Jeff Nielsen, Chair of the Grain Growers of Canada:
Thank you, Mr. Chair, and Members of the committee for the opportunity to be here today.
My name is Jeff Nielsen, and I calling in from my farm near Olds, Alberta. I am the Chair of the Grain Growers of Canada, which provides a strong national voice for grain, oilseed and pulse producers through our 15 provincial, regional and national grower groups.
To put it simply, we are extremely disappointed with the support offered to farmers to date. The recent $252 million announcement directed limited funding to select sectors, while leaving others feeling totally ignored.
Let me be clear. We do not expect to be your main or sole focus right now, but we also don’t want to feel like an afterthought.
We don’t have to look far to see a very different level of support for agriculture. In the face of COVID-19, our direct competitor to the south has offered agriculture a support package of $19 billion, with over $6 billion going to crop producers.
For the benefit of the committee, let me give you some background on the state of the grain industry.
Certain grain commodities, such as corn, have been significantly and directly impacted by COVID. With the decrease in demand for fuel, ethanol plants are running at a very diminished capacity, and we don’t expect demand to return anytime soon.
Soybean cash receipts have fallen nearly 40 per cent over the last two years.
Malt barley demand is down significantly due to the closures in the restaurant and hospitality industry, resulting in decreased demand for beer. Barley cash receipts are down 21 per cent in 2020 from the same time last year.
Feed prices remain volatile due to decreased processing capacity.
Flaxseed cash receipts have dropped 33 per cent over the past year.
Demand for pulses has remained steady, but we still see serious challenges with a lack of shipping container availability, a problem complicated by rail blockades, port quarantines and decreased cargo ship movement.
A regular amount of uncertainty is typical for farmers. We plan for this. But these are not normal times. Recent years have been disastrous for many of us, in terms of weather, rising costs and growing market access challenges.
In fact, many Canadian farmers were not well positioned going into this pandemic. According to Stats Canada, in 2018 net farm incomes fell by nearly 21%, while realized net farm income fell by 45%.
While Statistics Canada data from this week shows a rise in income in 2019 for the first time in three years, that does not give an accurate picture. Excluding cannabis, crop revenues at the national level have declined by 1.1%. This only heightens concerns about our ability to service farm debt loads, which are now at a record high of $115 billion– an increase of nearly $30 billion over the past four years.
I don’t want to overstate this, but the reality is that our industry is hurting. And that’s not easy for us older guys to admit.
We need support.
Erin Gowriluk, Executive Director of the Grain Growers of Canada
Mr. Chair, now for the good news.
We believe there are easily achievable solutions to help farmers and protect our economy.
We have very specific, very actionable, requests for you today.
Firstly, as a sector, we are asking for two critical changes to the AgriStability program.
These charges are as follows: An increase trigger to 85 per cent for 2019-20 and for the remainder of Canadian Agricultural Partnership, and the removal of the Reference Margin Limits.
These two simple changes will give farms the confidence to keep operating.
As members of the Committee know, we are not alone in seeking changes to Agri-Stability. The fact is that this change is the one that unites essentially all agricultural sectors.
While it is a positive signal that the application deadline for this program was extended, we do not see it inspiring more farmers to apply. Farmers simply don’t see enough value in it to put in the time and effort required to enroll. Unfortunately, an online calculator will not change their minds.
However, we do commend the federal government on some of the other business risk management programs for farmers do work well, including Agri-Invest and crop insurance. These are a success story and a valuable tool for farmers, one that cannot afford to have funds diverted away to bolster or address the concerns we have cited here today. These programs need to continue to be complimentary.
Finally, we understand the cost of the current program is shared 60/40 between federal and provincial governments, and that those provincial governments are currently facing their own financial challenges. This is why we are seeking leadership from the federal government on this. We need our federal leaders to renegotiate the cost load.
As we look towards recovery, this is definitely not the time for government to abandon its vision for agriculture as a high potential sector for economic growth in Canada. As stated in the Report of Canada’s Economic Strategy Tables, Canada has the potential to be one of the top five competitors in the agri-food sector, increasing agriculture, agri-food and seafood exports by by 32% to $85 billion by 2025.
This is a laudable goal one, which the sector fully supports, but it can only come to fruition if Canadian farms remain solvent and able to succeed.
We are at a crossroads. We can choose to support Canadian farmers now and allow for that potential to be realized. Or, we can choose to abandon Canadian farmers when they need it and lose the vision for a real economic recovery and future prosperity for our farms.
As the national voice for grain farmers, we believe in being part of the solution and moving forward together.
Our agriculture minister has repeatedly encouraged creative solutions to the problems that we face.
We believe we have outlined for you creative, effective solutions that can be easily and quickly put into place.