AGRICULTURE
Mr. Deputy Chairperson (Ben Sveinson): Order, please. Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Department of Agriculture. Does the Minister of Agriculture have an opening statement?
Hon. Harry Enns (Minister of Agriculture): Yes, Mr. Chairman. I am, first of all, of course, pleased, in front of the admiring crowds of those concerned about agriculture, to make an opening statement about the importance of the department.
Let me simply, for the record, however, indicate that the agriculture and food sector, including the farmers and their families, play a very significant role in Manitoba's overall economy. It has a major impact affecting the livelihoods and the well-being of many Manitobans in 1995.
One in eight have jobs in the province as a direct result of agriculture. Over 60,000 persons are indirectly and directly employed in agriculture. Agriculture directly or indirectly accounts for about 19 percent of the total added value for the goods produced in our province. I make these points because although our population percentage is small, only up in the order of 3 percent of Manitobans are actively engaged in agriculture production, nonetheless we contribute upwards to 12 percent of the gross product, economic development product, of our province. In effect, it is the ongoing work of our industrious 25,000-odd family farm units that we have in Manitoba that provide this economic support to the overall well-being of the province.
In 1995, farm cash receipts in Manitoba were estimated at $2.4 billion. Receipts from crop production rose by 13.5 percent to $1.37 billion, mainly because of increased prices for all crops, more than offsetting the decreased marketing of barley, canola and mustard seed that we experienced in 1995. Higher receipts from hog, the PMU industry, dairy, chicken, turkey and egg production offset low returns from cattle marketing, resulting in livestock receipts of about $940 million in 1995, virtually unchanged from a year earlier.
Lower program payments for particularly the GRIP program, crop insurance and NISA resulted in a 63 percent decrease in direct payments to Manitoba producers which dropped from $310 million in 1994 to $110 million in 1995. While some may point out that that is a problem area, I would want to underline the fact that most farmers and I myself want to see the farmer essentially gain his returns and his dollars from the marketplace and not from government programs, so I think that point has to be made when you look at that decrease in the amount of support payments that were made to the farmers.
Manitoba crop producers relied more on returns from the marketplace in 1995 and less on government and that is as it should be. In recent years, the Manitoba government and Manitoba Agriculture have vigorously worked with the agriculture and food industry toward increasing our profits, diversification and value-added activities.
Our province's agrifood sector is vitally dependent on exporting unprocessed or semiprocessed food commodities. For example, 85 percent of our wheat, 53 percent of our barley, 81 percent of our beef cattle and 85 percent of the hog's pork are sent out of the province. We are very much an exporting province. Our province's agrifood industry will continue to be very dependent on dynamic forces beyond Manitoba's borders.
The new liberalized global trading environment represents a major opportunity for Manitoba's agrifood industry. This great opportunity exists both within our continent and offshore, in Japan, Korea, as well industrializing countries, such as the Phillippines, Malaysia and Thailand. The North American Free Trade Agreement, NAFTA, has created a market of over 368 million of people with an output of about $7 trillion per year. This agreement is opening up new export possibilities for Manitoba's agricultural products.
The revamped GATT, the General Agreement on Tariffs and Trade agreement, will improve Manitoba's export access to other countries' markets. The agreement will continue to greatly eliminate nontariff barriers, reduce export subsidies and clearly define health and safety standards.
Our Manitoba farmers can compete against any other producers within a global marketplace free of significant trade distortions generated by national governments. We in Manitoba look forward to the continued lowering of international trade barriers that will create an international marketplace more responsive to comparative advantages of exporting nations and regions.
We are confident that Manitoba has its own comparative advantage to successfully compete on a level playing field, global marketplace. Our advantage in great part is based on our high-quality agricultural products, assured supply, low unit costs of production, high level of farm technology and openness to innovation.
In the past few months I have been privileged to participate in several trade missions to Asia. As a result of these missions, my awareness and understanding of the great potential for exporting Manitoba agrifood products to these markets has been considerably increased. My personal experience on these missions again reinforced the importance of listening to the needs of our customers and providing products that meet those needs.
I especially revisited the--you know, it is particularly important that we appreciate and understand the different cultures and the different markets that we are attempting to service. Accordingly we must provide them with custom made and superior quality food products that exactly match their different tastes and preferences.
There are enormous opportunities to expand our exports in value-added products such as with chilled pork, forages, swine and beef breeding stock, canola meal and oil.
As most of my colleagues are aware, I recently returned from meeting representatives from the Ministry of Agriculture in the province of Hunan in the People's Republic of China. As a result of leading this trade mission, a number of agreements were signed that will encourage stronger relations between the province of Hunan and Manitoba. Hunan, by the way, is a province of some 92 million people, to just give some indication of the scale of doing business in a country like China.
The combined impact of the WGTA and the Canadian Wheat Board pooling reforms will be far greater on Manitoba producers than for any other western Canadian farmers. New economic realities imposed by WGTA and the Canadian Wheat Board pooling reforms will require Manitoba's agrifood industry to accelerate in making major adjustments towards greater diversification and value-added activity as well as finding and developing new markets. These grain transportation reforms will drive our province's agrifood industry toward long-term change, change with emphasis on high-value, low-volume crops, forage production, particularly on more marginal crop production land and less on low-value, high-volume crops for export and towards greater emphasis on livestock production, especially in the areas of hogs and cattle. The provincial government and Manitoba Agriculture are committed towards working with the agrifood industry in making these adjustments.
In recent months we have heard optimistic news about greater diversification and expanded value-added activities in our province. There has been an encouraging series of agrifood announcements about new or expanded processing plants slated for Manitoba. These announcements from various processors are particularly welcome, given our province's agrifood industry's need to adjust towards a greater diversification in value-added activity.
Some of these announcements involved the expansion of the McCain Foods potato processing plant in Portage la Prairie; the new hog processing plant by Schneider's slated for Manitoba; the food processing complex, including a canola crushing facility, by the Canadian Agra group at Ste. Agathe; the expansion of the Carberry potato processing plant by Nestle Food Products.
These new and expanded processing plant announcements have been driven by the agrifood industry. However, behind the scenes and in a support capacity, Manitoba Agriculture; Industry, Trade and Tourism; Rural Development; and Economic Development board staff have quietly worked very hard with a number of agrifood manufacturers in laying the groundwork to making some of these good news announcements possible.
Manitoba Agriculture staff were involved in such behind-the-scenes activities as conducting feasibility studies, reviewing infrastructural requirements and assessing supply needs for the manufacturers. Many of the new or expanded processing plants slated for Manitoba will certainly help our agrifood sector in making necessary adjustments to accommodate the post-WGTA and Canadian Wheat Board pooling era.
Of immediate note, there will be a major increase in Manitoba's potato production in response to McCain Foods and Mid-west Food Products announced expansions to their respective processing plants. It is expected that in the next few years producers will increase the province's irrigated potato acreage by approximately 30,000 acres. Manitoba's total land use for potato production will approach 90,000 acres upon completion of our potato industries expansion. During the next few years, Manitoba will be moving toward becoming the new potato capital of Canada, replacing Prince Edward Island, New Brunswick.
Our province's expanded potato production will necessitate a considerable increase in acreage under irrigation. Manitoba Agriculture will be working closely with the industry to address the need within a sustainable agricultural framework. Irrigation provides significant benefits in ensuring the competitiveness of processors in world markets. An increase of approximately 30,000 acres of irrigated potato production is estimated to provide close to 290,000 tons of marketable raw product or 145,000 tons of finished product with a market value of approximately $156 million; 110 full-time jobs on the farm will be created, with an estimated 800 new jobs in the processing and service industries.
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That is why this government supports the proposed Canada-Manitoba agreement on irrigation infrastructure development, a 10-year cost-shared program within our 1996-97 Estimates. Manitoba Agriculture has committed $500,000 this year to support value-added and food processing development through an irrigation infrastructure program.
However expansion plans for irrigation must recognize and take into account the current and future needs of nonirrigators, and irrigators, as well, in providing for an adequate in stream and healthy river flows. As such, emphasis will be in place on the capture of surplus water during spring runoff in retention ponds for latter use in this season by our irrigators. We are also aware of and encouraging news concerning the increased livestock numbers in Manitoba and the associated opportunities for adding value within our province in this area.
Statistics Canada estimates that there will be in the range of 1.8 million hogs on Manitoba farms as of January 1996, an all-time record high. In 1995, Manitoba produced over 2.9 million hogs. We are approaching the 3-million mark. We have always indicated in the past that our benchmark production line was in the order of 2-million to 2.3-million mark. In other words, hog expansion driven by continued strong prices is showing no signs of abatement; the expansion is moving on. With the recent announcement by Schneider's of a new hog processing plant, we expect our hog production to double by the year 2000.
Manitoba's 14,000 beef cattle producers had a record number of 635,000 beef cows and replacement heifers on farms as of July 1, 1995, an increase of some 4 percent from the previous year. I am well aware, as a modest beef producer myself, that perhaps this is the one area of agriculture that is in some very serious difficulty. I see the honourable member for St. Boniface (Mr. Gaudry) there, and he has several brothers who reside in my constituency who remind me of it in a very forcible way that all things are not well in the cattle industry right now.
There is considerable capacity for our cattle production to undergo further expansion, especially for increased backgrounding of beef cattle here in Manitoba. However, as already mentioned, current low prices for cattle have caused some difficulty for some producers while others are regarding this situation as an opportunity to expand their herds.
In the long term, grain transportation reforms will give our producers relatively lower feed costs combined with abundant feed supplies, contributing to our province's competitive advantage in cattle production.
On January 17, 1996, the Manitoba government announced the creation of a Working for Value Task Force to find ways of increasing the value of Manitoba exports. The major task force was asked to hear from rural Manitobans about how to increase Manitoba's exports by a billion dollars within a decade. From February to March of this year the Working for Value Task Force held some 26 public forum meetings across rural Manitoba. These meetings involved public input from community members, including producers, commodity groups, business and local leaders.
Our government task force was chaired by my colleague the MLA for Emerson, Mr. Jack Penner, and co-chaired by my colleagues for Turtle Mountain and Morris, Mr. Mervin Tweed and Mr. Frank Pitura. Local communities were asked to participate and provided us with thoughts and suggestions of how we could improve the condition and economic activity particularly, of course, with agriculture foremost in mind but not exclusively. It was inclusive of other industry economic efforts--tourism. It was a joint effort on the part of the three departments: Industry, Trade and Tourism; Rural Development; and Agriculture.
Many rural Manitobans told us that they were willing to take on the challenge of change to create more wealth, economic stability and jobs within their local communities. The task force interim report was released in Brandon at the Rural Forum on April 19 of this past year. That is just a month ago. Here are a few areas of opportunities and initiatives found within the interim report of what rural Manitobans told us. The greatest areas of opportunities were food processing, tourism, cattle, manufacturing and hogs. Major issues outlined in the interim report include investment for value-added initiatives, access to information and service, regulatory reform, community leadership, business planning and marketing, entrepreneurial training, ownership structures and infrastructure. The task force will later be submitting a final report to our government, and the Province of Manitoba is committed to using the task force report as a major foundation in formulating its future policy decisions affecting rural Manitoba and its communities.
