HALIFAX, TUESDAY, MARCH 25, 2003
STANDING COMMITTEE ON RESOURCES
9:00 A.M.
CHAIRMAN
Mr. James DeWolfe
MR. CHAIRMAN: Good morning, ladies and gentlemen. I will call this meeting to order. With us today are members of the agricultural community, the Federation of Agriculture. We are delighted to have such a large group of you here today to make presentations. Before we commence, I would like to introduce our committee to you. I think you know most of them, gentlemen.
[The committee members introduced themselves.]
MR. CHAIRMAN: What I will do is go directly to you, Laurence. Laurence is the Chief Executive Officer for the Federation of Agriculture. Laurence, I will allow you to introduce your team.
MR. LAURENCE NASON: Mr. Chairman, on my left is Fraser Hunter, who is a dairy farmer, and he is Chairman of our Industry Planning group. On my right is Bruce Roberts, who is Vice-President of the Federation of Agriculture. Sitting behind us, in case we get into problems, is Doug Bacon, President of the Federation of Agriculture.
What I would like to do, Mr. Chairman, is turn it over to Bruce, who will provide a bit of an introduction and talk about the industry for a minute, and then he will turn it over to Fraser, who will review with you a report that we have just completed that identifies the issues that are facing our industry in the next 10 years.
MR. CHAIRMAN: By all means.
1
MR. BRUCE ROBERTS: The Nova Scotia Federation of Agriculture appreciates the opportunity to meet and discuss the issues facing the agricultural industry with the Resources Committee. The agricultural sector, like most sectors in Nova Scotia, is adjusting to the dynamic changes taking place in Nova Scotia as the province adapts its social and economic systems to a post-modern global economy. It is crucial that an open dialogue between leaders in the agricultural sector and the political leadership of the province takes place at the highest possible levels. The NSFA views these types of forums as a demonstration of the willingness and the ability of the political decision makers in Nova Scotia to co-operate in a constructive partnership to ensure a sustainable and competitive agricultural sector in the future.
The issues that have become priorities for the agricultural community in Nova Scotia are varied and complex. All of these issues require the continued support and resources that have historically been provided by the Province of Nova Scotia through the Nova Scotia Department of Agriculture and Marketing, now the Nova Scotia Department of Agriculture and Fisheries. These issues also require the reassurance and resolve of the Government of Nova Scotia in its Legislative Assembly, that there is a commitment to a strong and competitive agricultural sector.
Our purpose today is to provide the committee with an overview of the primary agricultural sector and the strategic issues that are shaping the family farm in Nova Scotia. We hope that our presentation today will leave the committee with a better understanding of our industry and the challenges it faces in the next decade. We also hope that individual committee members will take the time to read, in detail, the document, "Agriculture and the Community in The Next Decade, Developing a strategy for sustainable agriculture in Nova Scotia." If we cannot answer all the questions you may have today, members of our council, leaders, the federation executive committee and federation staff are available at any time in the future.
The Nova Scotia Federation of Agriculture serves as an umbrella organization under which those involved in primary agriculture in Nova Scotia can act together to promote their common interests, both government and the general public. The federation has an active and organized structure that has continuously evolved over the past 107 years as the recognized voice of agriculture in Nova Scotia, and today is the only recognized general farm organization in the province. The NSFA is organized geographically into 13 regions and by commodity into 24 provincial groups representing over 2,000 farm businesses in total. These businesses account for approximately 95 per cent of the agricultural production in the province. The federation also maintains active affiliations, regionally, through the Atlantic Farmers Council, and nationally, through the Canadian Federation of Agriculture.
Throughout all its endeavours, the Nova Scotia Federation of Agriculture maintains a constant approach. That approach is guided by a philosophy that is grounded in extensive research, strategic planning, creative solutions, efficient implementation, and accountability. Our mission is to ensure a competitive and sustainable future for agriculture and a high
quality of rural life in Nova Scotia. To realize this mission, the principal focus of the NSFA has become the development of farm businesses that are financially viable, ecologically sound and socially responsible.
Farming in Nova Scotia underpins a large, diversified and important agri-food sector. The agricultural industry has always been and remains today a cornerstone of Nova Scotia's economy and a key component of sustainable rural communities and the diversity of lifestyle choices historically enjoyed by Nova Scotians. Only a cursory examination of the contributions made by the agricultural sector to the economic prosperity of Nova Scotia highlights the importance of the sector and the fact that any public investment made to assure a framework for growth and prosperity for the industry is a sound investment.
In 1999, agriculture and related services created, directly, $199 million to Nova Scotia's gross domestic product. Agriculture contributes 4.5 per cent of the total production from all goods-producing sectors, and 1.1 per cent of the provincial GDP. Agriculture's contribution to the GDP exceeds that of fishing, forestry, and is approaching the contribution of mining. In 1999, the agricultural sector accounted for 31.5 per cent of the primary sector jobs and directly employed 7,000 individuals. In 2002, Nova Scotia's farm businesses spent $345 million in goods and services; 93 per cent of the goods and services purchased by farm businesses are purchased within the Province of Nova Scotia from other Nova Scotia businesses; 60 per cent of those expenditures are made in the local communities in which farm businesses are located.
Based on an input-output analysis carried out for the Nova Scotia Federation of Agriculture, as part of the study on the economic impact of agriculture, direct, indirect and induced spending in the Nova Scotia agricultural sector generates the following measurable impacts on the province: 6,460 person years of employment, a total contribution to Nova Scotia's GDP of $389 million, and $129-plus million contribution to federal and provincial tax revenues.
A recently completed report, "Agriculture in the Nova Scotia Economy", appended to this presentation, will provide further detailed statistical information on Nova Scotia's agricultural sector. The federation would be pleased to meet with the Resources Committee at sometime in the future to discuss the political economy of agriculture in more detail.
It should also be noted that in addition to economic impacts, agriculture also performs other valuable functions within the community. We refer to these functions as externalities or multi-functionality of agriculture.
The multi-functional character of agriculture in Nova Scotia rests on three main functions, none of which are mutually exclusive and all of which provide a range of marketable and non-marketable outputs of benefit to the greater community. First, our industry provides the community with food and fibre at the lowest possible cost. Second,
agriculture plays a key role in the preservation of the environment and the development and maintenance of agro-ecosystems that contribute to our rich biodiversity. Finally, as the leading economic activity in rural Nova Scotia, agriculture contributes to the viability of the rural community and the diverse settlement patterns enjoyed by all Nova Scotians.
No one would dispute the fact that everyone has a right to safe, healthful, nutritious food. Food integrity is a public benefit provided by a sustainable agricultural economy. No one would dispute that everyone has a right to a secure food supply. Food security is another public benefit provided by a sustainable agricultural economy. No one would dispute the fact that everyone, including future generations, has the right to a clean, productive, natural environment. Again, ecological integrity is another multi-functional aspect of a healthy agricultural sector that benefits everyone.
These are all issues that highlight the importance of a sustainable agricultural sector and reasons why public decision makers should be concerned about the future of farming in Nova Scotia. Again, we would be pleased to meet with the committee sometime in the future to discuss and elaborate on the externalities of agriculture.
The topic we have been asked to address today is the family farm. The definition of a family farm is an elusive one. Farmers are under increasing criticism for the impact of farm practices on environmental quality and human health. In the minds of many, family farms, because they are operated as profit-oriented businesses, have become factory farms. While opinion polls indicate that Canadians still hold farmers in quite high regard, the public criticism of factory farms and of the industry is growing. Almost without exception farm businesses in Nova Scotia can still be considered family farms. They are still owned and controlled by families, however, things are changing.
[9:15 a.m.]
As indicated, the definition of a family farm is elusive. How have we defined the family farm in the past? The essential features of a family farm have always been considered to be freedom of managerial control, reliance upon family labour, the ownership and control of adequate land and access to capital resources, the ability to receive a return adequate to maintain a modest lifestyle, and the ability to pass the farm on to succeeding generations.
In terms of these defining features, let's look at some of the factors that are changing the definition of the family farm. Because of the large amounts of capital required to farm today, farmers have less control of their assets than ever before. Their assets, in most cases, are leveraged to the maximum. Access to capital is hampered by the relatively low operating returns in agriculture.
Reliance on family labour. This is quickly changing as family members are forced to seek higher-paying off-farm work to survive. Family members are being replaced on the farm by contract work and hired labour. A defining feature of discussions about youth in agriculture at recent industry consultations was the fact that farmers are reluctant to encourage their children to stay on the farm.
It is becoming increasingly difficult to control adequate land bases simply because in many areas farmland is worth more for development than it is for agricultural purposes. As development takes place, farmers are forced to sell land because of increasing assessments and because their remaining operations are incompatible with new non-agricultural land uses.
In terms of returns, they are extremely low and sinking. There is less opportunity to maintain even a modest lifestyle. The farmer's share of the consumer's food dollar continues to shrink. It is estimated that consumers spend 10 cents of every dollar earned on food. The farmer's share of that 10 cents is estimated at 1 cent.
Because of the value of modern farm businesses, they are becoming increasingly difficult to turn over within the family. There are fewer and fewer young people who are willing to invest $1 million into rural Nova Scotia and commit to living in communities that have inadequate transportation and communication infrastructure, limited educational opportunities for their children and limited access to health care.
In terms of a succinct definition, aside from the fact that the majority of farm businesses here in Nova Scotia are still family owned and operated, none fit perfectly. The structure and the ideal of the family farm is dynamic and changing.
