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September 25, 2001
Standing Committees
Economic Development
Meeting topics: 
Economic Development -- Tue., Sept. 25, 2001

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11:30 A.M.


Mr. Brooke Taylor

MR. CHAIRMAN: Good morning committee members and presenters. At this morning's hearing, we have members of the Nova Scotia Federation of Agriculture and before we ask them to introduce themselves, perhaps we could start with Cecil O'Donnell and introduce ourselves.

[The committee members introduced themselves.]

MR. CHAIRMAN: Perhaps we could start at my left.

[The witnesses introduced themselves.]

MR. CHAIRMAN: We also have other members representing, I guess, different commodity groups. Perhaps you could come to the microphone, if you don't mind, just to introduce yourselves for recording purposes.

[The witnesses introduced themselves.]

MR. CHAIRMAN: Welcome, members of the Federation of Agriculture. I would just for the information of committee members, suggest that the Federation of Agriculture does have a Federations of Agriculture Act, and I am sure all committee members are aware of that. Some of the objectives of the federation are to improve the farm and rural life of the province, make representations to government, government committees of inquiry or departments of government on matters of concern to the farming community, promote any program that directly or indirectly benefits the economic position of farmers.


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I guess, John, you are going to begin on behalf of the federation.

MR. JOHN DILLMAN: Yes, thank you, Mr. Chairman. Just as a bit of an introduction, the Nova Scotia Federation of Agriculture appreciates this opportunity to meet and discuss the issues facing the agricultural industry with the Standing Committee on Economic Development. We made available to the committee secretary, a printed copy. I will not be following that word for word but it will serve for your records after our presentation.

We hope that our presentation today will leave the committee with the same sense of urgency expressed by 40 farm leaders who met in Truro one week ago to discuss these same issues. Nova Scotia agricultural operators are among the most aggressive, innovative and dedicated business people in this Province of Nova Scotia. The Nova Scotia Federation of Agriculture serves as an umbrella organization under which those involved in primary agriculture in Nova Scotia can act together to promote their common interest to both the general public and to governments.

The NSFA was commissioned and has been operating now for 102 years in the province. The NSFA is organized geographically into 13 regions and by commodity into 24 provincial groups representing some 1,850 farm businesses in total. This accounts for well over 90 per cent of the agricultural production in your province. The NSFA also maintains active affiliation regionally with the Atlantic Farmers' Council and nationally with the Canadian Federation of Agriculture.

From the Act, the chairman noted some of the responsibilities that the NSFA carry in the province but the actual mission statement of our organization is to ensure a competitive, sustainable future for agriculture and a high quality of rural life in the Province of Nova Scotia. To realize our mission, the principal focus of the NSFA has become the development of farm businesses that are financially viable, ecologically sound and socially responsible. The agri-food industry has always been a cornerstone of Nova Scotia's economy. It is the means to sustainable rural communities and the diversity of lifestyle choices historically enjoyed by us in Nova Scotia.

There are two addenda attached to the written brief. Addendum II will provide the committee with an overview of the current condition of the industry and some of the challenges we are facing. The information in Addendum II is taken from discussions held last week, as I mentioned earlier, with our Council of Leaders meeting, which included the commodity groups, county and regional federations throughout the Province of Nova Scotia.

The Council of Leaders has asked four farmers to brief you on what is taking place in the Province of Nova Scotia right now. All the members have introduced themselves but I would formally introduce Laurence Nason, the CEO of the Nova Scotia Federation of Agriculture as a resource person, not to us but to you, as a committee, we are providing to you today for questions. Greg Webster will brief you on the problems being faced by the fruit

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and the vegetable sectors of our industry. Charles MacKenzie will brief you on the problems faced by our livestock sector. Richard Melvin will brief you on the issues surrounding water management in the province. Earl Kidston will use the potato industry to explain the impacts on our agribusinesses in Nova Scotia.

While the opportunities for Nova Scotia's agricultural economy have never been better, at the same time, we are entering a period when the outlook for the agricultural sector in Nova Scotia can only be described as very uncertain. Producers are being called upon to adapt a staggering array of innovations in their operations. The industry is continually buffeted by external forces over which we have little control and is continuously being pressed to take responsibility for problems that extend well beyond the farm gate.

While the immediate outlook for the industry is uncertain, in the rapidly changing world we live in today, opportunity abounds for the agricultural sector here in Nova Scotia. However, each opportunity seems to be coupled with some level of constraint that threatens to neutralize any advantage. Currently, one of them was limited constraints as adverse weather conditions. Only sound public policy with respect to the protection of farm income and assistance with the adaptation that must take place to counter changing weather patterns can help ease the impact and provide a solid basis for farm business to make the decisions and the investments that are required for a sustainable industry in the future. That is what we will be asking the Government of Nova Scotia to consider in the coming weeks.

If anyone has any doubt with respect to the seriousness of the challenges currently being faced by the farm community in Nova Scotia, they have only to turn to a report released earlier this year by GPI Atlantic. That report, more accurately than anyone realized when the report was released, predicts the collapse of a number of our agricultural sectors if agricultural policy in Nova Scotia is not revamped. The executive summary of that report concludes that:

"An inadequate return on investment can produce a wide range of negative social and environmental effects, each of which carries a significant cost. In extreme cases, when farmers cannot make ends meet, prime agricultural land may be sold and converted to other uses, resulting in the loss of a valuable, natural capital asset and a decline in food security for future generations. An inadequate return on investment is therefore not sustainable in the long run from either an economic . . .

Although total farm cash receipts haven risen 12% over the past 28 years, all other indicators of economic viability examined here are showing negative trends. If these trends continue at current rates, we are likely to see the virtual demise of several agricultural sectors in Nova Scotia, including apples, vegetables, beef and hogs."

This is a direct quote from that report that is available to all.

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According to recently released data by Statistics Canada, the outstanding debt of farms in the Province of Nova Scotia has increased 49 per cent since 1995. Much of this increased debt can be directly attributed to weather related problems. Farm families have poured every resource at their disposal to adapt their businesses to current conditions. Many are at the point where any future decisions will be made by their lenders. With the increased cost of irrigation to salvage crops and the cost of purchasing feed and forage to maintain livestock many family farms have reached their limit in Nova Scotia.

Collectively the industry has taken several initiatives. We have met with the Nova Scotia Department of Agriculture and Fisheries staff to assess the extent of the weather-related damage. The result is a survey currently being conducted, which will provide an accurate snapshot of the problem, remedial measures and associated costs. A meeting has been held with the minister, Mr. Ernest Fage, to seek emergency assistance for those who need it. We don't mind telling you the results of that meeting were not very encouraging to our members. Requests have been made to Minister Vanclief for human resources to assist in addressing water management issues. The federation is an active participant in the Canadian Federation of Agriculture in the lobby for an increase in the safety net funding.

A request has been made to the Departments of Agriculture, Environment and Labour to share engineering resources in a manner which would speed permitting and improved communications between the departments on water-related issues. An industry water group has actively been searching for solutions to problems associated with access to water. This group has worked largely on its own with little support from governments. A meeting of the Atlantic Farmers Council has been convened and is actually sitting today to discuss a pan-Atlantic approach to dealing with Ottawa on farm income problems, soil and water problems.

The industry has partnered with the private sector to establish a forage exchange that will facilitate the sale and purchase of forage throughout the province. The industry has partnered with the private sector and the Canadian Farm Safety Council to reactivate the family farm stress line in the Province of Nova Scotia. The Council of Leaders has established an industry working group to develop recommendations for a more responsive safety net program for our producers. The industry has actively supported and committed funding to a new Climate Change Chair at the Nova Scotia Agricultural College in Truro.

The Minister of Agriculture and Fisheries has informed the NSFA executive committee that farm families will have to rely on the present safety net packages that are currently in place. These programs are inadequate and we would ask you to look at Addendum II for your information.

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In the coming weeks, as we consolidate the information we have gathered and the degree of hurt to the industry becomes more clear, we will be asking the government to: assist farm families with income problems directly related to these adverse weather conditions; take remedial actions to enable farm families to deal with the collateral damage related to the adverse weather conditions; and to make a commitment to a long-term strategy that will enable farm businesses to adapt to the changing climatic conditions.

The Government of Nova Scotia needs to be committed on a long-term basis to the agricultural industry in Nova Scotia. We would like to thank you in advance for taking your time and for the committee taking its time to listen to our presentation. We would like to invite you to participate, when we are done, with whatever questions on the agricultural industry or weather related that you may have, Mr. Chairman. Now, we would like to continue along with our presenters, if you so wish.

MR. CHAIRMAN: Thank you, John. Mr. Webster.

MR. GREG WEBSTER: Mr. Chairman, committee members, thank you for the opportunity to speak with you this morning on the drought concerns that our industry has as they relate to the fruit and vegetable sector, that is what I am going to speak to. I will try to be fairly brief on it. I am more comfortable trying to answer your questions than I am with giving you a speech.

Just for background, many of you are probably aware that particularly in the Annapolis Valley this is our fourth year out of five with drought conditions. Those drought conditions did not impact the entire province in 1997, it was mainly the Annapolis Valley. In 1998 and 1999, it was more widespread. This year it has been province wide, with some very isolated areas between Truro and Musquodoboit that have had a little more rainfall than the rest of the province has had.

Approximately 60 per cent to 70 per cent of the fruit and vegetable industry is located in the Annapolis Valley, if you exclude the low bush blueberries which are spread throughout the province, primarily in the northern portions. As a consequence of those four years of drought the fruit and vegetable sector has certainly had significant impact over the past four years. We have seen significantly increased costs, for those of us who have had irrigation equipment and water available, in trying to water crops and take them to market. We have also seen significant yield loss on crops, whether they were irrigated or not.

