Prairie Agriculture: An Important Part of Canada's Future

The Hon. Roy Romanow Premier of Saskatchewan PRAIRIE AGRICULTURE: AN IMPORTANT PART OF CANADA'S FUTURE Chairman: Robert J. Dechert President, The Empire Club of Canada

Head Table Guests

Thomas L. Wells, President, TLW Consulting, Former Minister of Inter-Governmental Affairs and a Director, The Empire Club of Canada; The Reverend Kim Beard, Rector, Christ Church, Brampton and a Director, The Empire Club of Canada; Dane Liu, President, TDSB Student Council and Senior Student, Northern Secondary School; Terry Scott, Deputy Minister of Agriculture and Food, Province of Saskatchewan; Lillian Morganthau, President, CARP (Canadian Association for the 50 plus); The Hon. R. Roy McMurtry, Q.C., Chief Justice of Ontario and Former Attorney General, Province of Ontario; John A. Campion, Partner, Fasken Campbell Godfrey and a Past President, The Empire Club of Canada; Catherine Steele, VicePresident (Toronto) and Partner, GGA Communications and Third Vice-President, The Empire Club of Canada; Major The Hon. Mr. Joseph H. Potts, C.D., Superior Court of Justice, Ontario and a Past President, The Empire Club of Canada; The Hon. Gregory Marchildon, Deputy Minister to the Premier, Province of

Saskatchewan; Pamela Wallin, President, Pamela Wallin Productions Inc.; and Ray Mowling, President, Monsanto Canada.

Introduction by Robert J. Dechert

In 1899 it was said of Canada that her population is about five million souls and her valley of the Saskatchewan alone, it has been scientifically computed, will support 800 million. In losing the United States, Britain lost the smaller half of her American possessions.

The grain farms of Saskatchewan have been feeding the people of Canada and the world since their settlement in the nineteenth century. The wide expanse of the Saskatchewan prairies are among the most abiding images of Canada and have had, and continue to have, a profound impact on our national identity even for those of us who rarely have the privilege of visiting them. However, despite the importance of prairie agriculture to this country, our grain farmers today find themselves in an income crisis of epic proportions. But as bleak as this sounds the prairie farmer has a secret weapon and his name is Roy Romanow.

Premier Romanow was born, raised and educated in Saskatoon. He graduated from the University of Saskatchewan where he earned his arts and law degrees.

He was first elected to the Saskatchewan legislature in 1967 and has been re-elected six times. Between 1971 and 1982 Premier Romanow served as Deputy Premier and Attorney General of Saskatchewan. In 1979 Premier Romanow was appointed Saskatchewan's first Minister of Intergovernmental Affairs and it was in this capacity that he first burst upon the national political stage.

Premier Romanow along with our special guest The Honourable Chief Justice made history one night in a famous kitchen which resulted in the Constitutional Accord of November 1981 and the repatriation of our national Constitution in 1982.

On November 7, 1987, Mr. Romanow was acclaimed leader of the Saskatchewan New Democratic Party to succeed Alan Blakeney and in October of 1991 Mr. Romanow led the Saskatchewan New Democratic Party to a majority government and assumed the duties of premier on November 1 of that year.

During its second term Premier Romanow's government introduced several fiscal economic and social reforms including the Building Independence Strategy to help move families off social assistance, a number of enhancements to the provincial health-care system, the continued development of key economic sectors and the tabling of Saskatchewan's sixth consecutive balanced budget.

Mr. Romanow's New Democrat Party government was re-elected on September 16, 1999 and if the front page of today's National Post is any indication Premier Romanow's appeal extends far beyond the farming community. Ladies and gentlemen, please welcome The Honourable Roy Romanow to the podium of The Empire Club of Canada.

Roy Romanow

I'm not going to touch any part of the introduction at all except to say thank you very much Mr. President for its kindness and say that it certainly was much better than one I received in Saskatchewan recently.

