STANDING COMMITTEE ON RESOURCES
Mr. James DeWolfe
MR. CHAIRMAN: I will call the meeting to order. We have with us Mr. Geoff Moore, President of the Sheep Producers Association of Nova Scotia, with us today. Geoff is a Pictou County resident from Pictou West. We are looking forward to hearing from you Mr. Moore. As usual what we will do, with your permission, is have a short presentation and then we can open the floor to some questions. We certainly realize that farming has a lot of concerns of farmers from one end of this country to the other. We are interested in hearing your concerns and hearing about what direction your organization is going in the future.
I will turn the floor over to you in a moment but first, we will go around the table and introduce ourselves so that you know who we are. I must mention that this is rather informal, so just relax and have a coffee, none of us, except for one perhaps, are experts on sheep farming, so you have full control. Starting with Frank we will introduce ourselves.
[The committee members introduced themselves.]
MR. CHAIRMAN: Having gone around the table, and I think you have a list of the members here, note that one of them is a replacement, we will just turn the floor over to you.
MR. GEOFFREY MOORE: Mr. Chairman, thank you. Good morning everyone. I don't have a flashy presentation to make, I won't apologize for that. There are just a couple of ideas that I want to leave with you this morning, if I don't leave anything else. I refrained from writing a long report, I didn't want to bury my principal points under a lot of facts.
The sheep industry in the province has declined from several hundred thousand sheep maybe 100 years ago, I am told there were 100,000 in Cape Breton alone. Ten years ago we had twice as many as we do now. Now we are down to about 12,000 ewes. We may have bottomed out at that for now, but the industry is definitely not in a thriving state. While it is a very small industry, as you may have noted from my report, it amounts to income of about $1.5 million for farmers overall.
The story of the sheep industry is significant because it is not very different from the story of other sectors of agriculture. Outside of the supply managed commodities, there are very few farms which make a living for their owners. I want to address that point for a minute or two because you will find people who say, I know someone who is making a living farming, making a living growing vegetables, making a living with beef cattle. You will even find some of the farmers involved will tell you they are making a living raising sheep.
You have to examine those statements very closely because there are two complicating factors. Many people go farming after they have worked at some other occupation for awhile. They save up some money or they buy a farm while they are working and pay for it gradually, get the land, buildings, machinery and the stock, and then they start farming, some of them full time, with everything paid for. They may make enough for some years, they may be able to take enough out of the operation to live on the income. But at the same time, the machinery is gradually getting older, the buildings will soon need repair and they aren't able to set money aside to replace that machinery and repair the buildings 20 years down the road.
I don't call that making a living at a business. If you are making a living at a business, then the business is not only providing your living expenses, it is paying for itself, it is providing for its own renewal and continuance. It is very easy for people to think, especially since most farmers aren't accountants, that they are making a living at farming and to go on thinking that for maybe 15 or 20 years until all of a sudden one day the tractor goes toes up and there is no money in the bank. What do you do? You get a job and you are off the farm again. That is a very typical story.
The other complicating factor when you are talking to farmers about their income, is that many of them, again outside of dairy and poultry which are the supply managed commodities, do marketing themselves, they retail directly to the consumer. In that way they realize quite a bit of extra income over and above what they could receive if they were simply selling their products without any processing or further effort on their part. In those cases, they may actually make a good, well I shouldn't say a good living, but a modest living from their efforts. Their efforts are considerable in those cases because they are not only running a farm, sometimes they are running a manufacturing and a retailing operation as well, but for some families it does provide a reasonable living, but my point in that situation is that the money they are making is not being made from the farm. The money is being made from the processing, manufacturing, craft work, whatever, and the retailing of the product.
In most cases they would actually make more money if they didn't bother with the farm and simply bought the product from somebody else and, in fact, that is what a good many of them do. Some of the people who sell at farmers markets, who operate roadside stands, who do craft work and sell through various shops, buy a good deal, if not most, of their material from other farmers, process it themselves and sell it. They have their farm because they like farming. They like the security perhaps of having some of their own inputs available to them, but it is not basically a sustainable economic operation but, again, those people, many of them will tell you that they are making a living from farming.
So when you are discussing the profitability of farm operations, you have to separate the actual production of the basic commodity, whether it is lambs, or calves, or potatoes, or turnips, or whatever, from the further process of preparing those items for market and marketing them. There is money to be made in the processing, distribution and sale, but frankly I don't know of anyone who is making a living out of sheep farming despite what some of them may say. In all of those cases there are the complicating factors of pension income, a working wife, retailing product off the farm at farmers markets and roadside stands and so on.
I have referred to the problem in my report of imported food. In the case of lamb, here are variations on the theme, but I don't suppose it is much different for other commodities. Canadian production amounts to roughly one-third or one-half of total Canadian consumption. I am not sure what the figures are for Nova Scotia because you cannot get people to talk about it, if you are talking to someone from Sobeys, they will not tell you how much New Zealand lamb they sell or even how much local lamb they sell. I happen to know roughly how much local lamb they sell because I am involved in the operation of a lamb marketing co-op and we sell through Sobeys. So I have some vague notion of what their market is for local lamb, but I have very little idea of how much imported lamb they sell, but overall in Canada the figures run about 50 per cent of Canadian production; 50 per cent of Canadian consumption is Canadian produced.
We could sell more, we could produce more, but there is a virtually unlimited supply hanging over the market and in order to produce more Canadian product there has to be a financial incentive and there simply isn't. Restricting imports by even a couple of per cent would allow prices to rise a bit and it wouldn't require immense price increases. Maybe a 25 per cent increase in retail price, maybe 20 per cent, would result in good liveable incomes.
I think that this is a public policy concern because we live in a world where food is becoming scarcer and people are becoming more numerous. Sooner or later the two lines will intersect and the imported food which is now so cheap will become a lot more expensive and perhaps harder to get. It is not as simple as saying, well, when that time comes we will just crank up production. Agriculture, more than most industries, depends on infrastructure. You have to have operating farms with land that is in good shape and productive. You have to have supply infrastructure. You have to have farm supply stores, machinery suppliers and so
on. Those only exist if there is already a sustainable, viable agricultural industry. You have to have a marketing system. You have to have processors for the products. Those only exist, as I say, if there is already a viable thriving industry. As the industry declines, the infrastructure erodes. Then if you want to increase agricultural production significantly, it is going to take a long time because all of that infrastructure has to be reconstructed.
I have referred to the problem of government assistance for agriculture. Ideally, the very best assistance government would give, from my point of view, would be simply to legislate that all agricultural commodities have to be sold through marketing boards under supply management. We have seen this operating in the dairy industry and the poultry industry for a number of years. It works spectacularly well. Farmers are able to make a decent living. They know they are going to get a price for their product, which covers the cost of production, and it serves the consumer well because they get a quality product at a stable price and a short supply which is not the case in many other countries.
I would say that obviously there is no chance that supply management is in the near future going to be imposed on agriculture wholesales, so that is obviously a very idealistic suggestion. What will happen 10 or 15 years down the road remains to be seen. In the meantime supply management works in the sectors which have it because it restricts imports. That is the only way in which any system can work which gives farmers a living income. In the meantime, failing that, you have the two choices. Outside of supply management the only thing government can do is either restrict imports and allow domestic producers to expand to fill the market or if you want to continue having cheap imports of food, then you have to give money directly to producers to keep them in business.
As I suggested in my report, the most efficient way of doing that is simply to give it to them. That is done in Quebec, in the sheep industry at least. I don't know how they deal with other commodities. In the sheep industry they simply give sheep farmers something over $50. It used to be $60 four or five years ago. They have cut back a bit, but a significant amount of money per year so that the assistance is roughly proportional to production. It is not quite the same as subsidizing the actual production of lamb, but it is quite similar because your lamb production is going to be proportional to the number of ewes you have.
