HALIFAX, TUESDAY, JANUARY 28, 2003
STANDING COMMITTEE ON RESOURCES
9:00 A.M.
CHAIRMAN
Mr. James DeWolfe
MR. CHAIRMAN: Good morning, ladies and gentlemen. Welcome to the first meeting of the Standing Committee on Resources for the new year. We are pleased to have with us today Mr. Peter Clarke, Chairman of the Board of Directors of AgraPoint and Mr. Dale Kelly, Executive Director. Before we get underway, I would like to introduce the committee members, those who are present. We have a couple of other meetings on this morning so we will probably have a few people, who are normally on this committee, dropping in after their meetings are over. Starting with Mr. Hendsbee.
[The committee members introduced themselves.]
MR. CHAIRMAN: Without further ado, Mr. Peter Clarke, I understand you are going to lead off this morning with some words of wisdom for us to bring us up to speed on what you are doing and then we will allow some time following that for questions from the committee. So we are looking very much forward to hearing from you.
MR. PETER CLARKE: Thank you, Mr. Chairman. Good morning, everyone. We certainly do appreciate the opportunity to meet with you and speak with you today. Dale and I are going to both participate in giving you a bit of a presentation and then we will welcome a Q&A.
1
First thing is in regard to our name change. Let me address the name change of what we were and what we are today. Some of you may know us as the Agricultural Development Institute or ADI. In November, we changed our name to AgraPoint International Incorporated. Another company in the region, the ADI Group of Companies, was concerned about the confusion two ADI companies was creating and about a possible infringement on their trademark. It was a difficult decision for the board since we could have continued to use the full name of the company. However, we also had gained considerable profile as ADI but at the same time, it was a decision we felt confident in making. We are a unique, progressive, flexible company and we felt a new, shorter, more modern name would better reflect who we are, a starting point for success in the agricultural industry.
Our mission. AgraPoint's mission is to provide innovative development services that empower the agri-food community to create new value. Our offices, our team and what we do. We have two offices - one in Kentville and one in Truro - and a 21-member team with 17 specialists working in the areas of livestock, horticulture, field crops, as well as integrated pest management and food safety/quality assurance. We also have the province's first agri-food resource contact centre, professionals working in communications and information technology, a specialist leader and, of course, Dale, our Executive Director.
Our key commodity is our knowledge and information. We provide advice and we transfer and communicate information. This can be done through specialist services like recommendations for an individual farmer, a workshop presentation, fact sheets, newsletters, facilitating strategic planning sessions, assisting commodity groups in identifying research priorities or managing a new crop development project for an agri-business. We work one-on-one and we work one-to-many. We work in person, by phone, fax, mail and e-mail. Individual team members rarely work alone. We have a team and we operate as a team. We have come a long way in two years.
As most of you know, AgraPoint was born at a time of great change in the agriculture community. In 2000, the provincial Department of Agriculture eliminated all its production-based specialists and provided $2.2 million to industry to determine what services they needed and how best to provide them. Government specialists provided advice and support to the industry, from advice on production practices to information on government programs, to providing administrative support to commodity groups. That was the reality for a long time, that the industry would have access to these specialists for free. They were used by some and not by others. I can only speak from experience and past discussions I have had with other farmers.
There was the perception that if you needed something leading edge or done on time, you hired a private consultant and sometimes from away. You didn't rely on government services. I am not saying the government specialists weren't good at their job, smart or talented, I simply feel they suffered from trying to be all things to all people, from not having access to cutting-edge professional development opportunities and from having very little in
the way of goals and objectives that would have focused their activities and time. These were good people in a system, frankly, that was successful but success was not supported. So the government gave the control to us, the farmers.
[9:15 a.m.]
Commodity group representatives formed a committee and a concept of what would eventually become ADI, then AgraPoint was developed with some key characteristics: it would be arm's-length from government and registered as a company; it would not be part of the Nova Scotia Federation of Agriculture; it would receive direction of a farmer-majority board and it would be capable of generating revenues. The original board faced enormous pressure to hire back the specialists who had been laid off and get people on the ground immediately but we had no foundation, no plan, no vision and we felt those were important. We also felt it was important to hear the views of the person we would hire to lead the organization. If we got the type of person we wanted, a leader and a visionary, we knew the job wouldn't be attractive if they couldn't be part of building it with us.
We took our time and did a national search. We found Mr. Kelly and we feel waiting and getting the right person has paid off. He started January 1, 2001, with very little: no mission statement, no staff, no outline of the types of positions he would hire, no offices and he started from ground zero. In addition to hiring all the team members and opening the offices, an annual strategic planning process was put in place, a computer system including our own network was developed, administrative and human resource processes were put in place, professional service providers were selected, telephone systems were put in place, all the things companies already established take for granted that we needed to develop and implement from scratch. This was all done while team members were fully functioning and working with industry. As I said, we've come a long way in a short period of time.
A bit about the board. I have mentioned the board quite a bit so I would like to take a moment to talk about it. We have a seven-member board with four producer representatives and three current or former public servants. Joining me as producer representatives are Elspeth McLean-Wile, a dairy producer near Bridgewater and a member of the Dairy Farmers of Nova Scotia as well as Chairman of Milk Maritime; Ken Hunter, a sheep farmer from Cape Breton and an active member of the federation; Charles Keddy, a strawberry nursery operator and a cattle farmer from Kings County who was just named President of the North American Strawberry Growers Association. The other members are: Peter Underwood, Deputy Minister of Agriculture and Fisheries; Dr. Garth Coffin, Principal of the Nova Scotia Agricultural College; and the provincial Agriculture Department's former transition manager and manager of horticulture, Dr. Rick Whitman.
As chairman, I could not have a more committed, inquisitive and courageous board. They are open and questioning and truly have the best interest of the industry at heart. We meet on average once a month and also have at least one strategic planning session a year.
They are very dedicated and it shows in how well the organization has been operating and how solid we are in our philosophy for how the company works and what it does.
Breaking new ground. As an organization, and one breaking new ground here in Nova Scotia, we didn't have a road map but over time a definite philosophy developed that informed our decisions. It speaks to the key words in our mission statement: innovation, empowerment, belief in the future and value. It also speaks to aiming high, using our resources wisely, working with purpose, understanding that farming is a business, knowing that we can't do it all by ourselves, being committed to connecting the farm gate to what the consumers want and feeling our true success comes from our clients, increasing profits and believing that when we make our clients more profitable, that we deserve to be rewarded to ensure that we are around for years to come.
We firmly believe that we are not here to simply spend $2.2 million a year. We believe we would be doing a disservice to have an investment like $2.2 million and not grow it. The more we can grow it, the more staff we can hire and the more services we can provide.
We are also realists. We have been provided $2.2 million in annual funds from the government to be an industry-led initiative that provides services to industry. We recognize the trend towards less government support in areas outside the key areas of health, education and infrastructure, like roads. Other jurisdictions have gone that way, and many Nova Scotia farmers have been paying for services for years, sometimes their money stays here and sometimes it goes to other places, like Ontario.
Challenges. I would be remiss if I said fees weren't an issue of concern in our community. The vast majority of AgraPoint services are not charged for. We do not always charge farmers to come to their farms, but we also aren't doing too much random visiting. Farmers need to call us. Again, we are using our resources wisely. We do offer specialized and individualized service for a fee, a fee that is discussed up front and agreed upon by our clients. We have farmers coming to us every day looking for assistance to make their operations better, and are more than willing to pay.
The need is there and the demand is there. We manage those requests as best we can with the mix of no-fee services that we offer, like consultations, workshops, publications, the Resource Context Centre and our work with commodity groups. In fact, in the past couple of months we had more farmers calling us to work with them than ever before.
AgraPoint charging fees has been a cause for concern among other agriculture consultants who feel we are unfair competition. I disagree. If we weren't charging fees for similar services, that would be unfair. In fact, consultants came to us and asked us to charge fees. We believe there is enough work for everyone. If farmers are coming to us, wanting to work with our specialists, we believe that leads to a competitive atmosphere, which is always a good thing.
Fees have not been our only challenge. While we do have a very productive relationship with the commodity groups, we have not been able to forge a strong, productive relationship with the Federation of Agriculture. The board has initiated meetings with the federation executive, and discussed issues and certainly made progress, but we are not where we want to be. We are committed to continuing to identify the key issues of concern and work with the federation. We have very different but complementary roles. They are a lobby group for farmers; we provide services to farmers. Hopefully it's a relationship that will prosper over time.
Another issue has been Cape Breton. We have received pressure to place an AgraPoint specialist in Cape Breton. So far the board has been very firm in its belief that the province can be serviced from Truro and Kentville. In fact, one of our horticulturists has been to Cape Breton more in the past than in any year he worked for government. We have worked to implement processes to ensure that all parts of the province are serviced efficiently and effectively, and we're always open to discussions and suggestions. But we simply can't have a permanent presence in all regions of the province. It's not feasible. The government didn't have that with 50-plus specialists; we have 17.
I'm sure there will be challenges in the future, but the opportunities and exciting things that have happened and the positive feedback we have received far outweigh the challenges. The board and I are committed to continuing to make AgraPoint an effective, relevant and positive force in the agricultural community. That said, I would like to turn the floor over to Mr. Kelly, who will give you an overview of some of AgraPoint's activities and accomplishments. Dale.
