Mr. Faurschou for Mr. Derkach

Mr. Andrew Dennis, Private Citizen

Ms. Cindy Desrochers, Private Citizen

Mr. Doug Ramsey, Private Citizen

Mr. Wayne Solas, Twin Valley Co-op

Mr. Gordon Bartley, Private Citizen

Mr. Bill Cochrane, Private Citizen

Mr. Chairperson: I would like to call the Standing Committee of Agriculture to order. Good evening, everyone. I am very pleased to call this committee together. My name is Stan Struthers. I am the MLA for Dauphin-Roblin and the Chair of this committee. On behalf of the Member for Brandon West, (Mr. Smith), he wants me to welcome you here and say this is the home of the Brandon Wheat Kings, the No. 1 team in the Western Hockey League. So I got that out of the way. That is hard for a Dauphin guy to say, you know.

Tonight, the committee will be hearing public presentations regarding the provincial All-Party Resolution on Federal Support for Agriculture. For the benefit of both committee members and members of the public who are joining us this evening, I would like to take a moment now and review some of the general information regarding proceedings in this committee.

First of all, I would like to mention that all of the normal rules, traditions and practices which apply to standing committee meetings held in the Legislature, shall apply here tonight in this room. One of the rules that I would like to point out is that I want to remind all the members of the public, who are observing the committee meeting, that they are not to participate in a committee meeting by applauding or commenting from the audience.

Second, it was agreed by this committee at our organizational meeting on April 18, that members of the public would be allowed 15 minutes to make their presentations, followed by 5-minute question and answer sessions. While this agreement will apply to all meetings of this committee considering this matter, the committee did also agree to allow some flexibility to the 15- and 5-minute guideline.

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 committee on this matter. Also, following our usual practice, it was agreed that presenters will appear before the committee in the same order as their registrations were received by the clerk's office.

I want to remind everyone that if you have a cell phone on, please turn it off. I want to point out that copies of the resolution that we are debating today are available at the staff table just over here to my left. As always, if members agree to do so, the committee has the right to make exceptions to any of these agreements and practices.

Just before we get started, I want to introduce some of my colleagues sitting around the table. I will start over on my far right: Mr. Jon Gerrard, the Leader of the Liberal Party and Member for River Heights; Mr. Jack Penner, MLA for Emerson; Mr. Frank Pitura, MLA for Morris; Mr. Glen Cummings, MLA Ste. Rose; Mr. Larry Maguire, MLA Arthur-Virden; Mr. David Faurschou, MLA Portage. To my left, Minister Rosann Wowchuk, Minister of Agriculture and Food for Manitoba; Deputy Premier and Member for Wolseley, Jean Friesen; Tom Nevakshonoff, MLA Interlake; Steve Ashton, the Minister of Transportation, Thompson; Harry Schellenberg, the Member for Rossmere; Mr. Greg Dewar, MLA for Selkirk; and Hon. Scott Smith, MLA, Brandon West. I am Stan Struthers, MLA Dauphin-Roblin.

As a point of interest and information for all in attendance, this committee has been scheduled to meet again to hear further presentations on this matter at the following times and places: Next Monday, April 30, at 6:30 p.m., in Beausejour, at the Brokenhead River Recreational Complex, Beausejour Room; and next Tuesday, May 1, at 6:30 p.m., in Winnipeg, in Room 255, of the Manitoba Legislative Building.

* (18:40)

Mr. Frank Pitura (Morris): With leave of the committee, I would like to move that the honourable Member for Portage la Prairie (Mr. Faurschou) replace the honourable Member for Russell (Mr. Derkach) as a member of the Standing Committee on Agriculture, effective April 23.

Mr. Chairperson: Is there leave of the committee to appoint the Member for Portage la Prairie to replace the Member for Russell on this Standing Committee on Agriculture? [Agreed]

Mr. Chairperson: I will now read the names of the persons who have registered to make public presentations this evening, if the minister will give me back my list. Hugh Stephenson–

Hon. Steve Ashton (Minister of Transportation and Government Services): Just before we get into the presentations, it might be useful if we follow our normal practice to set some approximate time at which we would review whether we would complete our business or find some other option. I believe there has been some suggestion that we assess at midnight.

Mr. Chairperson: Yes, we can deal with that now, and then we will go through the names of presenters later. Would it be the will of the committee to hear presentations until midnight and at that point assess where we are? We have quite a long list of presenters, as you saw on the board as you walked in. At midnight, take stock of where we are, and then make a determination with the will of the committee to see how far along we will progress tonight.

Hon. Jon Gerrard (River Heights): It is clear from the number of people here that we need more than one evening, quite frankly, and we should, I would suggest, proceed right at the beginning to set an alternate date, if that is possible, to hear those who we do not have time to hear tonight.

Mr. Jack Penner (Emerson): I wonder, Mr. Chairman, whether it would be advisable to canvass the audience and ask what their preference would be. I think many of these people have come a long way, and the weather being what it is I think we are into the time of year when day-to-day sunshine and warm weather will decide how many of them will return or not for a following day. Maybe what we should do is canvass the audience to see whether we should continue another day or whether we should continue right through until we have heard everybody today or tomorrow morning, or whether there are written presentations that might need to be or could be tabled. That is why I say, Mr. Chairman, I think it would be up to you to canvass the audience and ask what their preference might be.

Mr. Ashton: Yes, the reason I suggested we assess at twelve o'clock where we are at is because, as often happens, if for example we have a handful of people left to present we often do continue beyond whatever time we set to accommodate the members of the public. I would suggest we assess that at twelve o'clock. I agree with Mr. Penner's point. The main concern we would have, certainly I would have as well, is make sure we do recognize, with the time of year and seeding and weather, that it may be difficult for people to come back. So I think our first effort should be to try and hear people tonight. If that is not possible, we can I would suggest look at that at twelve o'clock.

* (18:50)

I would also like to suggest, too, as Mr. Penner has indicated as well, I think it would be useful to have leave to have written presentations printed as written, if people prefer that option, because I know some people will not have written presentations. Obviously, we would be more than open to oral presentations, and certainly if people wanted to read their presentation I mean that would be a normal procedure, but if people do have a written presentation that they do wish to table, if we could perhaps canvass if there was leave, I think we could have leave to have that printed as if it was read.

Hon. Rosann Wowchuk (Minister of Agriculture and Food): Mr. Chairman, I also would like to indicate that I think the option of those people who have written presentations who may want to submit them and have them printed into the record is one option that we should consider. I also support the idea of assessing at midnight. Although I am open to another day of hearings, I am very sensitive as well to the fact that should the weather turn for the better by next week when we would have time to have another hearing then it may be very difficult for people to participate in it. We have to be very conscious of the time of year that it is. So I think that is something we have to consider as well as we make our decision on how we proceed. I think we should make a decision quickly because the less we talk the more time there is for presentations.

Mr. Jack Penner: While I concur with her reasoning, I would think that one of the options might be to continue hearings tomorrow morning, if that be required. Other than that, I am in concurrence with what has been said.

Mr. Chairperson: I thank everyone for that advice. Let us begin with the easier one first. If there are some people who are presenting who would simply bring their written submissions, if they choose, to the staff desk over here, and leave your written submissions, it will be included in the Hansard that we will be reporting on to the Legislature. If you would prefer to do that, leave it at the staff table and we will take your name off of the list for presenters this evening.

Having said that, is there leave of the committee to allow presenters to submit their written submissions to the staff table and be removed from the list of oral presenters? Is there leave for that to happen? [Agreed]

On the second one, is there leave of the committee then to reassess the number of presenters at twelve o'clock midnight and decide then whether we need to have leave to move on, possibly on an hour-to-hour basis, depending on where we are at with the number of presenters? [Agreed]

Mr. Larry Maguire (Arthur-Virden): I was just catching the eye of the minister there a minute ago, I believe, that there was some querying as to who could be here tomorrow morning, if we were to extend the session into some presentations tomorrow morning. Many of our side can be here, as far as I know.

Ms. Wowchuk: Mr. Chairman, I think we will have to have that discussion, but there are people on this side who have commitments tomorrow morning. That might make it difficult, but let us assess it at midnight.

Mr. Chairperson: I will now read the names of the persons who have registered to make public presentations this evening. Hugh Stephenson, David Hanlin, Perry Palahicky, Susan Melnyk, Andrew Dennis, Bob Radcliffe, Perry VanHumbeck.

Mr. David Faurschou (Portage la Prairie): Mr. Chairman, in essence of time here, can we just accept the list as presented and move on and get on with it?

Mr. Chairperson: Is it the will of the committee to accept this list as posted? [Agreed] A very good idea.

Those are the people who will be presenting tonight. If there is anybody else in the audience who would like to register or has not yet registered and would like to make a presentation, would you please register with our staff over at that table. I would like to mention to the presenters that 20 copies of any written version of presentations would be appreciated. If you require assistance with photocopying, please see our staff at that table.

Is it the will of the committee if a name is called and the person is not here to present to be dropped to the bottom of the list, to be called twice, and if on the second occasion that person will be invited to meet us at the next sitting of the Ag Committee in another community? [Agreed]

I will call on Hugh Stephenson to begin our presentations.

Mr. Hugh Stephenson (Private Citizen): I do not know what I did to be first on the list, but anyway.

Mr. Chairperson: Mr. Stephenson, do you have copies of your presentation.

Mr. Stephenson: Yes, I do.

Mr. Chairperson: If you could make those available to our staff, please.

Mr. Stephenson: Good evening, members of the committee, ladies and gentlemen. Bear with me if I bounce around a little as I have never made a presentation like this before, but I feel that it is necessary, as I believe we have a disaster taking place in agriculture. This committee on agriculture is likely more aware of some of the shortfalls we have in the grain sector, but I am going to relate costs I have on my farm.

I have raised hogs until the return on the pig would not buy a loin of pork chops. I have raised 75 to 100 cow-calf pairs until physical demands became too great this past winter. I presently farm about 1500 acres. My last year's nitrogen costs were $15.50 per acre, or $23,000. In 2001 my nitrogen costs will be $25.20 an acre, or $38,000. That is an extra $15,000. Diesel fuel and gasoline cost me $11 an acre in 2000, and in 2001 I estimate it will cost me at least $15 an acre. That is $4 an acre extra, or $6,000 for fuel.

I grow 750 acres of wheat, 750 acres of Canola. Manitoba Agriculture suggests the cost of producing an acre of wheat is approximately $185. My return for the 2000 wheat crop will likely be about $145. That is a loss of $40 an acre or $30,000. My loss for 2000 Canola is approximately $75 an acre or $55,000. My projected loss for the 2001 crop year, including increases in fuel and fertilizer prices, will total $106,000 or $70.66 an acre.

* (19:00)

Diversification is the rage today, but other crops show a similar loss pattern. Special crops are very susceptible to overproduction which drives prices down. Some special crops require specialized equipment to seed and harvest. Special crops require expertise that some producers may not have. This fact may subject them to more losses. Additional equipment costs, poor margins and inexperienced growers can make special crops a very risky business.