I was at a rural farm meeting, a political farm meeting, and we are going through interesting times out there. The Chair was a crusty old farmer who got up and said: "I want to introduce to you our Premier Roy Romanow. He's like a Texas longhorn." I thought to myself: "That's not bad. A majestic animal." And then he went on to say: "Just like a Texas longhorn. He makes a point here and a point there with a lot of bull in between."

Everybody knows that in show business there is an old saying that says that it is a hard act to follow. And I know what that means in appearing before you today. The Empire Club podium has been graced I'm told by more than 2,500 speakers. By prime ministers of this country and others, by presidents, by leaders in the arts, religion, the military, business and culture. Many many hard acts to follow. The prospect of joining such an illustrious group of speakers is somewhat daunting and I had a few moments of concern. Luckily I asked my wife Eleanor for advice. I said: "What do I do in this kind of environment?" She said: "Roy don't try to be too funny, too smart, too charming, or too witty. Just be yourself." So with that sound advice here I am. But I'm deeply honoured to have the opportunity and the privilege to join such distinguished company and to contribute to the exchange of ideas in this important national forum.

As all of you will know I have just returned from a few days of meetings with fellow premiers in Quebec City. We discussed a number of issues. I'd like to talk about health care and tax breaks but on another occasion perhaps. One of the greatest of the issues of importance to my province is the continuing and growing crisis in agriculture and agricultural income. For months the people of Saskatchewan and Manitoba have been speaking with one voice to our friends and neighbours across the country. We've been asking our friends and neighbours and our fellow governments to show strength, compassion and common sense economically (I'll say a word about that in a moment) in dealing with this very important matter. I want to make it clear. We are not asking for a handout. I want to repeat that. We are not asking for a handout. We're asking for fair and equitable treatment in a very unfair and inequitable economic environment. We're saying to Ottawa and to Canadians everywhere from coast to coast to coast, prairie farmers need your support and merit your support because farming has played an important part in Canada's history and will continue to play an even greater part in Canada's social and economic future.

From 1993 to 1997 Saskatchewan's average realised yearly net farm income was about $740 million. In 1998 it declined to $531 million. And in 1999 it's forecast to be about $95 million. That's only 15 per cent of the five-year average. That's the economic cost-the cost that is felt in our cities and our towns throughout our province-but there's also a huge human cost. Farm families who have been on the land before Saskatchewan or even the Empire Club existed see no alternative but to sell out with all of the attendant consequences of personal and family stress and emotional breakdown. A heartbreaking story.

It would be one thing if the blame for this downturn could be laid logically and realistically at the farm gate at the feet of the farmers who till the land. But the plain simple fact is that Saskatchewan and Western Canadian farmers are constantly innovative, immensely resourceful, and work as hard as anybody anywhere on earth. And their productivity gains have been staggering. The increasing level of production from our land base demonstrates clearly that Saskatchewan farmers are world class. I want to make the point this way. Grain production has increased from five bushels an acre to 25 bushels an acre, a productivity factor increase of five, despite a relatively constant land base. Friends, this crisis in agriculture incomes is not the fault of those innovative hardworking farmers.

Nor is it due to the inaction of Saskatchewan taxpayers. At home we provide $300 per capita to farmers and agricultural programmes out of our tax dollars, the largest support of any province in the Federation and much greater than any support from Ottawa to Saskatchewan farming folks.

We'll put up our farmers against the world anytime and win in any fair and equitable competition but the competition is not fair; the competition is not equitable. You can see this very graphically in the OECD's analysis of grain subsidies. In 1998 European wheat farmers were subsidised US $141 per ton. American farmers were subsidised US $61 per ton. For Canada the subsidy was US $8 per ton. Put another way wheat and barley producers in Saskatchewan alone would have to get $1 billion extra from the federal government just to match the U.S. subsidies that their counterparts in North Dakota and Montana get from their national government in Washington DC. That in a nutshell is why the Prairie Farm Income Coalition right across the West asked for a billion dollars trade equalisation payment to level the playing field until the United States and the European Community agree to end this madness of subsidies. Our grain and oil seeds farmers can't compete when their competitors start the race so far ahead.