Just a few specific budget highlights. Manitoba Agriculture's 1996-97 budget expenditure represents a balance in serving the needs of Manitoba's farmers and the agrifood industry within the general framework of fiscal restraint. The total budget expenditures for Manitoba Agriculture in 1996 is approximately $96.5 million. This figure represents a total reduction of approximately $11.6 million from the '95-96 voted Estimates of $108.1 million. Our budget was reduced as a result, of course, of moving to a new generation of safety-net programs. Enhanced Crop Insurance from GRIP could not have been run--virtually all of the reduction that members of the committee will note are due to the termination of the GRIP program.
Manitoba's agriculture crop insurance premium increased by some $20.9 million. However, the increase can only partially offset the $32 million in reduced premium expenditures reflected when the GRIP program was terminated, and therein lies the $10 million reduction which is very clearly reflected in the Estimates line.
The Gross Revenue Insurance program for crops was terminated effective, of course, at the end of the '95-96 crop year. Throughout its five-year history the program ensured that producers received income support through difficult times. However, improved market prices, reduced federal support and mandated removal of trade barriers under GATT contributed to the demise of the program. The elimination of GRIP facilitated the introduction of an Enhanced Crop Insurance for the '96 crop year. The new program covers the majority of crops grown in Manitoba including tame hay. The program is production neutral, less trade distorting, environmentally sustainable and reduces the need for ad hoc assistance in the event of a major crop loss. Premiums for Enhanced Crop Insurance have increased to some $35.7 million from the $14 million that were in the Estimates just a year ago.
A further program that was introduced in the current year for which provisions are made in the Estimates is the Diversification Loan Guarantee Program developed by the Manitoba Agricultural Credit Corporation to assist producers to adjust to the loss of federal grain subsidies by providing new levels of financing for diversification and value-added purposes. I understand that my critic from the official opposition has indicated to me that she would prefer to be dealing with the crop insurance corporation tomorrow when next this committee meets, so we can inform staff that crop insurance personnel will not be required for this morning's session.
I thank you, Mr. Chairman. I look forward to a lively debate on the Estimates of the Department of Agriculture.
Mr. Deputy Chairperson: We thank the Minister of Agriculture for those comments. Does the official opposition critic, the honourable member for Swan River have any comments?
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Ms. Rosann Wowchuk (Swan River): Yes, I would like to take a few moments to put a few comments on the record, and to begin with, I want to agree with the minister that agriculture is a very important industry in this province and one that does not get nearly the recognition that it should for the role that it plays in the economy of the province. The saying is that how agriculture goes, so goes the rest of the province, and in many cases we have seen that happen, and when agriculture is in difficulty, it is very much reflected in the rural communities.
The farming community has gone through a tremendous change in the last year, particularly with the change to transportation, the Crow benefit, and that has caused a lot of concern in the rural community, and we will see farmers having to change how they run their operations because basically with the loss of the Crow benefit, it is a tremendous increase. I think that farmers are very fortunate, particularly the grain producers, this year in that we have seen an increase in the price of grain. Had we not seen that increase in the price of grain, I think the situation reflecting the change to the transportation support would have been much more desperate than it is right now.
The other issue that I think is important to recognize is that although farmers are getting a fair return for their product, they are facing many increased costs, particularly grain producers with the increased chemical costs. Chemical and fertilizer costs tend to go up as soon as grain prices go up, and it ends up being that the bottom line for the producers does not increase very much at all.
The whole industry is changing. We have to make changes to find out ways that we can use the grain that we produce without having to ship it to market, and I think one of the areas that we have to do much more work in is in research and development, to ensure that this happens, and that is one of the areas that I believe government, both federally and provincially, has an important role to play but has been neglectful in this area, and I believe that we have to offer supports to farmers in that area, ways of diversifying.
The minister indicates that there is a tremendous opportunity for growth in southern Manitoba in the potato industry, and I look forward to hearing about that, and I think that this is an important area of growth, as is the livestock industry, that we have to look at ways that government can help producers make the adjustments.
I have concern about the cattle industry. I think the cattle producers are facing real difficulties right now. I talked to a few of them. As the minister has indicated in his area there are many cattle producers, and they are going through a difficult time. There are no supports at the present time for the cattle industry. I hope that we can have some discussion through the Estimates as what the minister sees as possibilities of working with the cattle industry to help them through this difficult time. We talked about processing in the hog industry. I hope that we can look at also how we can have some of the value-added jobs in the beef industry as well.
One of the areas of concern that I would want to address is under the area of crop insurance and wildlife damage. We have had lots of discussion in this last winter with the heavy snowfall and increased numbers of wildlife. Farmers have certainly paid a price for that and have certainly faced difficulties when they tried to have adjustments done to their crop insurance claims. I think that is one area that a lot of work has to be done on to help farmers through this and also have government recognize that they have a responsibility, not only through the Department of Agriculture but along with the Department of Natural Resources, to manage the wildlife. Or, if they are not going to manage the wildlife, the big game, then put in place proper supports for farmers, because in this last winter they have not been supported properly. There have been a lot of farmers who have lost a tremendous amount of income and have been the people who have been paying the price for keeping these large numbers of big game on their property.
The hog industry is an important industry and certainly one that can grow. I am pleased to see that the numbers are there. The minister is well aware that we do not agree with him on his decision to move to dual marketing of hogs. We do not believe that that is the direction to go. The hog industry has grown under single-desk selling, under Manitoba Pork, as the market grew. I believe that if the market is there, and the minister indicates from his travels and the places he has been on trade missions that there are increased markets, I believe that under single-desk selling the industry can and will grow just as it did in the past to meet the demands.
As these industries grow, both the livestock industry and the hog industry and other areas, there is a responsibility of government to address the environmental issues of ensuring that they are sustainable. We have had many issues raised in areas with hog production of use of water and water tables. That is an area that I believe that the government has to do much more work on to ensure that we have a balance between the growth of industry and the quality of life of other people. Along with the growth of industry, there is that responsibility to ensure that we can keep that balance in place.
The one issue that the minister did not mention that I would like to have some discussion on is the announcement that came that the government is going to be moving on elk ranching. We still have not seen that legislation. I have questions that I would like to ask about the direction the industry is going, why decisions were made to change positions so dramatically from 1992 to 1995, and where the information came from that resulted in the minister changing his mind from someone who is opposed to the industry to now being such a supporter of the industry. So I think that there are several federal issues that are certainly impacting on the farmers in Manitoba. One in particular is the future of the Canadian Wheat Board and what this government is doing to get their message out to ensure that the Wheat Board remains as a viable industry in this province.
I guess we have to look at how we are going to meet the changes that have resulted in the change from the Crow. We have to ensure that as we make these changes that all people in Manitoba benefit that live in rural Manitoba, that we can ensure that there is sustainability and that the people who want to remain small farmers have the opportunity to do that, because not everybody wants to move into being a large operation. I think that is important as well. We see that our population is going down in rural Manitoba, and we have to look at ways to ensure that not everybody is swallowed up by larger farmers and that we end up with having very few people in rural Manitoba.
So with those few comments I look forward to having a debate on some of the issues that I have mentioned and going through the Estimates. I am sure that the minister will have many answers. My one hope is that we can get through this and that the weather will change and we can see our farmers get out on the land and have a successful year because at this point that is far more important than anything we can be doing here.
Mr. Deputy Chairperson: I thank the member for Swan River for her comments. Is it the will of the committee to allow the member for St. Boniface to make some opening statements?
Mr. Neil Gaudry (St. Boniface): Mr. Chairperson, I will be very brief since the hours or the time is limited so that we can get to the other departments. I would like to concur with the minister and the member for Swan River (Ms. Wowchuk) that agriculture is a very important industry in Manitoba.
I will have questions for the minister, and I want to make sure that when I ask these questions they will be on a positive nature, not in a negative, especially after reading an article in the KAP News yesterday, I thought hit me very well, where Mr. John Castle says, farming has changed so much that people born and raised on a farm but having left 25 or 30 years ago would not have a clue how to operate one today. End of quote.
I thought it was appropriate for me having left the farm a number of years ago and go back quite often, like the minister knows, not to work, though, just to visit, I thought this was very appropriate, because I see the changes that have occurred over the years since I have left the farm. This is why I say I follow the industry very closely, and I will be asking questions that I have prepared to ask the minister. Therefore, not to waste any length of time to make comments here, I will reserve my remarks during asking questions.
Like the member says, we hope for good weather very shortly so the farmers get onto the field and get their crop in so they have a profitable year again this year. I wish them well in their agricultural endeavours in the upcoming season. Thank you very much, Mr. Chairman.
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Mr. Deputy Chairperson: I thank the member for St. Boniface for those comments. Under the Manitoba practice, debate of the Minister's Salary is traditionally the last item considered for the Estimates of the department. Accordingly, we shall defer consideration of this item and now proceed with consideration of the next line. Before we do that we invite the minister's staff to join us at the table, and we ask that the minister introduce his staff present.
Mr. Enns: I am pleased to introduce senior members of my staff: Assistant Deputy Minister Mr. Craig Lee will be known to members in the area of policy; Les Baseraba, administration and field services. I am particularly pleased to welcome a new face to the Department of Agriculture, although I hasten to add, not a new face to the service of government in Manitoba, Mr. Don Zasada, the new Deputy Minister of the Department of Agriculture. In introducing Mr. Zasada, in his first experience in going through the Estimates of the Department of Agriculture, I would like, for the record, to acknowledge the many years of service that former Deputy Minister Mr. Greg Lacomy provided to the farming community, the people of Manitoba and the Department of Agriculture. Mr. Lacomy retired from his position early on this year, and we wish him well in his retirement years. Thank you, Mr. Chairman.
Mr. Deputy Chairperson: We thank the minister. We will now proceed to line 1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits, on page 13, $437,000.
Ms. Wowchuk: Mr. Chairman, I would like to take this opportunity to get a bit of an understanding and the role of different people on the minister's executive support staff, and just ask the minister--there are several major things going on in agriculture, the changes that have been going on, and there is a lot of work, I am sure, that the department has been doing.
One of the areas that I would like to know about and one I mentioned in my opening comments, with these changes, there has to be a lot of work done on research. It is our feeling that Manitoba is losing out on research. It seems that Saskatchewan is becoming the agricultural research centre for western Canada, and we are losing out in Manitoba. Along with research, there is marketing, and the minister indicated that he has done some travel and outreach work to look at new markets, but I would like to ask the minister, who on his staff is responsible for marketing and research, and what kind of work has been done in the last little while to ensure that Manitoba does get its fair share of research in this province?
