HALIFAX, TUESDAY, APRIL 20, 2004
STANDING COMMITTEE ON RESOURCES
9:00 A.M.
CHAIRMAN
Mr. John MacDonell
MR. CHAIRMAN: If we could deal with a couple of issues that I kind of intended to deal with at the end but number one was around the request of DNR to make a presentation and I think the committee was under the impression that Mr. Underwood, the deputy, would be here as well. In looking at the correspondence that came from the Committees Office, I'm not sure, if I were Mr. Underwood, that I would see that as a clear invitation to him specifically. "The Standing Committee has determined that it would like to hear from Officials from the Department of Natural Resources on this issue." so I can certainly see from that, unless there is something else, Mora, that was more specific.
MS. MORA STEVENS (Legislative Committees Clerk): If I may, when I was speaking to officials in Natural Resources and Nancy McInnis Leek, of course, has been a contact for a lot of these things, that was the impression I was under, that he was coming. Obviously that was not his impression because all the correspondence there, when you do invite, goes through the deputy minister. What I thought was that Nancy was saying yes, he would like to be there because sometimes the deputy ministers are coming and it had never been corrected from that misunderstanding because there was a list of people and then when they got together the deputy minister obviously wasn't under that impression.
MR. CHAIRMAN: I guess I am asking you, I will say what I think and then you guys can tell me, but it would seem that whenever we invite someone from a department, that leaving it up to them to send the officials who could most appropriately deal with whatever issue would seem to be the right thing. If it turns out there is someone that we want specifically, I think we could indicate that but generally, is the committee fine with that, if we ask a department that they make the decision about who would be the most appropriate? Is that okay with members?
1
MR. CHARLES PARKER: Unless we have some specific reason to ask the deputy minister.
MR. CHAIRMAN: Or anybody, if we ask for somebody specifically but I think generally speaking that would be fine.
The other thing is, was it Mr. McIntosh who was here for the Forest Products Association who sat in on that Woodlot Owners and Operators meeting that we had?
MS. STEVENS: Yes.
MR. CHAIRMAN: Anyway, the Forest Products Association would like to be able to come before the committee and I am just wondering what the members feel about looking at our present agenda to see whether or not there is an opportunity to slide them in somewhere since they have actually made a request to come before the committee. I just wonder what the members feel about that.
MR. WILLIAM LANGILLE: We are booked right into June aren't we?
MS. STEVENS: Yes. Our next meeting is May 18th with the Department of Transportation and Public Works concerning the rural infrastructure and then after that it is the middle of June for Nova Scotia Power to talk about the effects of Hurricane Juan and as well as the members wanted to talk about the wind turbines and the future capacity that they might need because of what happened this winter.
MR. LANGILLE: I would make a motion that we invite them in the Fall but I think they would be a good group to have.
MR. CHAIRMAN: Is the committee fine with that? Okay. These two presenters, the May one, obviously, has been approached, DOT. Has Nova Scotia Power been approached?
MS. STEVENS: Yes, they have been approached and would love to come.
MR. CHAIRMAN: Good, I think that is the fairest thing. Would you handle that, Mora?
MS. STEVENS: I will do that.
MR. CHAIRMAN: Thank you very much. I appreciate getting those out of the way in such a congenial manner.
MR. LANGILLE: I was just going to say the House goes in at 12:00 noon. I know that we have pre-caucus. We are all under a time frame so I will be leaving at 11:00 a.m. (Interruptions) Yes, I know they are late
MS. STEVENS: They did call, and they apologized. They were just stuck. They said they should be here about this time.
MR. CHAIRMAN: Well, I'm not going anywhere. (Interruptions) Mr. Chataway, are you Mr. Dooks' substitution?
MR. JOHN CHATAWAY: That's correct.
MR. CHAIRMAN: Welcome to the committee.
[9:07 a.m. The committee recessed.]
[9:10 a.m. The committee reconvened.]
MR. CHAIRMAN: Welcome to the Resources Committee today. I think I will let the members of the committee introduce themselves, and then you can make your presentation.
[The committee members introduced themselves.]
MR. CHAIRMAN: Martin, are you going to make the presentation? Go right ahead, please, and you could introduce yourself to the committee as well.
MR. MARTIN PORSKAMP: I'm Martin Porskamp, Vice-Chairman, Pork Nova Scotia; to my left is Henry Vissers, General Manager, out of the office in Truro; and to my right is Lloyd Evans, a member of the Pork Nova Scotia Board. Thank you for letting us come before the committee this morning to make our presentation. I think everybody has a copy of it, so I will just go through it. After, we can discuss some points if you have any questions and so on.
Pork Nova Scotia appreciates the opportunity to address the Standing Committee on Resources with concerns and current events of the pork industry. The pork industry in Nova Scotia is valued at over $30 million at the farm gate and over $100 million to the Nova Scotia economy. The industry employs over 1,500 people in mainly rural jobs throughout Nova Scotia. Pork Nova Scotia thanks the committee for the invitation, and we hope that we can work together to sustain a healthy pork industry in Nova Scotia.
Pork Nova Scotia is the marketing agent for hogs in Nova Scotia and is mandated to carry out the purchase and sale of hogs in this province through the Natural Products Act. The mission of Pork Nova Scotia is "To create the most favorable environment possible for
the production and marketing of pork in Nova Scotia and to assist in maximizing returns for Nova Scotia producers." The competitiveness of the pork industry in Nova Scotia and its ability to continue to contribute substantially to economic and social progress in the Province of Nova Scotia are affiliated with the strong commitment, both from within the industry and from government. The increased productivity achieved by the pork industry demonstrates an undeniable commitment to the industry on the part of pork producers of Nova Scotia.
The pork industry is a fundamental component of the rural community. It is a major creator of wealth and jobs in Nova Scotia and can be one of the key platforms of Nova Scotia's agricultural economic growth. The future development of the pork industry is a major interest to a wide range of Nova Scotians as a major contributor to employment and economic development. Pork Nova Scotia in the province produces over $30 million in hog sales at the farm level, and has an economic impact to the province's economy of over $100 million. The pork sector makes an important contribution to the economy in the area of employment. At least 1,500 people in Nova Scotia obtain full-time work because of the $100 million worth of economic activity that the hog industry generates, and the bulk of this is mainly agricultural. Employment is concentrated in rural areas.
One of the most frustrating things that Nova Scotia pork producers face is the fact that we have no control over our price. In 2003, our industry was hit by factors outside of our control that have negatively impacted our price. Currently BSE and U.S./Canada oversupplies of pork have all pushed down the price producers have received. There's a bit of a chart there as to the history of the price, what it has done this year and last year.
[9:15 a.m.]
The BSE crisis reached far beyond the beef sector and threatens the entire red meat industry. The increased beef supply in Canada, resulting from beef not moving into export markets, forced more Canadian pork into the U.S. markets. U.S. analysts say this has put negative pressure on their markets by as much as $10 per hog. Since Canada's hog market is formula priced based on major U.S. markets, that has caused erratic and low Canadian hog prices. Partly because of these extra hogs moving to the U.S., Canada is now facing a countervail and anti-dumping challenge.
Pork retail volume also suffered with the decreased demand for pork because of the beef crisis. Rapid appreciation of the Canadian dollar during 2003 has resulted in material revenue loss amounting to approximately $20 Cdn. per head. A rule of thumb is that every point increase in the Canadian dollar is a 2 cent per kilogram drop in our price. Even though the pork industry in Nova Scotia is local and should not be affected by any of these trade issues, because Canada exports such a large part of the nation's pork production, we are affected. These situations in isolation would not cause as much of a problem for the industry but the triple hit of currency appreciation, oversupply and BSE has meant that we have
suffered through a protracted period of low prices in 2003 and up to the beginning of March 2004.
In December 2003, the Minister of the Nova Scotia Department of Agriculture and Fisheries announced a Hog Loan Support Program managed through Pork Nova Scotia. The program has helped producers to manage their cash flows during a time when prices were $30 to $50 below the cost of production. We believe that without this assistance, the industry would be in a much worse financial condition. As it is, our production has dropped by 15 per cent over the last 24 months. The Hog Loan Support Program, established in 2003 and its predecessor the Farm Loan Board loan, with option B, triggers a repayment once the price is above $145 a hog. All amounts over $145, up to $15 or $160 per carcass, are paid back to the hog loan. This loan is at Farm Loan Board rates of 5.8 per cent.
Since the time this repayment trigger was established, feed prices have increased by more than $10 per hog. This has meant that producers have less money to work with now than they had during the worst of the price crisis. We have requested the Nova Scotia Department of Agriculture and Fisheries and the Farm Loan Board to review the repayment trigger and to change the loan agreement so that the repayment trigger can be adjusted quarterly based on feed costs.
We have some unique problems and strengths in the Nova Scotia pork industry that can only be addressed by a policy that is developed in Nova Scotia. The policies of the federal government are focused on exports. Exports are not the total answer for the Nova Scotia industry. In fact, Nova Scotia pork producers only produce 70 per cent of what Nova Scotians consume. The national drive to export has meant that the Nova Scotia price is set based on the export of hogs which means that any time the Canadian dollar changes or a North American surplus causes the U.S. price of pork to change, we take a loss - even though there is no surplus of pork in Nova Scotia and the province is still a net importer of pork.
Pork Nova Scotia believes that the Province of Nova Scotia should establish a food policy that better reflects the reality in Nova Scotia. For example, the regular retail price for pork in Nova Scotia moves very little in relation to the wholesale and producer price. We believe that the price paid to consumers is a good reflection of the cost of producing the product and getting it to the consumer. The problem is that producers do not always receive a fair share of the retail price. The inequity can be corrected in a number of ways.