MR. DALE KELLY: Thank you, Peter. Good morning, ladies and gentlemen. In addition to the comments I will make, we have also handed out some materials, just as examples of the work that we do. This brochure is a water conference that we held in conjunction with NSDAF and the federation down in the Valley earlier this year, and it's the proceedings that went out to all their participants. This booklet, the yellow one, is one that goes with our annual report, which we produce once a year. It details our activities as well as our financial statements.
The book that we made up especially for you is one that just outlines the team - at the very back you will see there's a description of everyone who works for us - as well as some of the materials that we make available to the public at large, and in some cases commodity groups, because we are authors within various commodity newsletters. And this is a little packet of information that outlines how to reach the professionals within AgraPoint, as well as some of our services. If anyone needs additional copies, let me know.
We have been a group of professionals since the start, April 2001, when we began as a team, to work toward figuring out how we can be a real asset to the community and assist the industry moving forward, and simply recognizing that we want to be a valuable resource
and recognizing that we have lots of ideas. We know that the community at large is just brimming with new ideas. Many farm professionals in this province are leaders in their own right, and hopefully we can be there to support them.
Our team is a mix of professionals. We've been able to hire people who used to work with the Department of Agriculture here in Nova Scotia. We've also been fortunate to hire professionals from outside Canada. We've hired an individual who used to work for Monsanto. We've hired people from Alberta, Manitoba and Ontario. They've really added to our expertise within the province and, certainly, the community at large has been very responsive to the professional expertise that we've been able to garner as a team.
Given the fact that we've been around approximately 18 months now, it has not only been a challenge working with the community, but our team itself. Figuring out to work within our two offices, the mixture of the relationships between our professionals, we're diligent in building that. In that time, we've conducted over 1,700 farm calls, where our professionals have gone out in response to either a farm call that they've been asked to do or they've simply been going by a farm and wanted to go in and see how someone has been doing relative to a recommendation they might have made or a challenge that they might have heard that producer was faced with.
At this point, we've also either hosted or participated in close to 100 workshops around the province, and we've attended or facilitated over 400 meetings around the province, since our inception 18 months ago. Truly, one of the benefits of our board has been that they believe in professional development as we do, and over the course of the last 18 months we've asked our professionals to look for opportunities where that additional knowledge would help them serve the farm community. At this point, we've been able to take in over 30 activities in that regard.
Our specialists routinely do publications and fact sheets, as well as regular articles that some of you will have seen in the Farm Focus that we contribute to and commodity newsletters. We have worked on a number of interesting projects, including our current work today with the Atlantic Branded Beef Management program here in Atlantic Canada, with its branded program. We've also been providing strategic planning and management advice to two national breed associations, and working on the mink Aleutian Disease Task Force, in fact leading it. We have a conference coming up, as you will see in the brochure in the packet that we sent out earlier, at the end of this month.
In addition, we've developed a corporate Web site and partnered in a national Web site called Agri-ville.com, which is a very interactive Web site for farmers to actually talk on-line about various issues that they're faced with. There are a number of interactive commodity groups within that Web site. Since our involvement in that Web site, we've seen representation from Atlantic Canada increase by over 150 per cent in terms of membership.
I think the other important point of our organization is to appreciate that we've built and continue to build a very comprehensive database in that we are very customer-driven, and that database has become very valuable for us to send information that's very targeted to the producers, because we know what they're doing on their farms and we can direct information to them on that basis.
Mr. Clarke mentioned earlier our Resource Contact Centre. This is unique to the region and in Canada in that it is the first private-sector contact centre for the agriculture industry. It's not just a call centre. It's unique in a couple of ways. One, it's open from 7:00 in the morning until 9:00 at night; and two, it's staffed by professional agrologists. So in their own right, they are capable of answering questions. What we've done, because of the extended hours, is worked with NSAC, and we employ masters' students to work the evening hours. Those professionals can either address the questions themselves or they have access to our team of professionals to address the questions. At this point, they've handled over 1,600 queries.
Our idea behind the centre was, rather than bog our specialists down with handling routine requests for information, the contact centre has a lot of those resources at their beck and call, and they can either put packages together and mail them out to people, or e-mail or fax them, or simply answer them right over the phone. Again, if they're unable to, they have ready access to any of our professionals.
In February 2002, we had our first conference. It was a partnership between industry and ourselves, and we wanted it to be applicable to producers right through to consumers. It was called Creating Momentum - Thinking Through Ideas. It was focused on being interactive and having the participants take home ideas they could truly implement in their operations. It was also focused on adding more value to the business through identifying new opportunities and products. We had 130 people attend and the feedback survey showed that 98 per cent said it met or exceeded their expectations. We have had calls from sponsors to see when we are going to do another event such as this because they would like to be another sponsor. We have no plans at this point for a conference like the one we held last year, however, we are working on a regional crop fest that would take place in 2004.
[9:30 a.m.]
In addition to our work within the community, as I said earlier, our board has been very supportive of our professional development and on average, our professionals and support staff attend at least one professional development opportunity over the year and we truly feel that this is one of our defining characteristics. What we would like is for the farming community here to recognize AgraPoint as being the first point of contact and if we can't answer the question they are looking for or we don't have the resources, we will be able to put them in touch with other contacts around the globe who can answer the questions for them.
In one of my experiences talking with a dairy farmer who was unable to get the answer he required a couple of years ago within the province, he actually accessed his answers over the web, downloaded the solution, which he wasn't able to get from either his vet or any dairy specialist here in the province. I thought it was very unique that he would undertake that kind of initiative to solve a very challenging problem on his farm. It truly demonstrates the professionals we have within this province and the lengths to which they will go to solve their problems.
It was mentioned earlier that we have put in place a process that helps us with our daily work. We all have individual work plans, those work plans are followed through every month, at which time we report to the board of directors. We also have a system of accountability where we take all the information that we gather, in terms of what we're doing and where we're going, and we present a six-month report to government and then we present our annual report to industry and government, which is the one you have in front of you now. Through those two processes, they work in sync with our internal processes of accountability, through our work plans at the office.
In a conversation about our teams not long ago, someone said it's not very likely that you know where your team members are or what farm they're visiting. In fact, we actually do know. We can tell you where we've been and we can also tell you where we go. One of the items behind our team has been that we want to be successful and we use resources wisely. We will often ask our team members when they are on a farm not to simply solve that problem, but to also determine if there are other issues on the farm that maybe they can't address, but someone else on the team can. So, we sort of kill two birds with one stone and we come to the farm with a whole farm solution in mind, as opposed to going with a myopic view of just our own, one specialist point of view.
In addition to our own internal processes of accountability, the board made it very clear at inception that they wanted some accountability outside of our telling ourselves how good we feel about ourselves. We went through a process last year of doing an extremely extensive interview with the farm community, by a company out of Bedford who interviewed and held two focus groups and also did phone interviews with about - I may be wrong on this - 600 farms, I think, where they interviewed people and asked them about ADI, that's after only six months in business.
At that rating by those farmers, they rated us, on a scale of one to five: at 4.56 out of 5 for service, in terms of accessed information and for in-house expertise; at 4.44 for access to information out of 5; and in terms of innovativeness, they rated us at 4.67; and our commitment to the development of the Nova Scotia industry at 4.7 out of 5. Again, that was a professional, market-driven survey of farmers within the Nova Scotia community - that was a year ago.
This year, we are currently conducting another survey that's being done by a third party of the people we have served, both by virtue through our resource contact centre, as well as through the farm visits. Our board has made it very clear that they are accountable to industry and they want to be able to hold their heads up amongst industry and tell them what we've done and how we've done it. We hopefully are as responsive to the community as we can be with the resources we have.
We have talked a great deal today about what we believe we're up to and what we have been able to offer to date. We believe we have much to give and are very anxious to continue working in the direction that we are. We look forward to your comments and questions this morning, thank you.
MR. CHAIRMAN: Thank you, Mr. Kelly and also, Mr. Clarke. We now have the floor open and Mr. MacKinnon has indicated he would like to go first.
MR. RUSSELL MACKINNON: Mr. Chairman, my first question would be for Mr. Clarke. I believe in your opening comments you indicated that this is a private corporation?
MR. PETER CLARKE: It's a corporation with one shareholder, who is the minister.
MR. MACKINNON: But you indicated that it was a private . . .
MR. PETER CLARKE: We want to operate it as a type of a private-driven, focused, business-type-driven industry.
MR. MACKINNON: So either it is or it isn't. Is it private or is it not?
MR. PETER CLARKE: No, it is not.
MR. MACKINNON: Okay, so it's a Crown Corporation?
MR. PETER CLARKE: Correct.
MR. MACKINNON: On Page 17 of the auditor's report, it says, to the shareholder. The only shareholder is the minister, is that correct?
MR. PETER CLARKE: Correct.
MR. MACKINNON: Do you report directly to the minister?
MR. PETER CLARKE: Yes.
MR. MACKINNON: Do you provide an annual report to the minister?
MR. PETER CLARKE: Yes.
MR. MACKINNON: I notice you have a close to $900,000-some odd surplus, and you had a surplus last year as well. Why would you argue that you need a continued $2.2 million if you only spent half of that?
MR. PETER CLARKE: In the beginning, since the startup we have yet to really have much of a full year of operation, so we had startup issues. Therefore, to be running a full complement of one year is one of the ways to address that question. Also, we have felt, as a board of directors, that we needed to have a contingency plan in place, if something ever did happen relative to the wind-down of the business, for the people who work for us.
