Legislative Assembly of Ontario

AGRICULTURE FUNDING

ONTARIO CORN PRODUCERS' ASSOCIATION

ONTARIO FEDERATION OF AGRICULTURE

CATHOLIC RURAL LIFE CONFERENCE

CONTENTS

Wednesday 2 October 1991

Agriculture funding

Ontario Corn Producers' Association

Ontario Federation of Agriculture

Catholic Rural Life Conference

Adjournment

STANDING COMMITTEE ON RESOURCES DEVELOPMENT

Chair: Kormos, Peter (Welland-Thorold NDP)

Vice-Chair: Waters, Daniel (Muskoka-Georgian Bay NDP)

Arnott, Ted (Wellington PC)

Cleary, John C. (Cornwall L)

Dadamo, George (Windsor-Sandwich NDP)

Huget, Bob (Sarnia NDP)

Jordan, Leo (Lanark-Renfrew PC)

Klopp, Paul (Huron NDP)

Murdock, Sharon (Sudbury NDP)

Offer, Steven (Mississauga North L)

Ramsay, David (Timiskaming L)

Wood, Len (Cochrane North NDP)

Substitutions:

Fawcett, Joan M. (Northumberland L) for Mr Offer

Hayes, Pat (Essex-Kent NDP) for Ms S. Murdock

Clerk pro tem: Manikel, Tannis

The committee met at 1540 in committee room 1.

AGRICULTURE FUNDING

Resuming consideration of the designated matter, pursuant to standing order 123, related to the state of emergency and income crunch in Ontario agriculture.

The Chair: We are going to commence hearing from people this afternoon.

I want to make reference at the onset to the subject matter of this section 123 process. That is the motion brought by Mr Cleary, which stated in part, "That in consideration of the state of emergency and the income crunch in Ontario agriculture, especially in the oil and grain seed sector, caused in part by the 35% drop in cash crop commodity prices, the Liberal members of the standing committee on resources development request an emergency debate and hearings." This hearing process is what we are engaged in now.

I want to thank people for coming and for their patience in getting this started. Members were delayed in the Legislature.

I also want to note once again for the next consecutive time, knowing that people from the whip's office, among others, astutely follow the transcripts of these proceedings -- I suspect for a variety of reasons, one of them being to see what kind of comments I am going to make about the government position on any number of issues --

Mr Villeneuve: Are they still watching you, Peter?

The Chair: They watch closely, but God bless them for paying attention. If they are paying attention, they will note that I have remarked every time we have met during this 123 process that it is abominable the produce which is being provided for refreshments. I am speaking of coffee, tea and milk and juices that are here at the side table. People should feel at home in terms of having a coffee or a juice. I have a whole lot of juice fruit farmers down in the Niagara Peninsula, as there are in the other parts of the province and the country, but we do not have any orange groves. If Queen's Park cannot, by example, make a point of serving Ontario produce, and quite frankly Ontario produce only, at its functions, including its committee meetings, then we are not setting a very good example.

Notwithstanding that I have said that emphatically when people from the Ministry of Agriculture and Food have been here, perhaps now the whip's office will exercise its powers to ensure that the refreshments served at committees and everywhere else in this building are made in Ontario, grown in Ontario, processed in Ontario. It is that difficulty in getting people to buy Ontario produce that is also, in some small part, responsible for the dilemma that farmers in this province face.

Mr Hayes: On a point of information for the Chairman's benefit, I agree with him 100% about the Ontario produce and juice and what have you, but if he will notice, we have just Ontario products over here right now, except for the coffee of course.

The Chair: I took the orange juice so that I would have evidence.

Mr Hayes: You took that? Why, you pulled a quickie on me.

The Chair: I was not going to be caught on this one, Mr Hayes. I would also like some assurance that the apple juice is made from Ontario apples. I am very serious about that.

ONTARIO CORN PRODUCERS' ASSOCIATION

The Chair: The first group to be speaking with us is the Ontario Corn Producers' Association. Gentlemen, thank you very much for coming this afternoon. You have 30 minutes. My comments will not in any way interfere with the 30-minute time period allotted to you folks. Please talk to us. Make sure, please, that you leave perhaps 15 minutes minimum for conversation and questions and dialogue with members of the committee and let us know who you are as you begin your presentation.

Mr Anthony: I am Frank Anthony. I am president of the Ontario Corn Producers' Association. Cliff Leach is past president of the Ontario corn producers. Don LeDrew is general manager of the Ontario corn producers.

Thank you for having us. I have a written brief. I would like to go through that. It will probably take about 10 minutes. After that, we will just throw it open for questions and general discussion. I promise you I will not read too fast. I have been accused of reading too fast.

The 25,000-member Ontario Corn Producers' Association appreciates the opportunity to meet with the Legislature's standing committee on resources development. Corn represents Ontario's largest commercial agricultural crop, being grown on over two million of the province's 8.5 million acres of arable farm land. Corn serves as a vital base for the province's livestock industry as well as the principle feed stock for many food and industrial processing plants. Of the five million tonnes of corn produced on average in Ontario each year, about three million are used for Ontario livestock and poultry, one million tonnes are sold to Quebec and the Atlantic provinces and for export, and one million tonnes are processed industrially within the province.

Corn is present in some form in over one quarter of all the retail items sold in a modern grocery store and also represents a key ingredient in the manufacture of products such as automotive fuel, steel, rubber tires, textiles, adhesives and many other non-food materials. Corn is a mainstay of the Ontario provincial economy.

Financial crisis: Recent years have not been kind to Ontario corn farmers. A trade and subsidy war led by the United States and the European Community has meant a plunge in grain corn prices for the past half decade. Corn prices have remained well below the cost of production. With the severe cash flow and income deficiencies of the 1990-91 crop year, this has culminated in Ontario corn farmers facing the worst economic conditions in memory.

Corn and other grain and oilseed production in Ontario since 1985 has been dominated by two influences: (1) price depressions caused by an international subsidy and price war and (2) inadequate Canadian statutory support programs to protect domestic farmers from the consequences of these price depressions.

Although the myth persists in some circles that the impact of the international price and subsidy war has been greater for farmers in provinces other than Ontario, the facts speak differently. Grain and oilseed prices have been just as depressed in Ontario as in any other province, and so has the income of farmers dependent on grain and oilseed production as their source of family wellbeing.

Calendar year 1991 is proving to be even more disastrous for Ontario grain and oilseed farmers, corn prices having dropped from values which were already at or near historic lows, measured in real value per tonne, to prices which have been as much as 30% lower. The Ontario cash price for corn is at an all-time low, measured in real, inflation-adjusted currency, and in substantial areas of southern Ontario the 1991 summer drought and hail damage have intensified the misery.

Debt loads continue to mount for thousands of producers, and the search for off-farm employment, rendered even more difficult in a recession-afflicted economy, grows. Retirement reserves and other forms of life savings are cashed in a desperate attempt to pay crop bills and secure family needs. Municipal taxes go unpaid and participation in debt review hearings grows. Bit by bit, family farms, sometimes those which have been in the family for more than a century, are sold off as a means of staving off formal bankruptcy.

Without immediate help, thousands of Ontario farmers will not remain in business until next year, or are likely to enter the 1991-92 year in such desperate financial condition that future survival is unlikely.

As stated recently by the Ontario Agricultural Commodities Council, "How well would the rest of society function if it had experienced gross income reductions coupled with increased operating costs in the range of one third to two thirds?"

Immediate assistance is required. Even though corn prices are at an all-time low, the 1990-91 federal agricultural stabilization program for corn will provide no payment. This illustrates the inadequacy of the present farm income support programs.

Canadian federal and provincial governments have developed two new complementary income support programs. Unfortunately, these new programs, commonly called the gross revenue insurance plan and the net income stabilization account, will not be fully operational until the next crop marketing year.

In April, the federal government announced the introduction of several new short-term programs and indicated that the purpose was to provide income assistance equivalent to what would have been provided if GRIP and NISA had been in place for the 1990-91 year. Unfortunately, this assistance does not come close to meeting this objective. Calculations made by Ontario farm groups using government data show that total income for 1990-91 for corn, soybeans and winter wheat will be at least $124 million lower than what would have been the case if GRIP and NISA had been in place. Approximately $76 million of this shortfall is attributed to grain corn.

We acknowledge and are appreciative of the interim payments on the 1991-92 revenue insurance program for Ontario grain and oilseed producers announced on September 17. It must be stressed, however, that this constitutes assistance for low 1991-92 crop prices. Assistance for 1991-92 cannot and must not be portrayed as the solution to income problems associated with the previous crop year.

Ontario farm leaders welcomed yesterday's announcement of a $35.5-million financial assistance package by the Hon Elmer Buchanan. Mr Buchanan's announcement shows that the Ontario government recognizes the serious financial crisis being experienced by farmers. All three political parties deserve a thank you for supporting the request of farm leaders for emergency assistance. OCPA sincerely appreciates this financial support in answer to grain and oilseed producers' requests. Specifically, the $15-million top-up to the Agricultural Stabilization Act addresses our request to waive the premium-equivalent deduction on 1990-91 payments under the Ontario farm income stabilization program.

