Manitoba Committee Hansard — 30 April 2001 (Agriculture and Food Committee, Sitting 4, 37th Legislature, 2nd Session)

37-2-ag4

Manitoba — Debates (Hansard)

Second Session - Thirty-Seventh Legislature of the Legislative Assembly of Manitoba Standing Committee on Agriculture Chairperson Mr. Stan Struthers Constituency of Dauphin-Roblin Vol. LI No.4 - 6:30 p.m., Monday, April 30, 2001 ISSN 0713-9632

Member AGLUGUB, Cris ALLAN, Nancy ASHTON, Steve, Hon. ASPER, Linda BARREIT, Becky, Hon. CALDWELL, Drew, Hon. CERILLI, Marianne CHOMIAK, Dave, Hon. CUMMINGS, Glen DACQlJAY, Louise DERKACH, Leonard DEWAR, Gregory DOER, Gary, Bon. DRIEDGER, Myrna DYCK, Peter ENNS, Harry FAURSCHOlJ, David FRIESEN, Jean, Hon. GERRARD, Jon, Hon. GILLESHAMMER, Harold HEL WER, Edward I !ICKES, George JENNISSEN, Gerard KORZENIOWSKI, Bonnie LATHLIN, Oscar, Hon. LAlJRENDEAlJ, Marcel LEMIEUX, Ron, Hon. LOEWEN, John MACKINTOSH, Gord, Hon. MAGUIRE, Larry MALOWAY, Jim MARTINDALE, Doug McGIFFORD, Diane, Hon. MIUYCHUK, MaryAnn, Hon.

MITCHELSON, Bonnie MURRAY, Stuart NEVAKSHONOFF, Tom PENNER, Jack PENNER, Jim PITlJRA, Frank PRAZNIK, Darren REID, Daryl REIMER, Jack ROBINSON, Eric, Hon. ROCAN, Denis RONDEAU, Jim SALE, Tim, Hon. SANTOS, Conrad SCHELLENBERG, Harry SCHULER, Ron SELINGER, Greg, Hon. SMITH, Joy SMITII, Scott, lion. STEFANSON, Heather STRUTHERS, Stan TWEED, Mervin WOWCIIlJK, Rosann, Hon. MANITOBA LEGISLATIVE ASSEMBLY Thirty-Seventh Legislature Constituency The Maples St. Vital Thompson Riel Inkster Brandon East Radisson Kildonan Ste.

Rose Seine River Russell Selkirk Concordia Charles wood Pembina Lakeside Portage Ia Prairie Wolseley River Heights Minnedosa Gimli Point Douglas Flin Flon St. James The Pas St. Norbert La Verendrye Fort Whyte St. Johns Arthur-Virden Elmwood Burrows Lord Roberts Minto River East Kirkfield Park Interlake Emerson Steinbach Morris Lac du Bonnet Transcona Southdale Rupertsland Cannan Assiniboia Fort Rouge Wellington Rossmere Springfield St. Boniface Fort Garry Brandon West Tuxedo Dauphin-Roblin Turtle Mountain Swan River Political Affiliation N.D.P. N.D.P. N.D.P. N.D.P. N.D.P. N.D.P. N.D.P. N.D.P. P.C. P.C. P.C.

N.D.P. N.D.P. P.C. P.C. P.C. P.C. N.D.P. Lib. P.C. P.C. N.D.P. N.D.P. N.D.P. N.D.P. P.C. N.D.P. P.C. N.D.P. P.C. N.D.P. N.D.P. N.D.P. N.D.P. P.C. P.C. N.D.P. P.C. P.C. P.C. P.C. N.D.P. P.C. N.D.P. P.C. N.D.P. N.D.P. N.D.P. N.D.P. P.C. N.D.P. P.C. N.D.P. P.C. N.D.P. P.C. N.D.P.

18 3 LEGIS LATIVE ASSEMBLY OF MANITOBA THE STANDING COMMITTEE ON AGRICULTURE Monday, April30, 2001 TIME -6:30 p.m. LOCATION-Beausejour, Manitoba CHAIRPERSON-Mr. Stan Struthers (Dauphin-Roblin) VICE-CHAIRPERSON-Mr. Tom NevakshonotT (Interlake) ATTENDANCE -14-QUORUM-8 Members of the Committee present: Hon. Messrs. Ashton, Lemieux, Smit h, Hon. Ms. Wowchuk Messrs. Cummi ngs, Dewar, Gerrard, Maguire, Nevakshonoff, Penner (Emerson), Pi tura, Schel lenberg, Struthers Substitutions: Mr. Praznik for Mr. Faurschou WITNESSES: Mr. Leonard Gluska, Reeve, R.M. of Kelsey Mr. AI Tymko, Reeve, R.M. ofBrokenhead Mr.

Andy Baker, Private Cit izen Mr. Brad Mroz, Private Citizen Mr. John Sokal, Council lor, R.M. of Spring field Mr. Wayne Drul, Manitoba Vice-President, Unit ed Grain Growers Mr. Bill Chuckry, Chuckry Farms Mr. Claude Roeland, Private Citiz en Mr. Ken Yuill, Private Cit izen Mr. Brian Kelley, Pri vate Ci tiz en Mrs. Dorothy Boznianin, Reeve, R.M. of Lac du Bonnet Mr. Larry McGonigal, Private Cit izen WRITTEN SUBMISSIONS: Mr. Roger Goethals, Reeve, R.M. of Winc hester Ms. Julie Turenne Maynard, The Manit oba Chambers of Commer ce Mr. Ian Robson, Private Citizen Mr.

Wayne Drul, Manit oba Vice -President, United Grain Growers MATTERS UNDER DISCUSSION: All-Party Resolution on Federal Support for Agricu lture; Proposition present e e par tous les partis au sujet de l'aide fed erate a !'agriculture ••• Mr. Chairperson: Good evening ; everyone. Will the Standing Commi ttee on Agricult ure please come to order. Tonight the comm ittee will be hearing public presentations regarding the provincial All-Party Resolution on Federal Support for Agriculture.

For the benefit of all in attendance this evening, I would lik e to take a moment now and review some general information regarding proceedings in this comm ittee. Fir st of all, all of the normal rules, traditions, and practices which apply to standing comm ittee meetings held in the Legislature shall apply here tonight in this room. Second, it was agreed by this commi ttee at our organizational meeting on April 18 that members of the public would be allowed 15 mi nutes for presentations, followed by 5-minute question-and-answer sessions.

While this agree ment will apply to all meeti ngs of this commit tee considering this matter, the commit tee did also agree to allow some flexibil ity to the 15 -and 5- min ute guidelines. It was also agreed at the April 18 meeting that, following our usual practice, an individual may make no more than one presentation to the commit tee on this matter. Also, following our usual practice, it was agreed that presenters will appear before the commit tee in the same order as their registrations are received by the Clerk's office. In the case of presenters who are not in attendance this evening, but have their names

18 4 LEGI SLATI VE ASSEMBLY OF MANIT OBA April 30, 200 I called , the comm ittee agreed to call the names twice during the meeting and then call them once again at subsequent meetings of the comm ittee. I would like to mention to the members of the public in attendance ton ight that they are not to partici pate in the comm ittee meeting by applauding or comment ing from the audience. Also, for the information of the public, copi es of the resolution under discuss ion here ton ight are available from our staff table you may have noticed at the back. Copies of the resolution are there.

I would ask all those in attendance with cell phones to please turn off your ri ngers so that the proceedings are not interrupted. As a final point of information for all in attendance, th i s commit tee has been scheduled to meet aga in tomorrow night, Tuesday, May I, at 6:30 p.m. in Winnipeg in Room 255 of the Manito ba Legislative Bui lding. I would lik e to take a moment now and introduce the members of the comm ittee starting-yes, Mr. Penner? Committee Substitution Mr. Jack Penner (Emerson): Mr. Chairman, I wonder whether I mi ght move a substitute. Mr. Chairperson: Sure, go ahead. Mr.

Jack Penner: Wi th leave of the comm ittee, I would lik e to move that the honourable member for Lac du Bonnet (Mr. Praznik) replace the honourable member from Po rtage Ia Pra iri e (Mr. Faurschou) as member of the Standing Comm ittee on Agricu lture, effective April 30. Mr. Chairperson: I would li ke to ask the comm ittee, then, is it agreeable that the Member for Lac du Bonnet subst itute for the Member for Portage Ia Prairie here at th i s comm ittee meet i ng tonight? Is it agreed? [Agreed] Welcome, Mr. Praznik. Welcome to Beausejour. * * * Mr.

Chairperson: I would like to introduce the Leader of the Lib eral Party, Member for River Heights, Mr. Jon Gerrard; as you know, from Lac du Bonnet, Mr. Darren Prazn ik; MLA for Emerson, Mr. Jack Penner; MLA for Morris, Mr. Frank Pitura; MLA for Ste. Rose, Mr. Glen Cum mi ngs; MLA for Arthur-Vir den, Mr. Larry Maguire; the Mi nister of Agr iculture and Food, Rosann Wowchuk; the MLA for Interlake, Tom Nevakshonoff; the MLA for Brandon -West, Scott Smith; the MLA for Rossmere, Harry Schel lenberg; the MLA for Selkir k, Mr. Greg Dewar. My name is Stan Struthers, and I represent the constituency of Dauphin-Rob li n.

I will now read the names of the persons who have registered to make public presen tat ions this evening. Oh, I am sorry, Mr. Praznik. Mr. Darren Praznik (Lac du Bonnet): Mr. Cha ir, thank you. Just on a matter of log i st ics. In speaking wi th a number of my constituents and ne ighbours who are here ton ight who are not reg i stered, and I know you will be reading through this list, there are eight presenters. But, I gather, just for their information, if anyone does want to be added to this li st as the evening proceeds, they can do that, and perhaps, Mr.

Chair, you might want to point out where they would register to add their names to the list. Thank you . Mr. Chairperson: That is a good point. I think Mr. Praznik was reading ahead on my scr i pt here, because that is going to happen all in due course. But, as Mr. Prazn ik has indi cated, if you want to register and make a presentation here ton ight, you can reg i ster at the staf f table at the back of the room. Thank you. On our list so far we have Mr. Leonard Gluska, the Reeve of the R.M. of Kelsey; Mr.

AI Tymko, Reeve of the R.M. of Brokenhead; we have Andy Baker, a private cit izen; Brad Mroz, pr ivate citizen; John Sokal, Councillor of the R.M. of Springfield; Mr. Wayne Drul, Manitoba Vice -President of the Un ited Grain Growers ; Bill Chuckry of Chuckry Farms; Claude Roeland, a private cit izen; and Brian Kel ley and Ken Yu ill presenting together. If you want to register to make a presentation, please do so at the back with the staffperson there. Those are the persons

Apri l 30, 200 1 LEGI SLATI VE ASSEMBLY OF MANITOBA 18 5 reg istered to speak th i s even ing. I would li ke to ment i on to presenters that 20 copies of any wr itten vers ion of presentations would be appreciated. If you requ ire ass istance wi th photocopying, please see our staff table at the back of the room. If there is anybody else in the aud ience that would li ke to reg ister to make a presentation ton ight, reg i ster at the staff table. I would li ke to inform the comm ittee that wr itten subm iss ions have been rece ived from Mr.

Roger Goethals, Reeve of the R.M. of Wi nchester, and from Jul i e Turenne Maynard, the Man i toba Chambers of Commerce. Also, I have been adv ised that Ian Robson, whose name was called at a previous meet ing of th i s comm ittee, has si nce requested to have hi s presentation accepted in wr itten form. Cop ies of these br iefs have been prepared and di str ibuted to comm i ttee members. They are in front of you.

Is it the wi ll of the comm ittee for these wr itten subm i ss ions to appear in the comm ittee transcr i pt for th i s meet ing? [Agreed] * (1 8:40) I also want to here in Beausejour, as we have done in a previous meet i ng, indi cate to presenters that if you choose, you can si mply put your wr itten subm issi on forward and opt not to do your oral presentat ion. So you can put your wr itten subm iss ion forward. We wi ll accept that. It wi ll be taken as part of the transcr i pt for th i s comm i ttee if you do not wi sh to make your oral presentation.

