentration of agricultural enterprises. The implications of climate change for the more concentrated ownership and the corporate ownership are not clear. Is this an opportunity or a concern? That remains to be seen.

Tools for adaptation: We have few identified tools to allow producers to adapt to climate change. We are still debating how climate change will be expressed within the region. Research into climate change and our potential responses in agriculture is at an early stage and is not well funded. There is limited capacity within universities and provincial extension services for the development and delivery of new agronomic concepts and tools such as those necessary for the adaptation to climate change.

Producer awareness is also of concern. In that same survey, only 24 per cent, or one in four, of agricultural producers were aware of the climate change issue. Earlier, I referred to a number of producers who were willing to take on their responsibility to reduce greenhouse gas emissions. I should have indicated that that number was of the percentage of those who were aware. Therefore, the figure would be 68 per cent of the 24 per cent who are actually aware of the issue. I should have made that point more clearly.

Only one in four agriculture producers is currently aware of the climate change issue and we need to address that situation.

Having said that, the Atlantic region has the greatest degree of awareness. That is an opportunity.

Another concern is producer skepticism. One third of agricultural producers believe that there is nothing to be concerned about in terms of climate change. This group may resist adoption of practices to respond to climate change or the mitigation of greenhouse gas emissions.

Also, a number of producers indicated that government assistance would not change their perspective and would not increase their willingness to adapt to climate change or mitigate greenhouse gas emissions. This is a matter of concern.

What are the opportunities? Climate change may present some significant opportunities for Atlantic Canada. The relatively short growing season is one of the challenges in Atlantic Canada. Some of the general circulation models predict that the climate in Atlantic Canada may become warmer and wetter.

I believe that this committee has heard from some of the representatives from Agriculture and Agri-Food Canada who are doing this modelling. I make reference to a report that Andy Bootsma and his colleagues from Agriculture and Agri-Food Canada have prepared on potential scenarios and impacts for Atlantic Canada. That is cited at the end of my report.

There is an opportunity to introduce new crops or alter crop rotations within the region in response to the higher heat units that would be experienced. In particular, Mr. Bootsma considered the possibility that the area devotedto a corn-soybean-grain rotation could be expanded and noted the relevant economic impacts. I will present that data in a moment.

There could also be improved yields from existing agricultural rotations as a result of a longer growing season, carbon dioxide fertilization effects and warmer temperatures.

I have presented two of the figures from the Bootsma paper in my submission. They simply reflect their interpretation of the impact that general circulation models would have for the region.

We do not have adequate future data scenarios for Atlantic Canada. The general circulation models that currently exist are at too coarse a scale from both the temporal and spatial perspective to be useful to Atlantic Canada. Essentially, in these models Atlantic Canada is two data points on the overall grid that covers the earth. That is not sufficient information for all agricultural regions within Atlantic Canada.

The Bootsma paper attemptedto downscale this information using topographical differences across Atlantic Canada. Other initiatives in Atlantic Canada are attempting to use a statistical downscaling model. I mention those later in the paper.

Essentially, Bootsma concluded that over the next 30 years, we could have about 200 growing-degree-days greater warmth. Over the next 60 years, we could have as many as 400 growing-degree-days of additional heat during the growing season.

This is coupled with increased precipitation, at least in the shorter term, where we could have as muchas a 25 per cent decline in the moisture deficit. That is figure B in the presentation. It is important that if we have increased heat, that we have the water to allow for crop growth.

There is greater concern in the longer term that we may move into a moisture deficit situation, particularly in New Brunswick. That is shown in the purple portion of figure B on the slide.

One of the challenges in assessing the impact of future climate on agriculture is that we do not have good tools to analyze the what-ifs. Bootsma took a simple what-if scenario. They said that the future Atlantic climate was quite similar to that of Southern Ontario. What if the cropping system dominant in Southern Ontario were to become dominant in Atlantic Canada? What would that mean for the agricultural economy in Atlantic Canada?

Basically, they assumed that the current acreage in barley would shift to corn and soybeans. We see in this figure, which is not in the written presentation, that they looked at the possibility that corn acreage could increase to as much as 30,000 hectares and soybeans could increase to as much as 20,000 hectares, replacing the current barley growth. That would result in, essentially, a doubling of the revenues.

There is an opportunity for increased revenues as a result of climate change in Atlantic Canada. I am not suggesting that Atlantic Canada should shift to a corn-soybean rotation. This is one scenario that Bootsma suggested considering because of the information that was available.

Scenarios specific to Atlantic Canada should be examined and pursued. There is the potential for enhanced agricultural revenues as a result of a warmer, moister climate.

Climate change may be an impetus to address the risk management issues that exist within Atlantic Canada. We will have to address the issue of economic risk. Many agriculture producers in Atlantic Canada feel that current crop insurance and risk management systems are not adequate to address their concerns, and hope that this issue may cause us to revisit some of those programs.