In the past we have gone to government during difficult price periods and have received support through programs such as the current Hog Loan Support Program and predecessor programs like enhanced NISA and the Pork Risk Management Program. These types of programs help producers but are mostly short-term solutions that force the industry to come back for support every few years as we move through a four-year hog cycle. The Nova Scotia pork industry requires $10 per hog above the established Nova Scotia price formula for long-term sustainability.
Retail recovery. A different method would be for the industry and government to acknowledge that we have a domestic hog industry in Nova Scotia that needs more than the North American price to survive and that it is a valuable industry for Nova Scotia. The industry needs a mechanism to receive a fair share of the retail dollar.
A number of ideas can flow from this policy, but a simple and effective one would be to say that the Province of Nova Scotia would legislate that so many cents per kilo be collected from the retail price of pork sold in Nova Scotia and that amount be remitted to producers through a pooling arrangement. For example, a typical ham weighing 4.39 kilograms retails for $5.20 per kilogram, or for a total price of $22.82. For this program, producers would require 10 cents per kilogram of this price or 44 cents of the value of this ham.
Eligibility for funds could be limited to the total pork consumption in Nova Scotia. This is not an export program. This program would protect investment made by producers in the province as well as the food-producing capabilities of Nova Scotia.
The future of the industry. In April 2003, a joint committee report on the future of the Nova Scotia hog industry was presented to the Deputy Minister of the Nova Scotia Department of Agriculture and Fisheries, Peter Underwood. The committee was established at the deputy minister's request and was made up of board members of Pork Nova Scotia and the staff of the Nova Scotia Department of Agriculture and Fisheries. The report from the committee made a number of important recommendations. As a condition of the Hog Loan Support Program, we have also been asked to look at longer-term industry strategies. We believe there are a number of issues that can be taken from these past reports.
The industry needs a stable price mechanism. Through some method, producers need a pricing system that ensures a fair return for investment over time. They cannot continue, and lenders will not let them continue, to invest in the Nova Scotia pork industry unless there's a reasonable expectation of a return. The Nova Scotia inventory of barns is aging rapidly and under current conditions, as they are closed, they will simply not be replaced.
Consumers want to purchase Nova Scotia product. We believe that Nova Scotians are supportive of Nova Scotia agriculture and want an agriculture industry to survive here. In addition, local producers care about local consumers; they have the conviction and the desire to deliver the best possible product to them. And it's not just for jobs, although that is important. We believe that the consumer has an understanding of the need for food security and are aware of our unhealthy dependence on the transportation industry to provide us with our food.
Grain transportation costs. We are at a $30 per ton, or a $10 per hog disadvantage on grain freight costs. Nova Scotia pork producers are among the most efficient in Canada, but in a low margin business a $10 hog disadvantage over our Ontario cousins is enormous. This
is the elephant in the corner. Anyone who can address the feed costs disparity in Nova Scotia livestock production would solve many of the sector's problems.
The efficiency of size and co-operative developments. In order to take advantage of efficiencies, the pork industry in Nova Scotia must transition to newer, modern facilities. There are also opportunities for producers to pool resources in order to be more efficient. For example, Pork Nova Scotia studied the possibility of producers co-operating on a sow unit. The intent would be for all sows from this group of producers to be housed in a single larger unit. A group would then distribute the weaner pigs back to the producer's own farm to be raised to market weight. This process would have the advantage of specialized employees on the sow farm and a consistent high-quality pig for the grower and the processing plant. Our study shows that this would work, but again, in order to make the type of investment required, some assurance of market return must exist.
The industry has been developed with the encouragement and support of the province and we need the support to continue. National safety net programs support the industry up to a national historic margin. Pork producers in Nova Scotia are not profitable at this level and need the help of the province to take us to a sustainable level. This has always been the issue and it still is.
The questions that Nova Scotia must answer are: what is the value of the pork industry in terms of both jobs and ability to produce food for its citizens? What role does the pork industry play in the development and maintenance of a sustainable rural economy in the province? What are the social and economic implications of an agriculture economy without pork? Without a viable hog industry is Nova Scotia willing to become dependent on someone else for another part of their future security? With that we present our report and we're open for discussion.
MR. CHAIRMAN: Mr. Parker.
MR. CHARLES PARKER: Good morning, gentlemen. I'm certainly glad that you are here to discuss this important industry. Having grown up on a family farm in Pictou County, I have some idea, a little bit, about how the industry has transformed over the years from a large number of farms to a very smaller number, more concentrated, much more, today, it is a specialized industry. I had a few questions about your report, around marketing. You mentioned the idea here about a recovery program - on the retail recovery program, you get a few cents per pound coming back on the retail cost. How would you monitor that, or how could that be implemented to work if it was allowed to happen?
MR. PORSKAMP: It's an idea that we have been talking about for awhile, and I guess logistically it would be difficult - Henry, if you want to elaborate on that - it was one thing we have been bantering around. That would be one way to get some money from the retail
right back to the producer. Whether that is possible or not, I guess that's a whole different issue for now.
MR. HENRY VISSERS: Pork Nova Scotia was created by legislation by the Province of Nova Scotia, under the Natural Products Act so it would be a matter of the Nova Scotia Legislature making changes to our legislation so that we were able to recover that money from retail. We feel that, just based on some of our preliminary work, if we collected 10 cents per kilo from all the pork that's sold in Nova Scotia, that would amount to enough so that the production that exists in Nova Scotia would receive that the additional $10 per hog that we feel we need to continue operating.
We would still be open to all of the highs and lows that the market creates; it would still mean that the producers would have to be efficient to survive. The federal programs that exist would still work because you still have that change. The new case program has an adjustment based on the difference between a low price and a high price. The previous three years become the reference margin, and if you have a year where the price tanks, then you receive the 70 per cent of the amount from those three years. So that federal program would kick in then and that would take the edge off of the poor years. Over time producers would still have that extra margin they require to reinvest in the industry and to survive.
MR. PARKER: So in reality then, you'd be wanting to get money off both ends of the market then - as you sell your product to the wholesale and you get a certain amount per hog, and then you'd want some off the other end on the retail, on the top and the bottom end of things, more or less.
MR. VISSERS: We've always been told when we speak to retail that the pork prices are inelastic for demand, that consumers will buy a certain amount of pork regardless of whether they move the price up or down a few cents. Over the last 10 years at least the retail sector has maintained a pork price. They've certainly seemed to increase it when the price of pork has gone up, but it hasn't reflected on the downward side when the price goes down. They say if they would reduce that price that they wouldn't be able to bring it back up to the level they need when the pork price recovers, and we acknowledge that that is possibly true.
We also say that there is enough money in the retail dollar to keep everybody happy; we just don't have a mechanism to recover that for the industry. So rather than a simple formula-based market price that reflects a North American price, we need to try to protect our domestic industry by saying that we need to look at the retail dollar as well as what the North American market says.
MR. PARKER: Well, it's a novel idea, and I guess that would have to be legislated in order for it to happen. I don't think that the retailers would be willing give up a share of their dollar - I wouldn't think. I was also going to ask - you'd mentioned 70 per cent of the pork is all that is being grown here in Nova Scotia at the present time - is there any of that 70
per cent that's being exported out of the province and then other coming back in, how does that work?
MR. VISSERS: There is certainly some of that going on. Basically, if you are going to a processing plant, rather than an assembly line, it's a disassembly line. So you're taking the pork carcass down into various cuts; there isn't a market for that whole hog per se. Of course, it's marketed by cuts. I'm not in the processing business, but the little bit of knowledge that I've picked up from it, a processor in Nova Scotia may be exporting things like hams. They may be importing things like loins.
[9:30 a.m.]
MR. PARKER: There's also some backyard producers who grow their own pigs, you know, or their own pork for the season and sell it to their neighbour, a little bit of that going on, but is there much direct marketing to the consumer going on other than that part of it?
MR. VISSERS: We have a number of producers who have established meat shops on their farm simply for that farm and try to work their way through this hog cycle that we've had with us for many years. It's not a significant amount of the pork that's sold in Nova Scotia, but it's certainly significant for those farms.
MR. PARKER: Oh, indeed, I know the beef producers more and more are trying to market locally and get some of that retail dollar direct to their farm and I'm just wondering how the pork industry was handing that?
MR. VISSERS: There is some of that going on. It would be difficult for the industry to make a big move towards something like that because most of the larger chain stores where the majority of the pork is sold have distribution centres that are centralized for the Maritimes and all of the pork going into those centralized facilities have to be federally inspected because the pork is then distributed throughout the Maritime Provinces.
MR. PARKER: A couple of other questions here. In the whole North American market there seems to be an oversupply at times, certainly of pork production. Do you have any influence on that or does the Canadian market have any influence? I know that we're pretty small in the whole American market, but is there any way to control that overproduction?
MR. VISSERS: There is a way to control it, but it's beyond us. We're a small domestic market and whether we're here or not, in the scheme of things, it doesn't make any difference. It certainly matters to us and we hope it matters to Nova Scotia, but as far as the size of our industry, Canada exports 50 per cent of its pork. The whole industry in the past, particularly in the past 10 years, has been driven to export, to bring back those export dollars into Canada. Nova Scotia has maintained an industry of basically the same size over that period of time. If things change in Quebec, or Ontario, or Manitoba, then it probably changes
the supply in North America. A 2 per cent change in the North American supply of pork will improve the price to the point where producers are profitable.
MR. PARKER: But there's no supply management on a continent-wide basis, it's just produce whatever you feel the market can bear or can handle at any particular time?
