The Nova Scotia Legislature

The House resumed on:
September 21, 2017.

HANSARD

NOVA SCOTIA HOUSE OF ASSEMBLY

COMMITTEE

ON

RESOURCES

Thursday, February 10, 2011

COMMITTEE ROOM 1

Nova Scotia Federation of Agriculture

Printed and Published by Nova Scotia Hansard Reporting Services

RESOURCES COMMITTEE

Mr. Sidney Prest (Chairman)

Mr. Howard Epstein

Mr. Jim Boudreau

Mr. Gary Ramey

Ms. Lenore Zann

Mr. Leo Glavine

Mr. Andrew Younger

Mr. Alfie MacLeod

Mr. Chuck Porter

In Attendance:

Ms. Jana Hodgson

Legislative Committee Clerk

WITNESSES

Nova Scotia Federation of Agriculture

Ms. Beth Densmore, President

Mr. Richard Melvin, 2nd Vice-President

Mr. Henry Vissers, Executive Director

[Page 1]

HALIFAX, THURSDAY, FEBRUARY 10, 2011

STANDING COMMITTEE ON RESOURCES

1:00 P.M.

CHAIRMAN

Mr. Sidney Prest

MR. CHAIRMAN: Okay, we'll get our meeting started. On our agenda today, we have the Nova Scotia Federation of Agriculture. We will start with the introduction of the members of the committee, then we'll move on down the agenda.

[The committee members and witnesses introduced themselves.]

MR. CHAIRMAN: On our witness presentation we can go on for probably an hour or an hour and a half, then we'll have a question and answer period and then there will be an opportunity for you to have closing statements and the end. (Interruption) Ten minutes for the presentation, yes.

MS. BETH DENSMORE: First of all, I want to thank you for inviting us to come in to present agriculture to you because we certainly believe that it is a very worthwhile cause. It is a wealth generator for Nova Scotia as well.

We do have a presentation, I believe everybody has a packet in front of them. In it, the presentation is there. There is also some background information. Also, last Friday we had a presentation with Finance Minister Steele, as well as the Agriculture Minister, John MacDonell, so that presentation is in that folder as well, so we'll just move ahead with the presentation.

We are the Federation of Agriculture. We are the only general farm organization in Nova Scotia. We are 115 years old - we look good for our age, don't you think? (Laughter) We were formed under the Federation of Agriculture Act with stated purposes to develop policies that ensure a healthy agriculture sector in Nova Scotia and we are the voice of Nova Scotia farmers.

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Our mission is to ensure a competitive and sustainable future for agriculture and a high quality of rural life in Nova Scotia. Our goal is to have a sustainable future for our industry through building farm businesses that are financially viable, ecologically sound and socially responsible.

Some facts about our industry: we have a combined farm gate value of $509 million, the value of the agri-food industry is $2.3 billion, the direct jobs are 5,400 with a capital investment of $2.1 billion and the goods and services purchased is $460 million.

The federation's major activities: the Meet Your Farmer Web site. It was created to reconnect the consumer with the farmers that produce the food on your table. The goal is to create prosperous communities that will support all Nova Scotians.

Agriculture can be part of a sustainable balance by 2013, with stability in the short term to transition in the long term; ease the province's health care burden; create good jobs and grow the economy; and improve quality of life for Nova Scotians.

The agriculture sector in Nova Scotia generates wealth, jobs and export earnings for the entire community economy. If you have good health with the good food, it all circles back around. The policies that promote increased production of food and fibre, a profitable agriculture sector, gives fresh, healthy options for consumers and thus reduces the burden on health and wellness.

Growing the economy and investment in bio-energy - LST Energy's hay pellet burning furnace the "S", I believe, is another producer. If somebody wants to give updates on the other two gentlemen, it's the names of the producers who actually invented this furnace. Swanson is the one I am most familiar with, Gus Swanson is a producer as well.

Millen Farm's Fresh QC Program for tracking berries - this is quite an impressive thing to see when you look at the bar code that you pick up on his berries at the Sobeys stores and Superstore. You can actually take that bar code and track it back to the day, to the spot in the field and who picked it. Everything is in that bar code; it is really quite incredible.

The investment in new products in each markets - the turnip sticks that Sawler's have put in place; blueberry juice from Van Dyk's, that has certainly been, I guess you could almost say copied even in New Brunswick because recently we were in New Brunswick and the blueberry juice that was there even has almost the identical label to Van Dyk's blueberry juice that was actually started here.

Farms are the cogs of economic spinoff. Operating expenses associated with farms are made within their community - the local feed dealers, the machinery dealers, many other agri-businesses from vets to accountants. Anything you can possibly think of just goes right

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back around - the general contact tractors, buying local from farmers who spend the dollars in Nova Scotia - a healthy economic spinoff.

Agriculture is one of the few resource sectors that actually does generate revenue. Annual contributions to federal and provincial tax revenues is $154 million and that was in 2004. That was from the Food Miles Study that was actually presented, I believe, in July of last year.

Agriculture directly employs over 5,400 Nova Scotians, plus the thousands supporting the industry beyond the farm gate and there are also those who are involved in the agri-food industry. It accounts for almost 10 per cent of Nova Scotia's workforce.

The social and environmental benefits provide healthy water, soil and air for all Nova Scotians, wildlife habitats and healthy ecosystems, opportunity in carbon credit markets, renewable energy and energy conservation and scenic landscapes.

Investment tax credits are a bonus for farmers; it supports farmers re-investing in their farm businesses. These are items that we see as being a bonus in the future, increases investment in agriculture and improves farm profitability, supports growth and innovation and we also have new entrant programs that we need to build the sector capacity. And that is us, the federation. That hour and a half that I was so concerned about. (Laughter)

In your packets there are also some pamphlets with some agriculture facts in there. We certainly encourage you to read through those; if nothing else there are beautiful, bright pictures in them. Would you like to add anything, Richard?

MR. RICHARD MELVIN: Just one quick comment, Beth. We also have our 2011 policy paper in there which - when you have time to digest it - touches on about 10 of our key themes for policy that we're working on this year and going forward. That's information in there as well to refer to or question us on if you wish.

MR. CHAIRMAN: So are we ready for some questions? Gary.

MR. GARY RAMEY: Thank you for coming. I just wanted to go back to one of the points you made and maybe have somebody say a little more on it. One of the slides here says, "Agriculture can be part of a sustainable balance by 2013 with stability in the short term to transition in the long term." I sort of understand that, but can somebody flesh that out a little bit for me and tell me exactly how you see that, please?

MS. DENSMORE: I'll use the mink sector as an example. We look at that, it's profitable, there's huge dollars in the mink sector. The difference in the average producer from the mink breeders to the average agriculture producers in Nova Scotia is 20 years less. When the commodity is profitable you have more new entrants, they really excel at it and

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they want to move ahead. As soon as we become profitable, all sectors, you will see more investment there. The income tax alone that comes from that is beneficial to the province.

With the research that has been done, the investment from research alone for the quality of products that we have, and this is not only for mink, that investment comes back around.

[1:15 p.m.]

MR. MELVIN: I think the 2013 number kind of refers to the budget cycle that Minister Steele is working toward in the Back to Balance, which we as a federation and our members are all on side with the concept of Back to Balance and the multi-year approach, the stepped approach and that sort of thing. That's where that 2013 number comes from.

I guess in the shorter run, in the immediate run in this fiscal year that the budget is being done for now, obviously every department is being told to reduce by a certain amount and agriculture is part of that picture. We do have some concerns around some of the programs that potentially will be cut significantly as a result of that process, that directly help farmers develop their farm infrastructure and new entrant-type programs. There are some very direct things that we're concerned about.

The number Beth referred to, the $154 million of taxes that flow in as a result of agriculture, that was federal and provincial. Approximately half of that $154 million is provincial tax, so around $75 million a year of taxes that the study that we had done a few years back - direct and induced provincial taxes that as a result of our farm gate economic activity. We feel that direct investment in agriculture does have a return on investment for the province and we want to advocate for that and consider dollars invested strategically in agriculture as investments with payback. We can talk more about that as you wish, but that's one of our key thoughts.

MR. RAMEY: May I ask a supplementary?

MR. CHAIRMAN: I didn't mention that the first round of questions, if we can leave it for 10 minutes, so go ahead, you've got some time.

MR. RAMEY: This will be a short snapper then. We're talking about, you mentioned new entrants into the agriculture business and I would find that extremely rewarding if I knew that lots of people were wanting to do that. Do you have any stats on the numbers of people who are lining up or who might be in a queue or who are interested in coming aboard and trying farming as a career?

MS. DENSMORE: We've been told from the Farm Loan Board in Nova Scotia that at their door there have been up to 50 over the past three years, new entrants just coming to

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them. That would be the only number I have, our executive director may have a few more numbers for that.

MR. HENRY VISSERS: I don't have any other numbers but really it's two streams. One of them is immigration and we've seen a few new farms come lately because of that. The other one is succession, so there are existing farms that are taken over by the next generation, and then the other one is new entrants. Of course the new entrant one and the immigration one are the ones that are particularly daunting, because of the capital investment required to start a farm of any size, so those are the ones.

All three groups are targeted but the issues for those groups are different. The new immigrant to Canada who is going to start a farm possibly has a language barrier and very little understanding of what the rules and the laws are here, so they would need more help yet. There is some work being done by the provincial government on some of that, as far as the agricultural side of it goes, too.