Mr. Enns: Mr. Chairman, it is probably a little difficult to answer in the sense that the area of research that the member specifically refers to, I think I understand what she is referring to, is the level and commitment and actual research projects that are being undertaken in agriculture in Manitoba. That is, of course, a multifaceted effort, main research activity that the Department of Agriculture supports. As reflected in these Estimates, it is, of course, carried on at the Faculty of Agriculture at the University of Manitoba, which receives an annual grant in the order of $738,000 from us. That has been a kind of a core support to agricultural research that has been traditionally provided by the Manitoba Department of Agriculture.
I share the member's concern that the downsizing, if you like, of agricultural research in such facilities as Morden and Glenlea and Brandon that has occurred in the last calendar year by Agriculture Canada certainly is of concern to me and, I am sure, to all Manitobans who understand the importance of these research programs as they relate to the well-being of agriculture in Manitoba. I acknowledge that certainly it would appear that in some instances greater emphasis has shifted to our neighbouring province, in Saskatoon, Saskatchewan. Whether that has something to do with the fact that the current federal Minister of Agriculture is native to that province, I would not like to impute those kinds of motives, but, certainly, the facilities, particularly in the area of biotechnology, have become outstandingly successful and aggressive in that facility.
I want to assure the honourable member that we are working diligently to ensure that adequate levels of research continue in the province of Manitoba. Specifically within the department, to answer the member's questions, Mr. Assistant Deputy Minister Craig Lee heads up the Policy and Economics research aspect of our department where we have staff--one always could do with more staff, I suppose--who are responsible for providing the data.
They have had a busy year in the sense that these fundamental changes that the member alluded to, the grain transportation changes, the disappearance of the Crow, the very major changes to the Canadian Wheat Board formula at the St. Lawrence shipping routes, has kept our staff busy working with various commodity organizations to generate the kind of statistical data that was important for ministers to have at their fingertips in the series of meetings that led up to these decisions and trying to put Manitoba farmers' positions adequately in front of the federal authorities when the issue of some compensatory cushioning of these major policy changes were made in the announcements of the support program, the $1.6-billion payout program for western grain producers as a result of the loss of the Crow and to try to argue about getting Manitoba's fair share. That kind of work necessitated a lot of work on the part of flushing out these figures.
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The other person that the member asked about was who is in charge of the marketing aspect. We have later on in the Estimates a specific line, and Ms. Dori Gingera is the person responsible for the Marketing branch. Again, we have senior staff within that branch who work specifically in welcoming and developing trade initiatives, whether it is support to Manitoba trade missions abroad or incoming visitations of which we have a growing number.
In excess of 20 delegations, for instance, were received from the one country of China alone in the last 12-month period. This requires a considerable amount of staff support in making these kinds of arrangements possible, and, of course, the more everyday efforts on the part of the marketing staff is to assist producers, particularly with the emphasis to value adding and the actual market development of farm products, and there have been some very notable success stories in the last 12 months.
Honourable members will be familiar with the success of a farm family from a very small beginning but value adding into various bakery products on the Pizzey farm with flax products, with different on-site, value-added processing of that kind of farm commodity.
Just recently in the Waskada area, the department and the Marketing branch participated in the development of a major greenhouse facility that is now actively selling vine-ripened tomatoes all within the province of Manitoba. I think they have their production all sold. I do not know precisely what scale the production is in, but apparently employing upwards to five or eight people in that operation. This is the kind of work that the department normally undertakes to help value-add on the farm.
Ms. Wowchuk: Mr. Chairman, I know where we deal with the line on research, but I was trying to get a feel for whose staff responsibility, in the senior staff, whether there was any outreach work going, in particular, to try to attract more research here to Manitoba, but from what I gather the minister is saying that there is no role for senior staff. That is basically the work of the university to attract research here, or is there a role? Is government doing anything to attract? If it is for the University of Manitoba, then that is fine. That is what I am trying to find out. Is there senior staff that is working in this area to try to attract more research and development in Manitoba?
Mr. Enns: You know, developments with respect to attracting and carrying on agricultural research, not a new, but there is greater emphasis being placed on direct participation by various commodity organizations in that research and in the actual funding of that research. Much of the federal dollars that are being made available for ongoing agricultural research are being provided on that basis.
That was why, the honourable member will recall--I regret with some opposition coming from her and her group--I was a strong proponent in the successfully enabled commodity organizations to better fund themselves to access those kind of research dollars. I can report to the committee, a year later, that among the first organizations to have successfully used that legislation that was passed last year are the canola growers of Manitoba and they have very specific research programs.
Canola is perhaps the outstanding example. It is kind of mind-boggling to fully appreciate the extent to which ongoing agricultural research in that crop's development is taking place that has produced a host of different varieties that most specifically suit the growers needs, but there is a case where for them to access some of the federal dollars research through their Canola Council, they need to be in a position to have some seed money. They now are in that position, with the 50 cent per ton deduction that they can provide the kind of base dollars that then begins to flow federal dollars and other private sector dollars into a worthwhile research program.
Other organizations such as the forage growers are taking advantage of the same legislation, and they are leading in some of the research requests for ongoing research in the area of forage. In other words, within the department, of course, Assistant Deputy Minister Dave Donaghy is probably our best point man in terms of co-ordinating with Dean Elliot from the Faculty of Agriculture, University of Manitoba, and/or interfacing with the different commodity groups and assisting them with their efforts to reach out and to bring research dollars into Manitoba, but it is essentially driven by the various commodity groups and again I repeat our kind of main Manitoba centre, exclusive of the federal presence here, is through the Faculty of Agriculture and Dean Elliot's work in research.
Ms. Wowchuk: Mr. Chairman, the minister mentioned the commodity groups paying for research, but this research is tied to business, shared with business. Does the minister not agree that there has to be a certain amount of research that is done by government, not tailored to the needs of business or that government has a responsibility to do some base research that is accessible and valuable to the development of the agriculture industry without being tied to business? Do you not believe that there is some need for that kind of research?
Mr. Enns: I do not disagree with the honourable member, and I tend to view that kind of basic, ongoing core support that governments, both federal and provincial, provide through their universities and as specifically noted in these Estimates, the $738,000 that we provide to the Faculty of Agriculture as not being industry driven, as being publicly government driven if you like, provides that kind of base core of research in agriculture that I think comes close to answering the member's question.
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What has developed more and more, and I have no difficulty with that, is the kind of more direct or applied research that is industry driven and that generally comes through the various commodity organizations, and to some understandable because it is supposed to some extent when a commodity organization, such as the canola growers or the forage seed growers, put up some of their dollars, they are looking for specific market-orientated results that will further their objectives with respect to that specific crop.
I do not disagree with the member's base assumption that there needs to be some core research supported by the general public through government programs. I point to the ongoing support that the Faculty of Agriculture is provided with by the department in these Estimates.
Ms. Wowchuk: I raise this concern because of an article I read and heard about just recently and it deals with the potato industry that the minister had just recently talked about and the value of this industry to Manitoba. The farmer that was making the comments had indicated that through research and genetic control of the potatoes that were being grown, the chemical industry basically had control of what kind of chemicals would then have to be used in the production and spraying of these potatoes and that is what I am trying to avoid. I think that we need very much base research that will help all producers no matter what the commodity, whether it is canola or potatoes or wheat, that research is not done only by the chemical industry or the fertilizer industry, whoever it may be, so that then they have control of what chemicals the farmers use. That is basically why I am saying that it is very important that we have some base research.
I hope that this government will pursue to increase the amount of research that is done in this province in the best interest of producers so that we can have growth in the cereal grains, in the animal industry. In all of those areas we need research, but we do not want to see it controlled to the extent that the feed companies in the animal industry or the chemical companies in the cereal or vegetable industry will have control over the producers. That is the point that I am trying to make, and I think that it is very important that we move in that direction and that there is somebody that is pursuing to attract that industry to Manitoba.
I want to move on to a couple of areas and I would like to talk about a couple of areas that are federal, so they will not come under any lines probably. One of them is, of course, the Canadian Wheat Board, which is in the news a lot lately and under attack by a few producers across the country in comparison to the ones that support. There were hearings that were held on the grain industry here in Manitoba. They were held across the country. I would like to ask the minister if his government made a presentation at that hearing and if can share with us what his presentation was and if he could possibly provide it to us.
Mr. Enns: Mr. Chairman, the answer to the member's question is yes. We did make a submission to the committee while it visited Manitoba. I have no difficulty; in fact, I would ask my staff to make available to the honourable member a copy of that submission that was made on behalf of the Department of Agriculture which, in essence, stated Manitoba's concerns and position to that committee.
I might, just for the record, indicate that the key concerns that were expressed in that documentation--and for the member's benefit, I indicate to her I have this submission and I would ask the Clerk if I could make some additional copies for other members of the committee as well, to make that available to members of the committee.
Just in a very brief recap, the key issues that we felt it was important to bring to the committee's attention was that Manitoba producers must have reasonable access to the U.S. market and be able to directly reap benefits of this locational advantage. It was important to put that point forward to any group that is looking at how we manage and how we sell and market grain out of western Canada. Manitoba, of course, is the most severely impacted province by the loss of the Crow. So any advantage provided to our producers to the most readily accessible market, obviously the U.S., was an issue of some importance to us, and we sought and looked for some consideration of that fact by the Canadian Wheat Board in their marketing strategies of western wheats.
It is also critical for Manitoba producers in the agri industry that Canadian Wheat Board policies not hamper and actually encourage development of value-added opportunities. Members will recall reading in the farm press, and I am delighted that it is occurring in the southern part of my constituency, one of the first re-emergences of flour milling on the Prairies, major facilities being proposed that would mill upwards to 120 tonnes of flour per day of farmers' grain.
There was some initial difficulty and problems or unnecessary hurdles to overcome by farmers. This initiative is being done by, put on by a group of five or six wheat farmers, grain farmers in the province, who cannot make flour from their own wheat. They have to buy their own wheat from the Canadian Wheat Board before they can do it. So it is important that the Canadian Wheat Board understands that my government and this Department of Agriculture will not tolerate that kind of unnecessary bureaucracy to stand and interfere and to hinder value adding on Manitoba farms, particularly if we are now faced with a very excessive increase in freight costs to move the product out.
I am troubled by the fact that when you look at a jurisdiction like Kansas, which is the major wheat grower in the United States, it is also the major--67 percent of all flour milled in the United States is milled in Kansas. Prairie Canada is where the milling wheat is grown. We do not mill any flour. Only 2 percent of the flour milled in Canada is milled where the wheat is grown because millers have found it more convenient. If the grain is shipped to them at lakeside, in eastern Canada or on the West Coast, at taxpayers' expense, why mill the grain in Saskatchewan or in Manitoba?