Now it is often said that before it can be solved the problem must be clearly stated and defined. Well the problem is international subsidies which drive down the price of grain crops and in the long term the solution is to work with the international community to put an end to subsidies so that we can truly realise the efficiencies of the global marketplace. The marketplace is where the farmers want to earn their money.

But these international trade negotiations can only be undertaken if the national government assumes its national and constitutional responsibility. How could it be otherwise in any federation in the world? But in the short term until those unfair and trade-distorting subsidies are negotiated away or at least mitigated, a million plus people in Saskatchewan and a million plus people in Manitoba simply cannot win any spending contest against 300 million Americans and 370 million Europeans.

There's another element to consider as well-the concept of what Canada is and how we define ourselves as a nation. As the singer Murray McLaughlin says: "Canada is a territory of the heart." I love those words. A territory of the heart. And by that I think he means that we have learned through shared experience that sometimes we can accomplish more by working together than we can on our own. Over more than 130 years together as a nation we have always depended upon each other to build our communities and our regions and to establish in this great place called Canada a quality of life which is second to none in the world. Sure we have our problems but still it's quite a record. We built this nation on the principle that a shared burden is a lighter burden. And when something happens to our neighbours and friends like the ice storm that devastated parts of Central Canada a few years ago the rest of us pitched in and helped out. Whether that meant Saskatchewan power workers coming to Ontario to fix power lines with generators as they did or the federal government investing Canadian taxpayers' resources into rebuilding a shattered economy as it did, it was done. That's how we see it in Saskatchewan. The crisis that we face now is our ice storm. It is a cruel cold hand that has flattened much of our farm economy and we couldn't do and can't do anything about it. Just as the people of Central Canada struggled against the devastation of ice and snow our Canadian grain farmers are now struggling against the devastation of unfair, even predatory, competition backed by the treasuries of the world's most powerful nations. Now we are asking our neighbours and our friends, our fellow Canadians, to help us dig out from under our storm; to help thousands of families and farmers avoid devastation so we can keep doing our part for the Canadian people and the Canadian economy and so we can keep working together towards a brighter future for this country in the twenty-first century.

But of all the reasons for reaching out to get our prairie grain farmers through this cash crisis perhaps the least understood is the economic argument. Simply put, agriculture has played and will continue to play a vital role in our economy. The Empire Club has heard from Bill Gates and next week I'm told Carole Stephenson will be here from Lucent to tell you about the exciting possibilities of the communications revolution and we welcome it. I welcome that revolution and even Saskatchewan has got a world class communications network and a growing infotech industry. But turning our eyes to these exciting new visions that Gates and Stephenson will talk about should not blind us to the opportunities and the advantages that we already hold.

A few months ago John K. Carrington, the Chief Executive Operating Officer of Barrick Gold, talked to the Empire Club about the need for a policy environment that would promote growth in the mining industry. He believed that mining has been an important part in our economic development so far and he argued that it can continue to be an important part of our economic future with the proper support. Well, if that's true of mining and I believe that it is then it is certainly true of agriculture.

I want to cite another speaker who told the Empire club about the exciting opportunities present in modernised farming. That speaker was The Honourable John S. Martin. Most of you may not know of Martin, the Ontario Minister of Agriculture, who spoke to the Empire Club almost exactly 76 years ago in 1924. And I also want to repeat what Tom Kent, a key policy advisor in the Pearson and Trudeau governments, had to say about the state of prairie agriculture in the 1950s after the Great Depression. This is what Kent says in his biography: "In the early post-war years, world markets for grain were strong. The farmers came to a prosperity that few had known before." And he said this: "Those city prejudices often created a contrary assumption. It was a prosperity earned by unsubsidised production. Canadian grain farmers did not receive the supports that were and are commonly given to other industrialised countries; in particular they did not receive the support of the U.S. Treasury and other countries." Well my point is the same as The Honourable John Martin's and Tom Kent's. Agriculture will continue to be a growth industry in this country as they predicted 76 years ago and in the 1950s as long as we do not allow it to be strangled in the months ahead.