Other forms of government subsidies are very inefficient and probably damaging in some ways to the agricultural community. I have pointed out that government and the Department of Agriculture in this province and probably in most provinces, have been very fond of giving capital assistance, getting young farmers in, helping young farmers with grants and loans. That helps a farmer get started, but what about the guy who is going broke 10 miles down the road or even a mile down the road? I have got three empty hog barns within a mile of my farm that were all built with government assistance. They were built, they were unprofitable, there are no hogs in them. I wouldn't say they are empty, they are probably being used for machinery storage now or maybe hay stuffed - well, one of them I know was used as hay storage.
That is a waste of money. It is also a waste of the expertise which those farmers gained in raising hogs. They have spent several years learning how to raise hogs, working hard at it, and that is gone. It is wasted. If you are going to spend money on farming, give it to the farmers and let them decide what to do with it. Don't bribe young farmers to come into farming if you are not going to support them once they are in there. It is a waste of their time and it is a waste of your money.
I think those are the main points that I wanted to address and I hope I have raised some questions in your mind. I will turn the floor back to the Chairman.
MR. CHAIRMAN: Thank you for your report. How can they ship lamb from the other side of the world, New Zealand and Australia, all the way up here and sell it for the prices they do, the lower prices? Is it because the sheep have free-range food?
MR. MOORE: It is a very different situation there. I worked in New Zealand for a year. That is why I got into sheep farming, God help me. First of all, they don't have any significant winter there. They can pasture their animals year-round. They don't have to house them, so that is a big saving in cost. They don't have to feed them in the winter, they can just stay on pasture. So that saves them the cost of the housing, it also saves them the cost of the machinery for putting up winter forage, winter feed. Their costs are so low, alongside of ours, they start off with a lamb that sells here for $120, it might sell for $10 there and it is still profitable to them.
The other thing is that lamb production in Australia and New Zealand isn't a main item. It is the by-product of the wool industry. They can actually support their flocks on wool sales alone, so the lambs are just an extra.
MR. CHAIRMAN: Interesting, thank you. Mr. MacAskill, you had a question.
MR. KENNETH MACASKILL: I want to take you back many years, probably in the mid-1940's with the establishment of the Gaelic College. I recall they used to have a program on the radio every Saturday night and the theme of the program at that time was more sheep on the Cape Breton hills. You mentioned it in your later statements that the value of the carcass was almost nil. It was just food for the sheep farmer, but the focus was on the fleece. Where do we stand today in terms of the value of the fleece versus the value of the carcass?
MR. MOORE: For Nova Scotia producers the wool has represented maybe 5 per cent of total income and that price doesn't seem to be likely to improve. Wool, of course, is not as widely used as it used to be. It has got a lot of competition now from synthetics, but the market for wool is also very much controlled by Australia and New Zealand. They have huge production so they dominate the market and they get a much better price for their wool. I don't know what the current price is, but in the recent past it has been in the order of $3.00 to $4.00 a pound. In Nova Scotia we have been getting something in the order of 80 cents
or 90 cents a pound. In the rest of Canada they are lucky to get 50 cents a pound. We have a very tiny production of wool compared to Australia and New Zealand and it is a very variable quality. So the big users of wool aren't very enthusiastic about it. Most of it goes to local mills.
MR. MACASKILL: Are there any carding mills left in the Maritimes?
MR. MOORE: Yes. There is at least one in New Brunswick, maybe two, and there is one on P.E.I.
MR. MACASKILL: There is still one on P.E.I.?
MR. MOORE: Yes.
MR. MACASKILL: In your opinion, how many sheep can the market absorb in Nova Scotia? You say that we have around 12,000 ewes. In your opinion, how many should we have to supply the market in Nova Scotia?
MR. MOORE: I am guessing that we could roughly double that if we had the whole market for lamb, but it is also true that it is very dependent on the price of other meats because, of course, people go to the store and wonder what kind of meat they are going to get. They may buy lamb sometimes just because they want lamb, but very frequently it is dependent on price. Beef is a little cheaper than lamb for comparable cuts but pork and poultry are very much cheaper.
Of course the price of pork and poultry is very dependent on the price of grain, which is currently and has been for a number of years now selling considerably below the cost of production. I am told that the cost of raising pork is about 60 per cent feed cost. When 60 per cent of your input is about one-third or one-quarter of what it ought to be, you have a big built-in subsidy there. So, pork is a lot cheaper than lamb and will be for some time. If the price of pork and chicken goes up, then there is room for the price of lamb to go up. If the price of lamb goes up, then you will see more people coming in, and you might have 50,000 ewes in the province. There are a lot of factors involved.
MR. MACASKILL: You say there is a lamb marketing board in the province?
MR. MOORE: We have a Lamb Marketing Co-Op. We have been operating for 18 years now. We sell about maybe one-third of the lambs that are produced in the province.
MR. MACASKILL: If you go into a restaurant and talk to people who normally eat lamb or consider lamb one of their favourite dishes, they seem to talk about New Zealand lamb; why? What can we do to change the eating habits or the minds of people who appreciate lamb and why they don't buy local lamb?
MR. MOORE: Make it cheaper, I guess. We are going to get some help in that. The price of petroleum is going up, so that is going to increase the cost of transportation and inevitably New Zealand lamb is going to get more expensive. It is very largely a matter of price. We are very fortunate here in Nova Scotia in that local lamb does have a good name and a lot of people prefer local lamb to anything else so they are willing to pay considerably more for it. If you look at the price of lamb in the stores, you will see that we are asking them to. Thank heavens they are willing to pay as much as they do but there is a limit to that.
MR. MACASKILL: Thank you, Mr. Chairman. I will pass to the next.
MR. CHAIRMAN: Mr. MacDonell.
MR. JOHN MACDONELL: Hello, Geoff. I have a couple of questions. One is around the lack of numbers for how much lamb is sold. You were saying you know how much Northumberlamb sells to Sobeys but you don't know how much other lamb Sobeys is getting. Also you probably would have no idea how much New Zealand lamb would be in restaurants or anywhere else. I noticed in this document here that in 1995, it says that sheep numbers decreased to 26,000, and it said 4,000 less than the previous year. That means that in 1994, there were 30,000 - I am assuming ewes - in the province. That certainly doubles the 12,000 that we are talking about.
I am just trying to think, in my memory, because I haven't been as close to the organization as I was at one time, but I am kind of thinking that maybe the numbers were even greater than that, even ahead of that, to 1992 or that area. You may know better. As far as marketing, even in the case of 30,000 ewes, the lambs that were produced, was there any problem? I know not all of them went through Northumberlamb. I would kind of like you to, if you could, just expand on how Northumberlamb works, because I think it would be good for the committee to have some understanding of that. I think your comments about supply management are good ones. I will leave it there for the first second or two, if you could address those, as far as the numbers and how Northumberlamb is operated.
MR. MOORE: About 18 or 19 years ago a group of us in Pictou County - I should probably go back farther than that because this has a fairly long history, but there had been an abattoir co-op in River John which a group of producers built. For several years they marketed cooperatively to a number of stores. That project failed for various reasons, but a couple of years later Sobeys at that time was very interested in selling local lamb and the meat manager at Sobeys was English, liked lamb and wanted to sell it. I am told that Frank Sobey himself wanted to see lamb sold. One of the contacts they had made with the River John people was followed up, they said well you guys aren't operating as a co-op anymore, but why don't you organize specials for us. If you can get a couple of hundred lambs killed at the Canada Packers plant on P.E.I. and delivered to our stores, then we can put them on special and we can sell significant numbers of lamb.
[9:30 a.m.]
Two of our producers organized this and they did it a couple of times in the one summer, and then one fellow said well, if we are going to go to all that work two or three times in the summer, it wouldn't be a whole lot more work just to do it on a weekly basis. So back in 1981 we started selling lamb primarily to Sobeys on a weekly basis, having the lambs custom killed at a provincially inspected abattoir in Truro, having them delivered by a small wholesaler who was selling veal to Sobeys. After a year of that, which worked fairly well, we decided we better go on our own, buy our own delivery truck and get serious about it.
It worked well, the system was very simple. Initially, it was just a matter of people who had lambs would phone up the organizer and tell him, he would take orders from the stores, and then when he knew how many lambs he was going to need for a particular week, he would phone the producers who had lambs booked in and get them to take them in for killing, and then our contract trucker would deliver them. It continued like that. We did acquire our own truck. Our hope was that we could avoid having any sort of assets other than a telephone in the kitchen, the truck took care of that. Then a couple of years later the abattoir at which we were killing the lambs was for sale, so in order to protect ourselves we formed another co-op and bought Brookside Abattoir in Truro.