There is also an opportunity in that this does provide us occasion to make a linkage between the adaptation to climate change and themitigation of greenhouse gas emissions, and also other environmental concerns within agriculture. In developing a strategy for agriculture adaptation to climate change, it is important to recognize that producers manage agricultural systems. They must be able to see the link between the adaptation to climate change or the reduction in greenhouse gas emissions and their present agricultural practices.

Other environmental issues and effects on profitability and competitiveness must be clearly addressed. Producers manage complex, integrated systems. They cannot deal with issues in isolation. On this basis, the policies developed to respond to the issues of greenhouse gas emissions and/or the adaptation to climate change must be placed in the broader context in which producers operate.

Strategies should capitalize on the co-benefits associated with the mitigation of greenhouse gas emissions and other environmental issues such as air and water quality. We are fortunate in that there are several management practices that address multiple goals simultaneously. These sorts of practices are the most likely to be adopted by the producer community as the value can be more readily demonstrated.

Indeed, many of the practices proposed for the mitigation of greenhouse gas emissions are essentially improved agronomy, such as improved nutrient use, soil conservation and animal husbandry, which also represent important components in our adaptation strategies.

What are the threats of the changing climate to agriculture in Atlantic Canada? The greatest threat is the frequency of extreme events.

You have heard from Professor Barry Smit from the University of Guelph on this issue. One concern is that the gradual change in climate could also result in an increased frequency of extreme events that would have a negative impact on agriculture. The economics of agriculture are such that it is difficult to deal with this greater frequency. That is one of the grave economic concerns within agriculture, particularly within the Atlantic region.

There are also concerns about other direct economic risks resulting from extreme events. Those are risks not only for agricultural producers, but also the communities that depend upon them, such as the agricultural suppliers and the food production industry in rural communities. We should not forget this.

Another element of the risk is the potential impact of climate change on global markets. Extremely fluctuating and varied global markets could have a challenging impact upon Atlantic agriculture. We cannot forget that a more variable climate may also have severe environmental consequences. Increased soil erosion and increased impact on surface and groundwater is of concern. We may have to call upon agriculture producers to enhance their soil conservation measures. We may have to help them bear the cost of that.

Pest management is another concern. The increased frequency of pest infestation, whether insects or weeds, and a change in the spectrum of pests impacting on agriculture are of great concern. Our ability to respond in the licensing of pest control products or pest practices may not be able to keep pace with the changes in the pest spectrum or pest infestations.

In Atlantic Canada, there is a unique situation because of the rise of the sea levels that may have an impact on agricultural land. Much of the agricultural land in Atlantic Canada is low-lying, dike land that is very fertile but with the potential to be affected by sea level rises. Another concern, particularly in Prince Edward Island, is that many of the groundwater systems underlie the Island and are in contact with sea water. Therefore, increased sea level rise may cause increased saltwater intrusion into those groundwater systems, impairing their use for domestic and agricultural use. There are issues around the allocation of groundwater for agricultural versus domestic use in Prince Edward Island currently. This could exacerbate that situation.

That is the ``SWAT'' analysis, if you will, that I wantedto put before you. It highlights a number of important issues such as water management. Understanding how we will manage water, both excesses and lack thereof, will be key to Atlantic Canada's response to climate change. Will there be enough water? Who will demand that water? What will be our ability to manage that water, not only the quantity but also the quality? What will be the impact on both surface and groundwater quality?

Another major issue is economic risk. We need to rationalize our economic support and ensure that programs are more stable and predictable as part of the long-term planning process for producers. I do not believe that Atlantic Canada producers think that is the case at the moment.

In terms of immediate needs, we need improved future climate scenarios for Atlantic Canada. There is continuing work through Environment Canada and the Meteorological Service of Canada to develop these future climate data sets that are of appropriate temporal and spatial scale to be useful to agriculture. We need increased tools to analyze that data to know, from an Atlantic perspective, what the implications of a change in climate may be for agriculture. Rather than take the approach that Bootsma took— simply take the agricultural practices from another region and overlay them on Atlantic Canada— let us look at how Atlantic Canadian agriculture could evolve.

There is another capacity issue that is of concern to me in Atlantic Canada, as in many areas of this country, and that is the capacity to support fundamental agricultural research— agronomy, therefore. Fertility research has decreased. Also, the capacity for extension services to deliver information to the farms has been severely curtailed over the last 20 to 30 years. We now have a much-reduced ability to deliver the message to the producer.

I mentioned earlier the survey on awareness surrounding climate change and greenhouse gas mitigation. Lack of awareness is largely because we have a much-reduced extension capacity within the provinces at the moment and this needs to be addressed.

We had a rather well-developed agronomic system that delivered the green revolution. We have largely dismantled that system and are relying upon much of the information collected during that period for our current agriculture practices. We know that our soil fertility has changed, that our climate has changed and that we are using new varieties, but for the most part, we are still using the same agronomic information that was developed in the 1960s and 1970s. That is a concern.