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Two other actions that would help address the crisis include:

1. Provide a 1% contribution to the NISA program for Ontario crop producers for the 1990 taxation year. The 1% contribution will automatically trigger another one-half per cent in federal NISA -- net income stabilization account -- contributions for Ontario farmers. This would give farmers access to about $26 million in badly needed provincial assistance and also to an additional $8 million in federal funds.

2. Modify the floating price option under the 1991 crop insurance program for grain and oilseed producers. There are details at the back of our handout that we can delve into during the question period.

Agriculture credit: Special attention must be given to agricultural credit, recognizing the particular difficulty experienced by many corn producers in securing financing in the spring of 1991. This situation will worsen in 1992 unless this problem is addressed. Most farmers are operating with lines of credit much reduced from previous years and many have no line of credit at all.

In order to address these concerns, OCPA is working with representatives of the Ontario Agricultural Commodities Council, the Ontario Federation of Agriculture and the Ontario Ministry of Agriculture and Food to develop a crop insurance and GRIP-based loan program. We ask for your support in implementing this program quickly.

Regarding the future of Ontario corn production, the financial crisis must be addressed in order to secure a viable Ontario corn industry. For the long term, Ontario corn producers have pursued and will continue to pursue many initiatives to improve the industry's viability. For your reference, we have attached a background summary of corn production information and OCPA activities.

One key area we wish to highlight is intensive market development efforts for fuel ethanol, a renewable, non-polluting octane enhancer made from corn which can be used to replace environmentally undesirable compounds now being used for octane enhancement in Canadian gasoline. Ethanol's addition could also be used to reduce atmospheric concentrations of carbon monoxide, a particular health hazard in central Toronto, and carbon dioxide, a global concern related to the greenhouse effect. Ethanol also has a positive net energy balance. For example, each litre of ethanol contains two to four times more energy than is required for all related crop production and ethanol manufacturing activities.

One job in five in Ontario depends on food and farming, and governments must not let these value added jobs nor the future of Ontario farmers disappear.

We respectfully submit this brief on behalf of the corn producers of Ontario. There are a lot of footnotes at the back for information purposes. With that, Mr Chairman, we throw it open for questions.

The Chair: Extremely well put. There are seven minutes for each caucus; lots of time for questions.

Mr Villeneuve: Gentlemen, thank you for your very thorough presentation.

First of all, your very first request,the bottom of page 4, was that the government of Ontario provide a 1% contribution to NISA, The strange thing is, we had an opposition day on Monday and that was our motion. Strangely, the members of this government will probably tell us that they support you, yet they did not support the motion. I find it difficult as to which direction they are going right now. The OFA strongly endorsed it, I know you people endorse it, and it would indeed catch a situation whereby our farmers have fallen through the cracks in 1990-91, before NISA and GRIP came into it.

The government of Ontario gladly took the $4-million federal contribution, put it into the general revenue and came back with the $35.5-million announcement yesterday, which was appreciated, as you have alluded to. However, could you explain to us what the 1% NISA participation would mean in dollars to Ontario farmers?

Mr Anthony: When you look at the value of Ontario grain and oilseed crops, 1% amounts to $16 million provincially.

Mr Villeneuve: That would be $16 million that the government of Ontario would not have to pull out of its particular coffers. It would be money coming from the federal level.

Mr Anthony: No. They would have to take $16 million out of the provincial coffers.

Mr Villeneuve: What would it mean to Ontario farmers?

Mr Anthony: It would mean $16 million from the province and then it would trigger another 0.5% from the federal government, which would be an additional $8 million.

Mr Villeneuve: So there would be an additional $24 million here, over and above the $35.5 million that was announced yesterday.

Mr Anthony: That is correct.

Mr Villeneuve: Okay, that clarifies that.

A sugar policy: We have heard a lot about Ontario and Canada not having a sugar policy. Ontario corn has now become a very important element in liquid sweeteners. Could you comment on that to some degree as to where your particular industry sits on a sugar policy?

Mr Anthony: Federally we would like to see a sugar policy in this country. Canada is one of the few countries in the western world that does not have a support value on sugar; it just allows sugar to be dumped. If there is sugar in the world, it can come in here without any tariffs on it. If you look at the US sugar policy, I believe the support value of sugar is someplace in the mid-teens in cents per pound. There is no support here in Canada. We are fortunate that a lot of our industrial usage for corn does get exported to the United States. Companies like Casco and St Lawrence, when they were in business, were putting product in there.

But we would like to see a sugar policy here. I think it would be a federal initiative to have it done, but we would like to have it.

Mr Villeneuve: But Ontario is the province that would probably benefit, Ontario corn producers, because indeed Ontario corn is the primary ingredient in the sweetener trade in Canada.

Mr Anthony: The two segments of the agricultural economy that would benefit would be corn here in Ontario and certainly the sugar beet industry. It is struggling in Alberta and non-existent in Manitoba. There used to be a sugar beet industry in southwestern Ontario.

Mr Villeneuve: Finally, ethanol. I have been a strong supporter of the production of ethanol. I think you are aware that two million bushels of corn go into the production of ethanol every day in the United States. What do you believe the ethanol industry of Ontario -- which I believe is coming, and we have some background information -- should look like, as the people who are growing the feedstock for that industry?

Mr Anthony: First of all, we would like to see on a provincial and a national basis that all gasoline in Canada contain 10% ethanol. That would be wonderful. Don or Cliff here might comment on the number of bushels that would be involved in it, but it also should be noted that there is more ethanol used in the United States every day than there is total gas consumption in Canada. It is that well accepted down there.

Mr Villeneuve: My question basically revolves around, would you support, say, three large production plants, or would you support 10 smaller production plants? Would you install them in the areas where the livestock could utilize the 28% protein concentrate left over? What are your thoughts on that?

Mr Anthony: These plants are going to have to be efficient. It may end up being that the large plants will be the most efficient. They probably will be when you look at what happened in the United States.

There are actually three beneficiaries. One is certainly the grain sector, not just corn but --

Mr Villeneuve: No, the environment, I think, is number one.

Mr Anthony: The environment certainly is a beneficiary, and last but not least is the livestock industry. Our livestock industry here in Ontario has been hurting. We have been at a competitive disadvantage to western Canada. If we had that feedstock coming back from those plants, we could build a livestock industry too. What that industry would do is basically take dollars from the urban areas of Ontario and put them back into the rural areas.

Mr Villeneuve: Ethanol is a renewable resource to be the octane enhancer for cleaner-burning fuels, which I strongly support.

Mr Hayes: Just dealing with the NISA program, I think it would be only fair to say for everybody here that the minister did explain to the commodity groups quite clearly last week or the week before how we could not get into NISA right away. I do not think it was anything where we were trying to lead someone down the garden path. We felt there was some immediate money needed and I think we addressed that, and I would like you to respond to that.

Mr Anthony: Certainly the $15 million that is being saved in the Agricultural Stabilization Act top-up is basically the equivalent of what we would have had with the 1% NISA. It would have been $16 million.

We are certainly grateful for what we got yesterday, do not get me wrong, but we do have $124-million worth of hurt. We are going to be looking to the federal government for a big chunk of that, but we are not sure that even that is going to be enough to make up the difference.

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Mr Klopp: Do we have any numbers on how much corn would be used in our ethanol position? Do you have just a rough number?

Mr LeDrew: The estimates that have been used have been in a range of 20 to 40 million bushels of corn, which approximates somewhere in the 10%-plus range, also depending on, of course, much the same as Mr Villeneuve indicated, the size of the plants, etc. That is an estimate.

Mr Klopp: Yes, okay. I know the ministry is working on this, not fast enough by any means, but we are working at it. The whole process of the corn industry, and indeed all the commodities for the long term, have to get up in price.

I did not have the number in my hands, so that is why I asked you about the 10%. That hopefully will not hurt the price of corn getting up at the farm gate. What are your feelings on the whole situation of the global prices, and what can we do to get the farm-gate price up so that we do not need safety nets but we actually have a plank there to stand on?

Mr Anthony: If you look at the number of supplies, coarse grains or corn, in the world right now, we are basically at the same level as we were during 1971-72, with about a 14 days' supply.

If you go back in history and look at the prices shortly thereafter, we saw prices in the $4-a-bushel range, basically all-time-high prices. I do not believe we are going to see those prices until this trade war between the US and the EC stops. As long as they are willing to give part of that grain away, we are going to be facing these depressed prices. The very second that trade war is over, and it remains to be seen what it takes to stop it, and we go back to domestic production, I think we will see higher prices.

Having said that, in the meantime we look at support programs. Certainly we, as farmers, do not like to have to take part of our income from support programs. That is just totally against what we are there for. We want those dollars to come from the marketplace. At the same time, in order to get it back to the marketplace, it is going to take increased domestic usage, and fuel ethanol is one of many things. As Mr Villeneuve just mentioned, sugar policy would be another.

Probably last but not least -- and we will be approaching the federal government regarding this -- is credit for exports. The very second you have one bushel of corn too many in the province, automatically the price is depressed. If you have one bushel too little, then you are looking at US replacement value. US replacement value would be probably 40 to 50 cents higher than the prices here in Ontario right now. Translated, that would be some $70 million.

Mr Leach: I would just like to make a few comments in that area. It may be a misconception out there that all we have to do to get the price of corn up -- and it is a disaster; it is low right now at roughly $2.50 a bushel -- is just put the price up to $3.50 or $4.