Hugh Maynard of the Quebec Farmers Association says, "The family farm is not a sacred cow that was created 200 years ago and will never change, and coming up with a definition that suits all has and will remain elusive." He goes on to say in an article in the Quebec Farmer's Advocate that, "The real debate should be about what kind of agriculture does society want and give some definitions and criteria to those basic principles. Within that framework, one can see when and where a family farm can fit." We subscribe to Maynard's view that, "The real debate should be about what kind of agriculture does society want and give some definitions and criteria to those basic principles. Within that framework, one can see when and where a family farm can fit."
Appended is a report entitled "Agriculture and the Community in The Next Decade, Developing a strategy for sustainable agriculture in Nova Scotia." That report identifies major issues confronting family farms in Nova Scotia. The objectives and strategies set out in this report are intended to lay the foundation for a sustainable agriculture and stimulate the continued development of sustainable farm businesses in Nova Scotia. Our family farms will
be defined in the context of agriculture and the community in the next decade. Now I will turn it over to Fraser to give you some information about that study.
MR. FRASER HUNTER: Thank you, Bruce. As Laurence introduced me, I am Fraser Hunter. If you look at your sheet there on the agenda, I'm not independent, I'm the Industry Planning Committee Chairman, not the independent planning committee chairman, so I do work with these guys some of the time.
I farm at Knoydart, and you will all know where that is, at least Mrs. Baillie and Mr. DeWolfe know where it is, but it's on Northumberland Shore, Pictou-Antigonish border. We have land in Pictou and Antigonish Counties; my tax bill in Pictou County is 85 cents and my tax bill in Antigonish is $1,600, so you know where my farm buildings are, but I pay my dog tax in Pictou County.
In the last two years and from the binder in front of you, you'll see that the federation has been seeking input from its membership, the general public at large and anybody who wanted to speak to it to where our industry should be in the future. In that binder you'll find a lot of details, a lot of input, personal stuff, personal comments, et cetera, to give you an idea of what we found when we went across Nova Scotia and we did go across Nova Scotia, we went to eight different centres at various times, we also discussed it three times, I think, Laurence, at our annual meeting, plus at workshops, et cetera. There is a vast input of knowledge from the community at large.
I just wanted to read something written by a young farmer, Kim Waalderbos, from Cumberland County. This was in 2000, she won the Farm Credit Corporation's National Essay Award and this was one of the comments that she had in that essay.
"Information is power, and an informed public is the best ally farmers can have. The greatest challenge facing the industry today is communication, not only is this the greatest challenge, but communication can also become the greatest asset to agriculture. Our creative efforts must focus on bridging the awareness gap between agriculture and the world. In effect we're killing two birds with one stone; by educating the public, we explain how our food is produced. Especially important considering food concerns . . . and secondly through education we can draw support for our cause attracting the attention of policy makers in particular. After all, you can't bite the hand that feeds you."
That was written by a young farmer from Colchester County who is continuing her education in the agricultural industry. We appreciate as a federation the opportunity to come today to this committee, to communicate with you, to explain what is happening down on the farm.
If you can turn to your folders, to the back section, as Bruce mentioned there is a section there entitled "Agriculture in the Nova Scotia Economy." We apologize for the pages not being numbered in order, but if you work about eight pages from the back you'll find it in beautiful technicolour and we have Nova Scotia there. I just wanted to point out a few facts and figures and they are listed in tables there.
On Page 2 of that there's a Table 2: Employment for Nova Scotia by Industrial Sector, and if you look at agriculture and related service industries there are 9,925 jobs in agriculture. If you then go to Table 3, that splits it down in terms of your constituencies, what does this employment mean in our rural constituencies. We then flip over to Page 5 and you have your dollar figures there.
We have a tremendously important agricultural industry in Nova Scotia. Our total gross receipts for the year 2000, was $460 million. It is interesting looking down the counties, a county that you probably don't perceive as being a major agricultural county, Digby County, that was the county that had the highest net revenue per farm in the province from agriculture. Now do you all know what they make their revenue from? Mink and hogs, that's net revenue and most of the net revenue lately has been coming from mink rather than hogs.
It is interesting, we have a very diverse agricultural industry out there, we're the most diverse in Canada and that gives us real strength because when one thing is down the other thing is up. It also leads to - under the new agricultural policy framework - some problems because that framework has got a very Western Canada bias and doesn't take into account the really diverse industry that we have here in Nova Scotia. It is really interesting, I only noticed that this morning when I was reading it, so don't think that I knew everything. Bruce is from Digby and I slept in the same room as him last night and he brought it to my attention. It gives you an idea of where the economy is in Nova Scotia.
Kings County, if you look down there, $36,000, well that is the backbone of the agricultural industry in the province. If you look down to some of the other counties, the counties I'm in, Antigonish and Pictou, important to the rural economy, very important to the rural economy when you look at $460 million gross receipts.
If you look at the dairy industry alone in my situation, in Nova Scotia we have 17,000 kilograms of milk quota. For every 30 kilograms of milk quota on a farm, that supplies one job. On our farm there are two of us working, we have roughly 60 kilograms of milk quota but for every 10 kilograms of milk quota, it also provides three jobs in the processing industry. So for one job on the farm, at the processing and distribution industry, it provides three jobs, so it's very important.
If we look at Cape Breton, one of our major processors has his processing facility in Sydney, Scotsburn. We also have other processing facilities right around the province but you can see the value added that's occurring through the process. Agriculture has a big influence and fingers going out.
Anyway, to get back to what Bruce mentioned, we had this Industry Planning Committee set up, it has taken us two years, we have had input from people from the States, we have had input from people from Australia and in May, we'll have somebody who is coming over from the U.K. to speak on Prince Edward Island about giving us the European community perspective as to where they are with agriculture.
I have used this analogy before, but Canadian agriculture is like rugby football. I don't know if any of you are involved with rugby football. American agriculture and European agriculture are like American football, it's fully protected, they wear all the gear the American footballers, the helmets, the pads and everything else. That's like American and European agriculture. Australian agriculture and New Zealand agriculture is like Australian-football-rules players, have you ever seen that on television? They wear short armed singlets and they have no protection and anything goes. We are sort of in the middle like rugby union football, we have a little bit of protection, but not very much. So it's a very diverse economy we're working in, very diverse protection we're working in and we are trying in Canada to go that middle road and especially here in Nova Scotia.
In our trips round the province and the input from the various people, we came up with six areas which were of great concern to the agricultural community and to the community at large. If you turn your folder to just after where Bruce finished, "Agriculture and the Community in The Next Decade."
Our main aim in the Federation of Agriculture is to ensure a competitive and sustainable future for agriculture and a high-quality rural life in Nova Scotia and that's what the federation's main goal is. We represent 2,000 farmers out of 2,400 registered, out of a community of 4,000 and that's what we're trying to achieve.
I lived on Cape Breton for a number of years and then moved to the mainland, whether that was a positive or negative move I'm not quite sure but we're on the mainland in Pictou and Antigonish and were made very welcome there. In rural Nova Scotia, agriculture is vitally important. If you go to an area like Mabou, there are about 20 dairy farms in a radius of 10 miles, a tremendously important economic generator in that community. If you take that with the fishing and logging, you have a sustainable community.
When we get back to our roots, it's sustainable. When we move away from our roots, it's not sustainable and that is a problem that has been occurring.
The six areas that came up as we went around the province, as major concerns of farmers and the community at large are listed through here. One was the environment and Bruce has already mentioned it; a second - just flipping through them - was food safety and quality assurance; a third was marketing; a fourth was youth; a fifth was land-use planning; and the sixth but not least, of course, was farm income. All those sectors of all those headings are very much integrated. If we don't have a farm income that is sustainable, the industry is going to go down. If we don't have youth coming in, the industry is going to go downhill. To get a farm income we have got to get marketing structures put in place. We are not going to be sustainable if we don't look after the environment and the consumer wants food quality. These were the issues that came up very much to the forefront as we went around the province.
[9:30 a.m.]
From Page 3 onwards, it goes through some of the objectives related to the environment. Here, the Nova Scotia federation and Nova Scotia, in general, has been a leader in looking after the environment policies in connection with Canadian agriculture. The federation in the last four years has developed an environmental farm plan and has developed a nutrient management plan. I mean, life has forever changed after Chernobyl's link to nuclear, Hagersville linked to tire dumps and, of course, Walkerton linked to water problems. The agriculture industry was blamed heavily in the Walkerton situation but it wasn't the agricultural industry that was running the system to purify the water. That is where it was let down.
We have taken a leadership and in the next few years it is hopeful that every farm will have an environmental farm plan. People will go onto the farms, assess the situation, look for problems or prospective problems and put into place a plan to overcome them. But finance is then of major importance.
I was sitting in the hotel room this morning and when you go back to Kim Waalderbos, education and communication's importance, sitting there in the washroom, you see a little sign that says, reuse, recycle, the three r's, and turn the water on and the pressure of the water comes out of the tap and it has probably wasted about a gallon of water there as I was cleaning my teeth, and various things like that. I flushed the flusher and everything went down. I presume it goes into the harbour because that is what I have been told about - you know, that is where everything goes.
We, in agriculture, have taken the initiative to put in place environmental controls that will control the problems that may come from agriculture. Agriculture has looked after the environment for years and years when nobody else cared about it. But now, under pressures of these other things that have been happening, we took the initiative and put in place that nutrient management. We don't want to put excessive nutrients on the land and
that is the next process that we are going through. The Nova Scotia federation was the leader in the country for that.