We all know the Americans and Europeans are subsidizing their agricultural sector, and they have no intentions of stopping this practice. The U.S. program runs off a guaranteed loan price, and the difference between the loan and the actual price is paid to the producer. It is more or less the cost of production. We have CMAP, which is capped at approximately $10,000 or less, I guess, this year. A lot of larger farms are supporting two, three and four families, so why the cap on the program? We have AIDA or CFIP, which are great revenue boosters for chartered accountants. AIDA had administration costs of over $80 million. CFIP is the same program and is unfair to livestock producers, as they average livestock against grain and these producers get nothing to offset the grain losses. Manitoba Agriculture has been tinkered with, but does not address any price disaster.

In 1999, Manitoba Crop Insurance pushed the seeding date back to protect themselves and government more than anyone else. This pushed producers to seed crops that should not have been planted. The decision to pay $50 an acre on unseeded acres was announced. Crops had been mudded in, machinery wrecked and little or no chance of getting your input costs back in the west-central and western part of the province.

NISA is a good program, but my NISA account would not cover my projected losses for the 2001 crop year. It was never designed for such a disaster.

The Québec farmers have a cost of production program, which I understand paid over $65 an acre for the wheat in 2000. I feel that Manitoba Crop Insurance and its counterparts in the rest of the country could adopt a similar program for the rest of the country. We need a commitment from the federal and provincial governments as well as producers to have such a program address potential problems before they happen rather than after the fact.

With all due respect, bureaucrats do not seem to understand or care about agriculture and how timing delays in government decisions can be financially disastrous to farmers. If farmers have no money, the multiple of seven stops. Machinery dealers, restaurants, mechanics, stores, schools, hospitals and many other businesses in rural towns and cities are in jeopardy.

In closing, we need a cash injection of $65 to $70 per acre now. We also need a cost of production program similar to the one in Québec. If we had a cost of production program in place, I do not think there would be any need to have this kind of begging session. After all, we do produce the food that feeds the country.

I hope something constructive comes out of this experience. Thank you for this opportunity to speak to you.

Mr. Chairperson: Thank you, Mr. Stephenson.

Ms. Wowchuk: Mr. Stephenson, I would like to take this opportunity to thank you for making a presentation. You said you have not made one before, but that just outlines how serious the situation is and that many people who have not made presentations before to a committee are coming forward.

The resolution that we passed in the Legislature with all-party support calls for the federal government to put forward an additional $500 million in support and then to work on long-term solutions. Do you support the idea of going to the federal government for an additional $500 million to top up the $500 million that the federal government already put in place to help farmers through this crisis, and then working towards long-term solutions?

Mr. Chairperson: I should explain, for the purposes of Hansard, I need to say your name and to allow you to then speak after that.

Mr. Stephenson: It is a start, Rosann. I think that it is no more than enough. I think what we need is a program. We have to have it in place before some of these things happen, rather than after the fact. We need a commitment from the federal government. I know that Manitoba is trying. Manitoba tries, but it has to be a federal thing, because we are up against guys that are subsidized and countries that are subsidizing and I do not know. Half a billion dollars, well, it sounds like a lot of money but it is not. Anyway, thank you.

Mr. Gerrard: Thank you for your presentation. You paint a pretty dismal picture of how things are at the moment. It certainly calls out for assistance. My question to you, just so that people have an understanding and a sense of the implications of what happens if you do not get it, if we are not able to get additional federal support. How can you farm with this kind of a return?

Mr. Stephenson: I do not know just how we are going to do it. We are going to have to cut back drastically on input costs. Anytime I have ever done that before, you end up with a lot less. So your whole revenue drops off again. I do not think you can win. I think it is a good thing that I sold some of those cows last year. We are going to use up our possible retirement nest egg. Maybe there is not going to be anything there after this year.

Mr. Glen Cummings (Ste. Rose): Thank you for your presentation. You are indicating here that you expect to lose approximately $100,000 on this year's operations. That being the case, you probably had lost that much equity last year as well, I would imagine, in '99. Given the question that Mr. Gerrard just asked, do you believe that a GRIP-style program–it has been a while since it has been around, but recently enough that we remember what was involved with it–is that the type of program you believe should be returned with significant federal involvement?

Mr. Stephenson: Yes, I think actually something to that effect. The Québec program, I understand, is similar to that in that you get a cost of production. Okay, we get a dollar a bushel more for our wheat. What is going to happen like in, well, we will say it, chemical companies? The first thing we are going to do is you are not going to have your 20% discounts on seed and chemical, which they have kind of a monopoly on. Your fertilizer prices are going to go up, if they can go up higher than they are. So we are going to have to have a cost of production thing so that it addresses these things. We have no control over what the prices of fertilizer or chemical are. I think that GRIP, or a program like that, may have its merits.

Mr. Maguire: You have just outlined some of the solutions, but in your presentation you also talked about some of the shortfalls of the present programs that we have, Hugh. A presenter today earlier made the point that in Dauphin only a business that is prosperous, or an industry that is prosperous, can really do the things that have the resources to protect our health, our environment and our enterprises. When we are looking at working from the back end of that horse all the time, if you want to put it that way, the way we are looking at the programs that we have today, can you further outline or would you agree that the shortfall in many of the programs today is the overlap that really provides one program being a cash advanced against the next one until, you know, the $50, some of it, came out of AIDA, so you did not get it? That is the kind of shortfall that I am referring to. Can you just make a comment on that?

Mr. Stephenson: We have to have something in place before these things happen. Always after the fact, like I said in my presentation. Decisions that are made late, if you do not know what to do–some of those crops in 1999 should have never been seeded. There is no way on God's green earth they should have been seeded. We wasted a lot of money. I personally wrecked an engine. Now we need something in place before that, rather than after the fact. So, yes. They do overlap, certainly. Sometimes we keep trying to reinvent the wheel.

Mr. Jack Penner: I did a bit of quick calculation while you were speaking. You said your losses would be $70.66 an acre. If you multiply that to roughly about 12 million arable acres in the province of Manitoba, that would mean that the shortfall or the loss over the entire acreage would be about $840 million in this coming year alone. If you multiply that over the amount of acres just for Saskatchewan, Alberta and Manitoba, you can see the actual amount of money needed. The minister asked whether another $500 million would do it, when in fact the loss alone to Manitoba would in total be 840, based on your calculations. So I think we can see the dire straits the farmers are in and the amount of money that farmers are paying toward the subsidization of food in this country. I think consumers need to be made aware of that.

Mr. Stephenson: I agree with you that $500 million really is not enough, but it is a heck of a lot better than what we have right now.

Mr. Chairperson: Thank you for your presentation, Mr. Stephenson.

Mr. Stephenson: Thank you.

* (19:10)

Mr. Chairperson: I just have two things to take care of before we call the next presenter. Ms. Cindy Desrochers has put forward her submission in the form of a written document and has removed herself from the list, so No. 10 on our speakers' list has opted to send in her submission instead of orally presenting tonight.

We have a request. I will need advice from the committee. As regards item No. 12, Wayne Motheral of the Association of Manitoba Municipalities has another commitment this evening that he needs to be at. Do we have agreement from the committee to move Mr. Motheral to the No. 2 spot which would be next on our list? Is that fine with the committee? [Agreed]

I would like to call Mr. Wayne Motheral. Good evening, Mr. Motheral. Do you have a written presentation to be circulated?

Mr. Wayne Motheral (Association of Manitoba Municipalities): Yes, we do, Mr. Chairman.

I would like to thank the committee for allowing us to move up. We are involved in a municipal administrators convention here in Brandon right now. We asked if we could get moved up and I appreciate that very much.

Mr. Chairperson: We aim to please, Mr. Motheral.

Mr. Motheral: On behalf of the Association of Manitoba Municipalities, I am pleased to have the opportunity to appear before the Standing Committee on Agriculture and offer our association's support for the all-party resolution that was recently passed by the Manitoba Legislature, dealing with the agricultural and rural community crisis in Manitoba.

These hearings are historic for Manitoba in that it is very rare for a committee of the Legislature to travel across Manitoba and listen to presentations on an issue before the Legislature. I believe the last time this was done was during the Meech Lake hearings. However, the agriculture and rural community crisis is so serious that drastic action needed to be taken to send a strong, united message to the federal government on the severity of the crisis in Manitoba and the need for national leadership and action. We are aware that your committee fully understands the impacts of the agriculture and rural community crisis in Manitoba, and our association has been doing its part to raise the issue with the federal government with the recent letter we sent to the Prime Minister. We hope our presentation this evening contributes in a positive manner to finding solutions to the serious agriculture and community crisis facing our province and our nation.

Before discussing the agriculture and rural community crisis, I would like to raise one specific issue that the federal government did not demonstrate national leadership on in Manitoba but which is related to the agricultural and rural community crisis. I am referring to the efforts by many people in Manitoba to obtain disaster assistance for those areas of the province that were affected by the wet conditions in 1999. The issue of disaster assistance has been a very, very frustrating and disappointing experience for those of us in Manitoba who truly believed the federal government would respond to this disaster in the same decisive and compassionate manner as it has responded in previous disasters in Manitoba.

The wet conditions in Manitoba in 1999 were a natural disaster, an act of God. It was therefore both the role and responsibility of the federal government to commit the needed resources to ensure our producers and communities could survive until the effects of the disaster were overcome. By not responding to the disaster in Manitoba in 1999, the federal government accelerated the agriculture and rural community crisis we are talking about today.

The rural fabric in the areas affected by the wet conditions looks much different today than it did in 1999. The federal government has a long and proud history of responding to disasters in the past, but that long and proud history ended in 1999 with the wet conditions disaster in Manitoba. Many of us who truly believed in the philosophy of federalism, which said that if one part of Canada was in trouble and needed help the rest of Canada would pitch in and help, were truly disappointed and let down by the federal government in our disaster in 1999.

At the same time, our association would like to commend the provincial government of Manitoba, both the previous Filmon government and the current Doer government, for their leadership and support of producers and rural communities affected by the wet conditions. Your efforts have been truly appreciated by those individuals and communities affected by the wet conditions. We urge you to continue to push this issue with the federal government until Manitoba obtains some sort of compensation for those individuals and communities that were affected by the wet conditions.

I would now like to turn to the larger agricultural and rural community crisis that is referred to in the all-party resolution that was recently passed by the Manitoba Legislature. As you are aware, the financial crisis in agriculture is having a real impact on producers and rural communities. In Manitoba and across Canada, farmers are struggling to deal with the continued low commodity prices, while at the same time farm input costs such as fertlizer, fuel and chemicals continue to rise, as we heard from the previous presenter. Many farmers cannot afford to put in a crop this spring. This will have a profound impact, not only on the producers and their families but also on their communities and the rural economy.

While our association is not a farm lobby group, our member municipalities are feeling the impact of the weak state of the farm economy. Last month we conducted a two-week tour of rural and urban communities across the province, and community leaders have been unanimous in emphasizing the severity of the current situation. They have been telling us that this is not just an agricultural crisis anymore; this is a community crisis that threatens the social fabric of rural Canada.