MR. RAMEY: Yes, I know about that but are you encouraged by this? I mean is it maybe looking a little bit better than it has been in the past or is it about the same?

MS. DENSMORE: Personally, I am encouraged. In fact one of the new immigrants just actually ended up maybe a five minute drive from me, so another little bonus. As Henry said, language barriers are certainly an issue. It's there, it's the understanding of tax issues here compared to Italy, in this case.

The understanding is just very hard to go forward from that but in the experience I've had with Cyril in particular, he seems to be very happy. He has moved here, he has invested totally everything he has and he now has a fourth child on the way. It has really helped our local economy alone just from that.

MR. RAMEY: Do you have a mentor program or something, a farming mentoring program to help new guys like that?

MS. DENSMORE: The Young Farmers actually have a program in place that they're expanding on. They are looking for other mentors, by the way, so if anybody is open.

MR. RAMEY: That's good to know. Thank you, Mr. Chairman. I'm sorry I didn't mean to go quite so long.

MR. CHAIRMAN: There's one committee member who was late coming here. Maybe he could introduce himself.

MR. HOWARD EPSTEIN: Howard Epstein, MLA for Halifax Chebucto, and my apologies for being late.

[Page 6]

MR. CHAIRMAN: Thank you, Howard. Okay, our next question, Mr. Porter.

MR. CHUCK PORTER: Thank you, Mr. Chairman, and I want to thank all three of you for coming in today and giving us your presentation - too bad it didn't go an hour, Beth. (Laughter) Anyway, a couple of little things, we were talking a little earlier but I want to pick up where Gary left off with regard to entering the farming industry.

I had an opportunity a couple of weeks ago to visit some farms in Antigonish. One of them was a young man who had just gotten into the dairy business last Fall. Now I guess in the grand scheme of things, dairy is somewhat successful, as much as I am hesitant to use the word right now but they are the successful side, or appear to be. He certainly does appear to be doing very well but he is a young man who got in.

I said, what challenges are there to getting in. He did have challenges, it wasn't easy to get money to get in the business. There didn't seem to be a lot of support when it came to the financial backing to get into the business, although it was a very successful operation and I am sure you all know it - the young Mr. Versteeg, a great operation and it had been around. Fortunately he is very quick to say that the two older gentlemen who previously owned it are around every day, still helping him out because they want to see this a success. You talk about mentorship - boy, there is absolutely wonderful mentorship going on there and thankfully for that young man because he is doing great things there, so just on that piece.

You talked about your meeting, Beth, in your presentation with the Minister of Finance, the Minister of Agriculture and let's get right down to it. There are budget cuts coming. Have you been made aware of where those are? Where is it coming from?

MS. DENSMORE: Our understanding in our initial discussions with the deputies and the planning and policy group were that we are supposed to be looking at the Farm Investment Fund, the FIF, as we call it - as well as new entrants. Those are the top two that we've been told.

MR. PORTER: It's certainly going to have a huge effect, I would say, and I just look at your documentation - the other document and one of your top line items here, Farm Investment Fund is a boost to farmers and their non-farming neighbours. I know last year there was a cut of several hundred thousand dollars from the Farm Investment Fund, what will that mean this year?

Again, going ahead, how are we going to see success and try to match up with that statement, which is obviously important. You list the number of projects there, as well as possible through the farm investment. Obviously there will be a decline there, so what effect will that have on trying to grow the industry and do what we've been talking about here?

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MS. DENSMORE: The first thing the Farm Investment Fund does is help us become competitive with other jurisdictions across Canada. It also really promoted the environment, our safety, not only our safety but that of the animals as well. There is business management included in there, upgrading, it is huge. It's huge in the fact that these producers - this is for the most part, 50 cent dollars and the producers have to match that.

So it's very large when you look at it in the total figure, they are investing dearly themselves but just from that investment alone, you also have - whether it is manure storages and I use that as an example because dairy is doing very well, it's a commodity that, as you mentioned, it is number one in Nova Scotia, although mink is knocking at its door. It certainly is doing well, it's not without its issues, besides, but when you look just what the Farm Investment Fund alone, manure storages which we have to have, it's good for the environment, it's safety, the entire kit and caboodle is there.

When you take that manure storage alone, first you have to hire an engineer and you have to hire general contractors. Whether it is an excavator, whether it is the people who put the forms in, it is the contractors, the truck drivers, the whole works, you go right down to the concrete people at the plant and the truckers again, who bring that from there - these are all jobs that continue because of the Farm Investment Fund. We're able to go further from there and it is good for the environment.

MR. PORTER: Has that spinoff number ever been created, Beth? Like the example you just gave? Any one of you, do you know the spinoff of that? That's just a great example right there of how well-defined in a community those dollars do spinoff and what it does mean and generates. I'm just kind of curious. I didn't mean to interrupt you there.

MS. DENSMORE: To my knowledge, the numbers have not been added up. It depends, for every producer it's different, whether it's the type of storage you're putting in, whether it is the number of cows that you have, you have to be able to handle that amount of manure for a nine month period. But as far as actual numbers, to my knowledge, it has not been done.

MR. MELVIN: This would be a general shot to answer that question. As Beth said, that specifically hasn't been studied by an economist or someone like that. The general number is that our farm gate sales are roughly $500 million. This program we're talking about has been a long-term component of helping develop agriculture infrastructure, going back decades. So there's a linkage between that program and the ongoing development of agriculture.

Getting back to the tax base question, $75 million worth of provincial directed induced taxes, the number that the provincial government is investing directly into farms, on an annual basis - Farm Investment Fund, New Entrants Program, business risk(?) management, which is another pillar - is in the range of $20 million a year, so $20 million

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invested and $75 million in tax base. Those line items that are invested directly in farms are a stimulus towards building that farm gate, and a very competitive rural, I might add.

As Beth noted, we are in a very global, competitive economy here. I've had immigrant farmers, Dutch people going back over the last decade or so, who have told me why they chose to come to Nova Scotia to farm. One of the reasons was the farm investment program that helped them to develop their land base and their other infrastructure compared to other jurisdictions, and they were literally looking at the world when they were choosing where to move from Holland. It's a strategic program, a strategic investment in agriculture and in economic stimulus, literally.

MR. PORTER: So there's great value in the program, no question about that. Just on that quickly, is there anywhere else then - I know you have to have cuts, that's real, you have to find somewhere to slash the dollars. Is there anywhere else, in terms of what's invested into the farm community and agriculture in general, where the cut could be absorbed or maybe there's more than one other place other than the Farm Investment Fund, which is very vital and plays an important role for us?

MS. DENSMORE: After just sitting through two days of our Council of Leaders meeting, and for those of you who don't know, the Council of Leaders is the leaders of agriculture in Nova Scotia, comprised of 26 commodities and 13 counties right across the province. Every three months or so we sit around the gable and go over all of our issues and have an agenda. The biggest issue this time was budget cuts, where we could possibly take them. We're 0.8 per cent of the budget, agriculture, and we actually are wealth generators. We don't see a place that you could possibly cut, we just don't see it. We've tried, we've looked as commodities, we actually need more.

I know that's not an unusual statement from anybody you talk to and we did actually say to Minister Steele, we understand what you're doing, we agree 100 per cent that you need to look after this deficit, we do agree 100 per cent. The difference is with agriculture, we do create wealth. We're looking for investment back toward agriculture.

MR. PORTER: Difficult times, there's no question, but there are some things we have to have a second look at perhaps to see whether or not you can survive. You're already behind the 8-ball, so to speak, and now taking another hit will only make it worse, that's very hard. Not that Back to Balance isn't important and having a deficit removed, it would be all wonderful if we didn't have a huge debt and that we were a have-province, per se. Certainly that changes the outlook and we can never have that outlook if we're not working toward it - I agree with those comments as well, I think it's important. At the same time, balance is the key word there.

As I travelled around and visited five farms that day and every one of the people when I asked, how do you manage - it's a balancing act. It was funny or odd to see the

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consistency from all five of them and all being different, three of them were dairy, one was beef and he was in it because he loves farming, it was a passion. He's losing money and works a full time job besides; it's the only reason he can survive. The other guy was an organic farmer. But the same rule applied and they're finding it very difficult, some successful, some barely surviving, so it is difficult times.

[1:30 p.m.]

It's interesting to hear you say that there's just really no room for any more cuts and what will that mean. Did the minister offer anything except to say look, we're just informing you, that's what the meeting was for and there really is no option? Are there some options still on the table, Beth, do you think or are you confident now going forward that we're going to have to assume 3 per cent to 5 per cent, whatever it might be, by way of a cut?

MS. DENSMORE: I would never assume anything like that.

MR. CHAIRMAN: You'll have to come back, Chuck, your time is up. Mr. Glavine.

MR. LEO GLAVINE: Just to start with, concerning real debt, we've got some fictitious numbers out there provincially, but that's for maybe a bigger discussion on another day.

Farms debts, $789 million - is most of that through the Farm Loan Board, banks, where is most of that held, for example? I'm wondering if you could explain a little bit around that?

MR. MELVIN: The Farm Loan Board is about 20 per cent of that, roughly $150 million or thereabouts. Farm Credit Canada, which is the federal Crown agency that finances farms is a major block. I don't have that number in my head, but it would be probably slightly larger than the Farm Loan Board and then conventional bank financing for operating and equipment purchases. The Farm Loan Board is there, it's significant, but not the major lender.