Engaging the university community is of concern in many of the agricultural departments across this country. Soil fertility and agronomy issues are not of central interest and importance. Too often, we are drawn into other environment issues. Those are important and worthy, but they are distracting many of our departments from focusing on these fundamental issues that are of key importance to agriculture.

There are some rather innovative attempts to engage the university community in the climate change issue. The BIOCAP Foundation of Canada and the Atlantic Environmental Science Network, or AESN, Climate Change Cooperative are trying to harness and bring together the resources of the communities to focus on this issue and engage both the agriculture industry and governments in developing the capacity to deliver this kind of research.

With that, I bring my submission to a close and simply say that an innovative approach of this nature, engaging the university community, has to be fostered to ensure that we develop the research and the extension capacity to deliver the message on how we are able to adapt to climate change and reduce our greenhouse gas emissions.

Senator Hubley: I would like to say that the committee travelled to the Atlantic region about one year ago. We did have the opportunity to visit the Nova Scotia Agricultural College, where we held hearings that were most interesting. We were impressed with the ongoing work at the university and our trip proved to be successful.

Today at the table we have representation from New Brunswick, Nova Scotia and Prince Edward Island. I come from Prince Edward Island and have been interested in the work that pertains to the Atlantic region and climate change.

I will use the model of Prince Edward Island to highlight a couple of things from your presentation. One, which is on the list of strengths, and I thank you for listing those, is the diversity of our production systems. We do have a broad agricultural sector in P.E.I. Atlantic Canada has the second highest degree of corporate ownership. I will use potatoes as the example, because the corporate ownership that we are speaking of uses that one commodity or crop for their production. I have a feeling that the impact will be much greater because of that. If we are not able to produce the variety of potato that will satisfy the needs of the industry, the industry may disappear.

In your work, would you say that you have looked at the fact that corporate ownership dictates the kind of agriculture that we carry out, which also intensifies the risk to our region? Would you comment on that?

Mr. Burton: I will preface my comment by saying that I am a soil scientist and not an economist. The question you have raised is largely an economic issue, to which there are two sides. One is that, as you identified, it increases diversity and increases vulnerability because it is a one-crop system. That is a concern. The other side is an advantage, in that a degree of corporate concentration can bring greater resources to addressing the issue. Those organizations are able to invest to a greater degree in research and innovation to try to enhance adaptation.

Which of those two sides predominates? I think it depends on the nature of the climate change and the speed at which that occurs.

Mr. Jean-Louis Daigle, Executive Director, Eastern Canada Soil and Water Conservation Centre: It is a pleasure to make a presentation to your group. I was in Truro last year and some of you may recognize me. Gordon Fairchild, our soil specialist, had been invited to appear here. He was working quite a bit with Dr.Burton here. He had to make another presentation on nutrient management this week, so he could not appear here. I will express both our views. I will illustrate my remarks with pictures. In our centre we deal frequently with the producer industry. We have to use illustrations often when we are communicating with them.

This slide shows the Upper St. John River Valley at Grand Falls, New Brunswick, where the centre is located. If you look at the left side of the screen, you will see the U.S. border. Our area is much influenced by the U.S. side, and I work with their Natural Soil Conservation Service. The potato industry has many cross-border issues.

The centre is located in a prime potato production area. I will focus my presentation on erosion and water issues. Many studies have been initiated in areas such as Black Brook and Little River. They are assessing erosion impacts on surface water quality. The Canadian River Institute, or the CRI, has initiated habitat studies of our streams to look at agricultural runoff. The area has been a natural lab for soil and water conservation education purposes.

We held a strategic planning session last year with 25 of our stakeholders. We revisited our mission. The centre was created 12 years ago, and it was time to rethink our focus, given the new challenge.

Our mission, which was adopted by vote of our stakeholders, including farmers, is to promote sustainable natural resource management with Atlantic Canada agricultural stakeholders. We are talking not only soil conservation, but also sustainable natural resources. Soil is a natural resource. We do not make good agricultural soils any more. We have to protect it.

We envision that the future development of the agricultural industry will be environmentally sound, economically viable and socially responsible. We see that agriculture is facing many social issues for which the industry is not prepared. Much education needs to take place. There are many adjustments within and complaints about agriculture.

Our mandate was revisited under the direction of our stakeholders, mostly the producer organizations. Items 5 and 6 show our new mandate areas, which include specialized advisory services to groups, not to the producer directly. We are not replacing the Department of Agriculture or any research group. We are there to assist producer organizations to better understand the policies and provide professional development, such as that which Dr.Fairchild is doing this week. This is a new role for us. It is the first partnership between our centre and the agricultural college.

The centre was fortunate to be sitting at the Agriculture and Agri-Food Canada round table, as was David Burton. We have learned many things. We have had debates on the weakness of the science on the effect of climate change on agriculture. We had many specialists around the table. Even then, I could tell that the impacts on agriculture were not being addressed. However, it was not the focus of that group. It is great that your group is doing an investigation into this matter.