MR. MACKINNON: So you're building up a reserve fund.
MR. PETER CLARKE: We're building up a contingency fund, but also, in the process of our still ramping up in delivering all our services to the agricultural community, it will still take resources to do that.
MR. KELLY: Just to clarify, we began in April 2001 with eight people on staff, and we currently have 21. So over that time period, we grew.
MR. MACKINNON: But let's be fair, that's down from the close to 55 that the department had under Production Technology. In terms of rural leadership, it's down to about five from the original 12. I'm just trying to find out what the problem is, because you seem to be banking lots of money and you've indicated that one of your largest stakeholders is at odds with you. I spoke with several representatives from the Nova Scotia Federation of Agriculture, and they have grave concerns about the way this particular organization is functioning. In fact, I even spoke with the executive director as late as this morning. They are quite concerned about the lack of support that they're receiving from AgraPoint on some critical needs. How do you respond to that, and what are you doing to improve this vacuous communication?
MR. PETER CLARKE: We are definitely working with the Federation of Agriculture through their executive and our board of directors. Obviously, you must remember it was the will of the farmers of the province to set this up as an arm's-length relationship with the services that we did provide to the agricultural community. Therefore, obviously, when you do set some things up and you operate things in a business manner, there are always some issues and concerns and debates to be resolved. Having said that, we are working diligently with the federation and our clients to provide services as they had asked us to provide them in a manner that is going to be complementary to our industry.
MR. MACKINNON: First of all, my understanding of what they were asking for and what you've just suggested in terms of establishing this organization are two different things.
That having been said, if you refer to the bullpen sessions, so to speak, at the federation's annual meeting, I think the comments that were directed toward yourself and others in AgraPoint would suggest quite the contrary of a rather harmonious relationship.
That having been said, we noticed in the paper today that the price of milk is going up 5 cents for a 2 litre container. What has AgraPoint done, given the fact that you say you're working very closely with the federation, to help them reduce their costs? What specific action have you taken to help the federation reduce its production costs that would have helped to avoid or avert this 5 cent increase for a 2 litre container?
MR. PETER CLARKE: Specifically what have we done to help the federation reduce the price of milk?
MR. MACKINNON: Yes. The cost of production.
MR. PETER CLARKE: I'm sorry, sir, that wouldn't be our realm of business to be involved in.
MR. MACKINNON: It's not your realm of expertise?
MR. PETER CLARKE: To help the federation reduce the price of milk? No. That isn't a relationship that would be . . .
MR. MACKINNON: That's not what my question was. My question was, to help reduce the federation's cost in the production of milk that would have averted this. Production technology is a very important component to running an efficient operation. If you have an inefficiently-run operation, with a lack of proper technology and support services and so on, your production costs are going to be higher. It's simple economics. So, what has your organization done to help the federation reduce its costs?
MR. PETER CLARKE: I'm sorry, Mr. Chairman, but we don't help reduce the federation's costs. We would help a farmer reduce his cost of production by their having access to our services and the expertise of our team of people, and we do that through a one-to-one relationship with the farmer, we do that with the milk producers of the province, through our different . . .
MR. MACKINNON: But you've already indicated you don't have a good working relationship there.
MR. PETER CLARKE: Sir, I think you're speaking of two different groups here. You need to be clear that they are two different groups.
MR. MACKINNON: I know they're separate, but there's a lot of cross-pollination, for the lack of a better expression.
MR. CHAIRMAN: There is cross-pollination going on in this room, to be more to the point.
MR. MACKINNON: More to the point, let's shift the focus then, since they don't seem to be doing anything for the federation.
MR. PETER CLARKE: Mr. Chairman . . .
MR. MACKINNON: My next question is . . .
MR. CHAIRMAN: I think Mr. Clarke would like to respond to that.
MR. PETER CLARKE: I would like to respond to that, because I believe that's a really unfair and inappropriate comment. We have worked with the Federation of Agriculture, and do and will continue to do that. Again, we are providing services to the agricultural community. The federation is a lobby group that represents farmers, and we're certainly in tune with the concerns of the federation and the farmers. We will continue to work with the farmers to try to alleviate or reduce their costs and address their needs, today and in the future.
MR. MACKINNON: Well, we will agree to disagree, because you haven't given me specifics. With regard to the issue of bio-security, I know you've tried to do some work with the mink industry, what specific action have you taken to deal with the issue of bio-terrorism in the agricultural community in Nova Scotia?
MR. PETER CLARKE: To date we have not had any requests that I know of relative to bio-terrorism in this province. Therefore, I would have to say - what have we done specifically? - nothing. (Interruption)
MR. CHAIRMAN: The question has been asked, for clarification on bio-terrorism with regard to the agricultural industry, Mr. MacKinnon.
MR. MACKINNON: Well, there's a whole variety of scenarios. I think our experts here would easily clarify, but to give an example for someone who's from an urban centre, it would be very easy to import an infected animal that could spread a disease. That sort of thing, and the technologies that would apply. One final question, Mr. Chairman.
MR. CHAIRMAN: Very briefly.
MR. MACKINNON: I've read your report, and I noticed there is some collaboration with other jurisdictions outside of Nova Scotia. Is AgraPoint providing any specific services to other entities, outside of Nova Scotia, other than within Nova Scotia?
MR. PETER CLARKE: Yes, and I will let Mr. Kelly address that, in regard to some of the interests that we have.
MR. KELLY: Yes, we have activities that have gone on in P.E.I., Newfoundland, New Brunswick and Alberta. All those activities were and are fee-for-service business arrangements.
MR. MACKINNON: So you make money on that.
MR. KELLY: Correct.
MR. CHAIRMAN: Mr. Parent.
MR. PETER CLARKE: Mr. Chairman, excuse me. Just a clarification. Going back to the bio-terrorism, I wondered if the gentleman didn't also mean, perhaps, bio-security. If you meant bio-security, which is a different thing but they do have some cross-relationship, what are we doing in regard to AgraPoint - we've done a significant amount of business with our clients relative to helping them have really good bio-security systems, on-farm food safety type programs in place. Yes, we've done a significant amount of work, and we have several examples of that. So if that's what you were asking, that's the answer to my question, sir.
MR. CHAIRMAN: Thank you, Mr. Clarke, for that. Mr. Parent, would you like to ask a few questions?
MR. MARK PARENT: My mind goes back to an evening almost three years ago when we were looking at changes, and you spoke up, Peter, with the possibility of a plan that would perhaps meet the budgetary needs of the province but also the needs of the farmers. Out of that conversation, there was the genesis of ADI. I've watched it grow with interest. My own informal talks with farmers in my area support the findings that you have in your own surveys, that farmers have made the change and have appreciated what ADI and now AgraPoint is doing for them. I have been interested to hear the more scientifically valid surveys that you have done across the province because that's what I'm finding in my particular riding when I talk to farmers, that they appreciate the change.
[9:45 a.m.]
One of the areas that struck home to me, ever since moving to the part of the Valley where I live, was the global nature of agriculture. I guess maybe like lots of typical Canadians who weren't exposed to agriculture too much, I had the sort of image of agriculture that was false. It is a vibrant business and it is a business that has to compete globally. I'm wondering, when one of your mandates is for strategic planning, how do you help farmers deal with the global nature? Now I know it affects different commodity groups differently but how do you help farmers deal with the global nature of farming now?
MR. PETER CLARKE: I will first start off and perhaps Dale will want to make some comments as well. You're right in your comments about the global industry we find ourselves in. We are finding through our contacts with people around the world - and we are continually making more contacts with people in the industry - that we have an awful lot in common, a lot that we can share with each other and a lot that we can be progressive in telling each other. So, therefore, through our specialists, our communications, our abilities today with the communications as they are, we are constantly in touch with the people and we're trying to make those connections with our agricultural community, more so than what they ever have been before, recognizing full well that to be global helps us to help ourselves in what we do as production, through how we produce things, right through to the end product ending up in the retail outlet. We have a lot that can be complementary and we can share around the world and we continually try to do that. Dale.
MR. KELLY: I would like to comment on a couple of points. One is if you take a look at the make up of our team, it certainly is global in its make up. We have an individual who comes from eastern Europe, we have an individual who comes from Kenya, we have people who have worked in lots of different parts of the world. My background, of course, is I was born and raised here in the Maritimes but spent 20 years also working a lot around North America. I think because of our expertise, we've been able to identify some opportunities with the farm professionals here because some of the people in this province are incredible entrepreneurs who currently have operations in South America and in the Caribbean. I think some of the most innovative minds exist around this province in various commodities and I think you have to be very commodity focused.
Within this country we have different marketing opportunities so I think within our team what we've attempted to do, at least, is work with the commodity groups on the various issues they're faced with when it comes to the fact that we are in a global market but also to be responsive to individual producers who some are attempting to piggyback on some of the success of the Nova Scotia fisheries industry and the export markets that they've developed in having complementary food products to that network. We have done some work with some of those organizations as well, to see if we can help them leverage that work. Some of it is in product make up, some of it is in some of the production techniques that they have to
change, some of it is in traceability and food safety issues at the global marketplace and certainly, the Canadian marketplace is demanding.
MR. PARENT: One more question, if I may?
MR. CHAIRMAN: Yes, go ahead.
MR. PARENT: This model of AgraPoint is rather unique, as you've mentioned, and phenomenal growth in two years, as you say, having to navigate through many new and different challenges. Are other jurisdictions across Canada looking at what we're doing here and what sort of conversations are you having, versus with colleagues across Canada about this particular model?
