Mr. Maurice Foster (Algoma):
Mr. Speaker, we would have been glad to hear from the hon. member but I guess if the rules are being strictly enforced we will have to accept your direction in that regard.
Bill C-54 provides amendments to the Farm Products Marketing Agencies Act and essentially changes this act by adding a new section to it which provides legislative authority to have check-offs for agencies established by the government, by an Order in Council, for national check-offs. These check-offs involve interprovincial groups, as well as check-offs for crops being marketed from the international realm into the Canadian marketplace. It is legislation that is very similar to some legislation now in place at the provincial level which establishes agencies, that are very different from the agencies provided for National Farm Products Marketing Agencies.
The bill changes the other legislation to remove the word "marketing" and puts in "National Farm Products Agencies Act". It is legislation that a number of organizations, including the beef producers, honey organiza-
tions, and the Horticultural Council of Canada, have supported.
It has one very special feature to it and that is that these check-offs would not only apply to producers within Canada but to products coming into Canada. In some commodities where we do not import it would not be a very big feature.
For commodities such as fruits and vegetables which we do not produce in this country, perishable fruits in the wintertime, and so on, it would make provisions for a check-off. Those check-offs could be used for promotion of that product or they could be used for research.
I think the number of agencies asking for this indicates that they want it.
In sending this legislation to the standing committee we have to be sure of a number of things.
One is that the government is not planning to off-load their responsibility for research in this country onto the producers of the commodity, whether it is the beef producers, horticulture crop producers or whatever. The federal government historically has had a national responsibility for basic research, for fundamental research, for research that is transmitted and made available to producers.
Clearly, in the discussions which will take place in the standing committee, we will want to have those kinds of assurances. Perhaps they could be written into the legislation or perhaps there is some other mechanism to ensure that those safeguards are there.
We do not want this government which has drastically reduced the amount of support for research, I believe some $40 million between 1989 and 1990, to shirk its duty in that responsibility. We do not want it to off-load it on to the producers or the provinces, as it did with some of the safety net legislation. They have a responsibility to carry out that research.
The promotion itself is something that is up to producers. Clearly, there have to be mechanisms in the legislation to make sure that the majority of producers want this and that there are adequate safeguards to ensure that there is a referendum in the provinces that produce the commodity, or on a national basis to ensure that
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whatever is being done a majority and a good solid majority of the producers support that promotion.
It is my understanding that this legislation can be used by the existing supply management groups if they want to have check-offs. I believe they now have mechanisms where certain types of check-offs or funds come out of their national organization for promotion but I do not think it is used for research very often. So that adds another provision for those groups.
A number of organizations have indicated their support for this legislation, I understand the Canadian Cattlemen's Association, the Canadian Pork Council, the Canadian Horticultural Council, the Canadian Fruit Wholesalers Association, the Fresh for Flavour Foundation, the Western Grains Research Foundation, the Canadian Honey Council and the Canadian Nursery Trade Association. Clearly, there are those groups that support the legislation.
As I understand the legislation, there would be provision in it for co-operation between provincial and national organizations running check-offs.
It is interesting that a number of these organizations that are supporting this legislation really have been very reluctant ever to become involved in a national farm products marketing agencies act under the existing legislation which provides for supply management and cost of production and all the rest of it.
This bill before the House today needs to go to the standing committee to make sure that there are safeguards with regard to how it will be used.
Clearly, some groups like the National Farmers Union have expressed concern that they want to be able to appear before the standing committee.
They see it as a regressive tax on farm production because the majority of those producers of a commodity would be able to vote and have a levy which could be used for promoting that product nationally or internationally.
They are concerned that the government will off-load its research responsibility.
Those are legitimate concerns which need to be aired and examined.
The Canadian Pork Council is concerned that the check-off system would result in a costly additional bureaucracy and institutional arrangements.
It seems to me that those are the kinds of concerns that need to be explored and analyzed. We need to see if there are amendments that can be made to the legislation to ensure that those kinds of problems do not exist with this check-off legislation.
Clearly we would want to see that this legislation would be supported by the majority of producers. We should examine whether there is some way that the vast majority of the producers would support the legislation. The check-off could be very arbitrary and harmful to low income producers or smaller producers. I think we need to look at that aspect in the committee when it is being examined.
It is my understanding that this legislation can be used for the supply management sectors. They do have some provision, of course, for this kind of promotion under existing legislation but here they would be able to impose levies which could be used for the research project.