Farmers are being forced off the land, grain elevators are closing, local businesses are suffering, schools are closing and municipalities are losing their tax base. Our association has consistently delivered this message to elected officials in the federal and provincial governments over the course of the last year. In our role as an advocate for all 201 municipalities in Manitoba, the AMM recently delivered this message by way of a letter to the Prime Minister and also suggested some of the steps we believe need to be taken by the federal government to address the problems facing Canadian farmers and rural communities.

An immediate infusion of financial assistance to farmers was clearly needed in the short-term, and we are appreciative of the $500 million announced earlier by the federal government to address the short-term problem. However, it is not enough to fix the problem, even in the short-term. The federal government has taken approximately $2 billion in support payments away from the agricultural sector in western Canada through removing the Crow rate subsidy and reducing the amount spent on research and development. Even with the aid package recently announced by the federal government, this reduction in funding has not been recovered. In addition, Canadian farmers still only receive 9 cents of every dollar from the federal government, compared to the 38 cents that the American farmer receives and the 56 cents that European farmers receive. Canadian grain and oilseed producers are among the most competitive in the world and, on a level playing field, could compete successfully against the farmers of any other nation, but Canadian farmers cannot compete against the treasuries of the United States and the European community without a greater contribution by our federal government.

* (19:20)

Farmers have already tried to practice responsible stewardship of our land and our natural resources. Recently, however, in an effort to cut costs and increase production, farmers feel that they are being forced into making decisions that are not in the long-term interest of the environment. For example, in an effort to maximize production, marginal lands in riparian and other ecologically sensitive areas are being cultivated and normal crop rotations are being abandoned in order to grow higher-value crops more frequently than the land can sustain. Both of these practices have potentially long-term and damaging environmental consequences, but farmers believe that they have no choice in the present economic climate. The AMM believes that our farmers want to be responsible stewards of the land. If it is a priority for Canadians to ensure that our rural areas are managed in an environmentally responsible manner, we believe that a moral and financial commitment needs to be made by the federal government on behalf of all Canadians to make sure that a sustainable model is developed and put in place. The AMM would welcome the opportunity to work with the federal government to build on such initiatives as the environmental tax credit, developed by the Prairie Farm Rehabilitation Administration to promote responsible stewardship of our agricultural resources.

In addition to dealing with the farm crisis in the short term, an effective long-term strategy needs to be developed to ensure healthy farms, and more importantly to ensure the long-term sustainability of rural communities for future generations. Our members have told us that the Agricultural Income Disaster Assistance program, AIDA, has not been successful in either targeting those producers who are most in need or getting money to them in a timely way. We are encouraged by the response we received recently from the Minister of Agriculture (Ms. Wowchuk), which indicates that the federal government is working to address these concerns through the agricultural safety net agreement and the multilateral negotiations on agriculture at the WTO.

A discussion about the future of agriculture on the prairies would not be complete without indicating the importance of establishing a value-added manufacturing industry that would take advantage of the abundance of agricultural commodities produced in the area. For too long we have been content to export our raw materials, and we have failed to develop a manufacturing base that would provide a market for what we produce and at the same time provide for jobs in our communities.

The AMM encourages the federal government to develop a comprehensive strategy that would encompass tax incentives as well as direct federal government funding and expertise to enhance the development of value-added industry in rural areas of western Canada. A number of opportunities exist such as the production of ethanol, the production of Canola-based industrial oil and fuels, pasta and flour milling, and opportunities in the livestock business.

The crisis in the farm and rural communities is surely upon us. If decisive action is not taken soon, rural areas of Canada will never be the same. Only the federal government has the resources to make an impact on the financial crisis that is devastating the rural economy. We believe that the agricultural and rural community crisis in Canada is one of the most importance public policy issues facing our country in the last 50 years. It is vital that the federal government renew their commitment to Canada's producers and rural communities by taking steps in support of a long-term plan for the future sustainability of agriculture and rural communities.

It is time that all governments, federal, provincial and municipal, engage Canadians in a comprehensive discussion on the importance of the agricultural sector and our rural communities and work to design meaningful and effective measures to ensure the continued viability of these critical elements of our economy and society.

Our association pledges to work with both the federal and provincial governments to find solutions to the crisis. It is a challenge we must all accept in order to restore some hope for the future of our producers and our communities. Thank you for allowing our association the opportunity to make a presentation to your committee.

Mr. Chairperson: Thank you, Mr. Motheral. We have quite a list of people who want to ask questions, so I would ask each person to be fairly quick, starting with Ms. Wowchuk.

Ms. Wowchuk: Mr. Motheral, thank you for your presentation outlining, through AMM's eyes, the seriousness of this situation. Earlier today we heard about this being not only a farm problem but a rural community problem. It is affecting many rural communities. You have outlined that very well in here.

There is one point that I wanted to raise with you and ask you about. You talked about the environmental tax credit and your preparedness to work further on that. I wanted to know if you are aware that there have been additional funds put into that environmental tax credit program to extend it.

Also, you talked about an encompassing tax incentive to help with the value-added industry. I wondered are you aware of other areas or whether the federal government is doing this in any other parts of the country with respect to agriculture or to value-added? I know they do it with other industries. Certainly we have Bombardier and things like that, but are you aware of any programs where that is working or other areas where a program like that is working?

Mr. Motheral: In a short answer to that, I could say that probably through the Prairie Farm Rehabilitation corporation there is probably some money filtering through to some possible environmental or tax incentive programs. There could be, but I am not aware of any one, as far as the agricultural industry is concerned, directly, no.

Mr. Jack Penner: Mr. Motheral, I could not agree with you more that the federal government has a very major role to play, as the federal government in the United States does, as Europe does, and that the provinces need not always be involved, or should not even be required, in many cases, to be involved in the ag support on an ongoing basis.

However, in your opening statements you indicated that the federal government had fallen significantly short on the '99 disaster in southwest Manitoba. Let me remind all of the people that are here today that in 1988 when we were first elected there was a similar event in the Swan River area. There was a major fire in the Interlake, and the Province made the decision almost immediately that restoration would be done and paid for. We went back to the federal government and negotiated. It took us better than five years to get the federal government to come in with their portion of the money that was expended, but it was the Province that made the decision.

The Province also made the decision, without the agreement of the federal government, that there would be an acreage payment of $50 an acre paid to southwestern Manitoba farmers for non-seeded acreage. I think the Province has a very significant role to play here in the immediate future to make those decisions, to ensure that the people who are damaged by floods and/or disasters get compensation that is deserved by them under the disaster programs, and then go to the federal government and say now come with your share. That has always worked for the province of Manitoba, until at least the last couple of years.

Mr. Motheral: Thank you. As you noticed, the focus in our presentation is more of a thank you to the provinces, the previous government and this Government, for the work they have done. We have to focus on the attention of the Canadian, of the federal government here, because this is an issue that can only be handled by them. That is why we focussed on this issue in this. Thank you.

Mr. Ashton: I appreciate your presentation. Of course, one of the arguments we make with the federal government is exactly what you put forward. Some $72 million was put forward, 50 of which was creditable under AIDA, so the Province has $20 million that has been put forward. The only federal cost-sharing has been on damage to property, and our position has always been, I think, collectively, that part of the issue in the southwest in 1999 was to restore land as well as property to its original state.

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In fact, I think Mr. Borotsik, a member of Parliament, was able to track down an internal document which really demonstrated exactly the spirit of what you are talking about, which is the federal government had that option. They had the option of treating the southwest a lot more generously than they did. Certainly, after eight requests of a meeting with the minister and finally getting one, I made that point to him directly as well, that the federal government could have been a lot more generous, and I appreciate the comments.

My question actually was really not so much to do with that, because I realize that was one of the other focuses, but you mentioned the Crow benefit. I suppose we are getting maybe some indirect benefit this year with the Prairie Grain Roads Program, which would be the first federal money on roads since 1996, and really the first federal money on agricultural roads, not national highways, since the elimination of the Crow rate. I am wondering–I know of course that AMM is going to be a partner in that process, 50 percent of the money going to municipalities–if you feel that this is something that has been missed all the way along in this.

Certainly, something I feel has been missed in this whole debate is, essentially, western Canada was bought out in two years on the Crow rate. So when it comes to talking about agricultural subsidies or investing in roads–I know in this meeting tonight there are many people facing a lot of pressures on roads–that if the federal government was to look for funding, a lot of it could come from what it used to spend on the Crow rate, what I consider a birthright of western Canadians, that was eliminated in a buyout package that was worth two years' worth of the Crow benefit. I am wondering if AMM feels there is some use there of using that argument, that we need some of the Crow rate back in the form of help for our farmers when they are in need.

Mr. Motheral: Thank you. I will talk about the wet conditions here one more time. We only mention them to bring up a point that the federal government did not react as they normally do to disasters. It was a disaster of Canada, a Mother- Nature-God-created disaster, and it was not recognized the same as other disasters that were in the country. We only brought that up as an example. We did not want to take the focus away from the actual crisis we have in communities right now. That is our focus. I know that it is still important to act on those wet conditions, but we have to change. We have to focus on the bigger picture.

As far as the roads, I mean it was a mere pittance of the actual fact of the actual damage to roads that is coming on, but if we do not get dollars into our agricultural communities and we do not get the dollars into our rural communities roads are not going to matter. That is just as plain and simple as that. I do know that there are some bad roads out there, but without this other, I do not want to take the focus away. I mean, sure, we lobby for dollars for roads and all that, but right now this evening we are talking about an agriculture and community crisis.

Mr. Cummings: Thank you for your presentation. I note that AMM, you said in your presentation, were encouraged by the letter from the Minister of Agriculture (Ms. Wowchuk) that indicates the federal government is working to address these concerns through the safety net and multilateral negotiations on agriculture in WTO. My view is that we are tired of picking up the crumbs that Ontario and eastern Canada and the federal government are offering us. It seems to me that as has been demonstrated around this table, whether it was '97, '99 or again this year, they have ignored largely the concerns of western Canada, and particularly our grain producers.

I would ask if the AMM would be prepared to encourage the Minister of Agriculture to consider that perhaps as a long-term solution but that he has to deal with the short term, and when you have an opportunity to make further presentation.

Mr. Motheral: If there is any way that we can get dollars into communities, whether it be federal dollars, whether it be provincial dollars, we will be a part of it.

Mr. Chairperson: Thank you, Mr. Motheral. I just want to point out for the benefit of members that we do have several people left on the question part of this presentation and they will be losing their opportunity to speak, because I think we have taken too much time with our speeches ourselves. The purpose of the five minutes is to question the presenters and get some answers from them. I want to caution the members around the table that we need to stick to questioning and listening to the answers, rather than making speeches ourselves. That might sound funny coming from one politician to a group of others. [interjection]

Despite the fact you are clapping for me, I want to tell you that people in the audience are not supposed to be doing that either.

So thank you very much, Mr. Motheral.

Mr. Motheral: Thank you for the opportunity and I will pledge for our association that we will work hard on this. This is a community issue. Thank you.

Mr. Chairperson: I would like to call Mr. David Hanlin. Mr. Perry Palahicky is on deck, so if Perry could be close to the front we can save a little time that way as well. Mr. Hanlin do you have copies of your presentation to be handed out? It looks as if you do. Mr. Hanlin.