MR. PETER CLARKE: Yes, there are people looking at us and what we're doing, how progressive we're being and of course you know with any new type of business, there are always growing aggravations and issues where with some you have successes and with some you have failures. We are being watched very carefully even by our neighbouring provinces in what we do. But we're also trying to gain information from other places and some other countries in the world; Australia and New Zealand come to mind as places where they are doing similar-type things and we are gaining also from talking to them and learning from their experiences and some of their mistakes and trying not to repeat those. So yes, it's a give and take but in general terms, we've been very pleased with the type of feedback we have gotten and are very interested in the people who are watching us as well because over time, hopefully, we'll have something to offer each other.
MR. CHAIRMAN: Mr. MacDonell.
MR. JOHN MACDONELL: Thank you, gentlemen, for your presentation. I think around the increase in milk, the dairy farmers of Nova Scotia could probably go there and answer that better. I have one question for Mr. Clarke. I would like to know what your background is. I see kind of a biography of everyone but I don't see one for you, so what is your claim to fame?
MR. PETER CLARKE: I don't have any claim to fame per se. I am a farmer and have been involved in farming all of my active career. I have been educated at high school locally and went to NSAC and have been involved in our farms, involved in poultry and producing crops such as corn, soy beans, wheat, barley, oats, those kinds of commodities. I've been involved in a number of farm organizations; I am presently chairman of some. I'm on the Canadian Egg Marketing Agency, I'm also on the Nova Scotia Egg Producers Marketing Board. I'm the Chairman of ACA Co-operative and others as well. My career is in agriculture and my love and my history is here.
MR. MACDONELL: So were you involved with East Coast Commodities?
MR. PETER CLARKE: Yes, I was also Chairman of East Coast Commodities.
MR. MACDONELL: Your comments around the point of competition for other agri-consulting companies would seem to me if you're doing some work with no fee or a minimal fee that certainly having $2.2 million of taxpayers' money would give you an advantage that other companies wouldn't have. Why is it you think that their complaint around unfair competition is not justified?
MR. PETER CLARKE: Originally, one of the times that they came to us was they certainly didn't want us to go out in the community and give our fees for free because they certainly thought that was extremely unfair because they had to charge, they had overheads and so on and so forth. They were very adamant, please charge for your fee for service in the community.
Recently we have been doing that and we've gotten some of the same consultants coming back and saying our fees are perhaps inappropriate as far as they saw it and in some cases we weren't charging enough. I tried to make it very clear to them and others that our fee for service is always under scrutiny. Over time if we see we are in an inappropriate factor in charging fees, we will make the proper adjustments. We will do that with good information based over a good period of time so that we can have a good background to back up our fee structure.
This is definitely new territory for us, it is one we are trying to be very careful and cautious with but we do need to charge a fee for the services that we are providing. Our specialists are truly expert in what they do and we need to be able to generate revenue for this company over a long period of time so we will be here to address the concerns of agriculture over a long period of time. I hope I've addressed your question.
MR. MACDONELL: I think you have, I think you tried. I'm curious about what you seem to regard as a contingency fund, and if I understood you correctly, it was around the notion to kind of take care of your people in case the company goes defunct. You're talking about being around for the long term, so the two lines of thinking don't seem to be coordinated with one another. It sounds like you think you might be around for the short term, and this fund is going to help support those people that you have employed if they have to be let go. So I'm wondering if you could kind of smooth out the difference that I'm getting in the thinking there.
MR. PETER CLARKE: Certainly, I will try to do that. I believe, being in business myself for a long period of time, that it's always good to have a contingency fund for whatever may happen. My employees, who work with me, I certainly feel that I have an obligation to them, as we at AgraPoint do have obligations to our employees. So if something did happen to our company, whether it be six years down the road or 10 years down the road,
we wanted a contingency fund put in place that would have a resolve to handle those people over a period of time, to ease them out of our business. That was the rationale.
The board of directors decided they wanted a contingency fund put in place. We felt that was a very good business decision. Again, we are here for the long term. We want to be here for the long term, and we are going to do everything we can to grow our business so we are here for the long term. The contingency fund is just part of the process.
MR. MACDONELL: I think that if you are here for six or 10 years and your contingency fund grows at the rate that it's growing, I don't think they will have to worry about doing anything afterward.
MR. PETER CLARKE: We don't intend to grow a contingency fund. Not at all. We intend to grow our business. The funds that we have and the funds that we generate, we will use those to grow our business.
MR. MACDONELL: About a year ago our caucus had asked for information around your budgeting, actually we filled out a freedom of information request, and we were told that we couldn't get that information, that you weren't actually part of the government. Now you're saying you're a Crown Corporation. Can you explain why the taxpayers shouldn't have more ease getting information from AgraPoint International?
MR. PETER CLARKE: I believe the information that you have in front of you today and the community has in front of them today is full disclosure of what we do.
MR. MACDONELL: Well, it wasn't about a year ago. That's why I'm curious as to why it was difficult to get it at that time. Do you provide services to the Department of Agriculture and Fisheries?
MR. PETER CLARKE: We certainly would consider doing that. Are we doing some of that now? Dale.
MR. KELLY: The strawberry inspection that we do for the horticulture industry. I'm just racking my brains. I guess that would be the only contract that we have right now.
MR. MACDONELL: Does the department pay you for that service?
MR. KELLY: The producers pay for half and the department pays for half.
MR. MACDONELL: So we cut the Production Technology Branch and the specialists, and now the department is hiring your specialists to do work for Nova Scotia farmers.
MR. KELLY: As I understand, it was a separate service. It was a combination of resources within the department, how they handled that particular service to the industry.
MR. MACDONELL: Plus give $2.2 million of taxpayers' money. My children are involved with 4-H. For a number of years they've shown poultry, raised poultry. Those birds have to be ILT vaccinated before they can take them to a show. Alex Oderkirk, who I see is employed by AgraPoint International, used to be the poultry specialist for the department, and he used to come and do that. Now he comes and does that as well, working for you. I guess that was really the reason I raised the question, is that also a service that the province is paying you to provide? Is he coming under contract, or in what way does that happen? I'm sure he's not doing it out of the goodness of his heart, although he is a good fellow. What's the arrangement there?
MR. PETER CLARKE: Your question is, is the province funding AgraPoint to do ILT vaccinations?
MR. MACDONELL: Right. Certainly in regard to 4-H, because it's the province that sends out the letter of request, stating if you want your birds done you notify the province. Then they will come and vaccinate. Well, Alex is the one who is still coming to do that, but he doesn't work for the province. I'm wondering about the arrangement.
[10:00 a.m.]
MR. KELLY: Up to this point, that arrangement was between Alex and the department. It had nothing to do with us, because Alex actually - I guess we are getting to specifics - was not a full-time employee of our organization. He had contractual obligations outside of our organization, and he had a relationship with us as well.
MR. MACDONELL: How many people working for you are in that position, that they have contractual obligations, kind of their own little business within your business?
MR. KELLY: Alex was the only one at the time. Alex has since come to our full employment.
MR. MACDONELL: I wonder if he will be doing that this year. Do you know?
MR. KELLY: I don't know. I would just clarify, as you can appreciate, nobody came to the board to say, for $2.2 million here's what you're going to offer for services. So the board has always taken the position that each time something comes out of government as to what we should be doing, the board has decided whether or not they felt that was within the mandate. If it's not, then our position has been that the government would pay for that service. That's a negotiation between the producers on our board and the government to take.
Strawberry inspection was one of them. ILT, we've not dealt with because Alex was doing that directly with government.
MR. MACDONELL: My view would be that if the taxpayers are contributing $2.2 million, they shouldn't be paying again to hire specialists that the government let go. I don't think you can comment much on that.
MR. PETER CLARKE: Were you paying anything, relative to having your birds vaccinated?
MR. MACDONELL: Yes, we were, so many cents a bird.
MR. PETER CLARKE: So you were contributing?
MR. MACDONELL: Yes.
MR. CHAIRMAN: I noticed that last year Canada was host to one of the largest bio-technology conferences in the world. There were some 15,000 delegates from 47 countries. I reviewed some of the papers that came in to that conference, agriculture-related. I too was born and brought up on a dairy farm in Pictou County, and so I have an interest in it. I'm just wondering, I know research is a very important component to your organization, but I expect it would be almost impossible to stay on top of the technology that's out there. It's most interesting, some of the work that's being done, molecular structures of plants and crops and animals, and you name it, that's comes forward at these types of conferences.
I'm just wondering where you go in relation to bio-technology? Does your organization review some of the things that are going on with regard to these new types of plants, hybrids or whatever you call them? Perhaps Dale could answer that.
MR. KELLY: There's no question that we consider that an area that we have both expertise in, with some of our team members, and an interest just generally within agriculture, because we think it's one of the bright lights of industry's going forward for this country and certainly for this province. We think bio-technology is going to play a part in it. What part, of course, who knows? But it's great that we have the expertise within our walls, that we can at least go to those conferences and participate knowledgeably.
Also, we've been successful in building relationships with other groups within this country. In particular, we've taken it upon ourselves to basically get a listing of all companies within the country that are currently operating in this area to know what their expertise is, what areas they're practising in and how that might relate to some of our commodities. Again, it's not necessarily a science that we will probably ever influence but it is a science that we want to stay on top of, and then how that would affect the producers within this province and those who want to participate and those who don't want to participate.