Unfortunately, rightly or wrongly, that just will not work in the world economy we are in. As Frank said, if we have one bushel more than we need in this country, we have to export it. The only way we could put our price up artificially, shall we say, would be to close our borders. To close our borders for corn means we cannot export or import, and I do not know what western Canada would do if it had to try and use up 40 million tonnes of western grain. We are in a world economy whether we like it or not, and unfortunately the price we receive for our product is the same price they receive in the US, in most cases with less trucking. We are caught up in that.

On the GATT negotiations, I am not nearly as optimistic as Frank. Frank is an optimist and I am a pessimist or a sceptic; I do not know which it is. In any event, Frank is an optimist and he expects that the GATT is going to get cleared up and that is going to solve all our problems.

I do not share that same optimism, especially in view of what I have seen just this past week. Was it 100,000 French farmers parading and spreading manure just over the threat of taking away their farm programs? I even heard today that liver pâté was spread all over the streets of Paris. Those guys are so militant that I really think we have some problems there.

I hear Roger back there laughing, thinking it is about time we did the same thing.

We have some real problems in agriculture. In the meantime, these are the solutions as we see them until these other problems can get straightened out.

The Chair: Mr Klopp, real fast.

Mr Klopp: Real fast. Right now, if I went over to buy some corn in the States, would it cost me about 40 to 50 cents more to bring it over here?

Mr Anthony: We are looking at a negative basis here in the province at the present time, negative to the tune of 10 or 20 cents under. In the United States, by the time you figure in the exchange rate, the Chicago price plus exchange, plus freight and so on, you are looking at 50 cents.

Mr Klopp: So corn could be $2.90 in Ontario before they could really say it is cheaper to bring it in from the States, and right now it is $2.50.

Mr Anthony: That is correct.

Mr Klopp: So we could be pushing somebody to get the price up a little higher, somehow. Do you think it is worth looking at?

Mr Anthony: The only way we will do that is by getting some export orders. Right now, when you go to export grain, the world market price is not really the thing that sells it. It is terms. We just do not have the terms. We will be going before the federal government and asking that there be some clarification done under the Export Development Corp for movement of eastern Canadian grains and oilseeds.

Mr Cleary: In your brief you say, "Debt loads continue to mount for thousands of producers....family farms, sometimes those which have been in the family for more than a century, are being sold off." Then you go on to say, "Without immediate help, thousands of Ontario farmers will not remain in business until next year."

Last week we had the Canadian Bankers Association in before this committee. They led us to believe that they would not have any more problem collecting their debts this year than in previous years. I would just like your comments on that.

Mr Anthony: I read their brief too, and my comment tonight is that they may not have any more trouble collecting on the accounts they have on hand as of today's date than they had a year ago. The only thing is, they dumped a whole bunch of guys last year and the year before and the year before that. Those guys are out there fending for themselves. They are not telling you something that is not true. It is just that they are not covering the whole industry.

Mr Cleary: Okay. Another question I have is on yesterday's announcement. Will that help solve some of the problems for your farmers who you say are selling off their farms?

Mr Anthony: Any dollars that go towards the situation are bound to help. Yesterday's announcement will help, but it is not going to save everybody. Even if we get all the $124 million we are requesting, it is not going to save everybody. It is going to prop up the industry for another year at least. There are other things we need besides more dollars to fix this problem. It goes back to new markets and so on.

Mr Cleary: My colleague Mr Villeneuve has been talking about ethanol for some time, and I have been working with a gentleman who just did a number of projects in other countries. Do you think ethanol we would produce here in Ontario should be used just for additives to gasoline, or do you think we should be exporting that to other countries for additives in industrial manufacturing?

Mr Anthony: I believe that if we have export opportunities, and the price is right, we should take advantage of it, because what makes the world go around is dollars, and if we have an inflow of dollars into this province or this country, it cannot do anything but help.

Mr Cleary: Has your organization looked into anything like that before for export to other countries?

Mr Anthony: Yes, we have taken a look at it. There are two grades of ethanol coming out: fuel grade and industrial grade. Yes, we have taken a look at it. We know that with our feedstock, the price of grains the way it is, and the technology that is available in Canada, we could be competitive in the world marketplace. There is a very good opportunity for Ontario to sell ethanol into the northeastern United States. It is a big market and it is close by.

Mr Cleary: That is exactly what I was led to believe too.

Mrs Fawcett: Just a point of clarification on my part, and especially on the corn producers: In your brief you say that there are three million tonnes used for feeding Ontario livestock. Will they get help from the announcement yesterday, as far as grain and oilseed producers receiving some benefit or some help is concerned?

Mr LeDrew: The question, I take it, is related to farm-fed grains. Is that correct?

Mrs Fawcett: Yes, the three million tonnes used for feeding Ontario livestock.

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Mr LeDrew: Just very quickly, the three million tonnes refers to both direct on-farm usage and through feed manufacturers where it eventually ends up within Ontario on that basis. I would also include some farm-fed usage in the amounts that go to Quebec and the Maritimes, of course.

In direct answer to your question, that is a concern that has been expressed, in that trying to find a mechanism for delivering some assistance on farm-fed grains -- I know a number of the other farm groups will also be asking for assistance in that manner. There will have to be further discussion on yesterday's announcement, I understand, before we can really answer that question.

Mrs Fawcett: How much does it cost to produce a tonne of grain?

Mr LeDrew: For Ontario corn, some of the average numbers have been in the range of $135 a tonne, in that area.

Mrs Fawcett: So if we are talking about the three million here, we are looking at approximately $400 million to produce that much.

Mr LeDrew: Yes. The value at the farm gate, using that sort of analogy, would be close to $500 million, you are right; in that area.

Mrs Fawcett: And that is only the three million. The money is not going to spread too far, is it?

Mr LeDrew: As I said, we are thankful for the $35 million.

Mrs Fawcett: Something is better than nothing, but it is still not enough.

Mr LeDrew: In terms of the farm-fed issue, that is something we will certainly have to address, and that is a problem within the current Agricultural Stabilization Act itself. That has always been a problem and that is why the new GRIP and NISA programs are in place, because that does cover on a production base rather than a sales base. One of the problems with the current Agricultural Stabilization Act is that farm-fed grains therefore do not get covered.

Mrs Fawcett: I think a few pork producers are having problems, and a few others.

Mr LeDrew: That is correct.

The Chair: Thank you very much for your insights and your valuable contribution to this committee's process. A report will be prepared. I trust that you will receive copies of that report promptly, which could mean any number of things when government is doing it, but as promptly as possible. I want to thank you again for coming in and wish you a safe trip back home.

ONTARIO FEDERATION OF AGRICULTURE

The Chair: We now have the Ontario Federation of Agriculture. Please put your names on the record and then commence with your submissions and try to leave at least 15 minutes for questions and dialogue.

Mr George: My name is Roger George. I am president of the Ontario Federation of Agriculture. I have with me Jack Wilkinson, my first vice-president. Jack is also the second vice-president of the Canadian Federation of Agriculture. Carl Sulliman is the chief executive officer of the OFA and Cecil Bradley is our manager of research and policy development.

I appreciate the opportunity to be here. I do not intend to read through our brief. I would ask that it be read into the record in its entirety or placed into the record in its entirety. That will save us some time. I just want to go through and hit some of the high spots very quickly.

We have indeed changed the focus a little bit overnight in light of the minister's announcement yesterday. We did a quick rewrite overnight -- at least, Cecil did a quick rewrite overnight. While we are focusing on the crisis on the family farm, and that is an ongoing crisis, we want to address our brief in two segments: one, the immediate crisis, and, two, the longer-term implications of this crisis.

First of all, we would like to start off on page 2 by giving appreciation to the government of Ontario for responding to the requests of farm organizations and farmers across the province with its $35.5-million announcement yesterday. While we know that is not going to solve the problem totally, indeed it is a first step forward, and the OFA and other commodity groups intend to use that $35 million as a lever with the federal government. We have invited people to a meeting in Winnipeg, attempting to negotiate and lever some more money from the federal government. That indeed is where the balance should come, because many of these things are federal responsibilities, but we were indeed quite pleased yesterday with Mr Buchanan's announcement. Having said that, it is not totally encompassing. There are some farmers who are going to drop through the cracks, but we will be looking for federal money to patch up some of those cracks.

Pages 2 and 3 basically deal with the farm income crunch, which I think has been very well defined in previous submissions to this committee, so I do not intend to go through that. I think the case is well documented. Instead, I want to turn to page 4, "The Drought of 1991," and just address the announcement of yesterday where the $3.5 million was announced to be directed towards farmers in drought areas or farmers in special difficulty. Very clearly those are not going to be sufficient funds to address the problems as documented by farmers in that area. But again, we are looking to the federal third-line-of-defence process to pick up some of the pieces there.

On page 5 we get into the long term. The other thing is we have the short-term crisis, getting people to 1992. Even getting them into 1992 and under the protection of the new stabilization programs, GRIP and NISA, all that is going to do is to provide some minimal levels of support to keep people in operation. What we are looking at here is an industry in crisis in many sectors, where there have been no profits for many years and we do not have the necessary capital to revitalize this industry. It needs a total, wholesale look at the way we restructure this thing.