Mr. David Hanlin (Private Citizen): I, too, have not done much of this. I would like to make an observation before I start here. It was about six years ago that I was in the very same room with a group of farmers from back in Miniota, and our Assiniboine Valley was badly flooded at that time. Of course, we were begging for change and begging for money, and here I am again.

Good day to the people of the committee. First I would like to thank you for giving me the opportunity to make this presentation on this most important issue. I cannot help but think that you as politicians and committee members witness us as farmers, business people, begging for change again. How long must this go on? How many more farm families must split up? How many more marriages must break up because of this issue?

I am going to stop here and reiterate a little bit that if our governments had taken notice then probably I would not have been here. We need short-term assistance now in the form of a cash injection on a per acre basis, and most important we need a long-term plan in the form of cost of production in order to save our farmers.

Farming is the only industry known that is not able to build in a cost of production. We have been left hanging out to dry for too long. Farmers have far too big an investment at stake not to have cost of production worked into their systems. Farmers also have no control over the vertical integration of their farming inputs. We need to have more control and we need to have it now.

I am making this presentation to you firstly as a farmer and secondly as a councillor in the R.M. of Miniota. A month ago we were the first R.M. to pass a resolution declaring our R.M. as a disaster as a direct result of the farming income crisis. We also went on to say that we would like the federal and provincial governments to adopt a program such as the one put forward by Murray Downing, or a modified GRIP-type program.

As a result of our presentation at the mayors' and reeves' meeting in Killarney, a resolution was made and a draft of a letter sent to the Prime Minister, Jean Chrétien, requesting a meeting with him as soon as possible. They were prepared to take the provincial agriculture minister and other interested government officials, as well as reeves, councillors, farm machinery dealers, rural and farm businessmen, to ask the Prime Minister for more consideration to the western farm economy disaster. It is a disaster. It is not a crisis. The crisis was about 1995 or 1996. This is a disaster, and I would like you to really have that sink into your head, because it is a disaster. It is not a crisis any longer.

To this date and to my knowledge, the Prime Minister has not responded to this letter. You will notice that I call the farm economy a disaster because that is exactly what it is. The Government is hesitant to call it that because of their lack of commitment, disaster assistance. It may not fall under the criteria for disaster assistance, but if the Government had the political will to change the wording I am sure it could be.

In closing, I want to reaffirm my stand that farmers first need an immediate cash injection to pay last year's bills. This needs to be approximately $40 to $60 an acre. This is the shortfall in income. Secondly, a program such as Murray Downing's cost of production or a modified GRIP-type program must be implemented for the next year's crop production. Thirdly, a debt moratorium to stop FCC, MACC, the big banking institutions, from seizing farming land so quickly. As well, the vertical integration of farmers' inputs have to come back in line with what the farmers' gate price is for his production.

You know the real tragedy here is the farm families, the children, the farm wives, as well as the broken marriages and the loss of century farms. This is happening. What about the tremendous stress that farmers endure year after year, mainly from not having a cost of production built into the system?

Thank you very much for listening to me.

Mr. Chairperson: Thank you, Mr. Hanlin.

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Ms. Wowchuk: Thank you, sir, for your presentation. Again, you have outlined how serious the situation is and the impact on families. You have raised a lot of points here. You referred to a program that is similar to GRIP. We had a GRIP program, and it was discontinued a few years ago. Under the trade agreements that we have, it is my understanding that particular kind of program we cannot bring back again. Had we continued it on, we could maintain the program, but it is very difficult to bring another. Because we are an exporting country, programs that we bring in have to be green, and we have to ensure that they do not interfere with trade. When you talk about a program like that, I wonder if you have given consideration to the fact that the programs we design must be green so they do not interfere with trade, because if we have trade barriers put up against us that will lead to further hardship for our producers. That is one of the challenges, and I wonder how you would view that.

Mr. Hanlin: I guess I kind of see it a little different because I am a farmer and I am not a politician. I see it as our Government being led by the nose, and probably you all have a ring in it too. The people to the south are dragging you and the people across the pond are dragging you even further. With that, they are dragging us down.

I think as a government you have to take a stand. I am quite sure that if you took a stand the farming community would be behind you, if the stand was right. I think if you have the political will to do something about this issue then it can be done, but if you do not have it then no.

Mr. Gerrard: Thank you. You present a pretty distressing picture, and really a call for action. As I interpret your numbers, you would be saying that the 500 million, at least if it was distributed like the 93 million that we have just got for Manitoba, that component would not be enough, quite frankly, to address the issue, and that there would be more needed. Is that right?

Mr. Hanlin: That is very correct. I think, to go a little further with that, if the $500 million came to Manitoba, it might do us some good, because that is what we need is about that much money. You know what that much money would go toward is paying last year's bills. My goodness. Is that not something? I am having a real problem with all that.

About a few years ago, a couple or three years ago, I decided at that point I would rent to some of my neighbours. I still farm somewhat, and at that time it was probably one of the best decisions I had made because I stopped the bleeding, but it infused in the people that I had rented to. I see them struggling so badly. I have this spring gone to them and said: If you cannot see through this, then I will summer-fallow it. I will summer-fallow it. I will take it totally out of production, the whole damn works of it, 1400 acres. I am not sure how many other farmers will do that, but I am prepared to do that.

Mr. Ashton: I was struck by your description of this being a disaster. You are right. I mean the existing disaster financial assistance programs deal with natural disasters. It struck me, I mean, here we are in Canada with probably the most efficient agriculture in the world, and I am wondering if the disaster that we are facing here in large part is because we are up against countries that are a lot less efficient than we are that have got major subsidies, the Europeans, the Americans.

The reason I want to ask you this question is it struck me that this seems to be very much a man-made disaster. I was just struck by the use of the word, because I think we are used to, if there is flooding, we understand the damage that creates, but when it is not something you can see and when you see the impact, it is a lot harder to deal with. I am wondering if that is maybe the message you are suggesting we get across, not just to the federal government but I think to Canadians generally: This is a man-made disaster.

Mr. Hanlin: Yes, I totally agree with you. It has been a totally man-made disaster. We, as farmers, are kind of a breed that plows along and hopes for change, and we seem to think that the more we produce the better off we are going to be. Well, that has been totally wrong. I guess because we are on the low end of the totem pole, we are the ones that were really affected the most. The people who are higher up of course are not as affected as most. Yes, we are. This is a man-made disaster.

I guess, I reiterate, as far as being a disaster, a financial disaster and a family disaster, okay. It has to sink in, "family," because there are some families that are really hurting bad.

Mr. Chairperson: Thank you, Mr. Hanlin.

I would like to call Mr. Perry Palahicky to present.

For the information of committee members, No. 33 on the speaking list, Doug Ramsey, private citizen, has opted to submit his written presentation, which will be distributed to committee members as well. So Doug Ramsey has opted not to orally present this evening but to submit his written submission.

Good evening, Mr. Palahicky. Do you have a written submission for the committee members?

Mr. Perry Palahicky (Private Citizen): No, Mr. Chairman, I do not.

Mr. Chairperson: Okay. You may proceed.

Mr. Palahicky: Honoured members of the committee, my fellow farmers, ladies and gentlemen of the media, I was brought into this little forum. I am a fourth generation Canadian, third generation farmer in western Canada. My family, my parents and myself, operate a family farm in the Rural Municipality of Wallace. We are starting on our sixth decade in that area in farming. Over the years, in discussions with my parents, listening to them talk about the Dirty Thirties and through World War II and sort of the boom years in agriculture and industry in the '50s and the '60s and into the '70s, I always felt that agriculture would always have its ups and downs. I just never thought we would get to this down and never see up again.

We have, as I will restate, just like my colleagues have said, a disaster. It is far beyond any mention of crisis. This is an absolute disaster. It is not just an economic agricultural disaster. This is social disaster. I cannot emphasize that enough. You cannot, in any industry, look at complete bottom-line dollars and cents and subtract that from the society or from the local infrastructure or from people themselves. It is absolutely impossible. If we look at agriculture suffering right now and we just look at it as dollars and cents and see that there is a loss there and we do not see the loss of people, we do not see the loss of communities, we do not see the loss of a future or a promise of this industry, then we are truly, truly in a serious, serious matter.

Again, I would like to reiterate what my colleagues have said: We are calling for an immediate and large cash infusion. That is the only way to stop the bleeding right now. There is absolutely no way that this is going to continue if we do not get a large cash injection. That is mandatory. On top of that, we do need a long-term program, a cost of production program, one that is full and comprehensive, one that does what all the other programs we have, have literally failed; they have absolutely failed us, everything from GRIP to crop insurance. All these programs have failed, because none of them actually take care of any of the disasters that we have, whether they be climactic disasters or disasters within the world, as far as subsidies from other countries, other nations. So those are the two most important parts of this.

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I would just like to say that I appreciate the all-party committee that we met with the last few weeks in different caucus meetings in the Legislature. I was part of that and I appreciated that, the fact that you have the desire to see that we are in a state of complete disaster here and that you are willing to address this. I would hope that we would have the opportunity to build something here and move it forward to the federal government, because these are the people who have really let us down. We need that kind of support, from grass roots, from industry, from local governments, from the municipalities right to the federal government. We need that type of solidarity and unity in order to bring this to a point of critical mass.

Like I said, the two main points, I will restate them, a large cash injection and a cost of production guarantee. We cannot function without these. We are the only industry in this country that buys on retail and sells on wholesale. I do not think there is any businessman that I could put together a business proposition and tell him to go out and produce a product or a service below his cost and expect him to go on year after year.

I know on our farm we have unfortunately had to go through eating away at our equity, my parents life savings assets. That is no way of conducting a business. I am single, but I feel for all the young farmers out there my age and the generation supposedly to follow, with young children and so on. I do not know what these people are going to do. It is not something that you want to look at and expect to have some sort of a future, because it is just not going to be there.

Mr. Chairman, committee members, I appreciate it. I wanted to be short and succinct. I hope that you have seen, through myself and my colleagues, that this issue is important. It is obviously important to you. It is obviously important to them. It is obviously important to all of us. I just would ask that we would go forward and be very pragmatic in this approach. This is a very deeply disturbing and very complicated issue and problem, but I think there are some very, very easy answers, if we just approach it in a very pragmatic fashion. Thank you.

Mr. Chairperson: Thank you, Mr. Palahicky. Ms. Susan Melnyk, you are on deck.

Ms. Wowchuk: Thank you for your presentation. I want to tell you that all of us take this issue very seriously. That is why we passed an all-party resolution asking for the federal government to put some short-term, immediate injection of cash, and then to work towards long-term solutions as well. I look forward to any advice you might be able to give. You say the answer is quite simple, to come up with a suggestion. There are many programs out there, and you were saying the programs are failing you, but can you just say, you talk about a simple solution. Can you explain that?

Mr. Palahicky: A simple solution in the fact that what we have drawn up in our rally committee, Mr. Murray Downing and Mr. Pletz, that information is what we would like. I know you are aware of it. That to us is the starting point, and what we would sort of appreciate, if you approached it through that avenue. I am not saying it is simple in that it is a done deal of any sort, but it is something that is very concise and very straightforward, and if we could approach it through that avenue.