We have continued to sell roughly a third of the lambs produced in the province. We could sell more, but as I explained it is more or less price. I think one of the significant things about that project is that it is very cooperative, it is a co-op and we do have members, but we don't market only the members' lambs. We market lambs for anyone who has them in order to get the largest possible pool of lambs and in order to have everyone's cooperation so that we don't split producers up into competing groups. Although it is not a supply management system, in that sense it resembles supply management.
The real idea of supply management is cooperation, it is a case of everybody saying okay, we are going to work together, we are going to share the available market and we are going to do it in such a way that everyone gets a reasonable price out of it to cover their cost of production. Some people, even farmers, regard supply management as being imposed by the government. Well, it is implemented under legislation but again it is basically a cooperative system in which a group of producers agrees to share the market and cooperate in supplying that market in a way which benefits everyone.
That is the same sort of attitude that we have taken in the lamb marketing in Nova Scotia, that we are all in this together, we have to find a way to share the market, everybody gets the same price, everybody has the same access to the market. We don't have any way of controlling supply so that if the supply gets too big, the only thing we can do is drop the price and peddle more lambs, but it works better than anything has ever worked before as far as lamb marketing is concerned. I don't know whether other provinces are imitating us, but since we have started the co-op in Nova Scotia the producers in Quebec now have about six
cooperative marketing organizations. There is a producer-organized marketing program in Ontario and I was invited out to Alberta and Saskatchewan last winter to talk to their producers about what we do here. They are beginning to think that it is time for them to get organized. I met a producer from Manitoba at a meeting a couple of months ago who says they are trying to get something organized in Manitoba.
So farmers are beginning to realize that the only way to deal with these problems is to work together and to cooperate. I think that that is sort of a small scale model of what society as a whole should be looking at and not just in agriculture, but in everything else.
MR. JOHN MACDONELL: I am wondering, coming back to the numbers again, if there were 30,000 ewes in 1994, would you have been marketing one-third of those?
MR. MOORE: I should probably address that question of numbers because I think that 30,000 is probably a total number of animals. In my time the peak of numbers was probably back around 1992, but at that time I think we had about 23,000 to 24,000 ewes and so what they do when they get these numbers is they count all the animals in the province at a particular time. That then includes some lambs and all of the ewes, of course, but it doesn't even include the entire lamb crop because by the time they do the counting some of them will have been gone. Yes, we have been marketing between 4,000 and 5,000 lambs a year for the past 20 years and that represents about one-third of the total production in the province.
MR. JOHN MACDONELL: I agree with you on your ideas regarding supply management. I know recently in talking with people from the Dairy Commission, they were talking about one organization I guess that had signed a big contract as far as, I think, selling milk. They were also downplaying the role of supply management actually and talking as though the days of supply management in the dairy sector might be over or heading to be over and yet they were able to find this quite good contract and didn't seem to realize that their ability to sign the contract was based on a long-term secure price, the quality of the product and a secure quantity of the product. If you started to remove any of those components, you would have a much more difficult job to sign this contract and they somehow didn't seem to relate their ability to sign what they thought was quite a good contract with the supply management system that had allowed these three components to stay in place and, therefore, it was their leverage in signing the contract.
In speaking with people from the Federation of Agriculture recently and just before we broke up it came as an aside about the fact that the sheep producers don't qualify for safety net help under the province, I know beef producers do, whether there has been some changes recently that some safety net programs apply to beef production, but they don't apply to sheep? Is that true or can you explain that?
MR. MOORE: I have to say that I am not really well versed on all of these policies right now. I haven't been the representative to the Federation of Agriculture. Being president of the association has been too much work for one person so we have sort of spun it off and we now have one of our other directors who attends the Federation of Agriculture meetings. I am not clear on what is happening in that area. Basically, I guess nobody is very happy with the various drought assistance programs and so on that have been devised in the last couple of years. Part of the problem is that they were based on the previous year's income and after two years of drought, the third year, your previous year's income was just as bad as this year so you are not showing a decline in income. So you are not eligible even though you are in pretty desperate shape.
Speaking of supply management, yes, I think it is a fact that people take things for granted after awhile. It is easy to see the problems with a system like that and forget about the problems that you had before you had it. Some of you may remember seeing a program on television, it must be four years ago now. A family in Nova Scotia was sick and tired of supply management and all the regulations so they packed up and moved down to New England. It might have been Country Canada that featured a program which showed how well they were doing there and they were very happy. They were making good money.
I don't think we ever saw on television the sequel to that, but I have connections with friends of that family and a couple of years later the milk pick-up truck didn't come into the yard one morning. They didn't think anything of it - it must have had a breakdown. It didn't show up the next morning either. The third morning they phoned up and said where is the truck? The dairy said we don't need your milk any more. We are not going to be picking it up. They said what are we going to do with our milk? They said, well, it is your problem, sorry about that. They wound up selling their milk at something like one-third of the price to somebody else. At that point, which was a couple of years ago, they weren't sure they were going to be able to hang on. You hear lots of criticism about supply management, but it is easy to forget the alternative can be much worse for farmers and for consumers.
MR. CHAIRMAN: It was interesting to hear you speak, Mr. Moore, about the co-ops because I just read an article that you probably have seen there in the Northern Business paper regarding a local sheep farmer, Trevor Richardson of River John.
MR. MOORE: I didn't see that article.
MR. CHAIRMAN: I know Trevor quite well. He is praising the co-ops because it maximizes returns to the farmer, he says, concerning sales by cutting out the middleman. So I guess it certainly is a good thing. Would you like to see more of these co-ops in the province?
MR. MOORE: Yes, I think it is not just in farming, but in other areas cooperatives are a very good economic structure. In the case of the lamb marketing co-op, as I say, we have been operating for 20 years, selling one-third of the lambs produced in the province, but probably more than one-half of the lambs that have actually been finished to market weight because a lot of the lambs go out of the province light and get shipped to Ontario and Quebec. Over that 20 years we have probably averaged $20 a lamb more to the producer than they would get from any other market and even the producers who don't sell through the co-op benefit because everyone who buys lambs has to compete with us for them. So we have driven the price at the auction in Truro up just by being there. So everyone has benefited a great deal.
People look at the lamb co-op and think that maybe that is a bit unusual, but most of the milk in Nova Scotia is marketed through co-ops. That has been going on for a long time. We don't realize how unusual that is. I just assumed that that is the way it is because I had seen a TV program I think about Quebec and apparently a lot of the milk is marketed through co-ops in Quebec. When I got out West and talked to them about co-ops last winter, you know, I just assumed that dairy co-ops would exist out there. It turns out they don't. There is nothing like that outside of Nova Scotia and Quebec. It is not done. So the idea of farmers working cooperatively to market their product, and as someone said cutting out the middleman, is not widespread at all, but it works.
MR. CHAIRMAN: Mr. Barnet.
MR. BARRY BARNET: Mr. Moore, I have three questions but before I ask them I want to qualify them. The community that I represent, over the past 50 years, we have gone from raising baby lambs to baby splits and bungalows, so I know very little about the farming industry. The first question I want to ask actually I do believe I might know the answer to but I will ask it anyway. From your perspective, do you know whether or not New Zealand subsidizes the sheep industry?
MR. MOORE: They do but I actually don't know to what extent and it is not easy to find out. It is not easy to find out how much any country subsidizes their agriculture because there are so many different sorts of subsidies. These days with subsidies being less respectable in international circles, they find various ways of concealing what they are doing.
MR. BARNET: The second question is, if the government were to subsidize on a per- ewe basis, the total number of sheep in the province, how large do you expect the numbers to grow to from the 12,000 there are now?