MR. GLAVINE: In terms of the beef industry, we haven't had quite as much discussion currently with it and there was a $2 million beef interest pay-down program and it goes up to 2011. I'm wondering how that has been received and is that a critical help to get through this period and is there a need for it beyond 2011?

MS. DENSMORE: Anything we can do to support the sector, more power to it. I'm going to defer this one to our executive director, as he has a few more numbers on this one.

MR. VISSERS: It has been helpful to producers and farmers; nobody is going to sneeze at $2 million. The complaints that we've heard, particularly in the first year of

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operating the program, was that it was only on bank loans; machinery loans, trade accounts and things like that were exempted from it. That being said, in the first year of operation there was quite a bit of uptake, it's taken year by year with an application process. We're in the process now of accepting applications for interest forgiveness for 2010 and the uptake seems to be greater than it was last year. I would have to say for those who are able to meet the criteria, it has been helpful. There are others who have said that because most of the money that they owe is either through machinery dealerships or trade accounts, it hasn't done much for them.

MR. GLAVINE: Thank you. That's a little overview that I needed. Oftentimes when farmers have this kind of debt - and that's why I talked about this and that we haven't been a province to invest dramatically in agriculture. Has the environmental farm plan been sacrificed any or are we being compliant and progressive in making sure that is part of the future way of doing business with agriculture in Nova Scotia? We know when things go bad or very suspicious even, like what we're dealing with around the mink industry and so forth. I'm just wondering again, for a little bit of an updated picture on percentage of farmers and where we are with that program?

MR. VISSERS: The federation manages the environmental farm plan through an agreement with the Nova Scotia Department of Agriculture. That in turn is an agreement between the Province of Nova Scotia and Agriculture and Agri-Food Canada through what's known as Growing Forward, so there is federal-provincial money involved in the environmental farm plan. We have a staff of six who are doing environmental farm plans on farms. We have in excess of 1,600 farms that have completed the environmental farm plan. This year our focus will be more on return visits than initial visits because we have so many of the farms that have taken up the program.

We did a review of the program this year, we did some consultation with stakeholders and had a meeting with our sister provinces to look at what their programs look like compared to ours. It certainly raised the bar as far as environmental standards on farms, it has identified a number of risk areas. Again, it is tied into the Farm Investment Fund because when they apply for support through that fund they have to take what's known as Appendix B, which is the list of items that need to be looked at in order to be in environmental compliance. They have to take that list to the Department of Agriculture Programs and Business Risk Management division in order for those parts of the program to be eligible and then they're eligible for funding through that. It's fairly closely tied to that program as well.

We think it's a very successful program, we're pleased with the uptake from the farm community and the desire to be good stewards and to improve what they're doing on their farms. Sixteen hundred farms, if you look at the list, it's the majority of the acreage and production in the province. We're representing in excess of 2,400 farms here, but a number of those are smaller farms. If you look at the list, all of those larger farms are included and we've taken it down to some of the smaller ones as well.

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MR. GLAVINE: Thank you for that overview and I wouldn't expect otherwise. Farmers generally have been outstanding stewards of their land.

Just to switch to another area, we had the Nova Scotia Federation of Agriculture Food Miles project and, of course, Select Nova Scotia with the locally-grown, locally-produced. We know that when GPI came out with their report - such a small percentage, the food dollar that's actually produced here in Nova Scotia. This week on Tuesday the Globe and Mail had a major article about the absolute need in our country to get growing our own food and to finally have some sense of greater food security and food safety.

I'm just wondering, do you as a federation want to see an actual government policy on this? We started to develop and emerge with one last Fall as you know - 20 cents of every dollar coming from food produced here in Nova Scotia. Do you think we actually need a policy, a government-directed position to get people aiming for the target?

MS. DENSMORE: I believe it would certainly go a long way. We need a food policy here in Nova Scotia to push that forward, I do not question that for a second. We need that availability, but we also need that fair price to the producer as well as the consumer, so that all needs to be taken into account - producers are consumers as well. We're not looking out for the almighty dollar, we're there for the good of everybody in Nova Scotia. So yes, a food policy, if we could get something moving on that, that would be perfect. Richard actually is involved in the Food Council of Nova Scotia, so . . .

MR. MELVIN: Thank you, Beth. This is a big question, there's a lot of layers to the answer I should say. As a federation, we do advocate for a food policy in Nova Scotia. Everything in life, business, or public policy needs a medium- to long-term vision to be successful.

One of the things, from my own personal experience since I started working with the federation a few years back on policy, is that we need a vision. It's not about us as the farm community having all of the answers - it's a much bigger question and it involves all the people in Nova Scotia at some point along the way. The success or failure that we have as an economy, the success or failure around food security, food safety, health - all those are big questions about sustainability of our province, much bigger than conventional farming per se. So we've recognized for a number of years that we need to engage with the general public and we need to do that through dialogue around food-related issues. Food policy would flow from that, a food strategy.

In our ideal world, I would say it's a partnership between people - ordinary Nova Scotians, stakeholders such as ourselves, farmers, yourselves as government MLAs and so forth - working together in some structured means with working toward that vision. We're lucky here in Nova Scotia and Canada to have access to food, the average Canadian now spends about 9 per cent of their disposable income on food. It is the cheapest food cost in the

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history of mankind, in the history of the world as a percentage of disposal income, that's what we're paying here in Nova Scotia and Canada; that's the good news.

The not so good news is that diet is fundamentally not healthy. It's a ramped-up, amped-up food supply on salt, sugar and fat, processed, et cetera. A lot of this originating out of policy that originates in the U.S. around a U.S. Farm Bill and the subsidization of corn. The consequence is we've got an unhealthy diet. Forty per cent of health care costs, some people say, are related to unhealthy diet.

We need to get our hands around this, we need to shift people's mindset over time toward healthy eating. We, in the food and agriculture sector, need to move our production toward healthy food products, it's part of a big picture. We need a strategy that aligns our resources in that direction, so it's very important.

MR. CHAIRMAN: Thank you, Mr. Glavine. Mr. Epstein.

MR. HOWARD EPSTEIN: Food, of course, is a life support system. It's crucial in the same way water and air are, we can't survive without it. Recognizing that, I have to say I have a huge amount of tolerance for government support for the food producing part of the agricultural sector, where I don't have a lot of tolerance for it for other aspects of economic activity.

Given that it seems to me important that we move in the direction of local self-sufficiency, province-wide it seems to me that that's an appropriate goal. I see it reflected in your policy statements - you talk about food security and I think there's a statement there that said food is more than just a commodity. I take it that that's the thinking and I certainly agree with the comment just made by Mr. Melvin about the healthy aspects of food that is concentrating on the aspects that are particularly healthy rather than highly-processed foods.

What I'm wondering about is the opportunities for us to move in the direction of increased self-sufficiency in the province. I know we're already very diversified in our production, that comes across in the documents that you give us, we have dairy, beef and we've certainly got eggs and poultry, sheep, potatoes and other vegetables and so on. The thing that strikes me particularly, first off I want to hear about what the opportunities are, but the thing that strikes me as maybe kind of missing from it is more in the general category of salad vegetables. I think about lettuces and I think about other salad greens, I think of tomatoes, cucumbers, broccoli. I don't know why we import those at all, it just seems to me to be completely nuts that our province should do that.

It seems to me that there are at least two factors that might move in the direction of allowing us to do more of that, one being climate change which would change our growing season a little bit and the other is the advent of greenhouses. I'm wondering whether these things are actually now being reflected in the actual practice on the ground? Are we seeing

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more movement in the direction of greater self-sufficiency and if not, what are the barriers? I'm not naive about the retail sector being dominated by a few players, but I'd be happy to hear your comments on this.

MS. DENSMORE: Retail certainly is number one an issue, the cost and the accessibility for some to get there. There is no way even with climate change - I don't think we're ever going to see oranges growing here or bananas, but . . .

[1:45 p.m.]

MR. EPSTEIN; No, I agree and probably not coffee beans and probably not other citrus fruits and so on, I think that's right, but I asked about salad greens which seem to be pretty basic.

MS. DENSMORE: That's true. The issue with the salad greens is the cost of heating those greenhouses and even within that there is huge opportunity, whether it's on the energy side of it, whether it's through pelleted heating systems for those. We can grow our own pellets even, there's no reason why we can't. It's getting that technology to the next level in order to expand on that.

MR. EPSTEIN: Is this happening? Are people experimenting with this and do they need support? What is it that you need?

MS. DENSMORE: It is happening, the LST. Right now there are issues with - I call them cinders, but I guess the actual word is "clankers", where they're building up within these furnaces right now and trying to find the right dryness of a particular grass, bush or whatever the case may be that they're using. There is research being done on that, but, again, it's time and dollars devoted to that research to take us to that next level - that is an issue with that.

Climate change certainly has made a difference, we have a very large greenhouse just outside of Truro, Stokdijk's. When you mention the cost, he's actually using sawdust shavings to heat his. That is becoming more of an issue for producers, to heat greenhouses with that because there's not as much sawdust out there as there used to be. There is more push on the energy side for that sawdust to go elsewhere.

MR. EPSTEIN: Have any of the greenhouse operators tried to tap into geothermal as a source of heat?

MS. DENSMORE: I'm not sure on that. Richard may be, he's a little more involved with the greens than I am.