But with the loss of the Crow, that old-think has to be rethought again. Now, it is not going to happen overnight, but within several decades, a generation from now, there will be very significant structural changes taking place in western Canadian agriculture.
Can the Canadian Wheat Board continue to exist and prosper for the benefit of the farmers if the North American market opens up to dual marketing? These were questions asked. My government's position is one of challenging the Canadian Wheat Board today, not of confronting the Canadian Wheat Board.
Mr. Chair, we have been joined by my assistant deputy minister, Mr. David Donaghy, who we were just referring to a little while ago at the table here.
Ms. Wowchuk: The minister has indicated that there is a need to have more value-added here, and certainly I agree with him on that. I am very pleased that there is a flour mill starting in Manitoba.
Mr. Enns: Potentially.
Ms. Wowchuk: Oh, potentially. My misunderstanding. I thought you had indicated that it was there. Certainly we have talked to the Wheat Board, and the Wheat Board said that these kinds of arrangements can be made. They will make those arrangements. The question I ask the minister though, in his presentation, is the minister's position that the Wheat Board should retain its monopoly for selling grain or in his presentation did he make a recommendation to move towards dual marketing of grain?
Mr. Enns: I appreciate that the honourable members have not had an opportunity of reading the submission. I invite them to do so. They will confirm that that is not a position that I have taken with that submission, nor one that I take now that challenges the Canadian Wheat Board's marketing position as the single selling desk for marketing Canadian grains. What I have challenged them and what is sprinkled throughout the submission is the chain status that Manitoba grain producers face as a result of the loss of the Crow and that from the Department of Agriculture's, from Manitoba's position, significant emphasis has to be refocused on the encouragement of value-adding within the province. That is somewhat--and I ask it more as a question--at odds with the mandate of the Canadian Wheat Board. The Canadian Wheat Board's mandate is to sell our grain abroad. I put it to the members of the committee, and, as long as they are doing it, they are fulfilling that mandate.
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All things being equal, if the Canadian Wheat Board can get $3.50 for our feed barley, for instance, in Japan, by all means, sell it to Japan. On the other hand, if hog producers are prepared to pay $3.50 for that barley to value-add through hogs and maintain a processing industry in the province of Manitoba, it is distinctly to the advantage of Manitoba and Manitoba's economy not to export that grain abroad but to value-add it and use it at home. In my opinion, there is a legitimate conflict in terms of how the issues are addressed. I want to be absolutely clear.
(Mr. Mervin Tweed, Acting Chairperson, in the Chair)
I do not believe--I say that with some experience and some pain, that it is not the position the department holds out that Manitoba grain producers should receive any less than world market prices dictate, nor do I believe that the hog industry or the cattle industry be supported by, reduced at the expense of the grain producers. Quite frankly, what has to happen is that beef prices have to come up to reflect today's cost, and the consumer has to acknowledge and accept the reality of that. There is no question that the higher and the sudden rise in feed costs have, to some extent, triggered the very serious price decline in the cattle industry, but I do not seek, as a solution to the cattle industry's difficulties, reduced feed prices necessarily. As the honourable member for Swan River indicated, I am pleased that after all too many years of depressed grain prices, finally in that area of agriculture there is a little more encouraging news. Just looking out the window, we just hope we get the crop in the ground so our farmers will be able to take advantage of those more encouraging commodity prices that I think most producers can look forward to if and when they get the crop harvested this year.
Ms. Wowchuk: The minister indicated that our closest market is the United States, and we have to look at ways that we can access that market a little bit more. I think we also have to recognize that the United States is a large grain producer themselves, and we cannot only focus on that area because we are soon going to see retaliation from the American government. We have heard it already: They do not want too much grain; they do not like the Canadian Wheat Board's monopoly.
Does the minister not agree that we have good markets in other areas of the world and we have to ensure that those markets are maintained? Because although we are going to change, we are going to be doing more processing. I think that is good, we are going to be getting more value-added for our grain, but for the amount of grain that we grow in Canada we are not going to put it all through value-added. We are not going to sell it all to the United States because they have their own grain as well, and it is important that we also keep the contacts, have the ability to sell to other parts of the world. It is the Wheat Board that has done that very well and got a very good return for producers.
So we have to be sure that we do not weaken the one tool that we have in order to access markets that are close by where we could end up in real difficulty and we do not ruin the markets that we have in other parts of the world, because we will not put all of the grain we produce through a value-added or through livestock. Those markets are important as well. We should not be focusing on trying to get more grain only into the United States.
Mr. Enns: Mr. Chairman, I totally agree with the honourable member for Swan River's comments. I think that even some of the harshest critics of the Canadian Wheat Board tend to acknowledge the role that the Canadian Wheat Board does in representing the Canadian producer in their offshore global market other than the U.S.A. It is, of course, the continental market that is probably more scrutinized by the Wheat Board's critics than any other market, but I confirm what the member says. I think the reputation that we have garnered for ourselves in Canada in the grain trade is one that needs to be respected and safeguarded. It is not just the role of the Canadian Wheat Board. Other agencies like the Grains Commission, our whole licensing process, our control of ensuring that when grain is ordered from Manitoba, or from Canada, there is a consistency to it, a quality to it that international buyers can depend on.
I am told that we are one of the very few nations who are suppliers of grain and that is in fact the case. Grain purchased from other major exporters like the U.S. do not carry that consistency, and it is for that reason that Canada continues to enjoy that reputation and it is still very much there. I have every belief that we will in significant numbers continue to provide the quality of milling wheat, the quality of malt barley. We are of course increasing amounts of vegetable oil both in the raw and processed form. I, of course, would like to see it more in the processed form leaving Canada, or this province, and that will continue and that is why the ongoing role of the Canadian Wheat Board, in my opinion, has a long-term future.
Ms. Wowchuk: I am pleased to hear the minister say that, and I also look forward to the long-term future of the Canadian Wheat Board providing service for farmers and maintaining that market we have.
I think the other thing that we have to recognize is something that the minister just mentioned--the importance of the grain trade to this province--and having the Canadian Wheat Board in Manitoba, in Winnipeg, provides a large number of jobs as do the other grain trades. But any move to dismantle the Wheat Board will hurt farmers, because they will lose a very important tool that they have to sell grain, and it will also hurt the economy of the province. I think that is something that has to be recognized and I look forward to the minister's strong support. There is no doubt that the Wheat Board does have to make some changes and they are making changes. They have made many changes from the time it was first established. I want to put on the record that we very much support the Wheat Board monopoly and the Wheat Board's continuance to be the single-desk seller of wheat and barley.
There are a couple of other areas that I would like to address. One of them is that along with the change to transportation, we have a change of the ownership of the hopper cars, and recommendations were made that those hopper cars should be owned by the grain companies. Farmers were not happy with that recommendation, and a proposal has been put forward that the hopper cars should be turned over to the farmers.
I would like to ask the minister if his department has had any discussion on that issue and whether the minister has written any letters to the federal minister with respect to that issue.
Mr. Enns: Mr. Chairman, allow me to take this opportunity to put on the record my appreciation for the co-operative assistance that the department and this ministry has received from a host of commodity organizations representing agriculture on this and many other issues.
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The honourable member will recall that I refer to them as a coalition of farm organizations that have advised me on a continual basis on these very important issues. They were brought together a year and a half ago when the federal government first gave us the indication that it was seriously considering the removal of the Crow benefit totally and indicated that there would be some compensatory package of dollars made available to grain producers to offset the loss of the Crow, and to provide advice to the ministry this coalition was formed. I believe the honourable member participated in certainly one of the meetings about a year ago in this very building when we were getting to the short strokes and decision time when it was being made with respect to the Crow.
This same group continues to come together and has provided information on these very important issues; in this case, the transportation reform that the member alludes to and the specific question of car ownership. The position that Manitoba put forward, supported by this coalition, is very strongly in support of the farmers having a direct ownership role in these vehicles to be able to, in the future, have some role in directing the flow and the movement of grain at the time that is critical to them.
Ms. Wowchuk: Does the minister see any role for the province to play in this with respect to financing of--there is a fairly substantial amount of money involved here. Has a figure been reached as to the value of the cars, and does the minister see any role for the government to play in putting any money into the purchase of these cars?
Mr. Enns: Well, Mr. Chairman, I would suspect that even with the priorities of the political group that is now asking me this question, if pressed they would probably say they better go into health or into some other areas of government priorities rather than buying rolling stock, and, furthermore, if the other governments who have made investment, both federal and in Saskatchewan and Alberta--and we see those brightly coloured cars, Alberta Heritage Fund, Saskatchewan Government, or the federal government's wheat cars--if they are in the process of divesting themselves of their interests in rolling stock, it would probably be a hard sell and a questionable activity for the department and for me to recommend to my government for us now to get into them.
In retrospect, I think it was the right kind of decision that was made by another government. The Manitoba government at an earlier time when we acknowledged the need for additional rolling stock to help the movement of major grain crops, and not wanting to be left out of the support to the grain industry when Alberta governments, Saskatchewan governments and the federal governments were actively investing in supplying of grain carrying stocks, you will recall we leased a number of cars for a period of time. When the need was not that apparent anymore, we no longer leased them. I am advised by staff that this program was carried on for about four or five years. We leased 400. We leased some 400-500 cars at that particular time. So we do not have that problem, quite frankly, that faces Saskatchewan and the other governments who are now trying to sell them.
But the position--the proposal of the group is that we are strongly supportive of the proposal for producer ownership of the cars.
Ms. Wowchuk: I thank the minister for clarifying that because it was my understanding that Manitoba owned some cars, and what I was looking for was to see whether the province was, with ownership of those cars, looking at a way to recapture them that they might be able to turn back to the producers, but if they were leased cars then that is not the question. The minister indicates that there was no ownership of cars in Manitoba.
I wonder, I may be asking this question in the wrong area, but if it comes under Crop Insurance or that department the minister can indicate, but I am--
Mr. Enns: We are dealing in this very first item, you know, policy studies and policy issues in this section of the Estimates, so it is quite appropriate in my opinion to ask for these somewhat wide-ranging policy questions. I have no difficulty with that.
Ms. Wowchuk: The question that I wanted to deal with deals with the western grain transportation program, the additional money that was announced, and I wonder whether there are funds coming to Manitoba. I believe there is $25.9 million coming to Manitoba for agriculture infrastructure enhancement.
I wonder if the minister can indicate to us what, and again if this the wrong area, if it has to be project specific, then I will defer to a different area, but I am wondering if the minister has given any indication. In other provinces we understand that there is money going for infrastructure. Earlier on we had heard the minister indicate that there might be--at one point he had said there could be some money going for irrigation projects, and I think that that is not there right now, but can the minister indicate what his plan is with respect to this money, how he proposes to use it in the best ability to help farmers?