I th ink that covers the bas is for the housekeepi ng that we need to do. I wi ll now call on Mr. Leonard Gluska, the Reeve of the R.M. of Kelsey, to present to the comm ittee. Mr. Gluska? Follow i ng Mr. Gluska wi ll be Mr. AI Tymko, so Reeve Tymko, you can be ready on deck. Mr. Gluska, do you have a presentation to be handed out? Mr. Leonard Gluska (Reeve, R.M. of Kelsey): Yes, there is one go i ng around the table at the moment. Mr. Chairperson: The floor is yours. Mr. Gluska: Thank you, Mr. Struthers.

I walked in here and the first th i ng I not iced was the fine des igns on the wall, but it made me wonder whether that was an example or a si lhouette of a sett ing sun and that would be symbol i c to our state of agr icultu re ri ght now. Lad ies and gentlemen of the Stand ing Comm i ttee on Agr iculture for the Prov ince of Man i toba, I have presented you wi th a text, that I, wi th your permiss ion, wi ll probably dev iate from now and aga in, but I wi ll try and conta i n myself to the text as I have presented it.

I feel both privi leged and re-inspired by the opportunity to make th i s presentati on in regard to the catastrophic status of affa irs in the gra in and oi lseed sector of our agr icultural industry. The passing of an all-party resolut i on deal ing wi th th is cr isi s in gra in and oi lseeds and the need for further support basically re-affirms my faith in the democracy as we know it in Canada, at least in th i s corner of the world. And, as I look at the copy of the resolut ion, I certa inly want to-maybe it goes wi thout say ing, but I am here to speak in support of it.

Th i s cr isi s can only be vi ewed, as we are today, on a global perspecti ve and therefore a matter that is inherent that the Canad ian government take the leadersh i p in deal ing with the challenges that have presented themselves on an internat ional level. I come here before you today from the perspect i ve of the Reeve of the Rural Mun ici pality of Kelsey. I am also act ive in var ious local and reg ional econom ic development boards over the years and other in it iati ves that are commun ity and reg ional based and provinc ial-wide.

I am a member, presently, of the Church ill North Gateway Inter i m Comm ittee. I am also

an act ive gra in producer and entrepreneur in the agr icultural industry. *(1 8:50) In my presentation to you today, respected members of the stand ing comm ittee, my intent is to focus on the grav ity and the real ity of the farm ing cr isi s in as object ive a manner as the subject permits. Some of the th ings I am about to

18 6 LEGI SLATIVE ASSEMBLY OF MAN ITOBA Apri 130, 200 1 say you have all probably heard before, and I was incl ined to say, well, you are go i ng to hear it again, but I am not going to. What I am going to say is hopefully if you have heard it before, my presentation wi ll help to sort of reinforce some of the facts and points that ex ist. Now, let us look at the big picture. To make a statement citing that this cr isis is the result of government misma nagement would be an understatement to say the very least.

The cr isi s is a result of no management at all, and I say that with all due respect, and I will bu ild on it as I go through the presentation. My presentati on today will attempt to shed some light on the present snapshot ofthe current cris i s in two parts: (

I) the present real it ies, and

(2) I am going to try and br i ng in some long-range perspectives. Present real iti es. Presently the returns on grain and oi lseeds are below the cost of product ion. These low commod ity prices do not even come close to resembling the return on the in vestments or the replacement of the equipment, let alone meet i ng the base costs of the inputs. The incr ease in cost to the Canad ian farmers for petroleum and fert il izer in one year was more than $1 bill ion, and at the same ti me commodity prices were falling.

The present ad -hoc programs have failed mis erably in address ing the program in more than one way. The support level does not even come close to addressing the shortfall created by the incr eased cost of energy comb ined with the declined returns and commodities. The process is wrought with untested formulas, huge adm ini strative costs and ti me delays. Thus, this results in promised aid arriv ing long after it was needed and also results in in equities in the distr ibut i on of th i s ai d.

And, as I was do ing my research, I ran across somethi ng- ) am going to devi ate from my text here-that ind icates to us that this is nothing new, the facts of problems with the formulas and the way th ings are being Band -Ai ded in the agricultu ral ind ustry by attempts to try and make it surv ive. I will quote you from a statement in the Western Producer in 19 92: Farmers across Canada have grown so used to being trampled by bureaucracy and politic ians, they will take anyth ing lying down.

If government announces a new program for agr icultu ral ass istance, they do it through all available media, screaming about the hundreds of mi ll ions of dollars they are spending. The next step, create a new bureaucracy to adminis ter the program, and bang, half of the mi ll ions di sappear, and as farmers we li e back and think that someone else will take care of the situat ion. I th ink we have come to such a cr isis in our agricultu ral industry here that the response I see is an all-party stand ing committee. Certainly there is recogn iti on that these Band-Aid approaches just are not working.

I ment ioned inequit ies. I want to refer just to one inequ ity in the last program we had runn ing, I think it was called AI DA, in the way that people were treated that did not belong to NIS A. They were penalized twice. Fi rst they did not rece i ve the matching contr ibut ion dollars from the government, which is indiv idual choice. They chose not to belong to NISA, so they di d not get the match i ng dollars. But, secondly, if they were eligible for any ai d from AID A, they were deducted as if they had received NI SA, had been in the NIS A program.

Again, both cases create a cash gain for the program being adm ini stered by the government. I do not understand what kind of th inking goes behind that. The cash advance program, I think, is a great program, but we have moved it now for the second year from the fall into the spring. Sure, th i s will help put the crop in the ground, but it is putti ng a crop in the ground that is not going to come back enough to cover the costs anyway. So where is that go i ng? What is the sum of the real it ies of the spring advance?

It could be creat ing a sit uation where you are digging the hole deeper. * (1 9:00) How much money wi ll go towards clear ing past-due fuel and crop input bills from the previous year? In the related agricultural ind ustry that I have been involved in, I come into contact with a lot of farm gate people. We do some truck ing; we do some custom herbicide application, so I have a large clientele, and these folks are all telling me the same story: Boy, I hope I can get the cash advance so I can pay my last year's fuel bill.

Apri l 30, 200 1 LEGI SLATI VE ASSEMBLY OF MANITOBA 18 7 Now where is that go ing to put them next fall? They are done. They are already done now probably. In all likel ihood, if that is the case, they are not go ing to get any new cred it extens ions anyhow. I do not know what the solut i on is there, but it certa inly, aga in, is a Band -Ai d type of approach to th i s problem. What happens to the farm operator, and there are a lot of them out there, who has been hav ing problems wi th ti me li nes and previous cash advances? He, in all probabil ity, cannot access the current spri ng cash advance.

So maybe I guess he puts the lights out in hi s place. If the agr icultural cr isi s is go ing to be dealt wi th fairly, equ itably and ti mely, an immed iate payout of even the presently comm i tted funds that have been comm i tted need to be adm ini stered in a si mple, efficient manner. There are ex i st i ng models that have been practised in the past, both in Canada and in the Un ited States, based on acreage payments. Acreage payments could be adm in istered through crop insurance agenc ies in each province.

The acreage records are already in place, the staff is already in place, the sav ings real ized in el imi nat ing another bureaucrat i c ti er would contr i bute to actually ai d the producers and not just appear to do that. I want to share some stat i st ics wi th you here after I say that the statements by the federal government that Canada cannot compete wi th the deep pockets of the U. S. and the European Un ion are not soundly based on any facts because the stat i st ics I am presenting you on page 4 wi ll tell you the story.

Producer subs idy equ ivalents in the European Un ion in 19 88 were 50 and in 19 9 8 were 65. In the Un ited States the y were 39 in 19 88 and 43 in 19 98. In Canada they were 41 in 19 88 and they are 18 in 19 98. What does that tell you? Is there really a support program here of any ki nd? Absolutely not. The money is gone; it has dr i ed up. Table 2 is the one that makes the story a little clearer aga in, and maybe a li ttle eas i er to understand. Farm support dollars per person: 19 8 6 versus 19 99 by countr ies.

The European Un ion in 19 8 6 contr ibuted $325 to agr icultural support in 19 8 6 and $336 in 19 99. They have rema ined constant. The Un ited States in 19 8 6 was $277, in 19 99 was $350. They have seen the need; they have gone ahead and put it in there. Japan, $5 10 in 19 8 6 and in 19 99, $566; Canada, $268 in 19 86,$163 in 19 99. The food basket that is used as a bas is for calculat ing the COLA, the cost of li vi ng allowance, in Canada is the cheapest one in the world. It shows that the sav ings per week per ci ti zen is a mi ni mum of $3 wh ich is equ ivalent to $15 6 U.S. per year.

Based on Table 2 that I just presented to you, lad ies and gentlemen, the agr icultural spending in I 999 agr iculture was bas ically taxpayer neutral. Look ing at it as the dollars that the agr icultural programs are hand ing out com ing from the taxpayer, bas ically they are null ified by the fact that the food is cheaper. However, cons iderat ion must be given to the fact that dollars earmarked for agr iculture in a government's budget does not reach all farm gates. Therefore, based on the food basket, there is another message here.

Each ci ti zen in Canada is be ing subs i dized by farmers in Canada, and that is sa i d wi th all due respect. It is nobody ' s fault, that is just the way it is. Th i s is indeed not surpr i sing because we know worldw i de that Canad ian farmers are the top producers in the world in terms of efficiency in be ing able to produce good, hi gh qual ity, safe food. Let us look at some long -term perspectives. Let us exam ine what agr icultural policy is and how it relates to other ki nds of polic ies. Agr icultu ral policy is a subset of the larger overall government policy.

Si nce our govern ment is elected by indi vidual const ituents, wh ich is the public, then the government policy, in fact, is publi c policy. Therefore, all government portfol ios, includ ing agr iculture, are mechan isms for developing publi c policy. There is another type of policy at work parallel to government polic ies and that is developed in the boardrooms of ma jor corpo rat ions. Th i s corporate policy may be, on some occas ions, parallel to publi c policy; however, the overr idi ng concern in corporate policy development is the legal obl igat ion to capture wealth.

In most agr icu ltural areas today, wealth is created, but it is captured elsewhere, and systemat ically it has taken and sucked out the old wealth from western Canada.

18 8 LEGIS LATI VE AS SEMBLY OF MANITOBA April 30, 200 1 Mr. Chair man, I am out of time? Mr. Chairperson: No, you have about half a mi nute. Mr. Gluska: Oh, my. I just want to take -1 cannot ask for an extension, can I? Do I need a motion from the standing comm ittee? Mr. Chairperson: You sti ll have your five mi nutes for questions. Mr. Jack Penner: Mr. Chair man, I would suggest that the comm ittee give some leeway.

I have paged through the report, and I think this is probably one of the better presentations that we have heard all nig ht, and I would certainly want the gentleman to be able to have enough time to present it. Hon. Rosano Wowchuk (Minister of Agriculture and Food): I would agree that Mr. Gluska should be able to finish his presentation, and we would waive our questions. Mr. Gluska: I appreciate that because I just feel I am moving into the

summary of what I have been building towards here. Mr. Chairperson: Just before you move on Mr. Gluska, then we have agreement in the committee to waive our questions and have Mr. Gluska continue? [Agreed] You would have about five mi nutes and fifteen seconds then. Mr. Gluska: I will try and tie it up in that time period. Thank you very much, Mr. Chai rman and ladies and gentlemen of the comm ittee. * (19:10 ) I think what I want to say here I am going to summarize in just a few words rather than going verbatim on the report in the in terest of time. I talked about agricultural policy.

Every nation has to address it as it relates because agricultural policy relates to a nation's sovereignty. There are other thi ngs that relate to a nation's sovereignty, which I will not build on, but it is in the text so it will become part of the records. A sovereign nation has to be able to control its debt, has to be able to maintain and protect its borders, has to be able to maintain an adequate source of energy and reserves, and maintain and guarantee a stable, national food supply. I wonder how many of those four points our nation is maybe slipping on. The fifth one is to maintain a water supply.

Let us look at agricultu ral policies and compare them to other parts of the world. In the European Union, their policy is called the farm pact. "Feed our own people" is the motto. European folks have experienced food shortages twice in this last century. They also want to guarantee a vi brant agricultural indu stry. They want to keep people in the rural areas rather than add to the problems in the urban areas. The United States, the farm policy is feed the world.

The United States Department of Agricul ture is charged with the responsibil ity of carrying out agricultural policies that are set out five years in advance. Let us look at the Canadian policy. Number one, right now there is no policy. Agricult ural Income Dis aster Assi stance, our policy is a disaster. If we have a di saster, we have a policy. Since the GRIP program has expired, the AI DA program's underpinning design was based on dis aster, and I know that folks that were in a di saster area did benefit by it somewhat, but this was not meant as a price support for commodities.