[Page 14]

MR. MELVIN: Not that I'm aware of but the geothermal question - I'm not aware of a greenhouse that's on that yet. As Beth said, a lot of them are using sawdust and alternative products like that to stabilize their fuel costs and so on. I would like to touch on one of the other questions you asked around food security and so forth.

The Food Miles Study that we had done in partnership with the Ecology Action Centre and so on, documented that Nova Scotians spend $2.6 billion on food on an annual basis. Of that, 13 cents of every dollar goes back to the farm gate in Nova Scotia and that would be for milk, chicken and the things that we produce here.

MR. EPSTEIN: Supply management sectors.

MR. MELVIN: A good chunk of that would be supply managed along with the apples and the other things that you'd recognize that we grow here. In that same study they picked one or two items and just said, what if we were to produce all the tomatoes we could consume here? The numbers stuck in my head if we were to do that; tomatoes is a major consumption item. It would create 1,000 jobs in Nova Scotia. Obviously, our tomato season is probably three or four months of the year fresh, plus some greenhouse on the shoulder seasons, but there's a massive potential in frozen, canned and preserved products in food products that we're not filling.

While those 1,000 jobs is an optimistic number in real terms, it just shows you how significant even one line item like tomatoes could be if we were to advance on it in a manner of thinking about food security and Nova Scotians' desire to find more locally-produced food. These things are all merged at a certain point into an opportunity.

They did the same study on beef and similar numbers were brought forward if we were to supply a heavier percentage of our own beef in the province which, I think, 95 per cent of our beef is imported now. This is a province that grows grass, cows eat grass, it's something we can do and we're reasonably competitive at it given a few fundamental things that would work for us. Again, there's another 1,000 jobs potentially and at the same time we're doing this in an environmentally sustainable manner and so forth. So at so many different levels it's a good thing to do.

In the short term the raw economics of where we are at in this two- or three-year window of budgetary issues, we have to think in one or two year increments at this moment in time in that regard. Going back, we need the 10- to 20-year longer-term vision - where are we trying to take this ship, so to speak - and the direction is toward more self-sufficiency. The 13 cent number is a low number, to put it into context, this is something that we'll have to figure out collectively, but what is the right number for a target? One hundred per cent would be too high. Nova Scotia is a small jurisdiction, we're never going to produce all of our own food for lots of climatic and logistical reasons. Is 25 per cent the right number? Is 30 per cent in balance from a food security point of view and still allowing the dynamics of

[Page 15]

the marketplace to give consumers the optimum price levels that are good for them. In my mind, obviously there's room for growth in that number based around some good, sound planning.

MR. EPSTEIN: We certainly take note of your document's call for a food strategy. I have to say we take that very seriously, it's a really good idea, of course, and long overdue. Thanks a lot.

MR. CHAIRMAN: Thank you, Howard. Lenore.

MS. LENORE ZANN: It's great to see you and congratulations, Beth, I'm so proud of you. I was there with Beth before she became the president, but it's fantastic to see a woman as the president of the Federation of Agriculture.

I was going to say I've been listening a lot on the radio lately to stories in the United States where in some of the inner cities that are under demise because of the manufacturing breakdown and I'll say, for instance, Detroit. In these inner cities, they have miles and miles of concrete, hardly any greenery and all of a sudden now that the industry is dying that made that city grow - the auto industry and everything - they're finding now that the grocery stores are closing, there's no fresh food available for people. Children have been growing up basically eating at the 7-Eleven Store on the corner and fast food items, as you said, which affects people's health, it affects so many things, it affects your longevity.

We talk about vision, I think we need to have it, but we need a federal vision, we need a provincial vision, we need local vision. I believe everything is connected, it's a holistic thing, we need to look at it holistically. I think we need to have strategy sessions in each of our different ridings to talk about this with all the local people. Gary was just whispering that to me there that he wanted to have one in his riding.

What I'm finding that they're doing in these big cities now is these cracked pavements, where they've been having these cars and parking lots, they're now turning back into farmland in the inner cities and in the schools of these inner cities, these kids have farms on the school property. They are milking cows - these kids said they never even saw a cow growing up and now they're bringing cows, goats, chickens, having their own little farms there which are now providing food for their families and for their areas. I find that extremely inspiring because it shows us the power of nature to be able to keep coming back no matter what we do to this planet, she seems to keep coming back in spite of us. I think the more we can try to help her to come back and be healthy in order to help us be healthy, we're going to be on the right track.

That said, I know that a lot of farmers in my area, some of them were complaining that there are a lot of large farms now that are taking over from the smaller farmers and the smaller farmers have trouble really staying afloat. Is that still a problem right now - I

[Page 16]

remember two years ago they were talking about that. Is that still a problem now or do you see that that's the only way it can go, that's the only way that farmers can afford to go?

MS. DENSMORE: Personally I don't see that being an issue. It's not that they're factory farms because they're not by any means, they're not factory farms, they're still family farms here. I'll use my own case as an example because I used to be a dairy farmer up until three years ago. We actually did sell our cows and quota to another new entrant in the Shubenacadie area. When we looked at it we were stressed, there was only the two of us who did the milking every day, day after day. You just simply burn out and after 20 years we were tired.

You need to have somebody else to be able to step up. It's the same number of animals that are here, the milk production hasn't changed to that level, it's the same number of animals, it's just maybe half the amount of producers that there used to be. That's not an issue in my mind because we're transitioning. We're not particularly farming dairy anymore and it's the same thing with pork. You have commodities that either you're taxed with time or taxed with profitability and/or both that have transitioned in some form or another.

As far as these becoming large farms, I don't see that as an issue, I don't see that at all. We have small producers, we have large producers, it just may be in some areas you'll see some increasing. Personally, I haven't seen that.

MR. MELVIN: If I could add, Beth, the concept of the size of farm is a relative term. I guess what I really want to say is that the Federation of Agriculture, we exist in large part to advocate, lobby, discuss, develop policies that really ensure the sustainability of the family farm. Certainly, that's the reason why I'm here, I know that. The alternative is the corporate. Businesses tend to get larger for economies of scale and as they get larger they get absorbed by bigger businesses - that's how the retail business and manufacturing businesses have gone.

We're really lucky here in Nova Scotia, we still have the residual framework of the family farm network in our province. I think it's fundamental in so many different ways that we maintain that, from an environmental point of view because these are the people, the families who live in these communities, they've been there for generations, they're going to take care of the environment they live in - it's just a self-induced thing. The social component of it, having these farms diversified throughout every county in Nova Scotia and through many of our rural communities these farms are part of the fabric.

Now all that food could be produced on a handful of corporate farms in Iowa or wherever you want to go with it, or Quebec, I might add. We don't want to see that, this is fundamental. A lot of the framework of the policies, we're a very democratically-driven organization, small farm, medium and large farms, all shapes and sizes come to our table. We develop policies that try to build a framework for sustainability for the family farm.

[Page 17]

MS. ZANN: Are you finding that the new generations are wanting to take over from their parents? Or is that a little bit of a problem?

MR. MELVIN: It's a challenge, The whole demographic thing, the same as the rest of society, we've got an aging farm owner-operator, our average age is 57 years. We don't have enough young people coming in the front door, that's part of the demographic thing that most professions and trades are facing in Nova Scotia and we're no different than any other in that regard - maybe we're even a little more challenged, because of some of the dynamics that are at play at the moment. It's one of the priorities on our radar screen, to try to create the environment to get young people, to help them get into the farming community.

MS. ZANN: Once you get them off their little computer games and things. To get them to go outside is a bit of a challenge sometimes.

MR. MELVIN: That's right. It's a different mindset, that's right.

MS. ZANN: I know. I have just one other question, what is your opinion about the whole value-added products idea? You know we've got the $5 million that we're putting into the Atlantic Centre for Agricultural Innovation in Bible Hill and the feds are putting in $2 million as well. I know they are going to be focusing a lot on that whole value-added products. I was talking to Mr. Berfelo from the pork industry there and he was trying to come up with ideas because right now it is hard to compete against the offshore beef, as they call it, or offshore pork and we have these Giant Tiger food stores that will sell Argentinian beef for a song. What is your take on the whole value-added product idea for Nova Scotia?

MS. DENSMORE: I think it's a huge opportunity for Nova Scotians. When you look at taking it a step further, we've mentioned Van Dyk's previously - they are taking a primary product and taking it to the end, a final product that has a much bigger market than they could with just their berries alone. It would be the same thing, or you take Rand's cheese - they've got the dairy farm, they're finishing that product, they are taking it that next step. Sawler's turnip sticks - many people had no idea there are actual sticks out there in the stores. It's just finishing that but it's much more appealing to a consumer to buy that stick than it is to buy a turnip and cut it up themselves.

[2:00 p.m.]

It's an opportunity that the innovation centre can certainly expand on and help them. You need those kitchens and the quality kitchens that the Health Department has put on now, in order to take it that step further, so that will be available to producers. It's a very good opportunity.

MS. ZANN: Not to mention sunflower seeds. Is the room aware of what they're doing with sunflower seeds at the Agricultural College there at the Atlantic Centre for

[Page 18]

Agricultural Innovation? They discovered that sunflower seeds have a natural insect repellent so what they do is they are just selling them again - like for seeds which the farmers don't really make much money selling sunflower seeds really - but if you turn it into a value-added product, they can hang it up in a kitchen and it repels insects and it is completely toxic-free, which is fantastic. Thank you.

MR. CHAIRMAN: Mr. Ramey.