The information that came out of our federation meeting last week indicated that of the crops that were not arable, either through lack of water or infrastructure, anything that wasn't watered is suffering crop loss in the range of 50 per cent to 100 per cent, depending on the crop and the soil type. Even irrigated crops, this past year, from checking with most commodities, are indicating yield reductions in the 20 per cent to 25 per cent range. We are speculating that once some final analysis is done on this that we are going to be looking at

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probably upwards of 50 per cent crop loss in general terms. It is still too early to tell that because a lot of crops are still being harvested and put in storage or put to market.

The fruit sector that I am going to speak primarily about is the perennial fruit crops, not the apple crops. The apple crop has taken some hurt but it really is dependent on location, soil type, variety and so on. The other perennial fruit crops, like the strawberries, raspberries, low bush blueberries, high bush blueberries, they have all suffered to varying degrees this summer. I think low bush blueberries took the biggest hit this harvest season. Strawberries and raspberries, where they come on in June and July, escaped the more significant effects of the drought as it relates to this year's harvest.

The biggest concern among these fruit crops, where they are a perennial crop, is re-establishment of that plant and its potential to put a crop out next year. I think most of us in the fruit sector are more concerned or as concerned about next year's production capability as we are about what we have achieved this year. That is something we really have to keep an eye on.

Strawberries and raspberries, and I think the blueberries, all tend to sit there, initiate their fruit buds and set their fruit buds at this time of year, late August to early October. Up until this last week, we haven't had any rainfall. It has been nice to see some showers developing. Some of these crops that have not had adequate water or irrigation may be in serious risk of not producing a crop next year.

The vegetable sector varies from, as I said before, crops that can't be irrigated to ones that have had some irrigation. Those of us who have had adequate water supplies are looking at increased costs of between $400 and $700 per acre on some of these higher-value vegetable crops to maintain crop production, and that still has not generated an average or excessive yield. Those fields, in all likelihood, will still be 15 per cent to 20 per cent under what we would consider an average yield with good rain conditions.

The other thing that we are seeing in the vegetable sector in particular is that a lot of crop is being harvested undersized, a lot of crop is going to market early, and I think there is going to be some potential impact of not having local product on the store shelves this winter. Storage crops are going to be in a much-reduced supply compared to previous years. You can't expect to see carrots on the store shelves until next spring, for example, or potatoes or rutabagas or cabbage. I think the onion crop has fared a little better than most of the others, and there will be a fairly good storage crop of onions available. We are going to see more reliance on imported food product, whether it be from other provinces or the U.S. and other countries earlier in the winter season than we have in previous years, so this not only impacts the farmer because we are getting bumped out of the market share but it impacts the consumer through higher prices. That is my snapshot on the fruit and vegetables.

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MR. CHARLES MACKENZIE: Mr. Chairman, greetings from the Nova Scotia beef industry. We are an industry comprised of approximately 1,100 registered farmers spread across every county of the province. We trace our roots back to the original settlers and builders of this province who kept cattle. The Nova Scotia beef industry contributes $22 million in annual farm cash receipts to the province's economy. This represents 5.5 per cent of the total farm cash receipts for the province and results in an expenditure of $17.5 million for operating inputs. This has a direct impact on rural Nova Scotia. This does not include associated income and expenses generated through value-added production, and secondary or indirect impact on other industries.

Employment generation in the province. The total impact of the beef industry is estimated to be a four-to-one output multiplied, our total provincial economic impact of close to $90 million per year. Standard industry on employment multipliers indicate the Nova Scotia beef industry supports approximately 675 full-time jobs. These are substantial, resource-based jobs for the province. The Nova Scotia beef industry currently has the resources available to double its current size. This expansion can occur on our existing land base with little capital expenditure necessary, other than the cow. An expansion of the industry by 50 per cent to 40,000 cows would create an additional 350 full-time jobs for the province. Again, these are substantial, homegrown positions.

The Nova Scotia Cattlemen's Association was gratified to hear of yesterday's announcement of the public funds aiding in the expansion of the Co-Op Atlantic Sydney's processing plant and the creation of 60 new jobs. The investment of the public funds in the beef industry at 10 per cent of this value of the input, the cow, would create an additional 270 jobs. This is based on the direct farm income from the generation of 37 beef cows.

The NSCA is united in its opinion that there is tremendous opportunity for the beef industry production in Nova Scotia. We feel there is an opportunity for growth at all levels of the beef industry, including the cow calf, background, finishing and the value-added sectors. There is recognition that the expansion must be market-driven. Nova Scotia currently imports over 90 per cent of its beef, based on the competitive advantage available to the cow-calf sector through the high-quality forage-based farms grown in Nova Scotia and relatively cheap land.

We look to the government to provide an economic environment that will encourage growth, recognition that all wealth springs from production of food and of course elimination of amorphous regulations would be of tremendous help. Quite simply, there is no resource-based industry that has the substantial wealth creation potential of agriculture. Those sectors that value-add Nova Scotia would receive serious consideration when government allots its scarce development resources.

The NSCA welcomes the opportunity to discuss this version of the development of Nova Scotia with you at your convenience. Thank you.

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MR. CHAIRMAN: Thank you very much, Charlie. Mr. Melvin.

MR. RICHARD MELVIN: I chair the Growers Water Group, a group that deals with water-related issues in agriculture, and that is what I will be talking about today. During the past five years Nova Scotia agriculture has faced four record-setting drought conditions during our growing season. Is this a climate change? Some people say, hydrologists and climatologists have told us that in fact it is but, of course, it takes a long while to establish that that is a fact. Five years is really a short time period in terms of issues related to climate, and it is also a relatively short period of time for us to try to adapt, as agriculture, whether it is a real or perceived issue that we are dealing with. Unfortunately, we haven't been able to adapt quickly enough to this issue.

[12:00 noon]

In 1998 the Growers Water Group was formed to begin to address water challenges faced in agriculture, particularly irrigation issues. It is made up of a group of 12 farmers who irrigate and have some knowledge and awareness of that issue. It also has ex officio participation from staff from the Department of Environment and Labour, and the Department of Agriculture and Fisheries in supporting roles. Since 1998 the Growers Water Group has been able to identify numerous issues which need to be addressed around water issues and irrigation for agriculture.

We have been able to develop and/or sponsor numerous research projects and studies. Approximately $400,000 of public funds have been spent on this initiative to date, and we are thankful for the support. This has partially laid the groundwork for further development. We in agriculture are committed to long-term sustainable solutions to water management, not only for agriculture but for the community as a whole. As an example, the Growers Water Group process identified the need for an Annapolis Valley watershed stewardship association, and this in fact became a reality in March 2001. It will provide a forum for citizens based in the Annapolis Valley watersheds to focus on water issues.

Unfortunately, in terms of getting viable water solutions in place for agriculture, we have not been able to move fast enough relative to the climate change we are apparently facing. It is currently estimated that we have 6,000 irrigated acres in Nova Scotia out of the total of 400,000 arable acres we have in this province. It is imperative that this irrigation capability be increased dramatically. For example, I believe we need to increase this capability by tenfold over five years. This would cost in the range of $60 million to $300 million, depending on methods and costs, or $12 million to $60 million per annum of capital investment.

While John's presentation has shown in the addenda that agriculture is currently investing $60 million a year in infrastructure with farm margins being so narrow at this time it is difficult or realistically impossible for this to be done without considerable commitment

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and creativity from industry and government, both provincial and federal. I believe we can meet this challenge in a straightforward, rational manner and by doing so position Nova Scotia agriculture in a firm and competitive position for the future. The sooner we start to ramp up our commitment to this process the better. I thank you for your attention and look forward to questions on water or other issues that you may have later.

MR. CHAIRMAN: Mr. Kidston.

MR. EARL KIDSTON: Mr. Chairman, I am a farmer in the Annapolis Valley. I am going to discuss, just for a moment, with you the implications on agribusiness and relevancies with agribusiness that the four out of the last five years' droughts are starting to cause and the real implications they can have.

I guess there are various sectors of agribusiness. I am pleased to be here because I recognize people around the room who understand this as well as we do. I am counting on them realizing the same things that I am going to discuss. Maybe we could start by looking at the retail sector in agriculture. We don't live in a vacuum in this province. We have to compete worldwide within the province and outside the province as well, in other words, we are marketing domestically or internationally, as producers. It is a competitive situation.

It has to do with the cost of the food basket, because someone says, well, okay, that's fine but what does it have to do with me? I am a consumer in Nova Scotia, I walk into a Loblaws store or a Sobeys store or a co-op store, what does it really mean to me? Well, those companies have to be viable too. It is by no mistake that they buy locally if they can, and it is great that they all say yes, we support local production. That is good for media and one thing and another, but the real reason they are buying local production is because of economics. They can buy local production more viably and more feasibly. There are various reasons for that. Plus, they want to provide the safest product to their customer they can.

Canada has one of the safest food products in the world. The longer the product travels on a truck or by ship or whatever coming here, the more risks are in it, not just for food safety but for economics. When a producer in Nova Scotia puts a product into a retail chain, that retailer knows that is his only cost of that product. When he brings it from far away that is not the case, there is lost product along the way and degradation. They have to absorb that, and that is why they have to put it into the store at a higher price. That, unfortunately, is what is going to happen, as you have been told here already, to a greater degree. That part of business is affected that way, and unfortunately the end result is a higher price for the consumer. The retailers, to make their margins, have to add more margin in place to take care of that degradation and the transportation costs. We know that fuel is up. All those things have to be absorbed, whereas if it is supplied locally that business can provide a more cost-effective food basket to you, the consumer, and to all our peers.

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Moving from the retail sector, if we go into what we consider another business sector, the HRI, the hotel-restaurant-institutional trade, we can say, okay, what does that have to do with what we are talking about today? I am going to use the potato industry in several examples throughout here because it is the one I am most familiar with. We provide potatoes from our farm to the institutional trade, whether it be restaurants, hotels, cafeterias or government institutions or what have you. For example, a count potato, I recall one week here a little while ago, our costs to that sector was $10 a box. That same product coming in from Idaho or out West was $18 to $21 a box.