If we look at the world as a whole, Canada is the only G-8 country without a food policy to address the cost of production and return on equity and labour. Quebec, in our own country, since 19 7 4, has had a farm income stabiliz ation program, and just a few pointers. Their program sets out seven years in advance planning of what may be coming in the future. The equaliz ation income is based according to specializ ed workers in the rest of the economy of $49 000 a year. It has been in place since 19 7 4. The agricultural sectors are commodity based not blanketed as all one ind ustry.

We deserve, in Canada, an agricultural policy. No one wants a free ride. Farmers are probably the most sensitive of anybody to handouts or to the welfare mentality. The farm community deserves a policy because agricultu re creates jobs, agricult ure sustains communities, agriculture produces exports, agriculture is 12

April 30, 200 1 LEGISLATI VE ASSEMBLY OF MANITOBA 18 9 percent of our GNP. Furthermore, Agricu lture Canada employs 12 000 staff, 800 of those are economists throughout Canada. Obviously none of our ag economists have been sensitive enough to the problems to inform their mi ni ster of the state of affairs. In all due respect to them, how can they be sensitive to that if there is no policy? How can employees be sensitive to any changes? I just want to take another mi nute and talk to you about the production costs and how almost silly it sounds. A bushel of barley creates 333 bottles of beer.

Out of that, $1 4.56 goes out of that sale towards federal and provincial taxes on one case. A quarter

section of barley, on that basis, produces over $4 mil lion. Let us consider two scenarios. Mr. Chairman, what have I got? One mi nute. Thank you. If you take a one cent surcharge, well, call it what you want, on a bottle of beer, that would give you $3.33 per bushel. Add that to $2.30, it would give you $5.63 per bushel of barley. A bushel of wheat produces 57 loaves of bread. A nickel would give you $2. 8 5 more; it would give you over $5.00 a bushel for wheat. If that were the case, we would not be here, you would not be here, I would not be here talking about this. The western economy would be booming.

There would be money; there would be jobs. The immedia te answer is a cash dis tribution quickly. The long-term answer is a long-term policy. Again I suggest that the distribution be based on an acreage payment, which seems to be simplest and the fairest because you are dealing with grain production. There are downsides to everything, but let us look at something that gives immedia te cash to people in the agricultural community.

Unless the crisis is approached imme diately at both levels of the senior government with a nonpartisan attitude, which you started here in forming the standing commit tee-my since re hope is that this permeates the far east, meaning Ottawa, and hopefully this halts the decimation of our rural western Canada because if it does not, ladies and gentlemen of the Standing Comm ittee on Agricu lture, I want to leave you with a thought. We might as well go home now, and the last one to leave our rural communities has an important responsibility. They are going to be the ones that need to tum out the lights.

Thank you for your time and God bless. Mr. Chairperson: Thank you, Mr. Gluska. We have agreed to forgo questions, previously agreed in the middle of your presentation. Thank you very much for attending here tonight. Mr. Gluska: I just want to sin cerely thank you for giving me the extension of time. Mr. Chairperson: Okay, thank you very much. I have Reeve AI Tymko presenting next. On deck is Mr. Andy Baker. Reeve Tymko, do you have a presentation to be di stributed to the members? Mr. AI Tymko (Reeve, R.M. of Brokenhead): Yes, I do, but I will hold on to it for a while and present it to you later. Mr.

Chairperson: Okay, the floor is all yours. Mr. Tymko: Fir st of all, I would lik e to, on behalf the Town of Beausejour and the R.M. of Brokenhead, welcome everyone to our part of the country. I have to share with you that this is probably the most beautiful part of the province, this eastern part of the province. I think if you take a tour around the area, you, in fact, will believe what I am saying. Plus, I want to emphasize the fact that we have some of the most productive farmland in the whole province of Manitoba, which we are proud of, and we are proud of our farming community.

I would like to thank you for giving me the opportunity to make a presentation on behalf of the residents of the R.M. of Brokenhead, and on behalf of our council who authorized me to make this presentation. I am not sure where I stand. This is why I am sort of holding back with my document that I was going to hand out because with the comment that Mr. Penner made-he had indic ated that was the best presentation he has ever seen. I am not sure whether, in fact, I want to hand my presentation out.

19 0 LEGI SLATIVE ASSEMBLY OF MAN ITOBA April 30, 200 1 w (1 9:20) I am taking a lit tle different approach than, I am sure, a Jot of the presentations you have heard from as far as agricu lture is concerned. I know that the bottom line is that the farmers are not getting enough money for their product. If I mi ght share with you a recent

article in the Winnipeg Free Press, I do not know how many of you people have seen it. It is called: The java jolt. When I read it, I thought it was very, very appropriate for the type of things we are dealing with. This is written by Ilana Si mon: When the alarm clock goes of f , the first most of us think about and long for is our morning cup of coffee. But, do you ever wonder where java jolt comes from and how much of what we, as consumers, pay for our coffee actually filters down to the farmers who grow and pick the coffee beans?

We can put in whatever words we want there, but I just thought this could fit in for grain farmers, cattle farmers, whatever it may be. The answer is not a lot. Typical ly, a pound of I 00% Colombian coffee sold in North America earns a coffee farmer Jess than I 0 percent of the retail cost. Thousands of Central and South Americ an small-scale coffee farmers are just strugglin g to get by. I think that is the case in our farming community at this stage.

A few concerns before I get on with the other part of my presentation, and I guess this is a pr ovincial concern as much as a federal concern, because my understanding is that education is both provincial and federal. But, in my opinion, we must sell the im portance of agricultur e to our people. It bothers me that agricultur e is not a topic that is compulsory in our school curriculum. It is an optional part of our school curriculum. We must make all people -city and rural aware and knowledgeable of the im portance of agriculture, and how it drives our economy.

The Jesson we mi ght learn is: perhaps we look at our computers and our com puter technology, and learn from them what did they use to sell our people in the whole computer industry. Perhaps we can use some of these methods in selling the need for our agricultu ral products. I know that Ron had mentioned a lot about field costs and so on and so forth. The approach I am going to take a look at is that the end result is that the farmer is not getting enough for their product.

We talk about input costs as far as the gasoline and diesel and fertil izer and so on and so forth, but in our particular part of the province here, which is Brokenhead, we have something that, I think, contributes to our input costs greatly and affects what we get for our product in the end, and that is the drainage. I am not sure whether this is strictly a provincial responsibili ty, or whether it is something that should be shared by the Province and the federal government.

I know that Mi nis ter Wowchuk and Mi nister Ashton, in fact, have their report previously, but at this time I would like to share the report with you and address this concern. Just a bit on the background, the R.M. of Brokenhead was formed in July 19 00. It is currently made up of eight townships and 18 4 320 acres. The Brokenhead River basin separates two geological formations, namely, lim estone to the west and the granite shield to the east. This results in the Brokenhea d River being the drai nage system for the adjacent lands.

The meeting of these two formations results in some of the richest, highly productive and fertile growing land. The economy of the R.M. of Brokenhead is predomin antly agriculturally based, with the largest grain deliv ery point in southeastern Manitoba located near Beausejour. Due to the fact that the Brokenhea d Ri ver runs through the entire length of the municip alit y, this results in 12 thir d-order drains running through our municipality in order to reach the Brokenhead River.

I think, if you check on the provincial map, in fact, the size of this municip ality, we have the greatest number of thir d-order drai ns. These thir d-order drains drain water from the R.M.s of Lac du Bonnet, St. Clements, Reynolds, Springfield, the Town of Beausejour, as well as lands in the R.M. of Brokenhead. With page 4. I think what I will do, I will just leave that, and you can read that at your

April 30, 200 I LEGI SLATI VE ASSEMBLY OF MANITOBA 191 leisure. We will go to page 5. This is where I feel that this affects our particula r situation because what happens is that the fanners in our area are not on the same playing field as a lot of other fanners are because of the economic losses that result of the fact that we do not have the proper drainage. I know a lot of other areas are concerned with retention of water. In fact, we are faced with a dilemma where we end up having to deal with drainage.

For my particular presentation here, I chose two of the 12 thir d-order drains located in our munici pality to ju stify and support the need for a comprehensive maintenance and capital upgrading of the provincial drains located within our municipal boundaries. The reason for my choices are as follows: I chose the Bachman Drain, which is one of the longest drains. As well as one of the largest drainage basins located in our municip ality, this drain was originally constructed to drain approximately five sections of land. But the drainage area has been increased to drain approxima tely 40 sections of land.

Now, what has happened is I sent out surveys to landowners and people that live along the Bachman Drain. The surveys were sent out, and the return, now, if you take a look at the figures there, the total losses are as follows. I will not go through all the details. There, again, you can read that. In 19 98, based on just the people that returned their surveys, there was an econom ic loss of $1 49,368. So, in 19 98, our fanning communit y, just along the Bachman Drain, had to recover that amount of money before they were on the same playing field as the rest of the people. In 19 99, the cost, there was $15 5,385 .

Now, these figures are all documented, sent in from the dif ferent fanners, which you will be able to take a look at a little further down. In the year 2000, the loss, in fact, was $208, 475. So the total crop lost from these surveys is $5 13, 000 or half a mill ion dollars in the last three years. Again, I just wanted to emphasize that not all of the fanners had returned their surveys. So we are talking about a pretty signi ficant loss for a very small number of people. The above figures exclude input costs. That is just the loss of crops they had.

Now, if the input costs are figured in, then the costs would be indic ated on the following page, which I have done there. I have summarized them with the different years, 19 98, 19 99, and I have gone into the wheat crops, taken the total number of acres. There were, at times, the input costs for the different crops that were grown in there. You can see, in 19 98, as well as losing the grain, they also lost in input costs $171, 000 in 19 98; in 19 99, an input cost of $128,000; and in 2000, $1 92,000. So, if you take a look at the

summary at the bottom, the total input cost over the three years is approximately half a milli on dollars and from the loss of the crops is also half a milli on dollars. So in fact, for the Bachman Drain, there was basically $1 mill ion that was lost. I guess the point I am making, that is $1 mill ion that was lost strictly because we cannot get the water off the land. Now, the Lydia tt drain is a short drain. It is one of the shortest drains and drains approxima tely two sections in our municip ality, two sections and quite a number of sections in the R.M. of Springfield.

Surveys were sent out to 17 landowners; 8 of the landowners returned their surveys. The others, I am not sure why they chose. I know that when I was gathering this survey, I was advised that it is probably best to have this information in before the Estimates go before the House, so that the people would have the information there before they do their Budget. I realize that what I am dealing with, a lot of it is provincial, but I am not sure whether drainage, in fact, should be strictly a provincial responsibility.

Or whether part of the costs that would be shared with the federal government should not come from that, whether it is from the Crow subsidiz ation, whatever it may be, to deal with our particula r dilemma here.

19 2 LEGI SLATI VE ASSEMBLY OF MANITOBA April 30, 200 1 So, if you take a look at 19 98, again, I want to emphasize there are only two sections of land. In '9 8 , there was a $61,000 loss; '99, approximately $60,000; in the year 2000, $297,000. So, again, the total loss there in the last three years was $41 8,000. As my note I have made there, there are photographs and videos that are available so you can visually see what goes on there. We have that. If we take a look at page 8, there again, the same

summary, these are the input costs. The other ones were strictly crop losses. So, if you take a look at the input costs there, the input costs for the Lydiatt drain are $1 03 ,000, plus the $41 8,000 in crop. So the total estima ted loss there is, again, half a milli on dollars for just two sections of land. In our particular case because, in the Municipal ity of Brokenhead, I think that, if we generally speak about the drainage system that we have within the R.M. of Brokenhead, we would have to say it is quite good.

But our problem runs into if we get our drains to the point where in fact they are good drains, we meet up with the provincial drains, which are the thir d-order drains. They cannot handle the water that we generate as well as all our surrounding munic ipalities. Now the biggest problem we end up with is that somewhere in the report here; I state it is just lik e because we are in the basin here, all our agricultural land. Which, again I have indi cated to you, is some of the best agricultural land in the province. Because we are at the bottom end, we have to wait our tum before the water leaves us.

It all comes down here. We have high elevation that way, that way, that way, from all ways. It inunda tes on us. We are in a holding pattern until the traffic leaves, and then our water goes down. I know that for years-1 am new at this game, but my predecessor, Clarence Baker , is here. I know that Clarence and the council at that time tried to update these drains as well, and we always seem to get the same answer. Does that mean hi? Mr. Chairperson: That means you are No. with one minute left. Mr. Tymko: I was wondering if I can get an evaluation up to now. Mr. Chairperson: You probably will. Mr.