Food safety and quality assurance have been thrown up to us. I am a dairy farmer. We are now having to - it is coming down through Dairy Farmers of Canada. We want to be aware of what happens to our milk. So we have monitors in our barns now under trial that record the temperature every 10 seconds of that milk in the tank.
We have never sold a bad product but we now want to prove that we are not selling a bad product. But that metre cost $2,000. That is worth 4,000 litres of milk. That is the production from one cow for three-quarters of a year, just to buy that metre. So the cost to prove what is happening is very excessive, similarly with the environment. We have a 60-cow herd. To put up a new manure pit is $150,000; that is 300,000 litres of milk. That is milk from 50 cows for one year. Where is the money going to come from? It is very capital-intensive, just like the harbour cleanup is costing. These are some of the problems that we have. To come up with solutions to the perceived problems, it is expensive.
Those were two issues that came out right across marketing. This is another major area of concern. As Bruce mentioned, we get 1 cent out of every 10 that is spent at the retail counter. That is pretty small. Ford doesn't go that way. We take what we are offered. Marketing is a major problem because we are left with two or three major retailers now in Canada and they have perceived control of what we get for a product. This does happen. So marketing is a major problem.
Youth and agriculture. Looking around the room, most of us are grey, or lack hair, Rob. Rob lacked hair when he was 20. (Laughter) But youth in agriculture, it is an aging industry and this is another major problem. We've got to have young people coming in. Some people don't want the youth to come in but agriculture has been tremendously good to me. You've got to want to do it just as I presume you've got to want to be a politician. If you enjoy doing it, you can get into the industry if you persevere. If you want to do something you will do it. But we have to make it a little simpler and less expensive for youth to get in.
We did produce a report back in 1998, Challenges Faced by New Industry Entrants. Land, capital, risk management, tremendous risks and knowledge. Those were four limiting factors that could stop youth coming in.
There was introduced, that interest, buy-down program for youth. It is a small part in getting there but we have got to make it easier for youth to come into the industry. Land has got to be made available. When I came to Canada in 1978, that was the hardest thing to do in Cape Breton, was buy a piece of land. That was Mr. MacKinnon's great-grandmother's piece of land and we are certainly not letting that out of the family. It was the hardest thing. We are vastly rich in a resource but we don't use it.
You've got to remember. Agriculture used to be a major energy producer. Reading back in the 1950s, we didn't use gas in the tractors, or horses, we used oats, a major energy product. If you look at the U.K., Europe, the United States and in western Canada, ethanol - they are looking at willows for power regeneration, this type of thing. There is tremendous potential but the system must be put in place so that we can get there.
It is great having youth around home. We don't always agree with them and they certainly don't always agree with us but if we are going to be sustainable, we have to have the youth coming through.
Land-use planning. I noticed in one of the notes that Laurence gave us this morning, there are 1,450 kilometres of roads in Halifax, they are 30-feet wide. That is the equivalent to 3,000 acres taken out of land use and that doesn't include all the car parks. Good agricultural land in this province mustn't be put into things that, in the long term, you are not going to get any return. I will always remember going to a farmer's farm and he was plowing up a field to put in alfalfa. What was on that field? Blueberries. Why plow blueberries to put in alfalfa? Blueberries are very sustainable. Alfalfa, you have to renew every five years. So we, as farmers, have got to assess our potential but land-use planning is an important aspect.
Then, finally, of course, farm income is so vitally important. If we don't have an income, again, it is not sustainable. Those five areas came out very strongly.
In this binder, the issues are highlighted and the strategies that are put in place. This, in fact, is a draft which will be approved, finally, by the council next week, so you've got it before the council. But in there, you can go through it at your leisure and look through it.
Agriculture is a very vibrant industry. It is agriculture, it is growing all the time. We have aquaculture, growing fish all the time, silviculture, growing wood all the time, and even the tourism industry hangs on culture. But it is growth. We are moving forward and it is a very vibrant industry.
Mr. Chairman, I will stop there. I have rambled on a little bit too long. Bruce, Doug, myself and Laurence, we are very much open to questions and discussions.
MR. CHAIRMAN: Well, thank you very much, Fraser and Laurence. Mr. Roberts, your presentation was very interesting as well.
I think we will just move right into questioning. You will get a sense there are quite a few rural MLAs sitting around this table and we certainly appreciate the importance of the family farm today in our society. We are going to start off with Mr. MacKinnon. He's first.
MR. RUSSELL MACKINNON: Thank you, Mr. Chairman. As you made reference to the environment - and I was quite impressed with your outline on how the agricultural community is very concerned about the environment. It reflects the concern that was put forth by Mr. Cameron from the Department of Agriculture last year, when he appeared before
the Public Accounts Committee, frustration within the agricultural community, that the Department of Environment and Labour was not moving quickly enough to address some of the concerns on agricultural-related issues focused on the environment.
I guess my first question will be - having reviewed the provincial water strategy, I see that there was very little reference to major environmental concerns on agricultural issues - what type of consultation or input did the Federation of Agriculture have into the development of that water strategy? And secondly, why weren't many of those concerns, some of which you have highlighted here today, reflected in that water strategy?
MR. HUNTER: I'm going to have to pass to you, Laurence.
MR. NASON: We had no input into the new water strategy.
MR. MACKINNON: None whatsoever?
MR. NASON: None that I'm aware of. So I guess that answers your second question as well.
MR. MACKINNON: My next question would be in regard to AgraPoint, which appeared before one of our committees several months ago. Myself and my colleague, the member for Hants East, raised a number of concerns, one of which was the fact that 45 per cent of their budget was not spent. They laid out the fact that that was for internal contingency measures. In other words, they wanted to look after their own financial security first. That's the way I interpreted having a $1 million surplus on a $2.2 million budget. What's the relationship of the Nova Scotia Federation of Agriculture with AgraPoint, and what is the working relationship, not only in terms of day-to-day activities, but how has AgraPoint helped the federation since its inception?
MR. ROBERTS: Everybody looks at me. The federation's only direct relationship with AgraPoint is that we recommend some of the board members to the minister, and the minister has taken our recommendations and appointed those people to the board. Other than that, we have no formal lines of communication with the organization. We have minimal input into their policy development or how they have developed. We were involved in an outline of what we perceive the industry needed or could live with to replace the production technology when that branch was cut from the budget. A very detailed recommendation was made to the minister at the time, and some of the features in that recommendation ended up in AgraPoint. That's as far as our formal relationship goes with AgraPoint. Your second questions was? (Interruptions)
MR. MACKINNON: Essentially they have a $2.2 million budget. I think you may have answered the second question.
MR. ROBERTS: As I said, there are no formal communication structures in place.
MR. MACKINNON: Let me shift the focus just slightly. With regard to NAFTA, I noticed - it may be coincidence, it may not be - that the total number of farms in Nova Scotia has declined by 12 per cent, and that seems to be, essentially, the equal timeframe of when NAFTA kicked in. Is there a cause-and-effect relationship there? I notice our total number of farms has declined by 12 per cent in that period. (Interruptions) What are the factors to that?
MR. ROBERTS: I think the trend in Nova Scotia follows the national trend in agriculture. We've seen a general movement towards consolidation of farms into larger units to try to give some economies of scale. We deal with razor-thin margins, and whether we want to become larger and spend 26 hours a day working instead of 24 hours, we have to do what we can to maintain our businesses. Whether NAFTA has had an impact on that, I really can't say. It's a national situation. We aren't alone in the reduction of the number of farms.
[9:45 a.m.]
MR. HUNTER: If you would just look at Figure 2, bar graph 1, with the loonie behind it, farms are everything from producing under $2,500 of gross receipts, which is five animals per year, to those producing over $250,000. One of the great things about rural Nova Scotia is that many people have joint incomes. If you look at one thing in isolation, it can cause problems. A lot of beef farmers probably drive a school bus and might have a lobster licence as well. It's difficult to look at it in total isolation, you have to look at it as a rural economy because the diversity in the rural economy leads to survival. You might be in the woods or you might be somewhere else. So yes, there's been a reduction in numbers because some people just can't be bothered to keep the cattle and have let the land go back. But there's certainly been a consolidation.
MR. MACKINNON: One final question then, because I know other members would like to ask questions. Last week or perhaps two weeks ago, the Nova Scotia Fruit Growers' Association appeared before the Economic Development Committee. They indicated that the only significant marketing strategy, in terms of funding from government, was a $500,000 allotment from ACOA, but nothing that they could identify from the provincial Department of Agriculture and Fisheries. What's the situation with the Federation of Agriculture vis-à-vis the department, in terms of marketing?
MR. NASON: We don't have a lot of discussions with the Department of Agriculture and Fisheries with respect to marketing. We do work with the marketing branch on various projects from time to time. The fruit growers' current marketing initiative is probably one
of the largest and best-funded marketing initiatives that has taken place in this industry for a long time.
MR. CHAIRMAN: Mr. MacDonell.
MR. JOHN MACDONELL: Laurence, it might be interesting for the members of the committee to have a little background. I know you studied some policy development in Holland and Great Britain, plus a background, you had a farm or maybe you still do, I'm not sure. Fraser, I think it might be interesting for the committee to know the evolution of your farm. Do you want to give us kind of a brief synopsis of where you're headed with your operation, if you know?