As the industry shrinks - that is just an example of potatoes - the same thing goes right across the board with other products. It doesn't matter whether you are talking broccoli or Brussels sprouts or carrots or what have you. Greg very eloquently exhibited some of the concerns from the vegetable industry. For example, the Brussels sprouts industry here is going to have half a crop this year. We can go on and on. The product isn't going to be out there as it was before. You are not going to notice a great big change immediately, but over time that food basket is going to cost you more.

The biggest thing to do with the HRI is the tourist industry. We are in a competitive environment in the tourist industry and the food sector is only one component thereof. During the time of year that Nova Scotia has the best tourist industry is normally the time of year when there is an abundance of agricultural products from this area. That wasn't totally the case this year. As you have heard, there are real concerns about what it is going to be next year. That is all I will say about the HRI at this time.

If we go to another sector of business, getting closer to agribusiness as I talk about this, that is the infrastructure necessary to maintain an industry of any nature and the critical mass that is necessary to do that. This industry is in real danger now of losing that critical mass. There are several industries that I know of, businesses have already put up the liquidation signs. This will continue. It is no different from the problem New York is facing right now. We haven't had loss of life here but the economic impact is of a similar nature in that it has a domino effect. Our farm puts blueberries into the U.S. We haven't put blueberries into New York since September 11th. I think you will see the costs in New York escalating for the same reasons as you will see here with this industry. This industry is in the same kind of dire straits as the airline industry, the only thing is this is our fourth out of fifth year for that situation. This isn't a one-year thing for us. This industry can handle one year, but four years out of five - think about your own businesses, how they could handle it.

Once this shrinks down, the infrastructure isn't going to be there for the critical mass. That is going to increase the cost of production; that is going to increase the cost of the end product to the consumer, again. So we say, well, what does it matter if agribusiness isn't here? Well, I guess to understand the agriculture industry in the first place is to understand agribusiness. That is no different from any other business. I know in our particular businesses we would like to see an 8 per cent profit margin on sales. We are lucky to get 3 per cent.

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Those are actual facts from our businesses. Macro-business isn't going to come in for that. Macro-business will come in and take over from the regular agriculture producers but not for that margin. They will obtain their 25 per cent to 30 per cent margins if they want, and they are not going to have to absorb that themselves, it will be absorbed by the end customer.

I want to use just one example to finish off with and talk about what it means to the agribusinesses that actually utilize the agriculture products. Just for some names, Hostess Frito-Lay, Avon Foods, Maple Leaf, there are a lot in Nova Scotia. The majority of these businesses are either national or international. We are a small place, Nova Scotia, so why are they here? Well, they are here because the people who work for them, the management and everything, are superior to a lot of the other areas. Any one of these processors or agribusinesses I have mentioned, they have plants in different places, some of them in different areas in Canada, some of them in different areas in North America, some of them in different areas in the world. They won't keep a plant here if it doesn't compete and return their minimum level of return on investment that they want. That is just national economics.

I will use, for example, the Hostess Frito-Lay plant in New Minas. It is the one I know best, it doesn't mean that it is any better or worse that the rest. That plant was not being competitive and it was being threatened to close down two years ago. With the three years of drought, Nova Scotia potatoes weren't of the quality they should have been. We had a real possibility of losing that plant. Last year, in the year 2000, it was a normal year of production, and the growers really did a job of improving their quality and the production and the production levels. The fact that they were still in production was thanks to the provincial government at the time that put monies into the industry, otherwise we could have lost it then.

The industry turned right around last year, the plant, the people in it and all their programs. That plant, last year, actually more recently than that, even up to now, is number three in North America; number three out of a hell of a pile of plants. That really says something for what Nova Scotia ingenuity and hard work can do. Along with that - and this portrays whether it is Avon or whatever - they have to compete for their lines. So, they went from a plant that could have been closed down to a plant that is a leader, and now it is in jeopardy again because we may not be able to, as an industry, supply their raw product. If the raw product can't be supplied in Nova Scotia, the plant won't be in Nova Scotia because of the cost. One thing about agriculture products, if you start trucking you are trucking a lot of water. Thank goodness we as people get our water source from plants.

They have to compete for those lines, and this plant through the normal production a year ago and their costs and everything else was able to attract the Hickory line. That product is now actively going to be marketed into the U.S. That could be lost. If we can't increase that volume, that potential export market for a Nova Scotia product will be lost. That can go right down the line.

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So, the ultimate problem really ends up being the loss of processing jobs, increased taxes because these agribusinesses are paying big taxes in the municipalities. There are real problems in the municipal arena, problems in the human resource arena for costs with lost jobs and that. That is just a little example about the whole agribusiness sector. I thank you for the opportunity to be one of the presenters here today.

MR. CHAIRMAN: I thank all of the farmers for the briefing to the committee. Laurence, as CEO, did you want to make some comments or perhaps we could move right into some questions? Mr. Epstein, with the first question.

MR. HOWARD EPSTEIN: Mr. Melvin, I was particularly interested in what you had to say. I wonder if you could help me just think through what it is that you laid out a little bit. I missed your cost figures. You were talking about estimating 6,000 irrigated acres, and you gave some cost figures as to what you thought it would be to increase that tenfold. Could you just say that again?

MR. MELVIN: To take that up to 60,000 acres, the average cost per acre for infrastructure is estimated to be $1,000 to as high as $5,000 per acre. If you do the math on that, 60,000 acres times $1,000 would be $60 million, and if you use the higher figure it is $300 million. Then I went a step further, and if we looked at that over five years, because we couldn't do this in one year logistically, it would represent an investment of $12 million to $60 million per annum.

MR. EPSTEIN: Here is what I am particularly interested in, clearly everyone has identified drought as a serious problem. You have three choices, either it rains or you find water on your own land or you bring water in from somewhere else. We will leave the rain off to one side because this is the problem we are dealing with and there is not much we can do about that. You are talking here about found water, that is either digging new wells or increasing your capacity to take standing water, the flowing water you have and bringing it to the fields.

What I am interested in is it seems to me I have heard talk from the Federation of Agriculture about the third possibility, that is bringing in water from somewhere else. There was talk at one point, I thought, about the potential for a water utility, particularly in the Annapolis Valley. What that implied really, was, I assume, going to some watershed and piping water along to the areas that need it. I am wondering what the current thinking is about that. By implication, where you are flagging irrigation, I assume that what you are talking about is water on site going down into the aquifer or drawing more water out of standing water or out of flowing water that is on or adjacent to the property. Did you mean to exclude the other possibility? Is it not feasible? Have you explored that other possibility?

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MR. MELVIN: I guess on a priority list, out of three, it would be our third priority because of the relative complexity involved in implementing that structure. Our first line of defence is to capture spring runoff from existing rivers and watercourses, with perhaps relatively low-volume pumps that would extract water out of those watercourses at a manageable rate and put it into a reservoir, for example, that would then be available through the summer season. We wouldn't impact on the stream flow enough to impinge on fisheries or environmental concerns.

The second possibility, a significant possibility, we have in the Annapolis Valley, in Truro and in some parts of Cape Breton, as hydrologists have advised, is the groundwater sources. Now there is a fair bit known about those. There are some very major resources there. Of course, we don't have the total picture, the total size of the aquifer and so forth, the dynamics of it are not totally known, but there is a long history of high-volume wells with towns and so forth that have documentation that show that on an annual basis, over a 30 year period, the level of those wells is maintaining a constant level throughout the period of the years. Wells with rates of extraction as high as 1,000 gallons a minute have maintained that over a 30 year period.

With some reasonable management and a lot of these mechanisms are already in place within DOE to ensure that we don't overdraw our aquifer, in my mind at least, we are reasonably protected there - there is a significant groundwater resource there. Those are the two things that we can tap in a fairly orderly manner, if the resources are there to let us do it.

MR. EPSTEIN: The indicators so far are that the drought has not affected, negatively, our aquifer?

MR. MELVIN: That is my understanding. The high-volume wells are staying at a consistent level year to year. At the same time of year, they would be at the same level. They are relatively buffered from short-term issues like we are dealing with.

MR. EPSTEIN: Is there any ongoing research about that? If so, who is doing it?

MR. MELVIN: There are numerous projects. A lot of them are relatively small projects. We, ourselves, within industry have four or five projects looking at that type of issue. We are partnering with the County of Kings, and things like that, on that particular issue, in the Cornwallis watershed. There needs to be a lot more done. We are really just at a starting point on a lot of that. Hydrologists have said we really need to map the aquifer with technology that is available today that wasn't available 20 or 30 years ago. We could do it fairly efficiently and have computer modeling and this type of thing to allow hydrologists to better manage that resource.

We have a path in front of us that is going to take some resources. My perspective, with agriculture, is we have to act with the information we have now. The best information

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we have now is telling us certain things. We have to act with that. As information evolves we will work within that information base as well. Today, I think there is enough information that we can start to draw on some of those aquifers without a high degree of risk of hurting, in the long run, our ability of sustainability on those aquifers.

MR. EPSTEIN: Was I wrong about the Federation of Agriculture talking about a water utility, or did they mean something different?

MR. MELVIN: The issue has been discussed over four or five years. I think it is one possible solution. I think when we talk about that concept, we think if in a particular geographic area there were 12 or 20 farms that would benefit from one major reservoir and then you would have some sort of distribution infrastructure to move that out, that is where the word utility might come into play.

MR. EPSTEIN: So the irrigation wouldn't just have to be individual projects on individuals farms, there could be a sharing of resources. That is a good idea.


MR. CHAIRMAN: Mr. Downe.

MR. DONALD DOWNE: I have a couple of questions here. First, I want to compliment the Federation of Agriculture for an excellent presentation covering the major crises that are before us in a number of sectors. I guess the water group, Richard, we started that in 1998 and that was tying in to some of Ralph Ballam, some of the boys up in Stewiacke and spreading that water system around and making sure that we had an adequate water supply for agriculture during that time. I think that is where we got Environment and some of the other departments trying to work together with the Federation of Agriculture. That has been the ongoing basis.