Tymko: I guess the answer we get back all the time is that there is no money. I guess I like some of the ideas that were presented here with the beer and so on, so forth; that if there was some sort of tax of that nature placed on it, in fact the farmers would have more di sposable cash. The other concern I have is that, for some reason, and I am not sure why, but every place we go, there seems to be a big push for conservation dis tricts. I have to share with you that, in our particular munic ipality, we are not the same as the rest of the province. We have a unique, different sit uation here.

We need drai nage and not conservation districts. For some reason, it seems that every time we tum any place, it seems that the only way we can access funds is if we join a conservation di strict. We keep hearing this over and over again. Again, I want to emphasize every farmer is different, every farming operation is different, every municip ality is different. Thank God we are different, but I have difficulty with people trying to come up with one solution for all of us.

We would love to bring in some of the alternative crops in our areas, but in order for us to bring in these alternative crops into the area, we do need better drainage. We can grow sunflowers. We can grow these specialty crops, but not under the current conditions where the water sits in and soaks out the crops for us. Mr. Chairperson: I hate to do this to you, Mr. Tymko, but we have gone over time. There are just a couple of mi nutes left for some questions. I do have a speaking list of people who want to ask some questions, so if we could keep our statements short and sweet, maybe we will get most of them in.

Mr. Tymko: I do not see anybody big enough there to throw me out. Ms. Wowchuk: Thank you, Mr. Tymko, and yours is also a very good presentation. What we find is each presenter seems to bring a different angle to it, and you brought the one of drainage ,

April 30, 200 I LEGI SLATI VE ASSEMBLY OF MANITOBA 19 3 so I have a couple of questions that I want to ask you. Fir st of al l, has this been an ongoing problem, or has it worsened over the last few years? Are you say ing that the munic ipality is maintaining your part of the drainage system, but the provincial drains are the ones that are the problem? Mr. Tymko: The provincial drains, in some cases, it has been 40 to 60 years since they have been maintained. They have been there, but nothing has been done. Hon.

Jon Gerrard (River Heights): Just a couple of questions to clarify a little bit about the size of the drai nage issue. You talk about two of the twelve thir d-order drains, and the losses in those two areas are one mil lion and half a mill ion roughly. If the rest of the third-level drains were inclu ded, and there was a simila r loss in those areas, you would end up with a total loss in the municipality of around $9 milli on. I do not know if these are the worst examples.

Or whether they are reflective in terms of the kind of im pact at the moment when it is difficult making a dollar in agricultur e-the drainage and making sure that this is all the more critical, I would think. * (1 9:30) Mr. Tymko: I guess the thing is I just chose these drains simply because one was the shortest, and the other one was the longest and for no other reason, just to cite an example. But I have a letter here that I would like to leave with the Chair that I just received today. It is regarding a letter we got, and it has been sent to Oscar Lathlin, Min ister of Conservation.

It is regarding another provincial drain, just to sort of reiterate what I am saying. Hon. Steve Ashton (Minister of Trans portation and Government Services): Mr. Chairperson, I certainly can testify to the conditions of some of the drains with my involvement I guess on the Emergency Measures side. As you know, of course, we have had some incr eases here for the first time in quite some time in the mai ntenance budget. I am just wondering which of the provincial drains is the priority in this area in terms of mai ntenance.

I have seen some of them dir ectly, I know they are all priorities in a way, but which ones are the drains that are in the worst shape? Mr. Tymko: I guess I would have to ask Clarence here which one does not need. They are all bad. Mr. Praznik: Just two questions for the reeve. I think you gave a great presentation. Just two things and they are basically questions just to elaborate somewhat on what you said, AI, to give people a perspective of what we have faced in this area. When the Bachman Drain was originally dug, the area that it was draining was fairly small compared to today.

Do you have the numbers on the additional number of acres that are now flowing into that Bachman Drain over the last, say, 20 years? Mr. Tymko: On page 3, originally it was eight townships and-no, pardon me, wrong place. I have it in here. On page 5 it was originally set up to drain five sections of land, and now it drains approximately forty sections of land, and nothing has changed. Mr. Praznik: Mr. Chair, just to make a point, it has not been added to. The second question, AI, is you talked about innovative approaches and different things. Conservation di stricts are not meeting the tests for out here.

Would you just take a moment to inform my colleagues about what you an d a number of the other municip alities have done to co-ordinate your drainage activity in the last four or five years; where we have had that co operation, because it is a different approach. Mr. Tymko: In the area here, what we have formed is what we call a Northeast Agassiz Watershed. What we have, Mr. Chair person, is the R.M. of St. Clements, Lac du Bonnet, Alexander, Brokenhead, Whitemouth, Reynolds and Springfield - as well as the town of Beausejour and, hopefully, Lac du Bonnet.

What we do is we meet the thir d Wednesday of each month to take a look at the drainage issues which are specific to our area. I have to tell you that the meetings that I have attended to date, it has always been drainage. I think the point I want to

194 LEGIS LATI VE ASSEMBLY OF MAN ITOBA April 30, 200 I make is that we are not opposed to the conservation part of it. If there is conservation, we believe that it has to be done. But the thing is in this whole process. I can understand the western part of the province, that conservation is probably a high priority, but here we have the reverse. Mr. Chairperson: Mr. Penner, for a really quick one. Mr.

Jack Penner: : Just very, very quickly, could you tell us in one minu te or less how you would formalize the process that you have been in , and what kind of funding mechanism you would need to be put in place that would give you the authority to do the assessments and the clean-outs? Mr. Tymko: I am not sure what you are asking. Mr. Jack Penner: Basically what I am asking is: what sort of a formaliz ation of the init iative that you have already taken as a group would be required by the Province to in itia te that kind of a process, and give you the authority by desig nation of grant funding to you?

To give you the authority to make the decisions where the action should be taken on the total drainage system. Not that the Province would be involv ed other than funding you the amount of money needed, and then you would make the decisions. How could you formalize that? * (1 9:40) Mr.

Tymko: I guess before the report was submit ted, we in fact met formally with the people who made submissions to it, and the feedback we received from the people that were there, the approach of farmers that submitted surveys was that: If I lose $1 8,000 or $25,000 every year, I would be more than will ing to present some of my econom ic loss because I have to put the input costs in there.

Rather than losing the input costs every year, I would be prepared to sacrifice or put in some of my own money so that I can access other funds so that in fact we can fix up this drain once and for all ; otherwise, I keep losing money year after year. It does not stop. Mr. Chairperson: Thank you very much, Mr. Tymko . Seeing as I opened up this comm ittee hearing in Dauphin by referring to it as God's country, I am glad you have balanced off east and west in this province with your bragging of your area. Thank you very much. Just before we move on to Mr.

Andy Baker, I want to introduce two more MLAs who have joined us here today, Ron Lemieux from La Verendrye and Steve Ashton from Thompson. I would li ke to call Mr. Andy Baker to the mic rophone, please. Mr. Baker, do you have a document to be distributed? Mr. Andy Baker (Private Citizen): No , I do not. This is not a very good time of the year for me. It is our first day out in the field. I had a lot of time to think about what I wanted to say, but it is not very easy to write stuff down when you are behind the wheel of a tractor. Mr. Chairperson: Okay, you can proceed. Mr.

Baker: Really, I just wanted to bring one point to the comm ittee, and that is the programs that we have had in the past as farmers and how beneficial they have been to me as a farmer. I think even though we all said GRIP was a good program, if we had kept GRIP and had kept it running, it probably would not be very useful to us right at this time because it had one fatal flaw. It had a declining coverage, so if we had gone five more years, our coverage, especially with rising input costs, would not really mean a lot to anybody. That is the problem with AID A and now its predecessor, CF IP.

Last year we had a 50% drop in net income on our farm. Because of the declin ing incomes on the farm, we did not qualify for an AID A or CFIP payment. This year I figured that I could go right to zero, I can have zero for a net income, and I st ill would not qualify because of the declining balance on your coverage. So that program obviously is not going to be much good for any farmers or any grain farmers for sure. The one program that has been really useful to me as a farmer has been the NIS A program, but it also has a flaw.

Once you have a few bad years in a row, your account balances start dropping really drastically, and if we have one more bad year, our account balances are going to be too low to trigger any useful payments.

April 30, 200 1 LEGIS LATIVE ASSEMBLY OF MAN ITOBA 19 5 One easy solution to that problem would be to incr ease the amount of government contribution to the program. Right now the governments contribute 3 percent to the program. If we doubled that contribution to 6 percent and left the farmers at the same level, it is very easy to figure out the amount of money that has to be put in by governments. The good thing about the NIS A program is that it does have caps. If you have good years, you get a large account balance and there are no government payouts, no more government payments made into those accounts.

I do not see why governments would not like that. When times are good, it does not cost them any money. I know lots of people argue about the amount of money that is in those accounts now and why is it not being util ized. I am not sure why any farmer would not want to take a program payment when it is triggered because obviously your income is low, you take out your government portion, pay your income tax at a low rate on that portion, and you use the money when you need it.

If you left it sit in there and did not take it when you were allowed to, you would reach your account balance limi t anyway and you would not get any more government contribut ions. If people want to leave their account balances in, that is fine by me. I know when I can trigger a payment, I take it. Obviously when I trigger it I need it, and I take it out. If there are farmers that do not need those payments and want to leave them in, governments will stop putting into those accounts once they reach their account balance li mits. That is pretty much al ii have to say. I thank you for your time.

I wish it had been a little bit earlier in the year that would have allowed us some time to really put the numb ers down. I am open to any questions now. Mr. Chairperson: Thank you, Mr. Baker. Ms. Wowchuk: I would li ke to extend a thank you as well for your coming this evening and taking the time to get off the tractor. You are one of the lucky farmers who is already out on the land. That is not happening in very many parts of the province. You talked about the programs that are not working, and AID A is not working.

There is a review of all those programs, there is a review of NIS A going on, and hopefully some of the changes that you suggest will be made. But is what you are suggesting that we elimin ate some of the other programs that are not working and use that money through NIS A and in crease the amount of money of the contribution through NIS A and create a pool of funds for farmers in that fashion? Mr. Baker: I know there are farmers that would say the AID A or CFIP program has been of great benefit to them. But I think if the NIS A program was enhanced, it could be of benefit to those producers too.

When you look at how the CFIP or AID A program has worked, it has worked for very, very few farmers. I also sit on the Manitoba Safety Net Comm ittee, and we have some of the figures from payments under the AID A program. In the first year, 3 percent of the producers received the bulk of the money, and some of those cheques that were written were in excess of $300,000. Now, that does not benefit the farming community as a whole when that kind of money is going to so few producers. At that time, grain producers were in financial straits too, and we were not triggering any payments.

In that first year when I filled out my AID A forms, I knew I would not collect, but I would have collected under that program if I had had -1 had one bad year out of the three that went for my average. If I had had an extremely good year, the same kind of year as I had in those other two, I would have triggered a program payment. Even though I needed it less, because obviously I made more money in the previous years, I would have triggered a program payment. That just points out why that program did not work and why we have to do something that is going to benefit producers better than that program did. Ms.

Wowchuk: If you were making recommendations on how the Safety Net program should be changed, that would be one of the recommendations that you would be making, is to shift from look at the funds that are in AID A or CFIP now and have them in a

19 6 LEG IS LATIVE ASSEMBLY OF MAN ITOBA April 30, 200 1 program that farmers could access in an easier way should they have a downturn. Mr. Baker: Yes. Mr. Larry Maguire (Arthur-Virden): Thank you, Andy. I just want to touch base or get a little bit further clarification on what you were thinkin g in regard to NIS A. There is a good concept there. You were talking about in creasing the program payments from 3 percent to 6 percent and keeping the caps, and of course the government does not pay in once you reach your cap, anyway, in those kinds of programs.

Are you looking, or would you then recommend as well that if the government was going to in crease its percentage of payment in, that you could look at increasing the cap as well? Mr. Baker: The cap has not changed since NIS A's inception, so I think just taking in the increase in costs on the farm, I think we would have to look at incr easing the caps to keep the program meaningful. In ten more years the existing caps obviously would not mean a whole lot in the way our economy is going, so I would say we would have to review the caps on an ongoing basis. And one other thing while we are talking about the review.