MR. HUNTER: My wife is home milking cows and I had to haul my son out of the Agricultural College to feed them this morning. So that's the family farm situation. Thank goodness we're within an hour of Truro, because if we were in Cape Breton it wouldn't happen. I immigrated with my wife and my elder son to Canada in 1978, left the U.K. because of opportunities in Canada. I was a lecturer in an agricultural college in the U.K. and just couldn't see myself standing in front of students for the next 40 years, although I would be eligible for a pension now. So we came to Canada because of opportunity. We landed in Cape Breton. I will always remember Halifax International Airport and the customs agent who said what are you going to Inverness for? That was what I was met with when I came through customs. My wife hadn't come, she came in May. If you move to Cape Breton in May, going up past Judique, there isn't a leaf on the trees, nothing, and she said, what have we left the U.K. for? She had left bulbs.
But Canada has been very good to us. I worked for the Cape Breton Development Corporation, I worked for a business development centre. In 1990 we bought a dairy farm. My wife milked the cows, I worked off the farm until 1998, when we moved to Pictou County to a larger dairy farm. That's the evolution. At the moment we're looking at doing something because we're in a supply managed commodity, it's difficult to expand, so we're looking at adding value to our product, whether that's through organics or through doing some on-farm processing, whatever, but we have to add value to our product. Do you want Bruce's evolution?
MR. MACDONELL: Yes.
MR. ROBERTS: I came to agriculture when I was in my late 20s, left an office without windows to go out and milk cows and I'm not sure which was the bigger shock to the system. I worked in agriculture and just prior to looking at becoming a farmer on my own, right around the time of the farm crisis in the early 1980s, so I went back to agricultural college, I had a degree in business from Mount Allison. I went to agricultural college, did upgrading in agricultural economics and I went to Guelph and did my master's in agricultural policy. I then was hired by the Royal Bank of Canada and I was with them for six years as
an agricultural lender, the final three years of that was in Kentville. I left the bank in 1993 and went to the University of Illinois and did a Ph.D. in agricultural economics; my focus was finance.
I was sitting down working on my dissertation one day when I got a phone call from a former client who said, come see what I'm doing now. Six weeks later, I was working for him and that was in the mink industry as a diversified agri-business. I was there for three years and then my wife and I and two friends started our own company. We operate a horizontally integrated contract system. We provide the livestock, the training, the majority of the inputs and the growers provide the housing and the labour. We pay them a fee per animal raised, there's an incentive component too and our organization in the last two years has been responsible for two new entrants to agriculture and three new entrants to the mink industry. The newest one is an existing farm that has diversified and they saw it as a great diversification option. It's something that you see in Nova Scotia that you don't necessarily see in other areas.
I spent some time in the Midwest and one of the things I realized about the Midwest is you don't have to be a farmer to grow things in the Midwest. When they talk about hearing the corn grow, they mean it, the soil is so rich. I have been involved with agriculture in Ontario, New Brunswick, Nova Scotia and throughout the Midwest and as far as I'm concerned, the best farm business managers in the world are in the Maritimes, they have to be because we have the most challenging resources; a small market, but we manage to survive and we do more than that, we prosper. That says something about what we have here.
Mr. Bacon.
MR. CHAIRMAN: Mr. Bacon, you would have to move up closer to the mike.
MR. DOUG BACON: That's okay. (Laughter)
MR. NASON: I have gone through Mr. Bacon's history in the past, Mr. Chairman, I would certainly be glad to do it again, with Mr. Bacon's permission.
MR. MACDONELL: I'm curious about your comments around trying to get youth in the industry. I know that now they are referred to as new entrants instead of young farmers. I heard you make one statement that always sticks with me, I think, Laurence, and that's whether it's your creation or the story is actually right about talking to a farmer who said he didn't have a child he hated bad enough to leave the farm to.
MR. HUNTER: That's a true story.
MR. MACDONELL: I guess another thing about youth is the statement that the older I get the smarter my parents seem to be, so sticking around long enough you tend to get an amalgamation of thinking between the youth and their parents.
Page 6 is very telling in that last comment with the dot beside it:
"Because of the value of modern farm businesses they are becoming increasingly difficult to turn over within the family. And, there are fewer and fewer young people who are willing to invest a million dollars in rural Nova Scotia and commit to living in communities that have inadequate transportation and communication infrastructure, limited educational opportunities for their children and limited access to health care."
If we believe that agriculture actually has the potential to sustain communities, then what would those communities that we're trying to get people to invest in now with those conditions, what would they be if there wasn't agriculture in rural Nova Scotia? I'm a believer in the idea that an ounce of prevention is worth a pound of cure and not everything is a cost. There are some things that actually are an investment that will reduce cost down the road. Trying to maintain rural communities with a little bit of investment actually, I think, will save the taxpayers money in the long run, so supporting agriculture will allow you to have a school that you can maintain with young families and therefore maybe even attract a doctor because why would they come if there's no school for their children? All of these things are related.
You mentioned in your original comments the importance of agriculture in Nova Scotia. Agriculture contributions to the GDP exceeds that of fishing and forestry. I'm curious because my thought was that there's over $400 million in direct farm gate sales with about $1 billion in spinoffs to the economy. I think fishing has about $1 billion in direct sales and so I'm curious what your analysis is on those numbers.
MR. NASON: We're talking about the contribution to the gross domestic product of the province.
MR. MACDONELL: Right.
MR. NASON: In fact, those numbers are from the Nova Scotia Department of Finance so they have to be right. (Laughter) That's the direct contribution to the industry, John, and it exceeds fishing, it exceeds lumber and I think mining and the gas sector are about $220 million, so it's about $20 million less than that sector.
MR. MACDONELL: Okay. Mr. Chairman, I took up a fair bit of time so I would like to come back but I will give other members a chance.
MR. CHAIRMAN: Mr. Dooks.
MR. WILLIAM DOOKS: Good morning and thank you for your presentation. Just looking at the binder you supplied it's up to anyone's interpretation, I guess, to understand the information supplied. I look at it in a very positive way and would say that farming in Nova Scotia has stabilized, it seems to be a strong industry and I'm sure not like any other small business - and this is what it is, I believe, a small business - it is certainly open to different challenges and I understand that. I also see it as a resource and I wanted to zero in a little bit on the family aspect of it.
When we look at the fishery or when we look at farming, automatically we think that it's a family business and indeed it is in Nova Scotia. For one to get into the fishing industry, you almost have to be the son or daughter of a fisherman, because of the experience and the way that the federal government has structured the licensing and the cost to get into the fishery. When I think of new farms, I automatically think that you have to be the son or daughter of a farmer to actually create a new farm or to at least be in the farming industry.
I was just wondering, as we talk about the youth part of it - and we understand that youth is important to carry on the family farm - do we reach outside of that and encourage new people or people who have not really had a history of farming to, number one, go to a university or an agricultural college, to open up a new avenue, to reach out to a sector of people maybe that we wouldn't ordinarily connect to farming? So maybe we should say we would look at people within metro Halifax, or on the Eastern Shore where farming has a bit of a history but not necessarily their way of life. Has the federation looked at that avenue, to recruit new people into the farming industry and/or I expect go outside of Nova Scotia and say, between the support of the farmers and our federation we have stabilized the farming industry, there are new challenges but new opportunities?
We talk about the family farm being strong here, unlike what we hear in media reports on farming in the United States, where the factory farms are buying up the family farms or they're going broke or whatever reason. The point is, is farming stable in Nova Scotia? Is it a good industry to get into? Is it possible you could reach outside the family unit and encourage new people to come into the farming industry?
[10:00 a.m.]
MR. NASON: I'll begin by telling you that I grew up just over the hill on Pepperell Street, something enticed me in, but that's not the norm today. (Interruptions) It's a huge advantage if you're part of a family.
As Bruce mentioned in his opening comments, one of the things we heard over and over again from some of the most prosperous and successful farmers in the province during our consultation process was I will not encourage my kids to take over this farm, simply
because I don't want them to have to go through what I've gone through in the past 10 years. I think that's a very telling comment on what's happened to the industry in the past little while. Certainly, you said that if we could stabilize the industry, could we attract people in from outside, and we certainly could. Although we're relatively well off compared to agricultural economies in the rest of the country, we do have some problems and there are some huge barriers with respect to enticing people, particularly people whose parents aren't already involved in the farm business, enticing them to get involved.
We have people come through our office on a regular basis. One of the most interesting discussions I had in the last year or so was with a young fellow who was trying to make up his mind whether he would go back to Alberta and work in the oil patch. This is a young fellow who is extremely well-educated and extremely bright. He was trying to make up his mind, whether he should go back to a job in Alberta, an extremely well-paying job in Alberta in the oil patch where he had worked for five days a week and had the weekends off, or come home and take over the family farm. He made the decision to come home and take over the family farm, but he was looking at a huge differential in income, he was looking at a huge differential in his investment, he was looking at a huge difference in the impact the decision he made would potentially have on his family.
MR. DOOKS: Thank you for your comments, but if one is going to be an entrepreneur in the Maritimes, specifically in Nova Scotia, there are certain challenges that we have to face. We become entrepreneurs because of the way of life or because it's going to offer us something that we're looking for, maybe differently than if we were a factory worker or whatever. My point being is that I understand the importance of farming in Nova Scotia, I understand the importance of mining and forestry and also fishing, and I would just like to make the connection that if one's involved in a resource-based industry, it doesn't necessarily come easy but it does provide a good way of life and it does bring us challenges, simply being entrepreneurs.
I don't know of any business in Nova Scotia that is simply easy for anyone who is at the head of the business. We have all the responsibilities that take place that come with running a business. I thank you for your comments. I just wanted to know in case I decide to go into farming, that there would be an opening there for me. (Interruptions) Much later in life.