MR. VISSERS: Yes, there used to be a lot more people, I don't know what they call them, in and outers I guess they call them, in the mid-western States and in the western part of Canada that when grain prices were low, they would start raising pigs to put the grain through the hogs so that they could value add to the grain. Because of the capital intensity of hog production today and because those hogs are raised in different types of facilities, that type of farm doesn't exist as much anymore. So we're seeing the change in the inventory start to shrink because of that, because there are so many people that have such long-term commitments to the industry. Even if those barns go empty, somebody else will pick them up for 50 cents on the dollar and the barn really doesn't go empty. We see less of that all the time.
MR. PARKER: I may have some other questions later on, but I know there are other members who want to ask as well.
MR. CHAIRMAN: Thank you, Mr. Parker. That's pretty nice of you. Ms. Massey.
MS. JOAN MASSEY: Thanks for coming in. Certainly this is a subject that I knew very little about, but I'm always willing to get educated. The questions actually that I had written down to ask you, you've really covered in your report. So I will just try to bypass those and think up some new ones.
When I was going through the documentation that was provided for us, I noticed that the number of hog farms that existed, say back in 1981, there were 763 farms, and the records in my information only show up to 1996, it went down to 217 farms. Are these family-orientated businesses would you say, run by families, sort of a Nova Scotia rural family?
MR. VISSERS: Almost exclusively the pork producers listed under Pork Nova Scotia are family farms. They've gotten larger over the years because they've had to survive. If your margins are thinner and you're only making so much per hog, the economies force you to get larger to do that. That's why the numbers have dropped. If you go back further, you will see that the numbers have really dropped over the past 30 or 40 years.
MS. MASSEY: I also noticed, though, that the number of hogs actually marketed has risen over the same time period. So the time period I was looking at was just 15 years. I thought that was kind of a big drop.
MR. LLOYD EVANS: The numbers that you used, I think you will find, were from Stats Canada.
MS. MASSEY: I'm not sure.
MR. EVANS: The numbers of a hog producer in Stats Canada is anybody who has more than two. To get that number you had, there was an awful lot of two-hog producers, because those numbers back in 1980 would be more like 230 actual producers and not the number that you had.
MS. MASSEY: One of the issues that I see in it is if these numbers are going down and these are family-run businesses, which really help the rural economy in Nova Scotia, which we know is in trouble now and it's a sustainable, I suppose, economy, in a way, that is a problem. The government has talked time and time again, in their green plan specifically, on sustainable industries and rural economies, and they're trying to help those things out. What have they done to help out rural Nova Scotia in this problem or dilemma that you're facing because of all you talked about, the BSE and the pricing and all these things? What have they, specifically, done in the last little while to help?
MR. PORSKAMP: Well, as mentioned in the report, we come back whenever there's a crisis and look for a handout, which is what we're trying to avoid or change. In this last go-around, we have the two loan programs, which help with the cash flow but it doesn't do anything for your balance sheet because you're just adding more debt to your balance sheet. Basically, at that point, the last thing we need is more debt. They helped out as far as our cash position went and we may be over this current low-price cycle for the time being, but we still have to pay back these loans at 5.8 per cent, which is what was mentioned.
MS. MASSEY: So it's really been - it sounds to me - like a crisis-driven . . .
MR. PORSKAMP: That's what it's been in the past.
MS. MASSEY: . . . reaction. So there's been no long-term plan. You've been reliant on loans and this and that coming forward throughout the years, from what I could see in here. I was wondering, there has never really been a long-term plan for hog producers in Nova Scotia?
MR. VISSERS: Probably the Pork Risk Management Program was the closest thing we ever had to a longer-term strategy, and that was about five years from the time it was started until the time it was shut down.
MS. MASSEY: Five years?
MR. VISSERS: It started in 1995, and it would have ended . . .
MS. MASSEY: I wouldn't call that long term. (Interruptions)
MR. VISSERS: I guess it was meant to be a longer-term strategy and it was meant to be supported by producers, processors and the province. That was probably as close as we ever came to anything that was long term.
MS. MASSEY: I know other people have questions. The comment here, consumers want to purchase Nova Scotia product. Years ago there was Atlantic Canada Plus, I believe that's what it was called. I'm not sure if that was a government-funded organization, but you could put a stamp on products that were made in Atlantic Canada. Is this the sort of thing you're looking at perhaps trying to do?
MR. VISSERS: We recognize the difficulty in stamping something Nova Scotian, when you're dealing with not filling the whole market and when you're dealing with organizations that work on a Maritime basis, like the larger chains deal Maritime rather than deal Nova Scotian. If you have a product that's stamped Nova Scotia and you're trying to sell it in P.E.I., there are probably some difficulties around that. We do believe, simply from the times that the industry is in the media, that the citizens of Nova Scotia want this industry to survive, and they would like to be able to identify and buy Nova Scotia pork.
MS. MASSEY: I don't know if this true or not, but a couple of days ago someone mentioned to me that Loblaws and Sobeys are looking at making the people that supply their retail stores with produce tell them exactly where the produce comes from, how it was raised. I think people want to be informed. With genetically engineered foods and we're going to be working with bio-solids in the very near future and people want to know where the food comes from, how it was grown and if it's safe. You talk about safety issues in here so I'm just wondering if you had heard or you can elaborate on that?
MR. EVANS: Atlantic Swine Research which is with the vet college in P.E.I. is the centre for it. They are doing a section of traceability studies with this one sector for across Canada. Their intent is to be able to trace the animal from the farm back to the retailer so if there's a problem it can go back to what farm it is. So that's a study which is being done through Canadian Pork Council for traceability of animals back from the retail store to the producer.
MS. MASSEY: All right, thanks a lot.
MR. CHAIRMAN: Mr. Langille.
MR. LANGILLE: Thanks very much. There are a lot of subjects that we've skirted around during the last few questions and I'll probably follow suit. There's one thing that stands out to me and that's your farm loan - you're paying 5.8 per cent? Have you ever attempted to negotiate that down. We know that prime has dropped and 5.8 per cent at one
time didn't seem high, but it seems a bit excessive now. Have you tried to negotiate a lower interest rate?
MR. PORSKAMP: Well, when the loans came out, it was basically their rate and that was their offer. There wasn't a whole lot of negotiation there. We had wanted to maybe use this money with no interest, just have the money, or at a much reduced interest rate, but that hasn't happened as yet.
MR. LANGILLE: I would suggest that somebody take the initiative and look into that possibility of negotiating a lower interest rate. Now, since the BSE last Spring, the pork producers were in trouble prior to that - is that not correct?
MR. PORSKAMP: That's true.
MR. LANGILLE: You get your feed mostly from Ontario?
MR. PORSKAMP: The corn from Ontario and the barley and wheat, I guess, from further west. And some from P.E.I. too.
MR. LANGILLE: Just for the record, that's the reason it costs $10 more to produce the hog here than in other places?
MR. PORSKAMP: It's all freight, yes.
MR. LANGILLE: I believe when we took the crow rate off, that would increase that of course.
MR. PORSKAMP: Definitely. When the feed freight assistance was taken off in 1995 it jumped our costs proportionately.
MR. LANGILLE: You mentioned the United States is looking at an anti-dumping. I'll give you an example. I had an opportunity to visit Puerto Rico last December and I picked up a newspaper there. They were complaining about the cheap Canadian pork, fresh frozen, being sent down at 98 cents a pound. That would be American dollars. In Puerto Rico they had to subsidize to $1.67 in order to try to compete with the cheap Canadian pork. That's a problem and I actually brought the newspaper clipping back and I gave it to the Minister of Agriculture because I was surprised when I saw that that far south. So when you talk of the anti-dumping, that they might, I can possibly see that.
I just want to get into the retail subsidy that you're looking at putting monies on the end of the retail to subsidize you people. I think it's a great thought, but I don't know if the consumer would go along with it. Also, I look at other producers in Nova Scotia if that happened. If you were subsidizing at the retail level, did you think of that?
MR. VISSERS: We haven't asked them to increase the price 10 cents a kilo. We've simply said that the retail price, that's the price as established now, there's enough room in there for everybody - both the processors and the producers - to be able to sustain themselves. That 10 cents would add 44 cents to the price of that ham. If something like this were to be put in place, the retailers may or may not add that 44 cents to the price of ham. We don't believe that it would be necessary for them to do that.
[9:45 a.m.]
MR. LANGILLE: Okay. As you know the government is bringing out Brand Nova Scotia, which will, in fact, attempt to encourage people to buy Nova Scotian. We will be initiating that in all our institutions, hospitals, and so on. Do you think that will have an impact on pork at all?
MR. VISSERS: We're producing 70 per cent of our needs right now. It would be great if there was a system in place - that there was a buy Nova Scotia first policy. I'm not sure how much help that would be to producers, unless there was buy Nova Scotia at a price that we can sustain ourselves, and that comes down to the problem. When we talk to retailers, they talk about increased tonnage too. There's no incentive for producers to increase their production at all if they're going to continue to produce at a price they can't sustain themselves at.
MR. LANGILLE: And that's understandable. Something else - your large retailers, they had a section of Nova Scotia products, whether if be in the meat section, with pork and beef and products of Nova Scotia, would this be an area that you would possibly look at? If we could convince the large retailers, Sobeys, Loblaws, to have a section of Nova Scotia products only, that would be a test case, I personally believe, of the consumer. If they would be willing to buy our products as compared to the other products from Ontario and Manitoba.
MR. VISSERS: Well, even with the difficult times producers have had, they've always been supportive of promoting Nova Scotia pork, because we believe in the quality of our product. We have somebody who works for us part-time who actually works on those sorts of issues. I believe that Pork Nova Scotia would be very supportive of such an initiative and we would work with you to try to make that happen, because it will certainly help the processors to put Nova Scotia product on the shelves of these stores, and if that happens then it helps us too.
MR. LANGILLE: And I guess where I'm going with this is even if it is a few cents higher than your imported pork - that's where I'm going with the test case, to see if the consumers would actually support Nova Scotia products.