Farm credit is a very important issue. I am sure Jack will address that in question period. We are very open to working with Mr Hayes and his committee. The simple message is, "Get on with it and let's work with farm organizations over the course of the fall and winter to develop proposals ready for the spring budget that we can take to Mr Laughren," because farm credit is a very important issue for us.

On page 6 we talk about the Fair Tax Commission. In our minds, one of the most important issues within the mandate of that commission is the farm property tax rebate. Over the course of the summer the OFA has written to the minister on three or four occasions, requesting the government's current position on this and what it intends to do with that program for 1992, because the order in council expires at the end of this year. To date we have received no indication at all from the minister of what he intends to do. We have heard rumours from OMAF and through different musings by politicians in the press that there are going to be some alterations. In OFA we are saying we have to have that consultation. Farmers have to know what to expect for next year because cash flows have to be prepared this fall for next year. If it is going to be changed from 75%, we need to know that, but we are saying in OFA: "Don't touch it at this point. Let the Fair Tax Commission do its job. That is the rightful place to do this. Just roll the order in council over for another two or three years until the Fair Tax Commission has had the opportunity to deal with this subject."

We want to make it very clear that this is a fundamental program for OFA. I cannot stress enough that we are dealing here with an inequitable tax on farm land. This has nothing at all to do with people. Politicians and others who get these two things mixed up cause us all sorts of grief out there. We shall be putting a lot of effort into making sure this particular issue gets addressed quickly by the minister. We are expecting some response from the government.

On page 7, trade negotiations, I bring your attention to the very last paragraph, where we are saying it would give the Ontario farm community a tremendous amount of support if the provincial Legislature would pass a unanimous resolution in support of the stated trade positions of the federal government. Yesterday we had a major meeting out in Mississauga with supply management people, in response to the possibilities of shifts in the European position at GATT. We just cannot afford to lose the one sector of our industry in Canada that has been consistently profitable enough to supply industry in Ontario. That accounts for about 30% of our total agricultural growth product. These people have to have the ability to maintain supply management under a more strongly worded article XI. We are calling for this House to give total support. Yesterday the minister made some strong statements in support, but it would be very useful to have politicians from Ontario joining the Ontario farm community in making sure the federal government does not shift from or get shifted from its position at GATT.

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In conclusion, the final couple of pages are just some technical data which suggest that the province of Ontario over the past number of years has been cutting back on its agricultural budget in relationship to the total budget of the province. We think agriculture is far too important a sector and rural Ontario is far too important to have cutbacks. I think we recognize that any money that is expended by rural people and by agriculture has a multiplying effect on the economy. At a time when we are trying to create jobs and to trigger economic revitalization, we believe our industry can help in that, but we certainly cannot do it unless we have some support from the province.

With that, I am going to conclude the official part of my presentation. We would welcome some questions.

The Chair: Thank you for the concise style in which you addressed the committee. Of course your brief will become an exhibit and a permanent part of the record of these proceedings and, along with others, will be valuable.

We have for each caucus a healthy chunk of time, some eight minutes or so. Mr Hayes, please.

Mr Hayes: I guess one of the things the minister pointed out with the $35 million is how we tried to funnel in through existing programs: the $11 million added to the farm interest assistance and then the other $15 million for the farm income stabilization and so on. As a result, of course, we have lost the $3.5 million down below for people, as you say, who fell into the crack. We have looked at this and we have had discussions as to the way this press release was put out. We would probably prefer to have that deal with, let's say, weather-related issues; in other words take care of a drought area and an area hit by hail.

Maybe it is not a fair question right now because we do not have the figures ourselves. The other programs, like the $11 million and the $15 million and the $5 million for the horticultural crops -- what we are looking at here is saying that some of those people, even the people who got hit by the drought, will benefit from the other programs. This would be for those who are not eligible for some of the other programs; we would be looking at assisting them on top of that. Have you any idea how many of the people in the drought area, for example, would be eligible for the above programs? This is what we are looking at.

Mr George: I do not have that information, but very clearly there are farmers who will be eligible for more than one component of the program. While there is $3.5 million in that drought fund, some of those farmers will be able to access interest programs; some of them will have sold grain in 1990 and will be able to get something out of the ASA. So yes, it is obvious that is going to happen.

At the same time, I think we have to be aware that it is not enough money for the drought people. We are looking for this third-line approach that has to come from the federal government.

Mr Hayes: Okay, thanks.

Mr Klopp: Earlier we were looking at the ethanol business, and the corn producers mentioned efficiencies, smaller operations versus larger. You mentioned in your brief the whole economic spinoff that agriculture has and with which I have totally agreed for a long time. Like examples of ethanol plants, should that be part of our discussion of efficiencies, one big plant versus smaller ones and getting work around? Is that something we should be looking at?

Mr Wilkinson: At some point. You have to stay within the economy that works, as well. The corn producers and others know this issue better than we do. Obviously the quick answer is that you would like to have a number of small plants spread around rural Ontario and do it that way. You get to the point very clearly where, if it is not an economic unit, then you cannot produce the ethanol at the right price. Then you are just not going to get anybody to move ahead with the development of the program because you are still forced, as we all seem to be, to basically price that litre of ethanol at what it can be brought in for from anywhere else.

There is going to be a tradeoff there. That is not our expertise. Our principle is in the old phase that we support this kind of approach, that it would be very good for the agriculture community. It is very positive from an environmental point of view and it would be very useful from the livestock industry's point of view. We want to see movement ahead in the ethanol system.

From our point of view there is really no mileage in spending a lot of time in the argument of where that efficiency trades off. Smaller and still efficient, I think, is the best because it helps for the usage of that feedstock coming out the other end for usage on livestock. It minimizes the amount of trucking you have to do to make sure you utilize that -- the drying costs, etc. You can use the wet grain a lot more easily. We would prefer it to be as small as is economically capable of producing it, in as small a plant, spread out as much as possible.

Mr Klopp: I just want to know if we should be looking at that a little bit. Obviously you do not spend a lot of time. If it is getting way out of line, forget it. We agree with that. I just want to know if it is even worth looking at, because economists have a lot of versions of efficiency which do not mean anything. I think we are living with inefficiencies which hurt us a lot.

Mr Hayes: Very briefly, something has just come to my mind; the other sector out there that has been very critical about farmers and supply management and marketing boards. I think we know whom we are talking about.

Mr Wilkinson: The unions. The unions are the only ones who can afford them.

Mr Hayes: No, not at all. No, the unions would like to bring the farmers up to their level, not bring themselves down to the low prices the farmers get.

What can we do as a government, in partnership with the different commodity groups or the OFA or the farmers themselves, to help to get that message out there that it is a bad image that they have?

Mr George: I cannot think why on earth you would be talking about anybody who would not like farmers and our industry. I thought everybody loved farmers.

Mr Hayes: I do not think so.

Mr Villeneuve: We are all consumers.

Mr George: You are obviously talking about --

Mr Hayes: The consumers association.

Mr George: -- getting our message out. We very clearly have to do that. This week we started by kicking off our agricultural education outfit. We need a commitment for some government funding to make sure that is an ongoing thing. Clearly, educating consumers is going to have to start in the classroom. There needs to be a major job, and I do not think that as farm organizations we have done as good a job over the years on communications as we maybe should have done. It is an ongoing battle. Communications, in my mind, is the beginning and the end of the whole thing.

Mr Waters: I come from an area up around Midland. I represent the Midland area. Where I actually live there is not a lot of farming left, unfortunately. We used to have 12 dairies; now we do not have any. Everything in the Muskokas has gradually deteriorated. Now I go over to Midland and I think in my riding there are four elevators, one of which is about to be dynamited and made into a resort. The second one they are going to store rubber in. The third one is just going to sit there and idle away until they dynamite it or something. The fourth one, at this point, is being used.

Obviously there has been a big downward shift in agriculture or something, because these elevators are just sitting there totally empty. I see one ship come in. How do we turn all that around to where it was? Maybe we are talking today about the short term, but I think we have to look at where agriculture was in this area, and whether it will ever come back. Is there any way we can ever bring it back to where it was?

Mr Wilkinson: It can be brought back to where it was if anybody wants to put the energy towards making it happen. Very clearly, we have been very involved in the short-term emergency, the crisis, over the last number of months -- years almost, it seems -- because that is where it has been.

The big, fundamental picture is that we have to start at ground zero and rebuild this industry. If we do not, it will be gone. Effectively, it is winding down in Ontario. I do not know; we have been trying very hard, and we are going to try much harder over the next number of months, to convince the taxpayers in this province and in this country of what they have and what they are losing, and what the ramifications are going to be to the Ontario economy if agriculture is not rebuilt and put in a framework in which it can survive and thrive again, grow again, and give the economic spinoffs.

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People do not seem to grapple with the fact that it is the second-largest industry in Ontario. The transportation and automotive sector is the only one that is bigger than agriculture and agribusiness. You know how uptight the province would get -- and this is no issue in relationship to an NDP government or any government; any government would get very concerned -- if the transportation sector in this province rolled over and died. We would be just pulling the stops out to fix it fundamentally. What is going on? It would be a crisis in the province and you could not turn without bumping into people trying to fix it.