Those are a number of concerns that we have about Bill C-54.
It is my understanding that this legislation can be implemented on a basis in which it would be mandatory or could be refundable. That is another aspect that has to be clearly identified. There are voluntary check-offs now for beef producers and on some other commodities. We would like to know just how the legislation would operate in that regard.
Those are a number of the factors which we think need to be considered when we look at this legislation in the standing committee.
I want to say a word or two about the original legislation, the act that we are amending here today, the Farm Products Marketing Agencies Act.
That legislation was set up in 1971 by the Parliament of Canada. A number of national farm products marketing agencies have been established: the Canadian Egg Marketing Agency, the Canadian Turkey Marketing Agency, the Canadian Chicken Marketing Agency, and the Canadian Broiler Hatching Egg Marketing Agency.
At the present time, there has been a report and an examination. I understand that there will be a vote next
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spring on the support that exists across the country for establishing a national apple marketing agency.
The reason I raise this is because that legislation was established some 20 years ago. It is really companion legislation to what was done under the Canadian Dairy Commission. It is under attack in the report that was issued by Arthur Dunkel, the secretary general of GATT in mid-December of last year.
That legislation has brought order out of chaos in several pieces of legislation in many farm sectors where farmers are able to produce and market a commodity and have some idea what the price will be.
It really was revolutionary legislation because in our country and in most of the western world the farmers' bargaining power is very little. In most commodities there are large international trading corporations which practically control the price of the commodities.
The National Farm Products Marketing Agencies Act, which was brought in in the early 1970s, gave producers the power to bargain in the marketplace with those large powerful retailing agencies, the international commodity companies.
Out of that has grown a very vibrant, progressive, effective farm supply management system where our poultry, egg, and dairy products are marketed on the basis of the cost of production, the average cost of production of the most efficient two-thirds.
It is amazing, as we look around the world, how much more efficient those producers have become. I do not have the exact figures in my head but the ones I remember are that Canadian dairy producers have become, during that 20-year period, about 70 per cent more efficient. For American producers it is about 42 per cent and for Great Britain it is around 25 per cent. We have a healthy, vibrant, rural agriculture.
There was great concern expressed during the free trade debate back in 1987-88 as to whether those supply management marketing agencies could survive the free trade agreement. Clearly they are very much under the gun today because of that.
I recall one meeting we had in Fredericton, N.B., where various groups, the local co-operative, the dairy farmers, the poultry producers, the egg producers came
before our committee and said: "If you want to see what the market economy can do for agriculture in New Brunswick, just go across the border in Maine where you will find practically no agriculture".
Most of their poultry and egg commodities are being produced in Georgia and Alabama and in southern states where there are no energy costs. Most of their milk is being produced in New Jersey or farther south.
We have in Atlantic Canada, in Quebec, in Ontario, and in parts of Manitoba and British Columbia a very vibrant, healthy, rural economy. It is something we have put in place. It is unique in the world. We produce the commodities that we need. We do not flood the international market. We continue to provide for the amount of access that historically has been the case from other countries such as the United States for poultry, turkey, eggs, or whatever was in place.
This system has meant prosperity, a continuous supply of farm commodities to the consumers at reasonable prices. Historically it has not increased any more than the Consumer Price Index and has increased at a price lower than those for commodities not produced under supply management. This is a legacy the Parliament of Canada has put in place under the legislation we propose to amend today.
There have been two very serious challenges to the whole system of marketing by the free trade agreement. When the government negotiated the free trade agreement it did not get any import controls for dairy commodities. The United States had an historical protection called a waiver which it got from the GATT negotiations back in 1954. It gave it complete control of imports.
As Minister of Agriculture John Wise stood in the House and said that the free trade deal did not threaten the supply management marketing boards of this country. I do not know whether he did not know or whether he did not want to face the reality of it, but clearly the FTA did so. There was no provision in there for import controls for processed dairy products like yogurt and ice-cream or any of the other processed dairy products. The historical arrangement under article XI of GATT provided for fresh farm produce but certainly did not provide for processed dairy products.
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Mr. Wise made the pronouncement in January 1988 that there would be no problem for our dairy and poultry industries; he would simply put these dairy products on the import control list. He was immediately challenged by Senator Lloyd Benson from Texas who said there was no provision in the free trade agreement to regulate import controls and if the government did it the United States government would immediately challenge it.