MR. ROBERTS: If I could make a comment, it's just that part of the challenge of becoming involved in agriculture has to do with the structure of the industry. When I was banking, I banked non-agricultural businesses at times as well. If you mentioned to someone who was opening a restaurant what it would cost them to get into a farm that created that same level of revenue, they would think you were crazy. I started trying to get into this industry over 20 years ago, and I just made it two years ago because I was finally able to develop the resources by working out to be able to make that initial investment and then take on a substantial level of debt, a level of debt that is not common to most small businesses.
This is one of the barriers, and then we're dealing with an industry that is volatile. The margins will go from being there to disappearing overnight. We're also in an industry where some of our potentially most-developable sectors, the organics, the vegetables, some of those mixed-farm approaches are starting to run into some serious problems because of some of the downloading of costs from the rest of the system onto the farm. The stores now want their products delivered to the store, all coded to run by their scanners, we're talking about traceability from farm gate to plate. These are all costs that are not going to be paid by the consumer, they are not going to be paid by the retailer, and they are not going to be paid by the processor. The only ones left are the ones who have to pay it to survive.
Those are the challenges we face. The massive investment in relation to the other types of businesses out there and the fact that we're not only price takers, we're cost-dumping grounds. Our system does not support passing those costs through to the consumer. Ten cents out of every dollar goes on food in this country, and that includes restaurants. That isn't very much. We get one-tenth of that 10 cents, and we get a lot more costs coming at us every day. These are some of the challenges.
We have massive opportunities in this province. Many of our new entrants, and a couple in Cape Breton, I think of now, are like me. They're 50 years old, just joining the industry. Creative, knowledgeable, coming up with great ideas, there's a lot of potential in those people and they set the way and show how other people can come into the industry too. But they're fighting a battle and we haven't figured out a system yet, as a society, where they can make a go of it.
MR. HUNTER: It's a long cycle in agriculture. I had a calf born yesterday and I don't sell anything from her for two years, so I'm looking at marketing her product in two years' time. What's the marketplace going to be like then? Up or down.
MR. DOOKS: Beef hasn't really been increasing. Just another comment, Mr. Chairman. I usually frequent the cattle auction in Truro. I can remember doing a bit of buying and selling myself some years ago. The prices have gone down, actually, in most cases from what it was in the early 1980s. You can buy a cow cheaper today than you could then, in most cases.
MR. HUNTER: Well, our cattle now, Finnish cattle, are having to go to Quebec or Ontario to get slaughtered.
MR. DOOKS: What would be the per pound now for beef?
MR. HUNTER: Finnish beef actually is fairly good at the moment. In the European EEC now, any animal cannot be shipped more than 95 miles for slaughter. So we wouldn't have anything killed in Nova Scotia. We would have a big beef herd.
MR. WILLIAM LANGILLE: Your comment that it can't be shipped any more than 95 miles for slaughter, why is that?
MR. HUNTER: Because of stress, the lobby for animal welfare, and because they've gone through this situation with foot-and-mouth disease, et cetera, for traceability of those animals.
MR. LANGILLE: Because of smaller countries, you're going country to country.
MR. HUNTER: No, no that's within a country.
MR. LANGILLE: They're going to slaughter and they're concerned about the stress?
MR. HUNTER: The stress on the animal, that's from the animal rights' lobby, but also for traceability because when they had that foot-and-mouth crisis they didn't catch up with the pigs for three days.
MR. LANGILLE: It was an interesting comment and I just wanted to pick up on that.
MR. HUNTER: That puts major restrictions on us here. If we came in with legislation like that, we would create work here, we have a small federal abattoir in Antigonish for cattle. It's not federally inspected, but that's the only one. That's the only abattoir that can interprovincially ship beef.
MR. LANGILLE: I believe that's because Hub Packers went out, which is controlled by Maple Leaf. I understand that the Prince Edward Island Government might be picking that up and putting one in Borden.
MR. HUNTER: Well, it's the Cattlemen's Association in the Maritimes that are looking, in conjunction with Co-Op Atlantic. Apparently the provincial government has supported it somewhat financially but that's still not off the ground. So what do we do with our cattle for two years? They're all going out. We have real price takers. That meat goes and comes back, so you can imagine the surcharge in oil at the moment, taking it out and back again.
MR. CHAIRMAN: Howard Epstein, you're up next.
MR. HOWARD EPSTEIN: This was a very interesting presentation, I certainly appreciate it. My constituency is the most urban of any of those represented around the table today but, of course, my constituents are the customers and the people you are ultimately dealing with. We are very interested in agriculture and where our food comes from, and we're interested in the economic sides of it, which leads me to one point I wanted to ask you about. I am particularly interested in ways which the provincial government and the
Federation of Agriculture can interact in order to help agriculture be healthy here. This has to do with the marketing side of it.
I wanted to ask you about one point that you made, because as you presented it it seems clear that food is relatively cheap and that it's certainly the vendors who are in a position to make most of the profits. This is clearly problematic for you, but when I read your section on marketing in your "Agriculture and the Community in The Next Decade" document, when it comes to recommendations I have to say they sound a little tepid. The one that struck me was the one in which you say you think that it would be useful to, "Establish a mechanism to bring together local producers and representatives of the major grocery chains operating in the province to discuss options and opportunities for providing consumers with greater access to local produce."
Sitting around and talking about it is probably useful, but at the same time, you've been around, as you say, for 107 years and there's been consolidation in the retail side of it for a long time. I would certainly be happy to see the provincial government talk very directly to Sobeys and the Superstore and the other retailers, but I'm wondering if there is any kind of mechanism that the provincial government could use to help you on the marketing side. Surely this is a prime aspect of your business.
MR. NASON: On that one, the provincial government could certainly facilitate those discussions.
MR. EPSTEIN: Has that occurred so far?
MR. NASON: No.
MR. EPSTEIN: Is there a reason why that hasn't occurred?
MR. NASON: No, I don't think so. You indicate that there's been a consolidation going on for a long time, and there certainly has but I think it's just fairly recently that we've seen a real concentration in the retail sector of two major retailers. That's creating a lot of difficulties. It means that farm businesses have had to make huge adjustments, and Bruce alluded to some of them.
MR. EPSTEIN: Can I ask what the barriers are? I've heard this discussed by agricultural producers before, and they've looked at the retail sector. They've suggested that the real problems have been, perhaps, volume and regularity of supply. Is that still the case?
MR. NASON: That's one of the barriers.
MR. EPSTEIN: What are the main problems then? Why don't they want to buy local produce more than they do?
MR. HUNTER: One is regularity of supply. They're working with computers and it's a figure and it's a product coming through. We're also dealing with a perishable product, which is a problem when it comes to agriculture. I know people say, well, the milk producers have to get more militant. Well, what do we do if we get militant? Well, we put the milk down the drain and that causes an environmental farm problem and we don't get paid . . .
MR. EPSTEIN: I'm sorry to interrupt, but milk surely can't be the problem. I think we see local milk on the shelves.
MR. HUNTER: We see local milk on our shelves, but we see a lot of manufactured dairy products coming in. We do not have an expanding dairy industry. Supply management has been tremendously good. I wouldn't be dairy farming if it wasn't for supply management. The only country in the world that has people milking 30 cows is Canada. There are problems when you get to the other end, when you want to expand, but it has brought a lot of stability to the industry. It's quantity and quality. They want everything the same. It's interesting.
There are different people out there in the consumers' market. There are those who buy at Sobeys. I love going to the Halifax Farmers Market, and people there are looking for crooked carrots. But when you go to Sobeys, they want little carrots, like that, because that's what their market wants. If you look at President's Choice, they've developed that organic section and it has tremendous potential. But if we want to produce organic milk here, we have to get a volume to do it, to get a processor interested in it, to shut his plant down at the weekend only to put organic milk through.
We have a problem even with mass. In Ontario there is a group which got together and they shut a cheese plant on the weekend from normal milk, on the weekend they only run organic milk, because they can store it.
[10:15 a.m.]
MR. EPSTEIN: Do I understand, Mr. Hunter, that you've actually started the process on your own farm to think about moving towards an organic certification?
MR. HUNTER: Yes, because there's a market there.
MR. EPSTEIN: What do you do about this processing side?
MR. HUNTER: That is something we're going to have to do. We're probably going to have to put up a processing plant of some sort, unless there's a group of 20 farmers who make that plunge. If you look at organics in a country in the European EEC, they get tremendous subsidies in the conversion. When I go organic, my production goes down and I have to spread it out over more acres, so it increases the cost.
MR. ROBERTS: Just one comment on the marketing end of it. Part of our problem with the marketing is our diversity in agriculture. If we produced one commodity in Nova Scotia, we could supply the consolidated systems that we now have both in processing and in retailing, it's not just the retailer. One of the things that we think there is a lot of potential for and one of the recommendations is for farmers to start working together more across commodities through co-operatives. We're seeing that now in Cape Breton with the Bras d'Or Co-op, very successful and setting some standards.
These are some of the things we're trying to work towards. It takes a long time to shift - first of all to see if we can prove the concept without going bankrupt while we're doing it, and then to start shifting a whole production system, previous relationships. And when you try something new, there's added risk. These are some of the barriers to the changes. We think that Brand Nova Scotia should be sold throughout the world as a premium product, environmentally friendly, the whole thing, but how do you shift a whole system and maintain its financial stability at the same time? As Fraser said, a major change to his operation can have a major impact on his production. The banks want their payments and the suppliers want their payments regularly.