Mr. Enns: The specific fund that the honourable member alludes to was referred to by the federal government as the $300-million adjustment fund. That is over and above the payout of $1.6 billion for the loss of the Crow benefit. This adjustment fund is roughly broken down--because Manitoba has at the same time also lost the St. Lawrence pooling formula that the major portion of that fund goes towards Manitoba and eastern Saskatchewan, about $105 million or something like that.
Another portion out of that fund was designated, I believe, some $45 million specifically to the alfalfa industry to offset the shock of the increased freight rates to them. Now, major benefactors of that are located in Saskatchewan and Alberta. We only have a very small portion of that. That left $140 million-$l45 million that the federal government indicated was available to the province for infrastructure, various infrastructure programs. The member is correct that, I think about a year ago, I had alluded to that some of our changes that were taking place, infrastructure, could include the demand for irrigation or some water development projects. Manitoba's share of those funds is some $26 million.
Just in the last several months, I have co-signed a letter with my colleagues, the Minister of Rural Development (Mr. Derkach) and the Minister of Transportation (Mr. Findlay), and forwarded to Mr. Goodale specifically supporting and agreeing with--in fact, the letter is co-signed by the president of the union of municipalities that the money all be attributed to roads and road improvement.
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We recognize that there will be very significant pressures on our road system. This is regrettably--one should not call $26 million small potatoes, but $26 million in the budget of requirements of what I hear from the Department of Transportation is not a great deal of money to offset the heavy pressures that are being placed on our road system. So to answer the question directly, it is being, from the Manitoba's government's point of view, all being allocated for roads.
I should indicate to you that I have just yesterday met with the federal minister of State, the Honourable Jon Gerrard, who is, as we speak, holding several meetings in the communities of Dauphin I believe, of Steinbach, Stonewall, and in Brandon. The member may have a news release that was issued about that to determine--allow me just to read you the first paragraph: Dr. Jon Gerrard, Secretary of State for Western Economic Diversification, will lead a series of rural meetings on the Western Grain Transportation Adjustment Fund to gather input on priorities for the use of that portion of the federal fund designated for agriculture infrastructure of Manitoba. This is the very $26 million that we are talking about here. The first meeting will take place in Brandon, Manitoba.
Now, I have some difficulty quite frankly. We have told him very directly, and his colleague, the senior minister, Mr. Goodale, where in Manitoba, where the Department of Agriculture, where the Department of Rural Development, where the Department of Highways wants these monies spent. Furthermore that position has been supported by the president of the union of rural municipalities. I am somewhat puzzled why this approach is being taken. Mr. Gerrard is now going out to these communities to get some additional input as to where those monies should be spent. I fear, quite frankly, that there will be no shortage of ideas of where to spend $26 million. If you go into any community and say, look, we have $26 million, how do you think we should spend it, you will get 101 recommendations. I tried to give that advice to my M.P., Dr. Jon Gerrard, that we quite frankly were a little puzzled at this approach. Because if in fact he is wishing to consult with Manitoba as to the most appropriate place to spend these dollars, as a politician of some experience myself, I do not think he could have asked for a better situation where, instead of us scrapping about it, between Agriculture or Highways, or between the union and municipalities or something like that, here we provide a consensus point of view about how that money should be applied in Manitoba and put that on the table for the federal government to access. However, they chose this course.
Ms. Wowchuk: I guess I have to agree with the minister that this may create a bit of chaos in the system, and it is unfortunate that with that amount of money--and it is going to be spent over two years as I understand; it is not in one year. So that amount decreases for what can be spent. I had hoped that there would be a co-ordinated effort through the Department of Highways and Agriculture and Rural Development, whereby there would be consideration given to the areas where there is the most rail line abandonment, in the areas where we are going to see a tremendous increase in traffic on the roads. I would hope that what the minister is doing now is not going to jeopardize and put chaos into the system, and we will see the roads that are most needed get the work. I hope that this does not become a political issue, where people are playing with this amount of money and political posturing rather than meeting the needs of the people and addressing the concern that really should be addressed here, and that is, the increased traffic that will result in these areas because of rail line abandonment and also a shift in transportation costs because farmers are moving from rail to road.
I would hope that the minister can use his influence, and we will certainly try to use ours, to have the best possible solution to this. I wonder whether it would be premature to ask the minister if he can share with us which roads were recommended by the government as ones that should be upgraded through this fund.
Mr. Enns: Mr. Chairman, let me get something off my chest that is beginning to worry me. I attribute it solely to the fact that the sun is shining, but we have now been engaged in Estimates for over an hour, and Rosann and I are just agreeing with each other all the time. We are being cordial and civil to each other. It is starting to cause me some angst.
While in that process of co-operation, allow me to extend this a little further. I indicated that the meetings that I just referred to that the federal government is holding, among the places they are visiting is Dauphin, in the next day or two. I would certainly encourage the member for Dauphin, I would certainly encourage my official critic to, in this instance, seeing as how we are agreed, the priorities of these monies, these $26 million, should be directed as the municipalities have requested us, for infrastructure roads. It certainly would not hurt to reinforce that position at these meetings, in this instance that we are at fairly strong consensus.
(Mr. Chairperson in the Chair)
I might say, that is why I, even though the member reminded me, earlier had mused in public about the fact that perhaps some of it could go for other infrastructure programs such as water retention for irrigation purposes, but I quickly withdrew from that position because the farm community legitimately views this as part and package of the withdrawal of the Crow benefits. The monies should be directed more specifically to some of the adjustment costs and extra pressure that it puts on our roads system, particularly in the area where rail line abandonment has occurred or is slated for further occurrences, that that is the appropriate use for these monies. That is what the municipalities recognize. That is what the coalition of commodity groups that I referred to earlier recognize, and we in the government recognize that as well. I think, in this instance, it would only be helpful if that, in fact, was allowed to be represented as a consensus coming from the Manitoba Legislature.
The member asked specifically. We are attempting at this point in the stage simply to secure those monies for Manitoba, and the difficulty will be for my colleague the Minister of Highways (Mr. Findlay) to make decisions, and I suspect inasmuch as it is federal money that the federal government will have a say in the actual application, which specific roads.
I think, again, the effort will be made to tie this in some fashion directly to where rail line abandonment is occurring. We have again another problem in Manitoba. We have suffered through more of the rail line abandonment some years ago already, whereas in Saskatchewan that is occurring in a more specific form right now.
Ms. Wowchuk: So specifically, Mr. Chairman, there are no roads designated yet. This is just a proposal that the Manitoba government has put forward, that the money be put on roads where there is rail line abandonment, where there is going to be increased traffic, but no plan has been laid out yet, and that will fall to the Minister of Highways' department to make a decision on which roads will be the benefactors of this money.
Mr. Enns: My understanding is because the monies are essentially federal, there is a proposal from the federal government to work this not unlike the infrastructure program that is just finishing that called for leveraging money from both the province and the municipalities, that there could well be a kind of consultation process with the municipalities, province and the federals involved in the actual allocation of where these monies are to be spent.
I point out, again, as my colleague the Minister of Highways (Mr. Findlay) keeps pointing out, he has a wish list that is very close to a billion dollars in new road improvement. Members will know that the annual expenditure of new highways in the province of Manitoba is in the order of 10 percent of that demand, about a hundred million dollars, so $26 million in that relationship is not going to go a long way in addressing the very serious demand for upgrading and improvement of our major highways.
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Ms. Wowchuk: I want to move on to another area. Over the last year, we heard a lot of discussion about a whole farm safety net program, about a national safety net program. Then the minister made an announcement about our Enhanced Crop Insurance Program, and we hear Alberta has a program. I think it is the Alberta farm income stabilization program.
I would like to ask the minister, is there still work being done on a national safety net program, or has all of that come to an end, and is each province going on their own to develop a program?
Mr. Enns: I want to acknowledge the federal government and my federal minister, Minister Goodale's, very sincere and strong effort to, as we exited the Gross Revenue Insurance Program, the GRIP program, to be able to introduce a second generation of support programs that were national in scope and provided for a level type of support for agricultural producers across the country. There was every effort made by the federal officials and minister to bring this about.
Regrettably, we did not succeed in doing that. What we did succeed in maintaining to some extent is the basic crop insurance programs, which, of course, continue to be the kind of core national program that is available to farmers across the country in much the same levels of support insofar as support from different levels of government, federal and provincial, and the expanded NISA program. Those are the two programs that can be described as national in scope and scale across the country.
Different provinces, notably Alberta, opted for wrinkles of their own and programs of their own, which made it then more difficult to move from, for instance, the GRIP program into a national-type program. We in Manitoba, faced with that situation, decided to utilize, and with the federal government's participation, some of the GRIP premium dollars that were no longer required for that program to provide what we believe to be, and we call it that, an enhanced feature to our basic crop insurance program. While no program is perfect, certainly one would have to indicate that by the reception that it has received by our producers as being a pretty positive program. It is my hope that the participation rate will be considerably increased from the levels of before.
Mr. Deputy Chairperson: Order, please. I would just like to ask here whether we have moved into crop insurance. No?
Mr. Enns: Well, we are discussing this under Policy Studies.
Mr. Deputy Chairperson: I see. Okay.
Mr. Enns: Because I am in that mood, and Rosann has been very civil and kind with me. I have decided to--and the sun is shining, Mr. Chairman, which means that things are moving in the right direction in Agriculture, that we are going to conduct these considerations of Estimates in a very civilized, reasonable manner. I would ask the Chair to consider seriously not interfering.
Mr. Deputy Chairperson: I am sure, Mr. Minister, that the committee is most appreciative of your generosity..
Ms. Wowchuk: Thank you, Mr. Chairman, and I appreciate your consideration as well. I had specifically indicated that I was not going to be getting into crop insurance. I wanted to talk about the national programs.
I guess I want to pursue this a little bit farther because there was so much discussion about a national safety net program and looking for some equality across the country. The minister is indicating that there were just breakdowns from some provinces. Why? What was the goal? What was the minister's anticipation of what the national safety net program would be, and what was the reason for the breakdown? Specifically, when you first went to this table to discuss national safety nets, what was the goal? Was there any consideration given to looking at a program that would ensure that farmers were treated fairly and would be insured, looking at cost of production formulas and things like that? I guess basically, what was the goal or the dream that the minister had as to what kind of program he would have liked to have seen as far as a national safety net program?
Mr. Enns: First and foremost, the position, I think, of any minister going into these kinds of negotiations, without even spelling out the actual details of the specifics of a program, the benefits of a program, is simply to ensure fair and equitable treatment in terms of the level of support coming to maintain a safety program in that province from the federal government. We spent considerable time in putting forward that position with the federal authorities.
The overall level of support is being downsized by the federal government, and that put our researchers to work crunching out the numbers, that if the overall window of the support program was being reduced from X number of dollars to a new level, that in the reduction we maintained our fair share.