About 11 months later the government put ice-cream, yogurt and a number of cheeses, butters, powders and so on on the import control list as of January 1, 1989. Immediately the United States challenged it and a GATT panel was struck. Nine months later, in September 1989, lo and behold the member of the senate finance committee of the United States was right that there were no import controls under the FTA and the decision of the government to place ice-cream and yogurt on the import control list was struck down by a GATT panel. Three months later, in early December 1989, the government agreed to the decision of the GATT panel.
That was when we got into the GATT provisions and that is why when the government went to the GATT it asked for not just the maintenance of article XI but the strengthening and clarification of article XI. The strengthening was to make it apply not only to fresh raw farm commodities like milk, chicken, and eggs but to any commodity that contained more than 51 per cent of that fresh raw farm commodity. That is where we are today. The government has been at the GATT table since 1986, the Uruguay round which could well have been the Vancouver round. The Prime Minister was determined that the meeting had to be in Montreal in 1986 so the decision was that it would be the Uruguay round because he would not support the Vancouver round approach.
During the last five years we have to look at what progress the government has made in pursuing its position to strengthen and clarify article XI of the GATT. The government should get busy in the next eight weeks and persuade the United States Congress and President Bush to accept our position. Let us be frank about this: very few countries oppose our position. Perhaps Holland and Britain, but most European countries are not very upset with the strengthening and clarifying of article XI. Most of the Cairns group apart from perhaps New Zealand is opposed to our position.
The government says in the House that 102 countries are opposing our position. That is probably not right. Probably a few oppose it, but our main problem is with the United States that wants access to our dairy and poultry products market in Canada because its industry, especially the dairy industry, is in total disarray. Literally thousands of dairy producers go broke daily or weekly or monthly because they have a system that simply does not provide them with an adequate return.
The final eight weeks of the GATT negotiations are critical. In my view there is one window where the Prime Minister should get busy and persuade the European countries to support his position. Most of all he should persuade George Bush to support his position. If that happens we will continue to have a supply management system.
What happens if the GATT negotiations break down totally? We go back to what is left from the FTA which is a disaster because the Americans already have access to our ice-cream and yogurt market. One more reference by the United States to a GATT panel for butter, cheese and powder, the major dairy commodities, would probably render the same solution. That would be extremely disastrous for our supply management system. Once a precedent were set for dairy products it would probably apply to poultry products and eggs as well.
The second alternative is if the government at the end of the day agrees to the tariffication system or there is agreement and the tariffication system becomes the order of the day. There are so many unknowns in that regard, but clearly none of the supply management groups believe the tariffication system will allow for the long-term operation of the supply management system.
We have increased access. We have the violent fluctuations of 100 per cent and 200 per cent in the value of commodities, and the value of commodities we would be referenced to would be United States commodities. In no time the tremendous capacity of United States producers to flood our market and put producers out of business would be evident.
We have an excellent system. The legislation that provides for this system is the Farm Products Marketing Agencies Act and the Canadian Dairy Commission which operates in a very similar kind of way. We are going to see 25,000 people on the Hill on Friday of this week, and they are not just farmers. They are the rural suppliers, people from the co-ops, people from the fuel
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companies, farm equipment suppliers, all kinds of groups.
Yesterday a representative from the Chamber of Commerce-I think he was in the Fraser Valley-stood up and told the Prime Minister: "This is not just an issue for the dairy and poultry industries of Fraser Valley. It is for our entire community".
These are the people who keep the economy of rural Canada going. You take them away and get less successful, or less prosperous industries. Their buying power, their impact on the community is lower. They gave the figure that for every $1 million worth of supply management commodity that is marketed in this country, some 14 jobs are created. There are 38,000 supply management producers, farmers, and farming businesses across this country. They employ some 22,000 people directly.
If you go into the processing industry, the processors of milk, the processors of dairy commodities, novelties, ice cream, yogurt, and all these products, or if you go into the poultry sector, the processing of those, you are talking about over 95,000 jobs in this country. These are not jobs that are all in downtown Toronto. These are jobs that are spread out through rural Canada, through Ontario, Manitoba, certainly in the prairies as well, in B.C., and the maritimes. This is an important sector of our economy. It would be impossible to exaggerate the impact that the Dunkel report would have on rural Canada. It really deals with the food security of our country.