MR. CHAIRMAN: Precisely, and I think it is very important to try to stay on top of what's happening out there, because it may have quite a profound effect on the future of agriculture in this province. Still on the first round, Mr. Hendsbee.
MR. DAVID HENDSBEE: Mr. Chairman, your insightful question with gmo's, genetically-modified organisms, just took my question off the list. Another question I had was in regard to your comments about some farmers hiring experts or consultants from time to time instead of using past services of the department. You also made the comment about other consultants wanting you to have fair and competitive rates or service fees. Could you tell me if you feel there might be some animosity, some people make reference to the Federation of Agriculture, and do you think that animosity may be arising because you were once a free government service and are now a new organization or a Crown Corporation where you have a user-fee service format? Do you think that caused some animosity in regard to, be it the lobbyist group or the farmers themselves?
MR. PETER CLARKE: Absolutely. Whenever you have a service provided in pretty near any industry that was for free and now you may have some relationship to providing either part or some of that service or some aspect of that service that's charging a fee, well people always relate back to why are you charging me for that now. That also goes over to the other side, potentially on the specialists side and the consultants who have gone out and set up some private businesses because of their expertise to provide services. If they see some potential competition coming in that, in their opinion, is inappropriately charging for fee, either too high or too low, then yes, that obviously will set up a bit of friction and some issues there as well. We are trying to walk the fine line here in trying to do some of both.
MR. HENDSBEE: In some of the other questions that were asked about business in other places or other jurisdictions, I wanted to know what kind of collaboration or co-operation do you have with the other Maritime Provinces. You said you had dealings with New Brunswick, P.E.I., Newfoundland, as well as some of the provinces out West. Could you tell me what other agencies are out there that are probably not a direct government department? I see in some of the literature you have the Prairie Swine Centre, you have the Prairie Farm Rehabilitation Administration and you also have stuff there from the Saskatchewan Irrigation Diversification Centre. Are there other structures across this country that you talked about - your set up being unique and they're watching us here but are there any similar agencies across this country that are not similar but provide a similar service and how are they compared to you here?
MR. KELLY: To the best of my knowledge in North America, there's no vehicle like ADI was created under. The closest thing that we've been able to find is an organization in New Zealand that in 1985, when the national government privatized basically, the food industry, a vehicle similar to ours ended up being developed and today is fairly vibrant. But in North America there are commodity-specific expertises available that are privately driven
and paid for by industry but nothing that has a comprehensive set of services like we offer - everything from livestock to horticulture to field crops.
MR. HENDSBEE: I see in your literature and some of the information you have, you had the water management conference and you also had some information about animal waste management and everything else. Could you tell me with regard to the concerns that we've had in the past about groundwater quality and possible contamination, either from pasturing cattle grazing out in the fields and their manure getting into water courses, or perhaps use of liquid manure concentrate or raw manure on a farmer's field, has that had any problems with groundwater quality and has your agency had anything to do with dealing with some of the research or trying to provide expert advice for farmers on how to mitigate those problems?
MR. KELLY: Certainly the water management conference was an initiative with ourselves, the federation and PFRA to put on that task force. In addition to sitting on a number of committees, our professionals engaged in a project on waste management which we started approximately six to eight months ago. Again, we're working in partnership with other agencies around the province to determine some strategies around waste management. We're actively following what is happening with the federation's initiative in the nutrient management planning and how that might fit with some of the work we'd like to do in the future, too. We're certainly involved and aware of what's going on in the industry but we don't and haven't been taking any primary role in that. We've been very much players and partners in initiatives but not actively leading them.
MR. HENDSBEE: My last question at this particular time would be, I had seen on a news report some time ago about some research with regard to a seaweed supplement to be added to silage for cattle to have which had a remarkable reduction in the E coli bacteria in their digestive system and therefore in their waste product. Has there been any local research on that because we being Nova Scotia, I'm sure seaweed is quite in abundance and is there an opportunity there for us to do further research to see if this seaweed supplement would be a major defence mechanism against E coli contamination?
MR. KELLY: Dr. Nicholas Odongo on our team is very aware of that work. I could not speak knowledgeably about where it's at and where it's going, I just know that he is aware of it and doing some preliminary work in looking at it but that's all I can tell you.
MR. CHAIRMAN: Mr. Langille.
MR. WILLIAM LANGILLE: I would like to congratulate you on your board of directors. I read their resumes, and it's very impressive. The survey that you alluded to a while back was scored very high. Out of five points, I think your lowest about 4.5. Can you tell me how you arrived at this survey, who you targeted and how you perceive the results?
MR. KELLY: Certainly. We were challenged as an organization at the outset to come up with a list of producers because the province has its guarded list, which they're not willing to provide, obviously, for their reasons. We contacted some of the commodity groups who were prepared to release their list to us, from which we started to build a comprehensive database of producers. At this point, our database would have in excess of 5,000 contacts. That would be farmers' organizations, consultants, et cetera, around the province. So what we did was we made that list available to the marketing firm that did the survey. We gave them names and phone numbers, and they took a random selection from that list. They had their focus groups and then they did the phone surveys from that list.
MR. LANGILLE: How many people would have been contacted?
MR. KELLY: I apologize, that was a year ago, I can't remember the exact number surveyed. I can tell you that the survey results were accurate, as in any poll, 19 times out of 20. I believe, out of the total population - I want to say we did around 1,200, Peter. I don't know if you can remember, she reported those results almost a year ago now. I'm sorry, I can't remember the exact number of surveys that we did.
MR. LANGILLE: There has been discussion that you might be around for the short term. I don't know if that's a Liberal or an NDP policy, or not. But anyway, getting into the Wild Blueberry Institute in Debert, what role do you people have to play with that?
MR. KELLY: In terms of the institute's work itself, again, we're engaged in that. Peter Burgess and Treasa Caldwell are very actively involved in the blueberry industry. Peter, obviously his family is actively involved in blueberries. Rick Delbridge, who works with us, has a blight monitoring program. Specifically in terms of leadership, we've been doing some projects, we've also been working with a group, but it would just be like any other commodity. We do lots of work in each of the commodities, in different projects, depending on their needs.
MR. LANGILLE: Your fee structure, I believe you said you provided some services free and others you charged for. It appears that you don't have a set fee for your services. Is this something that you might be looking at in the future? How are you going to address this?
MR. PETER CLARKE: We are continuing to address this over time. As I suggested, as we get more involved and do more business, we will certainly be more refined in our structure. Often, as you must appreciate, when people come to us for certain services, we have a good consultation with them and have tried to gain a real understanding as to what they want. In gaining what they want, and our trying to be able to address it with our suite of expertise in our group and what we would need to do for the client, then we try to come up with a fee that is complementary to the service provided. They can be very different. They can be something similar to what may be done for you and your neighbour down the road,
but they could be different. Therefore, the fee that's charged could and should be different as well.
MR. KELLY: I will just comment in general. The majority of work that we do within AgraPoint as a team is done as part of our contract for $2.2 million. The fee-for-service, the board was very clear to us in terms of coming up with the parameters for that. I would be the first one to say it's been tough for us to manage. We've attempted to be very fair with all producers within the province. If it's something very specific to that farm and there's no benefit to the industry overall, it's not new or innovative, if it's something that's been done repetitively for a producer for a number of years and they still want our experts to do it - and I'm going to use the example of fertility recommendations. We have two outstanding gentlemen on our team who have, in the past, done fertility recommendations. That was one of the primary services that we came out with a year ago. Our chairman, Peter, met with a number of consultants who brought grievances against us that we had offered the services last year for nothing and they felt that was an unjust service to be doing.
[10:15 a.m.]
So it was and probably is the leading service that we have offered for a fee. The farm community wants these two professionals to still do fertility recommendations for their farms because they are very good at what they do. So the board had a choice of either saying we don't offer that service, which would have angered the farm community, or we offer it but we're competitive with our fee schedule relative to what farmers would pay for outside of that.
Even within that suite of services outside of AgraPoint, meaning that you might access that service from a private consultant or you might access that service from a fertilizer dealer, there are two different ways that both of those individuals would be collecting, or groups would be collecting fees for services. So somewhere down the road, AgraPoint's professionals attempt to walk the line. I would just like to reiterate that the majority of services that the community receives within this province, they receive as part of the $2.2 million contract.
MR. LANGILLE: I just want to talk about the independent consultants who would be competing with your group. These independent consultants, would they have been affected by you providing the same service? They would obviously have to charge more. It doesn't look like they can be competitive when it comes to doing business.
MR. PETER CLARKE: We are certainly trying to not set up any type of a system that puts them at a disadvantage. We're just trying to be competitive, to provide the suite of services, if it's similar to what they provide. We're trying to be very cautious in doing that, recognizing fully that there are different overheads and different organizations and businesses that provide services out there, different than what we are. It is a difficult area for us to be
in, to be comfortable, to make everyone happy, which I am sure we will not, over time. There will always be someone out there who says either we're charging too much or not enough.
That is never going to go away from us, in our fee-for-service structure, but we're going to try to be fair, we're going to try to be competitive, to set up, in the community, opportunities for producers to go and choose who they might want to get those services from. A lot of it is still going to depend on the people they're comfortable with, the people they've had relationships with, and their abilities in the past, how they've worked with them and for them in the past. All those things are factors as well.