MR. MOORE: That is a really tricky question, because obviously if you increase the income there will be more people going into it. As I said, supply management is obviously the ideal way to manage an agricultural economy because once you make something profitable more people come in and the first thing you know you have an oversupply and then
everybody's income goes down. It just doesn't work very well, if you just subsidize. What has been happening in Quebec, their industry has been expanding very rapidly, some of them are actually able to live on the income from it, although most of the people I meet from Quebec still have other off-farm incomes so I am assuming that what is happening is that yes, they are getting money from the government but at the same time there is more lamb on the market so the price is going down.
MR. BARNET: The point I was trying to get to or the direction I was trying to lead to was how would subsidizing the industry relate to numbers of jobs and what would come back in terms of employment? Right now if we were to apply that subsidy, it would cost the government annually, with the size of the flocks, $600,000. If the flock were to double in size, that would go to $1.2 million. What would be the job benefit from that $1.2 million subsidy? Do you have any idea what that could be?
MR. MOORE: Well, to be honest I don't know how many people are employed directly producing and processing lamb, but you have 300 farms, with probably 600 people involved at that level. There is a couple of killing plants with - how many people would be involved there, 20 jobs involved in the processing and distribution of lamb in the province. I don't know what it would add up to if you doubled the size of the industry, I suppose you would double those numbers, more or less. It is very hard to tell when you do something like that, what is going to happen.
MR. CHAIRMAN: Mr. Boudreau.
MR. BRIAN BOUDREAU: I have to say it is an interesting topic and industry. We heard a lot about provincial governments, I am interested in what role the federal government plays within this industry.
MR. MOORE: There is relatively little direct federal involvement with the sheep industry in the province; in a direct sense, none at all. Of course the federal government does administer some programs like the income stabilization program, which involves producers setting aside a percentage of their income in an account which the government matches and then pays interest on. This can be drawn from if farm income falls below a certain level and if the farmer retires, that is of some assistance in the long run. The amounts involved are so small that it is not a major consideration. Basically, programs like that are not terribly useful because the money for them is basically off-farm income. A sheep operation, for example, doesn't have disposable income to save for a bad year because all the years are bad financially. If a farm has off-farm income, they can put some money aside out of that, but it doesn't come from the farm operation.
MR. BOUDREAU: This is an interesting topic, at least for me, today. I am like Barry, I am a little familiar with sheep although I don't know a great deal about them, that is for sure. What do you feel this committee could do to help this industry?
MR. MOORE: In the short term, directly, probably not a whole lot. As I said, what agriculture in the country needs is recognition, by the public and most importantly by people like yourselves who are in decision-making positions, of its importance, the importance to maintain it and of the difficulty of maintaining an industry in which so many people can't make a living. If you follow the notion that we should buy whatever is cheapest no matter where it comes from, then in agriculture particularly but in almost anything else, what is it that we produce here that we can't get cheaper from someplace else? If you follow the idea of buying what is cheapest to its logical conclusion, who in this province is going to have a job when we are done?
I think that we have to stop and think very carefully about the whole idea of free markets, free trade and so on. It sounds great and it works for some people, if you happen to live in say central U.S., southern U.S., and California, where you can produce food, three crops a year with irrigation, until you run out of water perhaps. In some areas that sort of idea works very well because you do have an advantage over anyone else in producing some things, but in Nova Scotia, we did in the fishery, we had maybe an advantage in producing fish but we spoiled that. What is left?
We have to do what we see is going to preserve our jobs, and we simply can't assume that we are entitled to the same standard of living that applies somewhere else. If buying Nova Scotia lamb at a higher price than New Zealand lamb means preserving Nova Scotian jobs, if buying clothing made in Nova Scotia means preserving jobs here in Nova Scotia so that the people who have those jobs can buy what you produce, then maybe that is what we have to do. If that means that we don't all live quite as well as someone in California or in France, then so be it.
Speaking of France, I assume you have read some of the statistics, people in Britain and Europe pay two and three times as much for food as a percentage of their disposable income. They understand that they have been hungry in this century and they understand the need to have a secure supply of food, and they are willing to pay for it. If we are not careful, we may wish that we had done the same. They, of course, don't use supply management there, they use subsidies. I am not sure how they restrain production. I guess probably farm production in Europe is restrained by the amount of land that is available for it so that they don't have quite the same problem that we do. They can subsidize farms and watch production grow without seeing it get too far out of hand. In Nova Scotia, well, in Canada generally, we still have enough farmland that if you subsidize production you will get an increase in production and probably perhaps an unmanageable surplus.
MR. BOUDREAU: Are marketing programs available within this industry now, and would you like to see those enhanced, a promotional program?
MR. MOORE: Yes, we get money occasionally for marketing. Our lamb co-op was involved in that several years ago. It is hard to know how much good programs like that do. People's purchasing depends so much on price that, yes, it helps if you can convince them that Nova Scotia lamb is better than New Zealand lamb. They will pay a small premium for it, but there is a limit to how far you can go with that.
The marketing program that we were involved in was a federal government program. In the first year they paid 80 per cent of the cost, and in the second year they paid 60 per cent of the cost and you know the sort of pattern. So we had to put a considerable amount of money up front. It was money that we probably otherwise wouldn't have spent and who knows whether it did any good. Again, one of the little details in these programs, we couldn't hire one of our own people to do this. It had to be somebody from outside. It couldn't be an existing employee so we couldn't use it to supplement the income of an existing employee. It had to be somebody else that we hired. So it didn't even help to provide a better income for one of our own employees.
Programs like that are of questionable value and one of the problems of them is the way it is done. The government, I suppose, feels it cannot decide that this company will get assistance and that company will not. Then you see big, profitable, successful companies getting marketing assistance under marketing programs to advertise this or that product and you think, is this the best use for public money? I think it is very questionable.
MR. BOUDREAU: This is my last question, Mr. Chairman, if I may. You indicated before that nobody was happy with the drought program. I wonder if you can give us some of your ideas how this could be repaired?
MR. MOORE: Things like drought assistance are very difficult to manage. First of all, the drought wasn't uniform over the province. At my farm we went without rain for three months straight. We had about one-third of the normal rainfall, for the entire summer. Two or three miles away they had more than the normal rainfall and you are aware that, in various parts of the province some places were hit very hard and others really had a reasonably good summer. The best sort of disaster assistance for farmers is simply to ensure that they have adequate incomes in all reasonable years so that when a bad year comes along, they have got the resources to deal with it.
If farmers need propping up because we have a dry year, then it probably means we were doing something wrong prior to that. Obviously, you get in a situation like this, farms are going to go broke; any government assistance is welcome. Why do we get into this situation, can't we do something better than stumble along from crisis to crisis?
[10:00 a.m.]
MR. CHAIRMAN: Mr. Epstein.
MR. HOWARD EPSTEIN: Mr. Moore, can you help me? I want to know how many members you have in your association.
MR. MOORE: Roughly 300, but I have to explain that a number of years ago, we became a recognized commodity group under provincial legislation, which means that the Sheep Producers Association is allowed to claim a check-off to fund itself from every animal, every sheep or lamb, that is sold. That automatically makes every sheep producer in the province a member of the association, so legally we have as many members are there are sheep producers, so there are some 300 sheep producers of one size or another. If we have an annual meeting, we expect to see 20 to 30 people at the meeting.
MR. EPSTEIN: Your membership is not individual based but tied to ownership of a flock?
MR. MOORE: Yes.
MR. EPSTEIN: Of those 300 flocks, are there variations in the size?
MR. MOORE: Yes.
MR. EPSTEIN: What is the range?
MR. MOORE: From 200 to 500. Maybe 500 is a bit high. We have a lot of people who just keep a couple of sheep and they are recognized sheep producers. But I would say typically there are a lot of 15- to 20-ewe flocks. The average is around 40. There are a lot of flocks in the under-100 range and then I don't know how many there would be over 100, I would guess 20.
MR. EPSTEIN: Are each of these enterprises family-owned farms?
MR. MOORE: Yes.
MR. EPSTEIN: There has been no real agglomeration of sheep producers, is that right?
MR. MOORE: No, in the sense of corporations wanting to be involved in sheep farming, no, there is no money in it.
MR. EPSTEIN: But you did mention that at least some of the producers have employees - I heard you just a moment ago mentioning about employees - so it is not purely family, is that right?