MR. EVANS: But I don't think that would get back to the producer, it would get back to the retailer. That's the problem.
MR. LANGILLE: Well, just in closing - and I have others - I believe that there could be a system put in place where if it's a few cents higher, when they buy the pork from the producers, that's where the monies of the increase would come in, and that would be something that you'd have to look at.
MR. EVANS: Co-op Atlantic has done a very good job with their Atlantic tender beef by its promoting an Atlantic program. They've promoted the Atlantic issue of Atlantic production and have been very successful in their stores with that.
MR. LANGILLE: I just want to go on record and say that I buy as much local pork as I can. There's a place between Tatamagouche and Brule, a local person who sells to a couple of retail stores and I try to buy there. I don't buy all, but I try to buy as much as I can. Okay, thank you.
MR. CHAIRMAN: You're welcome, Mr. Langille. I don't mind you going on record, as long as it's not a broken record. (Laughter) Mr. Glavine.
MR. LEO GLAVINE: Thank you very much for coming in this morning. Certainly, it's a group that I have met, living in Kings West, and there are probably a few others around the table that have as many hog producers in their riding as I do, and also, of course, the one major connected industry and that is Larsens, which is also in the riding. So I have a number of questions, not necessarily in any priority here, and over the course of the next hour I hope to get a few more in, but I don't want to monopolize.
When you talk about the feed for hogs, we know that the price that you are getting for the hog, the market price is certainly controlled outside of Nova Scotia. Is there any way that we can move to control the price of feed by producing more locally? Is that a reasonable option to take a look at?
The other part of that is, I hear that there's a bit of a move towards, perhaps, centralization of the feed, where one of the mills in the Valley will close, and feed is probably going to be coming from a larger source in Moncton. I would just like for you to address that feed issue. I think it is such an important connector to the whole end product, both in terms of quality and, obviously, price is the big factor that keeps coming up as to why the pork producers of Nova Scotia have a difficult time.
MR. EVANS: If you want to go to the feed issues, the return from raising grains is very small. If a farmer has an alternate crop that he can grow, he will grow the alternate crop before he grows grains because the returns are very small. Our climate isn't very conducive to good grain-growing conditions. For the producers growing barley, they would have to have in excess of two tons to the acre to have returns. You can get two and half tons of corn and the other commodities as well. It's a case of economics for the person who's growing it. They
just aren't there for the producer to grow grain for a resale basis. Most of the grain that's grown is in rotation with other crops that are grown.
MR. GLAVINE: I was wondering about the centralization, will that impact positively or negatively?
MR. EVANS: It depends how it works. It's supposed to be an ultra-modern plant that Maple Leaf is putting in Moncton. It's going to cover the entire production that they are doing in the Maritimes. I guess we will have to wait and see if they can supply the local Valley people from 150 miles away as economically as they do now. I don't think you will see any reduction in the feed costs, even though it's supposed to be so much more efficient and all the rest. I think you will see it gobbled up, maybe in transportation. I don't see this as being a dollar advantage to the producer.
MR. GLAVINE: With the very thin margins, of course, that you have in producing pork in Nova Scotia, I know that, for example, Larsens will get contracts to the United States for some of their products. Is that a viable area to look at, in terms of looking at any growth in this industry? I know trying to stabilize it at the moment is awfully important. In the future, is that an area that we could reasonably be looking at, whether it's a specialized product that will come out of the plant that can find niche markets and so on in the United States? Is there any drive towards that particular export area?
MR. VISSERS: I guess we've left that up to the processors, to try to develop those markets. Larsens has certainly done an excellent job trying to move some product into the States. I expect that if you talk to Larsens, they will say that they're having a lot less fun in the States now than they had a year ago, the same as we are, because of the change in the dollar. A lot of those investments in barns in other parts of the country and in some other infrastructure was based on the 63-cent dollar, 65-cent dollar, and they're just not sustainable at 75 cents. There may be some opportunities there for some of the cuts that come from the hog that's not saleable in Nova Scotia.
I guess from an industry point of view, if we have a stable platform on a domestic industry, that's what we're looking for. We're not looking to grow the industry to the point that we're net exporters of pork to other parts of the country or the States. That's not our goal.
MR. GLAVINE: Maybe just one other for now. Probably getting right at what is the hard question that we all need to be looking at, and certainly Ms. Massey referred to it this morning, and that is, it's been an industry in crisis, we're probably looking, for about 10 years, for sure, certainly since the pro rates came off. When we were getting feed pretty well at the same price that a farmer in Saskatchewan was getting, this was an industry, of course, that grew, and we had probably six or seven times as many producers as we have now. I think we're down to about 100 producers, 103 producers in the province.
The stabilization program from 1995 to 1999, I thought, from talking with farmers, certainly gave them some degree of stability in the industry. They didn't have the onus on their back when they went to the barn, as they've had for the past five years, that they may not be here next week, next month. There's certainly no need to encourage my family to stay in this particular industry.
So, I'm just wondering, are you now a strong promoter of Nova Scotia moving back to some form of stabilization, or, as you referred to it, to a pork risk management program, Mr. Vissers, so that then, when we have the crisis, they can borrow from the fund rather than going back to the government again, which has been the cycle for the last five years? When I speak of hog farmers, there's nothing more that they want than to know that there can be some stability for the next 10-year period. When I go on the back roads of Kings County and see the condition of some of the barns, deferred maintenance is a big reality that they are facing. They haven't been able to put anything back into their industry. I would just like to have some further comments on where we need to be, as all government people and MLAs need to be, directing the industry toward.
MR. PORSKAMP: As hog producers, we would like to be able to survive out of the marketplace and not have to have any kind of support from government. We do realize that we in Nova Scotia are probably in the most high-cost region of Canada, or one of the highest-cost regions of Canada, so that's why we're not actively pursuing export markets, because we're not in that kind of a position to do that. We would like to maintain at least enough to supply the local population. If we can't get it out of the marketplace, well then, yes, we are looking for some kind of a stabilization program out there that would maintain at least what we have and be able to make that viable for the producers so they can, as you say, repair barns. They have to be upgraded, there are new technologies out there that have to be incorporated, to remain efficient.
It's been very hard on the family life, too, when you have all these unknowns out there. As you said, you wouldn't encourage your kids to become hog producers, and at the moment I would tend to agree with you because it hasn't been a fun business to be in in the last few years. The lenders are beginning to really require that too. If there isn't anything out there, they're not going to lend you money, and that will put an end to the industry anyway, all by itself.
I believe that we can solve this problem, and we have to solve this problem. It is a substantial industry in the province, and I think it's worth having a good look at. Hopefully, with a good program in place, we can maintain and grow it.
MR. CHAIRMAN: Mr. Gerald Sampson.
MR. GERALD SAMPSON: Welcome, fellows. As I told you before the meeting, I had a little bit of experience, a long time ago, with my wife's uncle on a farm, transporting piglets up to Tatamagouche for sale and things like that, from Cape Breton. Anyway, business is business. If what you're doing is not working, then you have to change what you're doing. If there were no subsidy from the province, as a single business person or whatever business you were in, if you couldn't get a subsidy or a loan or something like that, then you would either be out of business or you would have to change what you were doing. It seems once you become reliant on any government agency, it's almost - I wouldn't say it's a curse - impossible to get away from it.
So what I'm looking at is the sows housed in a single barn, it looks to me to be more of a better business scenario. You would probably have greater production. I equate that to, oh, it's probably eight or 10 years ago in the lobster industry. Clearwater said to all the fishermen, we will give you $5,000 or $10,000 upfront, then we will take all your lobsters, and we'll sell them on the market, as you do on a stock market. When the price in France goes up, we'll sell them. If the price drops, we'll hold them. At the end of the season we'll give you the money, but nobody took advantage of it. It was too risky, they wanted their dollar in their hand every day. I was just wondering, is that the problem with the hog industry, or is there a willingness to put all the production into one massive producing firm, and then the pigs, the weaners go back to them to be raised to market value?
[10:00 a.m.]
MR. VISSERS: A study we did would have looked at between four and six producers going together, investing the money in the sow unit and then renovating their facilities at home so that they'd be able to take those weaner pigs back home and raise them. That way, you would have the efficiencies of that larger sow unit, plus you would be moving those pigs in different areas so that it would create sustainability for the environment, because the land- based farms would have the manure to spread, and we feel that that would work well. We still come back to the same problem. Who's going to invest in something like that if you can't get enough out of the marketplace?
There needs to be some kind of an adjustment in the market price formula that we receive in order for lenders and producers to be willing to make that kind of a major investment, which is why we talk about things like - and you said it yourself, if you have to keep coming back every time, is it something that's sustainable? It isn't. What we need is some help to make sure that the market price is reasonable, that we have a reasonable part of the retail price, so that we can survive. We made the suggestion on how it could be done, it's not the only answer. It is a method of doing it, and as the legislator, you have the ability to make it happen. That's why we brought it up. There would be all kinds of barns built if something like that were put in place. The hand of the market would . . .
MR. GERALD SAMPSON: Do you think you could make - not a good - a great business case for something like that?
MR. VISSERS: I think we could make a great business case for that. As we said briefly in some of what we've reported to you today, the pork industry is part of the rural fabric of Nova Scotia. It's integrated with things like feed sales for other livestock sectors, and suppliers and things like that. I believe we could certainly make a case for that.
MR. GERALD SAMPSON: I go back to when I had a little bit of experience, and even back then it was an industry that was very cost prohibitive to - really, the margins of profit were very small. On the feed end of it, my counterpart, Leo, addressed that reasonably well. What was done way back then, which probably wouldn't be allowed to be done today, was they were fed grain, but as an offset to that, then they were given raw fish which was available from the fish plants. It was very high in protein, and they just seemed to love that and thrive on it. Is that an allowable feed today, or has that gone off for meat feed, or whatever?