MR. GARY RAMEY: Thank you, Mr. Chairman. I'm finding this discussion extremely interesting. I'm a huge believer in agriculture so I guess it's good that I'm here. I see the development of agriculture as being a huge solution to rural economic development, for all the obvious reasons which I don't have to explain to any of you.

As the discussion has gone on, I keep thinking of the synergies that are necessary to make some of this stuff fly. For instance, when we were talking about greenhouses, Mr. Melvin or somebody I think, one of you, mentioned how greenhouses that are fuelled by the hay pellets that you grow on the land. So you've got one agricultural industry supporting another agricultural industry but they all require people to work in them to make it fly.

I think we're getting to the point, you know about the projected hydro deal from Muskrat Falls in Newfoundland and Labrador and some things that may relate to lower energy costs or certainly green energy here in Nova Scotia, which is coming, but also wind power, which is getting more and more sort of affordable and it's getting down to different scales. I was looking at windmills the other day that don't have the big rotors on them, that actually had diagonal lines the whole way around. They're all different sizes and they just quietly spin away in a vertical motion, rather than having these giant props which disturb the atoms in the air, according to some people - and may well do, I'm not disputing that. I'm saying that there are new technologies coming there too.

It seems to me that with all this arable land - I grew up in a small community called Crousetown, which has a population of 120 people on a good day, and everybody had a woodlot, some cleared land, and everybody had at least a cow or two and probably a pig and some chickens. That was farming mostly for subsistence, consumed by the people who lived there, including my own family I might add. All of that's gone but all the fields are still there, the ones that haven't grown up in alders. Most of the people cared enough about the fields that they would regularly cut back the bushes so they wouldn't grow up or anything, but they still don't do anything with it.

So here's all this beautiful land, fortunately some people have come in and started wineries. You couldn't grow grapes where I lived, at one time, you could never have a winery in the years gone by where I lived and now you can have a winery there. It's called the Petite Rivière Vineyards and it sells everything it makes, every year, and it's about to expand. So the climate has changed, we've changed.

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Beth, you hit on something a minute ago when you were talking about turnip sticks. Part of the reason we need to go there is you get more money for it, number one, but the second reason we need to go there is because people don't have any time. I look for bottled lobster. If I can find bottled lobster, vacuum packed in a jar, seriously, it tastes like it just came out of the ocean. You don't have to shell it, you don't have to cook it but if you want it, you can take it home and go, gulp, and eat it. That's what a lot of us want and that's what we have to do.

I think these discussions, which Lenore referred to and which I was whispering in her ear when you were talking, have to take place and they have to take place not just with people like me, the MLA, but probably with the warden or mayor of the municipality and open to the public: come on in, this is what we want to talk about, we want to talk about your food and your province and good quality stuff that's sustainable; tell us your ideas and we'll take them back.

I'm definitely going to do that in my own constituency because I see it as a giant economic generator, as well, something that we absolutely have to do. So thank you for stimulating that - that's not really a question, I guess, it was more of me making a speech, wasn't it? Unless you have some comment on that . . .

MS. DENSMORE: You can go to the innovation centre when it's up and running to see if you can bottle your lobster. (Laughter)

MR. RAMEY: Seriously, they do that in certain places in the world. Anyway, I think it's an idea that its time has come. I'll remember that, though.

MS. DENSMORE: I agree, the climate change, grapes in your area. We were told that in my area I could never grow grapes. I've been growing grapes for five years now.

MR. RAMEY: Things have changed, for sure. Thank you.

MR. CHAIRMAN: Mr. Glavine.

MR. GLAVINE: Thank you, Mr. Chairman. I'm pleased to have an opportunity for a few more questions. As we all know, when I first came to the Valley as a student at Acadia University, 40 years ago now, I saw agriculture as just so vibrant. Canard Poultry was full out, there were summer jobs if you didn't go back to your home province, and Avon Foods, Larsen's, Eastern Protein, you keep right on going.

The barns and the farms looked in great shape but when I drive Route 221 now, my heart sinks when I see what has gone on. While there are still some strong farms there, we have not, I don't think, as a series of governments - not to blame any one Party for not investing in agriculture. This current government put $91 million into Northern Pulp, $60

[Page 20]

million into Daewoo, what is agriculture getting? You've been told you're going to have less. We can create jobs, we can have a brighter future in agriculture but I don't see the will and the commitment from this whole series of governments.

What is it going to take, in some of your views, to turn some of this around? I mean if we're taking money out of new entrants, my gosh, that's where our hope and our future is. When I take a look at my neighbour, Justin Beck, a bright, young farmer who, given the opportunity, given some dollars to invest in, perhaps growing high-moisture corn and its possibility as a feed for our animals, I don't see government with the same will that some of our farmers have. How are we going to now recapture some of the vibrancy that we did have in agriculture 30, 40 years ago? We have a tremendous demise.

MS. DENSMORE: I agree.

MR. GLAVINE: What are a few of the vision pieces? I know we need that. You're absolutely right, Mr. Melvin, with that comment you made, we have to have targets, we have to have a goal out there for us to work to attain.

MS. DENSMORE: Well, first off, we have hope, there's actually hope again out there. I noticed over the last two years, even with the energy side of it, you have producers out there who can't afford to farm beef anymore, in particular, and/or pork, but in the case of beef there's still a lot of land out there that is actually growing up. When you see the producers, at some of our county meetings in particular, when you talk about the energy side of things, you can just see the hope literally lifting them with that possibility that they'll be able to grow that crop and earn a living again off the land.

The hope is huge with a lot of these producers who are really grasping for some way to access some dollars, without having to do it through the welfare and the employment income issues besides, the huge stressors. We look at the processing plants, as you have mentioned, the loss of those and the loss of those jobs, what that has done to tax this government just for the employment issues alone. That income tax, it is huge. There's always hope that we can move above that, the investment in agriculture, to keep those processing plants out there.

The other jobs, although we do have to invest dearly in our seasonal offshore workers program because they have certainly stepped up to the plate and gotten jobs done that, for some reason, were not able to get done on our own. Again, with that, Richard has brought in many offshore workers and he can likely speak better to that. My key would be the hope and the tax issues that are associated with agriculture loss.

MR. GLAVINE: I was again taking a look - and I was pleased to hear Mr. Epstein say that agriculture is an area, because of the global forces and the cheap food policy which has really undermined and hurt us and hurt our well-being, because we often don't have as

[Page 21]

high-quality food as we should be having, that can come right from our own soil and greenhouses here in Nova Scotia.

I take a look at the apple industry and the apple industry was really bottoming out. At one time in Nova Scotia, in 1939, the year the Second World War broke out, we produced 9.4 billion bushels of apples. We had gone down to about 2 billion and we're now up around 2.5 billion. The Honeycrisp program was an injection of new life. Think of how little money went into that, and psychologically and physically, taking out those old trees and new cultivars, what it did for that industry.

I think we can do the same with other sectors if we have faith to invest. We still want the big fix in Nova Scotia - $91 million to Northern Pulp, $60 million to Daewoo. Put $150 million into agriculture and you'll see jobs, guaranteed that you'll see jobs.

One last question. Last week the Kings County Council has had to deal with one of the most frustrating issues around farmland. I'm wondering where the federation stands in terms of the Agricultural Land Use Review Committee recommendations, vis-à-vis the decision that was made around the Greenwich proposal and farmland, especially adjacent to communities like Wolfville. Do you have a stand, a position on that?

MS. DENSMORE: We actually have it in our policy paper that's in your packet, it is for the preservation of agricultural land. We do appreciate the work that has gone into the land use report - very time-consuming, we realize that. There are a lot of recommendations in that that we certainly support. As far as Hants County, Richard can speak to that.

MR. MELVIN: I think the Agricultural Land Use Review Committee, as Beth has referred to, the report is a very well-put-together report, well researched, a lot of public input, well thought through and probably has 15, 20 fairly significant recommendations in it that, taken in total, would be moving us in the right direction. Quite honestly, our concern is that the report will be put on a shelf and not pursued as aggressively as it should be. That's our challenge, collectively, to make sure that doesn't happen.

The particular question, the immediate question around the Greenwich issue, I guess - our federation policy is overarching, we're not pointed at specific situations. I guess the only thing I would add is there's a process in place through county council, through Service Nova Scotia and Municipal Relations, that's the law of the land as it exists today and people will have to make decisions, I guess.

MR. CHAIRMAN: Thank you, Mr. Glavine. Mr. Boudreau.

MR. JIM BOUDREAU: Thank you, Mr. Chairman. Looking at some of the issues, in your presentation you talked about not being competitive with the rest of the country. I'm wondering if you could maybe give me a better understanding of some of the main issues.

[Page 22]

Obviously we talked about offshore product coming in, and so on, but from your individual perspective, what are some of the issues that are problematic in this area, the whole idea of competition?

[2:15 p.m.]

MS. DENSMORE: In Nova Scotia we are very diversified. When you put us in a national playing field, you have to compare us with the western provinces that are very strong in the wheats and grains, even beef, but there are payments out there in the form of CAIS, AgriStability, there are different - AgriInsurance recovery. There's a suite of "agri-vations", as we call them, at times here in Nova Scotia but they're out there and they're not doing anything, in particular, for diversified farms that we have here in Nova Scotia.

Quebec is another province that, I'm sure everybody is aware, really supports their agriculture sector and we can't compete with those. We have transportation issues here getting feed to Nova Scotia, even compared to other provinces across the country, that we just don't have the accessibility and it costs us more for that. So outside of that - do you want to elaborate on that?