That was the first issue, and it is the importance of maintaining that fair share because that then maintains the level playing field, that at least Ottawa provides for program support such as the base programs like crop insurance, like NISA. Our difficulty in achieving a kind of a national sign-on on all these programs were, quite frankly, the two provinces of Quebec and Alberta. Quebec simply would not undertake to put its signature to any national program, and Alberta has introduced or is in the process of introducing a program that they call GATT 70.
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It is a farm income support program that has been developed in Alberta and is unique to Alberta. It is a program that calls for, I suppose, premium-free enrollment by Alberta producers, but it only triggers any support payments when they fall below 70 percent of a five-year average or whatever the nature of that program is. It is quite a different program. Alberta, of course, argued that they wanted to have the federal government's support, the federal government's portion out of the safety program, to apply to their program. It was not to be and that is what prevented the consensus from being achieved for that kind of a national program.
We, quite frankly, I think it is fair to say, supported Mr. Goodale and supported the federal government in trying to achieve this national program, but, again, I suppose in Quebec's situation it was as much for political reasons as others. Certainly not in the year of the referendum were they going to be signing on to a national Canadian farm program. I think the Minister of Agriculture for Quebec had explicit instructions about that, and Alberta, as I mentioned, had their own reasons for not joining in a national program.
Ms. Wowchuk: I was talking earlier about where in the minister's staff--who was dealing with various programs and policies.
One of the policies that I want to talk about is the proposal by this government to dismantle the single-desk selling of hogs and the impact of that. Just to begin with, I want to say that the beginning of this was based on a report done by this government and a report called the Manitoba Pork Industry: Building for the 21st Century, and a report that the majority of people in the hog industry have been critical about indicating that they were not properly consulted, the majority of producers were not consulted. There were many recommendations made in the report.
The one recommendation that the government appears to be acting on is that one recommendation to move to the open marketing of hogs, and that is a recommendation that producers in the industry do not support. Producers feel very strongly that the hog industry has grown successfully under Manitoba Pork, and they have met the demands of the world markets. They believe that they can continue to meet the demands of the world market under Manitoba Pork. But this government has insisted that there is going to be changes, and we will be moving to an open marketing system of hogs.
I would ask the minister whether he has given any reconsideration, although not probably likely. We see the flexible marketing transition committee's report here as well, but producers are still not happy with this decision. I wonder whether the minister has reflected on that at all and is giving any reconsideration to maintaining the sale of hogs under Manitoba Pork and recognizing that the industry has grown and can grow without these kind of changes.
Mr. Deputy Chairperson: The generous honourable minister--
Ms. Wowchuk: Am I out of order, Mr. Chairperson?
Mr. Deputy Chairperson: No. Why, you were not finished?
Ms. Wowchuk: No, go ahead. You said generous and I thought you were saying I was--
Mr. Deputy Chairperson: No, I am sorry. I was just going back to the little episode a little while ago, and I just wanted to expand on that a little bit.
Mr. Enns: Thank you, Mr. Chair. The member alludes to the report. I am pleased to indicate to her, of course, that one of the co-authors of the report is sharing the head table here. Assistant Deputy Minister Mr. Donaghy, along with the former dean of the Faculty of Agriculture in the University of Manitoba and a well-known farm economist Professor Clay Gilson and, of course, Mr. Gerry Moore were the three gentlemen that put together that review of the hog industry back several years ago.
To answer the honourable member's question, there has been no second thoughts about the decision that the government has arrived at. I am very much aware, of course, that the decision does not meet with a universal acclaim, to put it mildly, but nonetheless I have no reason to change my feelings and convictions that it is an appropriate decision.
The member referred to the report and the fact that producers were not in agreement with that report. I would have to take issue with that statement by the member. The only serious disagreement that Manitoba Pork producers have taken with respect to that review done by the three gentlemen that I mentioned is that one recommendation with respect to greater flexibility in marketing, or removal of the single selling desk. There are many other features of that report that indicate the direction, indicate the opportunities, the challenges, current situation, which I believe are, by and large, acknowledged as being (a) good scholarship, ( b) more factually correct and one with which the industry and the individual pork producers have not taken an issue with. They have taken an issue with the one recommendation that the member alludes to, that is, the question of marketing.
The conditions that prevail for when the commissioners reviewed the industry, in my judgment, have not changed. There are some very specific market requirements that are, if anything, developing in a way that, in my opinion and the opinion of the authors of that report, called for more direct retailer, through processor, and to producer involvement in the chain of delivery of the product.
Also other issues such as capital requirements for the expansion of the hog industry, even at the farm site, is considerable. Again, the kind of contractual arrangements of a longer term nature that the more flexible marketing system makes possible, in the opinion of the authors and the opinion that I accepted, was more conducive to providing those kinds of capital requirements.
The report indicates significant requirements in the order of $300 millions, $350 millions of dollars are required, and I maintain that a credit union, a lending institute, private or public, will make those monies available more confidently if that producer can provide the proposed lender with a contractual undertaking that sees significant portions of the hogs to be developed or grown in that facility already precontracted and presold, in other words, to a sure source of supply.
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So those are some of the issues that predicated the decision. Of course, the major one was, and one that is still troubling me, that too many hogs are leaving the province for processing elsewhere. When we dealt with this issue a year ago, a year and a half ago, estimates ranged in the order of 3,000 to 4,000 hogs that were leaving the province every week. I am advised that today that figure is closer to 10,000 or 12,000 hogs that are leaving the province every week. That is why I wait with some anxiety, I suppose. I keep hearing that there are interests in further expansion of our processing industry by some of our existing people, like the J.M. Schneider announcement of some time ago. Quite frankly, I would like to see some concrete being poured and some construction being undertaken that would manifest that desire.
I am not at all concerned that this $40-million, $50-million development will likely take place in the constituency of my good friend, the member for St. Boniface, Mr. Gaudry, and provide the 500 or 600 additional jobs in his part of the province as opposed to my good friend and colleague in the Chair here who might have thought it should have gone to somewhere in his constituency, but, again, that is just the kind of a guy I am, Mr. Chairman, share the wealth.
Ms. Wowchuk: The minister indicates that there are recommendations in the report, and certainly there are. Producers did take exception to this one recommendation, and it is the one recommendation that the minister decided to act on that is causing the concern.
The minister raised a couple of points that I would like to address, and that is, he says that there are a large number of hogs leaving the province, somewhere in the range, it was 4,000, is up to 10,000. Is it not true that, if we move to this system of open marketing, there is no guarantee that these hogs will stay in Manitoba? There is no plant.
So really the minister has indicated earlier on that it was important that we open up the system so that there could be more processing in this province. The processors have put on the record that they do not need open marketing; in fact, they prefer to purchase from one agent. They have indicated that there are going to be problems for them. They do not have the facilities to take hogs directly to their plant, so in actual fact opening up to an open market system will not guarantee that hogs are going to stay in this province. Is that correct?
Mr. Enns: Mr. Chairman, I just want to put on the record that the member's statement about myself, or government, having just picked the one recommendation that is most troublesome to producers out of this report and acted upon it, simply is not true. I am advised that a goodly number, 85 percent, 90 percent, of the various recommendations made through the report have, in fact, been acted upon.
There have been one or two areas where we had specifically indicated there, or the report recommended, we establish a committee to co-ordinate various aspects of the hog producing, that have not yet been acted upon, but many of the issues that were raised by the specific recommendations that were raised in the review have, in fact, been acted upon.
I want to indicate, of course, to the honourable member that a very significant program that is being entered into in the hog industry is what we call PRE-HACCP program, the health program. We see that both from--doing our utmost to ensure that we in Manitoba and Canadians and any of our customers worldwide receive the highest-quality product of food and the one that I can attest to.
Our customers are demanding that we continually fine-tune our ability to ensure that, particularly in the area of food and processed meat production, it meet the highest levels of acceptability in terms of residue free, other health measures that are constantly being scrutinized by customers around the world. In order to do that, we have to be able to develop considerably more sophisticated programs of control that go right from the processing floor back to the farm, to the farmer's barn, to the farmer's gate.
We have to know when, upon inspection, unacceptable levels of residue of an antibiotic, for instance, or a feed ingredient that ought not to be present in the meat at that level, where and how did that occur. So programs are being introduced that will provide producers with that information that will develop an inspection or monitoring system that will bring us to the level that we can with confidence to our own consumers, Manitobans and Canadians, as well to our prospective customers of which there are many; 70 percent, 80 percent of our hog production is currently exported. All of the expanded hog production is for the export market, and we simply have to meet these standards in terms of health and safety of the product that we are exporting.
Ms. Wowchuk: The minister indicates that the majority, a large portion of these recommendations have been implemented. One of the recommendations is recommendation for education and training. The pork industry will require 8,000 new employees to meet the job requirements on farms through the service industry to the consumers, and there are various recommendations on how this education should be carried forward.
Can the minister indicate then, are there any special courses that have been designed at Assiniboine College or Red River College? Has Manitoba Workforce 2000 participated in any of the training, and are there any special programs being designed through the University of Manitoba Agriculture to meet the needs of these people who will supposedly get jobs in this industry and at what stage is that at?
Mr. Enns: I note, I think the member refers specific to one of the recommendations that Manitoba Agriculture expands their ongoing training role through local, regional, provincial initiatives, including pork quality assurance meetings, hog days, Manitoba swine seminars and so forth. Those activities are all being accelerated by the department at these various opportunities of meeting with hog producers. In addition, specific educational courses have been introduced at Assiniboine College I understand, and it would be our hope to continue to respond to these kind of requirements for our existing and for our new hog producers in the industry.
Ms. Wowchuk: Could the minister indicate what the course is that is being offered at Assiniboine Community College?
Mr. Enns: Mr. Chairman, I do not have the specific details of the course, but I could undertake to provide the committee with that information when next we meet, for instance. It would be something that perhaps the Ministry of Education would be able to put her finger on immediately, but we can certainly find out from the Department of Education what are the specifics of the course that is being offered.
Ms. Wowchuk: I would be interested in knowing whether the Department of Agriculture had any input into designing the course. Is it a course that is to help farmers get started in the hog industry? Is it a course in quality control in the meat processing industry? What type of course is it?
Mr. Enns: My staff advises me that it is a practice when courses of this kind are introduced into the educational system that our specialists--in this case, it would be our swine specialists--are actively involved in the development and the review of the curriculum material that is then presented in class.
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I might say that I encourage the member in this direction. If anything, in my judgment, we are not doing enough in our general educational services when it comes to providing our ever-increasing urbanized society--start with the young as they are in school--about agriculture and about the requirements of agriculture, about the contribution of agriculture just in the broadest and general way. We have become such a minority group of people dedicated to food production in this country. As I said in my opening remarks, only 3 percent of our population is actively involved in food production and that puts a greater burden on people like ourselves who from time to time come together to represent the interests of the agriculture industry in legislatures or in committees and, hopefully, make the right decisions in terms of the kind of support the department and the agricultural community requires in the many different requirements that they have, whether it is in transportation matters, whether it is in water matters, whether it is in marketing matters.