But in agriculture we have been suffering with net farm incomes that have shrivelled. We have been using off-farm income. In Ontario, we have as much off-farm income coming into agriculture as is required to run 60,000 census farm homes. It takes $1.5 millions to keep those homes running, 60,000 people, and there is $1.5 million coming in from off-farm income. It is an industry that has exactly zero capacity to feed its entire workforce. Here we feed 125 people in Canada and then we have somebody work off the farm to feed ourselves and our family, and nobody gives a damn about it.

We get lipservice about it and I know we talk about it. We pretend and, yes, we get a package and we are not ungrateful for this, but it is an industry that has to be fixed fundamentally. We have to have a credit policy that is different, a taxation policy that is different and all those issues. We are ready and we are up for the rebuilding of agriculture, and really what we are trying to say to Ontario is, "If you do not want to see it shrivel up any more than it is, we all have to go at it and put our shoulders to the wheel and fix it."

The Chair: Thank you, sir. We should note that Mr McLean has taken time from his busy schedule to attend here this afternoon.

Mr McLean: I am a farmer.

The Chair: We appreciate his interest.

Mr Ramsay: Welcome, Roger. Nice to see you and confrères Carl, Cecil and my neighbour Jack. It is nice to see you, Jack.

We have heard from the corn producers their sense of what the impact of NISA would be. In their case, they talked about a 1% contribution to NISA for their producers. Do you have a sense of, if the government had been a partner in NISA this year, what effect that might have had on Ontario agriculture?

Mr George: It just seemed to me to be a smart business move in times of economic difficulty. Any time you can put in $1 and get $1.50 back, it seems to me like a good investment. To that extent, we are disappointed that the provincial government decided not to go the NISA route.

The other thing there is, going that way would have addressed this farm-fed question, because unquestionably the biggest hole we have in the minister's announcement yesterday are the many thousands of farmers who feed their grain on the farm, and because of the methodology of the Agriculture Stabilization Act, as far as we can determine, they will not be able to access any part of this $15 million.

Mr Cleary: I have a couple of things. One has to do with the drought, but I will get to that in one minute. What changes do you think should be made in crop insurance, if any?

Mr George: That is an area that just has to be addressed. One of the single biggest problems, particularly in an area like Essex where they have had several years of disasters, be it drought, floods or whatever -- we have producers down there who have seen their guaranteed levels of productions ratcheted down to levels where it really almost was not worth paying their $10 an acre or whatever to insure that crop. When they have seen their averages come down from 40 bushels to 18 bushels and then it is only 80% of that, you do not have to stop and think for very long why a farmer would question why he would bother to insure that crop.

It is just the same as if you had a car that was worth $25,000 and after two or three accidents, the insurance company said, "You are a bad driver, but we can only insure you now for $2,000 if you wreck your car in the future." They charge us an extra premium or whatever. There have to be ways of dealing with that ratcheting process. That is one area that definitely needs looking at.

The crop insurance has been much improved over the years, but it is far from perfect. I think on a lot of these issues, we need some firm direction and leadership from the minister to tell his crop insurance commission to be creative with the act, just to go as far as it possibly can within the existing legislation. We believe it can be done and it needs some creativity and some boldness.

Mr Cleary: Would you not leave us with any suggestions?

Mr George: We are appearing before the commission in a couple of weeks and I think it is a technical subject. I think it would be more appropriate if we dealt with it there.

Mr Cleary: I know there has been drought in Essex-Kent. Are there any other areas in the province that you feel were neglected in yesterday's announcement?

Mr George: The township of Chisholm where I live is an area where we had some drought this year. We did not have any rain up there at all. Yes, there are spots everywhere.

Mr Cleary: Yes, I have seen a lot too.

Mr George: We do not have the details on the minister's announcement, but it would seem that there may be scope within that $3.5 million to target individuals or areas that have problems. I do not think it is just targeted directly to the southwest.

Mr Cleary: Something else that bothers me a bit, because of where I come from and all, is the cross-border shopping issue. Would you have any comments on that to do with agriculture?

Mr Wilkinson: I flippantly made a suggestion to the deputy minister over cross-border shopping. She indicated the province really could not do that much and I said we could pave all the accesses to the bridges for the summertime. To me, it is a serious fundamental problem. Any time you have $2-billion worth of purchasing being removed out of a province the size of this, it is a fundamental problem, it is a major issue. For example, in spot areas in northern Ontario, for milk and some other things, they have lost as much as 25% or 30% of their production directly to cross-border shopping.

It requires some changes, we think, to the federal act. I am not as clear on this issue as to knowing the details, as I should be, but we know the dairy farmers in Canada, for example, have asked for time periods that are spent in the United States for what you can bring back in perishable products, farms products; that they should be extended so that you eliminate a lot of this rolling over and doing your shopping there.

I think the province, though, can play a very important role here in educating the consumer, as it has done to some extent in areas like OHIP. If you are going to cross-border shop, what are the ramifications in this province. There are going to be all sorts of programs that have to be cut in this province. You cannot have the standard of living in Ontario, then go someplace else to buy gas, to buy this or that, and come back and expect to be able to have a standard of living as if you had spent all those tax dollars in this province. We know that. We see that constantly in agriculture.

As far as specific recommendations, I do not have them today. We know, for example, that the milk board and a number of commodity boards that are dramatically affected have made presentations. We can certainly work with them to bring some in, but I am not equipped today to answer with a list.

Mrs Fawcett: I would just like your comments on the family farm advisory program, because I had one of my farmers, Matthew Currelly, speak to me about that at noon. He is very much in favour of this program and hopes it will receive some money for the family farm group experiencing financial stress. I am just wondering, do you feel this is an important program? Do you feel the ministry considers that an important program?

Mr Wilkinson: Obviously, there are a number of programs that are extremely important in relation to that. For example, Mr Cleary asked the corn board a question about the Canadian Bankers Association saying there is no serious problem in Ontario and it is no different collecting money this year than last year. I guess the quick, smart-ass answer to that is that the banks never have any trouble collecting money, so they obviously do not have problems with accounts.

The facts as put out by the standing committee federally, ie, Canada, are that 9,600 farms in Ontario are technically bankrupt right now, today. Actually, these are eight- or nine-month old figures, so it is worse than that today. There are another 15,000 that are insolvent. There are 100,000 Canadian farmers who are basically considered in severe economic stress. I am sorry, it was 96 insolvent and 1,500 in severe stress. Of the $23 billion in Canadian agriculture debt, it is considered by that committee report that $5 billion is unrepayable. Clearly, we have a fundamental, serious problem. There are going to be all sorts of people going through debt review; there are going to be all sorts of people who are going to wind down their farm operations before debt review. That is why you have areas where people look at a condominium complex across the road and do not bother worrying any more about being in farming, because they are looking at the economic situation and the viability situation and they know it is not there.

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These are not unsolvable problems, but they are certainly big problems that require good-sized imaginations and a lot of resources. It is not all money. A lot of it can be taxation policy. A lot of it is structural policy. It does not always have to be a blank cheque to the farm community and it does not always have to be seen that way. I do not know if that exactly answered your question.

Mr Arnott: Thank you for your presentation. As always it was excellent. I would like to ask you a question, Mr George. You talked about the farm tax rebate program and your preference that it be left alone until the Fair Tax Commission has an opportunity to report. In the long term, could you describe briefly what would be your ideal farm tax rebate program?

Mr George: My idea would be not to have one, because if we remove the unfair taxation from our farm land and our farm buildings, the government of Ontario does not need to rebate $150 million-plus to farmers. It is as simple as that. That is something we have to sort out in the Fair Tax Commission. It is not something we can sort out by a minister worrying about how to trim $20 million from a budget, by a bureaucrat worrying about whether somebody who has enough farm income should be getting it or whether Dofasco steel gets $90,000. That has absolutely nothing to do with it.

Mr Arnott: The second question is with respect to farm safety. When you lose a friend in a farm accident, it really hits home. I know there are many farmers in my riding who are not making money, who have not made money for a number of years. I think about how they attempt to maintain their equipment and keep it up the way it should be, but some of them do not have the money to replace that equipment. I am very concerned about that. Would you like to comment on it at all?

Mr George: We should all be concerned about that. I think when we hear, as we have heard, about farmers who are growing 1,000 or 1,500 acres of grain and they tell us their newest tractor is 12 years old, there is something fundamentally wrong with an industry there. We think we are efficient -- we are not efficient. We cannot afford the latest technology in this province. Our technology is years out of date, yet we think we are efficient and can compete. We do not have the capital to reinvest.

That comes back to safety. As a farmer concerned about safety, I would just love to see mandatory quiet cabs with decibel levels legislated so the farmers do not go deaf driving these tractors. But these things cost $6,000 or $8,000 a throw. We could never afford to do that on our own, out of the pitiful profits we make. There is no profit in this industry, and without profit there can be no ultimate survival. We do not have that profit to replenish our industry and to be able to keep up with the standards as we should be doing. Farm safety is a grave concern to us.

Mr Villeneuve: To Roger or Jack, on farm debt review, I was an employee of the Farm Credit Corp for 13 years prior to my incarnation in politics and I will tell you, we made loans that were good loans. That was the thing to do at the time. The cash flow looked right. Through no fault of their own, the cash flow did not turn out and of course now you have to sit down with banks, with the FCC, with whomever. Is it working?