MR. EVANS: The processed fish meal would still be allowed as a protein supplement in your ration. Not the raw fish, but the processed fish.
MR.VISSERS: It's been changed to the point that all of that has value. It's a protein, so it has value. There are certain products the Canadian Food Inspection Agency will not allow to be fed to hogs or any other animals. There are certain permits and things like that that you need in order to feed some of that, and that is very limited. We have what we call the Canadian Quality Assurance Program, which means that all farms follow a certain set of criteria for standards we have established for quality as well.
MR. GERALD SAMPSON: Is there any feeling that you are over-regulated?
MR. EVANS: Not as a pork producer, but in the industry we are.
MR. VISSERS: I think the producers would all say that the paper burden has increased dramatically over the last 10 years, and we see it getting worse.
MR. GERALD SAMPSON: I raise that issue, because I listened to a report from farmers on CBC recently, and they said we're not like urban people, we resolve our problems on a daily basis as they arise. We don't call 911 every time something happens. If a machine breaks, we fix it. If something happens in the barn with one of the animals, we take care of it. They are not running to the vet or running to call the garage or 911 every time they turn around. They resolve the problem. They are quite independent. They were saying the regulations were really stifling activity on a farm, by the time you go to clean out a ditch and go through all your permits. So I was just wondering if that was one of yours?
MR. VISSERS: I think as an industry we have to be careful and we have to meet the standards that the provincial and federal governments set for us as far as environmental issues and safety issues for employees and things like that. There's not much choice for the industry to follow those things. If the Province of Nova Scotia dictates that for safety on the farm there needs to be a roll bar on the tractor, there's a good reason for that. You know I don't want my family member to be able to roll over any more than anyone else does. I think we do feel as an industry, producers do feel the increased paper burden.
They feel the increased burden of regulations around manure storage, environmental farm plans, all those sorts of issues, but the main issue that flows from that is always, I don't have a problem doing this sort of thing if I'm paid for my product and then I can put things in place that need to be done. The other thing that happens is that farms get larger because of this because they need the expertise to be able to do those things and they have to be able to pay for them. It's a lot easier to pay for something like that if it's spread over marketings of 5,000 hogs than if it's spread over marketings of 1,000 hogs. If there's a plan that has to be in place or something like that, then usually the cost is the same for either one. So it's either costing you $1 a pig over 5,000 or $5 a pig over 1,000. So that changes the size of a farm again.
MR. GERALD SAMPSON: And just one final question, Mr. Chairman, on that. It's usually the negativity that makes it to the media and the odour from hog farms, is there any research being done into possibly an additive to the feed, or something that could be done that when you hear complaints of hog farms, you hear about the odour from the farm which is a natural occurrence, but is there any research being done on that that would alleviate that for the urbanites coming in and encroaching on the farms?
MR. VISSERS: Continually. If you could make hog manure smell like strawberry jam, you would be a millionaire. We try to be responsible as far as spreading times. There's all kinds of research taking place on covers for storage and things like that. So that mitigates the odour during the times of the year when manure isn't being spread. We try to be good neighbours, tell our neighbours when we're going to spread manure, limit the spreading to a two-week period in the Spring of the year so that it's all done quickly. Those are the types of things that producers are trying to do.
So as far as removing the odour itself, there have been people working on that for years and they haven't got very far on it. What seems to work best is to try to put it in a covered pit, spread it quickly. There are a number of companies around that do the spreading for farms. They can bring two or three trucks in. They do it fast and it's done. It's incorporated in the land quickly. I know Lloyd has a lot of cropland and I believe that's what he attempts to do. There are different manure spreaders that actually put it right in the ground as they're spreading it.
MR. GERALD SAMPSON: I was going to ask you about the injection method.
MR.VISSERS: Yes, the injection method. So those are the sorts of things that we do, but the actual removing the odour, we don't seem to have much success with that.
MR. GERALD SAMPSON: The injection method, is that more costly than the regular spreading? I would imagine it is.
MR. PORSKAMP: And it's much slower. (Interruptions)
MR. EVANS: It takes the larger equipment because you've got those big shoes in the ground.
MR. VISSERS: More horses.
MR. CHAIRMAN: Mr. Colwell.
MR. KEITH COLWELL: Some of the questions I'm going to ask you, you've probably worked and worked on them, I know you have worked and worked on these things, but I just want to ask them again. One of your big costs, of course, as you've already indicated, is your feed cost. Now, when you purchase feed, do you do it as a unit in Nova Scotia, like all the hog producers together saying we're going to buy corn or grain and get a price for the year on it, or do they individually negotiate prices with the supplier?
MR. PORSKAMP: I think for the most part, most producers basically are on their own. A lot of them will contract for half a year at a time. I mean that's what I do personally. So we do know our feed costs for the next, for instance, six months, you know. There are a few co-operative buying groups out there too that will combine two, three or four farms so you have larger volumes that you can possibly get a better price. Personally I think ideally we need all the feed companies to get together in Nova Scotia to buy grain, like a boatload or half a boatload, or whatever it might be, and that's where the problems start to arise. I mean there are a lot of different philosophies out there. You have got a co-operative feed mill and then you've got the Shur-Gain out there. Their whole philosophies aren't quite the same as what their end goals are.
Our livestock industry in the province isn't that large even if you include all the dairy and the feathers and the hogs. I'm sure we could knock a dollar or two out of it if everybody worked together. We still have to haul it in here and that's going to cost us more than the guy in Ontario and further west. That's been our major obstacle, that $10 a hog on a per hog basis, that's basically what it works out to. You may be able to get a dollar or two out of there - maybe. That's just a maybe. We're just at the end of the line and that's basically what it is. We have restrictions in place as to what we can bring into Halifax and so on, by boat for instance. It's a regulatory thing too.
So, it's been an issue that's been talked about for so long. It's the feed thing, that's the main thing. If we could solve the feed thing, we'd be right on par with everybody else and then we wouldn't have to come back again. There's been study after study done on what we can do to reduce the cost of feed here and so far we haven't gotten anywhere with it. Or, in my opinion, we haven't gotten anywhere. We're still always that $30, $40 to $50 a ton for freight costs that it costs to get it out of Ontario or out of the West or whatever. I don't know how to solve that. Like I said, it's been studied to death and it's still being looked at. There's another committee looking at that and we have to meet with them this week. As I said, it's just been going on and on and on.
MR. COLWELL: The way to look at it, I used to run a manufacturing facility and we looked at pennies on particular items to make sure we made money on them and over time you cut the pennies down, I'm sure you do the same thing in your industry. Probably the pennies we were looking at on the product were a little bit tighter than what you're doing and sometimes you had problems, but you had the choice of not producing that product and producing something else you can make money on. You're not in that same situation.
It would only make sense to me even if you could save $2 a ton on this thing, to save it, it gets you closer - instead of being $10 off the mark, you're $8 off the mark and you're getting closer, just a little bit closer. You're all businessmen and you all understand that as well as I do. Even some of the handling costs maybe can be reduced. Is it a factor when you're buying product you just can't cash flow it? So if I came to you and I said I can sell you grain for $20 a ton, but you have to take your whole year's supply now, that would be a major problem, wouldn't it, for cash flow?
MR. PORSKAMP: For sure.
MR. COLWELL: If there was a system set in place to cash flow so that you could do it and get a substantially lower price on the product without paying horrendous interest charges on the loans, that would help make you more productive?
MR. PORSKAMP: Of course, sure.
MR. VISSERS: The problem is that grain prices are fairly volatile too. You may think you got a great price and it can change on you too and that's the reason we have a difficult time having the feed companies group buy. You can put a boatload of grain together and while it's coming across the water the price can change enough that by the time it gets here it's not such a great buy.
MR. COLWELL: Yes, but if you know . . .
MR. VISSERS: You can hedge it.
MR. COLWELL: Yes, if you know what you can live with in cost, even though you might have paid a little bit more than you should have, but again, you might have paid a little bit more now but if you wait you're going to pay a lot more when it averages out. If you know what you can live with in a cost in grain, you're willing to pay that price and say okay, we've got our cost fixed on the grain for this year.
MR. VISSERS: There are people who do that to a degree. There are a number of producers that have their own on-farm mill and they will buy as much as they can store in the Fall of the year from the crop that's coming off in any of the Maritime Provinces. There's barley being grown as an alternate crop for potato land and things like that so there is some of that going on. As you said, it is a penny business.
MR. COLWELL: Yes, if you could sort of look at all those situations - and I know you are, I'm just asking these questions - and really just knock that $10 down to $8 and then get to $7 and then to $6 and really work that way.
What about freight costs? Is there any co-operative or effort going on to get your trucking costs down?
[10:15 a.m.]
MR. VISSERS: That's the whole problem, is the freight cost. Everyone is open to the volatility of the grain market, but our cost of transporting grain in here is $30 to $50 per ton, as Martin said. It's not the cost of the grain, it's the cost of the transportation and we have not been able to solve that. The livestock industry in Nova Scotia has not been able to solve that problem, even though behind you is the 12-month port that could bring all the grain we wanted, we haven't been able to solve that problem.
MR. COLWELL: What are the obstacles here?
MR. VISSERS: I guess probably that's part of what we want to take another stab at because of a number of years ago, we said the obstacles were the regulations and the fact that there had to be a Canadian flag on the vessel that came in, and that it had to be an ocean-going vessel rather than the lakes vessel that came into Nova Scotia and the fact that there needed to be 10 people to unload a boat that could be unloaded by fewer than that, and those sorts of issues.
MR. COLWELL: Stuff that surely needs to be addressed.