We have been involved with the Agricultural Awareness Partnership Project. We received funding from the Climate Change Action Fund. We have partnered with the Canadian Federation of Agriculture, the Soil Conversation Council of Canada, the Canadian Cattlemen's Association and the PFRA western group. This is a sample package of the product of two years of work.

Our main goal was to bring awareness up a notch. At the beginning, as Dr.Burton said, farmers did not want to hear about it. Farmers who were talking about it among themselves were afraid to bring it up at the board level. Today, they are a little more enthusiastic. They want to hear about adaptation. The economic side hits them in the wallet. They want to hear about that as well as about greenhouse gas. We have quite a few challenges.

We provide advice on the C-CIARN board. Mr. Fairchild represents the centre on that group. We are also involved with the Greenhouse Gas Mitigation Advisory Committee of Agriculture Canada. We are heavily involved with the Soil Conservation Council of Canada in its Taking Charge initiative and GHG Mitigation Program.

The focus of my presentation today is the area of soil conservation and water conservation and management. We will have a tremendous challenge in the Atlantic region. If we believe that we have an abundance of water, we may be in for a surprise, because climate change and adapting to climate change will bring new pressures for which the farmers are not ready.

The Chairman: It is not dissimilar to the pressures out West.

Mr. Daigle: I will try to illustrate the differences in my presentation. I hear producer groups from B.C. and Saskatchewan. It is interesting to note the differences, but we have a common issue. We have common problems to address.

Senator Sparrow identified soil erosion as an issue for Atlantic Canada. A study was undertaken in 1985. It took a Senate investigation to trigger that study. It was a wakeup call that we were damaging and exploiting our soil resource.

We were losing crop productivity. We were losing $40 million a year due to soil degradation and erosion. That was on-farm costs. It did not include off-farm costs to the environment or the potential impact on water quality, which are now becoming big issues.

What is the value of those off-farm costs? Should we multiply that factor by three or four? We need to be realistic. There is a cost there. The cost of soil erosion in the potato belt was estimated to be $10 million to $12 million on-farm only. The centre was probably located in that belt to raise the awareness level of the producers.

The increased risk of soil erosion and agricultural runoff containing sediments cause other problems. It is not only sediments that leave the farm, but also fertilizer, nitrogen, pesticides and phosphorous. This is quite a concern in regards to our rivers.

From P.E.I. we hear concerns about the fish. What is the source of the problem? Is it only the pesticides, or is it really the erosion that carries these pesticides and bacteria to the rivers?

This photo illustrates the impact of a storm event in the St. André area over a 25-year period. There were four flash floods in one day.

In this area that you see, a study by a team from Agriculture and Agri-Food Canada estimated there are about 1,400 hectares of watershed and 55 per cent of it is in potato crops. Some 6,000 tons of soil loss have been monitored each year for five years. That is a significant assessment of our streams and rivers.

What are the figures elsewhere on the Island? When that particular area was chosen for the study, we thought that it could represent other potato production areas such as Prince Edward Island as well. The difference in climatic systems, and the water management and erosion issue are important to consider, as is the annual total precipitation. In Atlantic Canada, we have in the range of 1,000 millimetres per year, which is close to the figure in some areas of British Columbia. How all of that rainfall occurs is something to consider. We are seeing intense rainstorms in New Brunswick and in P.E.I., but in Nova Scotia, in the valley, they have droughts. Within the region there is quite a difference in the annual rainfall distribution.

I have a study that has just been published that I wanted to bring to your attention. I could also provide a copy of the report to the committee. The study concerns conservation implications of climate change, soil erosion and runoff from cropland. I used part of this study in the presentation today. We are finding that change in the precipitation regime, certainly with increased storm intensity and frequency, will intensify the risk of soil erosion, runoff and environmental and ecological damage. This information is derived from a working group struck by the Soil and Water Conservation Society. Some key Canadian leaders have participated in this study.

There are known solutions to the risk of adapting to soil conservation, sediment, and reducing fertilizer and pesticide loss to our streams. One is better crop rotation— strip cropping— but that means accepting a change in practices for how we farm the land. There is a barrier to farmers accepting the change unless they are convinced by the practices. Other practices, such as winter cover crops, green manure, conservation tillage and successful residue management have been implemented, particularly residue management, which has been effective in Prince Edward Island. We would like to have that system in New Brunswick. We would like the farmers to exchange information on these practical solutions that seem to be working for P.E.I. We need to share the information.

The Chairman: Does that include zero tillage?

Mr. Daigle: Yes, that includes zero tillage in Atlantic Canada, but it has not been widely adopted yet.

The Chairman: Why is that?

Mr. Daigle: Zero tillage in potato production would be a challenge. There has not been much documented research to demonstrate that zero tillage was truly effective because of our climate conditions. Instead, I would say drainage is a must from a farmer's point of view since zero tillage will work in a well-drained and well-managed land area for the most successful producer. However, this has not been documented yet.