Mr Wilkinson: Our organization has said the balance has started to tip back in favour of the creditors, in our sense. We have asked, in three briefs to cabinet, that this money be put forward through the province, because we are talking about clients who really do not have the economic resources to defend themselves, almost. We know it is not a judicial system, but in my opinion it is a quasi-judicial system.

Mr Villeneuve: It should be.

Mr Wilkinson: It should have been a judicial system with the ability to cram down, if it was justified. But we think, first of all, there should be some resources made available to clients going in front of debt review to have legal, financial and also representational services they can draw on so they can put a legitimate, fair case in front of the system.

Mr Villeneuve: A legal aid type system.

Mr Wilkinson: Yes, a legal aid system. Our farmers do not qualify under legal aid.

Mr Villeneuve: Yes, I realize that.

Mr Wilkinson: I just find these things fundamentally incredible. We just would not tolerate somebody standing in front of a judge without any defence. If they are poor, "There's your lawyer." But we send somebody to debt review and we basically give them field staff, who I think tried their best, but they are not there necessarily to speak for the farmer and are not hired by the farmer and an advocate of the farmer. They are hired by the Farm Debt Review Board to help put cash flows together.

I think they do a good job, but I think after a while you tilt the table and they start saying: "Well, what will fly through the credit system right now? What will the banks accept? I know this banker here. I know this banking system will accept this deal, if we can get a cash flow that matches that deal." Then away they go, but I think sometimes you forget about the farm you are representing and say, "What is the best deal that we can get for the farm family out of this?"

Mr Villeneuve: For that family, yes, exactly.

Mr Wilkinson: We know it is federal jurisdiction, but we would like to see the province put some money up, and have requested that for three years.

Mr Villeneuve: I am fully supportive of that. We are sending people when they are most vulnerable. They have been booted around from post to pillar and they are there cap in hand and it is a pretty downgrading situation for people who are proud and do not normally ask for a handout.

The message being sent out by the Ministry of Agriculture and Food regarding supply management and the Ontario broiler chicken marketing agency -- right now they have apparently thrown the cost-of-production formula out the window. Are you familiar with that?

Mr Wilkinson: Roger would be familiar.

Mr Villeneuve: I am very concerned. I am sure we can pass unanimously in the Legislature upstairs the fact that we support supply management, yet within the same Ministry of Agriculture and Food, in the broiler situation the Farm Products Appeal Tribunal has become, all of a sudden, an all-powerful body because it has rolled back 12 cents a kilo on what was a readily accepted cost-of-production formula. It is a very mixed message that I am getting right now from the ministry. Can you help me to understand what is going on?

Mr George: I think we have to recognize that the elected people who sit on the chicken board are the people to deal with this. I certainly do not intend, in this forum, to try to put forward any level of expertise. I think we have to recognize that there are problems within the industry, and I think the duly elected people are working to try to solve those problems. As supply management evolves, then I think it will be sorted out. My fundamental problem in this whole thing is to make sure we still have the framework in which to run the supply management industries.

Mr Villeneuve: In a press release dated September 30, the Minister of Agriculture and Food supported a 12-cent rollback from the cost-of-production formula. That says to me he has given his blessing to this, and I wonder what other supply-managed commodity he will be agreeing to. Can you crystal-ball-gaze a bit?

Mr George: No, I think you would have to ask the minister that.

I would like to say in closing I think all members of the Legislature have been touched one way or the other by the farm crisis this year. I just want to thank members on all sides of the House of all political stripes for their efforts in bringing us at least what we have gotten. I would ask you all to redouble your efforts and help us to work towards the long term.

The Chair: Thank you for your assistance and your insight. You have one of your staff people here. Perhaps you could introduce her.

Mr George: Laurel Campbell is our media relations officer, our communications person, my assistant when I am on the road. I am not sure what her title is.

Mr Sulliman: I think she is the one who officially welcomed you in the membership, did she not, Mr Chair?

The Chair: Yes. No qualms, no qualms.

Mr Sulliman: Let the record show that the Chairman belongs to the OFA.

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CATHOLIC RURAL LIFE CONFERENCE

The Chair: We now are going to hear from the Catholic Rural Life Conference. If you would come on and seat yourselves and tell us who you are and begin your presentation, hopefully leaving us 15 minutes out of the 30 minutes to have some dialogue with you. I say welcome to you.

Mrs Murphy: Thank you. I am Palmira Murphy, better known as Mickey. You may refer to me as Mickey; it may be easier. I am the chairperson and co-ordinator of the Catholic Rural Life Conference. This is Frank Earnst, our secretary, and Lise Willems is a member of the conference.

I typed up some things this morning without corrections. I think you have a copy of that by now. I will go over that first and then I have some comments to make, mainly about the area I come from, which is the tobacco district, Delhi. Then I will let Frank Earnst add to that, if that is all right with you, and then we will have some discussion. Okay?

The Chair: Yes, ma'am. I should tell you that Delhi is where my grandparents were tobacco farmers for decades and decades.

Mrs Murphy: Kormos. Are you related to Ann?

The Chair: They probably do not admit it. They probably get asked that question frequently.

Mrs Murphy: I will go ahead and start. Thank you for the opportunity to express the concerns of the Catholic Rural Life Conference. There have been three suicides in the Petrolia and Alvinston area and I am afraid there will be another round of suicides throughout Ontario similar to that of the tobacco area four or five years ago. I cannot help but wonder why a farmer's life is not as newsworthy or valued as that of a postal worker, for example, or why farm production is not considered as important as car production, etc. There seems to be some problem with values.

Food security is necessary not only to ensure that people have safe, adequate food, which is every person's basic right, but also to prevent consumers from ever having to pay exorbitant prices because they are totally dependent on other countries. Food is necessary to sustain life. What could be more important? Therefore, the production of food should not be a competitive business but a co-operative effort.

Reflecting back to when I was a child, I remember my father, relatives and friends talking about farming, and the two comments that I heard often were, "Canada is the land of opportunity," and, "When farmers prosper, everyone prospers." After the Second World War, farming went along very well and the economy boomed. I can also remember news reports that there would be a shortage of food in the future.

As time went on, farmers were told that farming was a business and they had to become more competitive. Fertilizer and chemicals were introduced and the yield per acre grew higher and higher. Then input costs went up. Higher interest rates, inflation, the value of the dollar and an oversupply all contributed to the farmers' profit margin shrinking lower and lower. The farmers' income has not kept up with inflation, mainly because of the strong competition from our neighbours in the United States who, somewhere along the line, have set our food prices.

I talked recently with some grain and oilseed producers and would not dare repeat the language used to express their anger, frustration and feeling of hopelessness. One man seemed to be in a daze and kept repeating, "I haven't got any money left." This man had been a very successful tobacco and grain farmer at one time. Now he has no money left to start again. He is almost at retirement age and does not have the education needed to get a good job. This is a typical situation in our area.

Another farmer, a woman, said: "We won't be growing corn next year if this is the way it's going to be. You're beat before you start." Comments like this make me wonder if this is what the federal government wants. If it is, it should have the honesty and decency to tell the farmers.

Another farmer commented on how Cargill and other multinationals in the US set our prices, which is wrong, and that last week corn was worth 15 cents less than in the US. Add to that the difference in the dollar and you have a no-win situation. I will quote him: "Why is the government allowing them to put small farmers out of business? They pay unfair, low prices while our government bails us out with taxpayers' money. Then when we lose it all, they will take what is ours and everyone will pay the price, except for the ex-farmers, who for the most part will be on welfare because the majority are approaching retirement age."

This is a comment worth remembering. The urgency of correcting this situation cannot be stressed strongly enough. The farm community does not want to ask the government to bail us out, but we have no choice. What we want and need are fair prices. The way it is now, the government programs can keep the farmer's head above water in some cases, but additional assistance is urgently needed for this year, especially in the drought-stricken areas and for the grain and oilseed farmers. We need financial emergency measures now and a temporary ban on farm foreclosures.

At present, we are not in charge of our own business, the multinationals are, and that is bad business management. The owners must always have control. That is recognized as good business management. By what right, authority or justification are the multinationals allowed to take advantage of farmers who provide mankind with life-giving sustenance? If farmers acted on that same level of immoral behaviour, which people justify by saying, "That's business," then we would all quit farming for one year, live off welfare payments. Perhaps that would raise the level of reasoning to where it should be. That is food for thought.

The following ideas are offered in a spirit of co-operation:

1. Improve the condition of the soil and the market by setting aside a percentage of acreage on every farm for cover crops until the land and economics of farming have reached the level of sustainable agriculture.

2. Farm programs should not be based on unlimited production, but rather on moderate-sized family farms.

3. The NISA program should be examined as to whether it promotes sound ecological practices.

4. We agree that stable funding is necessary but feel that farmers should direct their checkoff to the organization of their choice.

5. The farmer should get a fair income according to cost of production, and the province has an obligation to see that the federal government maintains article XI in the GATT negotiations.

6. The Ministry of Agriculture and Food should inform farmers of products that can be grown in Ontario instead of being imported, and should request the federal government to put tariffs on such products coming into the country. Tariffication is necessary to promote self-sufficiency and would minimize the risk of the investment and help the transition to new markets.

7. All long-term policies should work together to stabilize prices for the farmer and the consumer through better management and also to guarantee land quality for generations to come.

8. Cost of production, not commodity exchanges, should determine the food prices for domestic use. This would also eliminate unnecessary transportation which harms the environment.