Mr. Cummings: Thank you for your presentation. I think your words are more eloquent than many we have heard. I would just ask: You have emphasized the urgency of the situation, which I think we on both sides of the table agree. Without referring to it, can I assume that you are saying that the current program, including AIDA and the son of AIDA, are totally inadequate to deal with the current crisis?

Mr. Palahicky: Yes, sir. They are totally inadequate.

Mr. Gerrard: I think one of the important issues here is if there is a need for dollars, we have talked about the figure of 500 million, that there needs to be some sort of consensus on what that is and how it should be distributed. I think one of the things which is quite clear is that there is a lot more pain in southwestern Manitoba than further east in the province, although we will be there later on and next week and listening to farmers there.

My first question would be: How much in terms of dollars? The other point that I would ask you is you mentioned that farmers buy retail. Is there any way, and there were occasions in the past when you grouped together and pushed down some of the input costs, prices?

Mr. Palahicky: The overall number that is required for Manitoba would be in the line which we have already established between a $40 and $60 per cultivated acre amount. That is what we are looking for. Whatever that adds up to be in this province, that is what we need. That is the loss of income because of the commodity prices dropping, the increase in inputs. That is the buffer that needs to be made up. I will reiterate, just like my colleagues have said, that is just enough to bring us to the field this year. It has nothing to do with this year. It is to payback losses that occurred the last two years.

As far as your second question, as far as trying to increase our ability possibly to do something in the manner of wholesaling or getting ourselves into a better position to market ourselves or to buy inputs, I think we, unfortunately, and this is history in Canada, have had co-operatives. My grandfather was one of the initial people who started the Saskatchewan Wheat Pool years and years ago. Unfortunately, we have seen co-operatives shift from community-based and member-owned, member-controlled to avenues where they have almost taken on a corporate entity. In doing so, we have lost control there. We have lost our Agricore elevators in my area, simply because of the fact of economy of scale and the desire for industrialized agriculture, which pretty much precludes and marginalizes all the people. It does not allow for family farms, for communities. It does not allow for individuals to become self-sufficient and have a chance for prosperity and a future. All it does is it marginalizes us, reduces us to doing what we are doing here.

We are all good farmers here. We all produce at 100 percent and many of us beyond 100 percent of our yield average in our areas, and we do that at a loss. Why do we do it? Because we love doing it and because we are good at doing it, but there is no consensus, there is no solidarity amongst the people who are out there who are supposed to be looking after our business. Our business is farming. Our business is looking after land. Our business is to develop and produce food, safe and high quality, high quantities for everyone. Please. You people are the ones that we are investing our votes and our dollars and our time in, that you would do the things we cannot do. We need you people to be there to be the advocates for our cause. We cannot have governments succumbing to industry. We need governments to be helping the people, the individual, the taxpayers, your employers.

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Mr. Jack Penner: Well, thank you very much. You indicated before that the program that Murray Downing had developed was the kind of program the Province should be looking at. The minister has also indicated, in her view, that kind of program might not be GATT green. I would think when one looks very closely at the program, as I have looked at the program, it is significantly different from the GRIP program. It is also significantly different from our crop insurance program. Therefore, I would wonder whether you think that you could make the case, or that the case could be made before a tribunal that this program could in fact be workable and that it could be made GATT green. Is that your view?

Mr. Palahicky: You are correct, yes.

Hon. Scott Smith (Minister of Consumer and Corporate Affairs): Just quickly, Mr. Palahicky, per your presentation, you mentioned both financial and social impact. We have heard that over and over again all day with the young farmers and some of the programs that are out there. I guess, just with your background, you would be a good person, in my opinion, to ask. You are farming with a couple of generations of people who are still within the farm. I am just wondering, you are seeing the equity being so terribly depleted out of the farms from the older farmers and people trying to transfer the land and trying to move the land on to some of the younger folks in a seamless manner. Do you see a real deterrent, because of taxation and the transfer of land from one generation to the other, that older folks who are long-term farmers are not moving as quickly in that direction as maybe they could if they had some form of assistance or less taxation on transfer?

Mr. Palahicky: Though that may be the case in some cases, I strongly believe that it is more the fact that farming is just not viable, period. It is just not equitable. There are avenues, like you have suggested, that are probably applicable to some people, but overall you can ask most people who are in that 55 to 65 years old who have the 25- to 35-year-old sons who want to farm. Really the only deterrent would be that there is just no way of seeing themselves through as making a living at farming, because there just is not that kind of money in that industry.

Mr. Chairperson: Thank you very much for your presentation, Mr. Palahicky. I would like to call Susan Melnyk forward. On deck and be ready to go is Andrew Dennis.

Good evening, Ms. Melnyk. Do you have a written submission that you would like to have distributed to the members?

Ms. Susan Melnyk (Private Citizen): No, I do not.

Mr. Chairperson: Okay, proceed.

Ms. Melnyk: Mr. Chairman, committee members, ladies and gentlemen, I have never done anything like this before, so just bear with me. My name is Susan Melnyk and my husband and I farm with our youngest son in the R.M. of Rossburn. We took over the farming operation from my husband's mother in the early 1970s with no land payments to pay and money in the bank. We raised four children on the farm, thinking that someday they would all be able to farm with us. The three oldest have gone to the city with only the youngest left who is determined to farm.

Over the years, we have grown grains, oilseeds, lentils, raised cattle, pigs, chickens, milked cows for cream, up until all the creameries around the area shut down, at which point we had to sell our cream quota. Everything we made went back into the farm. We eventually had to expand, so we bought more land then had to purchase larger equipment to work this land.

In 1994, my husband put our semi on the road, and he and our oldest son hauled freight for the next year and a half while the rest of the family looked after the cattle. He farmed in between all that. Any money went back into the farm. My husband and son now do custom seeding, combining and grain hauling. We have diversified about all we can. After almost 30 years, we have used up all the equity we had built up and we are now trying to produce the country's food for less than the cost of production.

We now need an immediate cash injection, a realistic figure that addresses the losses incurred in the previous year, otherwise we cannot put in a crop this year. We have to establish a cost of production program to replace programs we have now. The AIDA program has not worked. We applied for AIDA for the 1998 crop year and received a cheque for $12,000. Then when we applied for AIDA for the 1999 crop year we were informed that an error had been made on their part and now they want $3,000 back. The only people to benefit from this program are the people working in the AIDA offices. Two different neighbours have family members who work in these offices and they are getting $25 an hour.

NISA did not work for us either. We never had any money available to put into the NISA fund. The provincial government has to recognize our concerns and take them to the federal government for us. I think we also need some type of a moratorium on all existing farm loans until the problem is recognized and a solution is reached. Thank you.

Mr. Chairperson: Thank you very much, Ms. Melnyk.

Ms. Wowchuk: Thank you, Ms. Melnyk, for outlining your family's situation. Yours is probably very similar to many families and many of us who are on the farm and hope that our children will take over and then come to a point where we are not sure whether we want to bless our children with the farm or not because it is so difficult. There are many of us who are in that situation.

You talk about wanting the children involved in the farm operation. I am sure that is a few years away, but do you see, once the crises which are dealt with–we need an immediate cash injection. We all know that we have to have some money to help our farmers, but then we have to think about the next generation of farmers. Do you believe that there is a role for the Government to play in helping with the transfer of land through one generation to the next, and do you think that would be an important place for government to play a role?

Ms. Melnyk: Well, something has to be done, because otherwise there is no way that our young farmers can get started. Our son is 22 years old, and it is very hard to find farmers who are that age. There is nobody under 30 who is farming pretty well. You have to look very hard to find somebody. So if we do not do something we will not have any young farmers left.

Mr. Gerrard: I just ask again the same question, and that is give me an estimate of how much you think is needed in terms of helping people like yourself. We have heard $40 to $60 an acre. If you put it in terms of the program that we have just had announced, which is $93 million, how much will that provide to your farm and what sort of multiple of that would you need to be able to continue farming this year, I guess?

Ms. Melnyk: It would have to be somewhere around $40 to $60 an acre, because the cost of the inputs, there is no way we can pay for anything with what we are being given now.

Mr. Chairperson: Thank you very much, Ms. Melnyk. I would like to invite Andrew Dennis to come forward, and also point out for the members of the committee that No. 13 on our speaking list, Gordon Bartley, has opted to hand in his written submission and not make an oral presentation. So he will come off the list. Mr. Dennis, do you have a presentation?

Mr. Andrew Dennis (Private Citizen): Yes, I do.

Mr. Chairperson: Thank you. If you could do that, that would be great. My friend from Portage la Prairie has reminded me to invite Bob Radcliffe to be on deck and ready to go.

Mr. Dennis: Hello and good evening friends, fellow farmers and members of the committee. My name is Andrew Dennis, and I farm in close proximity to the community of Brookdale. This is located toward the central eastern side of a Brandon-Neepawa-Carberry triangle. My wife Sharran and two children, Riordan, 11, who helped me today on the computer, and Ryerson, 4, and myself presently farm 2000 acres of grains and oilseeds.

First, I would like you to know that I am pleased to get this opportunity to address this committee. I would like you to know that the problems facing many segments of agriculture today are very real and very overwhelming. Furthermore, these problems are by no means new. These hardships have been brought on by our country's green trade goodwill gesture, the demise of the Crow rate freight assistance, followed by larger than ever European and American subsidies, then quickly brought into sharp focus by grains and oilseeds prices sinking as much as 40 percent, starting in 1998.

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The political system and will is not in place to address such situations and, although we know there are specific avenues and protocols to follow, if we farmed in such a slow and non-decisive manner, we would never get a crop in the ground or into the bin and would have been financially driven from the land long ago. Indeed, this has already happened to many good and efficient producers and their families, as they weaken financially and emotionally and head for greener pastures. They have abandoned their dreams of carrying on the important work of their forefathers and have taken their expertise, their families and micro-economies elsewhere, never to return. With their entrepreneurial spirit and broad knowledge base, they will do well for themselves. One small step forward for a family, one giant step backward for agriculture.

On our farm, as with others, we have noticed many big changes in the ways we have to do business. We strive to keep up with the changes around us, such as decreased grain transportation and handling services forcing more cost back onto the producer and municipalities, as the farmer now needs larger trucks, augers, bins, and even a bigger yard, and the municipalities struggle to maintain the roads. The costs of these changes are dramatically impacting one's bottom line. We have tried to keep up on our farm, but the changes are both too fast and too expensive. Still I am sure that if myself and many others had not changed we would have got even further behind.

Many have swum as far as they can. They are treading water for now and will not see the other side. Other older generation farmers will encourage their sons and daughters to seek careers, forgoing their good retirement that they so richly deserve. Who would take their operation? At this point, we do not know, but that will not keep them from making a sound decision for their children, just as their parents wrongly thought they were doing for them.

I would like to share with you some details of what kind of an income can be derived from running an efficient 2000 acre grain and oilseed farm over the last 20 years in Manitoba, the kind of farm that over the last 5 years has averaged 115 percent of the area averaged by its own Manitoba Crop Insurance crop management history figures, which are at the back of your pass-out, the kind of farm that is low disturbance seeding, low fuel consumption, low manpower, relatively low overhead, with tractors and air seeders that are 15 to 20 years old and subsidizes itself with a custom spray application business as well, a farm that is efficient in almost every sense of the word. This is my family farm.