I want to focus on some of the finances. John's presentation showed that the debt in the Province of Nova Scotia in actual terms has gone up about 49 per cent. I went back and took a look at some of the numbers. Since 1995 to the year 2000 the debt has grown about 48 per cent, 49 per cent. We are now from $308 million, in 1995, to over $457 million of farm debt. Interestingly enough, in that farm debt structure the Farm Loan Board's debt is about 4 per cent growth per year, which is a normal growth, an inflationary growth. Farm credit has gone up from $39 million to $118 million, about 200 per cent; the banks, from $88 million to $126 million. One of the concerns I have about banks, quite frankly, is that when they are in the business, that's great, but they don't make the decision here. They can turn the tap off just as quickly as the drought we have just experienced over the last four or five years.

There is a huge issue here that I think is going to put more pressure within the agricultural community as they start calling the notes, calling their loans or making it even

[Page 15]

tougher to get operating lines of credit and things of that nature. The bank policies being made primarily in Ontario could very well put a shift in the emphasis on agricultural loans. I think that is a concern. Provincially, maybe the Minister of Finance, the Minister of Agriculture, our subcommittee could be asking that the banks, for heaven's sake, don't run scared at this point, the industry has some challenges but they have some great opportunities in the future. Other sectors within agriculture, there is some good news in some of those areas. I want to make that as a point.

The other concern is about the fact that we have talked about the tremendous problem in reading the horticultural sector right now. Earl was talking about the impact that is going to have beyond the farm gate, in the agri-industry. We announced, back in 1999, a program for drought relief. I think it was a $20 million program that I was involved with, and then it was announced five or six times afterwards, the same $20 million. As I understand, that money was supposed to be over a four year period, leveraging that with the federal government so that we would be spreading the assistance across the board. I think it is gone now. I think that money is all gone.

Really, where we are at right now is talking with the federal government in regard to where we go from here under another AIDA program. There was a meeting. Can you explain to me what the minister is saying with regard to the current crisis you have today and where the provincial government is willing to go with regard to the assistance that you need. Really, what we are talking about here is infrastructure investment, cash investment and cash in the areas of either under NISA or under a distress program.

[12:30 p.m.]

MR. DILLMAN: Mr. Chairman, if it would be all right, I would ask Laurence to address that. He worked with those on our behalf on an everyday basis.

MR. CHAIRMAN: Sure, whoever is appropriate.

MR. LAURENCE NASON: Basically, we have a safety net package or envelope, we call it. It consists of three basic programs: crop insurance and NISA, which is a shared program, farmers are enabled through the program to put dollars away each year related to their income and those are matched by government and they can draw those out when their incomes go down. Then we have CFIP, which is an emergency farm income program. Basically, those programs don't work for us. They are national programs, they are designed for a different agricultural economy than we have in Nova Scotia. They are designed for acute income problems, for example, grain prices are good this year and they are poor the next year, these programs will kick in and provide assistance to farmers. They don't work here because we have had basically chronically low incomes for the past five years. A percentage of nothing is still nothing. They may work for a few individuals this year but we don't think they are going to work for many farms at all.

[Page 16]

The NISA program, as I have said, it is shared between the producer and the federal and provincial governments. The problem with that program right now, particularly in the beef business, is that the beef business has been so poor up until a year and one-half ago, that these guys haven't had a chance to build up enough dollars in their accounts, so there is no money there for them to access.

The other problem with that particular program is that it is based on last year's income, so you can trigger a payment this year based on last year. Last year, we had a fairly good year. So, farmers aren't going to be able to access those dollars in time. Nova Scotia farmers do have about $23 million banked up in NISA, one-half of that would be their own and one-half of that would be government dollars and we think there are going to be problems just accessing that in time.

The other one is crop insurance. Maybe I will ask Greg Webster to explain to you why crop insurance doesn't work for us here.

MR. WEBSTER: We went through some personal experiences with crop insurance back in 1999 on our cereal grains on a our farm. We are not only a fruit and vegetable producer but we grow winter wheat and rye and up to that point in time, barley, as rotation crops and we also utilized the straw for our own berry crop mulches and so on. As Laurence pointed out, these programs: NISA, crop insurance, CFIP or AIDA as Don knows it, the federal disaster program, don't tend to work well for us in this province because of the mixed nature of a lot of our farms. One sector of your farm one year will offset the losses in another and it tends to mellow things out in your own operation. Most of these national programs seem to be designed to work in a 1 in 5 year disaster scenario or crop failure scenario. They do not work in a 4 out of 5 scenario.

The crop insurance one, we had some real personal experiences with it. On the winter wheat side, we had been growing winter wheat for several years. In 1997, we had a severe crop reduction and we had an insurance payout in 1997 based on that compared to our historical yields. In 1998, we had a severe yield reduction. We had an insurance payout based on that. But crop insurance is based on a 10 year average. So as you start factoring in those two poor years into a 10 year average and drop off two better years from the other end, it got to the point that after the 1999 winter wheat harvest my guaranteed insurable yield that would trigger a crop insurance coverage was less than any yield I had had in 25 years of production. I don't believe that I am a poor enough manager to go below that number. So we basically walked away from crop insurance.

[Page 17]

We had a different experience on spring grains, barley crop, in that we planted a barley crop on April 17, 1999, and 1999 was the drought year, the drought started in late April/early May and it is the one that really had the most effect early on. By June 17th I filed with crop insurance for 100 per cent write-off on that barley field because it was on a sandy piece of land and it just burned out completely within two months. We received a cheque from crop insurance in the amount of $500 and some odd for six acres of barley. It worked out to $88 an acre. My out-of-pocket costs for land rental, for fertilizer and seed was $136 an acre, not accounting my tractor time, my labour or my other inputs. Based on that, you can see that crop insurance is of very little value to you even in that situation where it did trigger a payout but it doesn't even come close to covering your costs. So crop insurance to my mind is a misnomer. It is not insurance, it is false security.

The third point on crop insurance is that a lot of the federal programs that have been developed over the last five or six years are conditional on your participating in NISA, crop insurance and AIDA. Those are the first lines of defence from an income stabilization point of view. So if you use my examples on crop insurance, we are, in some cases, actually being blackmailed to carry crop insurance to participate in another program like a spring advance payment or a storage advance payment program. As a farmer and a business person, I don't really feel comfortable in being blackmailed into carrying something that is of no value to me just so I qualify for other programs. So for that reason a lot of farms don't qualify for the other programs or they carry a crop insurance program that is actually a net loss to them, just so that they have access to these other funds if they do need them. So those are some of the problems we are seeing with both Vanclief's and your Minister Fage's comments that these are your safety nets, use them. If they worked better we would gladly use them.

MR. DOWNE: Just one question, if I may, . . .

MR. CHAIRMAN: Not too much comment, a question.

MR. DOWNE: No comment. The bottom line here and that question was, what has the province told you at this point to the farmers in the Province of Nova Scotia who are literally at the point of closing down their operations? What has the government told them in the current crisis and has there been any commitment to do something to financially help farmers who are in crisis in Nova Scotia right now by this government?

MR. DILLMAN: I mentioned in part of my presentation that it was not a very encouraging meeting, Don. The minister at this point has told us that we have the three packages, as has just been explained to you, available to the producers in the province, but that he would take the meeting under advisement and that he would circulate a questionnaire, a survey of the industry, which he is participating in now and each registered farm in the Province of Nova Scotia should have a survey in their hands.

[Page 18]

Now, I don't want any committee members or anyone to take this as a negativity with regard to the minister's actions or against the minister, but one of the things as a representative for the industry that I am finding in communications with producers is that they have not had support for other items that the industry felt that the Government of Nova Scotia could wade right in and be supportive on. Several of the producers in the province, and a large number, we are very concerned are not going to fill the survey in. We have given all the input. We have had our farm organization give input to the minister, we have had representatives of our commodities give input to the minister in the past and in the recent past to no avail. John, I am not going to take the time to fill out the minister's survey because any of the input that I have paid for, I have paid my commodity, we paid the cost for my commodity group to give the minister input, we paid our farm organization's cost to give the minister input and the input has been negative. So the minister's action is that the industry is being surveyed now, really is the answer to your question, Don.

MR. CHAIRMAN: Just before you go, I would like to just ask you a question, you or Laurence. Regarding the NISA, the net income stabilization account, Laurence, I think you indicated there is approximately $23 million in that account, a national safety net program, is the federation attempting to access more of that money, are you making any progress with the feds along those lines, also? I know it is based on individual pay . . .

MR. NASON: Yes, we have made a number of suggestions to the province which takes those on to the NISA administration, the federal government, with respect to accessing these. As I indicated, I think the farmers in Nova Scotia have $23 million. We don't know where that resides because we can't get the information with respect to, is that in the accounts of beef producers or horticultural producers or apple producers or where it is. That information isn't public.

We have made some suggestions with respect to triggering those payments. As I mentioned before, one of the problems with NISA is that it works a year behind, so farmers will be able to draw it out next year for the hurt they have had this year. That is just too late. It is not bankable, you can't go to the bank and use it as collateral because when they designed the program they said that wasn't allowed. So, that's the problem with that particular program. We don't know, we would like to know, just exactly how much of the dollars that farmers have put away over the past five or six years, if they are going to be able to access that. We don't have that information.

MR. CHAIRMAN: Laurence, you say that you can't get that information.

MR. NASON: We can't, no.

MR. CHAIRMAN: The account numbers aren't public?

MR. NASON: No, they are not public.

[Page 19]

MR. JOHN MACDONELL: Thank you, gentlemen, for your presentations. I have to say that in three years of doing this job that I have become increasingly pessimistic about the role of government in doing anything for the agricultural sector. I think the GPI report should have sent a message, loud and clear. I think when the federal minister, in regard to the P.E.I. potato situation last year, said if I am producing widgets and I can't sell them, well maybe I shouldn't produce any more widgets, if that is your federal Agriculture Minister, you have serious problems.