We have a constant challenge to inform and to educate the rest of the population about the importance of what it is that we are doing because after all it is, as I have stated from time to time both privately and publicly, the most important activity of man, the basic provision of our food stocks. People are demanding that it not only be there in adequate form, they are demanding that it be there cheaply, too cheaply in my opinion, and they are demanding more and more that it be safe food, meeting the highest health standards.
Ms. Wowchuk: I guess that ball is in the minister's court. That is up to him and his department to ensure that he co-ordinates with the Minister of Education (Mrs. McIntosh) to ensure that there is a much greater content of agriculture-based information in our school curriculums, and I look forward to seeing him put some effort into that to ensure that the general public does know more about our education system. I look forward to seeing future curriculums and that we will see it. I say that in all seriousness. I think that we do have to do more, but it is up to the government to ensure that this does happen.
We are having a tremendous change in agriculture right now. We are coming into a generation of urban people, in particular, who have very little contact with the farming community. It used to be that there was either a grandmother or grandfather or aunt and uncle who lived on the farm and children used to visit. That is not there right now.
The minister raised the issue of education. I just put that to him, that I think that his department should be doing much more to work with the Department of Education to ensure that that content is in the school curriculums.
Mr. Enns: Well, Mr. Chairman, I again appreciate the comments by the member for Swan River and totally concur in her general remarks. I accept as fair the admonition to me that one of the responsibilities that I as minister have to accept is co-ordinating and promoting and putting forward agricultural issues with my colleague the Minister of Education and ensuring that more of this gets developed into our school curriculum.
Just for the record again, let me indicate that we are aggressively moving in this direction. It is the department's policy to expand their involvement within the school system. A staff year has been seconded as an agriculture curriculum specialist in order to provide the co-ordination and leadership in developing agriculture resource material. This provides Manitoba Agriculture with a unique opportunity to provide information to our 180,000 children who are in the school system.
We are working in co-operation with other strategic partners to promote agriculture and to develop various agricultural programs within the school system. We have various programs, agriculture in the classroom of Manitoba, that works with the Manitoba Department of Education and Training. Various commodity organizations, different marketing boards, co-operatives assist us. We partner with them in providing curriculum material in the classroom. Activities that have specifically occurred and are occurring include a Grade 5 curriculum in resource research and development. We have a presence in the Grade 10 and Grade 11 science curriculums that are specific to agriculture.
We are involved in what is referred to as a kids in the environment magazine, a children's magazine that deals perhaps more heavily with the environment generally, but we ensure with our input that the agricultural portion or side is represented. We are developing an agricultural education package to be used in school presentations by Manitoba Agriculture staff called Food, Agriculture, You in the Making, trying to make that connection between where the food, in effect, is grown and how it is grown. Eggs do not come in those funny cartons. Milk does not come in a plastic container. It comes from a living animal, a cow that needs to be cared for. Sometimes our urban cousins do not understand the conditions that these animals are cared for and make assumptions that are not correct.
This caring minister will be introducing legislation that ensures that we in agriculture take seriously the responsibility of the care and the proper care of our animals. I look for support from honourable members opposite when that bill arrives. It is called The Animal Care Act. I know that members will support me in that bill. I would like to go down in this session as being unique in the sense that I at least introduce a piece of legislation that will be unanimously supported in the House by all members, including the member for Dauphin (Mr. Struthers) and the member for St. Boniface (Mr. Gaudry). That is just an advance on my coming legislation. I like to do this homework at appropriate times.
Mr. Deputy Chairperson: The committee would like to thank you again, Mr. Minister.
Ms. Wowchuk: We look forward to that legislation, and I am sure we will have wonderful discussions on it.
Getting back to the hog industry, when the announcement came about the Schneider's plant, the minister talked about the increase of jobs that would result from the expansion and how good it was going to be for hog producers and for farmers in Manitoba. Following that announcement, there was a letter that came from the president of Burns, who was critical of this announcement. He, in fact, said, and I will quote one part: When Cargill's new plant in Alberta--Calgary's new plant in Alberta has created 700 new jobs, but almost all other beef plants in Alberta have been forced to close, with the loss of 2,000 jobs.
He also indicates that no farmer is going to grow more hogs because someone says he is going to build another packing plant. He is only going to grow more hogs if he is going to get a better price.
I want to ask the minister whether he has--and this letter was copied to the minister--any concern with the fact or whether he really believes those numbers are true, that by having another hog plant built in the province, we are going to have that many more jobs created or whether the minister has any concerns that building another plant will put other plants in jeopardy and whether he believes that producers are going to grow more hogs just because there is a plant built. I believe producers will produce the hogs if there is a market. If they can make a dollar, a fair return, they will do it. They will not do it just because the plant is there. There are other concerns, other plants that are in Manitoba.
Has the minister's department taken into consideration the other processing plants and what the impact will be on those plants? Was all of that taken into consideration when the government pursued building another processing plant? I want to say to the minister, this is not a statement in opposition to a plant being built here. It is a question about, what is the future of the existing plants, and what homework was done by the government to ensure that we will not be losing jobs at one plant at the price of another? The minister is well aware of the letter I am referring to that was sent to Mr. Clay Gilson by an Arthur Childs.
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Mr. Enns: Mr. Chairman, let me make it very clear that the government of Manitoba is not in the business and, quite frankly, ought not to be in the business of making management decisions by the industry, by processors as to where and when and how they choose to either invest or not invest in capital expansion of their facilities. It is our hope, and it is the hope of any government, that we provide through these kinds of investment opportunities more jobs for Manitobans and revenue, quite frankly, for the government of Manitoba so that we can maintain and carry on the level of services that particularly members in opposition daily demand and request of us as government. It is just that simple and that basic.
Nobody in my government is making analysis or taking actions that say this is going to build us a new processing plant. It would be an intervention in the marketplace that would be very difficult to justify. You know, whose plant should we be expanding or providing, so that is not a function of my government or this government at all.
What we have done a great deal of work on and what the review and the commission looked at was looking at the economic factors that will dictate where and why the assumption that increased and expanded hog production in this part of the Prairies, in this part of the country, is an appropriate undertaking. I agree with the honourable member. In the final analysis, it will be the hog producers themselves who will decide and are deciding on a daily basis that investment in hog production is to their benefit. They alone will make that decision and, quite frankly, this is the disagreement I have with some of the hog producers.
I, furthermore, make the statement, hog producers will produce hogs whether or not they are processed in Manitoba or not, and they are demonstrating that every day. If there are people in South Dakota or people in Toronto or elsewhere or in Alberta that want our hogs and they pay sufficient monies to maintain the interest in hog production by our producers, those hogs will be grown in Manitoba. The issue though is quite different as to whether or not they will be processed in Manitoba. We can only do what we believe is, in our judgment, create the kind of economic conditions that make that kind of an investment attractive to would-be investors. I would do that in different ways.
We do that by providing a stable tax regime which I am very pleased and proud to be part of a government that has introduced eight budgets in a row now without major tax increases. We signalled very clearly to would-be investors and we are talking about people who are talking about putting $50 million, $60 million, $70 million or $80 millions of dollars investment capital and there is, whether we like it or not, competition between jurisdictions as to where those dollars go. We have enough strikes against us here in Manitoba in the middle of the province, from a distance factor, from a weather factor. It does not surprise me that everybody would like to be in Vancouver harbour or on the mainland or even down East. So we have to have these attractive conditions that provide for that expansion to take place. I am satisfied that those conditions are being developed, those conditions are being met.
In the case of the hog industry, we have been advised whether--again, it is not for me. I have no desire to move and see how the hog processing industry will develop. I know that there are different aspects to it. There are some that provide and are content to look at the domestic market in a specific way, some that are garnering for different niche markets in a particular way, but there is, in my opinion, virtually an insatiable demand on a worldwide scale for quality pork. I am advised, however, to access that market, you need world-scale operations that begin to talk about numbers of processing hogs of upwards to two million a year. And that is the kind of facility that Schneider's has in mind, for instance.
Now, that is not a decision that I am making as government and not a decision that I am making to force other processors out, but it is a decision that if we want to competitively place our pork in the Japanese and the Korean and the Chinese markets in competition with the major players, whether they are in the United States or in Denmark or in Australia, then that is the kind of class of production we will require.
I might tell you that I have a bone to pick with Mr. Arthur Childs, the Chairman of the Board of Burns Meats, who I know and I have a great deal of respect for. He has certainly contributed a great deal to the well-being of this province in his many enterprises that he has operated. Burns has been established, a long-time processor of quality foods in our province, but one has to take with a grain of salt the kind of letter that he writes. He is writing as chairman and, I believe, sole owner of a meat processing plant that does not particularly welcome competition, and that is in essence the point that he is making.
I, on the other hand, feel extremely disappointed by the fact that we chose, that is, the pork industry chose, along with the Manitoba Department of Agriculture a few years ago, to do an extensive experiment with Burns packing house to provide an experimental shipment of chilled pork to the Japanese market. We had been receiving very clear market signals that the demand is increasing for the product to be provided to them in a chilled fashion, not frozen.
If we can move into that market demand, there are tremendous opportunities for Manitoba Pork, so we co-operated with the use of some tax dollars. The Manitoba Department of Agriculture contributed, the Manitoba pork producers contributed through their agency, Manitoba Pork, and the federal government contributed in total somewhat in excess of a quarter of a million dollars, $230,000, $260,000. We chose Burns to be the co-operating processor to provide several shipments, I believe 5,000 kilograms of chilled pork, on an experimental basis to a Japanese customer.
We ran the experiment successfully. The Japanese got the chilled pork and were ecstatic about it. They said, now, please just keep it coming, we cannot get enough of it. Our people, including my departmental people, went back to Burns with the good news and said, you know, we have a tremendous reception for your product in Japan, now please produce it. What was Burns response to us? We are not really interested in the Japanese market. We would just as soon concentrate on the domestic market. The experiment folded. We were out a quarter of a million dollars of public money. The Manitoba Pork producers were out $40,000 of money that they contributed to this experiment and we are not shipping any chilled pork to Japan.
That kind of industry response, quite frankly, is not acceptable if I, on the one hand, put myself and the department and my government out on a limb and tell my pork producers there are glowing and virtually unlimited opportunities for the selling of our pork unless we have much more aggressive and innovative marketers that go after that market. Because if we do not service that market, others will. The Danes will, the Dutch will, the Americans will, but the market is there for us. So my whole action in this pork matter is aimed as much at breathing some new challenges into the processing end of it than anybody else.
