STANDING COMMITTEE ON THE ECONOMY Hansard Verbatim Report No. 5 – April 15, 2008 Legislative Assembly of Saskatchewan Twenty-sixth Legislature STANDING COMMITTEE ON THE ECONOMY 2008 Mr. D.F. (Yogi) Huyghebaert, Chair Wood River Mr. Ron Harper, Deputy Chair Regina Northeast Mr. Darcy Furber Prince Albert Northcote Mr. Jeremy Harrison Meadow Lake Mr. Warren Michelson Moose Jaw North Ms. Laura Ross Regina Qu’Appelle Valley Ms. Nadine Wilson Saskatchewan Rivers Published under the authority of The Honourable Don Toth, Speaker STANDING COMMITTEE ON THE ECONOMY 39 April 15, 2008 [The committee met at 18:00.] India have over there and the food patterns that they’re requesting right now, I think, bode well for our grain side, The Chair: — It being 6 o’clock I’ll call the committee to whether it’s wheat or the pulse side or whatever it is. It really order. We have one substitution this evening; Mr. Forbes will looks good for the future. be substituting for Mr. Harper. This evening we will have Agriculture, vote 1, vote 146, and vote 147 for discussion this And then you throw in the ethanol and the bio-industries that evening. I’d like to welcome the minister and his officials. And are popping up all over, especially in the US [United States] I’d ask the minister if he’d please introduce his officials and if right now and some here in Saskatchewan. Some in Canada, I he has some opening remarks for the committee. think, will put a heavier demand even on our grain side which in turn will help keep the prices higher than normal, and let’s General Revenue Fund hope very high so we can actually see a profit out there. Agriculture Vote 1 I think the machinery dealers would be the first to tell you right now that they haven’t seen times like this for many, many Subvote (AG01) years. It may be back to the mid-’70s since they’ve actually had to order equipment in as farmers request that equipment. And Hon. Mr. Bjornerud: — Well thank you, Mr. Chair. With me that’s a very, very good sign, especially for rural Saskatchewan tonight is Alanna Koch, deputy minister of agriculture. To my and our smaller communities out there. right here is Laurier Donais, director of corporate service branch. Behind me is Dave Boehm, assistant deputy minister. We’re still dealing with things like droughts and flooding. I On my right side is, as you all know, Stan Benjamin, general hear today where there’s the odd spot in the central or manager of crop insurance. And on my left behind me is Tom northeastern side of the province where there’s a possibility of Schwartz, director of financial programs branch. And they will some flooding, but I don’t think we’ll be as bad as we were in be assisting me tonight to answer the questions and give the the last couple of years. answers that are factual which, in my past, I don’t always deal with. But that’s what the part that they’ll play tonight; you’ll get On the drought side, we see the Southwest going into their third good answers from them. and fourth year of drought, and had the opportunity to tour the area with the chairman last — what? — a week ago out there. I just have a few comments tonight that I’d like to start off with. And you really have to see the situation they’re in where And I think, Mr. Chair, and I think the members around the dugouts are going dry, water supplies are running out where table tonight will agree with this, that there’s a great deal of they have big cattle herds, and in some cases have been buying optimism starting in the province when it comes to agriculture. I feed for the last month or two just to get them through. So feel we’re turning the corner, especially on the grains side out they’re in a real bind also right now, and we’re watching that there right now. If you go to coffee row and any coffee shop in very closely. the province right now, I think you can feel that there’s a change happening out there now. We also know that the gopher infestation in the Southwest is a tremendous problem. And again you have to see that to really Having said that of course, when you have the cattlemen at the believe just how bad it is out there. That was one of the reasons table, the mixed farmers aren’t in too bad a shape. They’re we put 380,000 into our research program. And this isn’t going hurting on the cattle side or the hog side if they have hogs, but to probably help them all that much this year but we’re hoping the grain side is really helping their situation out right now. again . and many of the things we’re dealing with here, we Where we have the most . the biggest problem right now is hope to do for long-term situations, solving some of the where we have ranchers that are strictly cattle or our hog problems they have out there. And I think the research program, producers as we have heard where some have gone under we’re hoping we can find some ways to assist them. already. Some are in protection right now, and others are right up against the wall. And we all have to really feel for the We’re trying to extend or get strychnine opened up for after position they’re in. Most of those operations are family farms July 31. And what we see right now is that’s coming to an end out there, and we certainly all feel for the situation that they’re then. And I think that’s going to happen, but it’s something we in. really have to work on because this problem is not going away. Crop prices, as I’ve said, are strengthening and at a point right I might mention too that we really appreciate 164 RMs [rural now where we can finally maybe even see making a dollar out municipality] out there put $500 each into the research project. there right now, although remembering that agriculture has been So that shows you just how much they feel they need it out in the doldrums for a number of years and many farmers have there. And it’s much appreciated by our government, had a hard time just hanging on. So it’s long overdue that these prices are where they are. I don’t think any of us know how The strong Canadian dollar, as we all know, is really affecting a long that’s going to last, and I think we’re all crossing our lot of the things that are happening in agriculture right now. fingers that this is a long-term thing and not just a blip for one And when we come to cattle prices, with high feed costs, as I year. And I’m certainly no expert. said before, are putting them really behind the eight ball out there, and there’s a lot of hurt right now out there. We’re But I think the indications from demand on the food side from hoping now that the barbecue season is coming on and spring is around the world and the change in the habits that China and coming that we’re going to see a little bit of improvement in the 40 Economy Committee April 15, 2008 price. I think that’s the feeling we’re getting from the cattlemen. after harvest if they had a touch of frost where they might be And let’s hope they’re right on this one. And I think that usually selling a feed or a No. 3 wheat, they could still be possibly happens to a degree in the spring of the year and we’re hoping selling No. 1 or No. 2. that that does happen. So I think that’s going to be a very important development if Our budget for agriculture this year is $302.8 million, and that’s they can come up with this research to develop those crops. about . if you read in between the lines in our budget, that’s Increased yields, I think, is something we see with the corn about a 9 to $10 million increase. Now I know that isn’t what industry in the US right now, tremendous increase in yields, and shows in the budget from last year to this year, but there was a lot of that has come from research. I think that’s where we about 8, $9 million of wedge funding last year for research from may also benefit with our crops up here. If we can increase the the federal government that was included in the provincial yields, can you imagine with the prices we’re getting right now, budget, which was one-time funding that we don’t have this how that would fit with the bottom line of farmers out there year. So we replaced that and added a couple of additional right now? So breeding new varieties, I think we’ve done a million dollars to get to the point where we’re funding good job in the province in the past of coming up with new programs for this year. varieties. But the ongoing needs are there, and I think every time we can come up with something new that adds value to the We’ve also come out with $6 million for a water infrastructure farm gate and the prices out there, it’s just a benefit for all our program.