MR. VISSERS: Yes.
MR. COLWELL: Just changing the subject a little bit. You talked about a retail sort of subsidy on pork products. What about a small retail outlet system that all the producers could go together and I say all the product, like the beef, pork and the other meat products that come off the thing and set up some specialized meat stores in high volume areas, to help address that situation, and each supplier supply so much product?
MR. VISSERS: Probably be leery of trying to change people's buying patterns and making it more complicated than it would need to be. We're simply looking for a fair share of that retail dollar. We're not looking for the retail to increase the price 10 cents a kilo, we're looking for, over time, a fair share of that dollar, and it's amazing what 10 cents a kilo would do. Ten cents a kilo on all the pork that's consumed in Nova Scotia, would return $10 a hog to the pork producers, for every hog they produce in a year. Nobody would notice it but the producer.
MR. COLWELL: I agree with that but sometimes these big retailers, if you were going to come up as a retail outlet system, it really would work, which is possible to do, sometimes these big producers or purchasers might say, okay, we don't want the fear of that happening and take away a big chunk of our meat market, which a lot of people go in their grocery stores and buy, maybe we will give you a higher price for your product at the farm gate. That could be a good negotiating tool if you did it right.
I know the industry is so important to Nova Scotia, especially in rural Nova Scotia, it's critical that we keep family farms going, as far as I'm concerned, but you have to make money. If you don't make money, you're better off to do something else, but hopefully you can get the system worked around so you can make money on the farm and keep the farms there and make them grow, so that they can help. It's important as a Nova Scotian to have a sustainable, safe food supply, here in Nova Scotia, as well as have an industry like you produce. Look at your numbers, $30 million a year and $100 million spinoff, I mean that's a tremendous boost to the Nova Scotia economy.
I have some problems with the retail subsidy you're talking about. Not from the standpoint of a consumer, because I wouldn't mind paying 10 cents, it doesn't really matter, because it's up and down anyway in the grocery stores that much or more. The only thing I'd be worried about is it probably would have the Americans, and they're the worst at this, of course, they would then all of a sudden say, okay, you're charging this, this is a duty and now we want to put more tariffs on products going into the U.S. and all this sort of stuff, so you might be hit with that, even though it's at the retail level, but that retail level would be on even products that they bring in from the U.S., specialized products, that come in or from other places, they would say it was a subsidy and guaranteed you'd be in a mess within a month of that happening.
That's, unfortunately, the sad fact of what happens with these things, and there's such a big market they seem to push us around a lot, as they have done on the lumber issue, which is, just as far as I'm concerned, a crock, just so they can protect their own industry. That's an issue I happen to be very, very nervous about. Have you addressed that, or considered that?
MR. VISSERS: We haven't talked to legal counsel about what would happen in something like this. Nobody has ever gotten into trouble with countervail or anti-dumping or anything else for domestic industry policy. Even the countervail that's taking place now, can't say too much about it because it's just getting underway, but Quebec is an exporter of pork and they're not an exporter of live pigs. So they're not involved in this countervail because of that. If we're creating a mechanism for producers to get a fair return for their product as an internal Nova Scotia program, then I wouldn't think that we would get in too much trouble with any of Canada's trading partners.
MR. COLWELL: What I would suggest is that you get hold of the Department of External Affairs and let them give you an assessment on that answer rather than legal advice because legal advice is maybe okay and maybe not, but External Affairs would probably give you a better feeling of what they think would happen if you proposed that and probably if you did go and talk to them and they said, look, we don't feel this is a problem, then you've got a stronger case to come back to us, as legislators, or back to the retail operations and say this will not be a problem in the pork industry. I think that's an important question you want to have answered before you push this too far and not that I'm not saying it's a good idea, but you don't want to get caught sort of with your pants down as you start it. I will wrap it up with that. Lots of luck with it and thank you for coming today.
MR. CHAIRMAN: Mr. Hines.
MR. GARY HINES: Yes, I guess what I want to know is a little bit more about your organization. Are you fellows all volunteers in the areas that you do regarding your industry?
MR. VISSERS: I'm staff, I'm the Executive Manager of Pork Nova Scotia. Martin is Vice-president of Pork Nova Scotia and a producer. Lloyd Evans is the Director of Pork Nova Scotia and a pork producer.
MR. HINES: Okay, I wanted to go to the greater area. Are you affiliated with the Canadian organization?
MR. VISSERS: Yes, we are. We have a representative of our board that sits on the board of the Canadian Pork Council.
MR. HINES: And what are your common concerns that you have across the board when you meet as a national? Are they pretty much the import/export problems you run into?
MR.VISSERS: The Canadian Pork Council stays away from marketing issues for the most part, that's considered a provincial responsibility, but they are the lead as far as this countervail and anti-dumping challenge goes. So that's certainly taking a big part of the time of CPC at the present time.
MR. HINES: I guess the reason I ask that question is because when you have a national entity, you have common concerns that you deal with, but it's kind of like you're dealing with the devil because you're also in competition with them and that's why I asked that question.
MR. VISSERS: Yes.
MR. HINES: Now, I want to go to the local level. In terms of support from your industry, there are always movers and shakers and there are always people who give 110 per cent of their time and the others come aboard during a period of crisis. Do they share your frustration on a regular basis and if you ask those who are in the industry to come forward in good times and maintain the good times, or do they just respond, and I ask this because I've been involved in organizations where that was totally true. You guys work your hearts out and then when there's a crisis, yes, they will load up their truck and throw a few hogs in and they will do that. So you find that you get pretty good participation from your members?
MR. VISSERS: We have very good support from our membership. I think probably if you talk to other people in the agricultural sector, the pork producers in Nova Scotia are one of the more united organizations that there are in the province. We've been in existence in some form since 1952 and the group is very supportive. We try to work through issues both in good times and bad. Obviously, when the price tanks, a lot of our focus shifts to that thing, but we're certainly involved in and consult with the group on any number of issues, including quality assurance and the traceability programs, and now with this countervail, and there's always lots of issues to talk about and lots of support from our producers.
MR. HINES: And that's good to know that you don't get blamed for the bad times because lots of times that's what happens, the guy at the top who works his heart out gets blamed for the bad times.
I want to go back to this question of a sow unit. I think it's a good idea and I understand your frustration with getting financers and so on to accept a move forward to a new idea, not having stabilization. But just in your own opinion, do you feel that the devil you don't know may be not as bad as the devil that you do know, and that may be the risk you're taking by continuing to exist the way you're doing as opposed to taking that greater step? What I'm hearing is that a lot of the infrastructure has run down and so on and I guess decisions have to be made whether we're going to build complete units or whether we're going to build units that can take the weaners and that kind of thing. Is there a case to be made
with your financial people that would indicate that the devil you don't know and that you want to move forward to may be resolving more than one problem?
MR. VISSERS: We commissioned the study on the sow unit. Pork Nova Scotia's a marketing board, we're not an organization that would go out and try to borrow a bunch of money to put this type of a unit up. We stay out of that. That's the producers' thing to do. We put the case in front of the producers, we say this is what the cost would be, this is what it would take to build this unit. It's then up to producers to pencil it out and say whether or not they're interested in doing that. We haven't had much interest because under the current climate the dollars just aren't there. So it's simply a business case that they've said unless there's a stable platform under this industry, we can't take the risk of making that kind of an investment.
MR. HINES: I understand that. Thank you.
MR. CHAIRMAN: Well, I'd like to ask a few questions. I'm really interested in your legislation. I think it's a very good idea. It's not the road I would have gone down. I'm a big supporter of supply management and under NAFTA or WTO that's out for those commodities that didn't have it, that weren't grandfathered in. But, you can't have a marketing board, which you are, and the only thing you don't have is any leverage to get the price you want. So, the road I would go down is legislation to buy local, to force processors and retailers to buy local product here. To me, that would allow you to sit at the Natural Product Marketing Council, make a case for the price you need based on your cost of production, which would include your 10 cents. The industry would do that there at that point and there'd be no investigation into a way to get that price sent back, some way to be collected by Pork Nova Scotia or the producers. So you would take care of that rate at that processing level and the processors would pass that on to the retail, the same as milk or chicken. That to me seems simpler.
I guess as a politician, or a legislator, I also have the concern around the other commodities. There's a number of marketing boards, a number of commodities have marketing boards and there are some that do not, but you're in the unique position that you've already got the infrastructure in place as far as the marketing board and the ability to sit down under the Act to negotiate price. But, you have no way to actually make anybody agree to pay it. So, what I'm looking at would be legislation that would give you that lever - does that make any sense to you?
MR. VISSERS: Sounds great. Go for it.
MR. CHAIRMAN: Well, so far, I intend to, and I have looked, but the first argument that came up was that this wasn't possible was inter-provincial agreements within the country, with other provinces. I've looked at them, I don't see a stumbling block there. As far as restrictions under NAFTA or WTO, the federation is meeting tomorrow, Thursday and Friday
and international trade is one of the topics, so I've asked for them to ask this question to see whether internationally there's a problem.
A few years ago I contacted the chief negotiator's office for the next round of talks and I asked them if we were to set up a system here which actually gave domestic producers preferential price in this market, but didn't apply to pork coming into the market. In other words, pork coming into this market would get the world price, but they wouldn't be disadvantaged. In other words, whatever the world price was, they'd be getting that whether we had something set up or not. I said, would this be seen as something you could countervail? They said, we don't know. They couldn't tell me.
It would seem to me that in a domestic market - and I'm curious about the 70 per cent because this document, we were given a kind of addendum yesterday, over one-third of production were exported in 1995 to more than 55 countries. I'm curious about the production of the province. In other words, if we took all of the production of the province and included anything that might be exported, would that be 70 per cent of the consumption here, or is it 70 per cent plus that exported amount, which would make a greater impact on the domestic market? Can you answer that question?