Again, there are more expensive solutions for adapting to climate change and more precipitation. One is the cross- slope and contour farming. Again, the problem is getting farmers to accept the changed practices.

Other solutions may include grassed waterways that would mean the sacrifice of arable land. Sometimes, converting 10 per cent of the land to grassed waterways or diversion terraces, with the value of land sometimes ranging from $4,000 to $5,000per acre, is not rare in Prince Edward Island and in New Brunswick. It is certainly a sacrifice. How is that land to build structures to reduce erosion and enhance the environment replaced?

Land drainage enhancement in Newfoundland in areas of high precipitation could be good. The U.S. is starting to experiment with nutrient and sediment control basins just across the border. This is a way for them to protect the pristine waters such as long lakes. Canadians have invested a great deal of money in that area of cottage country. The Americans have demonstrated that there are other ways to control and reduce nutrients and sediment. The work has been ongoing for about 15 to 20 years.

Next we have water conservation and management needs. I want to speak to some of the aspects that Mr.Burton raised. I am from an engineering background and have seen many challenges over the last 25 years of my career. One of those is the increasing requirement for supplemental irrigation — competition for available water resources from surface and groundwater. Certainly, the issue in Prince Edward Island is that there are many questions to be answered about the groundwater.

We are not prepared for the need for water sourcing infrastructures in Atlantic Canada. We have not built infrastructures — canals, irrigation systems or water reservoirs — as they have done in the West. We do not have the mechanisms in place yet. This is what faces the valley in Nova Scotia. The farmers are asking themselves if supplemental irrigation is feasible in Atlantic Canada with all of the rainfall that they receive.

We could have increasing risk of floods in areas sensitive to floods, or watersheds. Watershed groups, fishermen and many other water users are concerned. Again, coastal zones of New Brunswick, Prince Edward Island and Nova Scotia are at risk of the sea level rising. There are flood plains in the Lower St. John River Valley and dike lands— a very unique construction by the Acadians — in Nova Scotia and in P.E.I. How will those dike lands be protected and how will flood waters and sediment be controlled?

There are two sides to the area: We can have intensive rainfall in one year and in the next we can have drought. This is the reality that we may face in Atlantic Canada. If we do not see that on a regular basis, as happens in Western Canada where they need to irrigate regularly, we could turn to the lakes and rivers to pump that water, but that will not work. The next two slides that I will show you illustrate source water-created conflicts in 1995 where three ministers in New Brunswick received calls on a daily basis for a number of weeks from farmers in my own backyard until I was asked to resolve the issue. Access to water will raise potential conflicts, not only between farmers, but also between municipalities and other users. Therefore, we will have to start building reservoirs, but we are not prepared for that and we do not have the programs in place to address a scenario where irrigation may be feasible.

As Mr.Bootsma determined, when we tell the farmers that there is potential for a new trend in Atlantic Canada, they become scared. I raised that point last December in a consultation, and as a result, they invited Mr.Bootsma to attend their annual general meeting and conference one month ago to explain his findings. We needed to communicate those results.

Irrigated land in Atlantic Canada would only account for0.7 per cent of the total irrigated land in Canada. Why bother? Why worry? Again, if that is the way for us to keep our cropping systems of potatoes and vegetables and keep our farmers in an active rural community, then we will have to address it.

Currently in Prince Edward Island, this industry has realized that there will be a demand in terms of the interest. The industry may determine that 30 per cent of the contractual acreage would be irrigated and that would create a challenge. Where will the water come from— groundwater or surface water? On that same basis, because of the drought in Nova Scotia, a national water supply expansion program was announced last summer. Agriculture and Agri-Food Canada was to examine water supply expansion studies to determine if there is a problem in the Atlantic regions.

A consultant group was mandated to do an initial examination of and consultation with the industry. I would like to point out a few things that they came up with. They said that perhaps there is not a net shortage of water on an annual basis, when looking at the annual precipitation.

However, there is competition and potential concerns over the allocation of the resources.

The key findings in the four provinces were the availability of water in a critical period, increasing demand for other users, and concerns that water quality for irrigation and for livestock has not been addressed. Farmers are also concerned. It is not only the ordinary citizens. They would like to know more.

There is a lack of regulatory consistency and efficiency. How do we bring more consistency to the Atlantic region? There is also a public perception that agricultural demand for water is jeopardizing the water supply for many municipalities.

Integrated soil and water management would be more important to us than irrigation. In a region with excessive rainfall and evaporation, we have to start looking at how to conserve the water in the soil. Irrigation will cost money. What is its feasibility? How can we produce higher quality crops and preserve the environment? We have to look at our basic conservation practices.

The Chairman: Could you sum up in about two or three minutes in order to leave time for questions?