MR. CHAIRMAN: Bill Dooks, you had a couple of questions.
MR. WILLIAM DOOKS: Yes, a couple of small questions. How many acres would be under production on registered farms in Nova Scotia?
MR. PETER CLARKE: I'm sorry, I cannot answer that question.
MR. DOOKS: Would you say that farming is on the increase? This is where I'm trying to go. Number one, is farming a stable industry in Nova Scotia right now?
MR. PETER CLARKE: I believe it is. There's always people coming into the industry and leaving the industry. There has been consolidation in most businesses, and farming is no different from that, and being open to all the pressures that we have in the industry today. Farms are generally getting larger, there's fewer numbers of farms in Nova Scotia. That's been continuing on that line of progression for many years. Those things aren't changing. Is agriculture in this province a success and will it continue to be a success, absolutely. We're here to help have that be a success.
MR. DOOKS: We're seeing the family farm disappearing, I would think. Correct me if I'm wrong, but corporations or businesses are buying the smaller to make larger - is it still based on a one-man or one-person ownership and it grows from there? Who's managing and operating the larger farms in Nova Scotia? Is it business or . . .
MR. PETER CLARKE: There's some of both. First of all, there are some families, I would say probably they're mainly family-based farms with sons, daughters, sons-in-law, daughters-in-law involved in the business that have grown their business that way. There's a significant amount of that that has happened. And yes, there's some corporate-type farming in this province that has grown as well. There's definitely some of each. Is the family farm
going away or gone from our landscape? No.
MR. DOOKS: I still see them cutting the forests and making new farmland, so that must be a sign that things are on the increase. What dominates it, dairy or a crop, or is it hog, poultry, where are we there? Do you have any stats on that? Is it the animal or the plant side of the farm that dominates it in Nova Scotia?
MR. PETER CLARKE: When you say dominates it . . .
MR. DOOKS: What is the percentage of dairy, hog, poultry, in relation to . . .
MR. MACDONELL: You mean a dollar value? (Interruptions)
MR. DOOKS: Well no, a percentage of the farms, or dollar value I guess is how you would dictate what it is.
MR. PETER CLARKE: If it was gross sales it would be dairy, poultry and horticulture.
MR. DOOKS: What about introducing any new type of species in Nova Scotia, buffalo, for instance? Where are we with looking at new types of farming to deal with climate change, to deal with the new movement that is taking place? Is there a more solid type of species that could be introduced to Nova Scotia to secure the future of farming? We know there is a lot of employment in farming and we know farming is business and it's important to Nova Scotia. I'm just concerned about where we're going.
MR. PETER CLARKE: To try to address your question, are there new and different species coming in, farmers are very entreprenuerialistic and they're always looking at new opportunities and so on and so forth. The best people to assess those types of new ventures I believe are the farmers and they do it from time to time. Is there something significant happening, relative to new species? No, not that I'm aware of.
MR. DOOKS: No big announcement coming, then.
MR. PETER CLARKE: At the same time, I think you asked about the future, too. The future lies in what we do, how to improve on what we do and how to improvise and change and evolve and very much to stay in tune with what our consumers want today and tomorrow. We try to focus very much on staying in step with consumers, what they're interested in, what they might be interested in tomorrow, to try to provide that and relate that information down through the food structure system to the production side. We, as farmers, are trying to be very much in tune with what the consumers want, so we can provide that for them today and tomorrow.
MR. CHAIRMAN: Mark, on this subject, is it?
MR. PARENT: Yes, I just wanted to jump in on the new products, species, crops, whatever. As you mentioned, Peter, really the individual farmers are the ones we should be talking to about that but it twigged my interest in one that may be suitable for the Valley area. I'm wondering if you've been approached on this or done any research on hemp and whether that's something that has come to AgraPoint yet. (Interruptions) There are a variety of products that can come out of it. Have they come for help with AgraPoint yet?
MR. KELLY: Not that I'm aware of.
MR. PARENT: Not yet.
MR. KELLY: There is work in Manitoba but I'm not aware of anything going on here.
MR. PARENT: Just curious.
MR. CHAIRMAN: On the second round, perhaps you can jump in here and help me, I don't know what we have left in time. I have Russell, Mark and John down, is there anyone else who wants to jump in there for the second round? Away we go then, Russell MacKinnon.
MR. MACKINNON: Mr. Chairman, I want to go back to the fee-for-service. First of all, would you be kind enough to provide a list of all the service fees that you charge the different farmers, like the strawberry, the beef, the dairy and so on? Would you be kind enough to provide a copy of the list of fees that you charge, to the committee?
MR. PETER CLARKE: We don't have such a structured list.
MR. KELLY: We operate like any other consulting house. We have professional time to sell, we assess or request on a project based on that.
MR. MACKINNON: So you don't have any specific fees at all?
MR. PETER CLARKE: If you came to us with a specific project and knew what you wanted to have expertise or help on, then we would certainly try to put forward a program to address that.
MR. MACKINNON: How much money did you make on fees in the last fiscal year, approximately?
MR. KELLY: Of the $114,000 of other revenue, about $50,000 of that would have been fee-for-service.
MR. MACKINNON: Where did the other $64,000 come from?
MR. KELLY: There were some interest revenues, I'm trying to think what the other - there's one other line item in there, Russell.
MR. MACKINNON: I can take that on notice. If you could give me a breakdown on that I would certainly appreciate it. I want to go back to the reference about charging more to the agricultural community for the use of service but when you break it down, if you take out the interest on the million dollars and you look at the total amount of revenue that came from the provincial government, $2.7 million in 19 months, and you only generated $114,500 in income from services provided, like fee-for-service, plus interest, it would appear to me that you're only recovering on fee-for-service about 1.5 per cent of your total budget.
That seems to contradict what my colleague, the member for Preston was suggesting, that the whole idea of setting up this corporation was, in essence, as I understood, that farmers would pay more for the services that they would request from government. So how can this be an efficient and effective operation for the industry and for the government when you're only recovering 1.5 per cent of your total budget?
MR. PETER CLARKE: You should recognize that we just started the fee-for-service structure.
MR. MACKINNON: I realize that but initially you said the reason why you wanted to build up that contingency was because you just got the service up and running but it has been running for 19 months, that's one and a half fiscal years. You've charged the strawberry industry for inspection, you've charged the poultry industry for vaccination, you've indicated you have charged non-Nova Scotia entities in western Canada for services provided. How much did you charge the non-Nova Scotia firms? How much revenue was generated from that?
MR. KELLY: Again, each project is different on its own.
MR. MACKINNON: But do you have any detail on this? You're saying that you're doing so well but yet you don't seem to provide very good accountability.
MR. KELLY: If you look at the financial statement that you have . . .
MR. MACKINNON: And you're using close to 50 per cent of your budget to build up a contingency fund in the event the corporation would collapse and obviously, that would be for human resources purposes. Am I correct on that?
MR. PETER CLARKE: As I stated before it would be for contingency for the people who work with us over a period of time to wind down the business.
MR. MACKINNON: I guess, in essence, if I was a businessman I would say this is a poorly-run operation because you don't seem to be recovering very much money, 1.5 per cent of every dollar that the taxpayers put in there. You say you would like to run it like a corporation. How can that be a good corporation for the taxpayers of Nova Scotia - it's a Crown Corporation - when you're only recovering 1.5 per cent of every dollar we spend?
MR. PETER CLARKE: Over time as we progress and are able to get more involved in a fee-for-service-type structure . . .
MR. MACKINNON: But you say you don't have a fee-for-service structure. You say it's on an ad hoc basis.
MR. PETER CLARKE: I indicated that it probably should be on an ad hoc basis because if we were going to charge everyone the same sort of fee for different services, our community would not put up with that. Over time, as we are successful in growing our client base, we will demonstrate to you and everyone else involved, that this is a good, well-run business providing great service for our community. The farmers will provide that information over time.
[10:30 a.m.]
We have only been in operation a short period of time, and for you to take a relationship between percentages of $2.2 million to what we're generating for income is very inappropriate at this time. Perhaps in the future it would be a good way to relate to what you may feel is our success based on our investment. The province has wanted to invest $2.2 million in our type of organization, providing services to our clients. That's what we're doing. I think we're spending the $2.2 million very responsibly. If we don't, at the end of the day, it's going to be very easy for all of us to determine what our fate will be.
MR. MACKINNON: I have one final comment, Mr. Chairman. I can only comment on the figures that you've provided. This is not something I made up. These are your figures. To suggest I'm taking anything out of context, I can only be using your figures, so maybe you've provided them in a way that would make it misleading. That's the only thing I can suggest if I'm taking them out of context, because this is an audited report. In the 19 months, you have $2.2 million of the taxpayers' money and you only recovered $114,500. Write that down, and then you take out the interest on the taxpayers' money that you put in the bank, $1 million at about 5 per cent, you're talking $50,000 there. You've only recovered about $60,000 out of $2.7 million.
Don't try to suggest that members of the Legislature are beating up on you because you haven't been given a chance. We're only using your figures to suggest that this private corporation would appear to be nothing more than a political power play. That's the way I'm reading it, as a businessman.
MR. PETER CLARKE: You're certainly entitled to your opinion.
MR. MACKINNON: Absolutely. That's what the taxpayers pay me for.
MR. PETER CLARKE: Absolutely. Again, our fee-for-service structure, Mr. Chairman, hasn't been in place for a long period of time. This is a company at startup. It does take time for us to get our business running in an appropriate manner, and this is how long it has taken for us to try to start generating revenues.