I like the idea of doing something around trying to establish a water group or a utility or access to water in a way that tries to meet the need. This may seem like a silly question, but I am wondering, do you have any idea how much water you didn't have?

MR. MELVIN: What our deficit was to fully function?


MR. MELVIN: It depends on crop, et cetera. I am just going to pull this right out of the air, but I would say two or three acre inches probably in a lot of cases would have addressed most crop scenario needs. So you multiply that by however many acres, 100,000 acres or 200,000 acres, and do the math; it is large numbers on one hand but on the other hand we are still in a Maritime climate here, we have precipitation during the winter. We are not living in a desert here, so the water is there.

MR. MACDONELL: I guess pulling it out of the air would be the right way to go. I am wondering about what kind of a program, support-wise, you gentlemen would develop if you could, instead of NISA or something that doesn't seem to work. I looked at the numbers, I think it was for 1998-99, of farmers who applied for help and the number who got it, and there is a big difference. Almost nobody qualified for help. I would like to know what you would design that would be the most help to Nova Scotia farmers.

MR. NASON: When I talked about the Safety Net Program I erred, there is a fourth component called Companion Programs. The Companion Programs are a block of money that the federal and provincial governments share, that are supposed to allow some flexibility within the safety net package and enable each province, in their bilateral agreements, to design programs that fit their producers better than the national programs. We have just recently established a working group to look more carefully at the whole safety net package and the Safety Net Program to try to come up with ways that the program will fit our agricultural economy and our diversified farms better.

There is another safety net I didn't mention. In the last month, Doug Bacon, the president of the federation, who is unfortunately at another meeting with his counterparts in other Atlantic Provinces today, we spent a month traveling around the province. The traditional safety net in farms in Nova Scotia has been the woodlot. I can't believe the number

[Page 20]

of farmers who have used that resource. They have cut their woodlots in the past four years and they don't have that resource anymore.

On the water thing, I am not as familiar with it as some of these other gentlemen, but to me it is not rocket science. We have lots of water here, the problem is that we have it at the wrong times of the year. I am going to ask Earl to tell you how big a problem it is just to dig a bloody hole in the ground so you can store it until you need it.

MR. KIDSTON: Laurence has hit on two things there. Number one, we do have water in the Maritime Provinces. We are one of the luckiest locations in the world. You can travel to so many countries, whether it be Israel, Peru, you can name names forever, and they have dealt with their water problems. They have real problems and they have dealt with them. We have a problem that we can't even seem to start to deal with, and that is the most frustrating thing as a producer.

Last year many producers would have addressed this problem partway if they could have gotten our Environment, Fisheries and Agriculture Departments to work together - well, we have two of them working closer together now - to recognize that this a serious problem in this province. Without that acknowledgement and recognition by these departments we might as well forget it, because we have to have permission in order to be a user and/or a reservoir of water. I can give you a direct example where some other farmers and ourselves, our farm, wanted to put a reservoir in last year that would have taken care of - oh, golly - maybe 500, 600 acres. We didn't ask for government funding to do that, we didn't ask for a penny because we knew what could happen if we didn't do it. Now we definitely know what can happen. We didn't do it.

I had a member of the Canadian Press out this morning, showing him potatoes that size that we are going to lose over $1,000 an acre on. That was on one of our farms, it was on another farmer's farm and a third farmer's farm. I showed him the crops. All we had to do was have permission from those agencies to put that reservoir in place, but they turned us down. The reason was there was some brook trout in a brook that we had to get the water from. We proposed to get that water in the spring when it is all running to the ocean, to have it and use it during the middle of the summer when there are shortages.

As Richard mentioned, this methodology, this idea - well, to use Laurence's words - isn't brain science, we don't need a whole bunch of extra grey matter to figure this out. There is excess water at a given time, let's take that water, put it into inventory and use it when it is needed. That won't compete with any human requirements or any recreational requirements or anything, in fact it will add to it. That can be done in any place.

We have to have permission to do it, and we have to have the acknowledgement that it can be done. In some places there will be fish ladders necessary. That is an area that the public - in other words, government - can help with, because it creates an environmentally

[Page 21]

positive reaction, it creates a real reaction for the people in the province and for tourism, and it gives a source for fire protection. There are all kinds of positive things, but nobody is ready to recognize that it has to be done. I don't know whether that is what you are thinking about or not, Laurence, but that's an example. The other thing, of course, are the wells which we need to be able to do.

MR. NASON: I guess the point is that our industry needs water for about eight weeks a year and a couple of weeks in the spring for frost, perhaps. There is lots of water around. In order to store it, to put in inventory, as Earl says, until we need it, we need to be able to get by some of the bureaucratic traps and walls that have been put up in our way. Like I say, if Earl could have got permission to dig his hole in the ground last year, he would have potatoes that size instead of that size, right?

MR. MACDONELL: Just a couple more short ones.

MR. CHAIRMAN: Yes, go ahead John.

MR. MACDONELL: Mr. MacKenzie, I am interested in the lack of beef that we produce in Nova Scotia. Your comment was that we import 90 per cent of our beef, and you were also saying that if we were to double production, basically, we could do it just by increasing the number of animals, as far as the cost factor on that. That means that, still, we would be a long way. If we are only producing 10 per cent of our production right now or our use in beef, then to double that we would still be producing somewhere around 20 per cent. It would seem to me there is an awful lot of room for growth in the beef sector. Of course, some of that is probably being made up in the dairy sector, I am assuming as well.

In the question of disaster management, and in particular in the case of drought, where I am assuming we would be looking at forages, in particular, pasture and so on, has the industry thought about how they would handle that? I mean, it is one thing when you are irrigating horticultural crops but in the case of forages, are we thinking of irrigation for pasture, hay, silage and whatever? Have you set your mind that far ahead?

MR. MACKENZIE: No. The big thing that happened this year, the first crop was good and there was feed left over from last year. Everybody had an abundance of feed. But then the drought came. Well, first, the army worm came and then the drought came, so people had to start feeding their winter supplies. What is going to happen is a lot of people are going to liquidate.

MR. MACDONELL: That is another concern because what is happening is, I would assume over the past five years that we had four years of drought, that the actual herd of breeding cattle must be diminished significantly.

[Page 22]

MR. MACKENZIE: Well, it dropped bigger in the Valley than anywhere because they had the drought longer.

MR. MACDONELL: My last question is around the GPI report. I think some of the recommendations it made were around marketing boards, co-ops and organic farming. I just wonder if the federation has taken that message, or tried to, to the government as well.

MR. NASON: Yes, we started an industry planning process last March. Those strategies are built into that process and we will be looking at those strategies in the future.

MR. MACDONELL: Thank you.


MR. MARK PARENT: Thank you for the presentation. I asked to sit in here on Richard Hurlburt's behalf because it is such an important industry in the riding that I represent. I thank you for the information that you have shared with us.

I am really not terribly sure where to begin with my questions. It seems clear that the long-term supply of water is something that we have to work at, both provincially and federally. Is one of the barriers to putting money towards that the lack of consensus as to whether there is a climate change that is affecting us? Do we need to do more study in that regard? I could see government officials and politicians saying, listen, you know, next year we may have adequate water supply, why should we put in heavy funding for infrastructure? Are you finding that as a problem? Do we have sufficient data now to determine that the climate is changing and that we need to provide this infrastructure?

MR. MELVIN: I'm not really sure, Mark. Climate change is such a long-term thing. It maybe takes 10 or 20 years to even make a real credible statement on that. We have got five years that may be an anomaly in terms of climate where it is extremely dry during the growing season, or may be part of a longer term trend. Some climatologists say it is part of a longer term trend. I have heard them speak on that. But to cast it in stone, you know, there are no guarantees when it comes to climate.

I guess the impediment that I see towards putting the structures in place financially sometimes is that we don't have the business structures, or if you are talking utility, well, a utility has to be formed. I mean, you have to form a structure, business plans have to be developed and all that type of thing. Even in the Annapolis Valley, we are talking six watersheds. We are talking hundreds of farms, hundreds of particular situations, six major watersheds. There is a very complex, multi-layered issue there that, quite frankly, we have not had the resources and manpower to address how we take the steps in a direction to understand and come up with some concrete way of making some small steps in formulating those types of structures.

[Page 23]

We have had volunteer committees working tediously, dozens of meetings a year, doing what we can do. We have had some support staff - one person-day a week - working on this type of thing. Those are the resources we have had, to apply to it to date. Therefore, relative to what needs to be done and the complexity of the issue, we are just really scratching the surface, frustratingly so when we see our farmers being mowed down terribly, financially, along the last several years. To me, it is having resources allocated to processes and we just don't have enough resources allocated yet to address those primary issues, I would say.

MR. CHAIRMAN: Mark, just before you ask your next question, I believe Mr. Webster would like to respond as well to your question.

MR. WEBSTER: Thank you, Mr. Chairman. I would just like to follow up on what Richard said and follow up on your question, Mark, as to whether or not we have enough information to proceed. I would like to base some of my comments on my 40 years experience with irrigation.

First of all, I think we can study something to death. If we look long and hard enough we will find an expert that will agree or disagree with us. That can drag the process on forever. I think what we are seeing in the industry right now is, we have had four to five very tough years from a water availability standpoint that has seriously impacted all sectors, not just the fruit and vegetable sector.

We certainly need the support of government, both morally and fiscally. I think to answer John's question earlier, or partly answer, what can we do, what should be done, what would we like to have, I hate to say it but I think we need another infusion of short-term dollars to help with the cash flow situation, similar to what we had after the 1997-98 droughts. Most of us in the farming community would prefer not to have to ask for that. We would prefer to have the infrastructure in place to allow us to deal with drought on an ongoing basis.

I can use my own farm as an example of that. We are farming very sandy Cornwallis soils in the Annapolis Valley and we have irrigated since day one. If we didn't, we wouldn't be there because we cannot reliably get a crop any year on our sandy soils without some water. Even on good years, I will use two to three acre inches of water on my high value crops. A year like this, I have used 10 to 11 acre inches on my high value crops and that still does not guarantee a good yield.