A moment ago I mentioned Murray McLaughlin and I wonder how many Canadians, when they think about farmers at all, think of McLaughlin's other description of farmers-"dusty old farmer, out working his field, hanging down over his tractor wheel." Well the modern Saskatchewan farmer wouldn't recognise that picture and you wouldn't either. Chances are he is not getting dusty and he is not hanging down over his old tractor wheel. He's riding in his mechanised $250,000-mortgaged combine gathering up as much grain as 20 farmers did just a few generations ago on a farm that is a streamlined, capital intensive, modern business operation and leveraged in the same way that other businesses are. These days some farmers use GPS global positioning satellites to more accurately apply fertilisers and chemicals and to watch their crops. They use computers and the Internet to manage the business and to monitor grain markets and prices around the world hourly. They're participating in the cutting-edge science being done at Innovation Place. I refer to Monsanto-our ag-biotech centre at the University of Saskatchewan. We have researchers and biotech companies working on new ways to enhance yields and to make better use of the crops we grow so well and then selling that knowledge and those products for hundreds of millions of dollars each year.

Just as importantly though Canadian prairie farms are poised to take advantage of the world's growth. Population is growing by 1.3 per cent per year, about 80 million people a year. That obviously means more demand for food. And Saskatchewan is good at producing toMuality yet inexpensive food not only for this country but for the world. That means growth; that means opportunity. Not only is the population growing, it is getting relatively more wealthy and that also means increased consumption of grains, oil seeds and live-stock products. And at the same time the population is growing, the amount of crop land in the world is shrinking. Urban industrial growth is encroaching. Soil salinity is rising on irrigated land which accounts for some 40 per cent of the world's food crops. As for subsidies I predict they too are going to have to decline. The economies in some of our competing countries are realising the enormous costs of the heavy subsidies that they're paying and there will be domestic and internal pressure for this to be lessened and for there to be a return to fair trade.

So let me summarise. Demand will rise as population grows and incomes rise globally. The growth in supply will be limited by a shrinking farmland base. This rising demand combined with declining supply can only mean higher prices in the medium and long term. And our farmers are modern-day businesses looking to the future.

Saskatchewan, Manitoba, the West have enormous advantages to take advantage of the situation. We have the best dryland farmers and an infrastructure which is proven to be efficient and productive. Since 1991 crops other than spring wheat have grown from 44 per cent to 73 per cent. Today back home farmers grow over 50 different crops-soy beans, lentils, mustard, you name it. Specialty crops represent over 30 per cent of the growth so they have diversified. Organic industry, about 25 per cent. Add it all up and you can see, I hope, that agriculture is not a declining industry. On the contrary it'll be a real growth business in our economic future. All we have to do is get through this current storm and we know that the sun will rise on a bright and prosperous future for Canada, for Saskatchewan and for our farm families.

Well friends I once ended a speech by saying: "To make a long story short..." and somebody from the back of the hall said: "Too late for that Roy." And maybe that's the case here but just very very briefly let me close by saying thank you all for coming here and a special thanks for the honour of speaking to the Empire Club. I believe this Club was founded in 1903 two years before my home province joined the Confederation. I know that as we approach our centennials both the Empire Club and Saskatchewan can look back on our histories with pride and forward to our futures with optimism and confidence. I truly believe that once the people of this part of the world and the people across our nation understand the case that we're trying to make-a case for fairness, for equitable treatment, a case for neighbours working together as Canadians always have, with a bright economic future-I'm convinced that indeed that future will be bright. Not just for our farmers, not just for our province or our region, but a bright and marvellous future for all Canadians and for Canada. We ask nothing more than the opportunity to contribute to it and to be a part of that bright future as we have been in the past.

Thank you all for listening. Good luck and God bless you all.

The appreciation of the meeting was expressed by John A. Campion, Partner, Fasken Campbell Godfrey and a Past President, The Empire Club of Canada.