I was really di sappointed at the NIS A review when it seemed to me after we had sat in the room for awhile and looked at what we were asked to review, that the Government was looking more at cutting the program than expanding it. That is really di sheartening when you are asked to sit on a comm ittee and you get in a room and you are dis cussing something, which I thought we were there to discuss im provements, not to try and convince governments to take more money out of the program. Mr.

Maguire: One of the things we have had presented to us at some of the locations has been the idea of the present programs that we have overlapping and taking away from AID A, as far as income supports from various programs being added up and actually reducing payments and di saster mechanisms from the AI DA package. I am just wondering if you had any comm ents on that. Mr. Baker: Are you talking about the CMAP payment, or something simi lar to that, detracting from what I would have received under an AID A payment? Mr.

Maguire: Yes, that as well as some of the payments, particularly somewhere in the southeast as well as the southwest in '99 in regard to acreage payments that came out there and other sources of income, that when they are added into AI DA, really allow the federal government to pay less of the proportion of di saster funding that AID A was put in place to do. Mr. Baker: I do not agree with that happening and obviously it has. I am not sure how you could get around that entirely. I think it is just we have to have a program. The AID A program or the CFIP program just are not going to work, period.

That program has to be completely changed, dropped, and put into something useful. I realize the amount of eff ort it takes to try and come up with any kind of a program just by being on the Safety Net Comm ittee. I can see it is not going to happen overnight, but I know there is a need to get money out to farmers overnight. One of the thi ngs that could be done reasonably fast is to double the amount of government contributions to NISA and get the accounts built back up to where they are meani ngful, especially to the younger farmers.

I do not think it is a program that maybe the farmers that are closer to retirement are going to necessari ly trigger, but the younger farmers definitely would. One other point to would be that really, if there was a good NIS A account balance of a retiring farmer and he was looking at passing this farm along to his son, what would be wrong with having a big account balance that could help him do that?

That he could use as a retirement fund, and not have to put his son in debt or his daughter-whoever is taking over the farm-or else not be able to retire in the fashion he should be after working his whole life? • (1 9:50)

Apri1 30, 200 1 LEGI SLATI VE ASSEMBLY OF MAN ITOBA 19 7 So anybody who says those account balances are going to get too big and they are going to be used for retirement funds, well, what is wrong with that? We realize there is going to be a problem transferring that land in the future and this would just help to facil itate transfers. Mr. Gerrard: You have done quite a good job of commenting on the programs. I would li ke your views on the CMAP program and how it worked in the payout of the $93 mill ion which is coming from Manito ba, and the approach that was used for that.

Whether that could be im proved or whether that is the optimum way. Mr. Baker: I think, judging from last year's program, last year's CMAP , I was really surprised at how fast the money came out to the farmers. I thought the Government did a really good job on arriving at a way to pay it and to get it out to farmers. I know at the Safety Net Comm ittee we were talking about how it should be done, should it be done acreage -based? We already had the payout done through NIS A the year before. That would obviously be the fastest way to do it.

I did not have any di sagreement with maintaining that payout fashion for this year. Mr. Jack Penner: Good to see you again, Andy. It has been a while since we have been able to sit around the table to dis cuss matters such as this. When you sit on your Safety Net Comm ittee, have you ever taken the opportunity to think outside of the programs that we have currently utiliz ed in Manitoba and western Canada, and take a look at what some of the other provinces do, not only the provinces but indeed our American friends?

They use the LOP program, their di saster program, land set -aside programs, plus eight other programs that I am aware of that they util ize-many of them being loans-type programs, therefore being GATT green. I wonder whether you have given any thought to the targeted kind of an LOP program that the Americans have used very successfully and that their farmers really have become quite attached to. Have you, as the Safety Net Comm ittee, given any consideration to those kinds of programming and recommendations to your governments? Mr. Baker: Actually, we have not.

Part of the reason is that I have only been on the commit tee for just over a year now and most of the time on the comm ittee we are dealing with programs that are already there and trying to improve them. We have not really had any time to sit down and try and design any other program. I think when we look at the U.S. programs there is always the problem of what kind of budget we are going to be working with. If you are lim ited right off the start with the budget , obviously you are going to be lim ited in the design of the program too.

That would probably facilit ate designing a program if we knew what kind of budget the governments were prepared to put up to support agricultu re. Mr. Jack Penner: I think you point out the difficulty that we have as farmers when governments first set budgets and then asked commit tees such as yours to draw the parameters around those budgets. I think that is where we fail sometimes.

I think we as politicia ns sometimes need to say to you as a commit tee you draft a program that would at least come to a close comparison to what our nei ghbours do under which we are attached to by trade agreements, be they FT A or the GATT or other trade agreements, but that we are attached to, and then give you the challenge to draft a program that would suffice to keep our farmers on the land, specifically our smaller family farms, and keep our communities viable.

Has that discussion ever taken place in your commit tee, and have you ever challenged your minis ters that you would lik e to do something lik e that? Mr. Baker: Yes, we have discussed that about the amount of money that we would need if we were going to design a program, or the lack of money needed to design a program. I guess that is the problem we face is how do we get enough money to design an adequate program. How do we get enough money out of the federal government to design that program? I know the provinces cannot do it on their own. There is no question about that.

So I think we have to impress upon the fact that it is really a federal responsibil ity, as it is in Europe and the U.S. , to support the farmers.

19 8 LEGIS LATI VE ASSEMBLY OF MANIT OBA Apri l 30, 200 I Ms. Wowchuk: Just br iefly, I know that you have looked at safety net programs and had di scuss ion on them. Do you th ink that it is important as we des ign safety net programs that we cons ider whether or not these programs are counterva ilable and whether there is go ing to be other problems that result for our producers, should we be challenged by other countr i es when we br i ng in a program. Mr. Baker: I would love to say let us just des i gn a program that is go ing to work and not worry about counterva il.

Obv iously, that is not go i ng to happen. The beef farmers are worr ied about duty, obv iously for good reason; so are the hog farmers, but it does not much matter. I just read an art icle in a farm magaz ine about los i ng the use of li ndane as a seed treat for Canola. The reason we lost the use of it is not because of any trade issues. It is not ava ilable in the U.S., to U.S. farmers, so we are tak ing it off the market voluntar ily so they do not complai n that we have a lower cost of production and come up wi th some counterva il. So really what is the di fference what we des ign?

I th ink the Amer i cans are go i ng to do what they want anyway. If we des igned a program that we thought worked for our farmers and went ahead wi th it, I do not th ink they would have too much argument over that. Mr. Frank Pitura (Morris): Andy, I just wanted to ask you, you were talk i ng about hav i ng an enhanced NIS A program wi th more dollars ava ilable in it. My quest ion to you is: Wi th the tr igger mechan ism on those programs, would you keep the ex i st ing tr iggers or would you make some recomm endat ions in terms of mod ify ing those tr iggers. Mr.

Baker: We would have to si t down and look at them. One of the good th ings about the program is there is a mi ni mum income tr igger, so no matter what happens you know you are go ing to have some money tr iggered, but I th ink we would probably have to si t and look at how the program does tr igger so it does not fall into the same flaw that GRIP would have or that the CFIP program does. Once the money was put in there, then I think we should do the rev i ew on NISA. Do ing a rev iew before it is go ing to be a useful program does not make a lot of sense.

Let us comm i t money to the program, then let us do the rev i ew and make it work. I know it can. It already works. It is already a workable program. It just needs some more money and a li ttle bi t of fine tun i ng and it would work just fine. Mr. Chairperson: Thank you for your ti me ton ight, Mr. Baker. Mr. Baker: Thank you very much. Good ni ght. Mr. Chairperson: Mr. Brad Mroz, pri vate ci ti zen, and on deck, Mr. John Sokal, Counc illor for Springfield. Mr. Mroz, do you have a presentat ion to be di str ibuted. Mr. Brad Mroz (Private Citizen): No, I do not. Mr. Chairperson: Okay, the floor is all yours.

Mr. Mroz: Thanks, Mr. Cha irman. I just have a few notes here, and thanks to all of you for com i ng out to Beausejour. There are just a few provinc ial issues I would li ke to talk about. I guess one that has been in the papers is, it seems that farmers in the past-because the educat i on taxes are based ma inly on land, and so forth- it seems that we are pay ing a di sproport ionate share of the educat ion taxes. I am just th ink i ng that maybe some of these taxes could be transferred more to the res ident ial; that we would pay on our res ident ial but not on our farmland as we ll.

It is almost like we are be ing taxed extra for that. Another th ing, I have to also talk about the dra inage systems. The province has to be putting more dollars into construct i on and ma intenance of the provinc ial dra ins. It is ju st li ke our reeve, Mr. Tymko, was talk i ng about here, that we are fall ing way beh ind in our area. I th ink my dad and a lot of the fellows for the i r whole li fe have been up aga inst the bureaucracy. It seems li ke every four years there is another elect ion and we start all over aga in. I th ink it is hi gh ti me that th ings got looked after.

The Bachman Dra i n is an example, and there are a lot of others in the area. It is our li vel ihood and it is cost i ng us money for generat ions around here. It seems li ke we always get pushed to the si de and forgotten about, but I hope that th ings can improve in th i s area as far as dra inage goes.

April 30, 200 1 LEGI SLATI VE ASSEMBL Y OF MANIT OBA 19 9 There are a few issues on crop residue burning that the province has divid ed in to zones. It just seems to me that there are a lot of fellows who are specializ ed into different crops and so forth, and they have to do some residue burning. There are days when these areas are maybe a little too large and clima ctic conditions are different. I am wondering if those areas could be maybe reduced. For example, our Red River southeast zone, I think it pretty well goes right to the border and all the way to the lakes.

That is a pretty large area to have the same weather pattern affecting everybody. So I was just wondering if some of those issues could be looked at. Another issue is our energy costs. I think that governments, federal and provincial, should be spending more time and effort into ethanol production, bio-diesel fuels, that we can use our own grains and renewable resources to produce our own energies. An example, you could be lowering taxes on these fuels to encourage production of them as well as lowering taxes at the pumps to encourage consumption of these fuels.

If these governments were serious about helping out with our energy costs and having them renewable and generated in Canada, we could add a lot of jobs, we could reduce costs, and we could do much better fo r our provinces I think by using up some of our grains and products to produce these fuels, in stead of relying on others. I do not think there is anybody who would disagree with that, but there seems to be a lot of talk about it but no action. I think it is time that we maybe take some steps forward and do something about this. There is also this situation of our products, for example, malting barley.

I am going to have to use that one. When a farmer grows 160 acres of malting barley, I think it is clo se to $2 milli on in taxes that are generated from that quarter

section of land. We are barely breaking even growing these crops. In 19 97 alone, over $3 bill ion in federal and provincial taxes were collected from that barley. There are six years you can take from the period of 19 87 to '97, over $17 billi on in taxes were generated from products that farmers produced. That is just on the domestic beer sales. Those taxes do not inclu de payroll taxes in the production of these products, the transportation and advertising on "Ho ckey Night in Canada" nationwide. None of that is inclu ded. It is just sales at the vendor.

The products that we produce are the products that are put into the system that the whole ind ustry and the whole country benefit from-those products being in existence. It is we who are taking it on the chin trying to grow these products for everybody else in the system to benefit on. It is just a matter of having some of this money redistribu ted back into the western provinces and the Canadian provinces, that when things are down we could maybe receive some of the funds back that our products helped generate for the good of the country.

When things are good, those monies in the general revenues are spent right throughout. So I think it is time some of the value of our products is coming back to where it is really needed. I can go on for more on that topic but it is just a matter of us providing products and everybody else benefiting from them. I guess one of the biggest thi ngs that I think could probably help our prices is a set-aside program. The Am ericans use set-aside programs, and so do the Europeans. It seems like Canada for some reason does not have a set-aside that I am aware of.

Some of the grains produced from these set-aside acres could be used in bio -diesel fuels, they could be used for ethanol production, they could go into grasses, but basically it would reduce supply and probably in crease prices. For example, if we could double the price of grains or triple them in Manit oba and Saskatchewan we could turn those two provinces into, instead of being have-not provinces -just look at Alberta, for in stance. The natural resources are coming out of the ground.