I think that we shouldn't be spending a lot more time studying this situation. We have to look at whether government has the willpower and the resources to put funding into it. Quite frankly, the farm community does not have the dollars to put into it in a significant manner because we are trying to survive.

[Page 24]

We are also dealing with a lot of food safety, environmental concerns that the consumers and your political peers, both federally and provincially, seem to think are in the best interests of Canadians and consumers, and we don't disagree with that. But that certainly is taking some of our short-term dollars to contend with some of the other - what I call - non-production issues.

On the capitalization side of it, of putting infrastructure in place, whether it be ponds, reservoirs, pumping systems, I think one thing that should be looked at from an irrigation point of view is that irrigation infrastructure is very long-term. I'm not saying we need to look at putting it into place, it's lifespan is very long-term. We are still running the same pumps, pipes and equipment that we bought 25 years ago so it is not something that is a heavily used up resource. Once it is in place, it is there for a long period of time and I think it has to be looked at as a serious investment in the agricultural community in the rural economy.

I worked with Richard in the Growers Water Group since 1998 and one thing we have tried to emphasize is that we recognize that there are more than agricultural users of water in this province and we all have to work together. We want comprehensive, well thought out plans put in place that benefit both the consumer and the residential and commercial industrial users as well. We don't want to be at loggerheads with government and other areas of society in fighting over water. We need to have it properly managed and we need to have the various government departments come forward and say, yes, we are prepared to work with you on that rather than saying, well, no, our policy says you can't do this. It is a negative approach instead of a proactive approach. So I hope I filled in some more of the gaps.

MR. CHAIRMAN: Mark, just before you ask your next question, I believe Mr. Kidston would also like to respond to your question.

MR. KIDSTON: Just very quickly, Mark, I happen to have with me the August report of the Atlantic Food and Horticultural Research Centre, Kentville. Every month they put out a report on the degrees of heat, the units of heat, the sun/wind, evaporation, water and what have you. This is a type of data that is readily available and I will just give you the summary of this report for the month of August 2001. Again, this is not a long-term study but that information is all available from different areas in the province for a substantial number of years. This particular report, which was the last one I had and I just grabbed it when I left this morning, the amount of heat, for example, in this month of this year, was 15 per cent higher than the 40 year average and 10 per cent higher than the five year average. So that tells you that the recent times have been hotter than the overall average. Granted, this is one set of numbers.

[Page 25]

The rainfall, being 11.5 millimeters this past August, was only 12 per cent of the 40 year average and I have rounded these percentages off, and it was 20 per cent of the five year average, again telling you that our rainfall is less in the last five years. I guess the real thing to look at is maybe our own lawns and things. We can see that but those are exact numbers kept by a scientific agency. So I do agree with what my two peers say here that, yes, we pretty well know we have a problem. I would suggest no more studying to determine that it is changing. I would suggest that it is time to move forward.

MR. PARENT: I just want to follow up, Greg, on a comment that you made which concerns me. Instead of feeling support from government, both levels, provincially and federally, you feel a lack of support. Is that something new? Is that something that just you feel or is that something the federation feels?

MR. WEBSTER: No, I don't think it is strictly a personal opinion. I think that we have been, as an industry and as an individual, frustrated with the whole premise that money thrown into two or three safety net programs and a basket full of companion programs are what the industry needs and wants in the long term. We want a sustainable, viable business environment. I don't think depending on handouts in the long term is what we really envision as being the answer. We need strategic investment that lets us get the infrastructure in place that we can look after our own needs.

Again, I will refer back to my own operation. If I was a farmer who had no irrigation prior to this five year drought, I would be much less capable of dealing with that drought than I have been. We have harvested a crop each of the last five years, not 100 per cent crop but not a 50 per cent crop either. We have been able to get a reasonable crop off. We have not had a complete crop failure in anything whereas I know a good many farmers who historically have not had to invest in irrigation because of the climate, the soil type, the area they were operating, the crops and so on. In the last four years to five years, they have not had the luxury yet they do not have the fiscal capability of putting that infrastructure in place because it is too much too quickly.

The irrigation investment on my farm alone is $500,000. Now you look at that and you look at my annual revenues of being maybe two and one-half times that at best and you say how can you justify $500,000 worth of irrigation expense for $1.2 million in revenues? The bottom line is that that investment has been taking place over 35 years to 40 years. As I mentioned early, it has a long life span. Aluminum pipe and dug out ponds and that kind of stuff don't deteriorate very quickly so it is there. It is my insurance policy. That is a better insurance policy than my crop insurance. In fact, that is one of the reasons I can't utilize crop insurance, because I am actually managing some of the risk on my own farm through other means. So we need that strategic investment. We need not a hand out but a help up. I think that we need that money invested in long-term vision and putting the infrastructure in place that lets us operate our businesses with some confidence. It is a different story to be able to

[Page 26]

pump no water or to run out of water halfway through your production season than it is to have to manage that and use that system to get you through with an average yield.

[1:00 p.m.]

This is an aside, but it refers back to an earlier question on the NISA program. This, again, is one reason why NISA doesn't work in some of our situations because even if we do manage our risk, it denies us access to the program. I have participated in NISA since 1990 or 1991 when it first came out. So over the years we had built up a fund there to draw from. Our income levels started dropping fairly seriously in 1997 because of the drought and the increased costs and the reduced production and so on. We have triggered a withdrawal from NISA in both 1998-99 and 2000 because of those poor years in 1997, 1998 and 1999.

NISA is based on five year averages so it is your gross margin over a five year period compared to the current year. What I am seeing in our own case, and I think will be a similar situation that other farmers will run into, is that the good years of 1995 and 1996 are disappearing from our average. We are now dealing with a five year run of mediocre to low averages and so how do you trigger on that basis? Not only do some farmers not have the money in there to trigger in the first place, because of inability to contribute, but some farmers that do have money in there are looking ahead and saying, I may not be able to trigger this money even if I want to. So one of the things that we have asked for in talking with government over the last year is the ability to do a carry forward. If you actually trigger but don't want to use it this year or don't need to use it, that you would be able to carry forward without retriggering so that that money is available to you for your own internal risk management. I think there is support for that within the Department of Agriculture and Fisheries staff provincially. I am not sure we have gotten the support from the federal and provincial politicians on it completely yet. It is obviously a federal decision but it has to be put up through the chain. That is one of the things that we feel would help us make NISA a better risk management tool.

Another thing that the horticultural sector in particular has requested is harmonization with our competition in Ontario and Quebec on the NISA programs because we are not at a competitive disadvantage in the marketplace but we are at a competitive disadvantage on our safety nets because Ontario and Quebec have the ability to contribute roughly 6 per cent producer and 6 per cent government into their NISA programs. We are at 4 per cent and 4 per cent. NISA, the main program itself, nationally, is 3 per cent; 3 per cent producer, 3 per cent government. Nova Scotia has a 1 per cent and 1 per cent companion program on top of that. Ontario has a 3 per cent and 3 per cent companion program and they also have self-directed risk management programs that are in lieu of crop insurance. If you don't have crop insurance available or don't want to use it, you can contribute to a self-directed risk management program.

[Page 27]

So in the long run, our financial competitiveness is eroding because of these banking programs that allow the Ontario and Quebec producers to have more money for a rainy day

than we are capable of generating. So I think on the NISA aspect, we need certainly government support on getting some of these changes made and putting us back on a level playing field with the other provinces that we can compete directly with the marketplace.

MR. PARENT: Just one more very quick question, Mr. Chairman. This is about a different issue but it affects the farm industry. I could direct it to Richard or to you, Earl, with your far-flung interests. Transportation of the crops, is that a problem here in the province for the highway system? Is this a problem, transporting crops outside of the province? Do we need to do more work in that regard?

MR. MELVIN: My answer would be it is not a problem, Mark. No, we have a fairly good highway system, the 100-Series Highways and stuff that can carry high-weight vehicles at reasonable speeds and so forth. I don't think there is an impediment there to our business as I know it anyway. Would you agree with that, Earl?

MR. KIDSTON: Yes, I would agree with our 100-Series Highways are good. I would have a little more problem agreeing that some of our local highways are as good but, in particular, our operation is doing damage to its crop by traveling over one piece of highway I know and I am sure you are aware of that, Mark.

MR. NASON: I would like to suggest that you ask the guys who farm on the road between Whycocomagh and Mabou what they think of the transportation system and how it impacts getting their crops to market.

MR. PARENT: So there is a problem with the secondary road system, is what you are saying?


MR. CHAIRMAN: Thank you, Mark. Brian Boudreau.

MR. BRIAN BOUDREAU: Mr. Chairman, first of all I want to thank everybody for coming in because I know I have learned a lot this morning. Being from Cape Breton, I think it is important for me to recognize that, of course, Cape Breton does have a very viable agriculture industry and in fact in my riding alone, hundreds of people are employed through farming and some very large farms exist.

It is a little alarming for me because I was going to ask the question, I guess what relationship the minister has with the organization but I am not going to go there at all. I think I know the answer to that question so I am not going to ask it and put anybody on the spot.

[Page 28]

I know in Cape Breton, after so many years farmers struggle to make ends meet and they continually lose money, the first thing you know there is a highway going down the middle of a field and a subdivision is divided which, in fact, threatens the very industry. Is that type of threat real as a result of particularly the drought situation?


MR. BOUDREAU: So really what we are looking at, do you feel your industry is in an emergency state right now or close to an emergency? How much attention do you feel is required to correct the situation and when?

MR. DILLMAN: Mr. Chairman, it would be emotional for us to deal with that question much further than I am prepared to go. I am prepared to tell you that we have producers, who we have spoken with, who, if they are able to sit down with the lender and convince the lender to lend them the money that they need to cover where they are now, they know they cannot pay that back. They absolutely know that even if the lender does them a favour and doesn't kick them out the door and works with them and lends them the money, they know when they are sitting with that lender that they cannot pay that. Their option becomes then, where are you going? Where is the business going? Where are you going to be able to do the present debt that you have built up? Your option is very much one option and that is to develop the land.