MR. MOORE: I don't know if there would be one sheep farm in the province that would have a full-time employee, but there would be a number of the larger farms that would have occasional employees for high workload periods, say haying; if you are making hay or silage, you would need extra help, shearing time, lambing time. There is occasional employment.
MR. EPSTEIN: Then sheep producers in general tend still to be in the pattern of family farms?
MR. MOORE: Very much so.
MR. EPSTEIN: When you look at those statistics that we saw of the big decline in numbers of sheep over the last decade or so, so that you are down to 12,000 now does that represent a decline in the number of families involved in this, or does it just mean that although they are still in farming the size of their flocks has declined or have they turned to some other aspect of farming? Do you know anything about that?
MR. MOORE: I think one of the major factors in that decline was the arrival of the coyote. Every farm of course, had a few sheep, as they had a few hogs and a few hens and some cows, and as the rural communities changed and people increasingly had paid employment rather than living as sort of subsistence farmers, a lot of people still kept a small farm operation going and because sheep were easy to look after, a lot of people kept a few sheep around. What happened a few years ago when the coyotes started coming in was there was devastation on these small farms where people with the small flocks, where people weren't managing them very closely, a lot of people at that point just dropped it, just gave up.
I think if there had been money in it, then people would have continued, they would have done what was necessary to control the problem and continue keeping sheep. In the situation where there was basically no money in it and the distress of seeing your animals being killed, a lot of people at that point, I think, just got out.
MR. EPSTEIN: There would have been enough very small owners of sheep to drive the statistics down from 30,000 to 12,000?
MR. MOORE: Certainly from 24,000 to 12,000. I think the 30,000, as I said, probably included lambs as well as ewes, but 12,000 includes just ewes.
MR. EPSTEIN: Can I ask a question about subsidies? Fairly regularly today you mentioned New Zealand as the chief competition, our relations with New Zealand would be governed internationally by trade agreements under the World Trade Organization. As I understand it there really aren't any restrictions or virtually no restrictions with respect to agriculture subsidies that apply there, but what I wonder is particularly for Canada vis-à-vis the United States, have you any information that could help us understand whether we would be in any difficulty under NAFTA if there were subsidization of sheep production here?
MR. MOORE: I don't know the provisions of the various trade agreements in any detail at all. I assume what Quebec is doing is legal, for example. I know the American government has only just in the last couple of months announced a $100 million program of subsidization for the sheep industry, including a 40 per cent tariff on imported lamb. There is certainly room for programs of that sort. What the details are, I really couldn't tell you.
MR. EPSTEIN: The basic information would make us tend to think that there may not be a problem in terms of NAFTA?
MR. MOORE: That would be my impression.
MR. EPSTEIN: Can I ask about water supply? You are in Pictou County, is that right?
MR. MOORE: Yes.
MR. EPSTEIN: I heard you say a little bit about water supply, it seems variable but clearly there have been a lot of dry seasons that we have encountered in the last few years. What I wonder is, although you described in your own area the lack of rainfall, what have you done about that? What is your source of water, and what is the source of water of others who are nearby who have experienced the same climatic conditions?
MR. MOORE: With most of the farming that we do in Nova Scotia, the problem of water supply is related to crops and with intensive cropping like vegetables of course you can use irrigation. When you get to livestock production you are talking about hay and grain and so on, where irrigation on any large scale just isn't practical, so basically either you get it or you don't. If you don't get it for a year, you have to buy feed and hope that you can find the money to do that and hope that it rains a bit more next year.
It is a bit worrisome. My well ran dry twice this winter, the first time in 25 years. It used to be when I started farming there that I could water my garden for an hour and a half no problem, in the summertime. Now in the winter, if the water is accidentally left running for 15 minutes, that is it, my well is pumped right down.
MR. EPSTEIN: Have any of your neighbours encountered that problem as well?
MR. MOORE: I don't know, this has only happened recently so I have haven't talked to them about it. It suggests that the formation that I am getting my water out of is being reduced, and that could have implications. There is a dairy farm just a mile away, and he needs a lot of well water. That could be a problem for him.
MR. EPSTEIN: Most of the complaints about water shortage that we have heard have been from the Annapolis Valley rather than from Pictou County, but I am wondering if the problem of reduced supplies in aquifers is in your part of the province as well.
MR. MOORE: There hasn't been any widespread report of it, but my own experience suggests that we might have a problem coming up. We have done a lot to aggravate the problem. We are not just getting dry summers now, we have cut our forests, and we have done it in the most destructive way possible. Huge areas are being clear-cut right now because lumber prices are up and people are just peddling it off as fast as they can.
A lot of the government subsidies to agriculture have gone for sub-surface drainage, putting tile drainage under fields to make them dry out faster in the spring, to make the land easier to work. Well, that works all year round, it gets the water off the land faster, it doesn't let it soak in. So again, we have aggravated what could be a potentially very serious problem in the future.
MR. EPSTEIN: I had one more question, if I could. I noticed in one of the Department of Agriculture reports that at least at one point in the past there was something called the Sheep Production Program and another thing called the Sheep Pasture Improvement Program. Are they still in existence?
MR. MOORE: No. The Sheep Production Program I think I referred to in my report very briefly, that was the program under which, if you kept a ewe lamb as a flock replacement you could get a subsidy of $40 for that animal, up to 20 per cent of your flock size. Those animals had to be above average under an indexing system record of performance program that we had, they had to be better than average animals, but you could get $40 per retained animal up to 20 per cent of flock numbers every year. So that was a significant assistance to quite a few flocks, and it wasn't only financial assistance, it was a useful incentive toward improving the quality of the flocks.
MR. EPSTEIN: I just want to say this, I think you have given us a very good presentation and I want to say I agree with you very strongly about the point you made about food security, I think that is just absolutely crucial. Furthermore, I think that the agricultural sector has a number of other very strong arguments that it could bring forward when it is looking, not only for ways to justify itself but looking for ways to get the government more actively involved. Thank you.
MR. CHAIRMAN: Just as a point of clarification with regard to Pictou County and its water supply, there were wells in various areas, certainly in my constituency, that were productive wells for the past 20 years and were being drawn down this fall and winter. It is interesting that if you have a dry summer it is usually the winter by the time the water table gets low enough or drawn down enough before you really notice it. So people are just amazed by this, that the water is going down. If they overuse their wells they can pump them down and they usually recover, so I guess the best plan is not to use them any more than you need to at any one time, or run the taps at half pressure.
I was talking with well drillers about this very recently because I was having many calls coming into my office about it. Of course, people blame their water shortage on just about everything other than the fact that we had a fairly dry summer.
Just before we go on, one point I found interesting was when you mentioned coyotes. I haven't had many calls about coyotes recently and last evening a gentleman, a farmer from the Churchville area of Pictou County who has a fairly large farm, told me that he is losing some sheep and also has lost calves to coyotes. He is wondering what government might do about it.
In reading recently, one sheep farmer is using Great Pyrenees dogs. When used and raised with the sheep they bond with the sheep and this sheep farmer, who is a large sheep farmer in the area, has never lost any of his herd to coyotes. Apparently these animals are a gentle animal and will protect the sheep even against bears. Do you know anything about that?
MR. MOORE: Yes, there are a number of producers in the province who are using guard dogs, the Great Pyrenees is one of them and there are two other breeds, the Kuvasz and Akbash, I think they are called, that are also successful. I don't know if we have any llamas in the province yet . . .
MR. CHAIRMAN: Yes, we do.
MR. MOORE: But people from out West and Ontario are very happy with them. Electric fencing also works, I have used electric fencing for the last 15 years or so. In that time I have had two kills but there are coyotes around the farm all the time, so I have done pretty well. As I said in the report, farmers have done reasonably well in controlling that problem. Again, every so often you do get animals that manage to outsmart your defences. When that happens, you have to pretty well remove the problem animal and that is best done by hunting with a good marksman with the proper equipment. That has worked very well, we have only had one rifle and the one man, Harry Mowatt, who is a retired DNR employee. He has done very well at cleaning up some of these particular situations. If we had a couple more people like that who were available in other parts of the province, he is basically in the central part of the province, it would certainly help people to deal with these outbreaks when they
occur. Every once in a while your system breaks down and somebody loses 20 or 30 lambs, it would be nice to get that straightened out as quickly as possible because obviously it is very costly and distressing to the producer involved.