So these are some of the barriers and these are some of the areas that we think that as an economy, the province as a whole, people involved in the province can move towards and help us develop and look for some of these opportunities. We used to have those within government. We used to have some of those resources. No province now has those types of resources left in their Civil Service. That's just the reality we have to work within. What it means is it takes us longer to make those changes because we have to provide the resources ourselves.
MR. EPSTEIN: Well, you shouldn't give up on this because there is a strong desire on the part of customers to buy local if possible. I want to ask about a Senate report called Canadian Farmers at Risk that came out in June of last year. In the section in which they discuss climate change there is the following statement, "The Nova Scotia Federation of Agriculture estimated that the dairy industry in Nova Scotia alone may have lost up to $8 million in the year 2000 as a direct result of the drought." They were using this as an example of ways in which drought and climate change has had impact on agriculture around the country.
I'm wondering, since we also heard this morning that you weren't consulted about the province's water strategy, what can the provincial government usefully do to help address the question of drought in agriculture in Nova Scotia? It seems to me there are at least two parts to this, one is long range, we can certainly try to not consume as many fossil fuels and so on, but that's a long-range strategy. The other part of it, really, is more focused, is there anything directly that could be done to help out?
MR. HUNTER: Our president took the initiative at that time to get Prairie Farm Rehabilitation Board administration in from the West, where they've been involved with drought. One of the interesting factors they said is, your problem isn't lack of water, it's storing water. We get plenty of water, but we have to put an infrastructure in place so that we can store that water.
MR. EPSTEIN: Does this mean more wells and ponds?
MR. HUNTER: Ponds, irrigation ponds, possibly wells. The runoff in water in Nova Scotia is unreal, in the winter. We have plenty of water, they don't even have that water out West. We have to put in an infrastructure where we can store it and utilize it. One inch of rain is equal to 22,500 gallons of water.
MR. EPSTEIN: Is there any program now to assist with this? I thought there was a proposal coming from the Federation of Agriculture or that went, as I recall, about two years ago, to the provincial government on this.
MR. NASON: The Farm Investment Fund provides assistance to develop the irrigation systems and so on and the Prairie Farm Rehabilitation Administration, we're working with them, they're working with the province to look at the whole issue of storing some of this water that is in abundance when we don't need it, in terms of off-stream storage facilities. I think there will be some pilot projects move ahead within the next year.
We have organized environmental clubs on a pilot basis across the province and the PFRA has agreed to provide those clubs with the expertise so there will be hydrologists who are familiar and who have been designing these systems for years, to come work with small groups of farmers across the province. One of the ideas is for off-stream storage and there is a lot of water in our watercourses at certain times of the year when we don't need it. One of the things we'll be looking at is developing systems to move that to storage facilities that can be used in the summer and so on. Water - strategically for the industry - is probably one of the most important issues we have to deal with. People don't realize that these guys can't farm unless they have access to a clean, abundant supply of water.
MR. EPSTEIN: Is this the sort of thing that should be managed at the individual farm level, at the municipality level, or out of the province?
MR. NASON: I think it's going to have to happen at all levels, certainly at the individual farm level. One of the pilot projects that may go ahead in the next year or so will involve a municipal unit co-operating with farmers and there is some need for provincial coordination as well, certainly some investment in some of the infrastructure that we may need in the future to deal with the issue.
MR. HUNTER: Speaking as a farmer, it's awful slow.
MR. EPSTEIN: Good. May I go back on the list as well for later on?
MR. CHAIRMAN: Yes. David Hendsbee.
MR. DAVID HENDSBEE: Mr. Chairman, I have quite a few questions and I know time is running out so I'll try to concentrate on three particular areas. Back in the year 2000, our government passed the Farm Practices Act, an Act to protect farmers engaged in normal farm practices without being sued for nuisance or negligence. The question I should ask you is, with the state of the family farms and urban development and everything else, the encroachment factors on farm properties and stuff, and some municipalities and some neighbours wanted to have more land-use planning or activity restrictions, what impact has that had on the family farm this last number of years?
MR. ROBERTS: I'm on the Farm Practices Board and I have also been involved with some issues around land-use planning and restrictions on agriculture in Yarmouth County. We have 54 municipalities and we are quickly seeing 54 different sets of rules coming out. They have some very interesting interpretations of some of the guidelines and some of the recommendations. The Municipality of Yarmouth interpreted them to the point that they literally effectively banned any type of livestock agriculture other than dairy and beef. The reason they didn't ban dairy and beef is that they have a dairy processing plant there that creates a lot of jobs. They did that and then if you move next door to Argyle, they came out with a plan that was not as Draconian, but certainly limits the ability to establish new farms and to expand existing farms.
You will not hear a farmer say that there shouldn't be controls. We understand that we have to live with our neighbours and it's important that we do so without offending those neighbours unduly. But the municipalities and the authorities need to recognize that the more they restrict us, the more they force us out of business and limit the opportunity for family
farms to continue to exist. It has become a very major concern for the federation.
MR. NASON: We are in the process of completing a study on the impact of local government on farm businesses in Nova Scotia. The results of that study will have some very pointed recommendations for your government with respect to some of the initiatives we think that the government needs to take with respect to the protection of agricultural land. I think at the top of that list, we think that the Province of Nova Scotia needs to play a greater leadership role with respect to the protection of agricultural land, now it's totally in municipal hands. There are certain areas where we need some direction from a central government with respect to what's happening to agricultural land. So the next year we will be presenting government with some recommendations with respect to exactly what you mentioned.
MR. HENDSBEE: Thank you, I look forward to that report. With regard to getting product to market and stuff, you talked about the consolidation of the wholesalers out there, we are getting a concentration of retailers. We have a few roadside markets throughout the province and we have a number of your products being exported to the States. Now we see new national food and safety standards coming in about nutrition, food labelling and stuff like that. You talked about how difficult it is for some of the farm units to provide individual packaging or individual labelling. You mentioned something about the scanning code for produce and stuff that the suppliers want to have on their product.
Can I ask in regard to all of that, with the change in the marketplace, how could the government assist with these changes or demands being placed on the farmer to have your product probably shelf ready, in regard to some of these suppliers wanting to buy the product? How can we help in that aspect?
MR. NASON: I guess we thought for some time, when Canadian Ministers of Agriculture finished meeting in Whitehorse 18 months ago or so, that there was going to be some assistance from both federal and provincial governments with respect to food safety, but that debate now has total focus on business risk management. We don't know how that is going to impact us, certainly, I think that if farmers are going to meet the consumers' demands as quickly as it appears we are going to have to, then governments are going to have to provide us with some resources to help us do that, not necessarily hard resources but certainly some extension work and so on to help us retrofit our operations, so we can provide consumers with what they want with respect to traceability and so on.
MR. HENDSBEE: With regard to diversification in the farming industry and stuff, we hear a lot about the need or the demand for perhaps organically-grown produce and stuff. We hear the fear about GMOs, genetically modified organisms. Do we have any of those concerns in this particular area of the country about these GMOs that are being experimented with elsewhere in the country? Could you probably allude further about the diversification of produce we have seen in our marketplace? We are seeing ginseng and other herbal ingredients being grown here, we have been seeing and experiencing the fall of tobacco no longer being grown in the province as much as it used to be. Will there be other cash crops out there that may be coming along? I don't know if hemp will ever come back or if the federal government is ever going to legalize other things but I'm just wondering, what diversification is going to be out there for the farmers?
MR. ROBERTS: I had a discussion with a relatively new farmer in Cape Breton who is involved in the Bras d'Or Co-op and they're starting to work on growing some plants that go into the nutraceutical market, vitamins, nutrients and herbal remedies. He is pulling out the information, finding out where he can find it and he's been approached by some people who are looking for the products. He's working on that now and it's a slowly developing process because there's no system in place to provide him with the expertise, the extension
services - most of the extension services tend to be directed toward some of the more traditional agricultural sectors, that's the reality, that's where the training is.
[10:30 a.m.]
Any of the innovations tend to come from the farmers themselves. Some of the other things they're looking at, certainly the organics in Nova Scotia are growing quickly. There's a demand for organic grains. There is more information becoming available through the new organic centre at the college.
But from theory to the farm, there seems to be a gap there. Someone mentioned about educating new farmers, well you go talk to the students at Nova Scotia Agricultural College - what was the number? - 15 per cent of them want to farm, the rest are there to get an education so they can get a job somewhere else. Most of them don't even expect to get a job in an agriculture-related industry. When we look at it as farmers, we say, where is the benefit to us from that educational process, where's the disconnect that our farmers are even sending their children there to get educated to come back to the farm? These are issues that, as an umbrella organization, we try to deal with.
There are opportunities there and they are being developed, but we used to have information systems in place in the department, in the government, that identified things for us to look at, and if we found some, then we could go out and they would investigate those things. They aren't as comprehensive as they used to be, let's put it that way.
MR. HUNTER: Diversification is a tool in our toolbox. Diversification shouldn't be an answer to not getting a sustainable income from what you're already doing. That's what it's being used as a lot. Diversification should be used as diversifying your farm after you've got the other operation running right, not to subsidize the other operation. It's often used in the wrong term. We look at diversification as being the extra, once we have something that's sustainable on our farms.