Mr. Daigle: In terms of riparian management, we have coastal zones and areas of high risk in low watersheds. There is dike land to be considered. Some dikes will not survive probably another year or two. We have the potential rise-in- sea-level issues.

I would like to give a few pointers. An education awareness initiative will be needed, as will tools to encourage natural resource management by agricultural stakeholders. It will take workshops, forums and educational material. As you see here, we have to bring the information to the producers. This is one thing the centre has been doing.

At the Soil Conservation Council of Canada board of directors meeting in Montreal last summer, they were looking at how to bring no-till systems into Eastern Canada in an effective way that shows benefits to the producer.

Research and development efforts will be needed to address long-term, sustainable management solutions. What is the interaction and what are the links between sediment, water quality and pesticides? We have not documented that.

The research is only starting in this area. It will take a longer commitment than three years, probably five or ten years of research, to document. Climate change adaptation will need integrated, long-term government programs and policies to address it. Climate change will have significant implications for soil erosion and runoff in Atlantic Canada, with increasing environmental pressure.

We need proactive strategies for soil conservation and environmental farm planning that farmers want to do. How can we maximize that process so that they are more aware of the coming issues in climate change and how they will adapt?

We need to improve our communication among all stakeholders on cost-effective risk management strategies and technology transfers at the farm gate if we want to sustain our rural communities.

The Chairman: Thank you.

[Translation]

Senator Ringuette: This reminds me the late 1980s, when we were trying to talk potato producers into crop rotation. We have achieved much, but there is more to do.

[English]

I perceive as consistent the great amount of research being done on climate change and its impacts on our agriculture and forestry. Evidently, there is a need to do much more. I am concerned about the transmission of the data and the communication, based on my past experience in our area, with the farming community.

Many institutions and government agencies are doing research focused on segments of climate change. We do not have a grouping of all this research for the scientific community to see the big picture of what is happening in order to analyze and transfer this knowledge to the users and the consumers.

From your past experience, the work you are doing now and the work that you see that needs to be done in Atlantic Canada, how can this committee help in making sure that all this research is brought together and analyzed in order that the big picture can be communicated to those who really need to know, the farmers?

Mr. Daigle: It is a difficult question to answer. It is true that we need to find more effective ways of communicating with the producers. This is one of the challenges that the centre has been facing. We are new at this. We are trying to fill some gaps. Many of our clients are producer organizations and producer leaders. Some of them will look at scientific results, but not many will take the time to do so. They may not take time to attend conferences.

It is a big challenge to transfer knowledge of some of the practices that may be working in one province. We know that something may be successful based not only on research, but also the practice of farmers.

A greater resource commitment is required, as Mr.Burton mentioned. It will take more resources in terms of research and finding solutions. It will also take resources for education and awareness programs, which are not there. The centre is small. We are four people trying to cover Eastern Canadain terms of communication with producer organizations. We have many calls. This winter, I did not have enough speakers to send to Newfoundland or other places.

We do try to bring in researchers from the other centres. We are trying to ensure that there are more discussion forums for producers about those challenges.

Keep in mind that it is not their priority. The priority for them is not the environment. Day-to-day economics and meeting their contracts and production needs are their top priorities.

Matters such as those that we are discussing are left behind until there is an issue. It is a challenging question. We need to find a mechanism for working more closely with the research community— the people doing research in Agriculture and Agri-Food Canada, the college and our centre.

We need to capitalize more on bringing various institutions to work together, but there must be resources. Without new resources, I am afraid it will not happen.

Senator LeBreton: I am interested in the issue of soil erosion. I am curious as to how things such as better crop rotation and winter crop cover affect erosion. I was raised on a dairy farm in Eastern Ontario in the 1950s. We grew corn. We knew that the field could produce corn for only one or two seasons, and then we needed to plant buckwheat or soy. We had to plough everything under and let the field sit.

In respect of the issue of soil erosion vis-à-vis Atlantic Canada, could it be that the arable land used is so highly taxed that the farmers would not want to give any of it up, let alone one-third of the farm, to let it rest for a couple of years?

Is that part of the problem, or is it that, particularly in Prince Edward Island and in New Brunswick, where the potato crop is huge, there are no incentives for them to diversify the crop. What could they diversify into?

Having been raised on a farm, I know how stubborn farmers can be when it comes to resisting change. Why is it that in the year 2003, crop rotation and soil rebuilding are still issues?

Mr. Daigle: Crop rotation is probably very effective, but the issue is the cost of land replacement. For example, if a farmer needed to grow 200 acres of potatoes in order to make ends meet, he would need a minimum of 600 acres to use crop rotation systematically. How could a farmer secure that extra land if it is simply not available or if it is already leased or rented? He would not be able to depend on it. The land that he rents would, therefore, not be rotated properly. He would only be able to rotate his land around his home.