MR. MELVIN: Just to add, globally speaking agricultural policy on a global level is dominated by the U.S. Farm Bill - U.S. farm policy - and in Europe, the EU, the Common Agricultural Policy. The underpinnings of how agriculture is supported, encouraged in those jurisdictions, ripples throughout the industrialized world. Quite honestly, we in Canada don't have as directed a program as either of those two jurisdictions, in terms of support to primary agriculture. It's a budgetary issue, it's a priority issue. We bear the consequences of that every day in a competitive environment. That's reality, we're not going to change the U.S. Farm Bill, we're not going to change the common agriculture policy, we know that, but it's out there and we have to be cognizant of that in framing our policy thinking, that this is not done in a vacuum, this is done in a competitive world and we have to always have that in our mind.

MR. BOUDREAU: Just as a follow-up then, just so I can get some clarity on the issue, sort of the definition of small, medium and large farms, as they relate to Nova Scotia because one of the things that has been suggested, and it may be a myth, is that some of the smaller operations actually impact upon the profitability of some of the medium to large operations.

Perhaps if I could get a definition of what we see there as small, medium and large, from the provincial perspective because I don't see anything we have sort of the big, commercial type farms.

MS. DENSMORE: For the most part, I see it pooling at the end, outside of farm markets or restaurant trade. I see the majority of the product actually, ending up in a

[Page 23]

warehouse, a depot kind of thing where it is all pulled back. I don't see it being an issue between small, medium or large producers.

Supply managed is covered no matter what your size is, right through the distributors but you see a difference and Mr. Epstein spoke about the greens. We do have greenhouse growers out there who are supplying that market, the restaurants in particular, the prepackaging individual bags, putting them right in there. I don't see how that's making a difference, no matter what their size is. It's an opportunity that they've stepped up.

Honestly, if they come together in the end, then I don't see it being an issue. We've got Richard, who is a large producer of basically five different commodities within his own hort sector and he is right into the stores with his own name brand. Do you want to expand?

MR. MELVIN: The question of the small farm, medium farm, large farm - what's happening is, if you start off with defining what we might call a large farm is the basic business unit that a scale of operation you need to develop enough sales and income to sustain a family household, so you need a net income of whatever that number - $30,000, $40,000 - to sustain. So you work from that back up to a gross sales and that's the scale of your business. A lot of our farms are what we would call large farms, that's the size they are - large equals that - and maybe it is two families instead of one family but that's a large farm.

When you go back down to the other side, this so-called small farm, are usually part-time, have off-farm income and have developed a life around that and that's fine, too. What we're seeing happening is a kind of hauling out that the medium-size farm that is in between those two levels, we see the numbers going towards and small and large, just the way they are evolving over time. So either you are part-time and off-farm income and that works for you or you are more in the larger, maybe commercial side of the equation, trying to support one or two family farm operators.

You do the math on the $30,000 or $40,000 household income, maybe times two if it is two families, and then the gross sales you have to generate from that is $500,000 to $1 million to something up in that range, just the margins that you work on and that's where most of our so-called large farms are in scale. They are still family-operated and basically hands-on, family operations.

MR. BOUDREAU: Just one final question. We've talked a little bit about the value-added side here and it has also been discussed about the losses that we have sustained in that area as well and we looked at some of the opportunities. What are the major challenges that you see to developing more value-added products within the industry itself?

MS. DENSMORE: The first challenge I see, as a primary producer, would be time. You are busy trying to farm and that does make a difference on the size of your farm. It certainly is a time issue, if you've got the time to sit down with somebody to even go further

[Page 24]

with your lobster idea. It's an opportunity again. It is a big restraint for producers, if somebody even has an idea that they want to expand on, and we have that going through some of our commodities now as well. Grape growers know that they need more grape growers; in order to keep their wineries going you have to have a percentage of local grapes in order to sell that, to keep your licence. So they are asking producers, they'll put the word out and producers will step up, in turn.

I think the only bad commodity I could think of right off, and I shouldn't say "bad" - it's the word that's coming out there first off - would be beef because it takes such a long time. You've got at least an 18-month span in order to turn that product over, so there's a really large time commitment, time investment for that commodity. It just takes that long in order for the animal to grow. Timing is certainly an issue, depending on the commodity as well.

MR. MELVIN: My parallel to that or supplementary to that would be economies of scale. In the conventional food market economies of scale, Leo mentioned the processing plants that unfortunately don't operate in our province anymore that were, by our standards, all fairly large enterprises. The food business per se is a very, very competitive business at the processing level. It is built around economies of scale and what flows from that.

In Nova Scotia this is one of our big challenges, economies of scale. When you get into value-added, the equipment, the technology, whatever is required to produce that product - when you amortize that over a size of market, it is a challenge. That can be overcome, at the end of the day it's about market demand and the customers wanting a product and pulling that through the system.

The consumer is, day by day, looking more and more for our product. We are at a point of improvement or progress in that regard. Our challenge is going to be to restructure, to some degree, our processing capacity along a smaller scale than probably what we have been used to in the past, but scale that at a level that will be appropriate for our size of market, which is relatively small, but building capacity in that area and the Centre for Innovation and things like that and getting people in Nova Scotia up and down through the value chain, to work together with that mission, to get some products pulled through the system.

I think we really need to have more value - this is a buzz word in agriculture - value chain. That involves everybody from the primary producer to the processor to the distributor to the retailer, working together to conceive a product and commercialize it. We don't have very strong value chains, we've really got to formulate those linkages. Certainly as a federation, we've facilitated a number of different projects over the last number of years that are going in that direction, to get people around a table and get them talking in that regard. That's the road we're on.

[Page 25]

MR. CHAIRMAN: Thank you, Mr. Boudreau. Mr. Porter.

MR. PORTER: Thank you, Mr. Chairman, for another opportunity. Maybe just some comments versus some questions, but a couple of things. I know when I was a kid - which wasn't that long ago - if you were asked where does milk come from that is on the table, well you said the cow, of course. If you ask kids today where it comes from, it is Sobeys, as an example, so there's a huge piece that is missing there, the education piece. Should we perhaps have an agriculture class in school, starting at elementary where it does matter, and all the way up through? I don't know, it's that kind of reminder that you need.

What we don't have, and I've talked to these farmers out there and different people, I realize that times are different, we have both parents working and they are getting off at 5:00 p.m. or 6:00 p.m. and they rush home and they might stop at Sobeys or wherever, or McDonald's, for that matter, it doesn't matter, but they are not doing things like we used to do things, so there is an education piece but there is also not a commitment. You can have all the governments you want come and go and you can have all the ideas you want come and go but when it comes right down to it, if you did a survey and you asked people, I am sure it has probably been done - I don't think there's a great commitment yet by Nova Scotians in general.

I don't say that in a disrespectful way, I say it in a knowledge-based way, that there's a commitment that I am going to buy all my eggs, if I live in Antigonish, from Paul Overmars or I am going to buy all my chicken in the Valley from someone, or wherever it might be but there's no commitment to say, when I go the store, even if I'm going to Sobeys, where did it come from?

We put Select Nova Scotia in place and that's all well and good. It doesn't do enough. It might be a good program but it doesn't do enough. It doesn't tell my kids anything, do you know what I mean? You have to instill this in people and if we're not starting young, the same as our health issues that were mentioned - what does it mean to go to McDonald's? Well nothing's wrong with going to McDonald's and having a Big Mac but you go every day for five years and I'll show you what a clogged artery looks like. Maybe you should take them down and show them.

It is like other things, there are some real facts that need to come out. It is education and it's a huge commitment. We don't have the buy-in in this province, I don't believe, from the people yet, that we need to have to support the industry. I don't think we're seeing that because we'll still buy the stuff from God knows where, that is sprayed with God knows what, because we want vegetables in January.

We've created in my area - I know Mason's, and Leo talked about apples, they have apples out there that look fresh in January, if you really want to. They've got a system in place so we know that that exists. They grow flowers all year long in my back yard in the

[Page 26]

greenhouses. I know there's an energy cost - so what? - is what I say to that. Yes, it does exist but if we're not looking at overcoming those issues, and I know that there are some new ideas with the grass and burning and I've seen the presentations, that's all good, all that new research.

At some point agriculture worked very well in this province. It seemed to sustain itself - I don't know how many years ago that was - I've said this on many occasions at many meetings that we do have to take a step back and we have to look at where things were. I don't know if they were 100 per cent but they were working, they were doable, farmers made a living and they wouldn't see a future like they see today, which, in talking to the farmers, is not much of a future, even in the successful type industries they will tell you, I'm not handing this off. They've done it for years, I'm not doing it. I'm prepared to sell, to get out while it is still good.

There has to be some way of that commitment - maybe if it's not a Select Nova Scotia commercial on TV, maybe it's more defined and an education management system that says, this is where eggs come from. That may be simple, maybe I'm too simplistic about the whole thing, but you have to take it back to a point where it was understood and where people did buy in and they know what it meant to go to Mike Oulton's, who is still in business today, and buy your meats there, that were locally grown there and cut there, jobs, et cetera, and produced, as Leo says. There's a great opportunity for jobs. It is a huge economic factor in this province that we've missed drastically. If you want to create jobs, you can create them. You invest those many millions of dollars you can create them because there are people out there who would be willing to go into it and who have ideas.