MR. LANGILLE: Interesting observations. I agree with you on diversification. I think a person ought to work on their strengths first and then maybe diversify. Something that Mr. Epstein alluded to was that he thought Nova Scotians would buy local. I believe it was last week that I noticed a co-op store closing in Glace Bay, and I think there were three others in New Brunswick, two or three others. That disturbs me. As you know, co-operatives are a strength in this province. I know the one in Truro, I believe it is doing very well. But when you see one close in a place the size of Glace Bay that can't compete, and I guess we're down to two stores now, two major chain stores, that disturbs me. The reason I'm saying that is that I don't know if there is the will to buy local rather than looking at the flyers. Anyway, having said that, I would like to move on, it was just a point.
I live on an abandoned farm, by the way, since 1953 the farm was abandoned. I picked up blueberries and it's a tree farm, the third tree farm in Nova Scotia. Also, talking about water resource, I've made four ponds, one and two acres big. We're talking about water storage and water supply, and I know, probably on your farm, is there any place that you have on your farm that you could make ponds for water?
MR. HUNTER: We started last year. From the point of view of existing ponds, we've enlarged one and we will probably put in two new ponds this year to store winter runoff. That's what we have to do. An acre inch of water is 22,500 gallons. If you want to put an inch over 100 acres, you need a 2-million-gallon reservoir. But if you strategically use that water, you can get tremendous production because going back to simple growth, you need water. We all need water; it's the major resource and it's an essential resource.
MR. LANGILLE: I believe you mentioned something about the amount of farmland we have here. I know looking around Antigonish, Pictou, Colchester where I live, you're looking at all kinds of old abandoned farms that have grown up but the land is good, it's good soil. I know you are into dairy but - does that concern you, coming from a small area with a large population and seeing all of these abandoned farms?
MR. HUNTER: Oh yes. I mean it amazed me when I first came to Nova Scotia in 1977, the abandoned land. You could look up through the Margarees, beautiful Class II land, used to have small dairy farms there but, you know, the economy changed and people moved to centres - the almighty dollar speaks. Maybe we have to change our values, and there is possibly a change but that value isn't given to our kids in school.
There's a value to living in rural Nova Scotia that you can't put a price on, but we still must exist because we're steadily losing services. I have to travel 30 miles to get machining done. A business in New Glasgow only has to travel a mile to get a machine. That's an expense to us in the price of gas, et cetera. There's tremendous potential in Canada for increased growth of production but it's the marketing and you're dealing in a world trade organization that's fighting and we're just a little small pawn out there. Really, if we could get Nova Scotia brand loyalty here, it would be great. The other thing is if you could even just convince every Cape Bretoner in Boston, Detroit and Chicago, to eat Nova Scotia lobster everything would be sorted there so we could ship a brand, finished product there - you know we would be all set.
I had never eaten lobster until I came to Canada but if you have ever seen a more unfriendly consumer product it's lobster. If they can sell that for $6 a pound, they're doing something right. You try to get into it and you can't even get in - it's like our milk cartons used to be before we put a screw cap on. (Laughter) People complained about putting screw caps on but milk is beneficial to kids and old people - kids couldn't open the carton and arthritic old people couldn't open the carton. The last product to become consumer-friendly with a screw cap on it was milk - beer was even ahead of us. Crazy.
Where else in the world do they sell milk in plastic bags? When I came from the U.K. you bought a plastic bag - well it wouldn't stand on the table. Have you ever tried to stand a plastic bag on the table? It doesn't work. You open it, snip it, consumer-friendly product packaging?
MR. CHAIRMAN: Thank you.
Mrs. Baillie, you will complete the first round and then we'll have time for a short question each for the second half.
MRS. MURIEL BAILLIE: Are you trying to tell me not to be too long? (Laughter)
I'm glad to hear about the screw cap on the milk carton because I didn't realize why it was put on there; I'm glad to hear that. Arthritic, old people - I have a mom who's 93 years old and she has great difficulty opening things, so I'm glad to hear that.
My comment - you spoke about the farmer who said he didn't have a son he didn't like enough to leave his farm to or whatever. I think it's very important to be happy in what you do. I was in education for 29 years and had a granddaughter who was leaning that way, but I didn't encourage her at all. Anyway, she went into education; she is doing her practicum now and she's so happy - it's exciting to see her happy with her work. There are young farmers out there - I wonder how much encouragement, if they want to do it, and I think if you want to do something you will succeed, and I just wonder what your comment is on a young farmer really wanting to do this. What's your comment - I think you will succeed if you really want to do something.
MR. HUNTER: Personally, I think you will, if you really want to do something. I take it back to when somebody gets married - and this isn't a criticism of a young farmer - they want a dishwasher and a clothes dryer and a tumble dryer. We might have placed some people's aspirations too high, they want to start where dad's finishing off. So maybe you have to walk before you run but we still need to put into place things that will help them. Every other industry gets loan guarantees. Agriculture doesn't get any loan guarantees.
ACOA, the first time I think they have ever helped a product on marketing would be the apple industry, when it comes to agricultural products. When they get $500,000 - I said the milk industry should be right there. We didn't get interest buy-downs. We did at one time through the Nova Scotia Farm Loan Board, new entrants under 30 got major buy-downs. There's a small interest buy-down there but you have to own land to get it, it's a grant but you have to own land to get it. There are lots of people who will lease you land, you couldn't get that new entrant's interest buy-down unless you own land. Now it's a grant, so why do you need to own land to get a grant?
If you wanted to start a beef farm, the capital cost of land might be prohibitive. You can lease it but you are never going to get anything from the New Entrants Program because one of the stipulations is you must own land. Mink farmers you don't need to own land to have a mink farm, but there are so many ways we could make it just a little bit more flexible. There will always be somebody abuse it and that's the big problem because you are trying to eliminate all the abuse that you eliminate everybody who wants to get there, but that's life.
If you want a farm you can do it. There's nothing better than waking up on a morning and it's minus-30 and you have to go to the barn and the barn's frozen. You can really put a sob story on if you want, but there's nothing better than seeing a newborn calf. An amazing thing is when sheep have triplets, somehow the good Lord sorts out which two legs come out with which head first. You know there are assets but we still have to make a living. So there are benefits but we still have to make a living.
Our young people are open to every peer pressure they get. They go to school - boy you smell this morning, you must be from the farm. Well, fair enough, they had to walk down the lane the cows walked through. There is that peer pressure on our young people that forces a lot of the young people out of agriculture. We have to educate and communicate.
MR. NASON: I think one of the biggest differences between most locations in agriculture is risk. You mentioned that your granddaughter is teaching school. She probably won't have to deal with the fact that she's invested a number of years in learning to do what she's going to do and be confronted with the kind of adverse weather conditions that we started to have in 1997, the kind of market conditions that Nova Scotia hog producers have experienced because of decisions of other national governments. So there are all of those factors as well which impact the decisions that young people make with respect to getting into the industry. They have to deal with a huge amount of risk.
MR. HUNTER: If you look at the hog situation it was influenced because the U.S. stopped buying steel from Russia, so Russia stopped buying poultry, so there was a buildup of poultry in the States and it impacted back on us in the hog industry. That is a tremendous risk to go out and that is the problem with the new ATF agreement, it's the risk management sector in there. Our province wants to sign it. We have said, no, we shouldn't sign it, that they want to sign it.
MR. CHAIRMAN: Is that it, Mrs. Baillie?
MRS. BAILLIE: Yes.
MR. CHAIRMAN: I just want to ensure I gave you appropriate time, in all fairness.
MRS. BAILLIE: I wanted to talk on and on about this but I won't.
MR. CHAIRMAN: I think we'll go to some short snappers. Mr. MacKinnon.
MR. MACKINNON: Mr. Chairman, I have two or three issues but I'll wrap them together as quickly as I can. The concept of marketing, the crooked carrot issue, I have been of the adage that we could certainly market those products by having food processing plants here in Nova Scotia to deal with those types of products, whether we bag them, whether we box them, whether we can them, whatever. It's an issue I proposed several years ago with the collapse of the fishing in Louisbourg, we had a $15 million plant just sitting idle, and it could have been easily transformed. It's all about marketing, and how we could do that, if you could comment on that. What percentage of food grown here in Nova Scotia is genetically modified, if any, and with regard to the increasing cost to the farmers because of fuel, what type of fuel rebate program does the Department of Finance have for the farming community?
[10:45 a.m.]
MR. NASON: With the fuel one, other than farmers' fuel that is used for the production of food, we don't have to pay the tax on it, there's no rebate program. One particular sector, the greenhouse sector, is struggling considerably now simply because of the increased costs of energy. I think that will also mean quite a difference for almost all sectors, crop sectors, once the cropping season starts. It's a huge problem and I can send you a report on it, we did a report on the cost of fuel and the increase and the impact on farmers a while ago and I can send that to anybody who wants it.
MR. HUNTER: There's Roundup Ready corn grown in the province.
MR. NASON: Yes, but not much.
MR. MACKINNON: Food processing?
MR. HUNTER: Food processing, that's a big issue. Food processing, we have the dairy industry and we have a number of plants. We have Oxford Frozen Foods who process carrots and blueberries and those products. It comes down to the economy of scale and how they're competing in the marketplace. It goes back to the retailer. When you only have two retailers to sell to, even the food processing industry has a problem. It's interesting. Scotsburn Dairy now ships ice cream right across Canada. That has been a major movement. They've expanded that plant in Truro, really pushed ice cream, and they have a very good product. I'm a Scotsburn producer. It's unfortunate you have no milk to drink, I see you're all drinking water or coffee. (Interruptions) But processing is a tool to get that product to market. Whether the farmers need to have more control of processing . . .