Thus, there is the land ownership issue, the availability of land and the feasibility of practising crop rotation. We have not yet demonstrated to producers the economic benefits of crop rotation. This was one of the reasons for creating a centre at the outset, but we never received a research mandate to answer those questions. Farmers in Prince Edward Island are questioning the economics of crop rotation.

When the soil is degraded, how do we restore productivity? It does not happen overnight. It will take from 5 to 25 years. That is why it is such an issue.

Senator LeBreton: How do you convince the farmers of the benefits? Is there an economic benefit? Could you convince them that, if they were to put one-third of their arable land into fallow, there would be a long-term benefit? Is that then a marketing problem?

Mr. Burton: Part of the problem may not be just convincing the farmers, but rather convincing the bankers. We mentioned externalities, valuing conservation and assigning a capital value to it, such that it could be reflected in the value of the farm, and that is a challenge. Many producers understand the value of crop rotation, but getting them to realize that each year when they sit down with their bankers is a bit tougher.

Senator LeBreton: You will not hear any argument here about bankers; I know that.

Mr. Daigle: Along the same lines, I talked to bankers in Grand Falls and I heard about farmers, even a few cousins, who nearly lost their farms. I was trying to find out what happened. Was the bank demanding that they produce from a specific acreage so that they are able to meet their payment obligations? That is the reality.

Senator Fairbairn: Thank you. I am from Southwestern Alberta. I will ask you about the part of your presentation on drought severity. As I read through, I thought I was reading about my home area. We have gone through that. If we had left it alone and had taken away the irrigation system, it would have been a semi-arid desert.

You certainly face a dilemma in trying to disseminate the right kind of information to plug into issues such as potential development of irrigation systems in Atlantic Canada.

We have had much experience with this in Western Canada, but most particularly in Southwestern Alberta. Have you made any connections with institutions such as the University of Lethbridge, which has been developing a water institute? It is strongly supported by what is now the largest Agriculture and Agri-Food Canada research station in the country. It has been in Lethbridge for a long time but it has expanded. It is concerned with water management and systems of irrigation. Our problem is that we have not had runoffs or snow, except for last weekend, when I gather most of the province was loaded down with snow, although it stopped before it reached my home area. That is one of our challenges. You at least are much closer to an ocean than we are.

Even though it is a different agricultural context, is it useful to able to make those connections with folks in the West because they are trying every kind of innovation. This committee has visited that area and we all know the grim forecasts for that part of Canada, especially if what we know now about climatic change continues on the same course.

This is forcing innovative scientific thinking on the ground with the farmers in the West. That is tough, because farmers farm, but they are now, out of necessity, being drawn in as vigorous partners in this quest for a better system.

Mr. Daigle: I would like to say that there has already been an effort to look at what has been done in Alberta. I went to Alberta in 1994 to investigate their systems because of the drought issues that were beginning to surface and we had no mechanism or infrastructure concept.

Recently, in the last two years, the Prairie Farm Rehabilitation Administration, PFRA, has begun to look at the issues in the Annapolis Valley with the Nova Scotia Federation of Agriculture Valley Water Groups. There is also some interest in New Brunswick in looking at the Western expertise and how there could be improved communication between us.

Senator Fairbairn: I was also going to mention the PFRA, which is a terrific organization. One of its strengths is that whereas other bodies gather information, the PFRA gets the word out to where it is needed and the farmers trust it.

Mr. Daigle: The PFRA is not well known in the Atlantic region. We need to be careful because we do live in a different climatic zone, so we need expertise from both areas.

Senator Fairbairn: Exactly. There is no question that it is a quite different issue, but getting the information into the farm community is so difficult, according to you. In that sense, they might be helpful.

Mr. Burton: It is useful to know that the study to which Mr.Daigle referred was done by PFRA in Atlantic Canada. It is the first time that the PFRA has ventured beyond the Manitoba border. We are trying to make that linkage to the Western experience.

Senator Fairbairn: Good.

Mr. Daigle: This is only a start. I wish this had happened 10 years ago when we were struggling to find things out. Farmers are saying that there is much education awareness but not enough technical support. The department cut back on their resources. Farmers do not know where to go for assistance.

They have challenges with access to water. DFO has strict rules that must be respected — it is the same in B.C. — for the sake of the fishermen. It is very complex. We need mechanisms and policies to ensure that we capitalize on what the centre and the college can do to help. We need to bring together new resources to help fill the gaps nationally.

Senator Fairbairn: We wish you well.

The Chairman: Mr.Daigle, you referred to two reports. Could you leave copies with our clerk so that we could circulate them and refer to them in our final report?

Senator Wiebe: Welcome, both of you, to our committee. I have had the good fortune to bump into Mr.Daigle in various parts of Canada. We have had great discussions over the past year and a half. I want to thank you for those, by the way. I have never had two soil scientists before me, especially with a microphone in front of me.

Carbon sequestration is becoming quite a topic throughout Canada. We are told that once the soil is cultivated, there is a loss of carbon into the atmosphere. Could either of you explain that to the members of the committee?