MR. CHAIRMAN: I know some farmers utilize donkeys for control and I guess they too will keep bears away. Bears will go in, I understand, in fact, I saw a field once where the bears went in and killed a bunch of sheep, obviously, just for the fun of killing them because they didn't eat them. It must have been just the kill that they were enjoying.
Mr. Chipman, we will move on to you.
MR. FRANK CHIPMAN: I wonder if you would agree with the statement that in the past governments have subsidized farmers at a cost to consumers, to the benefit of the retailer. Do you agree with that statement?
MR. MOORE: I wouldn't have said that, offhand. What is the argument for that?
MR. CHIPMAN: When you mentioned your market share you had received, I am speaking as a farmer myself, I grow apples and I guess what I am saying is we all have received subsidies in the past at a cost to consumers but the retailer was making all the money. What I am saying is the benefit was to the retailer and we didn't get our fair share of the market.
When I look at the price of apples, we were getting 13 cents a pound and in the store they are $1.13. I know vegetable producers who take their product directly to the supermarkets, one in particular and I won't mention the product, and he received 89 cents a pound at that chain, delivered to the store and the price went on it for $2.89 a pound. What I am saying is that the money is in the retail end of production. Would you agree with that? What portion would you get of the retail price of lamb, what percentage?
MR. MOORE: There is no question that the processing, distribution, and retailing makes money on food and in some cases maybe quite a bit of money, whereas the production end does not. I am not familiar with the price structure in other commodities, except vaguely, but with lamb I don't think the stores make a lot of money out of local lamb. We think the mark-up perhaps covers their actual cost. The figure I heard a few years ago was that a meat department in a store needs a mark-up of about 20 to 22 per cent in order to cover its various expenses. We think that by and large that is pretty much what the stores take on local lamb. I know, certainly when you look at some of the other commodities, you wonder if perhaps they are not doing better on some of them.
MR. CHIPMAN: My point is that in the past there have been government subsidies and they declined over the years. The consumer is the one who basically pays taxes to the government and of course that government money goes back to the producer. Now it seems
what you are seeing is a lot of off-farm income coming in, it is almost like the producer is now subsidizing the consumer not vice versa.
MR. MOORE: I think one thing is certain, the retail price is not determined by the local price for many of these commodities. If you subsidize the local production and you then make it cheaper for the stores, they aren't in any way obliged to pass that saving on because basically they are setting their price on the basis of what the imported commodity would cost. That may leave room in a lot of cases for them to take something extra out of the local product. Again I don't know what it is like in the various commodities, but it is certainly much harder for local producers, even with the lamb co-op, to sell to local stores than it used to be. As I said, in the beginning Sobeys used to be very anxious to buy lamb from us but now they are not as easy to get along with. I don't know what the future is for local product.
MR. CHIPMAN: This may be a facetious-type statement but no farmer has ever formed a national food chain. To me food is the most powerful tool in the world, and I think in this country we take it for granted.
MR. MOORE: Yes, I think we do. We have never been hungry, we have always had enough and it has always been cheap because there has always been so much land. We have never had any kind of a pinch and now of course we are in a position of being a first world country in a world of Third World countries where Chile, Mexico, everybody is fighting to get a little bit of foreign exchange and they peddle crops; their people are quite literally starving working on farms that produce cheap vegetables and fruit to be exported to this country and sold here at low prices. People here are doing just fine as far as food is concerned, it is very inexpensive. I don't think that can last.
You see in Latin America there is an ongoing rumble of guerrilla activity, it just goes on from year to year, decade after decade, first one guerrilla group and then another. When you push people hard enough, they will resort to guns. How much longer they are going to be content to see their land used to feed us with cheap food I don't know, but I would guess that it won't be forever.
MR. CHIPMAN: You mentioned the drought program, were you referring to the federal or the provincial program?
MR. MOORE: I think it is a combined federal-provincial, but again my eyes glaze over when I try to deal with these various government programs because they are so complex and they change so often.
MR. CHIPMAN: I know a lot of farmers in my area didn't qualify for the federal program after they had spent a considerable amount of money to hire an accountant to fill out the forms, they realized in the end they wouldn't receive any money because of our diverse agricultural economy here in Nova Scotia, in particular the Maritimes. One other point, and
I don't know if you are aware of this or whether you receive any of the drought money from the province but it is fully taxable. Anyway, do you think the government is doing enough to support agriculture in this province today?
MR. MOORE: In the position I am in, I would be expected to say, no, of course not, we need more money. The problem is, of course, that anything you can do is limited and in many cases nullified by policies which are largely under the control of the federal government. Certainly agriculture is in a dreadful state, and it is in a bad state, there is no question, you can't exaggerate, in my view, the seriousness of the situation. Yet in the short term, how much can the provincial government do, how much money do you have available? Even if you could spend it in useful ways, you probably don't have the money that would make the difference. As I said, the problems lie very largely with federal government trade policies. We are seeing a situation now where the federal government is gradually, little bit by little bit trading off supply management in these various trade agreements. So the one thing that has worked in agriculture in this country, the Canadian Wheat Board is another example, it is not a supply management system but it is a single-desk marketing system which ensures that the Canadian grain producers have the best possible access to world markets, for whatever that is worth at any given time. Again, it is under attack.
We are actually headed in the wrong direction. We are losing the instruments that have allowed some commodities in this country to be produced in a consistent, reliable way and give a living to the producers of them.
MR. CHIPMAN: Hopefully we can agree to disagree here. When you mention marketing boards, I agree they have given certain farmers commodities the right to a stable income, my feeling is that we don't get enough of the retail dollar.
MR. MOORE: I think that may certainly be true in some commodities. When you see the price of potatoes in the store for example, and you know the producer is getting 2 cents a pound and they are going for 15 cents a pound in a store, there has to be a problem there because there is not a whole lot of processing to putting a potato into the store.
MR. CHIPMAN: This reminds me of an article I read in the paper a couple of years ago, when you are talking about the value of food; you can buy a five pound bag of potatoes in a Toronto supermarket for $1.49, but you ship a five pound parcel through Canada Post to Toronto and see what it costs. There is no value placed on food. Those are all the questions I have.
MR. CHAIRMAN: The honourable member for Kings West.
MR. JON CAREY: You partially answered my question when you said there was a 40 per cent tariff to put sheep meat, lamb in the U.S. Do we ship any to the Eastern Seaboard?
MR. MOORE: There is some lamb that goes from Canada to the U.S. Most of it would be Western Canada. The producers out there, Alberta, Saskatchewan and Manitoba, have quite a large production - it must be 700,000 or 800,000 ewes and of course a relatively small population - so they don't even utilize the local market to the extent that they could. Most of their lambs are shipped out of the province, a lot of them come east to Toronto, a few go west to B.C., but a lot do go south to the U.S.
MR. CAREY: I was just thinking that even with the tariff, with the exchange advantage, and being so close to the New England market and that large population, has that been investigated or is there no opportunity to market in the New England States?
MR. MOORE: I don't know if anyone has ever really looked very closely at that. My impression is that their prices are lower than ours so that it wouldn't be of any benefit. I think there has been a little bit of trading back and forth, but certainly if you can't make a living selling in the Canadian market, you are not going to make a living selling in the American market because their food prices aren't any better than ours and their producers aren't in better shape than we are. They are in as much trouble. They don't have the advantage of supply management in any of their sectors. Down there, a dairy farmer is probably in as much trouble as a sheep farmer is here, he is probably working off the farm in order to support the farm.
MR. CAREY: In the area where I live we have the North and South Mountains, which are hills, but we have a lot of small farms that have been abandoned, where people used to make their livelihoods with a diversity of farming products. How many sheep would it take on these small farms so that they could be viable? In many areas these homes and lands have been abandoned and the houses or buildings have fallen down or are falling down. What volume of business would it take to be a sheep farmer or is that not a reasonable thing for anyone to do with the complexities and problems you are explaining here this morning?