You are the Committee on Economic Development of the Province of Nova Scotia. We are an umbrella organization representing an industry of your province. You will not be here in 10 years, 15 years, 20 years time, sitting at this table. The industry of agriculture in the Province of Nova Scotia will be here in 5 years, 10 years, 15 years, 20 years and in 50 years. It will not likely look like it does today. You won't look like you do today. What we want the committee and the Government of Nova Scotia and the people in the Province of Nova Scotia and indeed our federal Minister of Agriculture, is that we are doing the talking and we want to do the planning and we want to talk with someone who is willing to work to keep agriculture, on the long term, in this province. Not necessarily the present operator on the farm, may not fit into this long-term goal of this province, your province. You are the government. Our province, we are the agricultural organization. But I must say, in saying that, that in the paper that you have, we tried to bring this across to you in that we will be asking government, probably at least a three-fold, possibly four-fold, arrangement to work with the agricultural industry of today, keeping in mind the previous comments I have just made, Mr. Boudreau.

Assist farm families with income problems directly related to adverse weather conditions. When Mr. Downe made his comments leading to his question, he said you know we have this debt that is building at the financial institutions, the five big banks, for example. Well, where did that come from? That came from lack of operating profits in the agricultural industry. Agriculture is not based, in this province, on long-term mortgages held by the five

[Page 29]

major banking institutions. It is held by FCC, Farm Credit Corporation, the Nova Scotia Farm Loan Board, for our long-term mortgages. Most of the long-term development strategies inside the agricultural farm, as an owner-operator, or agribusiness, many of those loans are mortgage loans and they are developmental and they are carried by FCC and they are carried by the Nova Scotia Farm Loan Board. So when you see that figure go up and you represent the industry, it tells me a lot. So we will be looking for some method to assist the farm families that are operating the agricultural land today, trying to be compassionate to the future and to show good stewardship to the Province of Nova Scotia's socio-economic well-being as well as on a day basis or that day basis to be good to the producers who are producing in the province.

Take remedial actions to enable farm families to deal with the collateral damage relating to the adverse weather conditions. We are talking about developmental, how we can capture the water and be good stewards of that water but one of the things that agriculture must deal with, I don't want for us to not make the point well enough with you. Low bush blueberries and strawberries do their fruit set now or over this month or over the last three or four weeks. If the producers have lost that from lack of water, that is next year. Now sit down with your lender, have your working capital line not be able to be paid off, in fact climb from the year before, you have just taken 25 per cent crop off at astronomical irrigation fees or 50 per cent crop, astronomical irrigation fees, go in and guarantee them you have a crop to pay him back with next year. I hope you can because we can't.

Make a commitment to the long-term strategy that will enable farm businesses to adapt to changing climatic conditions. I made the statement, the Government of Nova Scotia needs to be long-term committed to the agricultural industry. I am speaking with members of the Government of Nova Scotia here and I need the Government of Nova Scotia to take this very seriously. I am not talking to the Minister of Agriculture and Fisheries, the Deputy Minister of Agriculture and Fisheries, or to the senior bureaucrats of the province. I am talking to the Government of Nova Scotia when I meet with the Standing Committee on Economic Development of the Province of Nova Scotia. So it is not by mistake that we make this presentation.

We need an acknowledgment of the scenario, your industry, our industry, is in today and we don't need you to go browbeat the Minister of Agriculture and Fisheries on our behalf. We don't need you to browbeat the Minister of Environment and Labour on our behalf. We need the collective Government of Nova Scotia to sit down and decide who they are going to work with, how they are going to work with it and do we want all roads and houses and tourism or do we want one of the real underpinnings of rural Nova Scotia, and that is the agricultural industry. That is what we are here to talk to you about today.

MR. CHAIRMAN: John, just before you leave . . .

MR. DILLMAN: Are you kicking me out?

[Page 30]

MR. CHAIRMAN: No, you are welcome to stay as long as you like. John, we have out on the old farm home, an old tractor there that I think in 1957 cost approximately $3,000 with a front-end loader and two point fast hitch. What would that itty-bitty model there, a New Holland - I am just saying New Holland because I know you are familiar with that brand seeing as your son sells farm machinery and equipment - but what would the typical farm tractor today sell for, 2001?

MR. DILLMAN: A utility tractor, which would be one that we would mow orchards with or work in the orchards with, we would say would be a utility tractor in the 50 horsepower to 60 horsepower range, we would be safety conscious and so on when we did the purchasing and purchased that machine, we are looking at anywhere from $40,000 to $60,000 to do that job.

As you drive down the highway and you see agricultural operators who are working large tracts of land preparing hundreds of acres of property in a year, their main tillage tractor, the main horsepower to do the tillage with, it is not unreasonable for these tractors to be in excess of $130,000.

MR. CHAIRMAN: Thanks, John. Did you have anything else, Brian?

MR. BOUDREAU: No, that is fine, Mr. Chairman, thank you.

MR. CHAIRMAN: Jon Carey.

MR. JON CAREY: Mr. Chairman, many of the questions that I had, Greg and John and Earl and others have answered but over the years I have always thought that this country and, in fact, probably all industrialized countries, had cheap food and now if you talk to a consumer, they will probably say that produce is expensive but I know that over the last 30 years your prices have not increased very much. I guess globally, and I think that is what we have to look at, other countries subsidize - or if you don't want to use that word, you can find another one - the agricultural industry to keep this cheap food. If we are going to have that, I think Canada and the Province of Nova Scotia have to buy into it.

How far out of whack are Canadians and Nova Scotians with the global situation as far as getting assistance? Would one of you have that - I expect Earl might have that - figure? In my opinion, we need to sell Nova Scotians and Canadians that farmers are not all rich. Sometimes the perception of the farmer is not really what it should be, I think, in my experience with dealing with them, and that they are not getting a return on their investment and that the individual resident of Nova Scotia and of Canada needs to support the agricultural industry if we are going to have "cheap food". Any comment?

[Page 31]

MR. DILLMAN: Mr. Chairman, I would like to address that question. I, with my family, our main line is dairy. I would like to answer it in this way. Canada has the highest quality standards of anywhere in the world, not only on the end shelf product of a dairy product but at the primary producer level. Now that is at the farm gate, it must meet the most stringent quality regulations and controls and testing. The Province of Nova Scotia has higher standards than the Canadian standard. The Nova Scotia consumer is being delivered the highest quality dairy product of anywhere in the world and someone else will have to price that, sir, I can't. What is that worth?

MR. KIDSTON: Mr. Chairman, to refer to my good friend, John, and also I would like to make reference to what my good friend, Don, said there earlier, there are some real problems out there. The food basket is a published part of the CPI and more often than not, Halifax has one of the lowest food basket numbers. It doesn't have one of the lowest costs of living but it has one of the lowest food basket numbers and that is the only criterion I can refer to. The producers in this - I guess John touched on a real thing. I have been asked it four times in the last two days so I think it is very valid, why should we, as a consumer, support the agriculture industry with public funds? After all, you have been whining now, this is the fourth out of the last five years. I don't blame them for putting that question forward. We, sure as the devil, don't like to be here doing it. We would like to talk to you about the good part of the industry, as the Committee on Economic Development, and the things we see that can be done yet. Unfortunately, all those good things that can be done here yet in this province aren't going to happen unless we do something about this four years of drought.

Definitely, agriculture as a primary sector, along with other primary sectors, have supported curtailing inflation over the last decade in this country, not just in this country, but in most countries. The first breakout from that has been fuel, as a primary product, and you have seen what has happened there. If the drought situation in Canada isn't addressed, you are going to see a bit of a breakout in food costs but it is not going to, of course, match fuel at this particular time because it is not a monopoly so much as fuel is.

We, as producers, wouldn't be here if this wasn't the fourth out of fifth year. This industry could handle itself without being here saying, look, we are in trouble guys. It is a hell of a hard thing to do when you are in business, you know, come forward and say, we are in trouble. I was asked by Country Canada this past week if I could put together some producers that might not be here next year to do a program and I said, there is no problem to do that.

I don't know whether Donnie knows more about me than I realized or not but I spent Friday afternoon arguing with one of our fine financial institutions and I think that our farming business is average for the province. We are going to make it through the year, the same as Greg referred that he was, but I have a real problem financing the operating line of credit for our business and I am only asking for pennies on dollars. There is a feeling out there that - I think there is a feeling, at least, among some of the banking institutions - their portfolio is too heavy in agriculture, the way they are responding. This is not through poor management that

[Page 32]

this committee is hearing from the agricultural industry today, it is through management of something that we have no control over, unfortunately.

The whole industry is managed very well in this province but there are producers out there, through no fault of their own, family farms for four and five generations, that unfortunately, after the first three years, and after the participation of the government in Nova Scotia, did make it and they got back on their feet a year ago and unfortunately if they had had just an average year this year, they would be okay but unfortunately some of them aren't going to be now. So when you ask - I think it was Mr. Boudreau who asked - how serious is this, that is a straight answer to a straight question.

MR. CHAIRMAN: Greg wanted to respond.

MR. WEBSTER: Mr. Chairman, just one more comment in response to Jon Carey's question on whether we should or shouldn't subsidize and how it fits into the overall scheme of things, I think that is part of the problem we are dealing with is the perception of words. I think we shouldn't be looking at public monies going into agriculture as a subsidy but I think we should be looking at it as more of a food safety/food security issue and that the Canadian consumer, our governments, expect to have food available for Canadians in the long term. Canadians rightly expect to have the highest quality food available, have safe food available, and we as producers are required to make changes on our operations and our operating procedures to make sure that happens. There is a cost to that, and that cost is not always recognized in the marketplace.