MR. KELLY: I would like to comment for one minute on this topic, if I may.
MR. CHAIRMAN: Yes, please.
MR. KELLY: A few points of information that I think it's important to recognize. If you look at the March 31, 2001 date, which is the seven months ending 2001, this company was formed by the industry back in, I believe it was August 2000, around there. I did not join the company until January 2001, and when I joined the company in January 2001 there was absolutely nothing here, no offices, no people, nothing. Basically, for the first three months of 2001, besides myself and the board of directors getting organized, we hired an IT person on a contract who had been doing some work in that period, but that was it.
If you take a look at the second year of operation, the full year of operation of which ADI existed, which began April 1, 2001 and finished March 31, 2002, in the course of that year we started with eight people on our team, in April 2001. I can't tell you exactly how many people we had by March 31, 2002, but we would have grown from eight to probably 16 or 17 people, I think, around that point in time.
As we brought people on, we started to pick up their salaries. I was very impressed with the board of directors that is industry-driven, industry-led, that they fought very hard to ensure that the industry got that $2.2 million. I would also identify the fact that the money that is within the balance sheet of ADI is not lost to the industry. In fact, due to the diligence of the board of directors, that money is still retained by the board for their purposes of operation. If they choose and see projects that they wish to initiate with those funds, that's what the province made available to the industry to do.
I think it's important to recognize that the farmers lead AgraPoint, and it's their prerogative at this point to take a look at projects, to take a look at how to invest those funds. So it might have been less appropriate to have worked hard to spend the money, recognizing that we are slowly growing up. When the 2003 annual report comes out, I know in this fiscal year we have more than doubled the amount of revenue this year from projects that we've worked on and contracts that we've taken, as well as work that we've done.
I guess I would also say that if you read the client satisfaction that we get from the people who do work for us, with us for the fee-for-service, you would find their satisfaction is phenomenal. The people who are using our services, whether it's for a fee or as part of our $2.2 million contract, people are extremely satisfied with the services.
I will just put a plug in for the board. I think they've been prudent in fact that money is not lost to industry. That money still resides within the company, and it will still be available to the industry.
MR. HENDSBEE: On this particular point, could I just ask for a clarification. The honourable member for Cape Breton West talks about the $2.2 million government contribution in Note 7, Grant for Startup Costs, the $600,000 in regard to helping ". . . provide appropriate contingency fund for ADI wind-up or other liabilities.", and for capital acquisitions. Could you clarify that $600,000 versus the $2.2 million? Is that part of that or additional to that?
MR. PETER CLARKE: We are only getting $2.2 million on a yearly basis, for AgraPoint. The additional monies were for startup, to do everything from putting our business in place to hiring an executive director to do a search, et cetera, the general things that would all be relative to a startup of any business.
MR. HENDSBEE: So it's in addition to the $2.2 million, one time only.
MR. PETER CLARKE: Yes.
MR. CHAIRMAN: Mr. Parent.
MR. PARENT: My colleague, the member for Cape Breton West's remarks seemed to be indicating that it's not good value for money in some ways. (Interruptions) I hope I'm not putting words into his mouth. From my perspective, having been in the heart of the agricultural community in Nova Scotia, I remember the great consternation when the changes came in that you alluded to, Peter, at the start, and the growing satisfaction with the work of AgraPoint as it has grown in operation and filled in some of those vacancies and some of the gaps that the farmers were feeling.
Basically, I can only speak out of my own experience and don't have the perspective you people have on the larger perspective, but it seems to have been something that has worked for the farmers. You've alluded to this in several surveys. I'm wondering, having seen this as a baby, born, and now I would classify it as sort of a vibrant teenager, where do you see the future of AgraPoint going, as you move into a different phase? What are some of the things you see in the future, in about a five-year window?
MR. PETER CLARKE: We certainly want to continue to provide services for the agricultural community, but we want to grow with that community, we want to be in tune with what they're looking forward to wanting for services today and into the future. In our dialogue with the people and the clients that we service, we will gain information from them as to what they see in their future, and try to then ask to be very progressive in trying to help our clients reach their goals, to try to help them be successful on their farms and be profitable. That's what we want to try to do, always continuing to make those connections with them and be there for support for what they need. You must remember, we're trying to provide a suite of services and a group of people that are available to the agricultural community in this province at a significantly reduced price and in numbers from before. We're trying to do that, definitely, with less dollars and fewer people.
MR. PARENT: But you've been fairly successful doing that.
MR. PETER CLARKE: We have, and we've gotten several compliments for doing that, and we hope to continue to do that. It's not without growing pains and hard work.
MR. PARENT: How important is the $2.2 million in the ongoing life of AgraPoint?
MR. PETER CLARKE: Absolutely critical. If we can't continue to provide the services that the agricultural community wants and hopefully grow those services, then we are certainly putting our agricultural business, in my opinion, at risk, in this province.
MR. CHAIRMAN: We will now move to John MacDonell.
MR. MACDONELL: I think that pretty well nails the notion of why your competitors think you have an unfair advantage. If you didn't have the taxpayers' dollars, you probably wouldn't exist. I just want to make a note that the last time Mr. Oderkirk vaccinated the birds at my place, he was a full-time employee of AgraPoint. According to this binder that we received, by March 31, 2002, ADI had 20 full-time team members, plus two consultants used as needed. Those vaccinations occurred, I think, last June, so he would have been there over two months, according to your documents. Those documents aren't right, you're saying?
MR. KELLY: No, I'm just saying the relationship that I have with any of the people on our team is a relationship between myself and those team members. He is the one individual who was an exception to the rule.
MR. MACDONELL: So he's not full-time.
MR. KELLY: He wasn't at that point.
MR. MACDONELL: As of March 31st he was, according to this.
MR. KELLY: It says that he was a team member, but, as I said . . .
MR. MACDONELL: It says full-time.
MR. KELLY: It says the words full-time?
MR. MACDONELL: Yes, full-time team members plus two consultants.
I guess I will come back to the fees which you said you couldn't give us but according to this, AgraPoint soil fertility and crop planning service fees for field crops are: 249 acres and under, $175 plus HST; 250 acres to 499 acres, $275 plus GST; and 500 acres to 1,000 acres, $400 plus HST. So you obviously must have some fees down somewhere if they are here. Do you have any more that you know of?
MR. KELLY: Again, those fees are put in there because the other consulting communities asked for a bit of guidance in terms of what we would be charging. We have to recognize that the difficulty we have is that every producer within this province has a different preparation mechanism on fertility recommendations. Those fees are based on the fact that when we arrive on that farm that the soil samples would have been taken, the analysis is back, the folks are ready to tell them what crops were in there last year, what crops they want to put in this year. It's assumed a certain amount of time will be spent on that farm. We came out with those fee schedules but is that to say that they will actually be driven to that and only that? Maybe not because if we arrive at that farm and they don't have any of that prep work done and yet they expect us to do it, then those fees could change from the schedule.
MR. MACDONELL: Sure.
MR. KELLY: It's very difficult for us because we are not like a pharmacy, we aren't like a shoe store. You can't just say, well, it's this, recognizing every farm professional has different management capabilities.
MR. MACDONELL: Well, they didn't make their analysis based on time, they made it based on acreage. So that's getting fairly empiracle. If it's within this range of size, it will be - it seems to be a lot of what you have written doesn't really apply when you are asked about it. It may or it may not, he is or he is not and if the other competitors would like to see some type of fee, those are put down for your competitors to say, then certainly I would think if a legislative committee was to ask for some type of fee structure that maybe we could have that provided, if your competitors can have one provided.
I'm wondering, are you negotiating with the province now for another $2.2 million or do you know that you are going to be given that in this budget year and are you aware, is that an ongoing $2.2 million, carte blanche? Do you know anyway that as long as the Tory Government is in place that you are going to be getting that? Where is that right now?
MR. PETER CLARKE: No, we certainly don't know that we are always going to get that from this government or any government that is in the future. We certainly hope that we will get that. There are a lot of farmers in the province who would hope the government would support us even more than $2.2 million. So it's always a negotiation. It's always we have to provide certain things to the government for them to go over, to make sure that we have met the commitment as they understand what they wanted and had expected of us. But is it guaranteed? No.
MR. MACDONELL: Are you negotiating now for that?
MR. PETER CLARKE: We are always in conversation and if you want to regard it as negotiations, but there is always conversation about where we are, what we are doing. It's ongoing. So hopefully as long as we can continue to meet our obligations, that money will be there. Again, it's . . .
MR. MACDONELL: They would like to see certain things in place in order for them to consider that so what are the things that they want to see, that the province wants to see?
MR. PETER CLARKE: It wants to make sure that we are providing the services as we indicated we have and that we are spending the money and doing the due diligence relative to putting in place a board of directors in our suite of services and how we service our clients. They want to be very responsible that the money they are providing us is good value for what we are providing.
[10:45 a.m.]
MR. MACDONELL: Do they see the $900,000 as a contingency, as a way that you're spending the money for the betterment of the industry? Has anybody raised a problem with, we think you should be spending that and doing things for the industry rather than providing a contingency fund? Has anybody raised that?
MR. PETER CLARKE: You would have to ask the government to answer that specifically.
MR. MACDONELL: Have they raised it to you? You should be able to tell us, if you're a Crown Corporation, I think we could know that.