They have paid down their debt, they reduced their taxes, they have money for schools and roads and they have dollars to spend for everybody. It all came from the ground. By increasing prices and the money that would be generated and the revenues from increasing commodity prices, the revenues and everything would show the incr eases from the land from Manit oba and Saskatchewan. We are being robbed in these two provinces. We have

200 LEGI SLATIV E ASSEMBLY OF MANIT OBA April 30, 200 1 products that are valuable to the economy. We are just not being paid for them. If we were paid for them, those dollars could be redistri buted back through the whole system. The examples out west, it could happen to us. If we had cut back our production, I think things would have worked that way. Basically, that is about ali i have to say. Thanks very much. Mr. Chairperson: Thank you, Mr. Mroz. Ms. Wowcbuk: Thank you, Brad, for your presentation. You covered many good points. You have talked about the residue burning.

Certainly those are good suggestions that should be reviewed. Also on the issue of ethanol and bio-diesel fuel, it is a suggestion that has been made by others and one that our government is commit ted to working towards. The program I want to ask you a question about is the land set-aside. Many have talked about this program.

I would ask you, in your view, when you go to a program of land set aside, do you look at this as a program where the land would be just completely taken out of production, or do you see set-aside as putting it into hay or pasture where the farmer can continue to use it, and what kind of a payment do you see as being a viable amount in a set aside that would be something that would be worthwhile for a farmer to consi der? Mr. Mroz: I believe if you take the acreages out of the ma jor crops, those are the acreages we have to target, as far as the oils eeds and grains basically.

They can also be put into crops for industrial purposes, such as ethanol, those kinds of things. Those programs alone would reduce production, right, or in crease consumption, but I would say $60 to $80 an acre is what a farmer would need probably to maintain those acreages. There is talk about the carbon credits and the value to envir onment. These set-aside acres also pretty well have to be explained as to the benefits to the whole of society as well. There are areas where grasses can be planted; they could be put into other things as well. Ms.

Wowcbuk: What you are talking about is mainly taking out of grains and oils eeds the areas that are having the most difficulty right now, and looking at alternates. Mr. Mroz: I think so, yes. * (20:00) Mr. Praznik: Brad, you have some excellent ideas. When you are talking about education and drainage, I suspect that leads to a major rethink of our whole property tax system since provincial and municipal governments are sharing drainage and taxation, and we are seeing education as a shared responsibil ity and yet a standoff between the two. So a major rethink is probably something on the agenda.

I wanted to ask, though, about the ethanol. I gather, in developing alternative uses for the products we grow, seeing a change in the fuel tax rate that would result in ethanol being a penny or two a lit re less than nonmix ed gasoline because ethanol is really right now about a 10 % mix if I am not mi staken, if we did see a provincial tax change or a federal tax change that would result in a penny or two differenti al, that, I would suspect, would lead to a huge demand for ethanol gasoline. I suspect that would be the only thing sold the province.

So your advice to a Min ister of Fi nance considering that in an upcoming budget would be to look at having a differential between regular gas and gas with ethanol to create that new market? Mr. Mroz: Yes, that is what I think. Whatever governments, federal or provincial, can do together. To, first of all, set things up so the ind ustry can get started as far as producing more of the product, and then having a price structure in place where the consumers are going to be buying that product. It is a twofold thing.

Fir st you have to get the system going, and then setting up a demand where people will be purchasing it. Mr. Gerrard: Just on the education taxes, it seems to me that it may not be quite as sort of complex to do as the member from Lac du Bonnet suggests. It could actually be done quite simply, either by elimin ating the education tax on farmland or alternatively by providing a provincial rebate for the education tax on farmland. Do you want to comment?

April 30, 2001 LEGI SLATIVE ASSEMBLY OF MANITOBA 20 1 Mr. Mroz: Well, whatever can be done. It just seems that we are paying on our residential plus our farmland. I am just thinking that there is a way that we could shift that over so it is more fair. Mr. Ashton: I was quite intrig ued by your discussion about what comes out of western Canada. I am just curious.

Just the two quick questions I will ask are: if perhaps when we are looking at how we are going to deal with the agriculture situation, do you think that maybe we should start with looking at what happened when we elim inated the Crow rate-which essentially western Canada had a two-year buyout? There is $800 mil lion, $900 milli on a year that used to come in a benefit to western Canada and now basically is sitting in Paul Martin's surplus every year. I am wondering if you think maybe that is where we mig ht want to start, because that was a dir ect benefit to western Canada and to agriculture, in particular. Mr.

Mroz: Absolutely. There was $720 mill ion a year annually, and it was sold on a div ersification and so forth. On our farm, I know at the time it was taken out I believe the figure I used at that time was a $1 40,000 increase in freight charges or $1 40,000 less for my wheat. That is just one farm, and you can check, the numbers are out there. Lik e, that is a huge hit, and we have all had to absorb that. The fact is we could not absorb it. We were told things will be better and we will diversify. Fellows around here backed out of wheat. They went into alfalfa seed. They went into other forages.

They went into livestock. They have done everything, and all they have done is incr eased their debt load, and then the livestock prices crashed. Everyth ing that was predicted as far as taking the Crow rate away and adding value, it added value to the agricultu re ind ustry but not the farmers. I have not seen any grain prices, any livestock prices or anything really, really benefit long term from the removal of the Crow rate. Our transportation costs have gone up. Our roads have been pretty well demoli shed since then. I think they are going to get worse.

So, absolutely, that is where the dollars could start to come from. There are a lot of other places. Mr. Ashton: I appreciate your comment on the hig hways because that is the big challenge. The other question I had is, just to focus on immedia te things that could be done, I am wondering if you think perhaps the federal government should treat farm fuel in the way in which the provincial government does.

This is something that has been in place for many years, because one thing that just amazes me is the fact that despite the farm crisis farmers pay a heck of a lot of money to the federal government in fuel related charges that they do not have to pay to the Province of Manitoba. Mr. Mroz: Yes, that is another place, absolutely. They say one thing, they do another. The federal government has a lot of different ways that they could reduce our costs, and a lot of different revenue sources where they could pass the dollars back.

It is li ke a neighbour of mine was saying: When there were farmers protesting this wi nter looking for additional funds to help us put a crop in the ground, and things were running short, there were a lot of farmers in the streets in Ottawa, right across the country and on the steps of the legis latures. Never once, and maybe I missed it but maybe you guys have seen it, that a lot of the public standing up and saying no, do not help the farmers out, do not help western Canada out.

It was not because people protested that the Government of Canada should not be helping agricult ure; it was because they decided on their own. There was no pressure telling them not to. I could see it if the general public stood up and said: We do not want to support agriculture; we do not need it; and we do not want it. It is all coming from hi gher than that. You are right. They have a lot of ways to do it, and they are not doing it. That is their decision.

It is funny that they are sending the federal Fisheries and Oceans department, I think, to come out and maintain our drainage systems and to, I guess, oversee our drainage systems to make it harder, that we buy backhoes and we buy equipment to drain land out here. I think what is happening, and people can correct me if I am wrong, but the federal bureaucracy is coming out here and is going to start issuing permits and telling us what we can do with our equipment and how we can drain our land.

202 LEGI SLATI VE ASSEMBLY OF MA NITOBA April 30, 200 l Those same federal Fi sheries department people probably were the same ones that shut down the cod fishing ind ustry in eastern Canada. You can just watch over the years how federal government dollars have been ratcheted down: removal of the Crow, removal of the two-price wheat system, not helping with farm fuels, not doing anything, and they are ratcheting down their support. Why do you think it was 90 mill ion available this year in a program, 10 0 last year? If their trend is to ratchet down agricultu ral support, 90 is less than l 00.

That is their idea, that is their plan. They let the Fi sheries department be overfished; they are letting us farm until they decide to shut us down. Vanclief has been in the paper talking about transitional funding to help people get out of farming. There is no funding, there is no talk about keeping us in it. They are talking about getting us out. When they send the federal Fis heries department out here to western Canada, it sure looks like that is their plan. Mr. Pitura: That is an interesting comment you had there. I am going to switch speed a bit and go back to this set-aside.

On the set-aside program that you had mentioned, any thoughts about a minimum period of time that the land would have to be placed and set aside? I believe you menti oned $60 to $80 per acre payment. Would that be an annual payment or one payment for the entir e time? Mr. Mroz: I am thinking annual as far as land costs go. That is our land and we have payments to make and so forth, and I am thinking annual. Could you repeat your question? Mr.

Pitura: On the set-aside program, was there any kind of minimum time that you were thinkin g about that land would have to be set aside, for three years , one year, five years? Mr. Mroz: It would have to be a longer term. I do not know, I would think at least five or ten years probably. It would have to be something that you are comm itted to, that is what I would think. Mr. Chairperson: Mr. Penner, for a quick one. Mr. Jack Penner: I was really in terested in your comment on education taxation and the removal of education taxation from farmland.

I do not know what your tax levels on education are on your land over here, but around the Montcalm Letellier area, where I farm, we pay between $7 and $8 an acre now on education tax alone. That becomes a very high cost per quarter for education. The amount of money that farmers contribute in that school division is an in ordi nate amount of tax for education. How would you design a new program of taxation that would elimin ate the requirement of land to be taxed, and how would you fund it if you had your way? Mr. Mroz: I would think I would probably do it over time.

I would probably gradually take it off of land and transfer it over to residential. That is how I think I would do it, and spell it out, and over a l 0-year, 5-year period that 20 percent of the education tax will be removed from farmland this year and placed on residential throughout the whole province. Put it up front and say what is happening and explain the reasons why. We have a house, and we have land too. Why are we over, double-1 do not know if you call it double taxed or what, disproportionate, I guess. I would do it over time, and I would do it gradually. Mr. Chairperson: Thank you very much, Mr.

Mroz, for your presentation, and have a good evening. Mr. John Sokal, the counc il lor for the R.M. of Springfield, with Mr. Wayne Drul on deck. Just for the information of the comm ittee and also for the information of Mr. Tymko, I have copies of the letter that you tabled, and it is being di stributed to all of the mem bers of the commit tee. Mr. Sokal, do you have a presentation to be dis tributed to members? Thank you very much. The floor is yours. • (20: 10 ) Mr.

John Sokal (Councillor, R.M. of Springfield): This presentation is to the Standing Commit tee on Agricu lture, Manitoba Legislative Assembly, from the council of the Rural Municip ality of Springfield, Oakbank, Manit oba, the subject being rural and agricultural crisis. The council of the Rural Munic ipality of Springfield is grateful for the opportunity to address the Standing Comm ittee on Agricult ure of the Manit oba Legislative

April 30, 200 I LEGI SLATI VE ASSEMBLY OF MANITOBA 203 Assembly relative to the ongoing crisis in rural Manitoba and this nation. The financial crisis in agricultu re is far-reaching. Across Canada farmers are struggling to deal with weakening commodity prices and rising input costs. This is having a profound im pact not only on producers and their famili es but also in the communities in which they live and work. This is not just an agricultural crisis, it is a crisis that threatens the social fabric of Canada itself.

Attached to this brief are copies of two resolutions enacted by the counc il of the Rural Munic ipality of Springfield on April 3. Both refer specifically to the local situation, while the resolutions make reference to only a handful of the numerous problems the agriculture sector generally is currently attempting to contend with.

Our producers are subject to all of the following: Prohibitive capital in vestments; extreme financial risks; world market conditions; international trade policies; foreign government subsidies; the loss of the Crow rate subsidy; rail lin e abandonment; closure of grain elevators; a deteriora ting transportation infrastructure; labour disputes; decreasing numbers of family farms and in creasing larger corporate farm units; a lack of tolerance and understanding from nonfarm residents; a shrinking labour pool; clima te changes and meteorological conditions; di seases and pests; and overregulation.

An infusion of public money will be helpful in the short term. There are none more resilient than the farmer. Things will get better, is beginning to be heard emanating from their mouths again as they patiently wait for more favourable conditions before returning to their fields. In the long term, governments need to honour this resil iency, and not to seek to take advantage of it. Governments and society in general appear to be paying little heed or could not care less about the impact sustainable development policies and land-use regulations are having on the agricultural sector.

For example, Provincial Land Use policy No. 2: Prime agricultu ral land and viable lower class land should be maintained for econom ically sustainable and envir onmentally sound agricul tural use and development. You cannot have your cake and eat it too. A healthy envir onment is essential for long term econom ic development. This principle implicitly requires all Manit obans to unconditionally acknowledge responsibilit y for balance between envir onment and the economy. Every segment of society must be accountable for decisions and actions.