[10:00 a.m.]
MR. MOORE: With prices as they are, I couldn't advise anyone to become a sheep farmer unless they were retired, had a pension and wanted something to do. You certainly wouldn't do it to make a living because you can't. On the other hand, as you say, there is a lot of land that is potentially productive that is idle now or underutilized. Something like 60 per cent to 80 per cent of the food we eat comes from somewhere other than Nova Scotia. So there is a huge potential for revitalization of farming in Nova Scotia but it all depends on the politics of the situation. As long as we are headed in the direction of free trade, including breaking down trade barriers between provinces, so that now the Province of Nova Scotia doesn't even necessarily give preference to local products, when we are headed in that direction what is the chance for areas like that? It could be a thriving agricultural area but not unless the price is right.
MR. CAREY: Thank you.
MR. CHAIRMAN: Mrs. Baillie.
MRS. MURIEL BAILLIE: While sitting here listening, maybe my question has already been answered. I was wondering about your comments that you cannot make an income from farming. Is there anything to entice young people to go into farming that you can see, besides their love of the land?
MR. MOORE: I know a young couple who started sheep farming several years ago, maybe four or five years ago. Both people were graduates of the Agricultural College, both from farm families, both very intelligent, capable, enthusiastic, and hard-working. They dove right into it and borrowed a lot of money, set up a good operation, got a lot of sheep and they were making a living farming, they were convinced of it. Two or three months ago I was talking to one of them and she said, we didn't really believe them when they told us it was going to cost us $0.5 million to get a farm set up and running, we didn't think it would cost us that much. She said, you know, I think it is true.
My whole impression of that conversation was that all of a sudden they had been mugged by reality and they had been devastated. For three or four years they had been going along thinking yes, we can do this and they have been setting things up, getting things organized and doing it all right. All of a sudden, where is the money? It is just not there and we cannot continue. They both have off-farm income so I suppose they will struggle through. Maybe they won't keep sheep, they may be like a sheep producer I met a couple of weeks ago at a meeting, who has 20 ewes and sort of plays at it. I forget how the topic came up but he said, I am still paying for my hog farm, only another 45 payments to go. This fellow was a hog farmer who kept hog farming until he just couldn't hog farm anymore and wound up owing thousands of dollars. Now he is selling insurance to pay for his hog farm that he doesn't have anymore.
MRS. BAILLIE: It doesn't sound too good, does it. I am not a connoisseur of lamb - ask me about lobster and I can tell you - but if I went to buy lamb and didn't mind paying a few dollars extra, is our local lamb more tasty than New Zealand lamb? Can you tell me if there is a difference in taste?
MR. MOORE: Actually, I haven't bought any New Zealand lamb, I have never bought any so I honestly can't tell you. I am told that New Zealand lamb is good. I ate New Zealand lamb when I was in New Zealand but I had never eaten lamb before so I wasn't very well equipped to judge it. I remember one of the first meals I had there at the farm I was staying at. We had roast and it was very good, I said what kind of meat is this, and they said hogget. I didn't like to appear ignorant by asking what hogget was, so it struck me that maybe it was a cut of pork of some sort. It turns out that hogget is sheep that is between one and two years old. I didn't know much about sheep before I started sheep farming, but I have learned a lot.
MRS. BAILLIE: I guess I will have to get someone who has tasted both to answer that question. Thank you, Geoff.
MR. CHAIRMAN: Contrary to that old song about the moose, sheep and moose don't taste near the same, do they? (Laughter)
MR. MACASKILL: Mr. Moore, I want to go back to the drought relief if I may for a minute. Am I correct in saying that in a drought the sheep are the least affected of animals because they graze on short grass and they don't need a lot of water? Does that put sheep farmers at a disadvantage when they apply for drought relief?
MR. MOORE: I don't know if it puts them at a disadvantage as far as drought relief is concerned, because so much of the cost of raising animals here is in the feed, the stored feed for the winter. In most years, even in a good year, you only get five months of pasture. In a poor year, it is a lot less. The biggest effect of drought is actually on the stored feed, the cost of hay and grain or your ability to produce them. It is true that sheep do require less water than other animals, than cows for example. I am told that a lot of people never used to bother watering their sheep at all, if there was water where they could get it, they got it, if there wasn't, they didn't. They were able to get enough from grass and . . .
MR. MACASKILL: Is it true they can survive on just the dew?
MR. MOORE: Apparently, but I have never tried it. I will say that if they have a bit of shade, they don't drink much water. I have always provided mine with water, and as long as there is a bit of shade for them to get out of the hottest sun, they don't drink a whole lot of water.
MR. MACASKILL: Just one more question. Back to the coyote, is there or was there at any time compensation for an animal that was destroyed by a predator such as the coyote or bear?
MR. MOORE: Yes.
MR. MACASKILL: Is there a bounty on the coyote that you destroy because it is a predator?
MR. MOORE: I don't know if there is a bounty on the coyotes anymore, I guess not. There used to be compensation for sheep that were killed by coyotes up until probably seven, eight years ago now, but that has been discontinued.
MR. MACASKILL: Was that significant?
MR. MOORE: Yes. I am not sure but it strikes me that it was on the order of $50 or $60 per animal. I don't remember exactly, but it was significant.
MR. MACASKILL: Can you insure a herd of sheep?
MR. MOORE: I don't know that anyone has ever tried.
MR. CHAIRMAN: Mr. John MacDonell.
MR. JOHN MACDONELL: There is no longer a bounty. I think you can insure a flock of sheep, I know you can insure them if you are moving them, hauling them somewhere. (Interruptions) Right. That is only if the insurance company can pull the wool over your eyes.
I do want to come back to a couple of things that had been mentioned. Probably for clarification in the point about Harry Mowatt, that is a night scope that Harry is using. When you were saying if we had more people or more rifles, I am not sure if everybody on the committee understood that gee, there must be more people in Nova Scotia who could handle a rifle than Harry Mowatt. There is one rifle with the night scope and I am not sure but I think they are $2,000 or $3,000 for the scope.
MR. MOORE: At least $3,000.
MR. JOHN MACDONELL: Broad daylight isn't an advantage for me anyway when it comes to using a rifle. I think people should be aware and I don't know if the research has shown anything different recently, but it is not even just the coyotes killing the ewes but coyote attacks, at least they used to say, would cause ewes to absorb a fetus. Therefore you would reduce your lamb numbers even though the ewes weren't killed, but the stress of being attacked by coyotes.
MR. MOORE: Yes, that is true. That is a major factor in any sort of harassment of a sheep flock. You never know what your losses are because if it is just after breeding or just before, they either will lose the fetus or they just won't conceive or they won't conceive as well. The losses can be very large without you knowing what they are.
MR. JOHN MACDONELL: I worried about that myself this fall. I had two coyotes around and that is why I knew that daylight didn't make any difference for me when it came to trying to shoot them. They did kill three or four of my geese and the kills were at night. A couple of years before, I had a couple of my sheep killed by coyotes, and I expected the same thing to start and it didn't. I recently had four sets of quads, so I assumed that their gestation was far enough along that the coyotes certainly didn't bother them for their prolificacy.
I think people should be aware, and just as an example, I think the Department of Agriculture has a pizza diagram that shows out of $13, a farmer gets about 50 cents from that, somewhere in that range. It gives us some idea about what farmers actually do get for what they produce.
I would like to respond to a couple of things Mr. Chipman said. I think the marketing boards tend to get more of the retail dollars for the farmer and I think by having that solid price structure, certainly one that tends to make sure that you cover the costs of production - the retailer is somewhat restricted in their range, and certainly in the older system, which we are moving away from as far as the Dairy Commission, that it was processor and producer that affected the price, they all sat down together. Therefore it had to somehow jive with what the consumer was going to pay, but what the producer was going to get.
Geoff, I wonder if you could tell us if a farmer brings in lambs to Northumberlamb to be killed - it is part of the order when they are called, could you bring in 6 lambs or 10 lambs or whatever - what is the difference in what the farmer gets and what Sobeys would pay Northumberlamb for the lamb? How much of the price does the farmer actually get for what he brings in there?