It's not a partisan issue, it's not a gender issue, this is an issue for all Nova Scotians that we don't know the cost, we think the cost of things are high today, I don't think we've even experienced that yet. To Lenore's point, we have a school not too far from you, I guess - I'm not sure how far from you - but Summerville is an example in my constituency that grow their own, right? They have their Fall harvest. It's a big deal, they invite everybody down and it's just wonderful but they know that's education and I can guarantee you that every one of the kids in that school take part in that, they know where the chickens and the eggs come from and they know where the milk comes from and so on. They know how carrots are grown and how vegetables are grown and so on.

It's not new, we've been doing it for thousands of years. We just seem to have reached the point that we can't overcome and if we don't take a step back and we don't involve the people who know, then we're not going to move ahead, I don't think, personally. I don't mean to sound depressing but I think that's the reality of where we're going and the future of our kids and grandkids and so on. I can see a day right now that if we continue down the path we're going that we'll have very, very few farms in not too many years, probably not in my time but my kids will see a huge reduction, and their kids and so on.

[Page 27]

Anyway, with that, I don't want to take any more time but I just want to thank you for being here.

[2:30 p.m.]

MS. DENSMORE: I feel really good now. (Laughter) As far as the education goes, that one is a little - it's bad timing to bring up education. (Laughter)

MR. PORTER: And I don't bring it up because of anything that we've been hearing about, I bring it up because of the importance of just one more piece of education. Math, Science, English - those are all huge, important but so is agriculture, equally, because of the economic spinoff. It's just as important as any other industry in this province, more so than some, so I think it is education, I think it's a big piece that needs to be considered.

MS. DENSMORE: There is an Agriculture 11 science course that is offered to schools. Now not all schools take that and it's not mandated.

MR. PORTER: In Grade 11, Beth, in all honesty, personally that's too late. I see Grades 4, 5 and 6, when kids are starting to understand the reality of what a dollar means, what it means to prepare a meal, maybe, too, as you get into Grades 6 and 7. Kids are learning these trades, cooking and stuff. Where does that come from that I'm going to make for dinner tonight?

I see it much younger and at Grade 11, I know from having two who have already gotten there pretty much, that they're not interested. There are other things on their minds, whether it is this, as Lenore has suggested, or whatever it is, instill it early and keep instilling it all the way along. By the time they get to Grade 11 maybe they will recognize the importance of it - I better take that class because I might be a farmer or a farmer's wife or husband or partner or something, I don't know. We have to look outside that box to survive. Anyway, thank you, Mr. Chairman.

MR. CHAIRMAN: Thank you, Mr. Porter. Mr. Ramey.

MR. RAMEY: I have two comments - you are already queuing me up there, aren't you, Beth? I have two comments and then a question. One of them related to something Mr. Melvin said. I think you threw out a percentage of about 40 per cent, maybe, of health care issues could be related to eating good food.

One of the things we're trying to do over the next little while is trying to get government departments to not be in these discreet little vacuums. Some people call them silos, they can call them whatever they want but where this department looks after this and won't look at anything else because this is what it does sort of thing.

[Page 28]

I'm the ministerial assistant to the Minister of Health and I also sit on a committee called The Better Health Committee, which now includes the Minister of Justice, the Minister of Education, the Minister of Community Services and the Minister of Health but maybe should include the Minister of Agriculture. I will bring this issue forward at that committee because it's obvious, I guess, when you are sitting in a room like this and it should have been obvious before but there's really a connection there. We were talking about synergies with the hay and the greenhouse, well this is another one of them, just on a different level. I want you to be aware that that will be done because I think it's an important connection.

The second thing is - not to pound that lobster thing completely into oblivion - I think part of what holds people up from the value-added, and I am sorry I'm using lobster because this an idea that I was talking to lobster fishermen about.

MR. EPSTEIN: You do know that they come from the ocean, don't you? (Laughter)

MR. RAMEY: I do know that but thank you for sharing. The point was that these lobster fishermen were complaining about selling lobsters for $3.50 a pound. It's a little better this year but last year it was terrible. I said to this lobster fisherman, why are you locked into that so much? People love lobster around here, all of us do, and if there was a place in the town - it happens to be Bridgewater that I live near - that was called Everything Lobster or the Lobster Claw or the Lobster Pot or something like that and all you sold there were lobster sandwiches, you sold lobster thermidor, you sold lobster croissants, you sold lobster omelettes in the morning and it could be take-out (Interruption) You never had a lobster omelette? God, these people are clearly not from the South Shore, we eat lobster in everything. (Laughter)

Also, as ridiculous as I know you say this sounds, people have taken chunks of lobster meat, they vacuum pack it in a bottle in brine and it tastes as fresh as anything when you take it out. That's the truth, Beth. The bottom line is, they said well that would be interesting but it's a cost of - by the time you try to set this all up and get retail, all the things that Mr. Melvin was talking about, this is what deters people from it.

One of the things we mentioned was these people live along the coast and all the coastal communities have these fire departments. Now the fire departments have had to put in all these different sinks and kind of get the kitchens upgraded so they can serve food in there, because they do a lot of that. I said to them, why don't you use, as an experiment, the local fire hall because it's a money generator for the fire hall? The people who shell the lobster then get the money for using the hall, they also get the money for doing the labour and some of it could be donated to the hall. You try it as an experiment to see if it would work and if it works, well then you expand it because you know it's an affordable option. That's the way you might poke your way into a market without investing giant sums of

[Page 29]

money and going, whoops, that was a bad idea, that sort of thing. So enough said about that, I'm not saying any more about lobster today. (Laughter)

My question is about NAFTA because I don't know a lot about NAFTA, except - well, okay, I won't say anything more than that. I don't know a lot about NAFTA - we'll go back to that - but how does NAFTA affect agriculture in our province? Is it a positive or negative influence on it, and is it part of the problem or part of the solution? I don't know if you have any thoughts on that but if you do, I'd be glad to hear them.

MS. DENSMORE: I would say it's likely 50-50 on that one. It depends on whether you're a high exporter or not, it certainly can be an issue. We're told with different avenues that we've gone down, we can't take that route because it's not user friendly. So I would say it's a 50-50 split, or very close to it if not that, so either way there are issues.

MR. MELVIN: I would add that the NAFTA question is a big question. My view of it is, to put it into context, in the world economy today China is the elephant in the room with their currency valuation, and devaluing their currency by about 40 per cent is a matter of government policy. That's basically a steamroller throughout the world in terms of manufactured or processed goods, it's rolling like a tidal wave around the world.

In my view, here in North America we should work together and that involves NAFTA - Mexico, the U.S. and Canada. When we put that together on a global context we have everything we need to be competitive in a global environment. Canada, in rough terms, has the raw resources - oil, gas, lumber, fish, grain and so on; the Americans have the capital and the richest market in the world; and the Mexicans have a population and a human resource capacity that's second to none. Through arrangements, treaties, and under the NAFTA framework, we should be working to harmonize that to the benefit of all three jurisdictions, to be globally competitive and take back some of our manufacturing capacity that we've sent to China, and so on and so forth.

MR. RAMEY: Thank you.

MR. CHAIRMAN: Thank you, Mr. Ramey. Mr. Younger.

MR. ANDREW YOUNGER: I apologize for being late, I was at another announcement next door. First let me say on NAFTA, I think I personally agree with you. It probably is a mixed blessing because one of the big things, of course, is if the rest of the world is going to a trading bloc, you can sometimes get isolated by staying out of it, which can cause as many problems as not being part of that trading bloc. I don't know that there's any black or white answer on that one.

The question I had - and I had asked my colleague whether this had been asked before I arrived - a number of us were up at the Nova Scotia Agricultural College recently and saw

[Page 30]

some of the work they're doing on marginal farmlands and biomass. Biomass has been an interesting topic of discussion of late, including at this committee with other groups coming forward, and it's all centred around forestry biomass. Some of the work that they've done there has actually been around - almost every crop farmer, and frankly some cattle and animal farmers as well, would have some marginal farmland on their property that isn't great. One of the opportunities they're looking at is can you grow switch grasses and other sorts of products that grow very quickly and regenerate maybe multiple times a year and create a cash crop out of it for biomass purposes that has arguably the benefits of a better carbon footprint than forestry would have, a quicker turnover time, plus money.

There are two models we looked at there. One is obviously - the big thing - they're just creating pellets and shipping them up to Lingan or wherever the case may be, or Point Aconi, but the other one is also to do retrofits for barns. You're heating a barn and they actually have a test burner going down there with everything from Tim Hortons coffee cups being put into bricks, to grasses, to you name it. I just wonder how much involvement your organization and your members have in partnering and working on some of those projects and how much interest there is in that sort of diversification in trying to use the marginal lands.

MS. DENSMORE: It's there and it's on our agenda. Henry has been working with the energy chair at the NSAC, Ken Corscadden, and I'll let Henry go further with that.

MR. VISSERS: It was a project application from the federation that put Ken Corscadden in as the renewable energy chair at the AC through Agri-Futures, which is a federal funding agency for agriculture. That has been a really successful position for us. He has spearheaded a lot of the work around the grass pellets and some of the renewables and also the conservation side of things, working with farmers, trying to reduce some of their energy usage on farms and things like that. He has had a number of successful projects. Just off the top of my head, I think he has piloted 16 different conservation projects on farms and the average savings per farm on energy was in excess of $2,000 per farm, which is pretty significant, and a greenhouse gas and carbon reduction at the same time.