Here are my earnings off my Canada Pension Plan statement of contributions, which you also have. For the 10-year period from 1980 to 1989, my average earnings were $6,636. Many of these years I worked off the farm for six months, from October 1 to April 15. In the 11-year period from 1990 to now, it is even worse. Average earnings dropped to $5,453 per year. The last five years were zero. That is on that sheet. Many of these years were also propped up by six months of off-farm income and in more recent years a custom spray application business. This farm, combined with the business that helps keep it floating, has grossed sales of nearly $500,000 but virtually no net income.

It is ironic to be producing food for the world but not making the income to buy food for ourselves. The Family Living Costs, a production 2001 guide as published by Manitoba Agriculture and Food, from which you also have highlights at the back there, show that to provide for my family of four it will cost in excess of $40,000 this year. How do we do it then? Well, it is not a big secret, nor is it magic. Ask many farmers and they will tell you that their debt load is rising. You know mine is. The numbers are very telling of that. Many are borrowing against future earnings in the hope that it will get better. Some even borrow on the hope that our governments will get up to speed on this thing called food production. Diversification, specialization, value-added, manufacturing, exporting, input retailing, local economies large and small, hundreds of thousands of jobs are riding on this industry.

Free trade is great if you say it fast, but we have to protect our agri-industry, our jobs and Canadian lifestyle from foreign interests. We need to get our support system for this industry up to the level where we are just short of breaking the trade rules, something I understand that we are a long ways from now. Right now we need a lot of support to make up for all the lost time since the Crow was taken from us. This will, in the short term, take some serious money. We have some major overdue maintenance to do on this industry, because it is not going to fix itself, and segments of it are crumbling fast. Other segments will likely follow in the scramble to get into them.

Once we have stabilized the industry, we need some programs that work. This becomes more of an economic policy, rather than band-aids and emergency funding. For some, tragically, it is too late, as the auction sales continue again this year, more numerous than ever before.

It is my hope that this committee will take this task very seriously, as I am sure that it will do, and does everything in its power to take and change the course of time before it is too late. Much expertise has been lost. Some will never be. The teachers have moved on.

I hope the information that I have provided is helpful and presents a clear and truthful picture of the situation down on the farm. I believe it is a common picture and story, one that is not always seen or presented in a perfect light. Thank you very much.

Mr. Chairperson: Thank you, Mr. Dennis.

Ms. Wowchuk: Mr. Dennis, thank you for your presentation. You have certainly painted a bleak picture of your farming situation, one that is repeated for many, many farm families, and one that is certainly a challenge for everybody.

I just wanted to ask you: What changes are you making on your farm to address this? People talk about land set aside, people talk about reducing input costs to get them through this situation. I would ask you whether you think that a land set aside program that is being discussed in some circles is a good idea and whether you are also taking steps to reduce your input costs to get you through this situation.

Mr. Dennis: I will address that. Reducing inputs, that is a bit of a hair-raising issue. It is just cutting your throat. It is pretty tough to do. Land set aside, it is a good idea, but you have to get a little more of the world to go along with it. I mean, we have to subsidize. We have to have support from our Government right from Ottawa. If we cannot do what the Americans and the Europeans do, we will not be here. Canada will not be in the playing field. The Americans, when they look toward Canada, they look at a 30-million-mouth market. If we do not play in that market, we become part of their market, and they take our exports and everything. It is going to hurt.

Mr. Gerrard: I am going to ask the same question. The reason is that in our resolution we talk about $500 million for the country, which if you put it in the same framework as we had with the last payout, which was $93 million for Manitoba, I do not know what your farm will get, but the issue here is that $500 million target, what we have heard from the others, is way too low. Should we be going for $40 to $60 an acre? Is some multiple of that $93 million, which will be provided shortly, enough?

* (20:20)

Mr. Dennis: I would have to say that, like one of the gentlemen said before, $65 will pay off last year's expenses. It does not address next year's situation. Some people are getting through. They are subsidizing it from many directions. The wife is working and they are driving school buses. They are doing custom work. They are doing everything under the sun. It is all going into the hole and they are still not breaking even. The amount of money we need is closer to the $7 billion that I think Jack Penner said would bring us up to par or parity with the Americans. I am not sure how we do it green, but that is supposed to be the politicians' job, to figure out how we can do it green. I think if we had the will, we could do it. We cannot let them step on our fingers just because we have taken away the Crow and we have led the way and then they are just burying us in subsidies.

Mr. Cummings: Andrew, the one thought that comes to mind after listening to your presentation is that you are making the statement that this is urgent and help is needed now. If it is anything less than the $40 an acre plus that most people seem to be pointing toward, are we going to continue to lose your generation of farmers?

Mr. Dennis: Absolutely. The one lady that was ahead of me here said her son was 22. That is very rare. I went to meetings when I was 20; there was 20-year-olds there. I went when I was 25 and the youngest guys were 25, then 35. Now I am 40 and honest to God there is not many under 40. They have just rode the thing up with me and the young ones are gone. Their parents have told them get out of here. We lose them. We have to pick up some 20-year-olds now, because the ones in between, they are gone forever; they are not coming back. We need some aid now or we are going to lose everything.

Mr. Pitura: Andrew, you indicated in your written submission that if we get the short-term prop-up for agriculture that we need to have more of an economic long-term policy. Any vision? How would you put that long-term policy? What would it look like?

Mr. Dennis: I think that would be pretty tough, but I think if you look to what the Americans and Europeans are doing we need something like that. That is driving up their own costs as well, so I really could not give you the answer, but I know we have a very big problem. It is the country's problem, because it is going to impact on the cities eventually. We are all going to run to the cities and we are going to take our money and our spending with us, and we are going to take a lot of jobs there.

Mr. Smith: Mr. Dennis, you paint a pretty bleak picture of farming we have heard over and over again, continued all day long. Coming from what you term as a young man in farming nowadays, members have mentioned and asked you the question, we have heard anywhere from $30 to $70 per acre obviously needed for immediate injection. You seem to understand and know your operations very well. Just on fuel costs, no taxation provincially on fuel costs, I am just wondering, one long-term solution, what kind of impact eliminating federal fuel taxes on your operation would have. Do you have any idea?

Mr. Dennis: Yes. Every little bit helps, as long as we keep accumulating it, because we need a lot. I read something the other day. It said commodity prices have gone up 12 percent since 1973 and our input costs have gone up 377 percent. That is pretty tough to take. Definitely, a little bit helps, but we have to get a lot of little bits or they do not add up to much.

Mr. Smith: Just on that, I just wonder if you would know offhand approximately what your fuel costs would be on your operation in a year.

Mr. Dennis: On my 2000-acre farm, it is probably around $15,000, and that is probably low because I am very minimal tillage sort of thing. What the percentage of the federal taxes are I really do not know.

Mr. Jack Penner: We have heard a lot of talk about the elimination of the Crow. Can you tell me on your farm what that has done to your costs in charges now assumed by you?

Mr. Dennis: Yes, I can. The first year the Crow left us, my dad and I sat down and figured out–I am not sure what the year was, it is a little while ago–it was going to cost us approximately $65,000 more to ship our grain off 2000 acres.

Now you accumulate that from '96 or whenever this was, I am not sure. If I had that money we might not be sitting too bad. That is a major source of the problem. We were looking at $7, $8 and $9 Canola at the time; it did not hurt so much. That price disappeared and, wow, does it ever hurt now.

Mr. Harry Schellenberg (Rossmere): I hear a lot about the Crow rate, the Crow benefit being gone and hurting farmers. As it happened, I do not think there was much of an outcry from the general public. Am I right about that?

Mr. Dennis: Yes, I think farmers may be a little apathetic. They always figure somebody else is going to pick up the ball when they are hurting, but it has not happened this time around.

Mr. Schellenberg: Not just farmers, the public in general, even politicians, rural ones that represent farmers. I did not hear any outcry about what would happen in the future. That is my point.

Mr. Dennis: I think their timing was quite nice. Commodity prices were fairly good, and if they were going to pick a time to pull it they picked a pretty good time. It did not hurt and we were led to believe, well, you know, let the end user pay the whole thing. The end user will pay the freight. Do not worry about it; it will all come back. It did not. When prices dropped, it hurt.

Mr. Chairperson: Thank you for your time tonight, Mr. Dennis.

Mr. Dennis: I would like to make one more comment. The meeting here to me, it seems a little like a NASA fact-finding meeting, when we already know that the gaskets on the boosters are faulty. The only difference is that the space shuttle has not crashed yet. It has not blown up, but maybe with enough money and enough will we can get to Mars yet. This is an endeavour that is even more worthwhile than that. Thank you.

Mr. Chairperson: Thank you very much, Mr. Dennis. I would like to invite Bob Radcliffe to come forward, please, with Mr. Perry VanHumbeck on deck. Bob Radcliffe? It appears Mr. Radcliffe is not here. We will move his name to the bottom of the list and call him later.

Perry VanHumbeck, would you come to the microphone please. Mr. VanHumbeck's name will be dropped to the bottom of the list and called later. No. 8, Roger and Lynda Desrochers. We have Larry Redpath on deck, so if Mr. Redpath could be ready to go.

I need to ask the committee for their consent to allow two presenters to present at the same time. It is my understanding that the custom is that we have one at a time. Is there agreement on that? [Agreed]

We will hear from both Roger and Lynda Desrochers then, please. Do you have written submissions? Oh, there we go. Just a little bit ahead of me. That is good. The floor is all yours.

Mrs. Lynda Desrochers (Private Citizen): Roger and I–this is a first, but since January we have done a lot of firsts, so bear with us.

Mr. Chairperson, distinguished guests, fellow farmers and media types. We want to thank you for taking the time to come to Brandon to hear what we have to say. I am Lynda Desrochers and this is my husband, Roger. We are from Baldur, Manitoba.

* (20:30)

We are here tonight to raise the concerns about the farm crisis. There is a desperate need for an immediate cash injection and a new farm policy that acknowledges the cost of production. We are not only here with concerns about ourselves. We want an agricultural program for all of Canada.

Roger and I have farmed together for 35 years. I can stop here and tell you I am going to read this but he is answering the questions. That is it. I am the mouth, he is the worker.

Roger began farming at the age of 13 and has farmed for 45 years. We have a son and three daughters. Aside from our daughter who is still at home and in school, our three eldest children are married and farming.

After the era of mixed farming, we specialized in grain, but in the last 10 years Roger and I have led our children into diversification. In four very distinct operations combined, the members of our family collectively seed over 4000 acres.

To diversify, we have 200 head in a cow-calf operation, 5500 hogs in a state of the art feeder barn. We share a seeding cleaning operation and are involved in developing a hunting lodge off farm. The men also do custom work and grain hauling, honey harvesting, carpentry and field work.

The women, there are four of us, hold full-time jobs in professional, financial and health care fields. We are raising six children, that is at last count, and off farm together we earn $150,000. This may sound like a lot of money, but we are sustaining four families.