[10:30 a.m.]
MR. VISSERS: Huh? (Laughter) The province and we don't collect any real good statistics on consumption. The only way that we can go at consumption is how many pounds or kilograms of pork the average Canadian consumer consumes, and how much pork we produce. We put the two numbers together, and that's where we come up with the consumption.
Now, if you're looking at what's produced here and what's exported, it could be completely different numbers because, for instance, Larsens Packers brings about 2,000 hogs a week in from southern New Brunswick, which they put through their plant. Do those hogs become Nova Scotia hogs when they leave that plant? They may well.
MR. CHAIRMAN: My reason for thinking about this legislation - it initially started out with beef producers, because it seemed to me, I know this present crisis, if they could get their price, they really shouldn't be affected by the BSE problem at all . . .
MR. VISSERS: The same situation as us.
MR. CHAIRMAN: We're importers of beef.
MR. VISSERS: It's the same, situationally, I believe, 30 per cent for beef.
MR. CHAIRMAN: Yes, and they don't have the marketing board structure. You're way ahead of the game in this regard. I'm curious about the check-off needed to sustain the marketing board. In other words, it would seem to me that if producers go out of production, the number of hogs in the province goes down, but your marketing board is supported through a check-off on the hogs that are produced. Do you know what the critical mass is, the point below which, if you go, if the hog production decreases to a point where you can't sustain your marketing board? Do you know what that number is?
MR. VISSERS: We've held our per-hog levy this year, as it was, and the marketing board had some reserves to actually meet the operating requirements of the board. Currently our main check-off, our universal check-off is at $1.15. In order to have a balanced budget, it should be somewhere around $1.35, I would hazard a guess. At what point does it get too high that the producers can't sustain it? On a per kg basis, it's still not a lot of money for who we are and what we do. I would expect that we can probably go at least to that before that would happen. If you're getting down to the point where there's - for instance, if we get down to 150,000 hogs marketed a year, can the industry sustain itself, much less the marketing board?
MR. CHAIRMAN: I have one more, and then I will relinquish. I'm wondering - Larsens is the biggest processor of hogs, but O.H. Armstrong . . .
MR. VISSERS: There's Larsens, which is the Mapleleaf Plant; there's O.H. Armstrong's, and there's Tony's Meats or Antigonish Abattoir, whichever you call it, in Antigonish, and then's there a quite a bit smaller one, Bowlby's Meats, and then there's a lot of smaller ones than that that are farm-based and other things.
MR. CHAIRMAN: Of all of those, which would be the ones that would be accessing the retail side, in other words that would be Sobeys and Superstore . . .
MR. VISSERS: Larsens is federally inspected, so obviously they're in the chains. Tony's is federally inspected, so he is as well. He's done quite a bit of work on value-added products, sausages and pates and things like that. O.H. Armstrong is provincially inspected and their focus is more institutional than retail, the different senior citizens' complexes, those sorts of things that are operated in Nova Scotia.
MR. CHAIRMAN: Do we have - and I apologize to the committee because I said I would be quiet - the processing capacity in the province to process 100 per cent of our consumption?
MR. VISSERS: Yes.
MR. CHAIRMAN: Good, that's what I needed to know.
We're getting into the second round, so Ms. Massey is number one on the list, Mr. Glavine is number two. If there are any other members - Mr. Parker.
MS. MASSEY: I'll try to be really quick. Just when I was going through this binder again, I was looking through some old newspaper clippings. There have been concerns with various communities - and this is in my capacity as Environment Critic, this is of interest - community concerns revolving around health concerns, manure management, waste consumption and odour control, specifically in this documentation here, with a farm going from producing around 3,000 hogs to 9,000 hogs. So when you talk about going to a larger sow unit, I'm just wondering if those are concerns that you would face or you would know how to face?
What I'm getting at here is that bigger isn't always better, I don't think. I think that's what I'm hearing you folks saying, that's something that you seem to be forced into doing. You would prefer to stay as family-operated production facilities, which would keep the economy going. It doesn't seem that the government is really focused on the rural economy or sustaining those economies that are really there. They're forcing you, therefore, into something which is bigger and maybe not as beneficial to the environment. I know there are concerns about farms that are getting so large that they are having an impact on the environment.
MR. VISSERS: Probably part of the reason we wanted to do that is and there are a couple of reasons but one of them is obviously to reduce the cost of that weaner pig and to provide a healthy, genetically-superior pig for the producer to raise on his home farm. A larger sow unit doesn't have a very big footprint on the environment, because as far as animal units go, it's fairly small compared to even some of the existing units. Instead of trying to make something that's a lot larger and concentrated, it's a way of doing the opposite. The sow unit is in one spot, and the feeder units, which is where the majority of the manure is produced, are still spread amongst the different - no pun intended - communities in smaller units that are sustainable because there's a land base there to spread the manure, and that is a family farm.
MS. MASSEY: My very last comment is, I found this very mind-boggling when I was reading through this information about a family in Waterville and how it's costing them $145 to raise one hog; they get $100 and they're losing $45. Who would stay in a business . . .
MR. VISSERS: Great business.
MS. MASSEY: You have to be committed to it. Then, when you look at - you're saying in this documentation, in this report here that consumers pay $406 per hog at the grocery store. So the markup is 300 per cent. I don't know if consumers . . .
MR. VISSERS: And we only want 10 cents.
MS. MASSEY: I don't know if we, as consumers, really know that we're paying these huge markups. I know when you go to the grocery store, it gets more and more expensive every day, and I don't know if it's something, price controls or whatever. There's just been information out that the health basket that people are supposed to live off is costing us over $500, and a lot of families, especially those on social assistance, can't afford those things. I think it's an issue relating to not just your issue, but it's far-reaching, it's environmental, it's family, it's health, it's a lot of issues wrapped up in one. I thank you for coming in and sharing that with us today.
MR. VISSERS: I guess that's one of the main points that we were trying to make when we talked about trying to recover some of that retail share, that the farmers' share is fairly insignificant compared to the different partners through the process, adding what they need to recover from their costs, as it goes to retail. Unfortunately, I think probably the retail price is fairly accurate. I expect that probably if the producers had their fair share of that dollar, the processor has things they have to do, there's a lot of transportation on it, coming and going, and at the end of the day, we believe that the consumer is getting a high-quality, healthy product. The problem that we have is that we're not sustainable, and we're not going to be able to be here to produce that product unless we get a fair share of that $400.
MR. CHAIRMAN: Mr. Glavine.
MR. GLAVINE: Two questions. Outside of this economic challenge - and that is huge, of course, for the hog industry, as we keep hearing - I almost hate to bring up the "d" word, diseases, but we've been dealing with that across the country, of course, for the past year. Currently, in terms of the hog industry, what are some of the challenges there, in terms of diseases, what happens inside the barn and so forth, just for the enlightenment of all of us here?
MR. VISSERS: Fortunately, our industry is concentrated fairly significantly in the Valley and in the Concession area, but compared to some other regions of the country, we don't have barn after barn going down a road, so we're not facing as much of those issues that we've seen in other parts of the country, as far as air transmission of disease and things like that. Most farms have a bio-security system in place where they don't allow people in the barn unless they meet certain criteria. Some farms actually have showers that you have to go through before you can actually get in the barn, others simply don't allow people in, others say that if you're not on another farm for 48 hours, then you can have access. Those sorts of things.
One of the bigger issues that we're facing as a risk for Canada is foreign animal disease. I don't know if you've heard of the issues surrounding that, but a couple of years ago there was a foot-and-mouth disease outbreak in Europe and that certainly rang the bell for everybody as far as being worried about those sorts of things. As it stands now, if there was an outbreak of foot-and-mouth disease in Newfoundland, or in B.C., or anywhere else, all
exports of pork and beef to most foreign countries would stop, because they are free of that disease, what we call a foreign animal disease.
If we were able to zone the country, for instance, if we were able to split the country in half, or zone the country at the border in Nova Scotia, we would have to be able to verify all the movement of livestock back 30 days, so then we need a traceability system, so then we have to identify all movement of animals. If there's an outbreak anywhere in Canada, everything gets shut down. If it's not in our zone, then we verify movement of all hogs and other livestock and trace that back, and within 30 to 60 days we're back in business, as far as movement of livestock. That region is stopped.
So, there are some real issues surrounding that. There are some real risks in not having a zoning process and that's part of what Lloyd talked about, the traceability project that Atlantic Swine Research Partnership is working on, and the Canadian Pork Council is spending a lot of time on that as well. Those are the national issues, the local issues in the barn. I've said that we have some bio-security measures in place, we're really careful about letting people into these barns and trying to maintain the health of these animals.
MR. GLAVINE: Thank you, very much. Certainly, another side to a very fragile industry, in some ways...
MR. VISSERS: Yes.
MR. GLAVINE: I'd just like to make a comment and then one last question. Ms. Massey referred to the family in Waterville and they were a family that during the height of the crisis I did go out to visit. A young farmer and his wife and six children, and they are probably that face of the future as well. And they very much want to be a pork producer in Nova Scotia, and the challenges they face are unbelievably enormous. I would just like for you to kind of crystalize and leave with us, maybe one or two things that as legislators, that we really need to focus on to help that family and the other 100 producers in the province, to look at a viable future. I certainly applaud government for coming in with the loan here, but that's not the answer, as you know.
The people that I talk to have a debt load that is incredible, I mean it's one that most of us would not want, to be going out to the barn and having to shoulder each day. But when we look at the quality of the product here, we rival any province in the country, and I don't think I'm out of line in saying that, and I'm sure you'll support that. Certainly, I think, when we look at the 100 farmers that are left, their efficiencies, again, are something to behold in the industry.