MR. NASON: With respect to marketing, somebody might want to take a look at what the province's involvement is in actually purchasing product. The province runs a correctional system, jails. I presume that you would have some sway over hospitals. The province must be a huge purchaser of food. It would be interesting to see just how much of that is actually produced in Nova Scotia and what the impact on the agricultural industry would be if the province had a policy to purchase local for the institutions that they are involved in. I think it would make a huge difference to our industry. (Interruptions) Exactly.
MR. MACDONELL: I will try to be brief. I will try to do what the member next to me did, roll two or three things together. I'm curious if anybody has done an inventory as to how much we produce and what we produce, compared to what's brought in. In other words, the differential to Nova Scotia producers meeting the demands of the Nova Scotia consumer. I know we're not growing pineapples or oranges, I feel fairly secure we're not growing many of them anyway.
Recently, in the last few months, there was a Cabinet shuffle. The Department of Agriculture and Fisheries got a new minister. When I saw the news that evening, one of the reporters asked Minister Balser about his demotion from Energy to Agriculture and Fisheries. The minister's reaction was certainly one that indicated he felt he had been demoted. So my thought was he wasn't really grabbing the bull by the horns and showing the potential, because we sure as heck never got a whole lot out of the energy sector as far as the offshore for this province, and not as much as what the agricultural sector is doing for the province. (Interruptions) That's my view. This is an area where he could actually make some gains for rural Nova Scotia.
So, I'm wondering if the minister made overtures to the Federation of Agriculture as soon as he took on that portfolio, was he in contact and have you had discussions with him on these issues?
MR. NASON: We've met with the minister twice in the last month, month and a half.
MR. MACDONELL: What's his reaction to some of these issues?
MR. NASON: Our meetings with the minister have been focused on risk management issues and agriculture policy framework issues.
MR. MACDONELL: And this new agreement that the province is looking at signing, you brought your concerns . . .
MR. NASON: Yes.
MR. MACDONELL: And his reaction to that?
MR. NASON: Well, I think the Province of Nova Scotia has said that they're going to sign an agreement with the federal government. That's probably the first time in Canadian history, when every farm group in Canada has united behind one issue and said that this isn't good for the industry right now; so stop and take a look at it.
MR. EPSTEIN: I will just make a comment. I have to say that we're very supportive of agriculture and we want to see it do well. I want to just flag for you, if I could, one aspect of your business that does worry me, and I would like some advice on this. I heard a reference earlier that in the Walkerton inquiry there was a lot of blame attached to the farmer. I don't think that's quite right. I think, in fact, Justice O'Connor didn't blame the farmer, it was the government that was blamed for failing to regulate, and it was particularly the water system that was blamed.
But I am very concerned about manure management and I'm particularly concerned about it when it comes to hog farms and to a lesser extent with cattle. I've been looking at the Alberta legislation, the Agricultural Operation Practices Act there, and they've actually brought in, in the form of regulations, separation distances and a whole variety of other detailed regulations, whereas in Nova Scotia we're operating with guidelines. What I'm wondering is whether you think it's adequate that we stick with guidelines or should there be the Alberta model, in which we actually have the detailed separation distances and other kinds of regulations in regulation form when it comes to separation distances and manure management.
MR. NASON: I think that if you look at what's happening with respect to manure management right across North America, you will see huge debates going on, in the Province of Ontario, in the Province of Quebec, in the Province of Alberta. Look what's happened here. There's not a huge debate going on. The farmers started about two years ago, took the initiative to develop a nutrient management planning model that involves manure management and the use of soil additives. That model has been developed, the Province of Nova Scotia has agreed to make that model available to every farm in the province.
So we haven't had this huge debate, because farmers have decided to deal with the problem themselves. I guess there are two ways of getting things done. One is by compulsion and one is by inspiration, and I think that we see here in Nova Scotia, particularly with environmental issues, is - we have farmers who recently completed a series of courses on a nutrient management plan and manure management, we had over 300 farmers who attended those courses across the province. Again, with the environmental farm plan, the province has agreed to invest $0.5 million a year to put those plans in place on farms, and they've stepped up the team that's delivering them and cannot keep up with the demand to have those plans put in place.
I think the farmers of Nova Scotia have done very well with respect to self-regulation. Certainly, I think that's the best way to implement policy, through inspiration and not compulsion.
MR. EPSTEIN: Goodwill is very important. Is everyone in compliance with the guidelines?
MR. NASON: I have no idea whether everybody is in compliance with the guidelines, but certainly with the commitment that we have with respect to implementing both environmental farm plans and nutrient management plans there will be no excuse for any farm in Nova Scotia to have waste management systems that do not meet certain standards that have been agreed upon by farmers, by the Department of Agriculture and Fisheries and the Department of Environment and Labour.
MR. LANGILLE: I would just like to comment, Mr. Hunter, on what you picked up on about the pork in Nova Scotia and how politics play a role in that. (Interruptions) As we know - I won't go into that - President Bush was supported by the steel workers and there was dumping going on from North Korea, Russia and Italy, of steel so they brought in an anti-dumping law. However, Russia, the biggest consumer of United States chicken, rebelled. So here's the Americans with all these chickens, so what do they do? Everybody starts buying chicken and nobody is buying pork.
In fact, I know the Helms-Burton law, which is one of the trade embargos with Cuba - they actually sold chicken legs to Cuba, and Nova Scotia is one of the biggest suppliers of chicken legs to Cuba. Everything has a rippling effect and this is what happens. This is how we are so knitted today with global decisions, more so than ever before. I just wanted to bring that to your attention.
MR. CHAIRMAN: That has been a bone of contention for you for some time, Bill. (Laughter)
MR. LANGILLE: Yes.
MR. CHAIRMAN: David Hendsbee, one minute.
MR. HENDSBEE: My last question. My question would be in regard to the risk management or help on the family farm and stuff, trying to survive. You talked about the conditions, whether they be climatic conditions that you are at risk for. You talk about the farms of leverage financing and trying to find working capital to provide some kind of seed and fertilizer for feed. What could this government - if you were to ask the government for any particular financial assistance, help or program to help the family farm, what would it be?
MR. HUNTER: The risk management program is applicable to all sectors. If there is, like, an insurance plan - not that we will want hand-outs - on the good days we would pay it back and the bad days we are able to get it. I mean, we don't know what this spring is going to be like. If it is a wet spring, we have slow growth and we are behind the eight ball all the way through; if it is a dry, cold spring we are even farther behind the eight ball. So it is an individual risk management program to farmers which is applicable and can be funded by the government.
The old NISA was pretty good but it didn't apply to supply-managed commodities. The new program coming down, if we sign it, possibly, as it is, some management commodities will not be covered. If we get a disaster like the drought of 1997, plus the army worm thrown in, we are down the drain. The drought of 2000 cost my farm $30,000. Where did that money come from? It came from the banks. What am I doing? I'm trying to pay it back now. That's the bottom line.
We run a family farm. Our debt load is $900,000. That is the family farm. Thank goodness for the Nova Scotia Farm Loan Board which I think is supported by all groups. I mean, it does help us a great deal but at the end of the day, the Nova Scotia taxpayer is going to want their money back.
MR. CHAIRMAN: Thank you for that. Bill Dooks, the last word.
MR. DOOKS: Well, Mr. Chairman, I will just make a closing comment. I would like to thank the Nova Scotia Federation of Agriculture for coming in today. I enjoyed your presentation. I am going to make a comment back to your binder again that the federation was established in 1895 and since that time, you certainly have gotten to know the industry.
With the information supplied to us today from your own federation, I can't help to say that farming in Nova Scotia must be stable. It looks, certainly, positive, it looks like an industry that people should get in. I picked out just a couple of things. Like, we have had an increase in hens, chicks, sheep, lambs, mink farming is up, field crops growing, fruit crops growing, maple sugar trees, greenhouse vegetables, almost every aspect other than dairy seems to be on the increase.
When we see growth in volumes, we must translate that with profit. I just think this is exciting news. Well, it should translate to profit because people will not increase their product unless there is a market for it and unless there is an avenue to sell. We know, not unlike any other resource industry in Nova Scotia, and probably the world, you are faced with challenges.
[11:00 a.m.]
The thing is the market can be up or down, but what I'm saying is, I'm commending the farming community in Nova Scotia, things look well. When you see people expanding and fields being developed and more trees being grown and more mink being harvested, things must be looking well in your industry.
MR. HUNTER: That doesn't take into account the off-farm income that's subsidized in those operations.
MR. DOOKS: Yes, thank you.
MR. CHAIRMAN: Thank you, everyone, for your comments. If you will allow me to make one comment and that is what concerns me is the comment about the minister and I have known the minister for five years and I know that this gentleman takes his job very seriously and I think you will find him to be a driving force for this industry. Having said that - that's off my chest - I want to thank you, gentlemen, for providing us with some insight into your industry and it's a very important industry.
We here in Nova Scotia should be proud that the Federation of Agriculture is in the hands of gentlemen of your calibre. We are indeed very fortunate that you have walked away from the boardrooms and your lecture halls and Pepperell St., I mean to leave a city and go into this business is amazing and to dedicate your lives to this important sustainable industry here in Nova Scotia. I was born and brought up on a dairy farm and I can tell you, in my mind, it's a way of life. I'm that kid that moved to Alberta, I didn't make the right turn and run the family farm and I've regretted it for 35 years, I can tell you that. Anyway, keep up the good work, gentlemen, thank you all.
We stand adjourned.
[The committee adjourned at 11:02 am.]