Through diversification, we no longer work five days a week. We are now working seven all year round. Our children, I can add, do suffer for this. My oldest daughter says: Why does he farm? Why does he not get a real job? This really hurts. This is not good.

This year with the cost of production doubling due to the increase in price of fertilizer and fuel, with no increase in our final price for our product, we, as well established farmers, have struggled to reach the decision to seed this year. We have always been very positive people, but this is a very negative situation, and denial is the first step in grief. I have always liked denial, and I love it. I stay there as long as I can, but I cannot stay there any longer.

Roger on the other hand is expected to carry the burden on his own. Farmers in general tend to think that they are required to handle anything Mother Nature hands them, but Mother Nature never taught us about the implications of world trade.

Unless you, the people working for us in the Government, are prepared to take a stand for us in free trade subsidies and world trade, we will all end up in the city looking for work. Are you folks prepared for us? We are a good bunch. It will not only be the farmers but the economic base we support. Folks in rural communities will be looking to the city for city jobs too.

The programs in place for disaster at this time are a disaster. AIDA cost $83 million to administer. This is $83 million not going to the farmers, and the money that did get to the farmers took over two years to arrive. Some farmers are still waiting or will not be paid.

During our trip to rally in Ottawa, we were told AIDA was not designed to pay out unless the income dropped drastically in one year. Farmers who stretched their resources to refinance were not even eligible. Does this make farmers second class citizens who are not allowed to succeed? Those in need who have suffered great losses predominantly due to the weather had to have the resource to hire chartered accountants to fill in the AIDA application forms. Then, refused by AIDA, farmers were left with a $400 bill for accounting, adding insult to injury.

This year there are a lot of farmers who will not be able to seed without a cash injection. Others may be able to still get credit or take from their savings to put in another crop. According to government figures, it will cost $187.13 to seed an acre of wheat. On an average of 36.3 bushels an acre, and at $4 a bushel, a farmer stands to lose $41.93 an acre.

Other crop input losses will range from Canola at $70.25 an acre, barley at $29 an acre. On grain or oilseed farms such as a 4000 acre, we are looking at an incredible loss. We know the federal government has approved $500 million, based on 86-million seeded acres. This apparently would give each producer $5, after administration costs.

This is a desperate situation and desperate people do desperate things. A lot of farmers have already left the farm, often in tragic circumstances. More farmers will be forced to leave, unless they can receive a fair price for their product.

Roger and I will continue to farm and support the individuals and groups working with our Government to realize an agricultural program for all of Canada, the end result being a fair price for our products. We hope to succeed so that our grandchildren, being the sixth generation to farm, will continue to successfully produce the highest quality, safest and most nutritious food of the 21st century. We want them to be confident in the fact that Canadian farmers will be sincerely supported by our Government and appreciated by the world markets.

We thank you for this opportunity to express our views and concerns.

Mr. Chairperson: Thank you, Mrs. Desrochers.

Ms. Wowchuk: Thank you, both of you, for your presentation. As I look at what you are doing, I have to say that I admire you for having your family so committed to agriculture. Many other people would want to see their children involved in an industry, but when I also look at it and I think if you could get a fair return from the marketplace for your product and did not have to work off farm, how many jobs would be available for other people. That is the real challenge here. If you are not getting your return from the marketplace and having to take another job, that is taking away from someone else who could also have that job and increase our population in rural Manitoba and build for healthy rural communities. That is what we would really, really like.

Many people have talked about the losses and the need for government support and for payments. I guess I would ask you: Given that the supports in other countries come from national treasuries–for example, in the United States, they do not come from state governments; they come from the national government. They also do in Europe. Are you looking for a program funded by the federal government, or are you looking for a program from the Province?

I have a second question to that after you respond to that.

Mrs. Desrochers: I can address the first half about other people liking to have our jobs. You can say that three times over. There are a lot of young people who could. My daughters,there is nothing they would love better. My oldest daughter is an R.N. and she is leaving home–three children–working shift work. There is nothing she would like better than to be able to afford to stay home. The megabarn is their hope that she will be able to go to just part-time.

Myself, because, as you see, we are very busy people, and we appear very successful–and we are successful–except that now we are hitting the downhill. They say: You know, I know rich farmers; they do not need the money. I say it does not matter if you are rich or poor. If you are not getting what you put in, you are not going to be there. Rich doctors get paid. Roger can answer about the world trade.

Mr. Roger Desrochers (Private Citizen): The only answer here today, I really do think, is that we need the cost of production. I mean there is just no other way. As far as the federal government and the provincial government, they will have to share the costs. I think that is what everybody is looking for. I do not have the answers. I just think there has to be something out there that can be done. We are hoping that you can do it. What can I say?

* (20:40)

Ms. Wowchuk: Just to follow that. The reason I asked the question about where you are looking for money to come from is that people talk about limited resources, provinces have limited resources, and provinces have balanced budgets to live within. So, when we start talking about other additional programs and additional spending for agriculture, it means cuts somewhere else. Have you thought about that, about how a province would find the resources for additional support? I throw that question to you not to deflect, but in a sincere way, and I raise it because in other countries it is coming from federal governments. If you have not thought about areas where we could save money to do this, I am not trying to put you on the spot, but I am trying to outline the dilemma we are in and why I think more of the responsibility falls on the federal government.

Mr. Desrochers: Well, I think maybe you could donate some of your cheque towards it, maybe. I do not know.

Mrs. Desrochers: I believe the federal government definitely has to be the main player, but I also believe that you are our line of government. We have gone to the federal government, but you are the experts at how you ask, how you go about it. We are farmers. Like one fellow said, we are farmers. That is what our expertise is. We are coming to you as our provincial–we know the provincial government. When we were in Ottawa and Ontario, for Ontario to get $64 an acre, it costs the province of Ontario $10 a person. For Manitoba, it would cost $800. We have to be realistic here and also know that our province–and I think that is the answer.

Mr. Ashton: I was really struck by your comments about the city, because I do not come from the city of Winnipeg. I hope this is not seen as critical to the city of Winnipeg. It could apply to a lot of communities in the province. I think a lot of people do not realize how much the urban economies depend on rural and northern Manitoba, I mean, it is interesting, when I look around this room here, how much of the economy of Brandon depends on rural Manitoba. Everybody here tonight is going to be buying gas, buying–well, mind you, I think we skipped supper both in Dauphin and here tonight, so it will not be food. It is just kind of ironic, something about agriculture.

I am just wondering if you could give, just on a personal basis, some indication of what is happening, whether it be in Baldur or generally, in terms of purchasing. One thing I have certainly heard is that you see the ripple impact of what is going on in the farm economy, because people are not just purchasing the way they used to. The reason I am asking this question, I guess, is maybe so that we can educate all of us collectively about the fact that what we enjoy in this province, what we have enjoyed as a standard of living is it is a two-way street. What really struck me is what is going to happen in the city if everybody in rural Manitoba moves into the cities. Where is that resource base that we have had in this province that has given us the standard of living we have? Where is it going to come from? Where are the jobs going to come from?

Mr. Desrochers: I think you are very right. I really believe that we cannot all go to the city. I guess it is kind of a figure that we are saying that, you know, we have a small restaurant in town that we go to for coffee. She does not know how she is going to keep operating because none of us are going to eat there anymore. We really cannot afford to. They are all hurting in town, too. It is not just us. I mean, when we do not have any money to spend in town, they do not have any money for themselves, too.

I am going to put another crop in whether the Government gives me any money or not. I wanted to put that in, because I feel that we have worked really hard. We do not take holidays, and we work really hard to get what we want to do. We sure would like you to do something for all these high costs. I have no answer. All I know is that we the need the cost of production, so maybe it will keep everybody in line. Maybe the people in the city just do not know how hard we work out on the farm. I am sure lots of you do not really realize just what it takes to make a farm situation work the way it should. I do not know if that answers your question.

Mr. Gerrard: You have a pretty impressive operation with the livestock and the grain and oilseeds. Many would think that by feeding grains to your hogs and your cattle that you are able to make money because you have a combined operation. Maybe you would like to comment on that and also comment on the fact that some of the programs have been designed so in fact you do not get compensation when you are feeding grain to livestock.

Mr. Desrochers: My son and my son-in-law have the feeder barn, but we built the hog barn. We sell the feed, our barley, and they supply the feed. Our barn is by hog space, so we have to check whether the price of hogs go at a certain price or not. It is a bit of a different situation.

As far as the cattle, well, both sons-in-law have a herd of cattle. I am involved in it. They buy grain from me to feed them, but it does not really amount to a whole lot. The barley you sell to your son-in-law is probably cheaper than you would sell it at the elevator.

Mr. Jack Penner: Mr. and Mrs. Desrochers, I truly appreciated your presentation. I think the one statement that you make, Mrs. Desrochers, and I think is really at the essence of this whole discussion, and you say denial is the first step in grief, then you say I really like denial, quite frankly, being a farmer myself and having three sons, as well, involved and all three of their wives working off the farm to support the farm, we know what you speak of, but I think there is a tremendous amount of denial in rural Manitoba. I think there is a tremendous amount of denial in government most days.

I would ask you whether you know that this Government, this current Government in Manitoba, has had increased tax revenues over the last two years amounting to around $750 million. Did you know that? Do you know that there is roughly about $300 million lying in a savings account left there by the previous government that could be used to support agriculture? That is why it was left there. Do you know that the increased revenues are almost all spent in the last two budgets in this province and very little of it or none of it has gone to agriculture? Agriculture, I would suspect, has been a very significant tax revenue generator for them. I am just wondering whether you would like to comment. I think denial is not only relevant to the farm.

Mrs. Desrochers: I agree. I totally agree that denial is in this room. I think, even as we speak, people are still denying it. Roger said last night I do not like talking about this. I believe there are a lot of farmers out there who are not talking about it, but come May, when they have to roll the wheels and they go home–and like I say, it does not stop at the farmers.

My question is if all this money is sitting around, why? Why? I guess that is my question to you.

Ms. Wowchuk: Thank you, Mrs. Desrochers and Mr. Desrochers, for your presentation. There is money in the Stabilization Fund. There are funds there that governments do set aside, but I think the issue that we are focusing on here tonight is the resolution that we have before us that was passed by all parties calling on the federal government to recognize its responsibility in this international crisis. It is a crisis that is driven, caused largely because other countries are supporting their agriculture industry while Canada has chosen not to support.

If you look at the level of support in Canada, which is somewhere between 10 and 11 cents on the dollar, whereas in Europe it is well over 50 cents, in United States it is over 40 cents on the dollar, that is being provided by national treasuries, and our producers cannot compete. So I think that it is very important that the resolution that we have brought forward here calling on the federal government, first of all, to put in some short-term money and then move towards long-term solutions is a very important step.

I think that, for me, there are roles for provincial governments to play, but the provincial governments cannot fill in the role of the federal government. I would ask you if you think it is the provincial government's responsibility or the federal government's responsibility to play a larger role when the federal government, in fact, has a surplus of over $15 billion.

Mr. Chairperson: We have run out of time, but I will allow either Mr. or Mrs. Desrochers to answer that question quickly.

* (20:50)

Mr. Desrochers: Rosann, in closing, I would like to say that I think the federal government should have a lot to do with it, but if you put your money on the table, maybe they would match it. What do you think?