So, I'd just like one or two things, that over the next while we, as legislators, can help you in devising a long-range plan, so that these people can stay in the industry, and we can have the 1,500 people employed, and these family operations can move forward.
[10:45 a.m.]
MR. VISSERS: I guess the recurring theme that we hear from producers is that there needs to be some kind of a stable platform under this industry. That they don't need guarantees, but they do need some kind of a belief that in going forward there is a system in place that will make their operations viable, so they can reinvest in the industry. As Martin has mentioned, there are efficiencies that can be generated from modernizing these barns. We can reduce some of those costs, even the feed cost that we talked about, by putting hogs in these new facilities so that they are converting feed better.
In order for producers to make that investment, in order for that young family to be willing to move forward, they need to be able to go to a lender and provide them with a cash flow projection that shows that over time they are going to pay their bills back and be able to feed their family. That's all any of these producers want. It's difficult to continually come back to government every four years to try to develop a new program, or a new mechanism to help us get over another crisis. It's a real tough way to run a business. People start to drag their feet when they go to the barn, when they don't really know whether or not they are going to have enough money to pay for that next load of feed next week when it arrives.
Whether it is something like we suggested that tags the retail price, whether it is a program that identifies what producers need in a floating fund that rises and falls with the market price, a ledger type account or something like that is what we have talked about in the past, they simply need some kind of an assurance that they are going to be able to survive until the next time.
MR. PARKER: I just had a couple quick questions. Most of the hog production is in Kings County, in Nova Scotia, I do believe, in Mr. Glavine's riding perhaps. Where else in the province are the producers? A little over 100 at this time is it?
MR. VISSERS: A little less than 100 producers. Concession has a number of producers. The Annapolis Valley is where Lloyd is from, and there's a few producers down there. Martin would be in the middle of it there, in Kings County, Canning area. There's a few producers up in the Antigonish side and there's a few around Truro as well.
MR. PARKER: South Shore? Is there some down there?
MR. VISSERS: South Shore, there was an industry there, but no longer.
MR. PARKER: I've been reading about the index, the 110.5 or the 109 index, can you explain that?
MR. VISSERS: When we sell hogs, they are sold on a matrix that we have negotiated with the plants, if they hit a certain weight target, and they are a certain lean yield, then they get an amount over base price. Unfortunately I don't have one with me, but right now if the hog carcass is 87 kilograms, and it's in our leanest lean class yield, yield class one, then it will get 114 index, or 114 per cent. We set a base price for the week, for instance, of say, $1.58 that hog would get $1.58 times 114 per cent. It's an incentive to grow that hog into that weight and to breed it for that lean yield.
MR. PARKER: Does the amount of fat or the lack there of that's . . .
MR. PORSKAMP: The loin eye too, how big the loin eye is, also plays a factor. It's basically, the carcass confirmation and weight.
MR. EVANS: Each carcass is measured on . . .
MR. PORSKAMP: Individually and in the plant.
MR. PARKER: One final question was raised there about how tough it is for some producers, and especially young families that have a large debt. Is there any type of self help group within Pork Nova Scotia, or is there some type of referral system when a farmer's really in trouble and the family needs help?
MR. EVANS: There is a crisis system in Nova Scotia for producers that do have either financial or personal problems within their operation that they can go to?
MR. PARKER: Is that for all farmers, or just pork?
MR. PORSKAMP: All farmers.
MR. PARKER: And it's helping or is it working?
MR. EVANS: We have about 20 people a year that make a request for the services.
MR. VISSERS: Not just from pork.
MR. EVANS: No, that's from the industry.
MR. PARKER: From the whole industry, the agriculture industry.
MR. EVANS: But over the last several years the largest number has been from pork.
MR. PARKER: A stressful industry, no question.
MR. EVANS: Yes.
MR. CHAIRMAN: Mr. Sampson.
MR. GERALD SAMPSON: My question is probably on more of a national level but, like I said, it's business and the bottom line becomes the top priority regardless and what I was wondering was, is there any innovation in the marketing strategy of pork, and I'm referring to - well, for years we saw Captain Highliner on the ads and now we see that they've taken pollock, which was a very low grade of fish, dyed it to make it look like crab, and everybody is buying it in the grocery store now and serving crab sandwiches and everybody just thinks it's the best thing since sliced bread.
What I'm wondering is, is there any innovation on the national level to market pork, to make it more appealing, or various products or a combination of - we have ducks and turkeys combined on the market now, or something, but I'm just wondering is there any innovation to (Interruptions) If there's more demand, there's going to be more money and, like I said, the bottom line is the top priority.
MR. VISSERS: It has been difficult to get that chicken nugget type of a product for pork. We seem to be on the dinner table more than we are in the restaurants and that is an issue for the industry, but it's one that neither the processors nor the producer groups have been able to - I would expect that if somebody was going to do it, it would be more likely that a processor would come up with a more innovative product. There certainly is more bacon on the hamburgers now which they say has helped sales. If you read some of the analyst reports from the States and things, they say the Atkins Diet has really sustained us over the last period of time. There's as much production on the market now as there was in 1998-99 when our price really tanked. The difference is that the consumption is higher and the Atkins Diet, the South Beach Diet, things like that, have probably helped us quite a bit.
MR. GERALD SAMPSON: But I get the direct feeling that you have been and you still are in a survival mode and you can't afford to jump up at any of these high-end things, or to take a risk, or take a chance, or try something innovative, or do anything with the main hog barn because you're struggling to stay where you are?
MR. VISSERS: Yes.
MR. GERALD SAMPSON: And that seems to be the number one priority?
MR. VISSERS: As a marketing board, our role isn't product development and, as a marketing board, our role isn't to build a barn, it's to help to try to facilitate the process, to put it in front of producers and say this is a possibility, what do you think? But there still needs to be that return from the market before anybody is willing to lay their wallet down.
MR. CHAIRMAN: Mr. Colwell.
MR. COLWELL: I just have a quick question. Has the Department of Agriculture and Fisheries really been helping, and I realize they help with loans which the whole industry I know appreciates very much, but is there any movement within the department, from your standpoint, to help make any programs that they're running more efficient, to help make the individual farm more efficient, so they can become more efficient and ultimately help their bottom line?
MR. EVANS: Since the demise of the Department of Agriculture four and a half years ago, there has been no direct commodity assistance from the department, so the answer is no.
MR. COLWELL: Can you say commodity commitment?
MR. EVANS: Well, prior to the demise of Industry, there was a dairy specialist, a pork specialist, a poultry specialist. Those people are all gone now so there's no direct support for any of those commodities to assist in that way.
MR. COLWELL: How much of a negative impact has that had on the industry?
MR. EVANS: Considerable amounts and some commodities a lot more than others, but it has definitely had a lot more effect on the smaller producers than the larger producers who can go out and hire a specialist. It hasn't affected them as much, but the smaller producers, it really has affected them because they really relied on their services a lot.
MR. COLWELL: What about overall programs in the department to improve efficiency, is there a program, say, to help the pork producers become more efficient so we can cut 50 cents off the loss of the $10, or $1 off that; are there any programs like that in place to help?
MR. EVANS: There are just general programs for the whole industry. There's nothing that's specific to the hog industry. The Farm Investment Fund is basically the only program that would be for an enhancement or development of some sort of initiative.
MR. VISSERS: A lot of those programs are targeted to attract federal dollars. There's a lot less interest in 100 per cent Nova Scotia dollars into any programs. If it's not something that's part of the federal Agriculture Policy Framework, then the Department of Agriculture and Fisheries has little interest in doing it.
MR. COLWELL: That's unfortunate because with a $30 million a year industry, if you could bump that up to $32 million or $35 million a year, the province wouldn't be long getting their money back. And then some.
MR. PORSKAMP: But most of those programs have all gone by the wayside and the ones that are left there, of course you have to spend your 80 or 90 per cent in order to get your 10 per cent, which is maxed out at $10,000 or whatever the program might be. You, personally, as a producer still have to spend the bulk of the money - which I have no problem with, but you have to have that money. It gets back to the same thing all the time. You're kind of in a Catch-22. To become more efficient you have to spend money but you can't spend it because you haven't got it.
It's becoming a real issue with older buildings, as was mentioned before, and at some point the age of the average producer is getting up there all the time and once these people retire or leave the industry, that's it, that particular farm is finished. That's a shame and it's happening all the time. There's a neighbour down the road from our place who's calling it quits, and he said, I don't need this anymore, why am I doing it? So they're in the process now of unloading their stock and once they're done, that farm is not going back into hog production. It will be finished and that's another one gone. It just gets down to, over time we haven't been getting enough for our product and it's a real dilemma.
MR. CHAIRMAN: Thank you, Mr. Colwell. Before I round up I want to know, has AgraPoint been of any advantage to you?
MR. EVANS: Can you say that without being (Laughter)
MR. PORSKAMP: No.
MR. CHAIRMAN: No. Well, I want to say on behalf of the committee, thank you very much. I really appreciate your input and your willingness to come see us. I would certainly hope that all members of the committee will try to take an opportunity to speak to the minister about you being here and some of the concerns that you raised.
I just looked at a letter to Mr. Speller prior to him becoming Minister of Agriculture - this was in December 2001 - around the shipping of grain here in regard to the poultry producers. The response that we got was that they would see it was forwarded to Minister Vanclief for his serious consideration. I guess maybe since Mr. Speller is in the driver's seat, that may be something we could revisit.
MR. EVANS: I think the best thing the federal government can do is stay away from anything to do with grain transportation in Atlantic Canada.(Laughter)
MR. CHAIRMAN: Thank you. We are adjourned.
[The committee adjourned at 10:59 a.m.]