Thank you, Mr. Chairman.
Good morning to the members of this committee.
Thank you again for inviting me here today to speak to you about Bill C-18, the agricultural growth act, and specifically the amendments that will impact farmers and the growth of our industry.
The CCGA represents 43,000 canola growers and is governed by a board of farmer directors representing all provinces from Ontario west to B.C. We are also the largest administrator of the advance payments program in Canada, offering financing on over 20 different crops.
With 90% of canola grown in Canada exported, canola growers need a competitive regulatory framework at home and the right set of crop input tools to compete internationally. The competitiveness of our industry, which contributes $19 billion annually to the Canadian economy, depends on up-to-date regulations. We welcome opportunities taken by the government to ensure farmers have continued access to the tools required to maintain the profitability of their farms.
A number of the amendments contained in Bill C-18 are expected to foster innovation in agriculture and provide for more responsive government decision-making. In particular, we applaud the government for proposing changes to the Plant Breeders' Rights Act to bring Canada in line with UPOV 91, the international standard adopted by Canada’s major competitors, while providing an exemption for farmers to save seed for use on their farm.
To show our support for ratification, the CCGA joined Partners in Innovation in July 2014, a coalition of 20 farmer, industry, and value-chain organizations formed to advocate for improvements to plant breeders' rights and to foster investment in research and innovation in agriculture.
Additionally, Bill C-18 allows for the recognition of foreign data and reviews for new feed, seed, and fertilizer registrations. This should streamline the registration process, making it easier to bring new products to Canada while still maintaining high levels of safety.
When it comes to changes proposed to the Agricultural Marketing Programs Act, or AMPA, farmers will benefit from a more valuable and responsive advance payments program. The provisions allowing administrators to advance on any commodity and the expansion of producer eligibility are examples of where farmers stand to benefit from this bill. We know first-hand how important this program is to farmers, particularly new farmers just getting established and farmers in need of flexible marketing and financing options.
The challenge with grain logistics experienced last crop year is a good example of how the APP helps farmers with marketing and cashflow needs. The cashflow crunch resulting from extensive delays in selling opportunities led to a substantial increase in the demand for the program and the total amount of money advanced to farmers.
CCGA staff were very busy last January and February processing cash advance applications at a time when historically the number of applications drops significantly and farmers begin to pay down their advances. By accessing financing under the 2013-14 APP, farmers were able to secure the necessary funds to purchase seed and crop inputs for the growing season that is just winding up now.
In total, CCGA advanced $1.59 billion in the 2013-14 program. That's 50% more than the previous year. Funds were advanced to 12,459 farmers, as compared to 9,961 under the previous 2012-13 program. Although, as I said, the CCGA is generally supportive of the proposed changes to the APP, there are key areas where improvements could be made to make the program even more useful for farmers, particularly in a crop year like the one we just had.
First, we think the repayment of advances made directly by farmers to program administrators could be made more flexible by eliminating penalties for repayments made without proof of sales documentation. Farmers complain to us about this feature of the program, and we believe it is one reason the program is not as well used as it could be.
Second, we believe, and farmers tell us, that the cash advance maximum limit needs to be increased. Doubling it to $800,000 would not be out of line, in our opinion. The APP limit was last increased in 2006 when it was set at $400,000 in total, with the first $100,000 interest free.
Since then, Stats Canada’s farm input price index has increased by 40 points from 110 to 150, with a base year of 2002 being 100. If the APP is to continue to be useful to growers, it must at least keep up with inflation. Under the 2013-14 APP, roughly 10% of growers who had an advance through CCGA were near or reached the maximum limit of $400,000, compared to 6% in the same situation the previous year.
In conclusion, there is an opportunity to amend Bill C-18 to make the advance payments program a more useful and valuable tool for farmers. The grain backlog demonstrated very well why the APP needs to be flexible and remain relevant as more farmers turn to the program than ever before. Our suggested changes offer a targeted, low-cost solution to ease cashflow and assist farmers with their financing needs. We hope you will seriously consider our suggestions, which would make the APP a more effective tool now and in the future.
Thank you for the opportunity to speak to you here today. I look forward to taking your questions.