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Ms. Wowchuk: I just want to ask the minister, the minister said that his department has done no work to outreach to try to attract businesses here as far as the packing business goes. Surely somebody has been coming from Industry and Trade, surely somebody has been working to attract meat processors to this province, whether it be the pork industry or the beef industry. Surely there must be some work being done analyzing what the importance of the industry is, and somebody must be doing some work to attract the processors. The minister is saying it is not coming from the Department of Agriculture?
Mr. Enns: We are constantly promoting what we call the Manitoba Advantage. We do it in all kinds of commodity areas. It is a theme that I take with me when I travel to different countries as the leader of a trade delegation. We have expended modest sums on video presentations of what we refer to as the Manitoba Advantage, and together with our Market Development branch and, more specifically, with officers of the Department of Industry, Trade and Tourism--whose department is specifically charged with the wooing or developing industry initiatives in the province--we certainly do everything we can to ensure that those whom we think could be potentially interested in Manitoba receive this kind of data and information.
I can report to members of the committee that it is not going unnoticed by those in the meat-processing industry that this part of the country, Manitoba specifically, is showing such robust growth in hog production. We have the distinction of successively being at the very top of the ladder in terms of our quality that we produce. We have an index measurement that rates the quality of hog carcasses, and Manitoba in the past five or six years has outdone all other jurisdictions in that respect. So a combination of the quality of hogs that our producers are capable of raising, the economics of raising them here which again in the post-Crow era are better than anywhere else in the country, are attracting a considerable amount of attention by those who are prospective players in the processing industry.
I can tell the honourable members of the committee that we have had visits from Iowa beef-packing people who are the largest red meat packer on the continent. We have had interest expressed by the Schneider people, of course, which is the most publicized one. We have had interest expressed by a major Quebec processor that has had an activity in the province through the Neepawa plant at some previous time. We are aware that plants in addition to Schneider's are looking at expansion opportunities like the Springhill plant.
All these activities are taking place and they are, of course, being supported and information is provided by members of my staff, as well as you would expect more specifically, by members of Mr. Downey's Industry, Trade and Tourism staff when it comes to having full understanding of the kind of support programs that are available from the government of Manitoba for these kinds of job-creating initiatives.
Ms. Wowchuk: Has the minister's staff done an analysis on the future of the family farm? There are different views of what the family farm could be, so I would ask the minister if his staff has done an analysis of what the future size of a future farm is that he sees as a viable operation, that he sees as an operation that the farm will be able to survive at with these changes that are coming about. We know that there is a trend and many small operations are saying that they cannot survive. That was a big fear that came out of this, when this announcement was made to move to dual marketing, that the smaller operations would not be able to survive. So I would ask whether any work has been done on that and what the minister sees as the future for farmers in Manitoba, particularly small operations.
I emphasize that because we see a decrease in population. As I indicated earlier, as smaller operations disappear, there is an impact on all the rural economies. But, specifically, what kind of analysis has been done on what kind of farms will survive? What does the minister see as the future for these smaller operations?
Mr. Enns: In my more robust years in opposition I would respond to that kind of question when I was in a more redbaiting mode and in a fashion that I was not really interested in social engineering and social tinkering of the kind the honourable member is suggesting to me. I would be concerned if members of my staff busied themselves deciding that a farm in Manitoba should be 633-and-a-half acres and should consist of 42 laying hens and three sows and one riding horse.
Ms. Wowchuk: Now, now. That was not the question.
Mr. Enns: I know, and I am being maybe not quite fair, but the question is a very difficult one to answer. It is changing, and it is being reflected in the changing of the policy that I am asking and that staff in the department is coming up with. Programs that we run through the Manitoba Agricultural Credit Corporation reflect these changes. What I think that I was fair to say was that a kind of a universal or more readily identifiable embracing of what ought to be the family farm and a cornerstone support for agriculture has changed very dramatically in our lifetime, and the honourable member is totally aware of it.
I am well aware, to be specific, that this charge is made specifically at me by my hog producers that, in the removal of the single-selling desk, this is an attack on the single-family farm. I have to tell the honourable members and members of this committee that, when the single-selling desk was introduced in 1972 or '73, there were 7,000 hog producers in the province of Manitoba. Twenty-four years later there are 1,900.
What happened to those 5,000 in family farm hog producers? They did not exit hog production because of the marketing structure. In other words, by removing the single-selling desk, I cannot even get half as bad as the single-selling desk was if you attribute the single-selling desk to the protection and preservation of the family farm. Five thousand people stopped producing hogs on small, I take it, and modest-sized family farms in Manitoba during the tenure of the single-selling desk.
No, Mr. Chairman, what happened is that junior came home out of college, just like young Mr. Struthers here, and said: Dad, get rid of those 40 pigs in the back of the barn and those three old cows that you are still milking. They are the ones that are tying you to the farm seven days a week, 365 days of the year, including Christmas and New Year's, and, probably more important, including the morning after last night's party. Live with the '80s and the '90s. Get regular weekends off. Go to the beach. So the farmers have. It is a societal change. They have moved out of particularly in the area of livestock, and they have changed the nature of farming.
But that is not to say that that is a bad or a plus. I am very positive. I look at these mega-hog operations that we have, multimillion-dollar farms. It is impossible in many instances for the single-family farm to contemplate that kind of an operation, but you look at the structure and you see there are three or four families involved very often. Very often, and with a regular workforce of maybe an additional 10 or 12 people working on these farms, they are working regular hours. They have weekends off. The owners have weekends off, and that is how agriculture is developing in many cases.
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My programs and staff have to respond to that. We do not do it exclusively. We try to be inclusive in our programming, in our attention to the whole range of rural and farm experience that is out there, including, and I raise this with staff from time to time, what we sometimes refer to as the hobby farmer. We have a large number of people out there who have come back, if you like, with a very modest agricultural interest. Sometimes maybe it is just a few horses; sometimes it is a relatively small forage production, somebody who has built a home on a quarter section or 50 acres.
I can remember, in a former department, Natural Resources, one of my director's lived just north of the city on a fine piece of alfalfa hay. He enjoyed putting up quality forage hay, which he sold to his neighbours who were in the cattle industry. I think the Department of Agriculture has to respond to all of these legitimate inquiries, and I take exception if we are asked to view agriculture in a way that excludes any of the kinds of activities that I have just described.
Ms. Wowchuk: Hog producers raised what I believe is a legitimate concern when this report came out, and the minister said that he was going to accept the recommendation to move to dual marketing. They raised a legitimate concern that they felt that moving to open marketing would have a negative impact on smaller operations. That was what I was asking the minister. Because it is a legitimate concern, it is an agriculture concern, has the minister addressed that? Does the minister come to any conclusion that there is going to be a negative impact? The minister can go back to the number of hog operations there were years ago and the number there now. We know that change has taken place. This is a concern today that producers have raised with respect to their future and how they are going to fit into this vertical integration plan. I raise it in all seriousness.
I ask the minister, has his department considered that, and does he believe that this will have a negative impact on smaller operations? Does he believe that they will not be able to survive, they will have to become larger to survive and make larger investments to survive? That is the question I am asking, and I believe it is a very legitimate fear that producers have put forward and one the department should be able to give some answers to producers. That is what I am asking, whether the department has done any work or analysis on as to the impact of this.
Mr. Enns: Mr. Chairman, I can only respond in a most direct way to the member's question that pork producers in Manitoba have demonstrated in a very real way, one that cannot be fudged by anything I say or put any political spin on it, that when I indicate to you that in the period of January, March, when certainly at the height of the decision with respect to marketing was well publicized and in the news--and one must assume, if it was creating that much anxiety among the pork producers, it might have cause for some indecision--Manitoba led the nation in pork expansion with a 104 percent increase over prior years versus in Canada, the national, being at 101. Then the period of April to June, the next three-month period, again, we are leading the nation with 103.2 percent in Manitoba versus 99. In fact, it is a small decrease; in portions of Canada hog production is decreasing. Our producers are making their management decisions indicating ongoing continued confidence in the industry.
Now, I am well aware that the current very welcome strong prices in hogs is providing the basis for some of that growth, although as members are only too well aware with their own farm background, the extremely high, record high feed prices in input costs all too often are associated with these price rises, and so the margin may not be all much different. But nonetheless that expansion is taking place. If that rate of expansion takes place, that doubling of hog production will occur not because this government or this minister is suggesting that that ought to occur. It will occur because, as the member fully knows, if the people involved in the business feel that there is enough economic reason, if there is an opportunity, there are markets for them to do that.
Mr. Chairman, it is a question that troubles me as to the impact that this decision has on the future of the modest or small producer. It is again an issue that, in my judgment, if the small and modest producers do several things, they can secure for themselves positions in the marketplace that ought not to be at any greater disadvantage to any of the larger producers. I certainly encourage in all my discussions and my meetings that they, for instance, continue to use Manitoba pork as the marketing vehicle of choice.
If I were in a position to market a modest number of hogs, 50, 60 or several hundred a year, it would not take too much to convince me that--and I am marketing against a neighbour's operation that is pushing out 2,000 hogs a week--I would want my hogs assembled and packed together in lots of a hundred or a thousand and, providing quality and genetics are there of equal value, there is no reason in the world why the modest or smaller producer ought not to be able to find ample opportunities to compete.
After all, it is only supporters of Manitoba Pork that are saying that I am doing away with Manitoba Pork. I am not doing away with Manitoba Pork or the board. In fact, Manitoba Pork as an entity will be well situated financially. Financially it will be secured with the universal levy that I am imposing on all hogs. It will flow to Manitoba Pork to continue doing the generic pork production that I think is of considerable value to the industry and to the province. But, more importantly, I think Manitoba Pork--and my understanding is that they are doing that right now--is looking at restructuring themselves. They are looking at creating a tighter relationship, if you like, between producers who wish to continue doing business with them. They have to earn, in my opinion, their position as being the marketer of choice for producers, rather than having it carried out for them by government regulations.
Ms. Wowchuk: The minister will have to agree. He says there is a small portion of--I believe he said--supporters of Manitoba Pork, but I believe that a survey was taken recently by Manitoba Pork, and in fact over 80 percent of the producers support the single-desk selling of Manitoba pork. So the minister in this move is not taking the advice of producers.
I want to ask the minister, he says that he does not believe that small producers will be negatively affected, they can survive. I am wondering if the minister has looked at the situation that developed in Carolina, I believe it was, where there were very large vertically integrated operations that went into place and, in fact, when that happened the majority of the small producers were put out of business. It has not been a positive effect for the producers in that state.
Will the minister recognize that this move towards vertical integration and larger operations not only has a negative impact on the people and on smaller operations, it has a negative impact in many cases on the environment? And that documentary that we saw, and I think the minister was even in that documentary as well, did not paint a very pretty picture of what could happen when we move to these large operations. Not a positive effect on the producers and not a positive effect on the environment in that state, and I wonder whether the minister will address that, please.
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Mr. Deputy Chairperson: Order, please. A vote has been called in the Assembly. This committee will recess and we will proceed to the Assembly.