Some of the issues around grass pellets are around the return to the farmer. The wood pellets are selling for somewhere in the range of $80 a ton. If you're going to grow grass for electrical generation, the price you would receive is significantly lower than that. The farmer needs somewhere between $110 and $120 a ton to make it pay for him to do that, so where do you start with that? We don't have a commercial industry yet. Probably as a commercial industry would be developed, there would be some things that you could do that would reduce those costs.

[Page 31]

[2:45 p.m.]

All indications are that eventually fossil fuel energy is going to increase so that will change the equation again, so that maybe that $120 isn't too far out of reach. It's almost like a chicken and egg kind of thing: do you invest some money to make it possible for those farms to grow that crop and have a return on it so that you can develop the industry? The furnaces are there, particularly for space heating for households. It sounds like you were at the engineering building and saw the furnace that was there burning grass, that's Gus Swanson's design. It works well, they've spent the winter working on that. They reduced the emissions coming out of it so that it meets standards and all that, so that part is there. You just have to get the industry to the size that it's competitive and it provides a return for the farm community.

MR. YOUNGER: This will be my last question, Mr. Chairman. I agree that there's sort of this price gap thing, but obviously that closes with efficiencies and as you say, the increase in price of fossil fuels. There are all kinds of things that I think will probably close that gap. I guess this is a two-part question. First, do you think there's the interest in the farming community to use that as part of their diversification model and an extra income stream, or sufficient interest to actually create, I guess, that critical mass of an industry? The second part would be, is there a role that you can see with government - and it can be grants, it can be tax credits, whatever - to help bridge that gap - not indefinitely, I don't think indefinitely, but at least while we're trying to bridge that cost versus a return gap?

MR. VISSERS: I think there probably is something that should be done there to help with that gap while the industry is being developed, a two-year investment or an income tax credit or something like that, that would help them do that. There is all kinds of opportunity land around that could be used for that. Just on the North Shore there are 70,000 acres and I think if you look at some of the stats on agricultural land, there are about one million acres of agricultural land that have gone out of production over the last century. Not all of that would come back into production but there are certainly some opportunities there. Switch grass is one that's named a lot, it may work. Probably part of this would be farmers who have more land than they need to raise their livestock, already have the equipment and that makes it possible for them to diversify into a crop like this. But I think there's lots of potential and there's lots of interest.

MR. CHAIRMAN: Thank you, Mr. Younger. Mr. Boudreau, one quick question.

MR. BOUDREAU: No problem, and it deals with the concept that Mr. Melvin brought up about the economies of scale and the need to work together and so on. Since we're on a lobster theme here I thought I'd use that. (Laughter) Coming from a fishing community along the Eastern Shore, the community there got together many years ago and developed its own canning facility for lobster and so on. During the height of the Depression

[Page 32]

it was one of the few communities in Nova Scotia that actually had full employment and was actually paying its shareholders and local owners a dividend.

I'm wondering if there aren't some lessons in the past that can be relearned and looked at and applied to the agriculture industry as well. I think you raise a very valid point, the whole concept of economies of scale and working together and co-operating, do you see more of that happening in your industry or is it something that's still in an infant stage?

MR. MELVIN: I think in my view it's still in the infant stage. There's a few start-up examples of companies and groups working together on energy issues and other food-related issues but we've got a long way to go. We need to facilitate - I see our role as a federation, and to some degree government, being facilitators in bringing the people together to get those sorts of structures or things put together because it is one of the clearest ways to overcome that economies of scale issue. That's one of the logical things to do.

MR. CHAIRMAN: Thank you, Mr. Boudreau. Well, that pretty well takes our time up for questions. We'd certainly like to give the witnesses a chance to make a final summation to the committee.

MS. DENSMORE: I guess, first of all, I want to thank you again for your indulgence, I really appreciate it. I find this very refreshing, even the lobster - we're not fisheries, we're agriculture, we're separate. (Laughter)

But seriously, we understand the deficit problems with Nova Scotia but, as we said at the beginning, we are a wealth generator and would really appreciate the support, if nothing else, at the very least with the same support as we have now. That is our biggest goal right now, to try to at least keep the investment that we have but certainly wouldn't reject any extra.

Again, we certainly want to encourage you to get in contact with us at any time at the federation office. I believe cards are in the folders as well. There is lots of information in your packets, please go ahead and read to your delight and again, call us at any time - and anybody else. Thank you.

MR. CHAIRMAN: Well, we certainly want to thank you for coming. The session was very informative so I think everybody probably learned something out of this and even got some tips on lobster. (Laughter)

We have to continue on with some committee business, so not everybody takes off.

[2:51 p.m. The committee recessed.]

[2:54 p.m. The committee reconvened.]

[Page 33]

MR. CHAIRMAN: Okay, we'll get our business meeting back on track. The last meeting we had there was a letter from the Pictou East MLA, requesting that a company in that area would like to come and present as a witness on some concerns they had regarding forestry. We had talked about it at the meeting but there wasn't a clear consensus on whether the committee approved of the letter, and them coming forth and being on the agenda at a later date. I just want to get that clarified today, if all the committee members are agreeable to have them come forth at a later date on our future agenda, that was Groupe Savoie in Pictou County.

MR. BOUDREAU: Mr. Chairman, if I may, just in reference to the letter we received, again, this is an issue of value-added to an industry which will create jobs and perhaps create more jobs. I believe the whole idea of value-added is always worth pursuing. This issue that Groupe Savoie raises is not unique to this group or this company, this is something that you will find throughout the province and perhaps there is something to be gained by listening to what this company has to say at a future date. We do have some other topics that have been put on the agenda and have been approved - for example, the Nova Scotia mink . . .

MR. CHAIRMAN: Yes, this would be in addition to the topics that we have put forward, so it's not going to be bumped up to the first or anything like that.

MR. YOUNGER: Mr. Chairman, I don't have any problem with this. I think I said at the last meeting, the only issue that was raised - and I think it was raised by members of all Parties - was that we can go ahead with this one but if we start having individual companies or organizations coming in regularly, at some point we're going to have to come up with - at the moment it doesn't matter, it's one, that's fine, I think it's legitimate - well, they're all legitimate - but there's a certain point where we only have one meeting a month, we'll just run out of options. I think it's okay with this one, but if it happens a lot we'll have to have a policy.

MR. CHAIRMAN: Mr. Porter.

MR. PORTER: Along the same vein as Mr. Younger, I was just going to say the same thing. Have we had any other requests from other lumber-industry-type businesses? Perhaps we should be considering them and bringing in two, three or four of them to speak on behalf of their industry - not a specific business but the industry in general. If not, perhaps we could look to see - I'm sure there are a few out there that may wish to come that we could contact. But the individual piece, yes, perhaps it would be better to hear a perspective from the industry versus one single company. Thank you.

MR. CHAIRMAN: Mr. Glavine.

MR. GLAVINE: This is exactly what I was thinking the committee should seriously take a look at. I see the value in this and would not speak against having Groupe Savoie

[Page 34]

come in, but if you take a look at the lumber companies, their days of just throwing stud lumber on the market, certainly in the short term, looks very bleak. Some are trying other value-added, whether it's a window manufacturer or whatever. I think hearing a little bit more from a wider audience of the industry that it may be something that our committee could make a recommendation, again, to government along the lines of rural economic development. I think hearing from three or four such industries may give us a little stronger picture of what we're doing right or not so well, especially in the hardwood sector of the industry, that would be my recommendation.

MR. CHAIRMAN: Mr. Ramey.

MR. RAMEY: I want to just re-emphasize what Mr. Porter, Mr. Glavine and Mr. Younger have said. I think by having one company come in - again, I'm not anti this company obviously - but by having one company come in it does set a precedent and then any company could say, you saw them by themselves so why can't you see us? The solution described by Mr. Glavine and others seems reasonable, if we want to hear from that sector, by all means, but I don't think it should be just one company representing one interest like that. Thank you.

MR. CHAIRMAN: Mr. Boudreau.

MR. BOUDREAU: I just want to bring to the attention of the group here that we're talking about - I'm very familiar with this because I've dealt with not so much this company but the whole issue of the way in which our forest industry is being used or misused, however you want to look at it. We have seen in this province stands of hardwood that would be worth millions of dollars in the marketplace being basically decimated and taken down for biomass and that truly does concern me. I know this issue goes far beyond Groupe Savoie, it extends into other areas on the mainland and on Cape Breton Island and it certainly might be something that we would like to look at in a broader perspective, I have no problem with that.

[3:00 p.m.]

MR. CHAIRMAN: Just with the committee's permission to go beyond 3:00 p.m., if we're going to discuss this or if we can wrap this up.

MR. YOUNGER: I think we all agree.

MR. GLAVINE: We all agree, I think, seeing the broader picture . . .

MR. RAMEY: Not an individual company, but listen to the issue on a broader perspective.

[Page 35]

MR. CHAIRMAN: Yes, very good. On to our next meeting date, March 10th, we need approval for a witness for that topic - the topic was the mink breeder.

MR. BOUDREAU: I think we identified the mink industry and it might be sort of in order that we ask the Nova Scotia Mink Breeders Association to attend and talk about the industry.

MR. CHAIRMAN: Is that agreeable? Mr. Porter.

MR. PORTER: Yes, that's fine.

MR. CHAIRMAN: Okay, very good. Our meeting is adjourned.

[The committee adjourned at 3:02 p.m.]