We are the stewards of God's creation. The Catholic Rural Life Conference promotes the value and dignity of each individual as a distinct person, but with a social obligation to work co-operatively in harmony and peace to attain what he cannot attain by competing against one another in the marketplace. We urge the government to help farmers through the financial crisis at hand and to create an environment by setting long-term policies which will enable farmers to manage their farms with some sense of confidence and security.

Now I would like to speak for a moment, if I may, about my own area. As I mentioned, I am from the tobacco district, which in some cases is more like the former tobacco district. I spoke to a friend the other day and he told me the taxes on his farm for one year were $12,000. That is a 125-acre farm. I think this is disgraceful. It is unrealistic. I know there are many farmers who are suffering because of it. This is in Norfolk county.

The farms in our district are small because they were tobacco farms. My farm is 104 acres and at one time that supported two families very well. Now it will not even support me alone. I had six children. When I say "supported," I mean we lived in comfort. I was not rich, but I certainly was never lacking for anything. My children went to university and we had everything we needed.

In some instances where farmers were growing tobacco and now grow alternative crops, especially such as grain and oilseeds, the farms show a loss because the fixed costs are higher than the income. I think you can all realize that pretty easily.

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Everything they have tried in our area seems to flood the market. It does not take much to flood the market when you are growing herbs. There are quite a number of things that have been tried. I myself went into trout production, and about the time we had a lot of trout to go, the price dropped from $1.85 live weight to $1.50. That was two years ago last spring. It has come up to $1.60, but at $1.50 we were not making money. My son and his wife and children had to move off the farm and find work elsewhere. At present, my oldest daughter is living there. We have geared down to one-third capacity and it is being operated as a part-time job.

The other thing that I went into myself was trying to get my farm into organic condition, because I have become very aware of what is best for the environment. I want to do what is best. I am growing alfalfa and grains to build my soil up, but I am not making any money whatsoever at that. However, my soil certainly has improved a great deal over the last few years.

I do not know if you people are aware that taxes collected on packs of cigarettes total in the area of $5 billion a year. The people from our area really feel that this money should be put back into agriculture. Very often you hear city people comment about how much help the farmers are getting from the government, but they do not seem to realize that the government has got an awful lot of money out of agriculture, especially from our area.

The Catholic Rural Life Conference, along with some Protestant churches, are getting together to discuss what can be done for farmers in the line of stress management. Finances are a problem here and it sure would be nice if we could get a little bit of backing from the province in that area.

I mentioned in the beginning the three suicides, and I am just afraid that this is going to happen again. Being from the Delhi area, I asked somebody who should know, but I cannot repeat his name, how many deaths there were due to the decline in the tobacco area. He said of suicides and deaths that looked like suicides and stress-related deaths -- heart attacks really went up -- he felt there were about 50 people who died because of the stress they went through. I would really like to see something done to help the farmers in Ontario who are going through a lot of stress right now. There are people available who are professionals at it, but it costs money and that is where the problem lies.

I also feel that farmers who are going through the Farm Debt Review Board need to know their rights before they go through. There is so much legal mumbo-jumbo talk that they do not understand, and they do not know that they have rights. They are at their mercy. When you are in a state of stress, the first thing that happens when you go through something like this is denial, the second is confusion and then there is the depression and the anger. These are all steps that are well known to people who do counselling. When a person is in a state of confusion, he does not know sometimes just what to do or where to turn. I feel it is very important that farmers are informed as to what their rights are.

I will turn it over to Frank now.

Mr Earnst: I would like to say that the basic thrust should be in agriculture. The problems in agriculture are largely related to disempowerment of the rural community. The emphasis is always on economics, and economics play a big part in this, but the underlying problem is often the lack of power that rural people have over their own lives. I think governments play a big role here and that is where long-term vision and planning should come in. Here is where the biggest problem lies. Agriculture has substantial resources, but there are some inherent problems. For instance, every generation has to pay anew the cost of the farm and often, with high interest, this amounts to four or five times the value of that farm. Some of these things need to be seriously looked at and I think we should give a more humane look at agriculture again and preserve rural communities.

Mrs Murphy: I believe Lise has a point she would like to make about crop insurance.

Mrs Willems: Yes. This morning the adjuster came to our farm. We grow about 80 acres of soybeans at the moment. We are farmers in transition to organic farming and, growing soybeans, we have studied what we could do about the weed problem. We used a system to grow rye with the soybeans to suppress the weeds, and the weather or other things did not co-operate. So we had the idea that the rye would grow up with the soybeans and then it would die in the summer, and that is what it did. But in the meantime lots of weeds came up also.

In our area we had about 40 to 50 bushels an acre. With crop insurance, we get 75% of this and it would be about 29 bushels per acre. Then the adjuster came to our farm this morning. He said, "It's too bad there are too many weeds on your farm." Now we have to cut it back another 40%, so there are left about 11 bushels per acre that we will get from the crop insurance, that they will give us back if this is the case.

We are trying to do our best to have sustainable agriculture in the future. When you are becoming organic, you cannot use chemicals, so we use other means. There is no clause in the crop insurance that thinks about organic farmers or their ideas, so it is really just pushing that we have to use a lot of chemicals to be able to use the crop insurance. I would like you to consider this, because I do not think that is sound practice for the future, and I would like help.

Mr Cleary: Thank you for your presentation. We are aware of some of the problems you are having in Norfolk and the amount of money that is turned in to the government through taxes, because the former Gordie Miller used to remind us of that all the time in the tobacco industry.

I am very familiar with your organization and I understand that you fully support the family farm. Is that correct?

Mrs Murphy: That is right.

Mr Cleary: In our part of Ontario, we have a great number of farmers who belong to your organization and a lot of them are hand-me-down farms. They really promote mixed farming in our area and they do it well.

You talked about suicides and financing and everything. We had representatives from the bankers' association in here last week and they left us with the impression that they would not have much more problem this year collecting their loans from farmers than in previous years. I would just like your comments on that.

Mrs Murphy: They are referring to tobacco farmers, the ones who are left. You either had to get out or get bigger, and if you had a small farm or only one farm, you pretty well had to get out. The first group that went out was mostly forced out by the bank and the farm credit. They had no choice. I think that would number about 180 right off the bat, and there were more forced out later on. So it was not always voluntary.

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I felt that I had an alternative by going into fish, which was very good at the time. But then about 30 other farmers in the area had the same idea and by the time we all had a lot of fish to go, the price dropped, of course, because we flooded the market. There was no supply management.

So when the banker says that, he is talking about tobacco farmers. The other farmers have been kind of forgotten.

Our problem is largely also the fact that it takes a lot to build up sand. Now sand was perfect land for tobacco. That was nothing but a dust bowl before tobacco started down there, and that built up the area. It is pretty hard to grow something on sand. You can grow vegetables; you just have to load it with fertilizer and whatever. I have taken the expense, which is expense, and the time to try to build my land up.

The other point is that our farms are small. What can you do on a small farm to make a living? I put all my money into fish. I thought organic and fish looked good, and now I do not have any money left to put into something else. There are so many farmers in the same situation. The farm on either side of me is for sale. If we could afford to buy the farm on either side, we would have a 300-acre farm and then we could likely do something worth while with some cattle and pigs or also perhaps a big vegetable farm.

The thing is our farms are small down that way. So many people still have their farms, but they are working, getting the jobs in town that other people would like to have. They have put in a factory down our way and it took up a lot of the tobacco farmers. They are hired quite readily because they are hard workers, but the thing is, for every farm that goes under, those people are going to the cities and towns looking for their jobs, and jobs are hard to get.

I myself looked for a job last fall and could not find one. At one time I owned and ran a restaurant. I could not even get a job as a waitress because I am too old. They want the young girls, right? I do not have the education to get a lot of jobs. I applied for a job to answer the phone for emergency calls for an ambulance service. Everything was fine and then they said at the end, "Well, you do have grade 12, don't you?" I said, "No, I don't." I have an education which is likely equal to grade 12, because I have taken many courses. I certainly have the life experiences behind me and I know the area, but I do not have grade 12. Therefore I could not get a job.

The couple who rent the farm house behind my farm are five years older than I am. They are in their early 60s and I do not know what they are going to do. They lost their farm, they lost everything. They are trying to work on a farm when there is work and collect unemployment insurance the rest of the time. When they get to be 65 or whenever their whole body breaks down and they cannot work on the farm any more -- I just see a lot of people in our area in the next five years or so, especially about five years from now, going on welfare because they just have no resources left.

Mr Cleary: Would you like to comment on the effects of cross-border shopping on agriculture? Do you get involved in that?

Mrs Murphy: I am not really involved with the cross-border shopping, but I do have an opinion. If you go down further into the United States, you are going to find the prices are not as cheap as they are in Buffalo and Detroit, and I think that says something right there. They are lowering their prices to get our people to go over there and shop.

I think when our people go over there and shop, when they come back over the border with these things, they should have to pay to bring them up to the level of our products. I really do not think it is right. You take care of your own family first, you take care of your own country first, and so on and so forth. It is kind of a moral issue. I know a lot of people, especially the ones who live close to the border, it really helps them out financially, but I think you have to do what is best for the common good, not for yourself. It is a rather selfish attitude.

Mr Arnott: I would like to thank you very much for your presentation this afternoon. You have done an excellent job.