Mr. Chairperson: I would like to thank Mr. and Mrs. Desrochers for their presentation here tonight.

Mrs. Desrochers: We thank you also.

Mr. Chairperson: Thank you, and I call our next presenter, Mr. Larry Redpath, private citizen. Also, for the information of the committee, presenter No. 39, Mr. Wayne Solas, representing the Twin Valley Co-op, has left his written submission here for us to include in the report that will be presented to the Legislature. He has opted not to make his presentation orally. I have been a little bit neglectful of my duties. When this happens, I am supposed to ask the committee: Does the committee grant its consent for these written submissions to appear in the committee transcript for this meeting?

Some Honourable Members: Agreed.

Mr. Chairperson: Agreed. Thanks for bailing me out.

Mr. Redpath, do you have a–you do, and it is being presented. The floor is all yours.

Mr. Larry Redpath (Private Citizen): I did not prepare any extra copies for you if that is what you are asking me. No, I did not.

Mr. Chairperson: Well, that is fine. You can proceed.

Mr. Redpath: Good evening, ladies and gentlemen, honourable members of the Manitoba Legislature standing committee. I would like to thank you for giving me the opportunity to speak to you regarding some of the issues that we are facing on the state of agriculture in Manitoba. I do not understand why I am not highly valued as a Canadian citizen in our society. I would think a producer of food should be the most important segment. I, for one, enjoy my food, and when I see you in the legislative cafeteria, I think you do, too. If things carry on the way we are going, you soon will not need a Department of Agriculture and Food.

In the past, people worked all day, every day, to feed themselves and their families. Now, the average farmer feeds 250 people, but many of us, unfortunately, have to send our wives out to work to feed us. I also work off-farm and have done so every summer and every winter since I started farming in 1978. I am working the equivalent of an urban worker and yet have to try and farm between jobs, after work or on weekends.

Needless to say, a lot of the small things and repairs go by the boards. Some of these small things are like telling my sons I cannot go to their hockey games or their baseball games or other events that they would like to go to, because there is no money. So, why would my boys, who listen daily around our kitchen table about the things I have mentioned, or will mention, entertain thoughts of farming? Why would my wife and I encourage them to farm? Actually, we are encouraging them to get an education and pursue other interests and leave the land. Is this what our provincial government wants?

On our farm, we have been policyholders of crop insurance from day one. In 40 years, we have seen the coverage levels drop to levels where it almost has no value. For red spring wheat, I have 17-bushel coverage valued at $4.65 per bushel, netting me $79.05. My costs, according to Manitoba Department of Agriculture, for 2000 are $187.15. As you can see, the costs of production have risen dramatically in this 40-year period, yet crop insurance does not reflect this in its coverage.

Our coverage levels cannot constantly be reduced as we have claims. As a comparison with Autopac–bear with me for an instant–after an accident, a car valued at $20,000 would be worth $15,000. Soon the car would be worthless, and yet the premiums rise. I wonder if the public would still purchase Autopac if this were the case.

The value of that wheat at $4.65 per bushel is not fully realized until our final payment is received some 18 months later. We need more money up front more quickly and at levels that reflect the cost of producing a crop in 2001. Two ways that I feel this can be accomplished is through a cash injection on a per-acre basis to help costs incurred from the previous two crops stemming back to the 1999 disaster. It seems like we are always focussing on getting some money out to us guys to put our crop in this year. You know, it is not the crop this year we are worried about. It is the last two that we have put in. The bills are not paid for yet. Keep that in mind. I have fuel and fertilizer dealers that refuse to supply me because of outstanding bills from '99 and 2000, something both levels of government have never fully addressed. Constant calls from collection agencies and FCC offices are not a lot of fun.

The second solution I want to address is the cost of production established for all areas of agriculture like grains or oilseeds. We cannot keep balancing budgets on the backs of small business, farmers and labour by removing services, supports and asking user pay for the many services we need.

Some of the examples–and they have been examples that have been used several times tonight and I am going to repeat them again–are the Crow benefit loss, plant research, even our cash advance administration. You go and get a cash advance in the spring, 50 bucks; you go and get one in the fall, 50 bucks again. A hundred bucks in one 12-month period. For what? I deliver about 14 semi-trailer loads of grain, and that is the amount of paperwork they have to deal with–about 14 items.

Cost of production is the only way we can address huge cost increases to fuel, fertilizer and chemicals where whatever market will bear are the charges in place. Changes are happening so fast in this industry that most of us cannot even begin to keep up. With the advent of the new inland terminals, increased costs are involved as we have to pay more for freight to get our products there. Why are these huge savings, made in 50- and 100-car spots, not passed on to us so at least we could pay our truckers and use that money where it is intended? What is the point of all these inland terminals? That is why I thought we had them–to reduce costs. Well, it is important that they reduce my cost, as well.

I would like to thank the MLAs for seeing fit to come out and hold these meetings outside the Legislature and meet with us and hear our concerns and solutions to this farm disaster. My prayer would be that this does not fall on deaf ears. Thank you.

Mr. Chairperson: Thank you, Mr. Redpath.

Ms. Wowchuk: Thank you, Mr. Redpath. I want to assure you that this will not fall on deaf ears. Earlier today, someone raised the issue of the federal government having a task force that was going to take a year and a half to report. I want to tell you that we are going to move very quickly, once hearing this, putting it into a package that will be sent to the federal government. This process is very important–to have as many people as possible, to add a human face to the whole issue. I thank you for the comments you have made, and certainly I appreciate the comments that you have made about the areas that have been cut back by the federal government and that have impacted on you. Although supported by many people, removal of the Crow has not been a benefit to producers. It has been a burden because it is an added cost.

Your issue of payment on cash advance and the filing of different papers are also added costs to the farmers. I want to just thank you for your presentation and for outlining the various areas that have been brought forward that are adding a burden to the producers who do a very important job. I just want to correct the record for a comment I made earlier, as well, where I said the federal government surplus was $15 billion this year. In fact, the federal government surplus was $20 billion this year. The provincial government surplus was $10 million. So that is why there is such a need to focus on the federal government, because they do have the resources of $20 billion. I have no question but I just thank you for your comments.

* (21:00)

Mr. Cummings: Thank you for emphasizing the urgency of our job tonight and the reinforcement of something my colleague said before, which is that every time one of our children chooses to leave the farm, they increase their standard of living. I would, in light of that, ask you if you believe that this motion that we have before us is adequate and presents the urgency to the federal government that we are all expressing here tonight. Do you in fact support this resolution? Have you had a chance to have a look at it?

Mr. Redpath: Actually, no, I have not had a chance to view that paper, which you are speaking about there, but I would certainly encourage to try to expedite that as quickly as possible. It just baffles my mind why we have to study this problem another month or another year and a half when I know all of you here present are aware of the urgency of it, and I am sure the people down at Ottawa also are aware of the urgency of it.

As has been mentioned here several times this evening, I think there has to be political will to act on this.

Mr. Gerrard: Let me just put this in the context of the changes in the Crow rate and the WGTA. Clearly some areas have had a lot higher impact because of the greater distance that the grain has to be transported. One of the problems in a sense of the $500 million, which in Manitoba has provided $93 million, is that it has been distributed on a cash basis across the country, and in any additional payout, clearly the overall cost would be less if it was tailored to where the need is. That is, in some fashion, that there was greater payout or a payout in relationship to how far, or how much effect there was of the loss of the Crow in the transportation effect. Do you want to comment on that?

Mr. Redpath: I guess I would like to preface some of my comments. You know you mentioned trying to get the money out where the greatest need is. I appreciate that problem. But I have also seen, you know, with some of our programs, and I guess AIDA comes to mind immediately, that somehow or other, where the need was greatest, it did not get there. I think that program was tailored to try and weed us out, so to speak, somewhat, but it did such a wonderful job of that, that really almost nobody benefited.

I guess what I am trying to say here is maybe we need to paint with a broader brush. Maybe we have to help everyone so that nobody gets left out. That is really what happened with some of our past programs, and AIDA, especially, did not come to where the need was the greatest, in my opinion anyway.

Mr. Jack Penner: Mr. Redpath, were you aware that the Province had increased income over the last two years of around $750 million? Were you aware of that? That their Budget revenue increase was $750 million, actually a bit more than that, over the last two years?

Mr. Redpath: No, I was not, no.

Mr. Jack Penner: Were you aware that there were around $300 million in the savings account that the Filmon government established?

Mr. Redpath: Yes, I was aware of the rainy day fund, and the other amazing thing while we are talking about the rainy day funds was it was not very hard here a few weeks ago to increase that. You know, we can find money for some things if we want to, and I think that was an example. A lot of us are confused about this rainy day fund. I used to have one too. It has been long-since gone. I have a few other programs too. My NISA, I thought that was maybe going to help my retirement package. Well, that has long been gone. My personal savings account does not exist. That is long-since been gone. Why are we so fortunate in the provincial government to have a rainy day fund, and when is the rainy day going to come along that we can access that?

One other comment I would like to make before I return to my chair is, we have talked about federal-provincial relationships here, and it is my opinion that a 60-40 split is much too rich for this province. I know that is something that has been struck, but for a province that has a large acreage base and a small population base, we have got to realize that that is not a workable solution. When you look south of the border, the individual state is not even brought into some of the federal packages. It is a federal package, and it is a federal package complete. So, from my humble opinion, a 60-40 split or ratio, however you want to talk about that, is much too rich for a province the size of ours. Thank you.

Mr. Chairperson: Thank you, Mr. Redpath. Just for the information of committee members, presenter No. 18, Mr. Bill Cochrane, a private citizen, has opted to hand in his written submission and not make an oral presentation.

Our next presenter actually would have been No 10, Cindy Desrochers, but she also opted to hand in her submission and forgo an oral presentation.

I would like to call Mr. Gary Temple to the microphone. On deck, and be ready to go, is Mayor Roy Stevenson, Mayor of the Town of Rivers.

Mr. Temple, do you have a package for members?

Mr. Gary Temple (Private Citizen): Yes, I do.

Mr. Chairperson: If we could get that distributed then, please. Mr. Temple, the floor is yours.

Mr. Temple: Good evening members of the board. My name is Gary Temple. I am a farmer from Waskada, Manitoba. We farm a fourth-generation farm. My son and daughter-in-law farm with us here. They are in Waskada and area.

I want to talk tonight on some of the problems leading up to the crisis in southwest Manitoba, and then carry on to what I feel is needed to hopefully rectify some of these problems we have with agriculture.

In the flood of '99, those of us who farm in the southwest Man could not sow a crop because of the supersaturated soils, because of 30 inches of rainfall all congregated in a 30-day period pretty well.

The $50 per acre received from government was spent with more to returns of the soil to a cropable position. The weeds grew shoulder high, and a spray program had to be adopted, plus two to three cultivations were required. Expenses of the land payments, taxes, machinery payments and living for that year came out of savings, if you were fortunate enough to have any, or from borrowed money. Because of low commodity prices since then, the recovery time will be a least three to five years, with good prices coming up.

Not everyone qualified for the AIDA program. Many could also not trigger their NISA a