I think that governments should not look at public funds going into agriculture as a subsidy, they should look at it as an investment in the long-term food security of this country and not make us dependent on somebody else to feed us. It only takes events like the one in the U.S. on September 11th to make us realize that our food supply can change very dramatically very quickly with no influence on anything we have done ourselves. World events are going to dictate whether or not the countries that export food to us, traditionally, have food available to export. Any country is going to look after itself first, there is no question about that.

I think that governments really should take a hard look at this whole issue, and stop thinking of money invested in agriculture as a subsidy and view it as just a long-term investment in the well-being of the country.

MR. CAREY: I know time is running out. This committee, what can we really do for you? Can you give us specifics? I know we don't necessarily have to do them here today in the time frame, but provide this committee with the things, such as - I think I read into some of the comments - restrictions in things you can do from environmental things, regulations that may impede your progress, keeping in mind the financial situation of the province but on the other hand what could be responsible for the government to do for you. I think this committee

[Page 33]

- I can only speak for myself, but I feel, knowing the people around this table - would want to do what they could to support the agricultural industry.

MR. DILLMAN: Mr. Chairman, from your introductions we have met each of you and know what areas of the province you represent, and as I indicated in the last homily I just gave you we see you as the province, the provincial Government of Nova Scotia, as representing all the Parties that come to play. We would just simply, today, want you to know that this is the scenario, this is what we are looking at, this is where we have been, and as we mentioned in the written address that is there, we are looking at a three or fourfold package where we don't want to speak out of turn, we don't want to say things today that when we are completely done looking at collateral damages and so on to the industry that aren't accurate, I would ask your patience for us not to specifically tell this committee today, infinitum what our request is because our request, to be very honest, ladies and gentlemen, is not prepared to be presented, but we do want you to know that we are actively trying to find out just exactly what this industry is going to have to do over the next very short time.

We have producers who want to know what we are doing, what is going to happen, is anything going to happen in the next 30 days, do I have 60 days to make my arrangements, can you assure me I have 60 days to make arrangements. You can be assured that we are going to be pretty diligent in trying to get this together. What we would ask of all members who sit on the committee and the committee itself is that when that is put together you be very open to discuss it with us; any questions that you would have in any part of it, get your answers from us, get them from the industry, get them from where they came from. Don't rely all the time on second-hand information; when you have a question about agriculture, we have a telephone number in Truro, we have a fax number in Truro, and we have Laurence and his resources. As I said today, we have brought him with us today to be a resource to you not to us.

MR. CHAIRMAN: Don, you can wrap things up as far as committee members go.

MR. DOWNE: I am looking at all my friends who I have known for so many years, university graduates, business people, and I know it has been a hard day for you to be here. Food security has been an issue that you have heard all of us speak about for a long time, and it is something we shouldn't take for granted. The quality of food and the price of food has always been a reasonable price for consumers. As a farmer, we can appreciate those words.

We talk about the investment in agriculture that is required right now because investment is really for the long-term stability of agriculture. I look at Greg or whoever I look at here, their kids are going into university, going back to the farm, these are all university graduates we have here, so it is a dynamic industry and one where we need to make sure we have a future.

[1:30 p.m.]

[Page 34]

I see two major issues at the forefront. After Charlie has talked about beef, and maybe the beef prices are up a little but the big problem now is to have enough hay to feed them for the rest of winter. If you don't have the hay to feed them, where are you going to get it and how much is it going to cost? It doesn't matter what price that beef is, you are not going to have cash flow.

We have some crises going on in the industry right now, and I think they have been articulated very well. A water strategy needs to be done and it needs to be done now. We need to know what we can do, where we can get going and how do we get this thing started. We need to do that now. The other issue is there is going to be short-term financial requirements for the industry. I really respect the Federation of Agriculture for coming here, not here to bash the Minister of Agriculture or to bash one government or another government, they are looking to us to show leadership as elected representatives.

I would like to move that an all-Party committee - because this isn't just a Conservative problem or a New Democratic problem or a Liberal problem, it is an agricultural problem affecting farmers throughout Nova Scotia and affecting the economic viability of agriculture long-term. I think John hit the nail on the head when he said that we are government. I, for one, would want to make a motion that we work as an all-Party committee and work with our Minister of Agriculture in whatever way we can. I think that speaks volumes, especially when you are going to Ottawa, when you can say that there is an all-Party committee with the agricultural community looking at what we can do to help agriculture in this province.

We can be here and play politics, but I really don't want to do that. I think what we need to do is take a leadership role as an organization, as a body. Many of you, all of you understand agriculture fairly well. My motion would be that we as a committee work as an all-Party committee, maybe appointing representatives from each group to work in conjunction with the department and the Federation of Agriculture in a co-operative way to help in whatever way we can to move the agenda forward to get their frustrations resolved and see what we can do economically to help the industry. I so move.

MR. CHAIRMAN: Do we have a seconder for that motion? Jon Carey.

MR. CAREY: I second the motion.

MR. CHAIRMAN: Any question on Mr. Downe's motion?

MR. BOUDREAU: Question.

MR. CHAIRMAN: The question has been called. Would all those in favour of the motion please say Aye. Contrary minded, Nay.

[Page 35]

The motion is carried.

On behalf of all committee members, I would like to thank the federation for coming in today. It has been quite informative, and I appreciate the fact that you respected that perhaps some of us around this table aren't as informed as we probably should be. We will commit to work with you, to work with the minister and the various appropriate bureaucrats to support the concerns you have brought in to this committee today. I want to thank you, again, for coming in. Laurence, if you wanted to wrap up, maybe take a minute just to possibly say goodbye or a parting shot, whatever you would like to do.

MR. NASON: The question was asked with respect to what you can do, but there was a question before that that alluded to the level of assistance Canadians receive. I will have some information faxed up, OECD numbers that will answer that question for you. Certainly, I want to thank you on behalf of the federation for having us here today. I want to ask Earl to sum up.

MR. CHAIRMAN: Laurence, just before you leave, the federation's office number, for members' benefit, is 893-2293.

MR. KIDSTON: I was going to ask Donnie, I am not sure whether we were allowed to vote or not on that motion, being as it was an all-Party motion. (Laughter)

MR. CHAIRMAN: It is pretty informal here, you could have.

MR. KIDSTON: Before I thank you on behalf of the federation and of all the farmers in Nova Scotia that we are representing, John mentioned, in his summation, that the process is partway along and it will continue, and we will have presentations of what the federation is proposing. What he was referring to is we are in the process of identifying the true hurt, and some of it has been totally identified, the rest is still being inventoried and once that is done that will take place. In the meantime, in response to John, I would feel awful bad if we didn't make a few suggestions before we leave here, to John and to you as a group.

We don't believe this can be totally handled within the Department of Agriculture and Fisheries and that is not because the Department of Agriculture and Fisheries isn't very capable, it is because the budget for the Department of Agriculture and Fisheries can't handle what it is going to take to correct this. That is why John refers to our looking to you people as the government. I want to emphasize that as a group we feel this is a government issue, both federally and provincially.

What can you do? There are going to be discussions with the federal officials. We need the Nova Scotia Government and you people as members of that to very much influence

[Page 36]

the people representing Nova Scotia to pressure the federal officials for changes in the programs that we need done in the federal programs; namely, the NISA, the CFIP and crop insurance.

Those changes only come about by pressure from the provinces because provinces are participants in those and partners in them. That is one thing, John, that can be done during the whole process before we get the final figures out and after. I think you understand, the final figures are not going to be pretty.

We need you to influence the various people in your government to try to obtain some equality in these programs with our competition. In other words, we are not afraid of a level playing field. The industry in Nova Scotia, if this was only a one-year hit, we would not be here. It is a strong industry. It is actually in an almost continuing developmental mode so it fits in with your committee very good.

We need you to push forward to help us get what Don's motion referred to and that was, water infrastructure. I would be so brave to suggest, I think, gentlemen, that we would really welcome participation from this committee in that process. That has to happen.

With those few suggestions, John, just so that we do have some response there to your question, I would like to finish on behalf of the group by saying how pleased we are that you would entertain us here today. We would have hoped to come to you with quite a different message and a different discussion, and hopefully, if this process that we need to go through is triumphant at the end of the day - and we are convinced it will be because this industry is one of the oldest in the country - and actually, if we go back far enough it was the government of the country, certainly, from this very city.

It has been here quite a while and it is going to be here. We want it to stay as agriculture, this land. We don't want it to be all concrete and houses. There is lots of Nova Scotia that can be, so we want it to be viable.

We believe that you people can play a real part in that. We are so very pleased that you received us today and we can't say thank you enough. Thank you.

MR. CHAIRMAN: Well, thank you very much. Don, you wanted the last, last word.

MR. DOWNE: No, no. I never get the last word with my friend, Earl. (Laughter) There was a Devco committee established. I remember we did an all-Party committee when we were going after the post-Panamax ships. I, at that time, had appointed Premier Hamm and Mr. Dexter.

I think what I am looking at is that we would have a representative from each one of our respective caucuses to work in conjunction with the department, the minister and the

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respective ministries, and representatives from the federation as one working body that we could immediately get going on the areas that we talked about - water, so on and so forth - and that in the event of going to Ottawa, that we would be there as a team going to Ottawa to talk to our Ottawa colleagues about, this is what all of our Nova Scotia Government is saying about this particular issue. It leaves us as one effective vehicle to go forward to represent the concerns that are there.

That was the imagery of what I got. I think everybody understands it and I am hoping that we can get that started and established right away.

MR. CHAIRMAN: Yes. We will take that to our caucus, Don, and hopefully, we can get a member of the committee. It certainly seems to be a real good idea and hopefully can assist the farmers.

I know there are three committee members, at least, who have to go to Sydney tonight. They are members of the Fire Safety Advisory Committee. So thank you. I apologize for running a little bit over. Have a safe trip.

The next hearing here is October 16th, the Deputy Minister of Economic Development. Thank you very much.

[The committee adjourned at 1:41 p.m.]