I have one question and it refers to the first paragraph of your presentation when you immediately talk about the suicides.

I may be mistaken, but I believe the Ministry of Agriculture and Food at one time had something called the farmers' help line, I think it was. It was a 1-800 number and it was sort of emergency counselling.

Mrs Murphy: That was set up in the tobacco crisis time, yes.

Mr Arnott: Do you know if it is still functioning?

Mrs Murphy: There could still be that emergency help line, but we want to go beyond that and have support groups in the different areas.

Mr Arnott: That is what I was asking. What could the province do to enhance that sort of counselling program?

Mrs Murphy: I think the churches and the farm groups are willing to work at that. Certainly we are, but it is the finance. If you have to rent a hall or rent facilities or get a speaker in to talk on stress or to talk on finance management, this is where the problem comes in. A little bit of financial help would go a long way.

Mr Arnott: But there are a great many volunteers who would want to come forward and assist in that, I would expect.

Mrs Murphy: Oh, yes. I have run a support group for four years and I would certainly do everything I can and I do not expect to be paid for it. I know the value of it. I was widowed 21 years ago and I certainly could have used something like that at that time. Therefore, I started a group and worked with the group for four years on that, so I have some experience and I do whatever I can.

Ms S. Murdock: In the past, farmers have all joined their own different groups, but do you feel that maybe one of the problems is that we have not come -- I say "we" because I was a farmer also -- in a united voice? I notice you mentioned that you agree with stable funding but each different type of operation should be able to fund the one it pleases, which I agree with. Do you not think we have to find a mechanism where we all come to governments with one united voice so that we get our point across?

Mrs Murphy: The reason I am not 100% for that is that at the time of the farm crisis in the tobacco area we formed a committee called the Committee for Equality. The first farmers who went out of tobacco farming were forced out by the banks and the credit unions. They had no choice. They were offered a few cents per pound of tobacco quota to exit tobacco, and then once that group went through, nobody else entered the program because it was such a poor offer that they just did not do it unless they had to, so they upped the ante by three times.

We formed the Committee for Equality, of which I was a co-ordinator and secretary-treasurer, and I called the OFA and asked for assistance and she said -- this is Brigid Pyke, of course -- "I'm sorry, we can't do that because the marketing board is a member."

I feel it does not always serve everybody's purpose. I belong to the trout producers' association and I belong to the organic growers, the ecological growers. I have a farm that is not making a living for me and I belong to these two associations because I need to know what is going on and I need to gather information and know more about it. For me to have to belong to another one on top of that is just one more financial strain.

Ms S. Murdock: Yes, I agree with what you are saying there but, again, then we come all divided to government and we have that problem where we, as farmers, do not speak with a united voice for each other. We have had that problem, I think, all through history and I think it is up to you and me and other people who are in different groups, smaller groups, to force, say, the OFA right now, but someone like that anyway, to be our spearhead.

Mrs Murphy: I see your point and I agree that farmers need to learn to stick together. I have sent out just recently to different farm groups an appeal for solidarity. Even though we are different groups, there is no reason why these different groups cannot get together and discuss the issues and learn from one another and see what can be done for all farmers.

Mr Hayes: I would like to compliment you also and welcome you. You made a very good presentation.

One of the questions I have really deals with the tobacco area and the so-called transition system, which meant well, but it seems that when we start talking to farmers about alternate crops, in that area particularly, they get quite upset. I have been down in that area talking to quite a few people and I see a real potential to grow other crops. Of course, if you mention that just by itself, people get upset.

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I know in your brief you mentioned that the Minister of Agriculture and Food should inform farmers about other products. Do you feel this province should really get involved in that? I see it as a problem of not getting the markets for them. It is fine to say, "Grow more strawberries or cauliflower," or whatever, but then we have to look at a system whereby we can market on behalf of those farmers who we are asking to extend themselves to do it. I would like to hear your comments on that.

Mrs Murphy: In our area particularly we do not know anything really to speak of about marketing, because we had a marketing board that has served us well over the years. I am not going to knock the marketing board. They have done very well. We can grow it, but how do we market it? It is not something you can learn overnight. That is the biggest area of need for the farmers: to know what crops to grow and get some help in marketing.

When I could not get this job last fall, there were courses coming up at the Ontario Ministry of Agriculture and Food office in Simcoe. It was four mornings a week and it was agribusiness management, marketing and accounting on the computer, and that was 20 weeks. So that is what I did. It was kind of a lean winter, but I went to school. I found the marketing course was just excellent. If you have never done any marketing before, it is pretty hard to do it.

At one time I grew about five acres of Belgian endive or whitlow chicory, and that is totally imported. That could be grown here. It grew very well on my land. There are other things too that are being imported that could be grown here, but how do you break into the market if you do not know where to go to find your markets? This is the problem. I think there is potential in our area too, but we do not know how to go about it.

Ms S. Murdock: There certainly is, and it is something that we, as a government, should be looking at to promote Ontario and to go into those alternate crops.

Mrs Murphy: The other problem is, in our area everybody has already put the money they had from their quota into something and it did not work, so there they are with no money to get started.

One week I received a letter from the bank, "Dear preferred customer." I would get my money for harvest time 0.5% above prime. I was a good customer. I always had everything paid off. The following week I went in to see about getting a loan to set up a rainbow trout operation and they wanted 2.5% above prime. I could hardly believe it.

When I look back I can see why, in a way. The banks actually were pushing on people, "Why don't you put in all bulk kilns," for instance. You must know what that is. That is the newer method, newer buildings for curing the tobacco. I was told too, "Why don't you put in all bulk kilns," and I said, "Well, I think I'll put in two at a time." So I saved my first $30,000 and I put in two. I saved another $30,000, and I decided instead of putting in two more bulk kilns I was going to put in a small trout operation just to see what the potential was and to learn everything necessary. I never did go any bigger.

A lot of these people were good farmers. They had put in all bulk kilns and then this happened a few years later and it was that expansion -- because they were good farmers and really looking to go ahead -- that cost them their farms.

I have one friend with a farm with all bulk kilns, two houses, a new modern pack barn, 100 acres. They lost everything. She said it just breaks her heart when she goes by there and sees these people who bought the farm, who are from the city, out there putting their golf balls on that lovely lawn that they put in all around the house and the barn and the bulk kilns. It is a real misuse of land and a sad situation.

Mr Wood: You mentioned about the banks, which Mr Cleary mentioned earlier, squeezing on people. We have had other groups who have come forward. A group mentioned the fact that there were three suicides in the county of Lambton. Would health problems and the resulting suicides, in your opinion, be the direct result of banks closing in too quickly when they probably could give them more time to refinance?

Mrs Murphy: I think that was a lot of it. At first, the farmers could hardly believe what was happening and all of a sudden, bingo, the banks cut them off and their farms were gone. It happened so fast it just sent them spinning. They just could not believe what was happening. There was one weekend in the spring when there were three suicides. The thing is, you do not even hear about this on the news. We feel in our area that because we are tobacco growers we are not quite up there with the rest of the people, and we are kind of discriminated against. That is the feeling.

But things have straightened around for a lot of the farmers now. The ones who could afford to buy the quota and expand did that and they are doing all right now, so the banks are not concerned about them. I hear there is an exceptionally heavy, good crop this year. I do not know what they are going to do with the extra tobacco, but at least they do have a good crop.

Mr Wood: I do not know too much about tobacco, but I see that one of them is from RR2, Mitchell. That is where I was born and raised. I spent about 12 or 13 years on a farm there and I know there were health problems and suicides at that time as a result of different reasons. It is not something new that has come along, but I guess it is more severe now.

Mrs Murphy: Government is people, but I do not think they really stop to think about what it would be like if they were in that situation. You work all your life to pay for a farm, which is your retirement when you sell that farm. That was the farmer's security. My farm is worth $1 million. If I could get $350,000 from it, I would be doing really well. I have not made a living on that farm since 1986. Not only did I put money from my tobacco quota back into it, but I also sold a piece of property I had for $50,000 and cashed in my RRSPs and all that because trout farming was so good. But, you see, everybody else had the same idea. Supply management, that is important.

Mr Hayes: I would like to respond to that last concern you have about being able to retire with some dignity and being able to keep that family farm, for example, in the family, for the sons or daughters. That is one of the things we are looking at. The minister, by the way, who was here today, has asked me to chair that particular committee on long-term planning. We would certainly appreciate any input you may have on that particular issue, because we really are taking a very serious look at that.

Mrs Murphy: Certainly I will do anything I can. Our farm has been in the family for over 100 years and I would really hate to see it go by the wayside.

The Vice-Chair: Seeing that Mr Hayes has overextended his party's time, I will ask if anyone else from the other side has a quick question for you. Hearing no one, I wish to thank you very much on behalf of the committee for your excellent brief and for the way you answered the questions. They were very clear and forthright. You gave us a real experience of what you have faced personally and I thank you for that, because we do not always hear that type of answer. When the recommendations have been finished and the package has been finished, we will forward one to you.

Mrs Murphy: Thank you very much. I have some copies of a news item. There are four here. It is really quite good. I just received it in the mail yesterday, if you would like to pass them around.

The Vice-Chair: Okay. At this point I would like to adjourn until Monday afternoon following question period.

The committee adjourned at 1730.