MR. PETER CLARKE: They haven't raised it to us as an issue, based on the fact that they know full well that we need to have a contingency plan in place, et cetera. They know how we want to grow the business, that we have just been short term, startup, and it's going to take significantly more dollars to do the things that we want to do. So far, the government, I believe, has been comfortable with how we've operated the business.
MR. MACDONELL: I think they probably have to be since they're giving you the money. I'm curious about your analysis that this is industry-run. I see the main lobbyist for the industry being the Federation of Agriculture. There seems to be some animosity between the federation and AgraPoint International. So if they're the main lobbyist for the industry and this is industry-run, why isn't there some kind of a smoother relationship between them and you?
MR. PETER CLARKE: I think the Federation of Agriculture recognized early on that the setting up of this type of a business would have some growing pains and perhaps some difficulties in relationships, and that's why they wanted us to be arm's-length. They knew that this could possibly happen. They were adamant that we set up as arm's-length. Recognizing early on that if you provide a suite of services for free, if you didn't continue to do it long term and grow that, obviously people would have concerns and issues over that. That is what happened, that is some of what happened.
We are confident that over time, with the people who represent the Federation of Agriculture, my fellow farmers, some of these issues will certainly be resolved, be less contentious, be more understanding. We work hard. It isn't what I would consider to be animosity, we work hard trying to understand each other's differences, the issues and in trying to be comfortable with where we both sit.
MR. MACDONELL: I notice Jeff Cutten, is he still one of your directors?
MR. PETER CLARKE: No.
MR. MACDONELL: He's listed there.
MR. PETER CLARKE: No, the Federation of Agriculture puts four names forward to represent the agricultural community, and we do have a bit of a revolving directorship on the board. Jeff Cutten did not successfully win the nomination at the federation.
MR. MACDONELL: Is it always someone who's on the Council of Leaders, because I think he was. He was on the Council of Leaders for the federation.
MR. PETER CLARKE: I don't believe he was in recent history, but he certainly has been in the past. Is it someone always on the Council of Leaders, no, not necessarily. Our new chairman, Charlie Keddy, I don't believe he's on the Council of Leaders.
MR. MACDONELL: Charlie, I think, was a former president of the federation at one time.
MR. PETER CLARKE: Correct.
MR. MACDONELL: I think I have probably asked about all I can, at least all I can think of right now. I want to thank you very much.
MR. CHAIRMAN: Mark.
MR. PARENT: I'm just interested, your new project, the Resource Contact Centre, the Web site, you mentioned in passing how it's being used. Could you elaborate on that a little bit more? I notice the sheet on the resource contact and the various questions that have come in are ranging all over the map. What is the usage of that, and what do you see as the future of the use of the Web to provide information to farmers?
MR. KELLY: At this point the Resource Contact Centre has fielded over 1,600 calls, e-mails or faxes since its inception, and it didn't actually open until, I think it was, October 10, 2001. So it was later in the company. We see and recognize that professionals within the farm community, just like all of us, have different ways of getting our information. Some will access by phone, some will access by an individual farm visit, some will do so over the Web. All we're doing is making all those tools of communication available to the community, and then we make all of them available depending on the person and the way in which they like to receive their information, and we attempt to serve them equally.
MR. PARENT: Another thing you made quite a point about and it's in the literature too, is the team approach that you've taken. Is that different than the old Production Technology Branch, was that more siloed? How does the team approach work and how does it benefit the farmer?
MR. PETER CLARKE: The team approach is something that we're very adamant that it become part of our approach. We've recognized by doing things with a lot of our agricultural community that oftentimes, any issue just isn't isolated, it has relationships on what the farm does and what the farmer's capabilities and knowledge is. Even within our own suite of services we have seen time after time that a team approach has been by far the best advantage in addressing the issues, the concerns in our situation, and that's what we're using. It is a bit of a different concept from what it used to be, it used to be perhaps one on one, but we've recognized and it's been proven time after time that it has been by far the best way for us to address issues on the farm and the farmers will tell you that as well.
People can be very complementary to each other. Normally, within the suite of services that we have, rarely is there a time that an issue or a problem comes up that a team member doesn't have something positive to add to the circumstance.
MR. PARENT: One other question and I don't want to string this out because I know - can I ask one more, or is time up?
MR. CHAIRMAN: We're winding it down. Last question.
MR. PARENT: Just about fertilizers and it ties in with my colleague's question but that's a major concern, the use of fertilizers. Organic crops are becoming a niche marketplace in the States, it's a very profitable sort of niche. Any thoughts on that issue, and then I will stop asking my questions.
MR. KELLY: Both those areas are pretty keen on our team and we're actively involved in the industry. I will address the nutrient management area first. We participated with the federation and the government on a trip to Europe earlier this year to determine fertilizer use and its consequences in Europe and how some of that knowledge might assist us in terms of how it affects Nova Scotians. We have been actively involved in following the nutrient management plans, as I said earlier, with the federation, in terms of the process that they're developing and we believe we will be part of the teams that are offering that service to the farm community.
We recognize that the fertility area of recommendations and its effects, in terms of those who have livestock and whether or not global fertilizer recommendations that we've used as an industry, are necessarily as advantageous of understanding interaction between livestock and land, more to use fertilizers to its advantage. So we're actively involved in those discussions and we have two team members who are really focused on that.
In terms of organic, we have one individual who has a master's in that area, as well as a subsequent Ph.D. We have an individual who also has a master's in horticulture and is currently engaged in taking the organics certificate course through the Canadian organics at NSAC. We see the organic industry as being again, one model that the agriculture industry is chasing and what we want to be careful of is recognize that we don't want to put organic up against conventional agriculture. That would be a travesty in terms of the industry, but we do want to make sure we have the expertise to address questions that come forward and how we can lead those who want to follow that trail best on their farm, with the knowledge that we have available.
MR. PARENT: Thank you very much.
MR. CHAIRMAN: We have room for two short snappers. One to Mr. MacDonell and I know Mr. Hendsbee wants the last word so that will be it for today.
MR. MACDONELL: I'll make it quick. I don't see a business plan in here but the previous one I did see had a component where ADI was to increase revenues over time and my thought was to the point of trying to be self-sufficient. You seem to be indicating to me
that you don't see that as a possibility in that you're going to be dependent on the $2.2 million. Is that a proper analysis on my part?
MR. PETER CLARKE: We hope to always be able to attract the $2.2 million, regardless of where we are in generating revenues as well. We hope that the government of the day would want to invest $2.2 million in what we do at AgraPoint, so I would hope that would continue and even grow, as some farmers have wanted it to grow. At the same time, we do want to increase the types of things that we can provide for the community and also charge fees as well, that should be very clear.
MR. CHAIRMAN: Thank you. Mr. Hendsbee, last word to you.
MR. HENDSBEE: My last question would be, with the so-called climate change going on and everything else affecting this province, what do you think will be the biggest threat to our agricultural industry? Would it be drought or disease or infestation?
MR. PETER CLARKE: It could possibly be a combination of all three. For me to pick one specifically, we're probably more adept at this point in time to deal with the others, other than drought. Drought seems to be a major issue for us in the province in the last number of years. That definitely is a very high issue, but that's not to diminish the responsibilities of the others. Infestation, pests, disease, we do have a suite of facilities available to us to try to address those kinds of issues. To pick one, I wouldn't want to be quoted saying that any one of those three would be by far the highest above the others.
MR. KELLY: On the flip side of that, I'm going to comment that I think this region, Nova Scotia being part of the Maritime Region, I think in agriculture its future is very bright. We have tremendous opportunities within our industry because of the recent policy framework that's been brought out by Ottawa. We're in a world where it is a global agriculture, people are looking for safe quality product for which this region has a tremendous reputation. We have some of the most educated farmers in this region, we have some of the best academic institutions within this region. We have a great diversity of crops, and if you look anywhere around the globe and try to figure out a place where you could have a microcosm of a food production industry with some of the greatest global reaches of Cavendish Farms and Oxford Frozen Foods, I think agriculture in general in this region is a very opportunity-rich industry. I hope that we're one of the main players in it.
MR. CHAIRMAN: Just to the committee, there's a letter attached to our agenda. Let's please deal with that next meeting. Review it and let's deal with it, because it's been kicking around for a while, regarding spraying. As for Mr. Clarke and Mr. Kelly, we thank you very much for your presentation. As you indicated, you've come a long way in less than two years. As a committee, we certainly wish you continued success in providing a valuable service to the agricultural community of this province. Again, I thank you for coming.
MR. PETER CLARKE: Could I have one closing statement?
MR. CHAIRMAN: You certainly may.
MR. PETER CLARKE: I recognize that with the group of people who are here today that there are many different interests and backgrounds, and obviously politics is in the room, et cetera. I would really encourage each and every one of you, if you have issues with what we do at AgraPoint, concerns and so on and so forth, please come and see us, please make every effort to contact us. Come to our offices, come talk to a board of directors' member, come talk to Dale.
It is truly our interest to be here on a long-term basis regardless of the flavour of the politics at any particular point in time. We want to be here because you people support us being here and the agricultural community supports us being here. So it's absolutely critical that we do try to address your concerns, as well as everyone else's issues and concerns. We have an open-door policy, so if anyone has any issues with us, please come and talk to us. Thank you for the opportunity to speak to you.
MR. CHAIRMAN: Thank you very much, too.
The meeting is adjourned.
[The committee adjourned at 10:59 a.m.]