MR. MOORE: At this point we are paying around $2.80 a pound, that is dressed weight, for lamb, and we are selling for about $3.50. We are putting about a 25 per cent mark-up. It is about a $30 per lamb cost for killing, marketing and distribution. There is significant expense involved.
MR. JOHN MACDONELL: The question about, is the government doing enough, that is always the question of where you draw the line between taxpayers' dollars and what you get for them. Certainly whether or not we ever analyse enough about dollar for value when we use taxpayers' dollars, whether we put it into agriculture or put it into anything, I think when it comes to rural communities that the government should look at the whole package. I don't necessarily know that picking the sheep sector and looking at it, isolate it from looking at the beef sector, isolate it from looking at any sector, or isolate that from looking at forestry, and how that impacts on rural economies.
I think the thing is to try to get as much bang for your buck and try to look at what you are going to face by not doing something and what the costs of that are. If we can look at what $1 million might be to the sheep sector, and that means that people are going to their local co-op to buy grain or spending money wherever in their community, that keeps people on the land and in those communities, and that means that you probably can keep a school open there because people are staying there, and that also means you might be able to keep a doctor in that community, especially since trying to get doctors in this province is still a problem, but I am sure that if you were a young doctor with a family, you wouldn't want to move anywhere where there wasn't a school.
I think that when governments look at what they should be doing for agriculture or what they should be doing for anything, they should take into consideration all the components of what it is that they want to achieve and try to assume that well, these dollars we are putting into agriculture actually might save us health dollars, trying to have an incentive for someone to go there to carry out a health practice. I think that in the long run, that approach to rural development would be a much better approach than worrying about whether or not we got the most out of $1 million because that might have saved us $5 million if we spent that $1 million.
Certainly I would agree that safety nets are great things, but those are only things designed for the bad times. If you can eliminate the bad times by putting in a secure marketing structure that gives people the price they need for what they produce so that they can make a living, then they can carry a lot of the brunt of the bad times on their own to begin with.
This brings me to another point. I have given a lot of thought to marketing boards and supply management. I haven't really figured out anything. You mentioned single-desk selling, and I would like it if you could give me a distinction between marketing boards and single-desk selling because I thought they were the same thing.
Also, I wonder how to incorporate supply management in sheep production, let's say to something similar to what Northumberlamb does, but how you account for the other people who are the players? You have the Antigonish abattoir there, it is a private organization and doing this to make money. I wonder if you have given any thought to the entire scope, if you were to impose - I will use that word, I don't like it but - to bring about supply management in that sector. I see applications for beef and so on. If you could answer those, the difference between single-desk selling and the marketing boards or supply management, and also how to incorporate the much bigger picture of bringing that about.
MR. MOORE: Well, marketing boards do include single-desk selling. I won't get into a lot of technicalities about what marketing boards are. The dairy system obviously is single-desk selling in the sense that everybody sells at the same price, and of course it has supply management. The Canadian Wheat Board doesn't have supply management, but all grain producers of certain grains are required to sell those grains to the wheat board and then it finds the best market it can and pools the price so that everybody gets the same price. That is single-desk selling.
That is particularly effective because it means that the large purchasers can't play off the small sellers against each other. It means that the grain producers themselves, who are relatively small compared to the processors who are buying the product, don't have to negotiate individually and get played off against each other because if you are a small seller, then the big buyer just says to you, well you will sell at the price that I am willing to pay or I will get it somewhere else. But if everyone sells their grain through the wheat board then the wheat board has all the grain and the buyers have to go to the wheat board, so the wheat
board's only competition is other big state trading agencies. The buyers can't as easily play these fellows off against each other and it gets a better price.
As far as the marketing of lamb in Nova Scotia is concerned, yes, the lamb co-op has been the dominant marketer for most of the last 20 years. The last three or four years, the Antigonish abattoir has gotten into the picture, they have a special deal with Sobeys. We are not sure what the connection is, but it doesn't appear to be an arm's-length situation. That has taken up part of the market. I am not sure what your question was, relating to that.
MR. JOHN MACDONELL: My question is heading in the direction of how you incorporate a system if you were going to bring about supply management in the sheep sector. You have to also have some consideration for private operations like the Antigonish abattoir. There is no private organization selling milk in the province, the Dairy Commission does that. I can't see how, if you are going to have a supply managed system in sheep and lambs, then you couldn't have private organizations still existing. That is what I am thinking. So how do you incorporate those into the system?
MR. MOORE: Well, it is a rather theoretical question I guess because it is not likely to happen anytime in the near future or the foreseeable future even, but I suggest it would work somewhat the way the wheat board works, that you would have a central agency, or the Hog Marketing Board for example. We have the Hog Marketing Board in Nova Scotia which doesn't incorporate supply management but it does accumulate hogs and distribute them to the various processors. I suppose it could work something like that, if we had a supply management system for sheep, then all processors would send their lambs through the Lamb Marketing Board and the Lamb Marketing Board would sell them to the various processors. I don't see that happening very soon.
MR. CHAIRMAN: Thank you. It seems that the time has slipped away. I wonder if I could just get one point of clarification before we adjourn. You indicated that there is essentially little or no money, Mr. Moore, in the raising of sheep. There is some money to be made in the processing, the distribution and the sales, and certainly that is where the co-ops come in - in the processing and the distribution and the slaughtering, the cutting, the packaging of the meat and perhaps distributing it to the stores - and also the cost you mentioned associated with that process can represent as much as 25 per cent of the cost of the product. But having said that, the processing and the distribution, is there any money that comes out of that co-op that goes back to the farmer? Surely the farmers get some return on that, do they?
MR. MOORE: What we try to do with the co-op is return as much of the wholesale price to the farmer as we can. We try to adjust the price that we pay for the lambs so that we don't make a large profit. We do have to make some profit because as the business grows you have to have a cash reserve, a working capital reserve, because you have to buy a new truck occasionally. When we sell lambs it takes the stores five or six weeks to get around to paying
us for them, but we try to pay the farmer the same week. Up front we have $50,000 or $60,000 of lambs that we have to pay for this week or that we have to pay for before we get paid for them, so there has to be capital available for that.
We do make a profit, but what we do is we return that to the producers as a patronage allocation. Every year that we make a profit, we divide it by the number of lambs that we bought in that year, so each producer is allocated that amount in proportion to the number of lambs they have sold. We don't give it right back, we keep it as a loan from the producer and pay interest on it, but that is our working capital. When a producer retires, then they can claim that money and it goes back to them.
MR. CHAIRMAN: I certainly want to commend you for the work that you are doing in the industry. I hope that you are pleasantly surprised by the interest you have generated around this table today.
MR. MOORE: I am a little bit surprised having been invited at all, but I appreciate the opportunity and I do hope that I have helped to give you some ideas about what is going on in agriculture in the province.
MR. CHAIRMAN: On behalf of the committee I want to thank you for providing us with your thoughts and insight regarding sheep farming and certainly the future of this very important industry to Nova Scotia. I guess each of us has to support that industry and promote Buy Nova Scotia First products. We are all responsible for that and the future of agriculture in general. I have to tell you that we will be sending you a transcript of today's meeting, and again thank you so much for coming up here on this, the first full day of spring. It certainly does look like spring out there today, it didn't on the weekend coming up to the big day. We are soon going to have the sheep back in the fields I think. Thank you again.
MR. MOORE: Thank you.
MR. CHAIRMAN: Just one point of business before we leave. I was approached by a member of the Woodlands Division of Kimberly-Clarke, wishing to make a presentation at some time to this committee, with no great urgency but perhaps it is something that we could consider and plug into our list. I noted that the Liberal caucus had provided us with one organization, the pork producers, Pork Nova Scotia. I was thinking that perhaps we could work that in soon because it might be a good follow-up to this industry. Would that be acceptable? We will leave it up to Darlene to make arrangements for that. On April 11th, we will be meeting with the Fish Packers Association, Mr. Denny Morrow. Any other business you would like to bring to the table? If not, then we shall adjourn. Thank you.
[The committee adjourned at 10:58 a.m.]