Do you have any idea for how long that occurs and how many pounds would be released?

Mr. Burton: I am actually a soil microbiologist. I am a fan of the little bugs that live in the soil.

One of the reasons why soil organic matter forms is that the roots that die at the end of each year are deposited in the soil and remain there. When you mix the soil up, the organisms have better access to them and can decompose organic matter. That causes a release of carbon dioxide in respiration.

When we broke the Prairies, we had much higher soil organic matter content. Ploughing caused that organic matter to break down and release nutrients. The Prairies were so fertile because there was so much stored nutrient content present. The ploughing caused the organic matter content to decline.

We have learned much about how that organic matter is formed and deposited in soil. We are looking at practices like reduced tillage to reduce the disturbance of the soil and allow the roots to remain in the soil and form soil organic matter. There are ways to manage soil and build up the organic matter. Perhaps it would not be to the same level as when it was under native prairie, but halfway there.

There are estimates of soil degradation or soil organic matter loss in Western Canada for some of the soils. The brown soil zone has lost almost half the carbon that it had at the turn of the last century. We may not be able to put all that carbon back, but maybe half of it, and that is a lot.

The positive thing for agriculture is that carbon also builds soil structure, fertility and water-holding capacity. It makes the system more resilient. It is a good thing for agriculture to do.

Agriculture Canada out of Swift Current has done a tremendous amount of work on detailing within the various soil zones the various best practices and the amount of carbon accumulation we can anticipate. They have some very good data on that.

Senator Wiebe: Would they also have data on how much could be lost by summerfallowing?

Mr. Burton: Yes.

Senator Wiebe: Could you make a wild guess?

Mr. Burton: Loss depends on from where you are starting. There is much concern that there has been sufficient summerfallow that we are close to the bottom already. The thought with summerfallowing is that by reducing the frequency, we can gain carbon. It is not so much that we can lose more, because we are kind of at the bottom of the barrel. However, we have the opportunity to put more back.

Senator Wiebe: A number of farmers now are starting to hope that they will be able to sell their capacity to store carbon in carbon sinks to a refinery or to the government. They are concerned that if someone purchases their carbon sink, a caveat will be put on their land to ensure that that carbon remains in that soil where they stored it.

If the economic opportunity to seed that land to something else presents itself, the farmer may be tempted to start to break that land again. Does he then have to pay back the individual who purchased that carbon? How much would be lost by the breaking of that land?

Mr. Burton: There are two responses to that. Producers are talking more now about leasing credits for carbon sequestration. You would lease the credit and continue to pay me as long as I maintain the practice. At the end of the period, theindustry would have to replace the credit so that the farmer does not retain liability.

The agricultural community is pushing for that. Within Kyoto, and in Canada, this has not been resolved. Those discussions are ongoing. From a producer perspective, that is the way to go.

As a soil scientist, I ask why would we want to get rid of that carbon? We have to develop agronomic processes to deal with high-carbon soils and high-carbon futures. It is a much better system. We need to develop that knowledge so that there would be no reason that the producer would want to get rid of that carbon.

Senator Wiebe: What is the most efficient preserver of carbon? Am I better off to encourage farmers in my province to direct-seed and to continue with the type of rotation that they have been doing, or to plant that land to trees?

Mr. Daigle: That is a complex question that could involve policy issues as well. The Soil Conservation Council of Canada is looking at the same thing.

I would like to reiterate that they are proponents of carbon leasing, not selling. How long can they store it? There are all the biological systems and the use of fertilizer to consider.

In terms of choices, we need to come up with a balance. Some lands are more marginal. If the lands are well identified, they could be planted to trees. Probably we would get more carbon sequestration through that biomass.

Atlantic Canada has many trees and forests, but we need to get agriculture talking more to the forestry people in order to plant the right tree species in windbreaks or along riparian areas to improve our water quality system.

This is a challenge. We need to identify those lands that are critical for other purposes, and find a way that we as a society can compensate people for leaving land out of production for society's benefit.

We have a lack of land in some areas and we need to find a way to replace it. In Western Canada, that is a different issue. We need to continue encouraging no-till.

However, we need to continue to look at other options when the land is marginal. The farmers need to be involved in the decision-making, as do the bankers.

Senator Day: Mr. Burton, in your needs list you talk about the Atlantic office of the Meteorological Service of Canada. You say that that work needs to continue. Is there a concern that it will not?

Mr. Burton: No. There is no reason for it to stop. I would hope that it would receive additional resources. There is no plan to discontinue it.

The Chairman: On behalf of the committee, I thank you gentlemen for two excellent presentations. As I am from Atlantic Canada, it was encouraging to see such excellence from our region.

We knew upon hearing that you were coming that you would be excellent witnesses. You have not disappointed at all. It has been very useful.

We hope to have an interim report out by the middle of June. At that time, a copy will be sent to you for your response and comments. We would like to hear from you on that.

The committee adjourned.