Regrettably, there are too many people that expect the agricultural sector to bear the brunt of paying for today's ills. These same people also expect the farm community to pay the price to ensure the survival of the human race today, tomorrow and into the future-by forcing them to produce food products at a price and in a manner that is not sustainable of their economic viability. This is totally unacceptable, and must be changed. There is a dir e need to work co-operatively. There must be a level playing field.

In an area like Springfield, our most valuable land is on flat terrain and consists of heavily im pervious clay soi ls. Draining is essential to productivity. In the last 10 years the provincial budget for drain construction and maintenance has been slashed with the result that local authori ties, the municip alities and conservation dis tricts do not have the resources necessary to provide adequate drainage. The farm community consistently loses large amounts of money as a result. In Springfield there is a significa nt rural residential and hamlet development with the result that there are land use conflicts.

The planning response is to restrict the ability of farmland owners to sell their valuable farmland for other development opportunities. At the same time proximit y of residential uses and qualit y-of-life concerns restrict the farmer's ability to fully diversify their agricultural acti vities and to take full advantage of chemical herbicides and pesticides. Farmers should be free to realize the maximum available value of their resources. Allow farmers to diversify. Compensate them if they are not allowed to.

Protect them from those that are driving farmland values down by advancing schemes requiring measures to be initia ted in the form of provincial land use policies, sustainable development policies, and municipal development plan policies-to prevent them from succeeding, while demanding at the

204 LEGIS LATI VE ASSEM BLY OF MAN ITOBA April 30, 200 1 same time that their own prosperity and lifestyles be protected and/or enhanced. The family farm is in crisis. One in seven jobs in Manitoba depends on the production gained from soil and water resources. Manit oba's economic growth and competitiv eness is tied dir ectly to the growth and prosperity of agriculture.

The Rural Municipality of Springfield belie ves that action should be taken at all levels of government to protect and support the family farm, and commit ourselves to become more and better aware of the way in which our own spending priorities and regulations can be im proved to lessen the burden. Respectively submi tted, Reeve and Council lors of the R.M. of Springfield. Mr. Chairperson: Thank you very much, Mr. Sokal. • (20:20) Ms. Wowchuk: Mr. Sokal, thank you for your presentation. Again, you have outlin ed some of the issues that seem to be the most pressing here in this area of the province.

I have a couple of questions to ask. I want to first ask about-you talk about the drainage issue, and many have talked about the drainage issue in this area and how im portant it is. We were also talking about the need to put money into safety-net programs. Is it your view that drainage is the most im portant issue, particula rly in this area, and if that issue is addressed, then farmers will have a lot easier time making a livin g? Mr. Sokal: I believe that both issues are im portant. I am not very fully conversant on the various programs that are available to all the farmers-NISA and GRIP and so forth.

From my standpoint, I believe that drainage is quite an issue with our farming communities, and the fact that on the east side of Winn ipeg and the west side of R.M. of Springfield, we do have quite great concerns about getting the water into the floodway. We are so close, within a half a mil e, and that water just cannot get into that floodway when that floodway is empty. We do need im provements and drop structures all the way from the west side of the Bir d's Hill Park, which adjoins St. Clements, all the way down beside Winnip eg and right down to the R.M. of Rit chot.

There are many things that I have written down to be presented with our council with government resources, that in the future some of these things will have to be addressed in order to get the drainage back more into order. The Cooks Creek Conservation District they are quite responsible for a large portion of the drains in Springfield, and they go along to the Cooks Creek, through St. Clements, and then into the Red River. A lot of the properties are private property, and a lot of the people do have small forage crossing s across, and there are various blockages in there.

It is quite a problem in the last five years that I have been on council. It has been dis cussed: how do we get into that to get all this cleared out? Whether there should be easements or government possibly buy so much side acreage on each side of the creek, so that we can get draina ge cleaned out in there. These are more issues that have to be addressed . Mr. Jack Penner: Mr. Sokal, on the second page, first paragraph, you talk about the healthy envir onment that is essential for a long-term economic development in rural Manitoba.

Last week in Brandon and Dauphin, we heard presenter after presenter articulate what the shortfalls would be this year if normal average crops were derived from the land based on costs that they already knew they would have. Can you give us an estima te as to what you think the per-acre losses will be and what would be required to underpin those losses this year alone by the federal and provincial governments? Mr. Sokal: That I am not able to do. I have not done any studies as far as percentages, numbers or figures. I have not been very conversant with that part of it.

I think some of the presenters prior to me gave very good presentations on facts and figures and num bers, which I guess from the municip ality here we ju st gave in generalities. I guess possibly we should have gone into some of the figures too, to be a little bit more presentable on some of our comm ents over here. I think we fail ed a little bit somewhat in that regard. Mr. Jack Penner: One last question. You talk about sustainable development, the need to fund

April 30, 200 1 LEGI SLATIVE ASSEMBLY OF MANITOBA 205 sustainable development properly, and how the agricultural community contributes to sus tainable development. When the minis ter's department, the Department of Agricu lture, has estima ted that the average losses for grain crops, barley, wheat, and Canola will range anywhere between $30 and $70 an acre this coming crop year, based on current numbers that we know. Would you agree that those numbers are relative in this area, and is that the kind of money that would be needed to ensure that farmers could be sustainable over the long period of time? Mr.

Sokal: I believe so, but I think that more accounts would have to be taken into consider ation with the rising costs of fuel last year, and also the in creases in the ferti li zer. It has been said by many producers in our areas that they are talking about a $25 per acre incr ease in this year's input into the crop, as compared to last year's. I am sure that would have to be taken into consider ation. Mr.

Gerrard: When we were in Brandon, we heard that sit uations were so bad in some municip alities that there were large tracts of Iand-I think in Blanchard something like 10 0 quarter secti ons--which were up for sale or rent and there were no takers. Can you tell us a little bit whether there is anyth ing approaching that in this area, or whether there are farmers who are deciding not to farm because the sit uation is so bad? Mr. Sokal: In the last two to three years, some big farmers from abroad have come across into Springfield and have purchased large tracts of land.

I have not been conversant with them to see how econom ic it has been for them in the last two to three years in the wet conditions that we have had. We do know that they have big equipment, big transportation facili ties. I am just not too sure where their margins are as compared to the average family farm situation. I believe that the second question was to do with tracts of land. Mr. Gerrard: Whether in fact there were farmers who were looking at the sit uation and deciding it was so bad that it was not worth farming. Mr.

Sokal: There has been talk going around in Springfield that some of the producers are finding that they may be in a position where they may have to sell or put their land away for a while because of severe losses they have had in the last two years. Here again, I do not have any figures on their input costs and what their net gains were from it. I failed to do that part of my homework on there. Mr. Praznik: I just wanted to make a quick comment. The Mi nis ter of Agricult ure asked Mr. Sokal, in her first question, about whether solving the drainage problems would put us in better shape.

Given that this is my home turf, I just wanted to assure that although drainage is important, the fundamental need to address the income issue, as I am sure Mr. Sokal would agree, is just paramount. The draina ge is very im portant but without the income issue addressed, it really is a superfluous issue. Our farmers do not have the income to carry on. Drainage is very important, but what we are here for in the short term, incr eased support payment at this time is still the number one issue. I am sure Mr. Sokal would concur. Mr. Chairperson: Mr. Sokal, do you have any statements? Mr.

Sokal: No, I concur with his statement. It has still been quite a priority with our producers in our area about the drai nage issues, and we have to get them corrected in order that they can continue on. Mr. Chairperson: Thank you very much, Mr. Sokal. Mr. Sokal: Thank you. Mr. Chairperson: I would like to call Mr. Wayne Drul to the mi crophone. On deck we have Mr. Bill Chuckry. Mr. Drul, do you have a presentation to be di stributed? Mr. Wayne Drul (Manitoba Vice-President, United Grain Growers): Yes. Mr. Chairperson: Thank you. Mr. Drul, we are all yours.

206 LEGI SLATI VE ASSE MBLY OF MAN ITOBA April 30, 200 1 Mr. Drul: Thank you, Mr. Struthers, ladies and gentlemen of the Standing Comm ittee. I will not be reading my entir e presentation tonight, in the in terest of time. I would like to just begin and thank you for this opportunity. * (20:30 ) UGG is one of the largest agri-business firms in western Canada, employing over 15 00, including more than 500 in Manit oba.

Founded in 19 06, the company's core busi nesses inclu de grain merchandisi ng, farm-input sales and service, li vestock production services, farm business communications, and farm financial services. UGG is governed by a IS -member board of dir ectors, including 12 elected farmers. The comm ents and recommendations we put forward here today are based upon policy resolutions adopted by UGG farmer members at our annual general meeting and advice we receive from our network of I 05 policy advisors. UGG is pleased to add its voice in support of the resolution put forward by your Comm ittee.

As your resolution properly notes, the financial difficulties facing prairie farmers are largely the result of decisions in policy areas that fall under federal jurisdiction. For this reason, UGG rejects the notion that federal support to farmers be cost-shared with the provinces on a 60-40 basis. The reduction in federal farm income supports, shortcomings in federal agricultural policy, and the failu re in international trade negotiations to adequately protect the interests of prairie grain producers are at the heart of the financial di fficulties facing western farmers.

We provide comment in each of these areas. Under farm support, federal farm support in the Canadian agricultural ind ustry has declin ed over the past decade. This is especially true for the three Prairie Provinces. A decade ago, federal government expenditures in support of agricultur e in the three Prairie Provinces averaged $2.6 billi on annually. Since then, federal expenditures have declined by 43 percent to $1. 5 billi on annually. The share of federal dollars going towards the three Prairie Provinces has also declined.

Where we once received over 60 percent of federal contributions, Prairie Provinces now receive less than 55 percent of the federal spending in agriculture. While the overall trend is di sturbing, the decline in support to prairie agriculture is even more alarming when you consider that it is grain producers in the three Prairie Provinces that are bearing the brunt of low prices caused by international price dis tortions.

Western Canadian farmers are being hit particula rly hard by the federal government's decision to sharply lower its level of farm support, without securing reciprocal agreement from the European Union, the United States and other countries to put support of their farmers on an equal footing with Canada. The production and trade-di storting policies of these other countries are widely acknowledged as a main cause of depressed farm incomes among prairie grain farmers.

We note that the federal cutbacks in support of prairie grain, oi lseeds and pulse producers were far in excess of Canada's commit ments under the WTO agreement. The U.S. marketing loan program is also having a serious detrimental impact on prairie farmers, particula rly Canota producers. Under the program, the U.S. government establi shes loan rates, which effectively provide a floor price for each commodity. These loan rates are establi shed at a national level, and then are adju sted for each county, depending on the county's dis tance to the nearest terminal el evator.

U.S. farmers can then trigger a loan deficiency payment whenever the county market price falls below the county loan rate establish ed for that commodity. The high U.S. loan rates encourage greater production, as more acreage is planted and farmers use more fertiliz er and chemicals to boost yields than would otherwise be the case. In addition, the relatively high support price for soybeans is encouraging U.S. farmers to plant more soybeans, at the expense of corn, barley, and perhaps wheat.

As you may know, Canola oil competes dir ectly with soybean oil, and so in creases in soybean production have a detrimental impact in Canola prices. The pain for Canadian Canota producers does not end there. The hi gh U.S. loan rate for

April 30, 200 l LEGISLATIVE ASSEMBLY OF MANITOBA 207 Canola is also encouraging U.S. farmers to grow more Canola, when market signals would normally be telling them to cut back acreage. We note as well that North Dakota county loan rates for Canola are somewhat above the national loan rate, ranging from U.S. $4.66 to $4.94 per bushel which, in Canadian funds is approxima tely $7.20 to $7.65 per bushe l. By comparison, spot prices for Canola in southern Manitoba are currently about $5.80 per bushel. The forward price for fall delivery is approxima tely $5.65 per bushel.

In other words, U.S. farmers can expect to receive almost $2.00 per bushel more for their Canola than their Canadian counterparts. This wide disparity in expected market returns is reflected in seeded acreage in tentions. Canadian Canol a acreage in 200 I is expected to decline by 23 percent to approximately 9.3 mil lion acres. This is on top of a 13 % acreage decline in the previous year. By comparison, U.S. Canola acreage in 200 1 is expected to in crease by 21 percent to 1. 9 milli on acres. This is on top of a 46% incr ease in the previous year.

Canadian farmers are left on their own to bear the full brunt of market dis tortions caused by the U.S. marketing loan program. In contrast, the U.S. government program not only shelters its farmers from low market prices, but aggravates the situation further by encouraging farmers to grow more Canola and soybeans than they would otherwise. In our view, the Canadian government is not doing enough to address this situation.