The time will come, in my view, when most of the countries of the world, like the United States, will have vast vertically integrated food production systems. There are producers of eggs for instance in the United States who produce as many eggs as our whole production in Canada. They are usually located in the southern states where they do not have high energy costs and they have very low labour costs.
We do not want that system. We want a system that meets our needs and creates jobs, where we have a better environmental arrangement. When we go into factory operations we have all kinds of environmental
and health problems. We want to maintain that kind of system.
The basic legislation which we are amending today to provide for check-offs and for research is that basic legislation which has provided that very secure, stable, progressive, and efficient production of agricultural commodities. It is a pity that all sectors could not have it. We simply cannot operate on that basis with major export commodities because you have to operate at a world price. Even at that we do have orderly marketing for wheat and barley by having the Canadian Wheat Board and similar kinds of marketing agencies for wheat and commodities in eastern Canada.
The genius of the National Farm Products Marketing Act which we are amending in this legislation today to provide a whole new section has been that it provides a very stable, secure system for food production in this country. This system can become more efficient and provide employment, food security, a vibrant rural life in Canada.
We have seen a devastation of our manufacturing sector in this past two or three years. In my constituency there have been literally thousands of jobs lost in the manufacturing sector. We certainly do not want to see that happen as a result of our downgrading the supply management system for dairy and poultry farmers.
If the Dunkel report was adopted, as has been proposed, every one of those sectors claim they would not survive the six years. In the case of poultry, they talked about going from 2,400 poultry producers to some 32 massive, vertically integrated production units, probably located in central Canada with the western part of our country and the vast rural areas of Atlantic Canada completely shut out.
The motion that was put by my party last week when we had the special debate on the GATT negotiations and on supply management called on the Prime Minister to personally get involved in those negotiations. We do not believe that the negotiators, regardless of how good they are, and I believe that they are capable people, have had much success. They have been there for five years in the Uruguay round in Geneva.
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When the Dunkel report came out it did not mention the strengthening and clarifying of our supply management, article XI. Therefore, it is up to the Prime Minister to use the power and prestige of his office, as the motion that was unanimously adopted by this House asks, and that the Prime Minister become personally involved, that he gamer the support of the other countries that favour our position: Japan, Israel, Norway, Switzerland, and Korea. I believe he should be getting a joint declaration.
There was a declaration by the negotiators which they took to Mr. Dunkel, Secretary-General of GATT, back in mid-December. That motion by those negotiators does not have the same prestige it would have had if the Prime Minister sat down with the Prime Minister of Japan and Israel and the other countries involved and they issued a joint declaration.
We are a major trading country. Japan is a major trading country. Korea is becoming an important trading country. Israel has a lot of influence in the world.
"This is our bottom line. This is what we want. We do not expect to be able to flood the world with cheap surplus food. We are net importers of these commodities. We are willing to provide an increased access of 3 or 5 per cent", I believe was the government's negotiating position. We are willing to reduce any subsidies. There is very little subsidy involved anyway. But this was the position put forward but we want to have a strengthened and clarified article XI.
If the Prime Minister would take that action and then arrange to meet jointly, as a motion of the Elouse calls on him to do, supported by the prime ministers of these other countries who are just as adamant as we are, saying that this is our position, this is what we want to achieve out of the GAIT round because the GATT round does make some changes with regard to export subsidies, for instance to the United States Export Enhancement Program, the European subsidies and so on, which will be beneficial to the grain and oilseeds sector.
If we sat down with the leadership of Europe, with the President of the United States and said: "This is what we have to have in order to maintain rural Canada, the family farm, the basis, the most secure and stable sector of our agriculture," I believe that we could be successful.
I see that as a very narrow window to have a strengthened and clarified article XI.
If we go back to what has been left over, the ice cream and yogurt decision from the free trade deal, that is very, very dangerous. The U.S. could move in easily on us. The tariffication proposal also is unacceptable for maintaining these marketing boards which were established under the original Farm Products Marketing Agencies Act.
We want to see the amendments go to committee for consideration, discussion, and examination of the concerns that have been expressed by some producers, although a great many of the agencies have expressed their support. I hope that the Prime Minister and the government will act now because the time is late for maintaining those agencies which are provided for under this original legislation. It would be impossible to exaggerate the importance to rural Canada of maintaining those agencies, those producers, those jobs and that processing industry. It is very important to Canada.
Subtopic: FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic: MEASURE TO AMEND