We recognize the Canadian government may be lim ited in its ability to convince the U.S. government to reign in its farm support but, at the very least, greater effort should be made to ensure the Americans do not support their farmers in a manner that is so blatantly production and trade dis torting. Failing this, we believe the Canadian government has an oblig ation to provide offsetting trade equalization payments. We will have more to say on this later. European oat subsidies.

Western Canada has enjoyed good growth in the production, processing and export of oats since the crop was removed from the jurisdiction of the CWB in 19 89. Despite this success, further expansion in the Canadian oat market is being undermined by American im ports of highly-subsidiz ed European oats. These subsidiz ed oat im ports negatively affect oat prices on both sides of the border and have limi ted Canadian oat exports to this im portant market. UGG has raised this issue with the federal government on several occasions. However, there appears to be a little progress in resolving the issue.

In December 19 98, Canada and the United States signed a Record of Understanding concerning several cross-border agricultural issues. One of the commitments under the ROU was to work together to encourage the European Union not to subsidize oats exported to North America. To date, we have seen no evidence of progress on this issue. The Europeans continue to hea vily subsidize oats exports to the U.S. In the current crop year, the Europeans have authorized shi pments of 664 500 tonnes of subsidiz ed oat exports in an average maximum subsidy level of$32 U.S. per tonne.

We find it inc redible that U.S. and Canadian governments continue to allow European subsidized oat shipments to be freely exported to North American shores, to the clear detriment of North Ame rican oat producers. In the int erests of Manitoba producers, processors and exporters of oats, we would urge the Mani toba government to determine why there has been no progress on this file, and to seek compensation from the federal government if an end to these subsidiz ed oat shi pments is not in sight.

The grain ind ustry in western Canada is primarily export-oriented and as such, securing hig her prices for prairie farmers is highly dependent on obtai ning unfettered access to foreign markets. The elimi nation of tariffs and other im port restri ctions on grain and grain products under the Canada-U.S. Free Trade Agreement has contributed to the strong growth in exports of most grain and grain-related products to the U.S. market over the past decade. However, Canadian governments must remain vigila nt to ensure access to this im portant market is not compromised.

208 LEGIS LATIVE ASSE MBLY OF MANITOBA April 30, 200 I In this regard, we wish to acknowledge and thank Min ister Wowchuk for the role she recently played in ensuring the North Dakota Legislature did not go forward with border measures that would have severely hi ndered the access of Canadian grain and grain products into the U.S. markets. While Canada has enjoyed success in securing im proved access for grain and grain-related products into the U.S. and Mexico, tarif f and non-tariff barriers in other countries remain high.

In our view, the Canadian government has not been aggressive in seeking reductions in these tariffs, particularly in Asian and South American markets.

While we are hopeful the negotiations under the proposed Free Trade Agreement of the Americas and the WTO will lead to im proved access to markets over the long term, we believe the federal government should be engaging in more bi lateral trade arrangements over the near term so as to reduce or elimin ate many of these hi gh-tariff barriers on grain and grain products. * (20:40) Across the Prairies, farmers are exempt from paying provincial taxes on farm-used fuel; however, farmers are not exempt from paying federal excise taxes on either diesel fuel or gasoline.

The current rate is 4 cents per litre for diesel fuel and I 0 cents per litre for gasoline. In our view, this represents an unwarranted tax burden. We can accept paying fuel taxes for that portion that relates to road travel. However, in the case of diesel fuel used by farmers, we estima te that 95 percent is used for field work. In our view, these fuel taxes represent an unwarranted tax on food production. We note that the manufacturers of most other goods are not subject to this extra taxation.

We further note that these taxes weigh disproportionately on prairie grain and oils eed producers which tend to be more fuel intensive than other types of farming operations. The Prairie Provinces have recognized the inappropriateness of taxing fuel consumed in farm operations. We believe this principle should also apply at the federal level and would encourage this comm ittee to seek an exemption for all Canadian farmers. Good roads are essential to ensuring Manit oba farmers have good access to competitive markets and competing busi nesses for both their farm inputs and production.

In '99, UGG commis sioned a study by the Univ ersity of Manitoba Transport Institute to examine the relationship between fuel taxes and road expenditures. The study found that the Manito ba provincial government's expenditures on roads were in line with the fuel tax revenue. In '97-98, the Province of Manitoba spent $232 milli on on roads, or roughly $1 .06 for every dollar of fuel tax revenue collected. This com pares reasonably favourably to Saskatchewan and Alberta where provincial road expenditures as a proportion of fuel tax collections amounted to 68 cents for Saskatchewan and $1.18 in Alberta.

The picture at the federal level is much more dismal, however. The Transport Institute found that the federal government collects about $4.5 bill ion in road fuel taxes and yet spends only $200 mill ion on road construction or less than a nickel for every dollar it collects in fuel tax revenue. On the Prairies, the amount spent by the federal government on roads is, or at least was at the time of the study, less than 2 cents for every dollar collected. We note, as well, that these federal taxes discri min ate against businesses in rural areas where shipping di stances to market are often greater.

We would urge your comm ittee to take whatever action it feels necessary to ensure federal expenditures on prairie roads are in creased. UGG believes that changes must be made under the Canadian Wheat Board Act that would remove the impediments to new generation co-ops and other value-added processing init iatives for wheat and barley on the Prairies. We believe these ventures offer farmers some genuine opportunities to add value and incr ease their farm incomes.

We note, for example, that the Ontario wheat farmers are permitted to market 15 0 000 tonnes, or about I 0 percent of their crop, dir ectly to processors. We find it unacceptable that growers in one part of the country are accorded marketing opportunities that are denied to growers of the same commodity in another part of the country. Intransigence on the part of the Canadian Wheat Board and the federal government is preventing these opportu nities from being realized. We ask your commit tee to seek the

April 30, 200 1 LEGISLATIVE ASSEMBLY OF MANITOBA 209 elimin ation of these impediments to the expansion of the grain processing indu stry in western Canada. For the above-noted reason, UGG believes the Prairie Provinces have a strong case for obtai ning federal fann support far beyond what has been allocated to date. That said, we believe that the additional $500 mill ion -as proposed in your resolution-is probably the most that mi ght reasonably be expected, given today's political clima te at the federal level.

As we noted earli er, given that the financial hardship facing prairie fanners is largely a result of federal policies, we do not believe there is any jurisdiction for a cost-sharing arrangement with the province or on any additional support payments. In our view, any fann support pro gram should adhere to the following principles: the program should be production and enterprise neutral; should not encourage the growing of certain crops over others; nor should it encourage one type of fanning operation over another. Programs should ensure fanners continue to follow sound management practices.

We believe that the equalization payments that NIS A provides is an effective basis for the federal and provincial governments to provide additional income support to farmers, as has been the case under the Canada-Manitoba Adju stment Program. In our view, these adju stment pro grams generally fit the criteria as noted above, although we believe that some recognition should be given to those fanners who grow and feed their own grain to li vestock. I am going to skip over to our

summary. A sharp decline in federal financial support to the fann sector, particularly to fanners in the Prairie Provinces. Over the past decade, federal support to prairie fanners has declined by 43 percent, despite the ongoing presence of highly distorting and price-depressing subsidies in our countries. The seemingly passive acceptance of the U.S. marketing loan program is strongly encouraging U.S. fanners to overproduce soybeans and Canota to the severe detri ment of western Canadian Canota producers.

The European Union continues to hea vily subsidize owed exports to the United States, despite an agreement between Canada and the U.S. that greater efforts should be made to elim inate this practice. Tariff and non-tariff barriers for the grain and grain-related products remain high in many countries. The Canadian government does not appear to be aggressive in seeking the reduction, or elim ination, of these trade barriers. In conclusion, UGG belie ves that the argu ments in favour of additional support for the federal government are well-founded and should be dealt with on an urgent basis.

We add our voice and support of the all-party resolution. UGG remains comm itted to this indu stry and is optimistic with respect to its long-tenn future. Thank you for this opportunity to put forward our views. I look forward to any questions you may have. Mr. Chairperson: Thank you very much, Mr. Drul. We have several people who are on the list with five minu tes remaining. Ms. Wowchuk is first, followed by several people, so keep your speeches short and your one question succinct if you would, please. Ms. Wowchuk: Mr. Chainnan, if I could ask you a question. Mr. Drul has rushed through his presentation.

Can you indi cate whether his presentation will be printed completely in the report? Mr. Chairperson: If there is leave of the commit tee, agreement of the comm ittee, we can see that that happens. Is there leave for that to happen? [Agreed] We will start with the five mi nutes now. Ms. Wowchuk: Mr. Chainnan, I want to ask, through you to Mr. Drul. Have you looked at the safety net programs and have you thought about-there has been a lot of criticism of AID A and I believe you said in your comments that AID A has not been effective.

Have you given any thought to what the best mechanism would be to deliver a program to farmers? Others have talked about enhancing NISA. Has UGG thought about what the mechanism would be for a long tenn safety net program? Mr. Drul: Yes, we have looked at this mechanism I guess for some time. I guess we feel that the NIS A program has worked

210 LEGI SLATIVE ASSEMBLY OF MAN ITOBA April 30, 200 1 reasonably well. We could see adding to that program and we could also see taking funds from AID A and the other programs, CMAP, is it-anyway, the other program, and adm inis tering that portion of the unused program so to speak through the NIS A program. We feel that the NIS A has been as fair as possibly can at this point in time. It is a good program and we should continue using it. Mr. Ashton: I think my question has an area of dir ect interest.

It should be of in terest to everyone, and certainly the former Mi nister of Transportation and myself here, on fuel taxes. To be fair to the federal government, this year will be the first time there will be any federal money on the road system in Manitoba since 19 96-the Grain Roads Program. It is about $6 mil lion. You have documented what goes out. I am just wondering if you think that is sufficient?

Or indeed, if you consider the fact the federal government takes out in fuel taxes in excess of $14 0 milli on every year; an amount that would be more than double our existing capital budget, whether in fact that is a very small start? Do you feel that they should be putting back far more than they are putting in this year on the Grain Roads Program? Mr. Drul: Yes, I think that, overall, the funds that are collected by the federal government have been a very, very small proportion than was put out. Even $600 milli on today is not a whole lot of money in comparison to the money that is being collected.

Our policy has always been if you put in a tax for a particular project that is earmarked for hi ghways or what have you, road in frastructure, that is where those funds should be allocated. So, yes, our answer would be that we feel they are definitely under-what would be the proper word?-definitely not giving us the money that we deserve- Floor Comment: They are ripping us off. Mr. Drul: They are ripping us off. • (20:50) Mr. Praznik: Mr.

Chair, I must say the current min ister of hi ghways and as the former minis ter of hig hways, this is an issue that we have talked about and are totally on side together, I believe, in advancing. The only place I di sagree with the minister is he said it is about 14 7 mil lion. I think his numbers are probably wrong for this year with the in creased price of fuel and given the federal tax is based on a percentage, so it is probably 15 0 mil lion, 160 milli on. But I want to ask United Grain Growers a very pointed question.

I have been urging this minis ter, and I think he is very inter ested in pursuing it and we have been kind of talking about this behind the scenes-but there really is a need for a major effort to lobby the federal government to move toward a dedica ted fuel tax, putting their money into roads. I see Reeve Boznianin is here from Lac du Bonnet, Springfield. I have always argued they should get a share of that federal fuel tax as well. Would United Grain Growers give some thought to joining a national lobbying effort to take this cause up? I know the road builders are talking about that.

There are other users, and if we do not make this a national issue, all we are going to continue to get are these ad hoc programs on roads while our infrastructure deterior ates, and my colleague is going to get $6 mil lion which does not even buy him six mil es of new hi ghway. Is it something UGG would be prepared to consider? Mr. Drul: Well, this would be something that I would definitely have to take up with the rest of my colleagues, no doubt. I would think, on the surface, it appears it would be a good thing, but as far as commenting what we would definitely do or not do is beyond me.

Floor Comment: But an in terest. Mr. Drul: Yes, definitely an interest. Mr. Chairperson: The amount of time we had has expired. We still have th

Document details

Collection	Manitoba — Debates (Hansard)
Citation	37-2-ag4
Type	hansard
Volume / chapter	37th 2nd hansardpdf ag4.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	441eee8f639f325705f8b2041a9bdc82c44f09d2

Source file is stored in the law ingest library (pdf).